State of Illinois
91st General Assembly
Legislation

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91_HB1389

 
                                               LRB9101693PTpk

 1        AN ACT concerning taxation.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Use  Tax  Act  is  amended by changing
 5    Section 3-5 as follows:

 6        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 7        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
 8    personal property is exempt from the tax imposed by this Act:
 9        (1)  Personal  property  purchased  from  a  corporation,
10    society,    association,    foundation,    institution,    or
11    organization, other than a limited liability company, that is
12    organized and operated as a not-for-profit service enterprise
13    for  the  benefit  of persons 65 years of age or older if the
14    personal property was not purchased by the enterprise for the
15    purpose of resale by the enterprise.
16        (2)  Personal  property  purchased  by  a  not-for-profit
17    Illinois county  fair  association  for  use  in  conducting,
18    operating, or promoting the county fair.
19        (3)  Personal  property  purchased  by  a  not-for-profit
20    music  or  dramatic  arts  organization  that establishes, by
21    proof required  by  the  Department  by  rule,  that  it  has
22    received an exemption under Section 501(c)(3) of the Internal
23    Revenue  Code  and  that  is  organized  and operated for the
24    presentation  of  live  public  performances  of  musical  or
25    theatrical works on a regular basis.
26        (4)  Personal property purchased by a governmental  body,
27    by   a  corporation,  society,  association,  foundation,  or
28    institution   organized   and   operated   exclusively    for
29    charitable,  religious,  or  educational  purposes,  or  by a
30    not-for-profit corporation, society, association, foundation,
31    institution, or organization that has no compensated officers
 
                            -2-                LRB9101693PTpk
 1    or employees and that is organized and operated primarily for
 2    the recreation of persons 55 years of age or older. A limited
 3    liability company may qualify for the  exemption  under  this
 4    paragraph  only if the limited liability company is organized
 5    and operated exclusively for  educational  purposes.  On  and
 6    after July 1, 1987, however, no entity otherwise eligible for
 7    this exemption shall make tax-free purchases unless it has an
 8    active   exemption   identification   number  issued  by  the
 9    Department.
10        (5)  A passenger car that is a replacement vehicle to the
11    extent that the purchase price of the car is subject  to  the
12    Replacement Vehicle Tax.
13        (6)  Graphic  arts  machinery  and  equipment,  including
14    repair   and  replacement  parts,  both  new  and  used,  and
15    including that manufactured on special  order,  certified  by
16    the   purchaser   to  be  used  primarily  for  graphic  arts
17    production, and including machinery and  equipment  purchased
18    for lease.
19        (7)  Farm chemicals.
20        (8)  Legal  tender,  currency,  medallions,  or  gold  or
21    silver   coinage   issued  by  the  State  of  Illinois,  the
22    government of the United States of America, or the government
23    of any foreign country, and bullion.
24        (9)  Personal property purchased from a teacher-sponsored
25    student  organization  affiliated  with  an   elementary   or
26    secondary school located in Illinois.
27        (10)  A  motor  vehicle  of  the  first division, a motor
28    vehicle of the second division that is a self-contained motor
29    vehicle designed or permanently converted to  provide  living
30    quarters  for  recreational,  camping,  or  travel  use, with
31    direct walk through to the living quarters from the  driver's
32    seat,  or  a  motor vehicle of the second division that is of
33    the van configuration designed for the transportation of  not
34    less  than  7  nor  more  than  16  passengers, as defined in
 
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 1    Section 1-146 of the Illinois Vehicle Code, that is used  for
 2    automobile  renting,  as  defined  in  the Automobile Renting
 3    Occupation and Use Tax Act.
 4        (11)  Farm machinery and equipment, both  new  and  used,
 5    including  that  manufactured  on special order, certified by
 6    the purchaser to be used primarily for production agriculture
 7    or  State  or  federal   agricultural   programs,   including
 8    individual replacement parts for the machinery and equipment,
 9    including  machinery  and  equipment purchased for lease, and
10    including implements of husbandry defined in Section 1-130 of
11    the Illinois Vehicle Code, farm  machinery  and  agricultural
12    chemical  and fertilizer spreaders, and nurse wagons required
13    to be registered under Section 3-809 of the Illinois  Vehicle
14    Code,  but  excluding  other  motor  vehicles  required to be
15    registered under the  Illinois  Vehicle  Code.  Horticultural
16    polyhouses  or  hoop houses used for propagating, growing, or
17    overwintering plants shall be considered farm  machinery  and
18    equipment  under this item (11). Agricultural chemical tender
19    tanks and dry boxes shall include units sold separately  from
20    a  motor  vehicle  required  to  be  licensed  and units sold
21    mounted on a motor vehicle required to  be  licensed  if  the
22    selling price of the tender is separately stated.
23        Farm  machinery  and  equipment  shall  include precision
24    farming equipment  that  is  installed  or  purchased  to  be
25    installed  on farm machinery and equipment including, but not
26    limited  to,  tractors,   harvesters,   sprayers,   planters,
27    seeders,  or spreaders. Precision farming equipment includes,
28    but is not  limited  to,  soil  testing  sensors,  computers,
29    monitors,  software,  global positioning and mapping systems,
30    and other such equipment.
31        Farm machinery and  equipment  also  includes  computers,
32    sensors,  software,  and  related equipment used primarily in
33    the computer-assisted  operation  of  production  agriculture
34    facilities,  equipment,  and  activities  such  as,  but  not
 
                            -4-                LRB9101693PTpk
 1    limited  to,  the  collection, monitoring, and correlation of
 2    animal and crop data for the purpose  of  formulating  animal
 3    diets  and  agricultural chemicals.  This item (11) is exempt
 4    from the provisions of Section 3-90.
 5        (12)  Fuel and petroleum products sold to or used  by  an
 6    air  common  carrier, certified by the carrier to be used for
 7    consumption, shipment, or  storage  in  the  conduct  of  its
 8    business  as an air common carrier, for a flight destined for
 9    or returning from a location or locations outside the  United
10    States  without  regard  to  previous  or subsequent domestic
11    stopovers.
12        (13)  Proceeds of mandatory  service  charges  separately
13    stated  on  customers' bills for the purchase and consumption
14    of food and beverages purchased at retail from a retailer, to
15    the extent that the proceeds of the  service  charge  are  in
16    fact  turned  over as tips or as a substitute for tips to the
17    employees who participate  directly  in  preparing,  serving,
18    hosting  or  cleaning  up  the food or beverage function with
19    respect to which the service charge is imposed.
20        (14)  Oil field  exploration,  drilling,  and  production
21    equipment, including (i) rigs and parts of rigs, rotary rigs,
22    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
23    goods, including casing and drill strings,  (iii)  pumps  and
24    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
25    individual  replacement  part  for  oil  field   exploration,
26    drilling,  and  production  equipment, and (vi) machinery and
27    equipment purchased for lease; but excluding  motor  vehicles
28    required to be registered under the Illinois Vehicle Code.
29        (15)  Photoprocessing  machinery and equipment, including
30    repair and replacement parts, both new  and  used,  including
31    that   manufactured   on  special  order,  certified  by  the
32    purchaser to  be  used  primarily  for  photoprocessing,  and
33    including  photoprocessing  machinery and equipment purchased
34    for lease.
 
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 1        (16)  Coal  exploration,  mining,   offhighway   hauling,
 2    processing, maintenance, and reclamation equipment, including
 3    replacement  parts  and  equipment,  and  including equipment
 4    purchased for lease, but excluding motor vehicles required to
 5    be registered under the Illinois Vehicle Code.
 6        (17)  Distillation machinery and  equipment,  sold  as  a
 7    unit   or  kit,  assembled  or  installed  by  the  retailer,
 8    certified by the user to be used only for the  production  of
 9    ethyl alcohol that will be used for consumption as motor fuel
10    or  as  a component of motor fuel for the personal use of the
11    user, and not subject to sale or resale.
12        (18)  Manufacturing   and   assembling   machinery    and
13    equipment  used  primarily in the process of manufacturing or
14    assembling tangible personal property for wholesale or retail
15    sale or lease, whether that sale or lease is made directly by
16    the  manufacturer  or  by  some  other  person,  whether  the
17    materials used in the process are owned by  the  manufacturer
18    or  some  other person, or whether that sale or lease is made
19    apart from or as an incident to the seller's engaging in  the
20    service  occupation of producing machines, tools, dies, jigs,
21    patterns, gauges, or other similar  items  of  no  commercial
22    value on special order for a particular purchaser.
23        (19)  Personal  property  delivered  to  a  purchaser  or
24    purchaser's donee inside Illinois when the purchase order for
25    that  personal  property  was  received  by a florist located
26    outside Illinois who has a florist  located  inside  Illinois
27    deliver the personal property.
28        (20)  Semen used for artificial insemination of livestock
29    for direct agricultural production.
30        (21)  Horses, or interests in horses, registered with and
31    meeting  the  requirements  of  any of the Arabian Horse Club
32    Registry of America, Appaloosa Horse Club,  American  Quarter
33    Horse  Association,  United  States  Trotting Association, or
34    Jockey Club, as appropriate, used for purposes of breeding or
 
                            -6-                LRB9101693PTpk
 1    racing for prizes.
 2        (22)  Computers and communications equipment utilized for
 3    any hospital purpose and equipment  used  in  the  diagnosis,
 4    analysis,  or  treatment  of hospital patients purchased by a
 5    lessor who leases the equipment, under a lease of one year or
 6    longer executed or in effect at the  time  the  lessor  would
 7    otherwise  be  subject  to  the tax imposed by this Act, to a
 8    hospital  that  has  been  issued  an  active  tax  exemption
 9    identification  number  by the Department under Section 1g of
10    the Retailers' Occupation  Tax  Act.   If  the  equipment  is
11    leased  in  a manner that does not qualify for this exemption
12    or is used in any other non-exempt manner, the  lessor  shall
13    be  liable  for the tax imposed under this Act or the Service
14    Use Tax Act, as the case may be, based  on  the  fair  market
15    value  of  the  property  at  the time the non-qualifying use
16    occurs.  No lessor shall collect or  attempt  to  collect  an
17    amount  (however  designated) that purports to reimburse that
18    lessor for the tax imposed by this Act or the Service Use Tax
19    Act, as the case may be, if the tax has not been paid by  the
20    lessor.  If a lessor improperly collects any such amount from
21    the  lessee,  the  lessee shall have a legal right to claim a
22    refund of that amount from the  lessor.   If,  however,  that
23    amount  is  not  refunded  to  the lessee for any reason, the
24    lessor is liable to pay that amount to the Department.
25        (23)  Personal property purchased by a lessor who  leases
26    the  property,  under a lease of  one year or longer executed
27    or in effect at  the  time  the  lessor  would  otherwise  be
28    subject  to  the  tax  imposed by this Act, to a governmental
29    body that has been  issued  an  active  sales  tax  exemption
30    identification  number  by the Department under Section 1g of
31    the Retailers' Occupation Tax Act. If the property is  leased
32    in  a manner that does not qualify for this exemption or used
33    in any other non-exempt manner, the lessor  shall  be  liable
34    for  the  tax  imposed  under this Act or the Service Use Tax
 
                            -7-                LRB9101693PTpk
 1    Act, as the case may be, based on the fair  market  value  of
 2    the  property  at the time the non-qualifying use occurs.  No
 3    lessor shall collect or attempt to collect an amount (however
 4    designated) that purports to reimburse that  lessor  for  the
 5    tax  imposed  by  this Act or the Service Use Tax Act, as the
 6    case may be, if the tax has not been paid by the lessor.   If
 7    a lessor improperly collects any such amount from the lessee,
 8    the lessee shall have a legal right to claim a refund of that
 9    amount  from  the  lessor.   If,  however, that amount is not
10    refunded to the lessee for any reason, the lessor  is  liable
11    to pay that amount to the Department.
12        (24)  Beginning  with  taxable  years  ending on or after
13    December 31, 1995 and ending with taxable years ending on  or
14    before  December  31, 2004, personal property that is donated
15    for disaster relief to  be  used  in  a  State  or  federally
16    declared disaster area in Illinois or bordering Illinois by a
17    manufacturer  or retailer that is registered in this State to
18    a   corporation,   society,   association,   foundation,   or
19    institution that  has  been  issued  a  sales  tax  exemption
20    identification  number by the Department that assists victims
21    of the disaster who reside within the declared disaster area.
22        (25)  Beginning with taxable years  ending  on  or  after
23    December  31, 1995 and ending with taxable years ending on or
24    before December 31, 2004, personal property that is  used  in
25    the  performance  of  infrastructure  repairs  in this State,
26    including but not limited to  municipal  roads  and  streets,
27    access  roads,  bridges,  sidewalks,  waste disposal systems,
28    water and  sewer  line  extensions,  water  distribution  and
29    purification  facilities,  storm water drainage and retention
30    facilities, and sewage treatment facilities, resulting from a
31    State or federally declared disaster in Illinois or bordering
32    Illinois  when  such  repairs  are  initiated  on  facilities
33    located in the declared disaster area within 6  months  after
34    the disaster.
 
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 1        (26)   Beginning  January 1, 2000, an amount equal to the
 2    amount of any rebate due from a motor vehicle manufacturer to
 3    the purchaser of a motor vehicle.  This paragraph  is  exempt
 4    from the provisions of Section 3-90.
 5    (Source:  P.A.  89-16,  eff.  5-30-95;  89-115,  eff. 1-1-96;
 6    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
 7    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
 8    eff. 12-12-97; 90-605, eff. 6-30-98.)

 9        Section 10.  The  Service  Use  Tax  Act  is  amended  by
10    changing Section 3-5 as follows:

11        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
12        Sec.  3-5.   Exemptions.   Use  of the following tangible
13    personal property is exempt from the tax imposed by this Act:
14        (1)  Personal  property  purchased  from  a  corporation,
15    society,    association,    foundation,    institution,    or
16    organization, other than a limited liability company, that is
17    organized and operated as a not-for-profit service enterprise
18    for the benefit of persons 65 years of age or  older  if  the
19    personal property was not purchased by the enterprise for the
20    purpose of resale by the enterprise.
21        (2)  Personal property purchased by a non-profit Illinois
22    county  fair association for use in conducting, operating, or
23    promoting the county fair.
24        (3)  Personal  property  purchased  by  a  not-for-profit
25    music or dramatic  arts  organization  that  establishes,  by
26    proof  required  by  the  Department  by  rule,  that  it has
27    received an exemption under Section 501(c)(3) of the Internal
28    Revenue Code and that  is  organized  and  operated  for  the
29    presentation  of  live  public  performances  of  musical  or
30    theatrical works on a regular basis.
31        (4)  Legal  tender,  currency,  medallions,  or  gold  or
32    silver   coinage   issued  by  the  State  of  Illinois,  the
 
                            -9-                LRB9101693PTpk
 1    government of the United States of America, or the government
 2    of any foreign country, and bullion.
 3        (5)  Graphic  arts  machinery  and  equipment,  including
 4    repair  and  replacement  parts,  both  new  and  used,   and
 5    including that manufactured on special order or purchased for
 6    lease,  certified  by  the purchaser to be used primarily for
 7    graphic arts production.
 8        (6)  Personal property purchased from a teacher-sponsored
 9    student  organization  affiliated  with  an   elementary   or
10    secondary school located in Illinois.
11        (7)  Farm  machinery  and  equipment,  both new and used,
12    including that manufactured on special  order,  certified  by
13    the purchaser to be used primarily for production agriculture
14    or   State   or   federal  agricultural  programs,  including
15    individual replacement parts for the machinery and equipment,
16    including machinery and equipment purchased  for  lease,  and
17    including implements of husbandry defined in Section 1-130 of
18    the  Illinois  Vehicle  Code, farm machinery and agricultural
19    chemical and fertilizer spreaders, and nurse wagons  required
20    to  be registered under Section 3-809 of the Illinois Vehicle
21    Code, but excluding  other  motor  vehicles  required  to  be
22    registered  under  the  Illinois  Vehicle Code. Horticultural
23    polyhouses or hoop houses used for propagating,  growing,  or
24    overwintering  plants  shall be considered farm machinery and
25    equipment under this item (7). Agricultural  chemical  tender
26    tanks  and dry boxes shall include units sold separately from
27    a motor vehicle  required  to  be  licensed  and  units  sold
28    mounted  on  a  motor  vehicle required to be licensed if the
29    selling price of the tender is separately stated.
30        Farm machinery  and  equipment  shall  include  precision
31    farming  equipment  that  is  installed  or  purchased  to be
32    installed on farm machinery and equipment including, but  not
33    limited   to,   tractors,   harvesters,  sprayers,  planters,
34    seeders, or spreaders. Precision farming equipment  includes,
 
                            -10-               LRB9101693PTpk
 1    but  is  not  limited  to,  soil  testing sensors, computers,
 2    monitors, software, global positioning and  mapping  systems,
 3    and other such equipment.
 4        Farm  machinery  and  equipment  also includes computers,
 5    sensors, software, and related equipment  used  primarily  in
 6    the  computer-assisted  operation  of  production agriculture
 7    facilities,  equipment,  and  activities  such  as,  but  not
 8    limited to, the collection, monitoring,  and  correlation  of
 9    animal  and  crop  data for the purpose of formulating animal
10    diets and agricultural chemicals.  This item  (7)  is  exempt
11    from the provisions of Section 3-75.
12        (8)  Fuel  and  petroleum  products sold to or used by an
13    air common carrier, certified by the carrier to be  used  for
14    consumption,  shipment,  or  storage  in  the  conduct of its
15    business as an air common carrier, for a flight destined  for
16    or  returning from a location or locations outside the United
17    States without regard  to  previous  or  subsequent  domestic
18    stopovers.
19        (9)  Proceeds  of  mandatory  service  charges separately
20    stated on customers' bills for the purchase  and  consumption
21    of food and beverages acquired as an incident to the purchase
22    of  a  service  from  a  serviceman,  to  the extent that the
23    proceeds of the service charge are in  fact  turned  over  as
24    tips  or  as  a  substitute  for  tips  to  the employees who
25    participate  directly  in  preparing,  serving,  hosting   or
26    cleaning  up  the  food  or beverage function with respect to
27    which the service charge is imposed.
28        (10)  Oil field  exploration,  drilling,  and  production
29    equipment, including (i) rigs and parts of rigs, rotary rigs,
30    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
31    goods, including casing and drill strings,  (iii)  pumps  and
32    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
33    individual  replacement  part  for  oil  field   exploration,
34    drilling,  and  production  equipment, and (vi) machinery and
 
                            -11-               LRB9101693PTpk
 1    equipment purchased for lease; but excluding  motor  vehicles
 2    required to be registered under the Illinois Vehicle Code.
 3        (11)  Proceeds from the sale of photoprocessing machinery
 4    and  equipment,  including repair and replacement parts, both
 5    new and used, including that manufactured on  special  order,
 6    certified   by   the  purchaser  to  be  used  primarily  for
 7    photoprocessing, and including photoprocessing machinery  and
 8    equipment purchased for lease.
 9        (12)  Coal   exploration,   mining,  offhighway  hauling,
10    processing, maintenance, and reclamation equipment, including
11    replacement parts  and  equipment,  and  including  equipment
12    purchased for lease, but excluding motor vehicles required to
13    be registered under the Illinois Vehicle Code.
14        (13)  Semen used for artificial insemination of livestock
15    for direct agricultural production.
16        (14)  Horses, or interests in horses, registered with and
17    meeting  the  requirements  of  any of the Arabian Horse Club
18    Registry of America, Appaloosa Horse Club,  American  Quarter
19    Horse  Association,  United  States  Trotting Association, or
20    Jockey Club, as appropriate, used for purposes of breeding or
21    racing for prizes.
22        (15)  Computers and communications equipment utilized for
23    any hospital purpose and equipment  used  in  the  diagnosis,
24    analysis,  or  treatment  of hospital patients purchased by a
25    lessor who leases the equipment, under a lease of one year or
26    longer executed or in effect at the  time  the  lessor  would
27    otherwise  be  subject  to  the tax imposed by this Act, to a
28    hospital  that  has  been  issued  an  active  tax  exemption
29    identification number by the Department under Section  1g  of
30    the Retailers' Occupation Tax Act. If the equipment is leased
31    in  a  manner  that does not qualify for this exemption or is
32    used in any other non-exempt  manner,  the  lessor  shall  be
33    liable for the tax imposed under this Act or the Use Tax Act,
34    as  the  case  may  be, based on the fair market value of the
 
                            -12-               LRB9101693PTpk
 1    property at the  time  the  non-qualifying  use  occurs.   No
 2    lessor shall collect or attempt to collect an amount (however
 3    designated)  that  purports  to reimburse that lessor for the
 4    tax imposed by this Act or the Use Tax Act, as the  case  may
 5    be,  if the tax has not been paid by the lessor.  If a lessor
 6    improperly collects any such  amount  from  the  lessee,  the
 7    lessee  shall  have  a  legal right to claim a refund of that
 8    amount from the lessor.  If,  however,  that  amount  is  not
 9    refunded  to  the lessee for any reason, the lessor is liable
10    to pay that amount to the Department.
11        (16)  Personal property purchased by a lessor who  leases
12    the property, under a lease of one year or longer executed or
13    in  effect  at the time the lessor would otherwise be subject
14    to the tax imposed by this Act, to a governmental  body  that
15    has been issued an active tax exemption identification number
16    by   the  Department  under  Section  1g  of  the  Retailers'
17    Occupation Tax Act.  If the property is leased  in  a  manner
18    that  does  not  qualify for this exemption or is used in any
19    other non-exempt manner, the lessor shall be liable  for  the
20    tax  imposed  under  this Act or the Use Tax Act, as the case
21    may be, based on the fair market value of the property at the
22    time the non-qualifying use occurs.  No lessor shall  collect
23    or  attempt  to  collect  an amount (however designated) that
24    purports to reimburse that lessor for the tax imposed by this
25    Act or the Use Tax Act, as the case may be, if  the  tax  has
26    not been paid by the lessor.  If a lessor improperly collects
27    any  such  amount  from  the  lessee, the lessee shall have a
28    legal right to claim a refund of that amount from the lessor.
29    If, however, that amount is not refunded to  the  lessee  for
30    any  reason,  the  lessor is liable to pay that amount to the
31    Department.
32        (17)  Beginning with taxable years  ending  on  or  after
33    December  31, 1995 and ending with taxable years ending on or
34    before December 31, 2004, personal property that  is  donated
 
                            -13-               LRB9101693PTpk
 1    for  disaster  relief  to  be  used  in  a State or federally
 2    declared disaster area in Illinois or bordering Illinois by a
 3    manufacturer or retailer that is registered in this State  to
 4    a   corporation,   society,   association,   foundation,   or
 5    institution  that  has  been  issued  a  sales  tax exemption
 6    identification number by the Department that assists  victims
 7    of the disaster who reside within the declared disaster area.
 8        (18)  Beginning  with  taxable  years  ending on or after
 9    December 31, 1995 and ending with taxable years ending on  or
10    before  December  31, 2004, personal property that is used in
11    the performance of  infrastructure  repairs  in  this  State,
12    including  but  not  limited  to municipal roads and streets,
13    access roads, bridges,  sidewalks,  waste  disposal  systems,
14    water  and  sewer  line  extensions,  water  distribution and
15    purification facilities, storm water drainage  and  retention
16    facilities, and sewage treatment facilities, resulting from a
17    State or federally declared disaster in Illinois or bordering
18    Illinois  when  such  repairs  are  initiated  on  facilities
19    located  in  the declared disaster area within 6 months after
20    the disaster.
21        (19)  Beginning January 1, 2000, an amount equal  to  the
22    amount of any rebate due from a motor vehicle manufacturer to
23    the  purchaser  of a motor vehicle.  This paragraph is exempt
24    from the provisions of Section 3-75.
25    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
26    89-349,  eff.  8-17-95;  89-495,  eff.  6-24-96; 89-496, eff.
27    6-25-96; 89-626, eff. 8-9-96;  90-14,  eff.  7-1-97;  90-552,
28    eff. 12-12-97; 90-605, eff. 6-30-98.)

29        Section 15.  The Service Occupation Tax Act is amended by
30    changing Section 3-5 as follows:

31        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
32        Sec.  3-5.   Exemptions.  The following tangible personal
 
                            -14-               LRB9101693PTpk
 1    property is exempt from the tax imposed by this Act:
 2        (1)  Personal property sold by  a  corporation,  society,
 3    association,  foundation, institution, or organization, other
 4    than a limited  liability  company,  that  is  organized  and
 5    operated  as  a  not-for-profit  service  enterprise  for the
 6    benefit of persons 65 years of age or older if  the  personal
 7    property  was not purchased by the enterprise for the purpose
 8    of resale by the enterprise.
 9        (2)  Personal  property  purchased  by  a  not-for-profit
10    Illinois county  fair  association  for  use  in  conducting,
11    operating, or promoting the county fair.
12        (3)  Personal  property  purchased  by any not-for-profit
13    music or dramatic  arts  organization  that  establishes,  by
14    proof  required  by  the  Department  by  rule,  that  it has
15    received  an  exemption   under  Section  501(c)(3)  of   the
16    Internal  Revenue Code and that is organized and operated for
17    the presentation of live public performances  of  musical  or
18    theatrical works on a regular basis.
19        (4)  Legal  tender,  currency,  medallions,  or  gold  or
20    silver   coinage   issued  by  the  State  of  Illinois,  the
21    government of the United States of America, or the government
22    of any foreign country, and bullion.
23        (5)  Graphic  arts  machinery  and  equipment,  including
24    repair  and  replacement  parts,  both  new  and  used,   and
25    including that manufactured on special order or purchased for
26    lease,  certified  by  the purchaser to be used primarily for
27    graphic arts production.
28        (6)  Personal  property  sold  by   a   teacher-sponsored
29    student   organization   affiliated  with  an  elementary  or
30    secondary school located in Illinois.
31        (7)  Farm machinery and equipment,  both  new  and  used,
32    including  that  manufactured  on special order, certified by
33    the purchaser to be used primarily for production agriculture
34    or  State  or  federal   agricultural   programs,   including
 
                            -15-               LRB9101693PTpk
 1    individual replacement parts for the machinery and equipment,
 2    including  machinery  and  equipment purchased for lease, and
 3    including implements of husbandry defined in Section 1-130 of
 4    the Illinois Vehicle Code, farm  machinery  and  agricultural
 5    chemical  and fertilizer spreaders, and nurse wagons required
 6    to be registered under Section 3-809 of the Illinois  Vehicle
 7    Code,  but  excluding  other  motor  vehicles  required to be
 8    registered under the  Illinois  Vehicle  Code.  Horticultural
 9    polyhouses  or  hoop houses used for propagating, growing, or
10    overwintering plants shall be considered farm  machinery  and
11    equipment  under  this item (7). Agricultural chemical tender
12    tanks and dry boxes shall include units sold separately  from
13    a  motor  vehicle  required  to  be  licensed  and units sold
14    mounted on a motor vehicle required to  be  licensed  if  the
15    selling price of the tender is separately stated.
16        Farm  machinery  and  equipment  shall  include precision
17    farming equipment  that  is  installed  or  purchased  to  be
18    installed  on farm machinery and equipment including, but not
19    limited  to,  tractors,   harvesters,   sprayers,   planters,
20    seeders,  or spreaders. Precision farming equipment includes,
21    but is not  limited  to,  soil  testing  sensors,  computers,
22    monitors,  software,  global positioning and mapping systems,
23    and other such equipment.
24        Farm machinery and  equipment  also  includes  computers,
25    sensors,  software,  and  related equipment used primarily in
26    the computer-assisted  operation  of  production  agriculture
27    facilities,  equipment,  and  activities  such  as,  but  not
28    limited  to,  the  collection, monitoring, and correlation of
29    animal and crop data for the purpose  of  formulating  animal
30    diets  and  agricultural  chemicals.  This item (7) is exempt
31    from the provisions of Section 3-75.
32        (8)  Fuel and petroleum products sold to or  used  by  an
33    air  common  carrier, certified by the carrier to be used for
34    consumption, shipment, or  storage  in  the  conduct  of  its
 
                            -16-               LRB9101693PTpk
 1    business  as an air common carrier, for a flight destined for
 2    or returning from a location or locations outside the  United
 3    States  without  regard  to  previous  or subsequent domestic
 4    stopovers.
 5        (9)  Proceeds of  mandatory  service  charges  separately
 6    stated  on  customers' bills for the purchase and consumption
 7    of food and beverages, to the extent that the proceeds of the
 8    service charge are in fact  turned  over  as  tips  or  as  a
 9    substitute for tips to the employees who participate directly
10    in  preparing,  serving,  hosting  or cleaning up the food or
11    beverage function with respect to which the service charge is
12    imposed.
13        (10)  Oil field  exploration,  drilling,  and  production
14    equipment, including (i) rigs and parts of rigs, rotary rigs,
15    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
16    goods, including casing and drill strings,  (iii)  pumps  and
17    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
18    individual  replacement  part  for  oil  field   exploration,
19    drilling,  and  production  equipment, and (vi) machinery and
20    equipment purchased for lease; but excluding  motor  vehicles
21    required to be registered under the Illinois Vehicle Code.
22        (11)  Photoprocessing  machinery and equipment, including
23    repair and replacement parts, both new  and  used,  including
24    that   manufactured   on  special  order,  certified  by  the
25    purchaser to  be  used  primarily  for  photoprocessing,  and
26    including  photoprocessing  machinery and equipment purchased
27    for lease.
28        (12)  Coal  exploration,  mining,   offhighway   hauling,
29    processing, maintenance, and reclamation equipment, including
30    replacement  parts  and  equipment,  and  including equipment
31    purchased for lease, but excluding motor vehicles required to
32    be registered under the Illinois Vehicle Code.
33        (13)  Food for human consumption that is to  be  consumed
34    off  the  premises  where  it  is  sold (other than alcoholic
 
                            -17-               LRB9101693PTpk
 1    beverages, soft drinks and food that has  been  prepared  for
 2    immediate  consumption) and prescription and non-prescription
 3    medicines, drugs,  medical  appliances,  and  insulin,  urine
 4    testing  materials,  syringes, and needles used by diabetics,
 5    for human use, when purchased for use by a  person  receiving
 6    medical assistance under Article 5 of the Illinois Public Aid
 7    Code  who  resides  in a licensed long-term care facility, as
 8    defined in the Nursing Home Care Act.
 9        (14)  Semen used for artificial insemination of livestock
10    for direct agricultural production.
11        (15)  Horses, or interests in horses, registered with and
12    meeting the requirements of any of  the  Arabian  Horse  Club
13    Registry  of  America, Appaloosa Horse Club, American Quarter
14    Horse Association, United  States  Trotting  Association,  or
15    Jockey Club, as appropriate, used for purposes of breeding or
16    racing for prizes.
17        (16)  Computers and communications equipment utilized for
18    any  hospital  purpose  and  equipment used in the diagnosis,
19    analysis, or treatment of hospital patients sold to a  lessor
20    who leases the equipment, under a lease of one year or longer
21    executed  or  in  effect  at  the  time of the purchase, to a
22    hospital  that  has  been  issued  an  active  tax  exemption
23    identification number by the Department under Section  1g  of
24    the Retailers' Occupation Tax Act.
25        (17)  Personal  property  sold to a lessor who leases the
26    property, under a lease of one year or longer executed or  in
27    effect  at  the  time of the purchase, to a governmental body
28    that has been issued an active tax  exemption  identification
29    number  by  the Department under Section 1g of the Retailers'
30    Occupation Tax Act.
31        (18)  Beginning with taxable years  ending  on  or  after
32    December  31, 1995 and ending with taxable years ending on or
33    before December 31, 2004, personal property that  is  donated
34    for  disaster  relief  to  be  used  in  a State or federally
 
                            -18-               LRB9101693PTpk
 1    declared disaster area in Illinois or bordering Illinois by a
 2    manufacturer or retailer that is registered in this State  to
 3    a   corporation,   society,   association,   foundation,   or
 4    institution  that  has  been  issued  a  sales  tax exemption
 5    identification number by the Department that assists  victims
 6    of the disaster who reside within the declared disaster area.
 7        (19)  Beginning  with  taxable  years  ending on or after
 8    December 31, 1995 and ending with taxable years ending on  or
 9    before  December  31, 2004, personal property that is used in
10    the performance of  infrastructure  repairs  in  this  State,
11    including  but  not  limited  to municipal roads and streets,
12    access roads, bridges,  sidewalks,  waste  disposal  systems,
13    water  and  sewer  line  extensions,  water  distribution and
14    purification facilities, storm water drainage  and  retention
15    facilities, and sewage treatment facilities, resulting from a
16    State or federally declared disaster in Illinois or bordering
17    Illinois  when  such  repairs  are  initiated  on  facilities
18    located  in  the declared disaster area within 6 months after
19    the disaster.
20        (20)  Beginning January 1, 2000, an amount equal  to  the
21    amount of any rebate due from a motor vehicle manufacturer to
22    the  purchaser  of a motor vehicle.  This paragraph is exempt
23    from the provisions of Section 3-55.
24    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
25    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
26    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
27    eff. 12-12-97; 90-605, eff. 6-30-98.)

28        Section 20.  The Retailers' Occupation Tax Act is amended
29    by changing Section 2-5 as follows:

30        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
31        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
32    the sale of the  following  tangible  personal  property  are
 
                            -19-               LRB9101693PTpk
 1    exempt from the tax imposed by this Act:
 2        (1)  Farm chemicals.
 3        (2)  Farm  machinery  and  equipment,  both new and used,
 4    including that manufactured on special  order,  certified  by
 5    the purchaser to be used primarily for production agriculture
 6    or   State   or   federal  agricultural  programs,  including
 7    individual replacement parts for the machinery and equipment,
 8    including machinery and equipment purchased  for  lease,  and
 9    including implements of husbandry defined in Section 1-130 of
10    the  Illinois  Vehicle  Code, farm machinery and agricultural
11    chemical and fertilizer spreaders, and nurse wagons  required
12    to  be registered under Section 3-809 of the Illinois Vehicle
13    Code, but excluding  other  motor  vehicles  required  to  be
14    registered  under  the  Illinois  Vehicle Code. Horticultural
15    polyhouses or hoop houses used for propagating,  growing,  or
16    overwintering  plants  shall be considered farm machinery and
17    equipment under this item (2). Agricultural  chemical  tender
18    tanks  and dry boxes shall include units sold separately from
19    a motor vehicle  required  to  be  licensed  and  units  sold
20    mounted  on  a  motor vehicle required to be licensed, if the
21    selling price of the tender is separately stated.
22        Farm machinery  and  equipment  shall  include  precision
23    farming  equipment  that  is  installed  or  purchased  to be
24    installed on farm machinery and equipment including, but  not
25    limited   to,   tractors,   harvesters,  sprayers,  planters,
26    seeders, or spreaders. Precision farming equipment  includes,
27    but  is  not  limited  to,  soil  testing sensors, computers,
28    monitors, software, global positioning and  mapping  systems,
29    and other such equipment.
30        Farm  machinery  and  equipment  also includes computers,
31    sensors, software, and related equipment  used  primarily  in
32    the  computer-assisted  operation  of  production agriculture
33    facilities,  equipment,  and  activities  such  as,  but  not
34    limited to, the collection, monitoring,  and  correlation  of
 
                            -20-               LRB9101693PTpk
 1    animal  and  crop  data for the purpose of formulating animal
 2    diets and agricultural chemicals.  This item  (7)  is  exempt
 3    from the provisions of Section 3-75.
 4        (3)  Distillation machinery and equipment, sold as a unit
 5    or  kit, assembled or installed by the retailer, certified by
 6    the user to be used only for the production of ethyl  alcohol
 7    that  will  be  used  for  consumption  as motor fuel or as a
 8    component of motor fuel for the personal use of the user, and
 9    not subject to sale or resale.
10        (4)  Graphic  arts  machinery  and  equipment,  including
11    repair  and  replacement  parts,  both  new  and  used,   and
12    including that manufactured on special order or purchased for
13    lease,  certified  by  the purchaser to be used primarily for
14    graphic arts production.
15        (5)  A motor vehicle  of  the  first  division,  a  motor
16    vehicle of the second division that is a self-contained motor
17    vehicle  designed  or permanently converted to provide living
18    quarters for  recreational,  camping,  or  travel  use,  with
19    direct  walk  through  access to the living quarters from the
20    driver's seat, or a motor vehicle of the second division that
21    is of the van configuration designed for  the  transportation
22    of not less than 7 nor more than 16 passengers, as defined in
23    Section  1-146 of the Illinois Vehicle Code, that is used for
24    automobile renting, as  defined  in  the  Automobile  Renting
25    Occupation and Use Tax Act.
26        (6)  Personal   property   sold  by  a  teacher-sponsored
27    student  organization  affiliated  with  an   elementary   or
28    secondary school located in Illinois.
29        (7)  Proceeds  of  that portion of the selling price of a
30    passenger car the sale of which is subject to the Replacement
31    Vehicle Tax.
32        (8)  Personal property sold to an  Illinois  county  fair
33    association  for  use  in conducting, operating, or promoting
34    the county fair.
 
                            -21-               LRB9101693PTpk
 1        (9)  Personal property sold to a not-for-profit music  or
 2    dramatic   arts   organization  that  establishes,  by  proof
 3    required by the Department by rule, that it has  received  an
 4    exemption  under  Section  501(c) (3) of the Internal Revenue
 5    Code and that is organized and operated for the  presentation
 6    of live public performances of musical or theatrical works on
 7    a regular basis.
 8        (10)  Personal  property  sold by a corporation, society,
 9    association, foundation, institution, or organization,  other
10    than  a  limited  liability  company,  that  is organized and
11    operated as  a  not-for-profit  service  enterprise  for  the
12    benefit  of  persons 65 years of age or older if the personal
13    property was not purchased by the enterprise for the  purpose
14    of resale by the enterprise.
15        (11)  Personal property sold to a governmental body, to a
16    corporation, society, association, foundation, or institution
17    organized and operated exclusively for charitable, religious,
18    or  educational purposes, or to a not-for-profit corporation,
19    society,    association,    foundation,    institution,    or
20    organization that has no compensated  officers  or  employees
21    and   that  is  organized  and  operated  primarily  for  the
22    recreation of persons 55 years of age  or  older.  A  limited
23    liability  company  may  qualify for the exemption under this
24    paragraph only if the limited liability company is  organized
25    and  operated  exclusively  for  educational purposes. On and
26    after July 1, 1987, however, no entity otherwise eligible for
27    this exemption shall make tax-free purchases unless it has an
28    active identification number issued by the Department.
29        (12)  Personal property sold to interstate  carriers  for
30    hire  for  use as rolling stock moving in interstate commerce
31    or to lessors under leases of one year or longer executed  or
32    in  effect at the time of purchase by interstate carriers for
33    hire for use as rolling stock moving in  interstate  commerce
34    and  equipment  operated  by  a  telecommunications provider,
 
                            -22-               LRB9101693PTpk
 1    licensed as a common carrier by  the  Federal  Communications
 2    Commission,  which  is permanently installed in or affixed to
 3    aircraft moving in interstate commerce.
 4        (13)  Proceeds from sales to owners, lessors, or shippers
 5    of tangible personal property that is utilized by  interstate
 6    carriers  for  hire  for  use  as  rolling  stock  moving  in
 7    interstate    commerce    and   equipment   operated   by   a
 8    telecommunications provider, licensed as a common carrier  by
 9    the  Federal  Communications Commission, which is permanently
10    installed in or affixed  to  aircraft  moving  in  interstate
11    commerce.
12        (14)  Machinery  and  equipment  that will be used by the
13    purchaser, or a lessee of the  purchaser,  primarily  in  the
14    process  of  manufacturing  or  assembling  tangible personal
15    property for wholesale or retail sale or lease,  whether  the
16    sale or lease is made directly by the manufacturer or by some
17    other  person,  whether the materials used in the process are
18    owned by the manufacturer or some other  person,  or  whether
19    the sale or lease is made apart from or as an incident to the
20    seller's  engaging  in  the  service  occupation of producing
21    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
22    similar  items  of no commercial value on special order for a
23    particular purchaser.
24        (15)  Proceeds of mandatory  service  charges  separately
25    stated  on  customers'  bills for purchase and consumption of
26    food and beverages, to the extent that the  proceeds  of  the
27    service  charge  are  in  fact  turned  over  as tips or as a
28    substitute for tips to the employees who participate directly
29    in preparing, serving, hosting or cleaning  up  the  food  or
30    beverage function with respect to which the service charge is
31    imposed.
32        (16)  Petroleum  products  sold  to  a  purchaser  if the
33    seller is prohibited by federal law from charging tax to  the
34    purchaser.
 
                            -23-               LRB9101693PTpk
 1        (17)  Tangible personal property sold to a common carrier
 2    by rail or motor that receives the physical possession of the
 3    property  in  Illinois  and  that transports the property, or
 4    shares with another common carrier in the  transportation  of
 5    the  property,  out of Illinois on a standard uniform bill of
 6    lading showing the seller of the property as the  shipper  or
 7    consignor  of the property to a destination outside Illinois,
 8    for use outside Illinois.
 9        (18)  Legal tender,  currency,  medallions,  or  gold  or
10    silver   coinage   issued  by  the  State  of  Illinois,  the
11    government of the United States of America, or the government
12    of any foreign country, and bullion.
13        (19)  Oil field  exploration,  drilling,  and  production
14    equipment, including (i) rigs and parts of rigs, rotary rigs,
15    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
16    goods, including casing and drill strings,  (iii)  pumps  and
17    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
18    individual  replacement  part  for  oil  field   exploration,
19    drilling,  and  production  equipment, and (vi) machinery and
20    equipment purchased for lease; but excluding  motor  vehicles
21    required to be registered under the Illinois Vehicle Code.
22        (20)  Photoprocessing  machinery and equipment, including
23    repair and replacement parts, both new  and  used,  including
24    that   manufactured   on  special  order,  certified  by  the
25    purchaser to  be  used  primarily  for  photoprocessing,  and
26    including  photoprocessing  machinery and equipment purchased
27    for lease.
28        (21)  Coal  exploration,  mining,   offhighway   hauling,
29    processing, maintenance, and reclamation equipment, including
30    replacement  parts  and  equipment,  and  including equipment
31    purchased for lease, but excluding motor vehicles required to
32    be registered under the Illinois Vehicle Code.
33        (22)  Fuel and petroleum products sold to or used  by  an
34    air  carrier,  certified  by  the  carrier  to  be  used  for
 
                            -24-               LRB9101693PTpk
 1    consumption,  shipment,  or  storage  in  the  conduct of its
 2    business as an air common carrier, for a flight destined  for
 3    or  returning from a location or locations outside the United
 4    States without regard  to  previous  or  subsequent  domestic
 5    stopovers.
 6        (23)  A  transaction  in  which  the  purchase  order  is
 7    received  by  a  florist who is located outside Illinois, but
 8    who has a florist located in Illinois deliver the property to
 9    the purchaser or the purchaser's donee in Illinois.
10        (24)  Fuel consumed or used in the  operation  of  ships,
11    barges,  or  vessels  that  are  used primarily in or for the
12    transportation of property or the conveyance of  persons  for
13    hire  on  rivers  bordering  on  this  State  if  the fuel is
14    delivered by the seller to the purchaser's  barge,  ship,  or
15    vessel while it is afloat upon that bordering river.
16        (25)  A motor vehicle sold in this State to a nonresident
17    even though the motor vehicle is delivered to the nonresident
18    in  this  State,  if the motor vehicle is not to be titled in
19    this State, and if a driveaway decal permit is issued to  the
20    motor  vehicle  as  provided in Section 3-603 of the Illinois
21    Vehicle Code or if  the  nonresident  purchaser  has  vehicle
22    registration  plates  to  transfer  to the motor vehicle upon
23    returning to his or her home  state.   The  issuance  of  the
24    driveaway   decal   permit   or   having   the   out-of-state
25    registration plates to be transferred is prima facie evidence
26    that the motor vehicle will not be titled in this State.
27        (26)  Semen used for artificial insemination of livestock
28    for direct agricultural production.
29        (27)  Horses, or interests in horses, registered with and
30    meeting  the  requirements  of  any of the Arabian Horse Club
31    Registry of America, Appaloosa Horse Club,  American  Quarter
32    Horse  Association,  United  States  Trotting Association, or
33    Jockey Club, as appropriate, used for purposes of breeding or
34    racing for prizes.
 
                            -25-               LRB9101693PTpk
 1        (28)  Computers and communications equipment utilized for
 2    any hospital purpose and equipment  used  in  the  diagnosis,
 3    analysis,  or treatment of hospital patients sold to a lessor
 4    who leases the equipment, under a lease of one year or longer
 5    executed or in effect at the  time  of  the  purchase,  to  a
 6    hospital  that  has  been  issued  an  active  tax  exemption
 7    identification  number  by the Department under Section 1g of
 8    this Act.
 9        (29)  Personal property sold to a lessor who  leases  the
10    property,  under a lease of one year or longer executed or in
11    effect at the time of the purchase, to  a  governmental  body
12    that  has  been issued an active tax exemption identification
13    number by the Department under Section 1g of this Act.
14        (30)  Beginning with taxable years  ending  on  or  after
15    December  31, 1995 and ending with taxable years ending on or
16    before December 31, 2004, personal property that  is  donated
17    for  disaster  relief  to  be  used  in  a State or federally
18    declared disaster area in Illinois or bordering Illinois by a
19    manufacturer or retailer that is registered in this State  to
20    a   corporation,   society,   association,   foundation,   or
21    institution  that  has  been  issued  a  sales  tax exemption
22    identification number by the Department that assists  victims
23    of the disaster who reside within the declared disaster area.
24        (31)  Beginning  with  taxable  years  ending on or after
25    December 31, 1995 and ending with taxable years ending on  or
26    before  December  31, 2004, personal property that is used in
27    the performance of  infrastructure  repairs  in  this  State,
28    including  but  not  limited  to municipal roads and streets,
29    access roads, bridges,  sidewalks,  waste  disposal  systems,
30    water  and  sewer  line  extensions,  water  distribution and
31    purification facilities, storm water drainage  and  retention
32    facilities, and sewage treatment facilities, resulting from a
33    State or federally declared disaster in Illinois or bordering
34    Illinois  when  such  repairs  are  initiated  on  facilities
 
                            -26-               LRB9101693PTpk
 1    located  in  the declared disaster area within 6 months after
 2    the disaster.
 3        (32)  Beginning January 1, 2000, an amount equal  to  the
 4    amount of any rebate due from a motor vehicle manufacturer to
 5    the  purchaser  of a motor vehicle.  This paragraph is exempt
 6    from the provisions of Section 2-70.
 7    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
 8    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
 9    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-519,
10    eff. 6-1-98; 90-552, eff. 12-12-97; 90-605, eff. 6-30-98.)

11        Section 90.  The State Mandates Act is amended by  adding
12    Section 8.23 as follows:

13        (30 ILCS 805/8.23 new)
14        Sec.  8.23.  Exempt  mandate.  Notwithstanding Sections 6
15    and 8 of this Act, no reimbursement by the State is  required
16    for  the  implementation  of  any  mandate  created  by  this
17    amendatory Act of the 91st General Assembly.

18        Section  99.   Effective  date.  This Act takes effect on
19    January 1, 2000.

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