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91_SB0878enr SB878 Enrolled LRB9105091PTpk 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 3. The Illinois Income Tax Act is amended by 5 changing Section 201 as follows: 6 (35 ILCS 5/201) (from Ch. 120, par. 2-201) 7 Sec. 201. Tax Imposed. 8 (a) In general. A tax measured by net income is hereby 9 imposed on every individual, corporation, trust and estate 10 for each taxable year ending after July 31, 1969 on the 11 privilege of earning or receiving income in or as a resident 12 of this State. Such tax shall be in addition to all other 13 occupation or privilege taxes imposed by this State or by any 14 municipal corporation or political subdivision thereof. 15 (b) Rates. The tax imposed by subsection (a) of this 16 Section shall be determined as follows: 17 (1) In the case of an individual, trust or estate, 18 for taxable years ending prior to July 1, 1989, an amount 19 equal to 2 1/2% of the taxpayer's net income for the 20 taxable year. 21 (2) In the case of an individual, trust or estate, 22 for taxable years beginning prior to July 1, 1989 and 23 ending after June 30, 1989, an amount equal to the sum of 24 (i) 2 1/2% of the taxpayer's net income for the period 25 prior to July 1, 1989, as calculated under Section 202.3, 26 and (ii) 3% of the taxpayer's net income for the period 27 after June 30, 1989, as calculated under Section 202.3. 28 (3) In the case of an individual, trust or estate, 29 for taxable years beginning after June 30, 1989, an 30 amount equal to 3% of the taxpayer's net income for the 31 taxable year. SB878 Enrolled -2- LRB9105091PTpk 1 (4) (Blank). 2 (5) (Blank). 3 (6) In the case of a corporation, for taxable years 4 ending prior to July 1, 1989, an amount equal to 4% of 5 the taxpayer's net income for the taxable year. 6 (7) In the case of a corporation, for taxable years 7 beginning prior to July 1, 1989 and ending after June 30, 8 1989, an amount equal to the sum of (i) 4% of the 9 taxpayer's net income for the period prior to July 1, 10 1989, as calculated under Section 202.3, and (ii) 4.8% of 11 the taxpayer's net income for the period after June 30, 12 1989, as calculated under Section 202.3. 13 (8) In the case of a corporation, for taxable years 14 beginning after June 30, 1989, an amount equal to 4.8% of 15 the taxpayer's net income for the taxable year. 16 (c) Beginning on July 1, 1979 and thereafter, in 17 addition to such income tax, there is also hereby imposed the 18 Personal Property Tax Replacement Income Tax measured by net 19 income on every corporation (including Subchapter S 20 corporations), partnership and trust, for each taxable year 21 ending after June 30, 1979. Such taxes are imposed on the 22 privilege of earning or receiving income in or as a resident 23 of this State. The Personal Property Tax Replacement Income 24 Tax shall be in addition to the income tax imposed by 25 subsections (a) and (b) of this Section and in addition to 26 all other occupation or privilege taxes imposed by this State 27 or by any municipal corporation or political subdivision 28 thereof. 29 (d) Additional Personal Property Tax Replacement Income 30 Tax Rates. The personal property tax replacement income tax 31 imposed by this subsection and subsection (c) of this Section 32 in the case of a corporation, other than a Subchapter S 33 corporation, shall be an additional amount equal to 2.85% of 34 such taxpayer's net income for the taxable year, except that SB878 Enrolled -3- LRB9105091PTpk 1 beginning on January 1, 1981, and thereafter, the rate of 2 2.85% specified in this subsection shall be reduced to 2.5%, 3 and in the case of a partnership, trust or a Subchapter S 4 corporation shall be an additional amount equal to 1.5% of 5 such taxpayer's net income for the taxable year. 6 (e) Investment credit. A taxpayer shall be allowed a 7 credit against the Personal Property Tax Replacement Income 8 Tax for investment in qualified property. 9 (1) A taxpayer shall be allowed a credit equal to 10 .5% of the basis of qualified property placed in service 11 during the taxable year, provided such property is placed 12 in service on or after July 1, 1984. There shall be 13 allowed an additional credit equal to .5% of the basis of 14 qualified property placed in service during the taxable 15 year, provided such property is placed in service on or 16 after July 1, 1986, and the taxpayer's base employment 17 within Illinois has increased by 1% or more over the 18 preceding year as determined by the taxpayer's employment 19 records filed with the Illinois Department of Employment 20 Security. Taxpayers who are new to Illinois shall be 21 deemed to have met the 1% growth in base employment for 22 the first year in which they file employment records with 23 the Illinois Department of Employment Security. The 24 provisions added to this Section by Public Act 85-1200 25 (and restored by Public Act 87-895) shall be construed as 26 declaratory of existing law and not as a new enactment. 27 If, in any year, the increase in base employment within 28 Illinois over the preceding year is less than 1%, the 29 additional credit shall be limited to that percentage 30 times a fraction, the numerator of which is .5% and the 31 denominator of which is 1%, but shall not exceed .5%. 32 The investment credit shall not be allowed to the extent 33 that it would reduce a taxpayer's liability in any tax 34 year below zero, nor may any credit for qualified SB878 Enrolled -4- LRB9105091PTpk 1 property be allowed for any year other than the year in 2 which the property was placed in service in Illinois. For 3 tax years ending on or after December 31, 1987, and on or 4 before December 31, 1988, the credit shall be allowed for 5 the tax year in which the property is placed in service, 6 or, if the amount of the credit exceeds the tax liability 7 for that year, whether it exceeds the original liability 8 or the liability as later amended, such excess may be 9 carried forward and applied to the tax liability of the 5 10 taxable years following the excess credit years if the 11 taxpayer (i) makes investments which cause the creation 12 of a minimum of 2,000 full-time equivalent jobs in 13 Illinois, (ii) is located in an enterprise zone 14 established pursuant to the Illinois Enterprise Zone Act 15 and (iii) is certified by the Department of Commerce and 16 Community Affairs as complying with the requirements 17 specified in clause (i) and (ii) by July 1, 1986. The 18 Department of Commerce and Community Affairs shall notify 19 the Department of Revenue of all such certifications 20 immediately. For tax years ending after December 31, 21 1988, the credit shall be allowed for the tax year in 22 which the property is placed in service, or, if the 23 amount of the credit exceeds the tax liability for that 24 year, whether it exceeds the original liability or the 25 liability as later amended, such excess may be carried 26 forward and applied to the tax liability of the 5 taxable 27 years following the excess credit years. The credit shall 28 be applied to the earliest year for which there is a 29 liability. If there is credit from more than one tax year 30 that is available to offset a liability, earlier credit 31 shall be applied first. 32 (2) The term "qualified property" means property 33 which: 34 (A) is tangible, whether new or used, SB878 Enrolled -5- LRB9105091PTpk 1 including buildings and structural components of 2 buildings and signs that are real property, but not 3 including land or improvements to real property that 4 are not a structural component of a building such as 5 landscaping, sewer lines, local access roads, 6 fencing, parking lots, and other appurtenances; 7 (B) is depreciable pursuant to Section 167 of 8 the Internal Revenue Code, except that "3-year 9 property" as defined in Section 168(c)(2)(A) of that 10 Code is not eligible for the credit provided by this 11 subsection (e); 12 (C) is acquired by purchase as defined in 13 Section 179(d) of the Internal Revenue Code; 14 (D) is used in Illinois by a taxpayer who is 15 primarily engaged in manufacturing, or in mining 16 coal or fluorite, or in retailing; and 17 (E) has not previously been used in Illinois 18 in such a manner and by such a person as would 19 qualify for the credit provided by this subsection 20 (e) or subsection (f). 21 (3) For purposes of this subsection (e), 22 "manufacturing" means the material staging and production 23 of tangible personal property by procedures commonly 24 regarded as manufacturing, processing, fabrication, or 25 assembling which changes some existing material into new 26 shapes, new qualities, or new combinations. For purposes 27 of this subsection (e) the term "mining" shall have the 28 same meaning as the term "mining" in Section 613(c) of 29 the Internal Revenue Code. For purposes of this 30 subsection (e), the term "retailing" means the sale of 31 tangible personal property or services rendered in 32 conjunction with the sale of tangible consumer goods or 33 commodities. 34 (4) The basis of qualified property shall be the SB878 Enrolled -6- LRB9105091PTpk 1 basis used to compute the depreciation deduction for 2 federal income tax purposes. 3 (5) If the basis of the property for federal income 4 tax depreciation purposes is increased after it has been 5 placed in service in Illinois by the taxpayer, the amount 6 of such increase shall be deemed property placed in 7 service on the date of such increase in basis. 8 (6) The term "placed in service" shall have the 9 same meaning as under Section 46 of the Internal Revenue 10 Code. 11 (7) If during any taxable year, any property ceases 12 to be qualified property in the hands of the taxpayer 13 within 48 months after being placed in service, or the 14 situs of any qualified property is moved outside Illinois 15 within 48 months after being placed in service, the 16 Personal Property Tax Replacement Income Tax for such 17 taxable year shall be increased. Such increase shall be 18 determined by (i) recomputing the investment credit which 19 would have been allowed for the year in which credit for 20 such property was originally allowed by eliminating such 21 property from such computation and, (ii) subtracting such 22 recomputed credit from the amount of credit previously 23 allowed. For the purposes of this paragraph (7), a 24 reduction of the basis of qualified property resulting 25 from a redetermination of the purchase price shall be 26 deemed a disposition of qualified property to the extent 27 of such reduction. 28 (8) Unless the investment credit is extended by 29 law, the basis of qualified property shall not include 30 costs incurred after December 31, 2003, except for costs 31 incurred pursuant to a binding contract entered into on 32 or before December 31, 2003. 33 (9) Each taxable year, a partnership may elect to 34 pass through to its partners the credits to which the SB878 Enrolled -7- LRB9105091PTpk 1 partnership is entitled under this subsection (e) for the 2 taxable year. A partner may use the credit allocated to 3 him or her under this paragraph only against the tax 4 imposed in subsections (c) and (d) of this Section. If 5 the partnership makes that election, those credits shall 6 be allocated among the partners in the partnership in 7 accordance with the rules set forth in Section 704(b) of 8 the Internal Revenue Code, and the rules promulgated 9 under that Section, and the allocated amount of the 10 credits shall be allowed to the partners for that taxable 11 year. The partnership shall make this election on its 12 Personal Property Tax Replacement Income Tax return for 13 that taxable year. The election to pass through the 14 credits shall be irrevocable. 15 (f) Investment credit; Enterprise Zone. 16 (1) A taxpayer shall be allowed a credit against 17 the tax imposed by subsections (a) and (b) of this 18 Section for investment in qualified property which is 19 placed in service in an Enterprise Zone created pursuant 20 to the Illinois Enterprise Zone Act. For partners,and21forshareholders of Subchapter S corporations, and owners 22 of limited liability companies, if the liability company 23 is treated as a partnership for purposes of federal and 24 State income taxation, there shall be allowed a credit 25 under this subsection (f) to be determined in accordance 26 with the determination of income and distributive share 27 of income under Sections 702 and 704 and Subchapter S of 28 the Internal Revenue Code. The credit shall be .5% of the 29 basis for such property. The credit shall be available 30 only in the taxable year in which the property is placed 31 in service in the Enterprise Zone and shall not be 32 allowed to the extent that it would reduce a taxpayer's 33 liability for the tax imposed by subsections (a) and (b) 34 of this Section to below zero. For tax years ending on or SB878 Enrolled -8- LRB9105091PTpk 1 after December 31, 1985, the credit shall be allowed for 2 the tax year in which the property is placed in service, 3 or, if the amount of the credit exceeds the tax liability 4 for that year, whether it exceeds the original liability 5 or the liability as later amended, such excess may be 6 carried forward and applied to the tax liability of the 5 7 taxable years following the excess credit year. The 8 credit shall be applied to the earliest year for which 9 there is a liability. If there is credit from more than 10 one tax year that is available to offset a liability, the 11 credit accruing first in time shall be applied first. 12 (2) The term qualified property means property 13 which: 14 (A) is tangible, whether new or used, 15 including buildings and structural components of 16 buildings; 17 (B) is depreciable pursuant to Section 167 of 18 the Internal Revenue Code, except that "3-year 19 property" as defined in Section 168(c)(2)(A) of that 20 Code is not eligible for the credit provided by this 21 subsection (f); 22 (C) is acquired by purchase as defined in 23 Section 179(d) of the Internal Revenue Code; 24 (D) is used in the Enterprise Zone by the 25 taxpayer; and 26 (E) has not been previously used in Illinois 27 in such a manner and by such a person as would 28 qualify for the credit provided by this subsection 29 (f) or subsection (e). 30 (3) The basis of qualified property shall be the 31 basis used to compute the depreciation deduction for 32 federal income tax purposes. 33 (4) If the basis of the property for federal income 34 tax depreciation purposes is increased after it has been SB878 Enrolled -9- LRB9105091PTpk 1 placed in service in the Enterprise Zone by the taxpayer, 2 the amount of such increase shall be deemed property 3 placed in service on the date of such increase in basis. 4 (5) The term "placed in service" shall have the 5 same meaning as under Section 46 of the Internal Revenue 6 Code. 7 (6) If during any taxable year, any property ceases 8 to be qualified property in the hands of the taxpayer 9 within 48 months after being placed in service, or the 10 situs of any qualified property is moved outside the 11 Enterprise Zone within 48 months after being placed in 12 service, the tax imposed under subsections (a) and (b) of 13 this Section for such taxable year shall be increased. 14 Such increase shall be determined by (i) recomputing the 15 investment credit which would have been allowed for the 16 year in which credit for such property was originally 17 allowed by eliminating such property from such 18 computation, and (ii) subtracting such recomputed credit 19 from the amount of credit previously allowed. For the 20 purposes of this paragraph (6), a reduction of the basis 21 of qualified property resulting from a redetermination of 22 the purchase price shall be deemed a disposition of 23 qualified property to the extent of such reduction. 24 (g) Jobs Tax Credit; Enterprise Zone and Foreign 25 Trade Zone or Sub-Zone. 26 (1) A taxpayer conducting a trade or business in an 27 enterprise zone or a High Impact Business designated by 28 the Department of Commerce and Community Affairs 29 conducting a trade or business in a federally designated 30 Foreign Trade Zone or Sub-Zone shall be allowed a credit 31 against the tax imposed by subsections (a) and (b) of 32 this Section in the amount of $500 per eligible employee 33 hired to work in the zone during the taxable year. 34 (2) To qualify for the credit: SB878 Enrolled -10- LRB9105091PTpk 1 (A) the taxpayer must hire 5 or more eligible 2 employees to work in an enterprise zone or federally 3 designated Foreign Trade Zone or Sub-Zone during the 4 taxable year; 5 (B) the taxpayer's total employment within the 6 enterprise zone or federally designated Foreign 7 Trade Zone or Sub-Zone must increase by 5 or more 8 full-time employees beyond the total employed in 9 that zone at the end of the previous tax year for 10 which a jobs tax credit under this Section was 11 taken, or beyond the total employed by the taxpayer 12 as of December 31, 1985, whichever is later; and 13 (C) the eligible employees must be employed 14 180 consecutive days in order to be deemed hired for 15 purposes of this subsection. 16 (3) An "eligible employee" means an employee who 17 is: 18 (A) Certified by the Department of Commerce 19 and Community Affairs as "eligible for services" 20 pursuant to regulations promulgated in accordance 21 with Title II of the Job Training Partnership Act, 22 Training Services for the Disadvantaged or Title III 23 of the Job Training Partnership Act, Employment and 24 Training Assistance for Dislocated Workers Program. 25 (B) Hired after the enterprise zone or 26 federally designated Foreign Trade Zone or Sub-Zone 27 was designated or the trade or business was located 28 in that zone, whichever is later. 29 (C) Employed in the enterprise zone or Foreign 30 Trade Zone or Sub-Zone. An employee is employed in 31 an enterprise zone or federally designated Foreign 32 Trade Zone or Sub-Zone if his services are rendered 33 there or it is the base of operations for the 34 services performed. SB878 Enrolled -11- LRB9105091PTpk 1 (D) A full-time employee working 30 or more 2 hours per week. 3 (4) For tax years ending on or after December 31, 4 1985 and prior to December 31, 1988, the credit shall be 5 allowed for the tax year in which the eligible employees 6 are hired. For tax years ending on or after December 31, 7 1988, the credit shall be allowed for the tax year 8 immediately following the tax year in which the eligible 9 employees are hired. If the amount of the credit exceeds 10 the tax liability for that year, whether it exceeds the 11 original liability or the liability as later amended, 12 such excess may be carried forward and applied to the tax 13 liability of the 5 taxable years following the excess 14 credit year. The credit shall be applied to the earliest 15 year for which there is a liability. If there is credit 16 from more than one tax year that is available to offset a 17 liability, earlier credit shall be applied first. 18 (5) The Department of Revenue shall promulgate such 19 rules and regulations as may be deemed necessary to carry 20 out the purposes of this subsection (g). 21 (6) The credit shall be available for eligible 22 employees hired on or after January 1, 1986. 23 (h) Investment credit; High Impact Business. 24 (1) Subject to subsection (b) of Section 5.5 of the 25 Illinois Enterprise Zone Act, a taxpayer shall be allowed 26 a credit against the tax imposed by subsections (a) and 27 (b) of this Section for investment in qualified property 28 which is placed in service by a Department of Commerce 29 and Community Affairs designated High Impact Business. 30 The credit shall be .5% of the basis for such property. 31 The credit shall not be available until the minimum 32 investments in qualified property set forth in Section 33 5.5 of the Illinois Enterprise Zone Act have been 34 satisfied and shall not be allowed to the extent that it SB878 Enrolled -12- LRB9105091PTpk 1 would reduce a taxpayer's liability for the tax imposed 2 by subsections (a) and (b) of this Section to below zero. 3 The credit applicable to such minimum investments shall 4 be taken in the taxable year in which such minimum 5 investments have been completed. The credit for 6 additional investments beyond the minimum investment by a 7 designated high impact business shall be available only 8 in the taxable year in which the property is placed in 9 service and shall not be allowed to the extent that it 10 would reduce a taxpayer's liability for the tax imposed 11 by subsections (a) and (b) of this Section to below zero. 12 For tax years ending on or after December 31, 1987, the 13 credit shall be allowed for the tax year in which the 14 property is placed in service, or, if the amount of the 15 credit exceeds the tax liability for that year, whether 16 it exceeds the original liability or the liability as 17 later amended, such excess may be carried forward and 18 applied to the tax liability of the 5 taxable years 19 following the excess credit year. The credit shall be 20 applied to the earliest year for which there is a 21 liability. If there is credit from more than one tax 22 year that is available to offset a liability, the credit 23 accruing first in time shall be applied first. 24 Changes made in this subdivision (h)(1) by Public 25 Act 88-670 restore changes made by Public Act 85-1182 and 26 reflect existing law. 27 (2) The term qualified property means property 28 which: 29 (A) is tangible, whether new or used, 30 including buildings and structural components of 31 buildings; 32 (B) is depreciable pursuant to Section 167 of 33 the Internal Revenue Code, except that "3-year 34 property" as defined in Section 168(c)(2)(A) of that SB878 Enrolled -13- LRB9105091PTpk 1 Code is not eligible for the credit provided by this 2 subsection (h); 3 (C) is acquired by purchase as defined in 4 Section 179(d) of the Internal Revenue Code; and 5 (D) is not eligible for the Enterprise Zone 6 Investment Credit provided by subsection (f) of this 7 Section. 8 (3) The basis of qualified property shall be the 9 basis used to compute the depreciation deduction for 10 federal income tax purposes. 11 (4) If the basis of the property for federal income 12 tax depreciation purposes is increased after it has been 13 placed in service in a federally designated Foreign Trade 14 Zone or Sub-Zone located in Illinois by the taxpayer, the 15 amount of such increase shall be deemed property placed 16 in service on the date of such increase in basis. 17 (5) The term "placed in service" shall have the 18 same meaning as under Section 46 of the Internal Revenue 19 Code. 20 (6) If during any taxable year ending on or before 21 December 31, 1996, any property ceases to be qualified 22 property in the hands of the taxpayer within 48 months 23 after being placed in service, or the situs of any 24 qualified property is moved outside Illinois within 48 25 months after being placed in service, the tax imposed 26 under subsections (a) and (b) of this Section for such 27 taxable year shall be increased. Such increase shall be 28 determined by (i) recomputing the investment credit which 29 would have been allowed for the year in which credit for 30 such property was originally allowed by eliminating such 31 property from such computation, and (ii) subtracting such 32 recomputed credit from the amount of credit previously 33 allowed. For the purposes of this paragraph (6), a 34 reduction of the basis of qualified property resulting SB878 Enrolled -14- LRB9105091PTpk 1 from a redetermination of the purchase price shall be 2 deemed a disposition of qualified property to the extent 3 of such reduction. 4 (7) Beginning with tax years ending after December 5 31, 1996, if a taxpayer qualifies for the credit under 6 this subsection (h) and thereby is granted a tax 7 abatement and the taxpayer relocates its entire facility 8 in violation of the explicit terms and length of the 9 contract under Section 18-183 of the Property Tax Code, 10 the tax imposed under subsections (a) and (b) of this 11 Section shall be increased for the taxable year in which 12 the taxpayer relocated its facility by an amount equal to 13 the amount of credit received by the taxpayer under this 14 subsection (h). 15 (i) A credit shall be allowed against the tax imposed by 16 subsections (a) and (b) of this Section for the tax imposed 17 by subsections (c) and (d) of this Section. This credit 18 shall be computed by multiplying the tax imposed by 19 subsections (c) and (d) of this Section by a fraction, the 20 numerator of which is base income allocable to Illinois and 21 the denominator of which is Illinois base income, and further 22 multiplying the product by the tax rate imposed by 23 subsections (a) and (b) of this Section. 24 Any credit earned on or after December 31, 1986 under 25 this subsection which is unused in the year the credit is 26 computed because it exceeds the tax liability imposed by 27 subsections (a) and (b) for that year (whether it exceeds the 28 original liability or the liability as later amended) may be 29 carried forward and applied to the tax liability imposed by 30 subsections (a) and (b) of the 5 taxable years following the 31 excess credit year. This credit shall be applied first to 32 the earliest year for which there is a liability. If there 33 is a credit under this subsection from more than one tax year 34 that is available to offset a liability the earliest credit SB878 Enrolled -15- LRB9105091PTpk 1 arising under this subsection shall be applied first. 2 If, during any taxable year ending on or after December 3 31, 1986, the tax imposed by subsections (c) and (d) of this 4 Section for which a taxpayer has claimed a credit under this 5 subsection (i) is reduced, the amount of credit for such tax 6 shall also be reduced. Such reduction shall be determined by 7 recomputing the credit to take into account the reduced tax 8 imposed by subsection (c) and (d). If any portion of the 9 reduced amount of credit has been carried to a different 10 taxable year, an amended return shall be filed for such 11 taxable year to reduce the amount of credit claimed. 12 (j) Training expense credit. Beginning with tax years 13 ending on or after December 31, 1986, a taxpayer shall be 14 allowed a credit against the tax imposed by subsection (a) 15 and (b) under this Section for all amounts paid or accrued, 16 on behalf of all persons employed by the taxpayer in Illinois 17 or Illinois residents employed outside of Illinois by a 18 taxpayer, for educational or vocational training in 19 semi-technical or technical fields or semi-skilled or skilled 20 fields, which were deducted from gross income in the 21 computation of taxable income. The credit against the tax 22 imposed by subsections (a) and (b) shall be 1.6% of such 23 training expenses. For partners,and forshareholders of 24 subchapter S corporations, and owners of limited liability 25 companies, if the liability company is treated as a 26 partnership for purposes of federal and State income 27 taxation, there shall be allowed a credit under this 28 subsection (j) to be determined in accordance with the 29 determination of income and distributive share of income 30 under Sections 702 and 704 and subchapter S of the Internal 31 Revenue Code. 32 Any credit allowed under this subsection which is unused 33 in the year the credit is earned may be carried forward to 34 each of the 5 taxable years following the year for which the SB878 Enrolled -16- LRB9105091PTpk 1 credit is first computed until it is used. This credit shall 2 be applied first to the earliest year for which there is a 3 liability. If there is a credit under this subsection from 4 more than one tax year that is available to offset a 5 liability the earliest credit arising under this subsection 6 shall be applied first. 7 (k) Research and development credit. 8 Beginning with tax years ending after July 1, 1990, a 9 taxpayer shall be allowed a credit against the tax imposed by 10 subsections (a) and (b) of this Section for increasing 11 research activities in this State. The credit allowed 12 against the tax imposed by subsections (a) and (b) shall be 13 equal to 6 1/2% of the qualifying expenditures for increasing 14 research activities in this State. For partners, shareholders 15 of subchapter S corporations, and owners of limited liability 16 companies, if the liability company is treated as a 17 partnership for purposes of federal and State income 18 taxation, there shall be allowed a credit under this 19 subsection to be determined in accordance with the 20 determination of income and distributive share of income 21 under Sections 702 and 704 and subchapter S of the Internal 22 Revenue Code. 23 For purposes of this subsection, "qualifying 24 expenditures" means the qualifying expenditures as defined 25 for the federal credit for increasing research activities 26 which would be allowable under Section 41 of the Internal 27 Revenue Code and which are conducted in this State, 28 "qualifying expenditures for increasing research activities 29 in this State" means the excess of qualifying expenditures 30 for the taxable year in which incurred over qualifying 31 expenditures for the base period, "qualifying expenditures 32 for the base period" means the average of the qualifying 33 expenditures for each year in the base period, and "base 34 period" means the 3 taxable years immediately preceding the SB878 Enrolled -17- LRB9105091PTpk 1 taxable year for which the determination is being made. 2 Any credit in excess of the tax liability for the taxable 3 year may be carried forward. A taxpayer may elect to have the 4 unused credit shown on its final completed return carried 5 over as a credit against the tax liability for the following 6 5 taxable years or until it has been fully used, whichever 7 occurs first. 8 If an unused credit is carried forward to a given year 9 from 2 or more earlier years, that credit arising in the 10 earliest year will be applied first against the tax liability 11 for the given year. If a tax liability for the given year 12 still remains, the credit from the next earliest year will 13 then be applied, and so on, until all credits have been used 14 or no tax liability for the given year remains. Any 15 remaining unused credit or credits then will be carried 16 forward to the next following year in which a tax liability 17 is incurred, except that no credit can be carried forward to 18 a year which is more than 5 years after the year in which the 19 expense for which the credit is given was incurred. 20 Unless extended by law, the credit shall not include 21 costs incurred after December 31, 2004, except for costs 22 incurred pursuant to a binding contract entered into on or 23 before December 31, 2004. 24 No inference shall be drawn from this amendatory Act of 25 the 91st General Assembly in construing this Section for 26 taxable years beginning before January 1, 1999. 27 (l) Environmental Remediation Tax Credit. 28 (i) For tax years ending after December 31, 1997 29 and on or before December 31, 2001, a taxpayer shall be 30 allowed a credit against the tax imposed by subsections 31 (a) and (b) of this Section for certain amounts paid for 32 unreimbursed eligible remediation costs, as specified in 33 this subsection. For purposes of this Section, 34 "unreimbursed eligible remediation costs" means costs SB878 Enrolled -18- LRB9105091PTpk 1 approved by the Illinois Environmental Protection Agency 2 ("Agency") under Section 58.14 of the Environmental 3 Protection Act that were paid in performing environmental 4 remediation at a site for which a No Further Remediation 5 Letter was issued by the Agency and recorded under 6 Section 58.10 of the Environmental Protection Act. The 7 credit must be claimed for the taxable year in which 8 Agency approval of the eligible remediation costs is 9 granted. The credit is not available to any taxpayer if 10 the taxpayer or any related party caused or contributed 11 to, in any material respect, a release of regulated 12 substances on, in, or under the site that was identified 13 and addressed by the remedial action pursuant to the Site 14 Remediation Program of the Environmental Protection Act. 15 After the Pollution Control Board rules are adopted 16 pursuant to the Illinois Administrative Procedure Act for 17 the administration and enforcement of Section 58.9 of the 18 Environmental Protection Act, determinations as to credit 19 availability for purposes of this Section shall be made 20 consistent with those rules. For purposes of this 21 Section, "taxpayer" includes a person whose tax 22 attributes the taxpayer has succeeded to under Section 23 381 of the Internal Revenue Code and "related party" 24 includes the persons disallowed a deduction for losses by 25 paragraphs (b), (c), and (f)(1) of Section 267 of the 26 Internal Revenue Code by virtue of being a related 27 taxpayer, as well as any of its partners. The credit 28 allowed against the tax imposed by subsections (a) and 29 (b) shall be equal to 25% of the unreimbursed eligible 30 remediation costs in excess of $100,000 per site, except 31 that the $100,000 threshold shall not apply to any site 32 contained in an enterprise zone as determined by the 33 Department of Commerce and Community Affairs. The total 34 credit allowed shall not exceed $40,000 per year with a SB878 Enrolled -19- LRB9105091PTpk 1 maximum total of $150,000 per site. For partners and 2 shareholders of subchapter S corporations, there shall be 3 allowed a credit under this subsection to be determined 4 in accordance with the determination of income and 5 distributive share of income under Sections 702 and 704 6 of subchapter S of the Internal Revenue Code. 7 (ii) A credit allowed under this subsection that is 8 unused in the year the credit is earned may be carried 9 forward to each of the 5 taxable years following the year 10 for which the credit is first earned until it is used. 11 The term "unused credit" does not include any amounts of 12 unreimbursed eligible remediation costs in excess of the 13 maximum credit per site authorized under paragraph (i). 14 This credit shall be applied first to the earliest year 15 for which there is a liability. If there is a credit 16 under this subsection from more than one tax year that is 17 available to offset a liability, the earliest credit 18 arising under this subsection shall be applied first. A 19 credit allowed under this subsection may be sold to a 20 buyer as part of a sale of all or part of the remediation 21 site for which the credit was granted. The purchaser of 22 a remediation site and the tax credit shall succeed to 23 the unused credit and remaining carry-forward period of 24 the seller. To perfect the transfer, the assignor shall 25 record the transfer in the chain of title for the site 26 and provide written notice to the Director of the 27 Illinois Department of Revenue of the assignor's intent 28 to sell the remediation site and the amount of the tax 29 credit to be transferred as a portion of the sale. In no 30 event may a credit be transferred to any taxpayer if the 31 taxpayer or a related party would not be eligible under 32 the provisions of subsection (i). 33 (iii) For purposes of this Section, the term "site" 34 shall have the same meaning as under Section 58.2 of the SB878 Enrolled -20- LRB9105091PTpk 1 Environmental Protection Act. 2 (Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96; 3 89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff. 4 8-17-97; 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717, 5 eff. 8-7-98; 90-792, eff. 1-1-99; revised 9-16-98.) 6 Section 5. The Use Tax Act is amended by changing 7 Section 3-5 as follows: 8 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5) 9 Sec. 3-5. Exemptions. Use of the following tangible 10 personal property is exempt from the tax imposed by this Act: 11 (1) Personal property purchased from a corporation, 12 society, association, foundation, institution, or 13 organization, other than a limited liability company, that is 14 organized and operated as a not-for-profit service enterprise 15 for the benefit of persons 65 years of age or older if the 16 personal property was not purchased by the enterprise for the 17 purpose of resale by the enterprise. 18 (2) Personal property purchased by a not-for-profit 19 Illinois county fair association for use in conducting, 20 operating, or promoting the county fair. 21 (3) Personal property purchased by a not-for-profit 22 music or dramatic arts organization that establishes, by 23 proof required by the Department by rule, that it has 24 received an exemption under Section 501(c)(3) of the Internal 25 Revenue Code and that is organized and operated for the 26 presentation of live public performances of musical or 27 theatrical works on a regular basis. 28 (4) Personal property purchased by a governmental body, 29 by a corporation, society, association, foundation, or 30 institution organized and operated exclusively for 31 charitable, religious, or educational purposes, or by a 32 not-for-profit corporation, society, association, foundation, SB878 Enrolled -21- LRB9105091PTpk 1 institution, or organization that has no compensated officers 2 or employees and that is organized and operated primarily for 3 the recreation of persons 55 years of age or older. A limited 4 liability company may qualify for the exemption under this 5 paragraph only if the limited liability company is organized 6 and operated exclusively for educational purposes. On and 7 after July 1, 1987, however, no entity otherwise eligible for 8 this exemption shall make tax-free purchases unless it has an 9 active exemption identification number issued by the 10 Department. 11 (5) A passenger car that is a replacement vehicle to the 12 extent that the purchase price of the car is subject to the 13 Replacement Vehicle Tax. 14 (6) Graphic arts machinery and equipment, including 15 repair and replacement parts, both new and used, and 16 including that manufactured on special order, certified by 17 the purchaser to be used primarily for graphic arts 18 production, and including machinery and equipment purchased 19 for lease. 20 (7) Farm chemicals. 21 (8) Legal tender, currency, medallions, or gold or 22 silver coinage issued by the State of Illinois, the 23 government of the United States of America, or the government 24 of any foreign country, and bullion. 25 (9) Personal property purchased from a teacher-sponsored 26 student organization affiliated with an elementary or 27 secondary school located in Illinois. 28 (10) A motor vehicle of the first division, a motor 29 vehicle of the second division that is a self-contained motor 30 vehicle designed or permanently converted to provide living 31 quarters for recreational, camping, or travel use, with 32 direct walk through to the living quarters from the driver's 33 seat, or a motor vehicle of the second division that is of 34 the van configuration designed for the transportation of not SB878 Enrolled -22- LRB9105091PTpk 1 less than 7 nor more than 16 passengers, as defined in 2 Section 1-146 of the Illinois Vehicle Code, that is used for 3 automobile renting, as defined in the Automobile Renting 4 Occupation and Use Tax Act. 5 (11) Farm machinery and equipment, both new and used, 6 including that manufactured on special order, certified by 7 the purchaser to be used primarily for production agriculture 8 or State or federal agricultural programs, including 9 individual replacement parts for the machinery and equipment, 10 including machinery and equipment purchased for lease, and 11 including implements of husbandry defined in Section 1-130 of 12 the Illinois Vehicle Code, farm machinery and agricultural 13 chemical and fertilizer spreaders, and nurse wagons required 14 to be registered under Section 3-809 of the Illinois Vehicle 15 Code, but excluding other motor vehicles required to be 16 registered under the Illinois Vehicle Code. Horticultural 17 polyhouses or hoop houses used for propagating, growing, or 18 overwintering plants shall be considered farm machinery and 19 equipment under this item (11). Agricultural chemical tender 20 tanks and dry boxes shall include units sold separately from 21 a motor vehicle required to be licensed and units sold 22 mounted on a motor vehicle required to be licensed if the 23 selling price of the tender is separately stated. 24 Farm machinery and equipment shall include precision 25 farming equipment that is installed or purchased to be 26 installed on farm machinery and equipment including, but not 27 limited to, tractors, harvesters, sprayers, planters, 28 seeders, or spreaders. Precision farming equipment includes, 29 but is not limited to, soil testing sensors, computers, 30 monitors, software, global positioning and mapping systems, 31 and other such equipment. 32 Farm machinery and equipment also includes computers, 33 sensors, software, and related equipment used primarily in 34 the computer-assisted operation of production agriculture SB878 Enrolled -23- LRB9105091PTpk 1 facilities, equipment, and activities such as, but not 2 limited to, the collection, monitoring, and correlation of 3 animal and crop data for the purpose of formulating animal 4 diets and agricultural chemicals. This item (11) is exempt 5 from the provisions of Section 3-90. 6 (12) Fuel and petroleum products sold to or used by an 7 air common carrier, certified by the carrier to be used for 8 consumption, shipment, or storage in the conduct of its 9 business as an air common carrier, for a flight destined for 10 or returning from a location or locations outside the United 11 States without regard to previous or subsequent domestic 12 stopovers. 13 (13) Proceeds of mandatory service charges separately 14 stated on customers' bills for the purchase and consumption 15 of food and beverages purchased at retail from a retailer, to 16 the extent that the proceeds of the service charge are in 17 fact turned over as tips or as a substitute for tips to the 18 employees who participate directly in preparing, serving, 19 hosting or cleaning up the food or beverage function with 20 respect to which the service charge is imposed. 21 (14) Oil field exploration, drilling, and production 22 equipment, including (i) rigs and parts of rigs, rotary rigs, 23 cable tool rigs, and workover rigs, (ii) pipe and tubular 24 goods, including casing and drill strings, (iii) pumps and 25 pump-jack units, (iv) storage tanks and flow lines, (v) any 26 individual replacement part for oil field exploration, 27 drilling, and production equipment, and (vi) machinery and 28 equipment purchased for lease; but excluding motor vehicles 29 required to be registered under the Illinois Vehicle Code. 30 (15) Photoprocessing machinery and equipment, including 31 repair and replacement parts, both new and used, including 32 that manufactured on special order, certified by the 33 purchaser to be used primarily for photoprocessing, and 34 including photoprocessing machinery and equipment purchased SB878 Enrolled -24- LRB9105091PTpk 1 for lease. 2 (16) Coal exploration, mining, offhighway hauling, 3 processing, maintenance, and reclamation equipment, including 4 replacement parts and equipment, and including equipment 5 purchased for lease, but excluding motor vehicles required to 6 be registered under the Illinois Vehicle Code. 7 (17) Distillation machinery and equipment, sold as a 8 unit or kit, assembled or installed by the retailer, 9 certified by the user to be used only for the production of 10 ethyl alcohol that will be used for consumption as motor fuel 11 or as a component of motor fuel for the personal use of the 12 user, and not subject to sale or resale. 13 (18) Manufacturing and assembling machinery and 14 equipment used primarily in the process of manufacturing or 15 assembling tangible personal property for wholesale or retail 16 sale or lease, whether that sale or lease is made directly by 17 the manufacturer or by some other person, whether the 18 materials used in the process are owned by the manufacturer 19 or some other person, or whether that sale or lease is made 20 apart from or as an incident to the seller's engaging in the 21 service occupation of producing machines, tools, dies, jigs, 22 patterns, gauges, or other similar items of no commercial 23 value on special order for a particular purchaser. 24 (19) Personal property delivered to a purchaser or 25 purchaser's donee inside Illinois when the purchase order for 26 that personal property was received by a florist located 27 outside Illinois who has a florist located inside Illinois 28 deliver the personal property. 29 (20) Semen used for artificial insemination of livestock 30 for direct agricultural production. 31 (21) Horses, or interests in horses, registered with and 32 meeting the requirements of any of the Arabian Horse Club 33 Registry of America, Appaloosa Horse Club, American Quarter 34 Horse Association, United States Trotting Association, or SB878 Enrolled -25- LRB9105091PTpk 1 Jockey Club, as appropriate, used for purposes of breeding or 2 racing for prizes. 3 (22) Computers and communications equipment utilized for 4 any hospital purpose and equipment used in the diagnosis, 5 analysis, or treatment of hospital patients purchased by a 6 lessor who leases the equipment, under a lease of one year or 7 longer executed or in effect at the time the lessor would 8 otherwise be subject to the tax imposed by this Act, to a 9 hospital that has been issued an active tax exemption 10 identification number by the Department under Section 1g of 11 the Retailers' Occupation Tax Act. If the equipment is 12 leased in a manner that does not qualify for this exemption 13 or is used in any other non-exempt manner, the lessor shall 14 be liable for the tax imposed under this Act or the Service 15 Use Tax Act, as the case may be, based on the fair market 16 value of the property at the time the non-qualifying use 17 occurs. No lessor shall collect or attempt to collect an 18 amount (however designated) that purports to reimburse that 19 lessor for the tax imposed by this Act or the Service Use Tax 20 Act, as the case may be, if the tax has not been paid by the 21 lessor. If a lessor improperly collects any such amount from 22 the lessee, the lessee shall have a legal right to claim a 23 refund of that amount from the lessor. If, however, that 24 amount is not refunded to the lessee for any reason, the 25 lessor is liable to pay that amount to the Department. 26 (23) Personal property purchased by a lessor who leases 27 the property, under a lease of one year or longer executed 28 or in effect at the time the lessor would otherwise be 29 subject to the tax imposed by this Act, to a governmental 30 body that has been issued an active sales tax exemption 31 identification number by the Department under Section 1g of 32 the Retailers' Occupation Tax Act. If the property is leased 33 in a manner that does not qualify for this exemption or used 34 in any other non-exempt manner, the lessor shall be liable SB878 Enrolled -26- LRB9105091PTpk 1 for the tax imposed under this Act or the Service Use Tax 2 Act, as the case may be, based on the fair market value of 3 the property at the time the non-qualifying use occurs. No 4 lessor shall collect or attempt to collect an amount (however 5 designated) that purports to reimburse that lessor for the 6 tax imposed by this Act or the Service Use Tax Act, as the 7 case may be, if the tax has not been paid by the lessor. If 8 a lessor improperly collects any such amount from the lessee, 9 the lessee shall have a legal right to claim a refund of that 10 amount from the lessor. If, however, that amount is not 11 refunded to the lessee for any reason, the lessor is liable 12 to pay that amount to the Department. 13 (24) Beginning with taxable years ending on or after 14 December 31, 1995 and ending with taxable years ending on or 15 before December 31, 2004, personal property that is donated 16 for disaster relief to be used in a State or federally 17 declared disaster area in Illinois or bordering Illinois by a 18 manufacturer or retailer that is registered in this State to 19 a corporation, society, association, foundation, or 20 institution that has been issued a sales tax exemption 21 identification number by the Department that assists victims 22 of the disaster who reside within the declared disaster area. 23 (25) Beginning with taxable years ending on or after 24 December 31, 1995 and ending with taxable years ending on or 25 before December 31, 2004, personal property that is used in 26 the performance of infrastructure repairs in this State, 27 including but not limited to municipal roads and streets, 28 access roads, bridges, sidewalks, waste disposal systems, 29 water and sewer line extensions, water distribution and 30 purification facilities, storm water drainage and retention 31 facilities, and sewage treatment facilities, resulting from a 32 State or federally declared disaster in Illinois or bordering 33 Illinois when such repairs are initiated on facilities 34 located in the declared disaster area within 6 months after SB878 Enrolled -27- LRB9105091PTpk 1 the disaster. 2 (26) Beginning January 1, 2000, new or used automatic 3 vending machines that prepare and serve hot food and 4 beverages, including coffee, soup, and other items, and 5 replacement parts for these machines. This paragraph is 6 exempt from the provisions of Section 3-90. 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; 90-552, 10 eff. 12-12-97; 90-605, eff. 6-30-98.) 11 Section 10. The Service Use Tax Act is amended by 12 changing Section 3-5 as follows: 13 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5) 14 Sec. 3-5. Exemptions. Use of the following tangible 15 personal property is exempt from the tax imposed by this Act: 16 (1) Personal property purchased from a corporation, 17 society, association, foundation, institution, or 18 organization, other than a limited liability company, that is 19 organized and operated as a not-for-profit service enterprise 20 for the benefit of persons 65 years of age or older if the 21 personal property was not purchased by the enterprise for the 22 purpose of resale by the enterprise. 23 (2) Personal property purchased by a non-profit Illinois 24 county fair association for use in conducting, operating, or 25 promoting the county fair. 26 (3) Personal property purchased by a not-for-profit 27 music or dramatic arts organization that establishes, by 28 proof required by the Department by rule, that it has 29 received an exemption under Section 501(c)(3) of the Internal 30 Revenue Code and that is organized and operated for the 31 presentation of live public performances of musical or 32 theatrical works on a regular basis. SB878 Enrolled -28- LRB9105091PTpk 1 (4) Legal tender, currency, medallions, or gold or 2 silver coinage issued by the State of Illinois, the 3 government of the United States of America, or the government 4 of any foreign country, and bullion. 5 (5) Graphic arts machinery and equipment, including 6 repair and replacement parts, both new and used, and 7 including that manufactured on special order or purchased for 8 lease, certified by the purchaser to be used primarily for 9 graphic arts production. 10 (6) Personal property purchased from a teacher-sponsored 11 student organization affiliated with an elementary or 12 secondary school located in Illinois. 13 (7) Farm machinery and equipment, both new and used, 14 including that manufactured on special order, certified by 15 the purchaser to be used primarily for production agriculture 16 or State or federal agricultural programs, including 17 individual replacement parts for the machinery and equipment, 18 including machinery and equipment purchased for lease, and 19 including implements of husbandry defined in Section 1-130 of 20 the Illinois Vehicle Code, farm machinery and agricultural 21 chemical and fertilizer spreaders, and nurse wagons required 22 to be registered under Section 3-809 of the Illinois Vehicle 23 Code, but excluding other motor vehicles required to be 24 registered under the Illinois Vehicle Code. Horticultural 25 polyhouses or hoop houses used for propagating, growing, or 26 overwintering plants shall be considered farm machinery and 27 equipment under this item (7). Agricultural chemical tender 28 tanks and dry boxes shall include units sold separately from 29 a motor vehicle required to be licensed and units sold 30 mounted on a motor vehicle required to be licensed if the 31 selling price of the tender is separately stated. 32 Farm machinery and equipment shall include precision 33 farming equipment that is installed or purchased to be 34 installed on farm machinery and equipment including, but not SB878 Enrolled -29- LRB9105091PTpk 1 limited to, tractors, harvesters, sprayers, planters, 2 seeders, or spreaders. Precision farming equipment includes, 3 but is not limited to, soil testing sensors, computers, 4 monitors, software, global positioning and mapping systems, 5 and other such equipment. 6 Farm machinery and equipment also includes computers, 7 sensors, software, and related equipment used primarily in 8 the computer-assisted operation of production agriculture 9 facilities, equipment, and activities such as, but not 10 limited to, the collection, monitoring, and correlation of 11 animal and crop data for the purpose of formulating animal 12 diets and agricultural chemicals. This item (7) is exempt 13 from the provisions of Section 3-75. 14 (8) Fuel and petroleum products sold to or used by an 15 air common carrier, certified by the carrier to be used for 16 consumption, shipment, or storage in the conduct of its 17 business as an air common carrier, for a flight destined for 18 or returning from a location or locations outside the United 19 States without regard to previous or subsequent domestic 20 stopovers. 21 (9) Proceeds of mandatory service charges separately 22 stated on customers' bills for the purchase and consumption 23 of food and beverages acquired as an incident to the purchase 24 of a service from a serviceman, to the extent that the 25 proceeds of the service charge are in fact turned over as 26 tips or as a substitute for tips to the employees who 27 participate directly in preparing, serving, hosting or 28 cleaning up the food or beverage function with respect to 29 which the service charge is imposed. 30 (10) Oil field exploration, drilling, and production 31 equipment, including (i) rigs and parts of rigs, rotary rigs, 32 cable tool rigs, and workover rigs, (ii) pipe and tubular 33 goods, including casing and drill strings, (iii) pumps and 34 pump-jack units, (iv) storage tanks and flow lines, (v) any SB878 Enrolled -30- LRB9105091PTpk 1 individual replacement part for oil field exploration, 2 drilling, and production equipment, and (vi) machinery and 3 equipment purchased for lease; but excluding motor vehicles 4 required to be registered under the Illinois Vehicle Code. 5 (11) Proceeds from the sale of photoprocessing machinery 6 and equipment, including repair and replacement parts, both 7 new and used, including that manufactured on special order, 8 certified by the purchaser to be used primarily for 9 photoprocessing, and including photoprocessing machinery and 10 equipment purchased for lease. 11 (12) Coal exploration, mining, offhighway hauling, 12 processing, maintenance, and reclamation equipment, including 13 replacement parts and equipment, and including equipment 14 purchased for lease, but excluding motor vehicles required to 15 be registered under the Illinois Vehicle Code. 16 (13) Semen used for artificial insemination of livestock 17 for direct agricultural production. 18 (14) Horses, or interests in horses, registered with and 19 meeting the requirements of any of the Arabian Horse Club 20 Registry of America, Appaloosa Horse Club, American Quarter 21 Horse Association, United States Trotting Association, or 22 Jockey Club, as appropriate, used for purposes of breeding or 23 racing for prizes. 24 (15) Computers and communications equipment utilized for 25 any hospital purpose and equipment used in the diagnosis, 26 analysis, or treatment of hospital patients purchased by a 27 lessor who leases the equipment, under a lease of one year or 28 longer executed or in effect at the time the lessor would 29 otherwise be subject to the tax imposed by this Act, to a 30 hospital that has been issued an active tax exemption 31 identification number by the Department under Section 1g of 32 the Retailers' Occupation Tax Act. If the equipment is leased 33 in a manner that does not qualify for this exemption or is 34 used in any other non-exempt manner, the lessor shall be SB878 Enrolled -31- LRB9105091PTpk 1 liable for the tax imposed under this Act or the Use Tax Act, 2 as the case may be, based on the fair market value of the 3 property at the time the non-qualifying use occurs. No 4 lessor shall collect or attempt to collect an amount (however 5 designated) that purports to reimburse that lessor for the 6 tax imposed by this Act or the Use Tax Act, as the case may 7 be, if the tax has not been paid by the lessor. If a lessor 8 improperly collects any such amount from the lessee, the 9 lessee shall have a legal right to claim a refund of that 10 amount from the lessor. If, however, that amount is not 11 refunded to the lessee for any reason, the lessor is liable 12 to pay that amount to the Department. 13 (16) Personal property purchased by a lessor who leases 14 the property, under a lease of one year or longer executed or 15 in effect at the time the lessor would otherwise be subject 16 to the tax imposed by this Act, to a governmental body that 17 has been issued an active tax exemption identification number 18 by the Department under Section 1g of the Retailers' 19 Occupation Tax Act. If the property is leased in a manner 20 that does not qualify for this exemption or is used in any 21 other non-exempt manner, the lessor shall be liable for the 22 tax imposed under this Act or the Use Tax Act, as the case 23 may be, based on the fair market value of the property at the 24 time the non-qualifying use occurs. No lessor shall collect 25 or attempt to collect an amount (however designated) that 26 purports to reimburse that lessor for the tax imposed by this 27 Act or the Use Tax Act, as the case may be, if the tax has 28 not been paid by the lessor. If a lessor improperly collects 29 any such amount from the lessee, the lessee shall have a 30 legal right to claim a refund of that amount from the lessor. 31 If, however, that amount is not refunded to the lessee for 32 any reason, the lessor is liable to pay that amount to the 33 Department. 34 (17) Beginning with taxable years ending on or after SB878 Enrolled -32- LRB9105091PTpk 1 December 31, 1995 and ending with taxable years ending on or 2 before December 31, 2004, personal property that is donated 3 for disaster relief to be used in a State or federally 4 declared disaster area in Illinois or bordering Illinois by a 5 manufacturer or retailer that is registered in this State to 6 a corporation, society, association, foundation, or 7 institution that has been issued a sales tax exemption 8 identification number by the Department that assists victims 9 of the disaster who reside within the declared disaster area. 10 (18) Beginning with taxable years ending on or after 11 December 31, 1995 and ending with taxable years ending on or 12 before December 31, 2004, personal property that is used in 13 the performance of infrastructure repairs in this State, 14 including but not limited to municipal roads and streets, 15 access roads, bridges, sidewalks, waste disposal systems, 16 water and sewer line extensions, water distribution and 17 purification facilities, storm water drainage and retention 18 facilities, and sewage treatment facilities, resulting from a 19 State or federally declared disaster in Illinois or bordering 20 Illinois when such repairs are initiated on facilities 21 located in the declared disaster area within 6 months after 22 the disaster. 23 (19) Beginning January 1, 2000, new or used automatic 24 vending machines that prepare and serve hot food and 25 beverages, including coffee, soup, and other items, and 26 replacement parts for these machines. This paragraph is 27 exempt from the provisions of Section 3-75. 28 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 29 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 30 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552, 31 eff. 12-12-97; 90-605, eff. 6-30-98.) 32 Section 15. The Service Occupation Tax Act is amended by 33 changing Section 3-5 as follows: SB878 Enrolled -33- LRB9105091PTpk 1 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5) 2 Sec. 3-5. Exemptions. The following tangible personal 3 property is exempt from the tax imposed by this Act: 4 (1) Personal property sold by a corporation, society, 5 association, foundation, institution, or organization, other 6 than a limited liability company, that is organized and 7 operated as a not-for-profit service enterprise for the 8 benefit of persons 65 years of age or older if the personal 9 property was not purchased by the enterprise for the purpose 10 of resale by the enterprise. 11 (2) Personal property purchased by a not-for-profit 12 Illinois county fair association for use in conducting, 13 operating, or promoting the county fair. 14 (3) Personal property purchased by any not-for-profit 15 music or dramatic arts organization that establishes, by 16 proof required by the Department by rule, that it has 17 received an exemption under Section 501(c)(3) of the 18 Internal Revenue Code and that is organized and operated for 19 the presentation of live public performances of musical or 20 theatrical works on a regular basis. 21 (4) Legal tender, currency, medallions, or gold or 22 silver coinage issued by the State of Illinois, the 23 government of the United States of America, or the government 24 of any foreign country, and bullion. 25 (5) Graphic arts machinery and equipment, including 26 repair and replacement parts, both new and used, and 27 including that manufactured on special order or purchased for 28 lease, certified by the purchaser to be used primarily for 29 graphic arts production. 30 (6) Personal property sold by a teacher-sponsored 31 student organization affiliated with an elementary or 32 secondary school located in Illinois. 33 (7) Farm machinery and equipment, both new and used, 34 including that manufactured on special order, certified by SB878 Enrolled -34- LRB9105091PTpk 1 the purchaser to be used primarily for production agriculture 2 or State or federal agricultural programs, including 3 individual replacement parts for the machinery and equipment, 4 including machinery and equipment purchased for lease, and 5 including implements of husbandry defined in Section 1-130 of 6 the Illinois Vehicle Code, farm machinery and agricultural 7 chemical and fertilizer spreaders, and nurse wagons required 8 to be registered under Section 3-809 of the Illinois Vehicle 9 Code, but excluding other motor vehicles required to be 10 registered under the Illinois Vehicle Code. Horticultural 11 polyhouses or hoop houses used for propagating, growing, or 12 overwintering plants shall be considered farm machinery and 13 equipment under this item (7). Agricultural chemical tender 14 tanks and dry boxes shall include units sold separately from 15 a motor vehicle required to be licensed and units sold 16 mounted on a motor vehicle required to be licensed if the 17 selling price of the tender is separately stated. 18 Farm machinery and equipment shall include precision 19 farming equipment that is installed or purchased to be 20 installed on farm machinery and equipment including, but not 21 limited to, tractors, harvesters, sprayers, planters, 22 seeders, or spreaders. Precision farming equipment includes, 23 but is not limited to, soil testing sensors, computers, 24 monitors, software, global positioning and mapping systems, 25 and other such equipment. 26 Farm machinery and equipment also includes computers, 27 sensors, software, and related equipment used primarily in 28 the computer-assisted operation of production agriculture 29 facilities, equipment, and activities such as, but not 30 limited to, the collection, monitoring, and correlation of 31 animal and crop data for the purpose of formulating animal 32 diets and agricultural chemicals. This item (7) is exempt 33 from the provisions of Section 3-553-75. 34 (8) Fuel and petroleum products sold to or used by an SB878 Enrolled -35- LRB9105091PTpk 1 air common carrier, certified by the carrier to be used for 2 consumption, shipment, or storage in the conduct of its 3 business as an air common carrier, for a flight destined for 4 or returning from a location or locations outside the United 5 States without regard to previous or subsequent domestic 6 stopovers. 7 (9) Proceeds of mandatory service charges separately 8 stated on customers' bills for the purchase and consumption 9 of food and beverages, to the extent that the proceeds of the 10 service charge are in fact turned over as tips or as a 11 substitute for tips to the employees who participate directly 12 in preparing, serving, hosting or cleaning up the food or 13 beverage function with respect to which the service charge is 14 imposed. 15 (10) Oil field exploration, drilling, and production 16 equipment, including (i) rigs and parts of rigs, rotary rigs, 17 cable tool rigs, and workover rigs, (ii) pipe and tubular 18 goods, including casing and drill strings, (iii) pumps and 19 pump-jack units, (iv) storage tanks and flow lines, (v) any 20 individual replacement part for oil field exploration, 21 drilling, and production equipment, and (vi) machinery and 22 equipment purchased for lease; but excluding motor vehicles 23 required to be registered under the Illinois Vehicle Code. 24 (11) Photoprocessing machinery and equipment, including 25 repair and replacement parts, both new and used, including 26 that manufactured on special order, certified by the 27 purchaser to be used primarily for photoprocessing, and 28 including photoprocessing machinery and equipment purchased 29 for lease. 30 (12) Coal exploration, mining, offhighway hauling, 31 processing, maintenance, and reclamation equipment, including 32 replacement parts and equipment, and including equipment 33 purchased for lease, but excluding motor vehicles required to 34 be registered under the Illinois Vehicle Code. SB878 Enrolled -36- LRB9105091PTpk 1 (13) Food for human consumption that is to be consumed 2 off the premises where it is sold (other than alcoholic 3 beverages, soft drinks and food that has been prepared for 4 immediate consumption) and prescription and non-prescription 5 medicines, drugs, medical appliances, and insulin, urine 6 testing materials, syringes, and needles used by diabetics, 7 for human use, when purchased for use by a person receiving 8 medical assistance under Article 5 of the Illinois Public Aid 9 Code who resides in a licensed long-term care facility, as 10 defined in the Nursing Home Care Act. 11 (14) Semen used for artificial insemination of livestock 12 for direct agricultural production. 13 (15) Horses, or interests in horses, registered with and 14 meeting the requirements of any of the Arabian Horse Club 15 Registry of America, Appaloosa Horse Club, American Quarter 16 Horse Association, United States Trotting Association, or 17 Jockey Club, as appropriate, used for purposes of breeding or 18 racing for prizes. 19 (16) Computers and communications equipment utilized for 20 any hospital purpose and equipment used in the diagnosis, 21 analysis, or treatment of hospital patients sold to a lessor 22 who leases the equipment, under a lease of one year or longer 23 executed or in effect at the time of the purchase, to a 24 hospital that has been issued an active tax exemption 25 identification number by the Department under Section 1g of 26 the Retailers' Occupation Tax Act. 27 (17) Personal property sold to a lessor who leases the 28 property, under a lease of one year or longer executed or in 29 effect at the time of the purchase, to a governmental body 30 that has been issued an active tax exemption identification 31 number by the Department under Section 1g of the Retailers' 32 Occupation Tax Act. 33 (18) Beginning with taxable years ending on or after 34 December 31, 1995 and ending with taxable years ending on or SB878 Enrolled -37- LRB9105091PTpk 1 before December 31, 2004, personal property that is donated 2 for disaster relief to be used in a State or federally 3 declared disaster area in Illinois or bordering Illinois by a 4 manufacturer or retailer that is registered in this State to 5 a corporation, society, association, foundation, or 6 institution that has been issued a sales tax exemption 7 identification number by the Department that assists victims 8 of the disaster who reside within the declared disaster area. 9 (19) Beginning with taxable years ending on or after 10 December 31, 1995 and ending with taxable years ending on or 11 before December 31, 2004, personal property that is used in 12 the performance of infrastructure repairs in this State, 13 including but not limited to municipal roads and streets, 14 access roads, bridges, sidewalks, waste disposal systems, 15 water and sewer line extensions, water distribution and 16 purification facilities, storm water drainage and retention 17 facilities, and sewage treatment facilities, resulting from a 18 State or federally declared disaster in Illinois or bordering 19 Illinois when such repairs are initiated on facilities 20 located in the declared disaster area within 6 months after 21 the disaster. 22 (20) Beginning January 1, 2000, new or used automatic 23 vending machines that prepare and serve hot food and 24 beverages, including coffee, soup, and other items, and 25 replacement parts for these machines. This paragraph is 26 exempt from the provisions of Section 3-55. 27 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 28 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 29 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552, 30 eff. 12-12-97; 90-605, eff. 6-30-98; revised 2-10-99.) 31 Section 20. The Retailers' Occupation Tax Act is amended 32 by changing Section 2-5 as follows: SB878 Enrolled -38- LRB9105091PTpk 1 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5) 2 Sec. 2-5. Exemptions. Gross receipts from proceeds from 3 the sale of the following tangible personal property are 4 exempt from the tax imposed by this Act: 5 (1) Farm chemicals. 6 (2) Farm machinery and equipment, both new and used, 7 including that manufactured on special order, certified by 8 the purchaser to be used primarily for production agriculture 9 or State or federal agricultural programs, including 10 individual replacement parts for the machinery and equipment, 11 including machinery and equipment purchased for lease, and 12 including implements of husbandry defined in Section 1-130 of 13 the Illinois Vehicle Code, farm machinery and agricultural 14 chemical and fertilizer spreaders, and nurse wagons required 15 to be registered under Section 3-809 of the Illinois Vehicle 16 Code, but excluding other motor vehicles required to be 17 registered under the Illinois Vehicle Code. Horticultural 18 polyhouses or hoop houses used for propagating, growing, or 19 overwintering plants shall be considered farm machinery and 20 equipment under this item (2). Agricultural chemical tender 21 tanks and dry boxes shall include units sold separately from 22 a motor vehicle required to be licensed and units sold 23 mounted on a motor vehicle required to be licensed, if the 24 selling price of the tender is separately stated. 25 Farm machinery and equipment shall include precision 26 farming equipment that is installed or purchased to be 27 installed on farm machinery and equipment including, but not 28 limited to, tractors, harvesters, sprayers, planters, 29 seeders, or spreaders. Precision farming equipment includes, 30 but is not limited to, soil testing sensors, computers, 31 monitors, software, global positioning and mapping systems, 32 and other such equipment. 33 Farm machinery and equipment also includes computers, 34 sensors, software, and related equipment used primarily in SB878 Enrolled -39- LRB9105091PTpk 1 the computer-assisted operation of production agriculture 2 facilities, equipment, and activities such as, but not 3 limited to, the collection, monitoring, and correlation of 4 animal and crop data for the purpose of formulating animal 5 diets and agricultural chemicals. This item (7) is exempt 6 from the provisions of Section 2-703-75. 7 (3) Distillation machinery and equipment, sold as a unit 8 or kit, assembled or installed by the retailer, certified by 9 the user to be used only for the production of ethyl alcohol 10 that will be used for consumption as motor fuel or as a 11 component of motor fuel for the personal use of the user, and 12 not subject to sale or resale. 13 (4) Graphic arts machinery and equipment, including 14 repair and replacement parts, both new and used, and 15 including that manufactured on special order or purchased for 16 lease, certified by the purchaser to be used primarily for 17 graphic arts production. 18 (5) A motor vehicle of the first division, a motor 19 vehicle of the second division that is a self-contained motor 20 vehicle designed or permanently converted to provide living 21 quarters for recreational, camping, or travel use, with 22 direct walk through access to the living quarters from the 23 driver's seat, or a motor vehicle of the second division that 24 is of the van configuration designed for the transportation 25 of not less than 7 nor more than 16 passengers, as defined in 26 Section 1-146 of the Illinois Vehicle Code, that is used for 27 automobile renting, as defined in the Automobile Renting 28 Occupation and Use Tax Act. 29 (6) Personal property sold by a teacher-sponsored 30 student organization affiliated with an elementary or 31 secondary school located in Illinois. 32 (7) Proceeds of that portion of the selling price of a 33 passenger car the sale of which is subject to the Replacement 34 Vehicle Tax. SB878 Enrolled -40- LRB9105091PTpk 1 (8) Personal property sold to an Illinois county fair 2 association for use in conducting, operating, or promoting 3 the county fair. 4 (9) Personal property sold to a not-for-profit music or 5 dramatic arts organization that establishes, by proof 6 required by the Department by rule, that it has received an 7 exemption under Section 501(c) (3) of the Internal Revenue 8 Code and that is organized and operated for the presentation 9 of live public performances of musical or theatrical works on 10 a regular basis. 11 (10) Personal property sold by a corporation, society, 12 association, foundation, institution, or organization, other 13 than a limited liability company, that is organized and 14 operated as a not-for-profit service enterprise for the 15 benefit of persons 65 years of age or older if the personal 16 property was not purchased by the enterprise for the purpose 17 of resale by the enterprise. 18 (11) Personal property sold to a governmental body, to a 19 corporation, society, association, foundation, or institution 20 organized and operated exclusively for charitable, religious, 21 or educational purposes, or to a not-for-profit corporation, 22 society, association, foundation, institution, or 23 organization that has no compensated officers or employees 24 and that is organized and operated primarily for the 25 recreation of persons 55 years of age or older. A limited 26 liability company may qualify for the exemption under this 27 paragraph only if the limited liability company is organized 28 and operated exclusively for educational purposes. On and 29 after July 1, 1987, however, no entity otherwise eligible for 30 this exemption shall make tax-free purchases unless it has an 31 active identification number issued by the Department. 32 (12) Personal property sold to interstate carriers for 33 hire for use as rolling stock moving in interstate commerce 34 or to lessors under leases of one year or longer executed or SB878 Enrolled -41- LRB9105091PTpk 1 in effect at the time of purchase by interstate carriers for 2 hire for use as rolling stock moving in interstate commerce 3 and equipment operated by a telecommunications provider, 4 licensed as a common carrier by the Federal Communications 5 Commission, which is permanently installed in or affixed to 6 aircraft moving in interstate commerce. 7 (13) Proceeds from sales to owners, lessors, or shippers 8 of tangible personal property that is utilized by interstate 9 carriers for hire for use as rolling stock moving in 10 interstate commerce and equipment operated by a 11 telecommunications provider, licensed as a common carrier by 12 the Federal Communications Commission, which is permanently 13 installed in or affixed to aircraft moving in interstate 14 commerce. 15 (14) Machinery and equipment that will be used by the 16 purchaser, or a lessee of the purchaser, primarily in the 17 process of manufacturing or assembling tangible personal 18 property for wholesale or retail sale or lease, whether the 19 sale or lease is made directly by the manufacturer or by some 20 other person, whether the materials used in the process are 21 owned by the manufacturer or some other person, or whether 22 the sale or lease is made apart from or as an incident to the 23 seller's engaging in the service occupation of producing 24 machines, tools, dies, jigs, patterns, gauges, or other 25 similar items of no commercial value on special order for a 26 particular purchaser. 27 (15) Proceeds of mandatory service charges separately 28 stated on customers' bills for purchase and consumption of 29 food and beverages, to the extent that the proceeds of the 30 service charge are in fact turned over as tips or as a 31 substitute for tips to the employees who participate directly 32 in preparing, serving, hosting or cleaning up the food or 33 beverage function with respect to which the service charge is 34 imposed. SB878 Enrolled -42- LRB9105091PTpk 1 (16) Petroleum products sold to a purchaser if the 2 seller is prohibited by federal law from charging tax to the 3 purchaser. 4 (17) Tangible personal property sold to a common carrier 5 by rail or motor that receives the physical possession of the 6 property in Illinois and that transports the property, or 7 shares with another common carrier in the transportation of 8 the property, out of Illinois on a standard uniform bill of 9 lading showing the seller of the property as the shipper or 10 consignor of the property to a destination outside Illinois, 11 for use outside Illinois. 12 (18) Legal tender, currency, medallions, or gold or 13 silver coinage issued by the State of Illinois, the 14 government of the United States of America, or the government 15 of any foreign country, and bullion. 16 (19) Oil field exploration, drilling, and production 17 equipment, including (i) rigs and parts of rigs, rotary rigs, 18 cable tool rigs, and workover rigs, (ii) pipe and tubular 19 goods, including casing and drill strings, (iii) pumps and 20 pump-jack units, (iv) storage tanks and flow lines, (v) any 21 individual replacement part for oil field exploration, 22 drilling, and production equipment, and (vi) machinery and 23 equipment purchased for lease; but excluding motor vehicles 24 required to be registered under the Illinois Vehicle Code. 25 (20) Photoprocessing machinery and equipment, including 26 repair and replacement parts, both new and used, including 27 that manufactured on special order, certified by the 28 purchaser to be used primarily for photoprocessing, and 29 including photoprocessing machinery and equipment purchased 30 for lease. 31 (21) Coal exploration, mining, offhighway hauling, 32 processing, maintenance, and reclamation equipment, including 33 replacement parts and equipment, and including equipment 34 purchased for lease, but excluding motor vehicles required to SB878 Enrolled -43- LRB9105091PTpk 1 be registered under the Illinois Vehicle Code. 2 (22) Fuel and petroleum products sold to or used by an 3 air carrier, certified by the carrier to be used for 4 consumption, shipment, or storage in the conduct of its 5 business as an air common carrier, for a flight destined for 6 or returning from a location or locations outside the United 7 States without regard to previous or subsequent domestic 8 stopovers. 9 (23) A transaction in which the purchase order is 10 received by a florist who is located outside Illinois, but 11 who has a florist located in Illinois deliver the property to 12 the purchaser or the purchaser's donee in Illinois. 13 (24) Fuel consumed or used in the operation of ships, 14 barges, or vessels that are used primarily in or for the 15 transportation of property or the conveyance of persons for 16 hire on rivers bordering on this State if the fuel is 17 delivered by the seller to the purchaser's barge, ship, or 18 vessel while it is afloat upon that bordering river. 19 (25) A motor vehicle sold in this State to a nonresident 20 even though the motor vehicle is delivered to the nonresident 21 in this State, if the motor vehicle is not to be titled in 22 this State, and if a driveaway decal permit is issued to the 23 motor vehicle as provided in Section 3-603 of the Illinois 24 Vehicle Code or if the nonresident purchaser has vehicle 25 registration plates to transfer to the motor vehicle upon 26 returning to his or her home state. The issuance of the 27 driveaway decal permit or having the out-of-state 28 registration plates to be transferred is prima facie evidence 29 that the motor vehicle will not be titled in this State. 30 (26) Semen used for artificial insemination of livestock 31 for direct agricultural production. 32 (27) Horses, or interests in horses, registered with and 33 meeting the requirements of any of the Arabian Horse Club 34 Registry of America, Appaloosa Horse Club, American Quarter SB878 Enrolled -44- LRB9105091PTpk 1 Horse Association, United States Trotting Association, or 2 Jockey Club, as appropriate, used for purposes of breeding or 3 racing for prizes. 4 (28) Computers and communications equipment utilized for 5 any hospital purpose and equipment used in the diagnosis, 6 analysis, or treatment of hospital patients sold to a lessor 7 who leases the equipment, under a lease of one year or longer 8 executed or in effect at the time of the purchase, to a 9 hospital that has been issued an active tax exemption 10 identification number by the Department under Section 1g of 11 this Act. 12 (29) Personal property sold to a lessor who leases the 13 property, under a lease of one year or longer executed or in 14 effect at the time of the purchase, to a governmental body 15 that has been issued an active tax exemption identification 16 number by the Department under Section 1g of this Act. 17 (30) Beginning with taxable years ending on or after 18 December 31, 1995 and ending with taxable years ending on or 19 before December 31, 2004, personal property that is donated 20 for disaster relief to be used in a State or federally 21 declared disaster area in Illinois or bordering Illinois by a 22 manufacturer or retailer that is registered in this State to 23 a corporation, society, association, foundation, or 24 institution that has been issued a sales tax exemption 25 identification number by the Department that assists victims 26 of the disaster who reside within the declared disaster area. 27 (31) Beginning with taxable years ending on or after 28 December 31, 1995 and ending with taxable years ending on or 29 before December 31, 2004, personal property that is used in 30 the performance of infrastructure repairs in this State, 31 including but not limited to municipal roads and streets, 32 access roads, bridges, sidewalks, waste disposal systems, 33 water and sewer line extensions, water distribution and 34 purification facilities, storm water drainage and retention SB878 Enrolled -45- LRB9105091PTpk 1 facilities, and sewage treatment facilities, resulting from a 2 State or federally declared disaster in Illinois or bordering 3 Illinois when such repairs are initiated on facilities 4 located in the declared disaster area within 6 months after 5 the disaster. 6 (32) Beginning January 1, 2000, new or used automatic 7 vending machines that prepare and serve hot food and 8 beverages, including coffee, soup, and other items, and 9 replacement parts for these machines. This paragraph is 10 exempt from the provisions of Section 2-70. 11 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 12 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 13 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-519, 14 eff. 6-1-98; 90-552, eff. 12-12-97; 90-605, eff. 6-30-98; 15 revised 2-10-99.) 16 Section 25. The Property Tax Code is amended by changing 17 Section 18-165 as follows: 18 (35 ILCS 200/18-165) 19 Sec. 18-165. Abatement of taxes. 20 (a) Any taxing district, upon a majority vote of its 21 governing authority, may, after the determination of the 22 assessed valuation of its property, order the clerk of that 23 county to abate any portion of its taxes on the following 24 types of property: 25 (1) Commercial and industrial. 26 (A) The property of any commercial or 27 industrial firm, including but not limited to the 28 property of any firm that is used for collecting, 29 separating, storing, or processing recyclable 30 materials, locating within the taxing district 31 during the immediately preceding year from another 32 state, territory, or country, or having been newly SB878 Enrolled -46- LRB9105091PTpk 1 created within this State during the immediately 2 preceding year, or expanding an existing facility. 3 The abatement shall not exceed a period of 10 years 4 and the aggregate amount of abated taxes for all 5 taxing districts combined shall not exceed 6 $4,000,000; or 7 (B) The property of any commercial or 8 industrial development of at least 500 acres having 9 been created within the taxing district. The 10 abatement shall not exceed a period of 20 years and 11 the aggregate amount of abated taxes for all taxing 12 districts combined shall not exceed $12,000,000. 13 (C) The property of any commercial or 14 industrial firm currently located in the taxing 15 district that expands a facility or its number of 16 employees. The abatement shall not exceed a period 17 of 10 years and the aggregate amount of abated taxes 18 for all taxing districts combined shall not exceed 19 $4,000,000. The abatement period may be renewed at 20 the option of the taxing districts. 21 (2) Horse racing. Any property in the taxing 22 district which is used for the racing of horses and upon 23 which capital improvements consisting of expansion, 24 improvement or replacement of existing facilities have 25 been made since July 1, 1987. The combined abatements 26 for such property from all taxing districts in any county 27 shall not exceed $5,000,000 annually and shall not exceed 28 a period of 10 years. 29 (3) Auto racing. Any property designed exclusively 30 for the racing of motor vehicles. Such abatement shall 31 not exceed a period of 10 years. 32 (4) Academic or research institute. The property 33 of any academic or research institute in the taxing 34 district that (i) is an exempt organization under SB878 Enrolled -47- LRB9105091PTpk 1 paragraph (3) of Section 501(c) of the Internal Revenue 2 Code, (ii) operates for the benefit of the public by 3 actually and exclusively performing scientific research 4 and making the results of the research available to the 5 interested public on a non-discriminatory basis, and 6 (iii) employs more than 100 employees. An abatement 7 granted under this paragraph shall be for at least 15 8 years and the aggregate amount of abated taxes for all 9 taxing districts combined shall not exceed $5,000,000. 10 (5) Housing for older persons. Any property in the 11 taxing district that is devoted exclusively to affordable 12 housing for older households. For purposes of this 13 paragraph, "older households" means those households (i) 14 living in housing provided under any State or federal 15 program that the Department of Human Rights determines is 16 specifically designed and operated to assist elderly 17 persons and is solely occupied by persons 55 years of age 18 or older and (ii) whose annual income does not exceed 80% 19 of the area gross median income, adjusted for family 20 size, as such gross income and median income are 21 determined from time to time by the United States 22 Department of Housing and Urban Development. The 23 abatement shall not exceed a period of 15 years, and the 24 aggregate amount of abated taxes for all taxing districts 25 shall not exceed $3,000,000. 26 (6) Historical society. For assessment years 1998 27 through 2000, the property of an historical society 28 qualifying as an exempt organization under Section 29 501(c)(3) of the federal Internal Revenue Code. 30 (b) Upon a majority vote of its governing authority, any 31 municipality may, after the determination of the assessed 32 valuation of its property, order the county clerk to abate 33 any portion of its taxes on any property that is located 34 within the corporate limits of the municipality in accordance SB878 Enrolled -48- LRB9105091PTpk 1 with Section 8-3-18 of the Illinois Municipal Code. 2 (Source: P.A. 89-561, eff. 1-1-97; 90-46, eff. 7-3-97; 3 90-415, eff. 8-15-97; 90-568, eff. 1-1-99; 90-655, eff. 4 7-30-98.) 5 Section 99. Effective date. This Act takes effect upon 6 becoming law.