97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3268

 

Introduced 2/24/2011, by Rep. John D. Cavaletto - Jason Barickman - Patricia R. Bellock - Richard Morthland

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 505/13  from Ch. 120, par. 429

    Creates the Soldiers to Farmers Program Act. Provides that the Department of Veterans' Affairs shall implement and administer the Soldiers to Farmers Program to provide financial and instructional assistance to Illinois veterans interested in starting a career in the farming and agriculture industries. Provides that from appropriations made for the purposes of the Act, the Department shall award a $10,000 stipend to program participants to go towards the purchase of land or farming equipment. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and the Motor Fuel Tax Law by providing up to a 5-year exemption to program participants for tangible personal property used in a farming or agricultural business operated by the veteran that is not otherwise exempt and claims for undyed diesel fuel used in a farming or agricultural business operated by the veteran for which claims may not otherwise be made.


LRB097 08272 KTG 48398 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3268LRB097 08272 KTG 48398 b

1    AN ACT concerning veterans.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Soldiers to Farmers Program Act.
 
6    Section 3. Definition. As used in this Section, "veteran"
7means an Illinois resident who has served as a member of the
8United States Armed Forces, a member of the Illinois National
9Guard, or a member of the United States Reserve Forces and was
10discharged under honorable conditions.
 
11    Section 5. Soldiers to Farmers Program. The Soldiers to
12Farmers Program is created to provide financial and
13instructional assistance to veterans interested in starting a
14career in the farming and agriculture industries. The program
15shall provide instructional materials and individual advice to
16program participants on farming and agricultural work,
17business management, and the regulatory burdens associated
18with the farming and agriculture industries. The Department of
19Veterans' Affairs shall implement and administer the program.
20From appropriations made for the purposes of this Act, the
21Department shall award a $10,000 stipend to program
22participants toward the purchase of land or farming equipment.
 

 

 

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1    Section 10. Rules. The Department of Veterans' Affairs
2shall adopt any rules necessary to implement and operate the
3program established under this Act.
 
4    Section 15. The Use Tax Act is amended by changing Section
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after the effective date
7of this amendatory Act of the 92nd General Assembly, however,
8an entity otherwise eligible for this exemption shall not make
9tax-free purchases unless it has an active identification
10number issued by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active exemption
24identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new and
5used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon a
11graphic arts product.
12    (7) Farm chemicals.
13    (8) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (9) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (10) A motor vehicle of the first division, a motor vehicle
21of the second division that is a self-contained motor vehicle
22designed or permanently converted to provide living quarters
23for recreational, camping, or travel use, with direct walk
24through to the living quarters from the driver's seat, or a
25motor vehicle of the second division that is of the van
26configuration designed for the transportation of not less than

 

 

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17 nor more than 16 passengers, as defined in Section 1-146 of
2the Illinois Vehicle Code, that is used for automobile renting,
3as defined in the Automobile Renting Occupation and Use Tax
4Act.
5    (11) Farm machinery and equipment, both new and used,
6including that manufactured on special order, certified by the
7purchaser to be used primarily for production agriculture or
8State or federal agricultural programs, including individual
9replacement parts for the machinery and equipment, including
10machinery and equipment purchased for lease, and including
11implements of husbandry defined in Section 1-130 of the
12Illinois Vehicle Code, farm machinery and agricultural
13chemical and fertilizer spreaders, and nurse wagons required to
14be registered under Section 3-809 of the Illinois Vehicle Code,
15but excluding other motor vehicles required to be registered
16under the Illinois Vehicle Code. Horticultural polyhouses or
17hoop houses used for propagating, growing, or overwintering
18plants shall be considered farm machinery and equipment under
19this item (11). Agricultural chemical tender tanks and dry
20boxes shall include units sold separately from a motor vehicle
21required to be licensed and units sold mounted on a motor
22vehicle required to be licensed if the selling price of the
23tender is separately stated.
24    Farm machinery and equipment shall include precision
25farming equipment that is installed or purchased to be
26installed on farm machinery and equipment including, but not

 

 

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1limited to, tractors, harvesters, sprayers, planters, seeders,
2or spreaders. Precision farming equipment includes, but is not
3limited to, soil testing sensors, computers, monitors,
4software, global positioning and mapping systems, and other
5such equipment.
6    Farm machinery and equipment also includes computers,
7sensors, software, and related equipment used primarily in the
8computer-assisted operation of production agriculture
9facilities, equipment, and activities such as, but not limited
10to, the collection, monitoring, and correlation of animal and
11crop data for the purpose of formulating animal diets and
12agricultural chemicals. This item (11) is exempt from the
13provisions of Section 3-90.
14    (12) Fuel and petroleum products sold to or used by an air
15common carrier, certified by the carrier to be used for
16consumption, shipment, or storage in the conduct of its
17business as an air common carrier, for a flight destined for or
18returning from a location or locations outside the United
19States without regard to previous or subsequent domestic
20stopovers.
21    (13) Proceeds of mandatory service charges separately
22stated on customers' bills for the purchase and consumption of
23food and beverages purchased at retail from a retailer, to the
24extent that the proceeds of the service charge are in fact
25turned over as tips or as a substitute for tips to the
26employees who participate directly in preparing, serving,

 

 

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1hosting or cleaning up the food or beverage function with
2respect to which the service charge is imposed.
3    (14) Until July 1, 2003, oil field exploration, drilling,
4and production equipment, including (i) rigs and parts of rigs,
5rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
6tubular goods, including casing and drill strings, (iii) pumps
7and pump-jack units, (iv) storage tanks and flow lines, (v) any
8individual replacement part for oil field exploration,
9drilling, and production equipment, and (vi) machinery and
10equipment purchased for lease; but excluding motor vehicles
11required to be registered under the Illinois Vehicle Code.
12    (15) Photoprocessing machinery and equipment, including
13repair and replacement parts, both new and used, including that
14manufactured on special order, certified by the purchaser to be
15used primarily for photoprocessing, and including
16photoprocessing machinery and equipment purchased for lease.
17    (16) Until July 1, 2003, coal exploration, mining,
18offhighway hauling, processing, maintenance, and reclamation
19equipment, including replacement parts and equipment, and
20including equipment purchased for lease, but excluding motor
21vehicles required to be registered under the Illinois Vehicle
22Code.
23    (17) Until July 1, 2003, distillation machinery and
24equipment, sold as a unit or kit, assembled or installed by the
25retailer, certified by the user to be used only for the
26production of ethyl alcohol that will be used for consumption

 

 

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1as motor fuel or as a component of motor fuel for the personal
2use of the user, and not subject to sale or resale.
3    (18) Manufacturing and assembling machinery and equipment
4used primarily in the process of manufacturing or assembling
5tangible personal property for wholesale or retail sale or
6lease, whether that sale or lease is made directly by the
7manufacturer or by some other person, whether the materials
8used in the process are owned by the manufacturer or some other
9person, or whether that sale or lease is made apart from or as
10an incident to the seller's engaging in the service occupation
11of producing machines, tools, dies, jigs, patterns, gauges, or
12other similar items of no commercial value on special order for
13a particular purchaser.
14    (19) Personal property delivered to a purchaser or
15purchaser's donee inside Illinois when the purchase order for
16that personal property was received by a florist located
17outside Illinois who has a florist located inside Illinois
18deliver the personal property.
19    (20) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (21) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (21) is exempt from the provisions

 

 

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1of Section 3-90, and the exemption provided for under this item
2(21) applies for all periods beginning May 30, 1995, but no
3claim for credit or refund is allowed on or after January 1,
42008 for such taxes paid during the period beginning May 30,
52000 and ending on January 1, 2008.
6    (22) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of the
14Retailers' Occupation Tax Act. If the equipment is leased in a
15manner that does not qualify for this exemption or is used in
16any other non-exempt manner, the lessor shall be liable for the
17tax imposed under this Act or the Service Use Tax Act, as the
18case may be, based on the fair market value of the property at
19the time the non-qualifying use occurs. No lessor shall collect
20or attempt to collect an amount (however designated) that
21purports to reimburse that lessor for the tax imposed by this
22Act or the Service Use Tax Act, as the case may be, if the tax
23has not been paid by the lessor. If a lessor improperly
24collects any such amount from the lessee, the lessee shall have
25a legal right to claim a refund of that amount from the lessor.
26If, however, that amount is not refunded to the lessee for any

 

 

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1reason, the lessor is liable to pay that amount to the
2Department.
3    (23) Personal property purchased by a lessor who leases the
4property, under a lease of one year or longer executed or in
5effect at the time the lessor would otherwise be subject to the
6tax imposed by this Act, to a governmental body that has been
7issued an active sales tax exemption identification number by
8the Department under Section 1g of the Retailers' Occupation
9Tax Act. If the property is leased in a manner that does not
10qualify for this exemption or used in any other non-exempt
11manner, the lessor shall be liable for the tax imposed under
12this Act or the Service Use Tax Act, as the case may be, based
13on the fair market value of the property at the time the
14non-qualifying use occurs. No lessor shall collect or attempt
15to collect an amount (however designated) that purports to
16reimburse that lessor for the tax imposed by this Act or the
17Service Use Tax Act, as the case may be, if the tax has not been
18paid by the lessor. If a lessor improperly collects any such
19amount from the lessee, the lessee shall have a legal right to
20claim a refund of that amount from the lessor. If, however,
21that amount is not refunded to the lessee for any reason, the
22lessor is liable to pay that amount to the Department.
23    (24) Beginning with taxable years ending on or after
24December 31, 1995 and ending with taxable years ending on or
25before December 31, 2004, personal property that is donated for
26disaster relief to be used in a State or federally declared

 

 

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1disaster area in Illinois or bordering Illinois by a
2manufacturer or retailer that is registered in this State to a
3corporation, society, association, foundation, or institution
4that has been issued a sales tax exemption identification
5number by the Department that assists victims of the disaster
6who reside within the declared disaster area.
7    (25) Beginning with taxable years ending on or after
8December 31, 1995 and ending with taxable years ending on or
9before December 31, 2004, personal property that is used in the
10performance of infrastructure repairs in this State, including
11but not limited to municipal roads and streets, access roads,
12bridges, sidewalks, waste disposal systems, water and sewer
13line extensions, water distribution and purification
14facilities, storm water drainage and retention facilities, and
15sewage treatment facilities, resulting from a State or
16federally declared disaster in Illinois or bordering Illinois
17when such repairs are initiated on facilities located in the
18declared disaster area within 6 months after the disaster.
19    (26) Beginning July 1, 1999, game or game birds purchased
20at a "game breeding and hunting preserve area" or an "exotic
21game hunting area" as those terms are used in the Wildlife Code
22or at a hunting enclosure approved through rules adopted by the
23Department of Natural Resources. This paragraph is exempt from
24the provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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1corporation, limited liability company, society, association,
2foundation, or institution that is determined by the Department
3to be organized and operated exclusively for educational
4purposes. For purposes of this exemption, "a corporation,
5limited liability company, society, association, foundation,
6or institution organized and operated exclusively for
7educational purposes" means all tax-supported public schools,
8private schools that offer systematic instruction in useful
9branches of learning by methods common to public schools and
10that compare favorably in their scope and intensity with the
11course of study presented in tax-supported schools, and
12vocational or technical schools or institutes organized and
13operated exclusively to provide a course of study of not less
14than 6 weeks duration and designed to prepare individuals to
15follow a trade or to pursue a manual, technical, mechanical,
16industrial, business, or commercial occupation.
17    (28) Beginning January 1, 2000, personal property,
18including food, purchased through fundraising events for the
19benefit of a public or private elementary or secondary school,
20a group of those schools, or one or more school districts if
21the events are sponsored by an entity recognized by the school
22district that consists primarily of volunteers and includes
23parents and teachers of the school children. This paragraph
24does not apply to fundraising events (i) for the benefit of
25private home instruction or (ii) for which the fundraising
26entity purchases the personal property sold at the events from

 

 

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1another individual or entity that sold the property for the
2purpose of resale by the fundraising entity and that profits
3from the sale to the fundraising entity. This paragraph is
4exempt from the provisions of Section 3-90.
5    (29) Beginning January 1, 2000 and through December 31,
62001, new or used automatic vending machines that prepare and
7serve hot food and beverages, including coffee, soup, and other
8items, and replacement parts for these machines. Beginning
9January 1, 2002 and through June 30, 2003, machines and parts
10for machines used in commercial, coin-operated amusement and
11vending business if a use or occupation tax is paid on the
12gross receipts derived from the use of the commercial,
13coin-operated amusement and vending machines. This paragraph
14is exempt from the provisions of Section 3-90.
15    (30) Beginning January 1, 2001 and through June 30, 2011,
16food for human consumption that is to be consumed off the
17premises where it is sold (other than alcoholic beverages, soft
18drinks, and food that has been prepared for immediate
19consumption) and prescription and nonprescription medicines,
20drugs, medical appliances, and insulin, urine testing
21materials, syringes, and needles used by diabetics, for human
22use, when purchased for use by a person receiving medical
23assistance under Article V of the Illinois Public Aid Code who
24resides in a licensed long-term care facility, as defined in
25the Nursing Home Care Act, or in a licensed facility as defined
26in the MR/DD Community Care Act.

 

 

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1    (31) Beginning on the effective date of this amendatory Act
2of the 92nd General Assembly, computers and communications
3equipment utilized for any hospital purpose and equipment used
4in the diagnosis, analysis, or treatment of hospital patients
5purchased by a lessor who leases the equipment, under a lease
6of one year or longer executed or in effect at the time the
7lessor would otherwise be subject to the tax imposed by this
8Act, to a hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of the
10Retailers' Occupation Tax Act. If the equipment is leased in a
11manner that does not qualify for this exemption or is used in
12any other nonexempt manner, the lessor shall be liable for the
13tax imposed under this Act or the Service Use Tax Act, as the
14case may be, based on the fair market value of the property at
15the time the nonqualifying use occurs. No lessor shall collect
16or attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall have
21a legal right to claim a refund of that amount from the lessor.
22If, however, that amount is not refunded to the lessee for any
23reason, the lessor is liable to pay that amount to the
24Department. This paragraph is exempt from the provisions of
25Section 3-90.
26    (32) Beginning on the effective date of this amendatory Act

 

 

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1of the 92nd General Assembly, personal property purchased by a
2lessor who leases the property, under a lease of one year or
3longer executed or in effect at the time the lessor would
4otherwise be subject to the tax imposed by this Act, to a
5governmental body that has been issued an active sales tax
6exemption identification number by the Department under
7Section 1g of the Retailers' Occupation Tax Act. If the
8property is leased in a manner that does not qualify for this
9exemption or used in any other nonexempt manner, the lessor
10shall be liable for the tax imposed under this Act or the
11Service Use Tax Act, as the case may be, based on the fair
12market value of the property at the time the nonqualifying use
13occurs. No lessor shall collect or attempt to collect an amount
14(however designated) that purports to reimburse that lessor for
15the tax imposed by this Act or the Service Use Tax Act, as the
16case may be, if the tax has not been paid by the lessor. If a
17lessor improperly collects any such amount from the lessee, the
18lessee shall have a legal right to claim a refund of that
19amount from the lessor. If, however, that amount is not
20refunded to the lessee for any reason, the lessor is liable to
21pay that amount to the Department. This paragraph is exempt
22from the provisions of Section 3-90.
23    (33) On and after July 1, 2003 and through June 30, 2004,
24the use in this State of motor vehicles of the second division
25with a gross vehicle weight in excess of 8,000 pounds and that
26are subject to the commercial distribution fee imposed under

 

 

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1Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
21, 2004 and through June 30, 2005, the use in this State of
3motor vehicles of the second division: (i) with a gross vehicle
4weight rating in excess of 8,000 pounds; (ii) that are subject
5to the commercial distribution fee imposed under Section
63-815.1 of the Illinois Vehicle Code; and (iii) that are
7primarily used for commercial purposes. Through June 30, 2005,
8this exemption applies to repair and replacement parts added
9after the initial purchase of such a motor vehicle if that
10motor vehicle is used in a manner that would qualify for the
11rolling stock exemption otherwise provided for in this Act. For
12purposes of this paragraph, the term "used for commercial
13purposes" means the transportation of persons or property in
14furtherance of any commercial or industrial enterprise,
15whether for-hire or not.
16    (34) Beginning January 1, 2008, tangible personal property
17used in the construction or maintenance of a community water
18supply, as defined under Section 3.145 of the Environmental
19Protection Act, that is operated by a not-for-profit
20corporation that holds a valid water supply permit issued under
21Title IV of the Environmental Protection Act. This paragraph is
22exempt from the provisions of Section 3-90.
23    (35) Beginning January 1, 2010, materials, parts,
24equipment, components, and furnishings incorporated into or
25upon an aircraft as part of the modification, refurbishment,
26completion, replacement, repair, or maintenance of the

 

 

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1aircraft. This exemption includes consumable supplies used in
2the modification, refurbishment, completion, replacement,
3repair, and maintenance of aircraft, but excludes any
4materials, parts, equipment, components, and consumable
5supplies used in the modification, replacement, repair, and
6maintenance of aircraft engines or power plants, whether such
7engines or power plants are installed or uninstalled upon any
8such aircraft. "Consumable supplies" include, but are not
9limited to, adhesive, tape, sandpaper, general purpose
10lubricants, cleaning solution, latex gloves, and protective
11films. This exemption applies only to those organizations that
12(i) hold an Air Agency Certificate and are empowered to operate
13an approved repair station by the Federal Aviation
14Administration, (ii) have a Class IV Rating, and (iii) conduct
15operations in accordance with Part 145 of the Federal Aviation
16Regulations. The exemption does not include aircraft operated
17by a commercial air carrier providing scheduled passenger air
18service pursuant to authority issued under Part 121 or Part 129
19of the Federal Aviation Regulations.
20    (36) Tangible personal property purchased by a
21public-facilities corporation, as described in Section
2211-65-10 of the Illinois Municipal Code, for purposes of
23constructing or furnishing a municipal convention hall, but
24only if the legal title to the municipal convention hall is
25transferred to the municipality without any further
26consideration by or on behalf of the municipality at the time

 

 

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1of the completion of the municipal convention hall or upon the
2retirement or redemption of any bonds or other debt instruments
3issued by the public-facilities corporation in connection with
4the development of the municipal convention hall. This
5exemption includes existing public-facilities corporations as
6provided in Section 11-65-25 of the Illinois Municipal Code.
7This paragraph is exempt from the provisions of Section 3-90.
8    (37) Tangible personal property that (i) is not otherwise
9exempt under this Section and (ii) is purchased by a veteran
10who is participating in the Soldiers to Farmers Program
11established under the Soldiers to Farmers Program Act for use
12in a farming or agricultural business operated by the veteran.
13The exemption under this item (37) shall extend for a period of
14not more than 5 years commencing on the date of enrollment of
15the veteran in the Program. No exemption for a veteran
16participating in the Program shall be claimed under this item
17(37) without an exemption certificate properly executed and
18furnished by the Department of Veterans' Affairs. This item
19(37) is exempt from the provisions of Section 3-90.
20(Source: P.A. 95-88, eff. 1-1-08; 95-538, eff. 1-1-08; 95-876,
21eff. 8-21-08; 96-116, eff. 7-31-09; 96-339, eff. 7-1-10;
2296-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff.
237-2-10.)
 
24    Section 20. The Service Use Tax Act is amended by changing
25Section 3-5 as follows:
 

 

 

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1    (35 ILCS 110/3-5)
2    Sec. 3-5. Exemptions. Use of the following tangible
3personal property is exempt from the tax imposed by this Act:
4    (1) Personal property purchased from a corporation,
5society, association, foundation, institution, or
6organization, other than a limited liability company, that is
7organized and operated as a not-for-profit service enterprise
8for the benefit of persons 65 years of age or older if the
9personal property was not purchased by the enterprise for the
10purpose of resale by the enterprise.
11    (2) Personal property purchased by a non-profit Illinois
12county fair association for use in conducting, operating, or
13promoting the county fair.
14    (3) Personal property purchased by a not-for-profit arts or
15cultural organization that establishes, by proof required by
16the Department by rule, that it has received an exemption under
17Section 501(c)(3) of the Internal Revenue Code and that is
18organized and operated primarily for the presentation or
19support of arts or cultural programming, activities, or
20services. These organizations include, but are not limited to,
21music and dramatic arts organizations such as symphony
22orchestras and theatrical groups, arts and cultural service
23organizations, local arts councils, visual arts organizations,
24and media arts organizations. On and after the effective date
25of this amendatory Act of the 92nd General Assembly, however,

 

 

HB3268- 20 -LRB097 08272 KTG 48398 b

1an entity otherwise eligible for this exemption shall not make
2tax-free purchases unless it has an active identification
3number issued by the Department.
4    (4) Legal tender, currency, medallions, or gold or silver
5coinage issued by the State of Illinois, the government of the
6United States of America, or the government of any foreign
7country, and bullion.
8    (5) Until July 1, 2003 and beginning again on September 1,
92004 through August 30, 2014, graphic arts machinery and
10equipment, including repair and replacement parts, both new and
11used, and including that manufactured on special order or
12purchased for lease, certified by the purchaser to be used
13primarily for graphic arts production. Equipment includes
14chemicals or chemicals acting as catalysts but only if the
15chemicals or chemicals acting as catalysts effect a direct and
16immediate change upon a graphic arts product.
17    (6) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (7) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including
25machinery and equipment purchased for lease, and including
26implements of husbandry defined in Section 1-130 of the

 

 

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1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (7). Agricultural chemical tender tanks and dry boxes
9shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

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1agricultural chemicals. This item (7) is exempt from the
2provisions of Section 3-75.
3    (8) Fuel and petroleum products sold to or used by an air
4common carrier, certified by the carrier to be used for
5consumption, shipment, or storage in the conduct of its
6business as an air common carrier, for a flight destined for or
7returning from a location or locations outside the United
8States without regard to previous or subsequent domestic
9stopovers.
10    (9) Proceeds of mandatory service charges separately
11stated on customers' bills for the purchase and consumption of
12food and beverages acquired as an incident to the purchase of a
13service from a serviceman, to the extent that the proceeds of
14the service charge are in fact turned over as tips or as a
15substitute for tips to the employees who participate directly
16in preparing, serving, hosting or cleaning up the food or
17beverage function with respect to which the service charge is
18imposed.
19    (10) Until July 1, 2003, oil field exploration, drilling,
20and production equipment, including (i) rigs and parts of rigs,
21rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
22tubular goods, including casing and drill strings, (iii) pumps
23and pump-jack units, (iv) storage tanks and flow lines, (v) any
24individual replacement part for oil field exploration,
25drilling, and production equipment, and (vi) machinery and
26equipment purchased for lease; but excluding motor vehicles

 

 

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1required to be registered under the Illinois Vehicle Code.
2    (11) Proceeds from the sale of photoprocessing machinery
3and equipment, including repair and replacement parts, both new
4and used, including that manufactured on special order,
5certified by the purchaser to be used primarily for
6photoprocessing, and including photoprocessing machinery and
7equipment purchased for lease.
8    (12) Until July 1, 2003, coal exploration, mining,
9offhighway hauling, processing, maintenance, and reclamation
10equipment, including replacement parts and equipment, and
11including equipment purchased for lease, but excluding motor
12vehicles required to be registered under the Illinois Vehicle
13Code.
14    (13) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (14) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (14) is exempt from the provisions
22of Section 3-75, and the exemption provided for under this item
23(14) applies for all periods beginning May 30, 1995, but no
24claim for credit or refund is allowed on or after the effective
25date of this amendatory Act of the 95th General Assembly for
26such taxes paid during the period beginning May 30, 2000 and

 

 

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1ending on the effective date of this amendatory Act of the 95th
2General Assembly.
3    (15) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients purchased by a
6lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time the lessor would
8otherwise be subject to the tax imposed by this Act, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act. If the equipment is leased in a
12manner that does not qualify for this exemption or is used in
13any other non-exempt manner, the lessor shall be liable for the
14tax imposed under this Act or the Use Tax Act, as the case may
15be, based on the fair market value of the property at the time
16the non-qualifying use occurs. No lessor shall collect or
17attempt to collect an amount (however designated) that purports
18to reimburse that lessor for the tax imposed by this Act or the
19Use Tax Act, as the case may be, if the tax has not been paid by
20the lessor. If a lessor improperly collects any such amount
21from the lessee, the lessee shall have a legal right to claim a
22refund of that amount from the lessor. If, however, that amount
23is not refunded to the lessee for any reason, the lessor is
24liable to pay that amount to the Department.
25    (16) Personal property purchased by a lessor who leases the
26property, under a lease of one year or longer executed or in

 

 

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1effect at the time the lessor would otherwise be subject to the
2tax imposed by this Act, to a governmental body that has been
3issued an active tax exemption identification number by the
4Department under Section 1g of the Retailers' Occupation Tax
5Act. If the property is leased in a manner that does not
6qualify for this exemption or is used in any other non-exempt
7manner, the lessor shall be liable for the tax imposed under
8this Act or the Use Tax Act, as the case may be, based on the
9fair market value of the property at the time the
10non-qualifying use occurs. No lessor shall collect or attempt
11to collect an amount (however designated) that purports to
12reimburse that lessor for the tax imposed by this Act or the
13Use Tax Act, as the case may be, if the tax has not been paid by
14the lessor. If a lessor improperly collects any such amount
15from the lessee, the lessee shall have a legal right to claim a
16refund of that amount from the lessor. If, however, that amount
17is not refunded to the lessee for any reason, the lessor is
18liable to pay that amount to the Department.
19    (17) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is donated for
22disaster relief to be used in a State or federally declared
23disaster area in Illinois or bordering Illinois by a
24manufacturer or retailer that is registered in this State to a
25corporation, society, association, foundation, or institution
26that has been issued a sales tax exemption identification

 

 

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1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (18) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (19) Beginning July 1, 1999, game or game birds purchased
16at a "game breeding and hunting preserve area" or an "exotic
17game hunting area" as those terms are used in the Wildlife Code
18or at a hunting enclosure approved through rules adopted by the
19Department of Natural Resources. This paragraph is exempt from
20the provisions of Section 3-75.
21    (20) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the Department
25to be organized and operated exclusively for educational
26purposes. For purposes of this exemption, "a corporation,

 

 

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1limited liability company, society, association, foundation,
2or institution organized and operated exclusively for
3educational purposes" means all tax-supported public schools,
4private schools that offer systematic instruction in useful
5branches of learning by methods common to public schools and
6that compare favorably in their scope and intensity with the
7course of study presented in tax-supported schools, and
8vocational or technical schools or institutes organized and
9operated exclusively to provide a course of study of not less
10than 6 weeks duration and designed to prepare individuals to
11follow a trade or to pursue a manual, technical, mechanical,
12industrial, business, or commercial occupation.
13    (21) Beginning January 1, 2000, personal property,
14including food, purchased through fundraising events for the
15benefit of a public or private elementary or secondary school,
16a group of those schools, or one or more school districts if
17the events are sponsored by an entity recognized by the school
18district that consists primarily of volunteers and includes
19parents and teachers of the school children. This paragraph
20does not apply to fundraising events (i) for the benefit of
21private home instruction or (ii) for which the fundraising
22entity purchases the personal property sold at the events from
23another individual or entity that sold the property for the
24purpose of resale by the fundraising entity and that profits
25from the sale to the fundraising entity. This paragraph is
26exempt from the provisions of Section 3-75.

 

 

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1    (22) Beginning January 1, 2000 and through December 31,
22001, new or used automatic vending machines that prepare and
3serve hot food and beverages, including coffee, soup, and other
4items, and replacement parts for these machines. Beginning
5January 1, 2002 and through June 30, 2003, machines and parts
6for machines used in commercial, coin-operated amusement and
7vending business if a use or occupation tax is paid on the
8gross receipts derived from the use of the commercial,
9coin-operated amusement and vending machines. This paragraph
10is exempt from the provisions of Section 3-75.
11    (23) Beginning August 23, 2001 and through June 30, 2011,
12food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages, soft
14drinks, and food that has been prepared for immediate
15consumption) and prescription and nonprescription medicines,
16drugs, medical appliances, and insulin, urine testing
17materials, syringes, and needles used by diabetics, for human
18use, when purchased for use by a person receiving medical
19assistance under Article V of the Illinois Public Aid Code who
20resides in a licensed long-term care facility, as defined in
21the Nursing Home Care Act, or in a licensed facility as defined
22in the MR/DD Community Care Act.
23    (24) Beginning on the effective date of this amendatory Act
24of the 92nd General Assembly, computers and communications
25equipment utilized for any hospital purpose and equipment used
26in the diagnosis, analysis, or treatment of hospital patients

 

 

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1purchased by a lessor who leases the equipment, under a lease
2of one year or longer executed or in effect at the time the
3lessor would otherwise be subject to the tax imposed by this
4Act, to a hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of the
6Retailers' Occupation Tax Act. If the equipment is leased in a
7manner that does not qualify for this exemption or is used in
8any other nonexempt manner, the lessor shall be liable for the
9tax imposed under this Act or the Use Tax Act, as the case may
10be, based on the fair market value of the property at the time
11the nonqualifying use occurs. No lessor shall collect or
12attempt to collect an amount (however designated) that purports
13to reimburse that lessor for the tax imposed by this Act or the
14Use Tax Act, as the case may be, if the tax has not been paid by
15the lessor. If a lessor improperly collects any such amount
16from the lessee, the lessee shall have a legal right to claim a
17refund of that amount from the lessor. If, however, that amount
18is not refunded to the lessee for any reason, the lessor is
19liable to pay that amount to the Department. This paragraph is
20exempt from the provisions of Section 3-75.
21    (25) Beginning on the effective date of this amendatory Act
22of the 92nd General Assembly, personal property purchased by a
23lessor who leases the property, under a lease of one year or
24longer executed or in effect at the time the lessor would
25otherwise be subject to the tax imposed by this Act, to a
26governmental body that has been issued an active tax exemption

 

 

HB3268- 30 -LRB097 08272 KTG 48398 b

1identification number by the Department under Section 1g of the
2Retailers' Occupation Tax Act. If the property is leased in a
3manner that does not qualify for this exemption or is used in
4any other nonexempt manner, the lessor shall be liable for the
5tax imposed under this Act or the Use Tax Act, as the case may
6be, based on the fair market value of the property at the time
7the nonqualifying use occurs. No lessor shall collect or
8attempt to collect an amount (however designated) that purports
9to reimburse that lessor for the tax imposed by this Act or the
10Use Tax Act, as the case may be, if the tax has not been paid by
11the lessor. If a lessor improperly collects any such amount
12from the lessee, the lessee shall have a legal right to claim a
13refund of that amount from the lessor. If, however, that amount
14is not refunded to the lessee for any reason, the lessor is
15liable to pay that amount to the Department. This paragraph is
16exempt from the provisions of Section 3-75.
17    (26) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued under
22Title IV of the Environmental Protection Act. This paragraph is
23exempt from the provisions of Section 3-75.
24    (27) Beginning January 1, 2010, materials, parts,
25equipment, components, and furnishings incorporated into or
26upon an aircraft as part of the modification, refurbishment,

 

 

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1completion, replacement, repair, or maintenance of the
2aircraft. This exemption includes consumable supplies used in
3the modification, refurbishment, completion, replacement,
4repair, and maintenance of aircraft, but excludes any
5materials, parts, equipment, components, and consumable
6supplies used in the modification, replacement, repair, and
7maintenance of aircraft engines or power plants, whether such
8engines or power plants are installed or uninstalled upon any
9such aircraft. "Consumable supplies" include, but are not
10limited to, adhesive, tape, sandpaper, general purpose
11lubricants, cleaning solution, latex gloves, and protective
12films. This exemption applies only to those organizations that
13(i) hold an Air Agency Certificate and are empowered to operate
14an approved repair station by the Federal Aviation
15Administration, (ii) have a Class IV Rating, and (iii) conduct
16operations in accordance with Part 145 of the Federal Aviation
17Regulations. The exemption does not include aircraft operated
18by a commercial air carrier providing scheduled passenger air
19service pursuant to authority issued under Part 121 or Part 129
20of the Federal Aviation Regulations.
21    (28) Tangible personal property purchased by a
22public-facilities corporation, as described in Section
2311-65-10 of the Illinois Municipal Code, for purposes of
24constructing or furnishing a municipal convention hall, but
25only if the legal title to the municipal convention hall is
26transferred to the municipality without any further

 

 

HB3268- 32 -LRB097 08272 KTG 48398 b

1consideration by or on behalf of the municipality at the time
2of the completion of the municipal convention hall or upon the
3retirement or redemption of any bonds or other debt instruments
4issued by the public-facilities corporation in connection with
5the development of the municipal convention hall. This
6exemption includes existing public-facilities corporations as
7provided in Section 11-65-25 of the Illinois Municipal Code.
8This paragraph is exempt from the provisions of Section 3-75.
9    (29) Tangible personal property that (i) is not otherwise
10exempt under this Section and (ii) is purchased by a veteran
11who is participating in the Soldiers to Farmers Program
12established under the Soldiers to Farmers Program Act for use
13in a farming or agricultural business operated by the veteran.
14The exemption under this item (29) shall extend for a period of
15not more than 5 years commencing on the date of enrollment of
16the veteran in the Program. No exemption for a veteran
17participating in the Program shall be claimed under this item
18(29) without an exemption certificate properly executed and
19furnished by the Department of Veterans' Affairs. This item
20(29) is exempt from the provisions of Section 3-75.
21(Source: P.A. 95-88, eff. 1-1-08; 95-538, eff. 1-1-08; 95-876,
22eff. 8-21-08; 96-116, eff. 7-31-09; 96-339, eff. 7-1-10;
2396-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff.
247-2-10.)
 
25    Section 25. The Service Occupation Tax Act is amended by

 

 

HB3268- 33 -LRB097 08272 KTG 48398 b

1changing Section 3-5 as follows:
 
2    (35 ILCS 115/3-5)
3    Sec. 3-5. Exemptions. The following tangible personal
4property is exempt from the tax imposed by this Act:
5    (1) Personal property sold by a corporation, society,
6association, foundation, institution, or organization, other
7than a limited liability company, that is organized and
8operated as a not-for-profit service enterprise for the benefit
9of persons 65 years of age or older if the personal property
10was not purchased by the enterprise for the purpose of resale
11by the enterprise.
12    (2) Personal property purchased by a not-for-profit
13Illinois county fair association for use in conducting,
14operating, or promoting the county fair.
15    (3) Personal property purchased by any not-for-profit arts
16or cultural organization that establishes, by proof required by
17the Department by rule, that it has received an exemption under
18Section 501(c)(3) of the Internal Revenue Code and that is
19organized and operated primarily for the presentation or
20support of arts or cultural programming, activities, or
21services. These organizations include, but are not limited to,
22music and dramatic arts organizations such as symphony
23orchestras and theatrical groups, arts and cultural service
24organizations, local arts councils, visual arts organizations,
25and media arts organizations. On and after the effective date

 

 

HB3268- 34 -LRB097 08272 KTG 48398 b

1of this amendatory Act of the 92nd General Assembly, however,
2an entity otherwise eligible for this exemption shall not make
3tax-free purchases unless it has an active identification
4number issued by the Department.
5    (4) Legal tender, currency, medallions, or gold or silver
6coinage issued by the State of Illinois, the government of the
7United States of America, or the government of any foreign
8country, and bullion.
9    (5) Until July 1, 2003 and beginning again on September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new and
12used, and including that manufactured on special order or
13purchased for lease, certified by the purchaser to be used
14primarily for graphic arts production. Equipment includes
15chemicals or chemicals acting as catalysts but only if the
16chemicals or chemicals acting as catalysts effect a direct and
17immediate change upon a graphic arts product.
18    (6) Personal property sold by a teacher-sponsored student
19organization affiliated with an elementary or secondary school
20located in Illinois.
21    (7) Farm machinery and equipment, both new and used,
22including that manufactured on special order, certified by the
23purchaser to be used primarily for production agriculture or
24State or federal agricultural programs, including individual
25replacement parts for the machinery and equipment, including
26machinery and equipment purchased for lease, and including

 

 

HB3268- 35 -LRB097 08272 KTG 48398 b

1implements of husbandry defined in Section 1-130 of the
2Illinois Vehicle Code, farm machinery and agricultural
3chemical and fertilizer spreaders, and nurse wagons required to
4be registered under Section 3-809 of the Illinois Vehicle Code,
5but excluding other motor vehicles required to be registered
6under the Illinois Vehicle Code. Horticultural polyhouses or
7hoop houses used for propagating, growing, or overwintering
8plants shall be considered farm machinery and equipment under
9this item (7). Agricultural chemical tender tanks and dry boxes
10shall include units sold separately from a motor vehicle
11required to be licensed and units sold mounted on a motor
12vehicle required to be licensed if the selling price of the
13tender is separately stated.
14    Farm machinery and equipment shall include precision
15farming equipment that is installed or purchased to be
16installed on farm machinery and equipment including, but not
17limited to, tractors, harvesters, sprayers, planters, seeders,
18or spreaders. Precision farming equipment includes, but is not
19limited to, soil testing sensors, computers, monitors,
20software, global positioning and mapping systems, and other
21such equipment.
22    Farm machinery and equipment also includes computers,
23sensors, software, and related equipment used primarily in the
24computer-assisted operation of production agriculture
25facilities, equipment, and activities such as, but not limited
26to, the collection, monitoring, and correlation of animal and

 

 

HB3268- 36 -LRB097 08272 KTG 48398 b

1crop data for the purpose of formulating animal diets and
2agricultural chemicals. This item (7) is exempt from the
3provisions of Section 3-55.
4    (8) Fuel and petroleum products sold to or used by an air
5common carrier, certified by the carrier to be used for
6consumption, shipment, or storage in the conduct of its
7business as an air common carrier, for a flight destined for or
8returning from a location or locations outside the United
9States without regard to previous or subsequent domestic
10stopovers.
11    (9) Proceeds of mandatory service charges separately
12stated on customers' bills for the purchase and consumption of
13food and beverages, to the extent that the proceeds of the
14service charge are in fact turned over as tips or as a
15substitute for tips to the employees who participate directly
16in preparing, serving, hosting or cleaning up the food or
17beverage function with respect to which the service charge is
18imposed.
19    (10) Until July 1, 2003, oil field exploration, drilling,
20and production equipment, including (i) rigs and parts of rigs,
21rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
22tubular goods, including casing and drill strings, (iii) pumps
23and pump-jack units, (iv) storage tanks and flow lines, (v) any
24individual replacement part for oil field exploration,
25drilling, and production equipment, and (vi) machinery and
26equipment purchased for lease; but excluding motor vehicles

 

 

HB3268- 37 -LRB097 08272 KTG 48398 b

1required to be registered under the Illinois Vehicle Code.
2    (11) Photoprocessing machinery and equipment, including
3repair and replacement parts, both new and used, including that
4manufactured on special order, certified by the purchaser to be
5used primarily for photoprocessing, and including
6photoprocessing machinery and equipment purchased for lease.
7    (12) Until July 1, 2003, coal exploration, mining,
8offhighway hauling, processing, maintenance, and reclamation
9equipment, including replacement parts and equipment, and
10including equipment purchased for lease, but excluding motor
11vehicles required to be registered under the Illinois Vehicle
12Code.
13    (13) Beginning January 1, 1992 and through June 30, 2011,
14food for human consumption that is to be consumed off the
15premises where it is sold (other than alcoholic beverages, soft
16drinks and food that has been prepared for immediate
17consumption) and prescription and non-prescription medicines,
18drugs, medical appliances, and insulin, urine testing
19materials, syringes, and needles used by diabetics, for human
20use, when purchased for use by a person receiving medical
21assistance under Article V of the Illinois Public Aid Code who
22resides in a licensed long-term care facility, as defined in
23the Nursing Home Care Act, or in a licensed facility as defined
24in the MR/DD Community Care Act.
25    (14) Semen used for artificial insemination of livestock
26for direct agricultural production.

 

 

HB3268- 38 -LRB097 08272 KTG 48398 b

1    (15) Horses, or interests in horses, registered with and
2meeting the requirements of any of the Arabian Horse Club
3Registry of America, Appaloosa Horse Club, American Quarter
4Horse Association, United States Trotting Association, or
5Jockey Club, as appropriate, used for purposes of breeding or
6racing for prizes. This item (15) is exempt from the provisions
7of Section 3-55, and the exemption provided for under this item
8(15) applies for all periods beginning May 30, 1995, but no
9claim for credit or refund is allowed on or after January 1,
102008 (the effective date of Public Act 95-88) for such taxes
11paid during the period beginning May 30, 2000 and ending on
12January 1, 2008 (the effective date of Public Act 95-88).
13    (16) Computers and communications equipment utilized for
14any hospital purpose and equipment used in the diagnosis,
15analysis, or treatment of hospital patients sold to a lessor
16who leases the equipment, under a lease of one year or longer
17executed or in effect at the time of the purchase, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of the
20Retailers' Occupation Tax Act.
21    (17) Personal property sold to a lessor who leases the
22property, under a lease of one year or longer executed or in
23effect at the time of the purchase, to a governmental body that
24has been issued an active tax exemption identification number
25by the Department under Section 1g of the Retailers' Occupation
26Tax Act.

 

 

HB3268- 39 -LRB097 08272 KTG 48398 b

1    (18) Beginning with taxable years ending on or after
2December 31, 1995 and ending with taxable years ending on or
3before December 31, 2004, personal property that is donated for
4disaster relief to be used in a State or federally declared
5disaster area in Illinois or bordering Illinois by a
6manufacturer or retailer that is registered in this State to a
7corporation, society, association, foundation, or institution
8that has been issued a sales tax exemption identification
9number by the Department that assists victims of the disaster
10who reside within the declared disaster area.
11    (19) Beginning with taxable years ending on or after
12December 31, 1995 and ending with taxable years ending on or
13before December 31, 2004, personal property that is used in the
14performance of infrastructure repairs in this State, including
15but not limited to municipal roads and streets, access roads,
16bridges, sidewalks, waste disposal systems, water and sewer
17line extensions, water distribution and purification
18facilities, storm water drainage and retention facilities, and
19sewage treatment facilities, resulting from a State or
20federally declared disaster in Illinois or bordering Illinois
21when such repairs are initiated on facilities located in the
22declared disaster area within 6 months after the disaster.
23    (20) Beginning July 1, 1999, game or game birds sold at a
24"game breeding and hunting preserve area" or an "exotic game
25hunting area" as those terms are used in the Wildlife Code or
26at a hunting enclosure approved through rules adopted by the

 

 

HB3268- 40 -LRB097 08272 KTG 48398 b

1Department of Natural Resources. This paragraph is exempt from
2the provisions of Section 3-55.
3    (21) A motor vehicle, as that term is defined in Section
41-146 of the Illinois Vehicle Code, that is donated to a
5corporation, limited liability company, society, association,
6foundation, or institution that is determined by the Department
7to be organized and operated exclusively for educational
8purposes. For purposes of this exemption, "a corporation,
9limited liability company, society, association, foundation,
10or institution organized and operated exclusively for
11educational purposes" means all tax-supported public schools,
12private schools that offer systematic instruction in useful
13branches of learning by methods common to public schools and
14that compare favorably in their scope and intensity with the
15course of study presented in tax-supported schools, and
16vocational or technical schools or institutes organized and
17operated exclusively to provide a course of study of not less
18than 6 weeks duration and designed to prepare individuals to
19follow a trade or to pursue a manual, technical, mechanical,
20industrial, business, or commercial occupation.
21    (22) Beginning January 1, 2000, personal property,
22including food, purchased through fundraising events for the
23benefit of a public or private elementary or secondary school,
24a group of those schools, or one or more school districts if
25the events are sponsored by an entity recognized by the school
26district that consists primarily of volunteers and includes

 

 

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1parents and teachers of the school children. This paragraph
2does not apply to fundraising events (i) for the benefit of
3private home instruction or (ii) for which the fundraising
4entity purchases the personal property sold at the events from
5another individual or entity that sold the property for the
6purpose of resale by the fundraising entity and that profits
7from the sale to the fundraising entity. This paragraph is
8exempt from the provisions of Section 3-55.
9    (23) Beginning January 1, 2000 and through December 31,
102001, new or used automatic vending machines that prepare and
11serve hot food and beverages, including coffee, soup, and other
12items, and replacement parts for these machines. Beginning
13January 1, 2002 and through June 30, 2003, machines and parts
14for machines used in commercial, coin-operated amusement and
15vending business if a use or occupation tax is paid on the
16gross receipts derived from the use of the commercial,
17coin-operated amusement and vending machines. This paragraph
18is exempt from the provisions of Section 3-55.
19    (24) Beginning on the effective date of this amendatory Act
20of the 92nd General Assembly, computers and communications
21equipment utilized for any hospital purpose and equipment used
22in the diagnosis, analysis, or treatment of hospital patients
23sold to a lessor who leases the equipment, under a lease of one
24year or longer executed or in effect at the time of the
25purchase, to a hospital that has been issued an active tax
26exemption identification number by the Department under

 

 

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1Section 1g of the Retailers' Occupation Tax Act. This paragraph
2is exempt from the provisions of Section 3-55.
3    (25) Beginning on the effective date of this amendatory Act
4of the 92nd General Assembly, personal property sold to a
5lessor who leases the property, under a lease of one year or
6longer executed or in effect at the time of the purchase, to a
7governmental body that has been issued an active tax exemption
8identification number by the Department under Section 1g of the
9Retailers' Occupation Tax Act. This paragraph is exempt from
10the provisions of Section 3-55.
11    (26) Beginning on January 1, 2002 and through June 30,
122011, tangible personal property purchased from an Illinois
13retailer by a taxpayer engaged in centralized purchasing
14activities in Illinois who will, upon receipt of the property
15in Illinois, temporarily store the property in Illinois (i) for
16the purpose of subsequently transporting it outside this State
17for use or consumption thereafter solely outside this State or
18(ii) for the purpose of being processed, fabricated, or
19manufactured into, attached to, or incorporated into other
20tangible personal property to be transported outside this State
21and thereafter used or consumed solely outside this State. The
22Director of Revenue shall, pursuant to rules adopted in
23accordance with the Illinois Administrative Procedure Act,
24issue a permit to any taxpayer in good standing with the
25Department who is eligible for the exemption under this
26paragraph (26). The permit issued under this paragraph (26)

 

 

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1shall authorize the holder, to the extent and in the manner
2specified in the rules adopted under this Act, to purchase
3tangible personal property from a retailer exempt from the
4taxes imposed by this Act. Taxpayers shall maintain all
5necessary books and records to substantiate the use and
6consumption of all such tangible personal property outside of
7the State of Illinois.
8    (27) Beginning January 1, 2008, tangible personal property
9used in the construction or maintenance of a community water
10supply, as defined under Section 3.145 of the Environmental
11Protection Act, that is operated by a not-for-profit
12corporation that holds a valid water supply permit issued under
13Title IV of the Environmental Protection Act. This paragraph is
14exempt from the provisions of Section 3-55.
15    (28) Tangible personal property sold to a
16public-facilities corporation, as described in Section
1711-65-10 of the Illinois Municipal Code, for purposes of
18constructing or furnishing a municipal convention hall, but
19only if the legal title to the municipal convention hall is
20transferred to the municipality without any further
21consideration by or on behalf of the municipality at the time
22of the completion of the municipal convention hall or upon the
23retirement or redemption of any bonds or other debt instruments
24issued by the public-facilities corporation in connection with
25the development of the municipal convention hall. This
26exemption includes existing public-facilities corporations as

 

 

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1provided in Section 11-65-25 of the Illinois Municipal Code.
2This paragraph is exempt from the provisions of Section 3-55.
3    (29) Beginning January 1, 2010, materials, parts,
4equipment, components, and furnishings incorporated into or
5upon an aircraft as part of the modification, refurbishment,
6completion, replacement, repair, or maintenance of the
7aircraft. This exemption includes consumable supplies used in
8the modification, refurbishment, completion, replacement,
9repair, and maintenance of aircraft, but excludes any
10materials, parts, equipment, components, and consumable
11supplies used in the modification, replacement, repair, and
12maintenance of aircraft engines or power plants, whether such
13engines or power plants are installed or uninstalled upon any
14such aircraft. "Consumable supplies" include, but are not
15limited to, adhesive, tape, sandpaper, general purpose
16lubricants, cleaning solution, latex gloves, and protective
17films. This exemption applies only to those organizations that
18(i) hold an Air Agency Certificate and are empowered to operate
19an approved repair station by the Federal Aviation
20Administration, (ii) have a Class IV Rating, and (iii) conduct
21operations in accordance with Part 145 of the Federal Aviation
22Regulations. The exemption does not include aircraft operated
23by a commercial air carrier providing scheduled passenger air
24service pursuant to authority issued under Part 121 or Part 129
25of the Federal Aviation Regulations.
26    (30) Tangible personal property that (i) is not otherwise

 

 

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1exempt under this Section and (ii) is purchased by a veteran
2who is participating in the Soldiers to Farmers Program
3established under the Soldiers to Farmers Program Act for use
4in a farming or agricultural business operated by the veteran.
5The exemption under this item (30) shall extend for a period of
6not more than 5 years commencing on the date of enrollment of
7the veteran in the Program. No exemption for a veteran
8participating in the Program shall be claimed under this item
9(30) without an exemption certificate properly executed and
10furnished by the Department of Veterans' Affairs. This item
11(30) is exempt from the provisions of Section 3-55.
12(Source: P.A. 95-88, eff. 1-1-08; 95-538, eff. 1-1-08; 95-876,
13eff. 8-21-08; 96-116, eff. 7-31-09; 96-339, eff. 7-1-10;
1496-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff.
157-2-10.)
 
16    Section 30. The Retailers' Occupation Tax Act is amended by
17changing Section 2-5 as follows:
 
18    (35 ILCS 120/2-5)
19    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
20sale of the following tangible personal property are exempt
21from the tax imposed by this Act:
22    (1) Farm chemicals.
23    (2) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the

 

 

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1purchaser to be used primarily for production agriculture or
2State or federal agricultural programs, including individual
3replacement parts for the machinery and equipment, including
4machinery and equipment purchased for lease, and including
5implements of husbandry defined in Section 1-130 of the
6Illinois Vehicle Code, farm machinery and agricultural
7chemical and fertilizer spreaders, and nurse wagons required to
8be registered under Section 3-809 of the Illinois Vehicle Code,
9but excluding other motor vehicles required to be registered
10under the Illinois Vehicle Code. Horticultural polyhouses or
11hoop houses used for propagating, growing, or overwintering
12plants shall be considered farm machinery and equipment under
13this item (2). Agricultural chemical tender tanks and dry boxes
14shall include units sold separately from a motor vehicle
15required to be licensed and units sold mounted on a motor
16vehicle required to be licensed, if the selling price of the
17tender is separately stated.
18    Farm machinery and equipment shall include precision
19farming equipment that is installed or purchased to be
20installed on farm machinery and equipment including, but not
21limited to, tractors, harvesters, sprayers, planters, seeders,
22or spreaders. Precision farming equipment includes, but is not
23limited to, soil testing sensors, computers, monitors,
24software, global positioning and mapping systems, and other
25such equipment.
26    Farm machinery and equipment also includes computers,

 

 

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1sensors, software, and related equipment used primarily in the
2computer-assisted operation of production agriculture
3facilities, equipment, and activities such as, but not limited
4to, the collection, monitoring, and correlation of animal and
5crop data for the purpose of formulating animal diets and
6agricultural chemicals. This item (7) is exempt from the
7provisions of Section 2-70.
8    (3) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (4) Until July 1, 2003 and beginning again September 1,
152004 through August 30, 2014, graphic arts machinery and
16equipment, including repair and replacement parts, both new and
17used, and including that manufactured on special order or
18purchased for lease, certified by the purchaser to be used
19primarily for graphic arts production. Equipment includes
20chemicals or chemicals acting as catalysts but only if the
21chemicals or chemicals acting as catalysts effect a direct and
22immediate change upon a graphic arts product.
23    (5) A motor vehicle of the first division, a motor vehicle
24of the second division that is a self contained motor vehicle
25designed or permanently converted to provide living quarters
26for recreational, camping, or travel use, with direct walk

 

 

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1through access to the living quarters from the driver's seat,
2or a motor vehicle of the second division that is of the van
3configuration designed for the transportation of not less than
47 nor more than 16 passengers, as defined in Section 1-146 of
5the Illinois Vehicle Code, that is used for automobile renting,
6as defined in the Automobile Renting Occupation and Use Tax
7Act. This paragraph is exempt from the provisions of Section
82-70.
9    (6) Personal property sold by a teacher-sponsored student
10organization affiliated with an elementary or secondary school
11located in Illinois.
12    (7) Until July 1, 2003, proceeds of that portion of the
13selling price of a passenger car the sale of which is subject
14to the Replacement Vehicle Tax.
15    (8) Personal property sold to an Illinois county fair
16association for use in conducting, operating, or promoting the
17county fair.
18    (9) Personal property sold to a not-for-profit arts or
19cultural organization that establishes, by proof required by
20the Department by rule, that it has received an exemption under
21Section 501(c)(3) of the Internal Revenue Code and that is
22organized and operated primarily for the presentation or
23support of arts or cultural programming, activities, or
24services. These organizations include, but are not limited to,
25music and dramatic arts organizations such as symphony
26orchestras and theatrical groups, arts and cultural service

 

 

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1organizations, local arts councils, visual arts organizations,
2and media arts organizations. On and after the effective date
3of this amendatory Act of the 92nd General Assembly, however,
4an entity otherwise eligible for this exemption shall not make
5tax-free purchases unless it has an active identification
6number issued by the Department.
7    (10) Personal property sold by a corporation, society,
8association, foundation, institution, or organization, other
9than a limited liability company, that is organized and
10operated as a not-for-profit service enterprise for the benefit
11of persons 65 years of age or older if the personal property
12was not purchased by the enterprise for the purpose of resale
13by the enterprise.
14    (11) Personal property sold to a governmental body, to a
15corporation, society, association, foundation, or institution
16organized and operated exclusively for charitable, religious,
17or educational purposes, or to a not-for-profit corporation,
18society, association, foundation, institution, or organization
19that has no compensated officers or employees and that is
20organized and operated primarily for the recreation of persons
2155 years of age or older. A limited liability company may
22qualify for the exemption under this paragraph only if the
23limited liability company is organized and operated
24exclusively for educational purposes. On and after July 1,
251987, however, no entity otherwise eligible for this exemption
26shall make tax-free purchases unless it has an active

 

 

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1identification number issued by the Department.
2    (12) Tangible personal property sold to interstate
3carriers for hire for use as rolling stock moving in interstate
4commerce or to lessors under leases of one year or longer
5executed or in effect at the time of purchase by interstate
6carriers for hire for use as rolling stock moving in interstate
7commerce and equipment operated by a telecommunications
8provider, licensed as a common carrier by the Federal
9Communications Commission, which is permanently installed in
10or affixed to aircraft moving in interstate commerce.
11    (12-5) On and after July 1, 2003 and through June 30, 2004,
12motor vehicles of the second division with a gross vehicle
13weight in excess of 8,000 pounds that are subject to the
14commercial distribution fee imposed under Section 3-815.1 of
15the Illinois Vehicle Code. Beginning on July 1, 2004 and
16through June 30, 2005, the use in this State of motor vehicles
17of the second division: (i) with a gross vehicle weight rating
18in excess of 8,000 pounds; (ii) that are subject to the
19commercial distribution fee imposed under Section 3-815.1 of
20the Illinois Vehicle Code; and (iii) that are primarily used
21for commercial purposes. Through June 30, 2005, this exemption
22applies to repair and replacement parts added after the initial
23purchase of such a motor vehicle if that motor vehicle is used
24in a manner that would qualify for the rolling stock exemption
25otherwise provided for in this Act. For purposes of this
26paragraph, "used for commercial purposes" means the

 

 

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1transportation of persons or property in furtherance of any
2commercial or industrial enterprise whether for-hire or not.
3    (13) Proceeds from sales to owners, lessors, or shippers of
4tangible personal property that is utilized by interstate
5carriers for hire for use as rolling stock moving in interstate
6commerce and equipment operated by a telecommunications
7provider, licensed as a common carrier by the Federal
8Communications Commission, which is permanently installed in
9or affixed to aircraft moving in interstate commerce.
10    (14) Machinery and equipment that will be used by the
11purchaser, or a lessee of the purchaser, primarily in the
12process of manufacturing or assembling tangible personal
13property for wholesale or retail sale or lease, whether the
14sale or lease is made directly by the manufacturer or by some
15other person, whether the materials used in the process are
16owned by the manufacturer or some other person, or whether the
17sale or lease is made apart from or as an incident to the
18seller's engaging in the service occupation of producing
19machines, tools, dies, jigs, patterns, gauges, or other similar
20items of no commercial value on special order for a particular
21purchaser.
22    (15) Proceeds of mandatory service charges separately
23stated on customers' bills for purchase and consumption of food
24and beverages, to the extent that the proceeds of the service
25charge are in fact turned over as tips or as a substitute for
26tips to the employees who participate directly in preparing,

 

 

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1serving, hosting or cleaning up the food or beverage function
2with respect to which the service charge is imposed.
3    (16) Petroleum products sold to a purchaser if the seller
4is prohibited by federal law from charging tax to the
5purchaser.
6    (17) Tangible personal property sold to a common carrier by
7rail or motor that receives the physical possession of the
8property in Illinois and that transports the property, or
9shares with another common carrier in the transportation of the
10property, out of Illinois on a standard uniform bill of lading
11showing the seller of the property as the shipper or consignor
12of the property to a destination outside Illinois, for use
13outside Illinois.
14    (18) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (19) Until July 1 2003, oil field exploration, drilling,
19and production equipment, including (i) rigs and parts of rigs,
20rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
21tubular goods, including casing and drill strings, (iii) pumps
22and pump-jack units, (iv) storage tanks and flow lines, (v) any
23individual replacement part for oil field exploration,
24drilling, and production equipment, and (vi) machinery and
25equipment purchased for lease; but excluding motor vehicles
26required to be registered under the Illinois Vehicle Code.

 

 

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1    (20) Photoprocessing machinery and equipment, including
2repair and replacement parts, both new and used, including that
3manufactured on special order, certified by the purchaser to be
4used primarily for photoprocessing, and including
5photoprocessing machinery and equipment purchased for lease.
6    (21) Until July 1, 2003, coal exploration, mining,
7offhighway hauling, processing, maintenance, and reclamation
8equipment, including replacement parts and equipment, and
9including equipment purchased for lease, but excluding motor
10vehicles required to be registered under the Illinois Vehicle
11Code.
12    (22) Fuel and petroleum products sold to or used by an air
13carrier, certified by the carrier to be used for consumption,
14shipment, or storage in the conduct of its business as an air
15common carrier, for a flight destined for or returning from a
16location or locations outside the United States without regard
17to previous or subsequent domestic stopovers.
18    (23) A transaction in which the purchase order is received
19by a florist who is located outside Illinois, but who has a
20florist located in Illinois deliver the property to the
21purchaser or the purchaser's donee in Illinois.
22    (24) Fuel consumed or used in the operation of ships,
23barges, or vessels that are used primarily in or for the
24transportation of property or the conveyance of persons for
25hire on rivers bordering on this State if the fuel is delivered
26by the seller to the purchaser's barge, ship, or vessel while

 

 

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1it is afloat upon that bordering river.
2    (25) Except as provided in item (25-5) of this Section, a
3motor vehicle sold in this State to a nonresident even though
4the motor vehicle is delivered to the nonresident in this
5State, if the motor vehicle is not to be titled in this State,
6and if a drive-away permit is issued to the motor vehicle as
7provided in Section 3-603 of the Illinois Vehicle Code or if
8the nonresident purchaser has vehicle registration plates to
9transfer to the motor vehicle upon returning to his or her home
10state. The issuance of the drive-away permit or having the
11out-of-state registration plates to be transferred is prima
12facie evidence that the motor vehicle will not be titled in
13this State.
14    (25-5) The exemption under item (25) does not apply if the
15state in which the motor vehicle will be titled does not allow
16a reciprocal exemption for a motor vehicle sold and delivered
17in that state to an Illinois resident but titled in Illinois.
18The tax collected under this Act on the sale of a motor vehicle
19in this State to a resident of another state that does not
20allow a reciprocal exemption shall be imposed at a rate equal
21to the state's rate of tax on taxable property in the state in
22which the purchaser is a resident, except that the tax shall
23not exceed the tax that would otherwise be imposed under this
24Act. At the time of the sale, the purchaser shall execute a
25statement, signed under penalty of perjury, of his or her
26intent to title the vehicle in the state in which the purchaser

 

 

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1is a resident within 30 days after the sale and of the fact of
2the payment to the State of Illinois of tax in an amount
3equivalent to the state's rate of tax on taxable property in
4his or her state of residence and shall submit the statement to
5the appropriate tax collection agency in his or her state of
6residence. In addition, the retailer must retain a signed copy
7of the statement in his or her records. Nothing in this item
8shall be construed to require the removal of the vehicle from
9this state following the filing of an intent to title the
10vehicle in the purchaser's state of residence if the purchaser
11titles the vehicle in his or her state of residence within 30
12days after the date of sale. The tax collected under this Act
13in accordance with this item (25-5) shall be proportionately
14distributed as if the tax were collected at the 6.25% general
15rate imposed under this Act.
16    (25-7) Beginning on July 1, 2007, no tax is imposed under
17this Act on the sale of an aircraft, as defined in Section 3 of
18the Illinois Aeronautics Act, if all of the following
19conditions are met:
20        (1) the aircraft leaves this State within 15 days after
21    the later of either the issuance of the final billing for
22    the sale of the aircraft, or the authorized approval for
23    return to service, completion of the maintenance record
24    entry, and completion of the test flight and ground test
25    for inspection, as required by 14 C.F.R. 91.407;
26        (2) the aircraft is not based or registered in this

 

 

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1    State after the sale of the aircraft; and
2        (3) the seller retains in his or her books and records
3    and provides to the Department a signed and dated
4    certification from the purchaser, on a form prescribed by
5    the Department, certifying that the requirements of this
6    item (25-7) are met. The certificate must also include the
7    name and address of the purchaser, the address of the
8    location where the aircraft is to be titled or registered,
9    the address of the primary physical location of the
10    aircraft, and other information that the Department may
11    reasonably require.
12    For purposes of this item (25-7):
13    "Based in this State" means hangared, stored, or otherwise
14used, excluding post-sale customizations as defined in this
15Section, for 10 or more days in each 12-month period
16immediately following the date of the sale of the aircraft.
17    "Registered in this State" means an aircraft registered
18with the Department of Transportation, Aeronautics Division,
19or titled or registered with the Federal Aviation
20Administration to an address located in this State.
21    This paragraph (25-7) is exempt from the provisions of
22Section 2-70.
23    (26) Semen used for artificial insemination of livestock
24for direct agricultural production.
25    (27) Horses, or interests in horses, registered with and
26meeting the requirements of any of the Arabian Horse Club

 

 

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1Registry of America, Appaloosa Horse Club, American Quarter
2Horse Association, United States Trotting Association, or
3Jockey Club, as appropriate, used for purposes of breeding or
4racing for prizes. This item (27) is exempt from the provisions
5of Section 2-70, and the exemption provided for under this item
6(27) applies for all periods beginning May 30, 1995, but no
7claim for credit or refund is allowed on or after January 1,
82008 (the effective date of Public Act 95-88) for such taxes
9paid during the period beginning May 30, 2000 and ending on
10January 1, 2008 (the effective date of Public Act 95-88).
11    (28) Computers and communications equipment utilized for
12any hospital purpose and equipment used in the diagnosis,
13analysis, or treatment of hospital patients sold to a lessor
14who leases the equipment, under a lease of one year or longer
15executed or in effect at the time of the purchase, to a
16hospital that has been issued an active tax exemption
17identification number by the Department under Section 1g of
18this Act.
19    (29) Personal property sold to a lessor who leases the
20property, under a lease of one year or longer executed or in
21effect at the time of the purchase, to a governmental body that
22has been issued an active tax exemption identification number
23by the Department under Section 1g of this Act.
24    (30) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated for

 

 

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1disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (31) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in the
11performance of infrastructure repairs in this State, including
12but not limited to municipal roads and streets, access roads,
13bridges, sidewalks, waste disposal systems, water and sewer
14line extensions, water distribution and purification
15facilities, storm water drainage and retention facilities, and
16sewage treatment facilities, resulting from a State or
17federally declared disaster in Illinois or bordering Illinois
18when such repairs are initiated on facilities located in the
19declared disaster area within 6 months after the disaster.
20    (32) Beginning July 1, 1999, game or game birds sold at a
21"game breeding and hunting preserve area" or an "exotic game
22hunting area" as those terms are used in the Wildlife Code or
23at a hunting enclosure approved through rules adopted by the
24Department of Natural Resources. This paragraph is exempt from
25the provisions of Section 2-70.
26    (33) A motor vehicle, as that term is defined in Section

 

 

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11-146 of the Illinois Vehicle Code, that is donated to a
2corporation, limited liability company, society, association,
3foundation, or institution that is determined by the Department
4to be organized and operated exclusively for educational
5purposes. For purposes of this exemption, "a corporation,
6limited liability company, society, association, foundation,
7or institution organized and operated exclusively for
8educational purposes" means all tax-supported public schools,
9private schools that offer systematic instruction in useful
10branches of learning by methods common to public schools and
11that compare favorably in their scope and intensity with the
12course of study presented in tax-supported schools, and
13vocational or technical schools or institutes organized and
14operated exclusively to provide a course of study of not less
15than 6 weeks duration and designed to prepare individuals to
16follow a trade or to pursue a manual, technical, mechanical,
17industrial, business, or commercial occupation.
18    (34) Beginning January 1, 2000, personal property,
19including food, purchased through fundraising events for the
20benefit of a public or private elementary or secondary school,
21a group of those schools, or one or more school districts if
22the events are sponsored by an entity recognized by the school
23district that consists primarily of volunteers and includes
24parents and teachers of the school children. This paragraph
25does not apply to fundraising events (i) for the benefit of
26private home instruction or (ii) for which the fundraising

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 2-70.
6    (35) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and other
9items, and replacement parts for these machines. Beginning
10January 1, 2002 and through June 30, 2003, machines and parts
11for machines used in commercial, coin-operated amusement and
12vending business if a use or occupation tax is paid on the
13gross receipts derived from the use of the commercial,
14coin-operated amusement and vending machines. This paragraph
15is exempt from the provisions of Section 2-70.
16    (35-5) Beginning August 23, 2001 and through June 30, 2011,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages, soft
19drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or a licensed facility as defined in

 

 

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1the MR/DD Community Care Act.
2    (36) Beginning August 2, 2001, computers and
3communications equipment utilized for any hospital purpose and
4equipment used in the diagnosis, analysis, or treatment of
5hospital patients sold to a lessor who leases the equipment,
6under a lease of one year or longer executed or in effect at
7the time of the purchase, to a hospital that has been issued an
8active tax exemption identification number by the Department
9under Section 1g of this Act. This paragraph is exempt from the
10provisions of Section 2-70.
11    (37) Beginning August 2, 2001, personal property sold to a
12lessor who leases the property, under a lease of one year or
13longer executed or in effect at the time of the purchase, to a
14governmental body that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16this Act. This paragraph is exempt from the provisions of
17Section 2-70.
18    (38) Beginning on January 1, 2002 and through June 30,
192011, tangible personal property purchased from an Illinois
20retailer by a taxpayer engaged in centralized purchasing
21activities in Illinois who will, upon receipt of the property
22in Illinois, temporarily store the property in Illinois (i) for
23the purpose of subsequently transporting it outside this State
24for use or consumption thereafter solely outside this State or
25(ii) for the purpose of being processed, fabricated, or
26manufactured into, attached to, or incorporated into other

 

 

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1tangible personal property to be transported outside this State
2and thereafter used or consumed solely outside this State. The
3Director of Revenue shall, pursuant to rules adopted in
4accordance with the Illinois Administrative Procedure Act,
5issue a permit to any taxpayer in good standing with the
6Department who is eligible for the exemption under this
7paragraph (38). The permit issued under this paragraph (38)
8shall authorize the holder, to the extent and in the manner
9specified in the rules adopted under this Act, to purchase
10tangible personal property from a retailer exempt from the
11taxes imposed by this Act. Taxpayers shall maintain all
12necessary books and records to substantiate the use and
13consumption of all such tangible personal property outside of
14the State of Illinois.
15    (39) Beginning January 1, 2008, tangible personal property
16used in the construction or maintenance of a community water
17supply, as defined under Section 3.145 of the Environmental
18Protection Act, that is operated by a not-for-profit
19corporation that holds a valid water supply permit issued under
20Title IV of the Environmental Protection Act. This paragraph is
21exempt from the provisions of Section 2-70.
22    (40) Beginning January 1, 2010, materials, parts,
23equipment, components, and furnishings incorporated into or
24upon an aircraft as part of the modification, refurbishment,
25completion, replacement, repair, or maintenance of the
26aircraft. This exemption includes consumable supplies used in

 

 

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1the modification, refurbishment, completion, replacement,
2repair, and maintenance of aircraft, but excludes any
3materials, parts, equipment, components, and consumable
4supplies used in the modification, replacement, repair, and
5maintenance of aircraft engines or power plants, whether such
6engines or power plants are installed or uninstalled upon any
7such aircraft. "Consumable supplies" include, but are not
8limited to, adhesive, tape, sandpaper, general purpose
9lubricants, cleaning solution, latex gloves, and protective
10films. This exemption applies only to those organizations that
11(i) hold an Air Agency Certificate and are empowered to operate
12an approved repair station by the Federal Aviation
13Administration, (ii) have a Class IV Rating, and (iii) conduct
14operations in accordance with Part 145 of the Federal Aviation
15Regulations. The exemption does not include aircraft operated
16by a commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part 129
18of the Federal Aviation Regulations.
19    (41) Tangible personal property sold to a
20public-facilities corporation, as described in Section
2111-65-10 of the Illinois Municipal Code, for purposes of
22constructing or furnishing a municipal convention hall, but
23only if the legal title to the municipal convention hall is
24transferred to the municipality without any further
25consideration by or on behalf of the municipality at the time
26of the completion of the municipal convention hall or upon the

 

 

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1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 2-70.
7    (42) Tangible personal property that (i) is not otherwise
8exempt under this Section and (ii) is purchased by a veteran
9who is participating in the Soldiers to Farmers Program
10established under the Soldiers to Farmers Program Act for use
11in a farming or agricultural business operated by the veteran.
12The exemption under this item (42) shall extend for a period of
13not more than 5 years commencing on the date of enrollment of
14the veteran in the Program. No exemption for a veteran
15participating in the Program shall be claimed under this item
16(42) without an exemption certificate properly executed and
17furnished by the Department of Veterans' Affairs. This item
18(42) is exempt from the provisions of Section 2-70.
19(Source: P.A. 95-88, eff. 1-1-08; 95-233, eff. 8-16-07; 95-304,
20eff. 8-20-07; 95-538, eff. 1-1-08; 95-707, eff. 1-11-08;
2195-876, eff. 8-21-08; 96-116, eff. 7-31-09; 96-339, eff.
227-1-10; 96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000,
23eff. 7-2-10.)
 
24    Section 35. The Motor Fuel Tax Law is amended by changing
25Section 13 as follows:
 

 

 

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1    (35 ILCS 505/13)  (from Ch. 120, par. 429)
2    Sec. 13. Refund of tax paid. Any person other than a
3distributor or supplier, who loses motor fuel through any cause
4or uses motor fuel (upon which he has paid the amount required
5to be collected under Section 2 of this Act) for any purpose
6other than operating a motor vehicle upon the public highways
7or waters, shall be reimbursed and repaid the amount so paid.
8    Any person who purchases motor fuel in Illinois and uses
9that motor fuel in another state and that other state imposes a
10tax on the use of such motor fuel shall be reimbursed and
11repaid the amount of Illinois tax paid under Section 2 of this
12Act on the motor fuel used in such other state. Reimbursement
13and repayment shall be made by the Department upon receipt of
14adequate proof of taxes directly paid to another state and the
15amount of motor fuel used in that state.
16    Claims based in whole or in part on taxes paid to another
17state shall include (i) a certified copy of the tax return
18filed with such other state by the claimant; (ii) a copy of
19either the cancelled check paying the tax due on such return,
20or a receipt acknowledging payment of the tax due on such tax
21return; and (iii) such other information as the Department may
22reasonably require. This paragraph shall not apply to taxes
23paid on returns filed under Section 13a.3 of this Act.
24    Any person who purchases motor fuel use tax decals as
25required by Section 13a.4 and pays an amount of fees for such

 

 

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1decals that exceeds the amount due shall be reimbursed and
2repaid the amount of the decal fees that are deemed by the
3department to be in excess of the amount due.
4    Claims for such reimbursement must be made to the
5Department of Revenue, duly verified by the claimant (or by the
6claimant's legal representative if the claimant has died or
7become a person under legal disability), upon forms prescribed
8by the Department. The claim must state such facts relating to
9the purchase, importation, manufacture or production of the
10motor fuel by the claimant as the Department may deem
11necessary, and the time when, and the circumstances of its loss
12or the specific purpose for which it was used (as the case may
13be), together with such other information as the Department may
14reasonably require. No claim based upon idle time shall be
15allowed. Claims for reimbursement for overpayment of decal fees
16shall be made to the Department of Revenue, duly verified by
17the claimant (or by the claimant's legal representative if the
18claimant has died or become a person under legal disability),
19upon forms prescribed by the Department. The claim shall state
20facts relating to the overpayment of decal fees, together with
21such other information as the Department may reasonably
22require. Claims for reimbursement of overpayment of decal fees
23paid on or after January 1, 2011 must be filed not later than
24one year after the date on which the fees were paid by the
25claimant. If it is determined that the Department should
26reimburse a claimant for overpayment of decal fees, the

 

 

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1Department shall first apply the amount of such refund against
2any tax or penalty or interest due by the claimant under
3Section 13a of this Act.
4    Claims for full reimbursement for taxes paid on or before
5December 31, 1999 must be filed not later than one year after
6the date on which the tax was paid by the claimant. If,
7however, a claim for such reimbursement otherwise meeting the
8requirements of this Section is filed more than one year but
9less than 2 years after that date, the claimant shall be
10reimbursed at the rate of 80% of the amount to which he would
11have been entitled if his claim had been timely filed.
12    Claims for full reimbursement for taxes paid on or after
13January 1, 2000 must be filed not later than 2 years after the
14date on which the tax was paid by the claimant.
15    The Department may make such investigation of the
16correctness of the facts stated in such claims as it deems
17necessary. When the Department has approved any such claim, it
18shall pay to the claimant (or to the claimant's legal
19representative, as such if the claimant has died or become a
20person under legal disability) the reimbursement provided in
21this Section, out of any moneys appropriated to it for that
22purpose.
23    Any distributor or supplier who has paid the tax imposed by
24Section 2 of this Act upon motor fuel lost or used by such
25distributor or supplier for any purpose other than operating a
26motor vehicle upon the public highways or waters may file a

 

 

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1claim for credit or refund to recover the amount so paid. Such
2claims shall be filed on forms prescribed by the Department.
3Such claims shall be made to the Department, duly verified by
4the claimant (or by the claimant's legal representative if the
5claimant has died or become a person under legal disability),
6upon forms prescribed by the Department. The claim shall state
7such facts relating to the purchase, importation, manufacture
8or production of the motor fuel by the claimant as the
9Department may deem necessary and the time when the loss or
10nontaxable use occurred, and the circumstances of its loss or
11the specific purpose for which it was used (as the case may
12be), together with such other information as the Department may
13reasonably require. Claims must be filed not later than one
14year after the date on which the tax was paid by the claimant.
15    The Department may make such investigation of the
16correctness of the facts stated in such claims as it deems
17necessary. When the Department approves a claim, the Department
18shall issue a refund or credit memorandum as requested by the
19taxpayer, to the distributor or supplier who made the payment
20for which the refund or credit is being given or, if the
21distributor or supplier has died or become incompetent, to such
22distributor's or supplier's legal representative, as such. The
23amount of such credit memorandum shall be credited against any
24tax due or to become due under this Act from the distributor or
25supplier who made the payment for which credit has been given.
26    Any credit or refund that is allowed under this Section

 

 

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1shall bear interest at the rate and in the manner specified in
2the Uniform Penalty and Interest Act.
3    In case the distributor or supplier requests and the
4Department determines that the claimant is entitled to a
5refund, such refund shall be made only from such appropriation
6as may be available for that purpose. If it appears unlikely
7that the amount appropriated would permit everyone having a
8claim allowed during the period covered by such appropriation
9to elect to receive a cash refund, the Department, by rule or
10regulation, shall provide for the payment of refunds in
11hardship cases and shall define what types of cases qualify as
12hardship cases.
13    In any case in which there has been an erroneous refund of
14tax or fees payable under this Section, a notice of tax
15liability may be issued at any time within 3 years from the
16making of that refund, or within 5 years from the making of
17that refund if it appears that any part of the refund was
18induced by fraud or the misrepresentation of material fact. The
19amount of any proposed assessment set forth by the Department
20shall be limited to the amount of the erroneous refund.
21    If no tax is due and no proceeding is pending to determine
22whether such distributor or supplier is indebted to the
23Department for tax, the credit memorandum so issued may be
24assigned and set over by the lawful holder thereof, subject to
25reasonable rules of the Department, to any other licensed
26distributor or supplier who is subject to this Act, and the

 

 

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1amount thereof applied by the Department against any tax due or
2to become due under this Act from such assignee.
3    If the payment for which the distributor's or supplier's
4claim is filed is held in the protest fund of the State
5Treasury during the pendency of the claim for credit
6proceedings pursuant to the order of the court in accordance
7with Section 2a of the State Officers and Employees Money
8Disposition Act and if it is determined by the Department or by
9the final order of a reviewing court under the Administrative
10Review Law that the claimant is entitled to all or a part of
11the credit claimed, the claimant, instead of receiving a credit
12memorandum from the Department, shall receive a cash refund
13from the protest fund as provided for in Section 2a of the
14State Officers and Employees Money Disposition Act.
15    If any person ceases to be licensed as a distributor or
16supplier while still holding an unused credit memorandum issued
17under this Act, such person may, at his election (instead of
18assigning the credit memorandum to a licensed distributor or
19licensed supplier under this Act), surrender such unused credit
20memorandum to the Department and receive a refund of the amount
21to which such person is entitled.
22    For claims based upon taxes paid on or before December 31,
232000, a claim based upon the use of undyed diesel fuel shall
24not be allowed except (i) if allowed under the following
25paragraph or (ii) for undyed diesel fuel used by a commercial
26vehicle, as that term is defined in Section 1-111.8 of the

 

 

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1Illinois Vehicle Code, for any purpose other than operating the
2commercial vehicle upon the public highways and unlicensed
3commercial vehicles operating on private property. Claims
4shall be limited to commercial vehicles that are operated for
5both highway purposes and any purposes other than operating
6such vehicles upon the public highways.
7    For claims based upon taxes paid on or after January 1,
82000, a claim based upon the use of undyed diesel fuel shall
9not be allowed except (i) if allowed under the preceding
10paragraph or (ii) for claims for the following:
11        (1) Undyed diesel fuel used (i) in a manufacturing
12    process, as defined in Section 2-45 of the Retailers'
13    Occupation Tax Act, wherein the undyed diesel fuel becomes
14    a component part of a product or by-product, other than
15    fuel or motor fuel, when the use of dyed diesel fuel in
16    that manufacturing process results in a product that is
17    unsuitable for its intended use or (ii) for testing
18    machinery and equipment in a manufacturing process, as
19    defined in Section 2-45 of the Retailers' Occupation Tax
20    Act, wherein the testing takes place on private property.
21        (2) Undyed diesel fuel used by a manufacturer on
22    private property in the research and development, as
23    defined in Section 1.29, of machinery or equipment intended
24    for manufacture.
25        (3) Undyed diesel fuel used by a single unit
26    self-propelled agricultural fertilizer implement, designed

 

 

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1    for on and off road use, equipped with flotation tires and
2    specially adapted for the application of plant food
3    materials or agricultural chemicals.
4        (4) Undyed diesel fuel used by a commercial motor
5    vehicle for any purpose other than operating the commercial
6    motor vehicle upon the public highways. Claims shall be
7    limited to commercial motor vehicles that are operated for
8    both highway purposes and any purposes other than operating
9    such vehicles upon the public highways.
10        (5) Undyed diesel fuel used by a unit of local
11    government in its operation of an airport if the undyed
12    diesel fuel is used directly in airport operations on
13    airport property.
14        (6) Undyed diesel fuel used by refrigeration units that
15    are permanently mounted to a semitrailer, as defined in
16    Section 1.28 of this Law, wherein the refrigeration units
17    have a fuel supply system dedicated solely for the
18    operation of the refrigeration units.
19        (7) Undyed diesel fuel used by power take-off equipment
20    as defined in Section 1.27 of this Law.
21        (8) Beginning on the effective date of this amendatory
22    Act of the 94th General Assembly, undyed diesel fuel used
23    by tugs and spotter equipment to shift vehicles or parcels
24    on both private and airport property. Any claim under this
25    item (8) may be made only by a claimant that owns tugs and
26    spotter equipment and operates that equipment on both

 

 

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1    private and airport property. The aggregate of all credits
2    or refunds resulting from claims filed under this item (8)
3    by a claimant in any calendar year may not exceed $100,000.
4    A claim may not be made under this item (8) by the same
5    claimant more often than once each quarter. For the
6    purposes of this item (8), "tug" means a vehicle designed
7    for use on airport property that shifts custom-designed
8    containers of parcels from loading docks to aircraft, and
9    "spotter equipment" means a vehicle designed for use on
10    both private and airport property that shifts trailers
11    containing parcels between staging areas and loading
12    docks.
13        (9) Undyed diesel fuel that (i) is not otherwise
14    eligible for a claim under this Section and (ii) is
15    purchased by a veteran who is participating in the Soldiers
16    to Farmers Program established under the Soldiers to
17    Farmers Program Act for use in a farming or agricultural
18    business operated by the veteran. Claims may be made under
19    this item (9) for a period of not more than 5 years
20    commencing on the date of enrollment of the veteran in the
21    Program. No claim by a veteran participating in the Program
22    shall be made under this item (9) without a certificate
23    properly executed and furnished by the Department of
24    Veterans' Affairs.
25    Any person who has paid the tax imposed by Section 2 of
26this Law upon undyed diesel fuel that is unintentionally mixed

 

 

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1with dyed diesel fuel and who owns or controls the mixture of
2undyed diesel fuel and dyed diesel fuel may file a claim for
3refund to recover the amount paid. The amount of undyed diesel
4fuel unintentionally mixed must equal 500 gallons or more. Any
5claim for refund of unintentionally mixed undyed diesel fuel
6and dyed diesel fuel shall be supported by documentation
7showing the date and location of the unintentional mixing, the
8number of gallons involved, the disposition of the mixed diesel
9fuel, and any other information that the Department may
10reasonably require. Any unintentional mixture of undyed diesel
11fuel and dyed diesel fuel shall be sold or used only for
12non-highway purposes.
13    The Department shall promulgate regulations establishing
14specific limits on the amount of undyed diesel fuel that may be
15claimed for refund.
16    For purposes of claims for refund, "loss" means the
17reduction of motor fuel resulting from fire, theft, spillage,
18spoilage, leakage, or any other provable cause, but does not
19include a reduction resulting from evaporation, or shrinkage
20due to temperature variations. In the case of losses due to
21fire or theft, the claimant must include fire department or
22police department reports and any other documentation that the
23Department may require.
24(Source: P.A. 96-1384, eff. 7-29-10.)