Full Text of SB1248 95th General Assembly
SB1248ham001 95TH GENERAL ASSEMBLY
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Revenue Committee
Adopted in House Comm. on May 28, 2008
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09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
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| AMENDMENT TO SENATE BILL 1248
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| AMENDMENT NO. ______. Amend Senate Bill 1248 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Use Tax Act is amended by changing Section | 5 |
| 3-50 as follows:
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| (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
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| Sec. 3-50. Manufacturing and assembly exemption. The | 8 |
| manufacturing
and assembling machinery and equipment exemption | 9 |
| includes
machinery and equipment that replaces machinery and | 10 |
| equipment in an
existing manufacturing facility as well as | 11 |
| machinery and equipment that
are for use in an expanded or new | 12 |
| manufacturing facility. The machinery and
equipment exemption | 13 |
| also includes machinery and equipment used in the
general | 14 |
| maintenance or repair of exempt machinery and equipment or for
| 15 |
| in-house manufacture of exempt machinery and equipment. For the
| 16 |
| purposes of this exemption, terms have the following
meanings:
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LRB095 07862 HLH 51423 a |
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| (1) "Manufacturing process" means the production of
an | 2 |
| article of tangible personal property, whether the article
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| is a finished product or an article for use in the process | 4 |
| of manufacturing
or assembling a different article of | 5 |
| tangible personal property, by
a procedure commonly | 6 |
| regarded as manufacturing, processing, fabricating, or
| 7 |
| refining that changes some existing material into a | 8 |
| material
with a different form, use, or name. In relation | 9 |
| to a recognized integrated
business composed of a series of | 10 |
| operations that collectively constitute
manufacturing, or | 11 |
| individually constitute
manufacturing operations, the | 12 |
| manufacturing process commences with the
first operation | 13 |
| or stage of production in the series
and does not end until | 14 |
| the completion of the final product
in the last operation | 15 |
| or stage of production in the series. For purposes
of this | 16 |
| exemption, photoprocessing is a
manufacturing process of | 17 |
| tangible personal property for wholesale or retail
sale.
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| (2) "Assembling process" means the production of
an | 19 |
| article of tangible personal property, whether the article
| 20 |
| is a finished product or an article for use in the process | 21 |
| of manufacturing
or assembling a different article of | 22 |
| tangible personal property, by the
combination of existing | 23 |
| materials in a manner commonly regarded as
assembling that | 24 |
| results in an article or material of a different
form, use, | 25 |
| or name.
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| (3) "Machinery" means major
mechanical machines or |
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LRB095 07862 HLH 51423 a |
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| major components of those machines contributing to a
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| manufacturing or assembling process.
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| (4) "Equipment" includes an independent device
or tool | 4 |
| separate from machinery but essential to an integrated
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| manufacturing or assembly process; including computers | 6 |
| used primarily in
a manufacturer's computer assisted | 7 |
| design,
computer assisted manufacturing (CAD/CAM) system; | 8 |
| any
subunit or assembly comprising a component of any | 9 |
| machinery or auxiliary,
adjunct, or attachment parts of | 10 |
| machinery, such as tools, dies, jigs,
fixtures, patterns, | 11 |
| and molds; and any parts that require
periodic replacement | 12 |
| in the course of normal operation; but does not
include | 13 |
| hand tools. Equipment includes chemicals or chemicals | 14 |
| acting as
catalysts but only if
the chemicals or chemicals | 15 |
| acting as catalysts effect a direct and
immediate change | 16 |
| upon a
product being manufactured or assembled for | 17 |
| wholesale or retail sale or
lease. | 18 |
| (5) "Production related tangible personal property" | 19 |
| means all tangible personal property that is used or | 20 |
| consumed by the purchaser in a manufacturing facility in | 21 |
| which a manufacturing process takes place and includes, | 22 |
| without limitation, tangible personal property that is | 23 |
| purchased for incorporation into real estate within a | 24 |
| manufacturing facility and tangible personal property that | 25 |
| is used or consumed in activities such as research and | 26 |
| development, preproduction material handling, receiving, |
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LRB095 07862 HLH 51423 a |
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| quality control, inventory control, storage, staging, and | 2 |
| packaging for shipping and transportation purposes. | 3 |
| "Production related tangible personal property" does not | 4 |
| include (i) tangible personal property that is used, within | 5 |
| or without a manufacturing facility, in sales, purchasing, | 6 |
| accounting, fiscal management, marketing, personnel | 7 |
| recruitment or selection, or landscaping or (ii) tangible | 8 |
| personal property that is required to be titled or | 9 |
| registered with a department, agency, or unit of federal, | 10 |
| State, or local government.
| 11 |
| The manufacturing and assembling machinery and equipment | 12 |
| exemption includes production related tangible personal | 13 |
| property that is purchased on or after July 1, 2007 and on or | 14 |
| before June 30, 2008. This use tax The exemption for production | 15 |
| related tangible personal property shall be awarded to the | 16 |
| taxpayer in the form of a credit memorandum issued by the | 17 |
| Department and is subject to both of the following limitations: | 18 |
| (1) Purchases of production related tangible personal | 19 |
| property made on or after July 1, 2007 and on or before | 20 |
| June 30, 2008 are eligible for a credit memorandum equal to | 21 |
| The maximum amount of the exemption for any one taxpayer | 22 |
| may not exceed 5% of the purchase price of the production | 23 |
| related tangible personal property that is purchased on or | 24 |
| after July 1, 2007 and on or before June 30, 2008 . A credit | 25 |
| under Section 3-85 of this Act may not be earned by the | 26 |
| purchase of production related tangible personal property |
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LRB095 07862 HLH 51423 a |
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| for which a credit memorandum an exemption is received | 2 |
| under this Section. | 3 |
| (2) The maximum aggregate amount of credit memorandums | 4 |
| the exemptions for production related tangible personal | 5 |
| property awarded under this Act and the Retailers' | 6 |
| Occupation Tax Act to all taxpayers may not exceed | 7 |
| $10,000,000. If the claims for the credit memorandums | 8 |
| exemption exceed $10,000,000, then the Department shall | 9 |
| reduce the amount of the credit memorandum exemption to | 10 |
| each taxpayer on a pro rata basis. | 11 |
| By February 28, 2009, the Department shall provide a report | 12 |
| to the General Assembly that indicates (i) the amount of | 13 |
| production related tangible personal property purchased | 14 |
| between July 1, 2007 and June 30, 2008 and reported to the | 15 |
| Department for purposes of this exemption, (ii) the amount of | 16 |
| credit memorandums issued, and (iii) the estimated impact of | 17 |
| providing an exemption for production related tangible | 18 |
| personal property from use and occupation taxes. | 19 |
| The Department may adopt rules to implement and administer the | 20 |
| exemption for production related tangible personal property. | 21 |
| The manufacturing and assembling machinery and equipment
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| exemption includes the sale of materials to a purchaser who
| 23 |
| produces exempted types of machinery, equipment, or tools and | 24 |
| who rents or
leases that machinery, equipment, or tools to a
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| manufacturer of tangible
personal property. This exemption | 26 |
| also includes the sale of materials to a
purchaser who |
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LRB095 07862 HLH 51423 a |
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| manufactures those materials into an exempted type of
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| machinery, equipment, or tools that the purchaser uses
himself | 3 |
| or herself in the
manufacturing of tangible personal property. | 4 |
| This exemption includes the
sale of exempted types of machinery | 5 |
| or equipment to a
purchaser who is not the manufacturer, but | 6 |
| who rents or leases the use of
the property to a manufacturer. | 7 |
| The purchaser of the machinery and
equipment who has an active | 8 |
| resale registration number shall
furnish that number to the | 9 |
| seller at the time of purchase.
A user of the machinery, | 10 |
| equipment, or tools without an
active resale registration | 11 |
| number shall prepare a certificate of exemption
for each | 12 |
| transaction stating facts establishing the exemption for that
| 13 |
| transaction, and that certificate shall be
available to the | 14 |
| Department for inspection or audit. The Department shall
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| prescribe the form of the certificate. Informal rulings, | 16 |
| opinions, or
letters issued by the Department in
response to an | 17 |
| inquiry or request for an opinion from any person
regarding the | 18 |
| coverage and applicability of this exemption to specific
| 19 |
| devices shall be published, maintained as a public record, and | 20 |
| made
available for public inspection and copying. If the | 21 |
| informal ruling,
opinion, or letter contains trade secrets or | 22 |
| other confidential
information, where possible, the Department | 23 |
| shall delete that information
before publication. Whenever | 24 |
| informal rulings, opinions, or
letters contain a policy of | 25 |
| general applicability, the Department
shall formulate and | 26 |
| adopt that policy as a rule in accordance with the
Illinois |
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LRB095 07862 HLH 51423 a |
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| Administrative Procedure Act.
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| Notwithstanding any other rulemaking authority that may | 3 |
| exist, neither the Governor nor any agency or agency head under | 4 |
| the jurisdiction of the Governor has any authority to make or | 5 |
| promulgate rules to implement or enforce the provisions of this | 6 |
| amendatory Act of the 95th General Assembly. If, however, the | 7 |
| Governor believes that rules are necessary to implement or | 8 |
| enforce the provisions of this amendatory Act of the 95th | 9 |
| General Assembly, the Governor may suggest rules to the General | 10 |
| Assembly by filing them with the Clerk of the House and the | 11 |
| Secretary of the Senate and by requesting that the General | 12 |
| Assembly authorize such rulemaking by law, enact those | 13 |
| suggested rules into law, or take any other appropriate action | 14 |
| in the General Assembly's discretion. Nothing contained in this | 15 |
| amendatory Act of the 95th General Assembly shall be | 16 |
| interpreted to grant rulemaking authority under any other | 17 |
| Illinois statute where such authority is not otherwise | 18 |
| explicitly given. For the purposes of this paragraph, "rules" | 19 |
| is given the meaning contained in Section 1-70 of the Illinois | 20 |
| Administrative Procedure Act, and "agency" and "agency head" | 21 |
| are given the meanings contained in Sections 1-20 and 1-25 of | 22 |
| the Illinois Administrative Procedure Act to the extent that | 23 |
| such definitions apply to agencies or agency heads under the | 24 |
| jurisdiction of the Governor. | 25 |
| (Source: P.A. 95-707, eff. 1-11-08.)
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09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
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| Section 10. The Retailers' Occupation Tax Act is amended by | 2 |
| changing Section 2-45 as follows:
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| (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
| 4 |
| Sec. 2-45. Manufacturing and assembly exemption. The | 5 |
| manufacturing
and assembly machinery and equipment exemption | 6 |
| includes machinery
and equipment that replaces machinery
and | 7 |
| equipment in an existing manufacturing facility as well as | 8 |
| machinery
and equipment that are for use in an expanded or new
| 9 |
| manufacturing facility.
| 10 |
| The machinery and equipment exemption also includes | 11 |
| machinery
and equipment used in the
general maintenance or | 12 |
| repair of exempt machinery and equipment or for
in-house | 13 |
| manufacture of exempt machinery and equipment.
For the purposes | 14 |
| of this exemption, terms have the following meanings:
| 15 |
| (1) "Manufacturing process" means the production of an | 16 |
| article of
tangible personal property, whether the article | 17 |
| is a finished product or an
article for use in the process | 18 |
| of manufacturing or assembling a different
article of | 19 |
| tangible personal property, by a procedure commonly | 20 |
| regarded as
manufacturing, processing, fabricating, or | 21 |
| refining that changes some
existing material or materials | 22 |
| into a material with a different form, use,
or name. In | 23 |
| relation to a recognized integrated business composed of a
| 24 |
| series of operations that collectively constitute | 25 |
| manufacturing, or
individually constitute manufacturing |
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09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
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| operations, the manufacturing process
commences with the | 2 |
| first operation or stage of production in the series and
| 3 |
| does not end until the completion of the final product in | 4 |
| the last
operation or stage of production in the series. | 5 |
| For purposes of this
exemption, photoprocessing is a | 6 |
| manufacturing process of tangible personal
property for | 7 |
| wholesale or retail sale.
| 8 |
| (2) "Assembling process" means the production of an | 9 |
| article of
tangible personal property, whether the article | 10 |
| is a finished product or an
article for use in the process | 11 |
| of manufacturing or assembling a different
article of | 12 |
| tangible personal property, by the combination of existing
| 13 |
| materials in a manner commonly regarded as assembling that | 14 |
| results in a
material of a different form, use, or name.
| 15 |
| (3) "Machinery" means major mechanical machines or | 16 |
| major components of
those machines contributing to a | 17 |
| manufacturing or assembling process.
| 18 |
| (4) "Equipment" includes an independent device or tool | 19 |
| separate from
machinery but essential to an integrated | 20 |
| manufacturing or assembly process;
including computers | 21 |
| used primarily in a manufacturer's computer assisted | 22 |
| design, computer assisted manufacturing
(CAD/CAM) system; | 23 |
| any subunit or assembly comprising a component of any
| 24 |
| machinery or auxiliary, adjunct, or attachment parts of | 25 |
| machinery, such as
tools, dies, jigs, fixtures, patterns, | 26 |
| and molds; and any parts that
require periodic replacement |
|
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|
09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
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| 1 |
| in the course of normal operation; but does
not include | 2 |
| hand tools. Equipment includes chemicals or chemicals | 3 |
| acting as
catalysts but only if
the chemicals or chemicals | 4 |
| acting as catalysts effect a direct and
immediate change | 5 |
| upon a
product being manufactured or assembled for | 6 |
| wholesale or retail sale or
lease.
| 7 |
| (5) "Production related tangible personal property" | 8 |
| means all tangible personal property that is used or | 9 |
| consumed by the purchaser in a manufacturing facility in | 10 |
| which a manufacturing process takes place and includes, | 11 |
| without limitation, tangible personal property that is | 12 |
| purchased for incorporation into real estate within a | 13 |
| manufacturing facility and tangible personal property that | 14 |
| is used or consumed in activities such as research and | 15 |
| development, preproduction material handling, receiving, | 16 |
| quality control, inventory control, storage, staging, and | 17 |
| packaging for shipping and transportation purposes. | 18 |
| "Production related tangible personal property" does not | 19 |
| include (i) tangible personal property that is used, within | 20 |
| or without a manufacturing facility, in sales, purchasing, | 21 |
| accounting, fiscal management, marketing, personnel | 22 |
| recruitment or selection, or landscaping or (ii) tangible | 23 |
| personal property that is required to be titled or | 24 |
| registered with a department, agency, or unit of federal, | 25 |
| State, or local government.
| 26 |
| The manufacturing and assembling machinery and equipment |
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09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
|
| 1 |
| exemption includes production related tangible personal | 2 |
| property that is purchased on or after July 1, 2007 and on or | 3 |
| before June 30, 2008. The exemption for production related | 4 |
| tangible personal property is subject to both of the following | 5 |
| limitations: | 6 |
| (1) The maximum amount of the exemption for any one | 7 |
| taxpayer may not exceed 5% of the purchase price of | 8 |
| production related tangible personal property that is | 9 |
| purchased on or after July 1, 2007 and on or before June | 10 |
| 30, 2008. A credit under Section 3-85 of this Act may not | 11 |
| be earned by the purchase of production related tangible | 12 |
| personal property for which an exemption is received under | 13 |
| this Section. | 14 |
| (2) The maximum aggregate amount of the exemptions for | 15 |
| production related tangible personal property awarded | 16 |
| under this Act and the Retailers' Occupation Tax Act to all | 17 |
| taxpayers may not exceed $10,000,000. If the claims for the | 18 |
| exemption exceed $10,000,000, then the Department shall | 19 |
| reduce the amount of the exemption to each taxpayer on a | 20 |
| pro rata basis. | 21 |
| The Department may adopt rules to implement and administer the | 22 |
| exemption for production related tangible personal property. | 23 |
| The manufacturing and assembling machinery and equipment | 24 |
| exemption
includes the sale of materials to a purchaser who | 25 |
| produces exempted types
of machinery, equipment, or tools and | 26 |
| who rents or leases that machinery,
equipment, or tools to a |
|
|
|
09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
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| 1 |
| manufacturer of tangible personal property. This
exemption | 2 |
| also includes the sale of materials to a purchaser who | 3 |
| manufactures
those materials into an exempted type of | 4 |
| machinery, equipment, or tools
that the purchaser uses himself | 5 |
| or herself in the manufacturing of tangible
personal property. | 6 |
| The purchaser of the machinery and equipment who has an
active | 7 |
| resale registration number shall furnish that number to the | 8 |
| seller
at the time of purchase. A purchaser of the machinery, | 9 |
| equipment, and
tools without an active resale registration | 10 |
| number shall furnish to the
seller a certificate of exemption | 11 |
| for each transaction stating facts
establishing the exemption | 12 |
| for that transaction, and that certificate shall
be available | 13 |
| to the Department for inspection or audit. Informal
rulings, | 14 |
| opinions, or letters issued by the Department in response to an
| 15 |
| inquiry or request for an opinion from any person regarding the | 16 |
| coverage and
applicability of this exemption to specific | 17 |
| devices shall be published,
maintained as a public record,
and | 18 |
| made available for public inspection and copying. If the | 19 |
| informal
ruling, opinion, or letter contains trade secrets or | 20 |
| other confidential
information, where possible, the Department | 21 |
| shall delete that information
before publication. Whenever | 22 |
| informal rulings, opinions, or letters
contain a policy of | 23 |
| general applicability, the Department shall
formulate and | 24 |
| adopt that policy as a rule in accordance with the Illinois
| 25 |
| Administrative Procedure Act.
| 26 |
| Notwithstanding any other rulemaking authority that may |
|
|
|
09500SB1248ham001 |
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LRB095 07862 HLH 51423 a |
|
| 1 |
| exist, neither the Governor nor any agency or agency head under | 2 |
| the jurisdiction of the Governor has any authority to make or | 3 |
| promulgate rules to implement or enforce the provisions of this | 4 |
| amendatory Act of the 95th General Assembly. If, however, the | 5 |
| Governor believes that rules are necessary to implement or | 6 |
| enforce the provisions of this amendatory Act of the 95th | 7 |
| General Assembly, the Governor may suggest rules to the General | 8 |
| Assembly by filing them with the Clerk of the House and the | 9 |
| Secretary of the Senate and by requesting that the General | 10 |
| Assembly authorize such rulemaking by law, enact those | 11 |
| suggested rules into law, or take any other appropriate action | 12 |
| in the General Assembly's discretion. Nothing contained in this | 13 |
| amendatory Act of the 95th General Assembly shall be | 14 |
| interpreted to grant rulemaking authority under any other | 15 |
| Illinois statute where such authority is not otherwise | 16 |
| explicitly given. For the purposes of this paragraph, "rules" | 17 |
| is given the meaning contained in Section 1-70 of the Illinois | 18 |
| Administrative Procedure Act, and "agency" and "agency head" | 19 |
| are given the meanings contained in Sections 1-20 and 1-25 of | 20 |
| the Illinois Administrative Procedure Act to the extent that | 21 |
| such definitions apply to agencies or agency heads under the | 22 |
| jurisdiction of the Governor. | 23 |
| (Source: P.A. 95-707, eff. 1-11-08.)
| 24 |
| Section 99. Effective date. This Act takes effect upon | 25 |
| becoming law.".
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