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Public Act 91-0051
SB144 Enrolled LRB9101598PTpk
AN ACT in relation to taxation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. Short title. This Act may be cited as the
Governmental Tax Reform Validation Act.
Section 10. Re-enactment; findings; purpose; validation.
(a) The General Assembly finds and declares that:
(1) The amendatory provisions of this Act were
first enacted by Public Act 85-1135 and all related to
taxation.
(A) Article I of Public Act 85-1135, effective
July 28, 1988, contained provisions stating
legislative intent.
(B) Article II of Public Act 85-1135,
effective January 1, 1990, contained provisions
amending or creating Sections 8-11-1, 8-11-1.1,
8-11-1.2, 8-11-1.3, 8-11-1.4, 8-11-5, 8-11-6,
8-11-6a, 8-11-16, and 11-74.4-8a of the Illinois
Municipal Code; Sections 24a-1, 24a-2, 24a-3, 24a-4,
and 25.05 of "An Act to revise the law in relation
to counties"; Section 4 of the Water Commission Act
of 1985; Section 5.01 of the Local Mass Transit
District Act; Sections 4.01, 4.03, 4.04, and 4.09 of
the Regional Transportation Authority Act; Sections
3, 9, and 10b of the Use Tax Act; Sections 2, 3, 3d,
7a, 9, 10, 10b, and 15 of the Service Use Tax Act;
Sections 2, 3, 9, 13, 15, and 20.1 of the Service
Occupation Tax Act; Sections 2, 3, 5k, and 6d of the
Retailers' Occupation Tax Act; and Sections 5.240,
5.241, 6z-16, and 6z-17 of the State Finance Act.
Article II of Public Act 85-1135, effective January
1, 1990, also contained provisions repealing
Sections 25.05a, 25.05-2, 25.05-2a, 25.05-3,
25.05-3a, 25.05-10, 25.05-10a, and 25.05-10.1 of "An
Act to revise the law in relation to counties" and
Sections 10 and 14 of the Service Occupation Tax
Act.
(C) Article III of Public Act 85-1135,
effective September 1, 1988, contained provisions
further amending Sections 3 and 9 of the Use Tax
Act; Sections 2, 3, and 9 of the Service Use Tax
Act; Sections 2, 3, and 9 of the Service Occupation
Tax Act; and Sections 2 and 3 of the Retailers'
Occupation Tax Act; and amending Section 2 of the
State Revenue Sharing Act.
(D) Article IV of Public Act 85-1135,
effective July 28, 1988, contained provisions
amending Section 6z-9 of the State Finance Act and
creating Section .01 of the State Revenue Sharing
Act.
(E) Article V of Public Act 85-1135, effective
July 28, 1988, contained provisions precluding any
effect on a pre-existing right, remedy, or liability
and authorizing enactment of home rule municipality
ordinances.
(2) Public Act 85-1135 also contained provisions
relating to State bonds and creating the Water Pollution
Control Revolving Fund loan program.
(3) On August 26, 1998, the Cook County Circuit
Court entered an order in the case of Oak Park Arms
Associates v. Whitley (No. 92 L 51045), in which it found
that Public Act 85-1135 violates the single subject
clause of the Illinois Constitution (Article IV, Section
8(d)). As of the time this Act was prepared, the order
declaring P.A. 85-1135 invalid has been vacated but the
case is subject to appeal.
(4) The tax provisions of Public Act 85-1135 affect
many areas of vital concern to the people of this State.
The disruption of the tax reform contained in those
provisions could constitute a grave threat to the
continued health, safety, and welfare of the people of
this State.
(b) It is the purpose of this Act to prevent or minimize
any problems relating to taxation that may result from
challenges to the constitutional validity of Public Act
85-1135, by (1) re-enacting provisions from Public Act
85-1135 and (2) validating all actions taken in reliance on
those provisions from Public Act 85-1135.
(c) Because Public Act 86-962, effective January 1,
1990, renumbered Sections 24a-1, 24a-2, 24a-3, 24a-4, and
25.05 of the Counties Code, this Act contains those
provisions as renumbered under Sections 5-1006, 5-1007,
5-1008, 5-1009, and 5-1024 of the Counties Code. Because
Public Act 86-1475, effective January 10, 1991, resectioned
Section 3 of the Use Tax Act, Section 3 of the Service Use
Tax Act, Section 3 of the Service Occupation Tax Act, and
Section 2 of the Retailers' Occupation Tax Act, this Act
contains those provisions as resectioned under Sections 3,
3-5, 3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40, 3-45, 3-50,
3-55, 3-60, 3-65, 3-70, 3-75, and 3-80 of the Use Tax Act;
Sections 3, 3-5, 3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40,
3-45, 3-50, 3-55, 3-60, and 3-65 of the Service Use Tax Act;
Sections 3, 3-5, 3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40,
3-45, and 3-50 of the Service Occupation Tax Act; and
Sections 2, 2-5, 2-10, 2-15, 2-20, 2-25, 2-30, 2-35, 2-40,
2-45, 2-50, 2-55, 2-60, 2-65 of the Retailers' Occupation Tax
Act. Because Public Act 85-1440, effective February 1, 1989,
renumbered Section 6z-16 of the State Finance Act and Section
.01 of the State Revenue Sharing Act, this Act contains those
provisions as renumbered under Section 6z-18 of the State
Finance Act and Section 0.1 of the State Revenue Sharing Act.
Sections 10b of the Use Tax Act, 10b of the Service Use Tax
Act, 20.1 of the Service Occupation Tax Act, and 6d of the
Retailers' Occupation Tax Act have been omitted from this Act
because they were repealed by Public Act 87-1258, effective
January 7, 1993.
(d) This Act re-enacts Section 1 of Article I of Public
Act 85-1135; Sections 8-11-1, 8-11-1.1, 8-11-1.2, 8-11-1.3,
8-11-1.4, 8-11-5, 8-11-6, 8-11-6a, 8-11-16, and 11-74.4-8a of
the Illinois Municipal Code; Sections 5-1006, 5-1007, 5-1008,
5-1009, and 5-1024 of the Counties Code; Section 4 of the
Water Commission Act of 1985; Section 5.01 of the Local Mass
Transit District Act; Sections 4.01, 4.03, 4.04, and 4.09 of
the Regional Transportation Authority Act; Sections 3, 3-5,
3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40, 3-45, 3-50, 3-55,
3-60, 3-65, 3-70, 3-75, 3-80, 9, and 10b of the Use Tax Act;
Sections 2, 3, 3-5, 3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40,
3-45, 3-50, 3-55, 3-60, 3-65, 3d, 7a, 9, 10, 10b, and 15 of
the Service Use Tax Act; Sections 2, 3, 3-5, 3-10, 3-15,
3-20, 3-25, 3-30, 3-35, 3-40, 3-45, 3-50, 9, 13, 15, and 20.1
of the Service Occupation Tax Act; Sections 2, 2-5, 2-10,
2-15, 2-20, 2-25, 2-30, 2-35, 2-40, 2-45, 2-50, 2-55, 2-60,
2-65, 3, 5k, and 6d of the Retailers' Occupation Tax Act;
Sections 5.240, 5.241, 6z-9, 6z-17, and 6z-18 of the State
Finance Act; Sections 0.1 and 2 of the State Revenue Sharing
Act; and Sections 1 and 2 of Article V of Public Act 85-1135
as they have been amended. It also re-repeals Sections
25.05a, 25.05-2, 25.05-2a, 25.05-3, 25.05-3a, 25.05-10,
25.05-10a, and 25.05-10.1 of "An Act to revise the law in
relation to counties" and Sections 10 and 14 of the Service
Occupation Tax Act. This re-enactment and re-repeal is
intended to remove any questions as to the validity or
content of those Sections; it is not intended to supersede
any other Public Act that amends the text of a Section as
set forth in this Act. The re-enacted material in this Act
is shown as existing text (i.e., without underscoring)
because, as of the time this Act was prepared, the order
declaring P.A. 85-1135 invalid has been vacated.
(e) In Sections 100 and 900 of this Act, references to
"this amendatory Act of 1988" mean Public Act 85-1135, as
re-enacted by this Act.
(f) The re-enactment or re-repeal of Sections of Public
Act 85-1135 by this Act is not intended, and shall not be
construed, to imply that Public Act 85-1135 is invalid or to
limit or impair any legal argument (1) upholding the validity
of Public Act 85-1135 or (2) concerning whether the
provisions of Public Act 85-1135 were substantially
re-enacted by other Public Acts.
(g) All otherwise lawful actions taken in reasonable
reliance on or pursuant to the Sections re-enacted by this
Act, as set forth in Public Act 85-1135 or subsequently
amended, by any officer, employee, agency, or unit of State
or local government or by any other person or entity, are
hereby validated.
With respect to actions taken in relation to matters
arising under the Sections re-enacted by this Act, as set
forth in Public Act 85-1135 or subsequently amended, a person
is rebuttably presumed to have acted in reasonable reliance
on and pursuant to the provisions of Public Act 85-1135, as
those provisions had been amended at the time the action was
taken.
(h) With respect to its administration of matters
arising under the Sections re-enacted by this Act, the
Department of Revenue shall continue to apply the provisions
of Public Act 85-1135, as those provisions had been amended
at the relevant time.
(i) This Act applies, without limitation, to proceedings
pending on or after the effective date of this Act.
Section 100. Section 1 of Article 1 of Public Act
85-1135 (which is incorrectly shown as Section 12 in the Laws
of Illinois) is re-enacted as follows:
(P.A. 85-1135, Art. I, Sec. 1)
Sec. 1. It is the intent of the 85th General Assembly
that:
(a) the abolition of the authority of municipalities and
counties to impose occupation and use taxes, and the
corresponding concurrent increase of the state rate of such
taxes with a corresponding distribution to such
municipalities and counties pursuant to this amendatory Act
of 1988, shall remain in full force and effect on a permanent
basis;
(b) there shall be no reduction or redistribution as to
proportional amount of such corresponding distribution
received by such municipalities and counties except as
expressly provided in this amendatory Act of 1988;
(c) there shall be no reduction of the rate or base of
such taxes except as expressly provided in this amendatory
Act of 1988;
(d) there shall be no limitation on the use of monies
received by such municipalities and counties except as
expressly provided in this amendatory Act of 1988;
(e) the distribution of occupation tax revenues to
municipalities and counties shall remain on the basis of
point of sale;
(f) tax revenues collected pursuant to the State use tax
Acts on interstate transactions involving transfer of
tangible personal property shall be distributed in accordance
with the formula established by this amendatory Act of 1988
for State use taxes; and
(g) repeal of the statutory authority of municipalities
and counties to impose local retailers' occupation taxes, use
taxes, and service occupation taxes shall not be so construed
as to impair the provisions of any development,
redevelopment, annexation, preannexation or other lawful
agreement which describes or refers to receipts from any of
such taxes, but, rather, any such description or reference to
such taxes shall be given effect as if reference were made in
such agreement to the replacement revenue for such abolished
taxes received from the Local Government Tax Fund, County and
Mass Transit Tax Fund or Local Government Distributive Fund,
as the case may be.
Section 105. The State Finance Act is amended by
re-enacting Sections 5.240, 5.241, 6z-9, 6z-17, and 6z-18 as
follows:
(30 ILCS 105/5.240) (from Ch. 127, par. 141.240)
Sec. 5.240. The Local Government Tax Fund.
(Source: P.A. 85-1135.)
(30 ILCS 105/5.241) (from Ch. 127, par. 141.241)
Sec. 5.241. The County and Mass Transit District Fund.
(Source: P.A. 85-1135.)
(30 ILCS 105/6z-9) (from Ch. 127, par. 142z-9)
Sec. 6z-9. (a) The Build Illinois Fund is created in the
State Treasury. All tax revenues and other moneys from
whatever source which by law are required to be deposited in
the Build Illinois Fund shall be paid into the Build Illinois
Fund upon their collection, payment or other receipt as
provided by law, including the pledge set forth in Section 12
of the Build Illinois Bond Act. All tax revenues and other
moneys paid into the Build Illinois Fund shall be promptly
invested by the State Treasurer in accordance with law, and
all interest or other earnings accruing or received thereon
shall be credited to and paid into the Build Illinois Fund.
No tax revenues or other moneys, interest or earnings paid
into the Build Illinois Fund shall be transferred or
allocated by the Comptroller or Treasurer to any other fund,
nor shall the Governor authorize any such transfer or
allocation, nor shall any tax revenues or other moneys,
interest or earnings paid into the Build Illinois Fund be
used, temporarily or otherwise, for interfund borrowing, or
be otherwise used or appropriated, except as expressly
authorized and provided in Section 8.25 of this Act for the
sole purposes and subject to the priorities, limitations and
conditions prescribed therein.
(b) The tax revenues and other moneys shall be paid into
the Build Illinois Fund pursuant to Section 6Z-17 of this
Act, Section 28 of the "Illinois Horse Racing Act of 1975",
as amended, Section 9 of the "Use Tax Act", as amended,
Section 9 of the "Service Use Tax Act", as amended, Section 9
of the "Service Occupation Tax Act", as amended, Section 3 of
the "Retailers' Occupation Tax Act", as amended, Section 4.05
of the "Chicago World's Fair - 1992 Authority Act", as
amended, and Sections 3 and 6 of "The Hotel Operators'
Occupation Tax Act", as amended.
(Source: P.A. 85-1135.)
(30 ILCS 105/6z-17) (from Ch. 127, par. 142z-17)
Sec. 6z-17. Of the money paid into the State and Local
Sales Tax Reform Fund: (i) subject to appropriation to the
Department of Revenue, Municipalities having 1,000,000 or
more inhabitants shall receive 20% and may expend such amount
to fund and establish a program for developing and
coordinating public and private resources targeted to meet
the affordable housing needs of low-income and very
low-income households within such municipality, (ii) 10%
shall be transferred into the Regional Transportation
Authority Occupation and Use Tax Replacement Fund, a special
fund in the State treasury which is hereby created, (iii)
subject to appropriation to the Department of Transportation,
The Metro East Mass Transit District shall receive .6%, (iv)
the following amounts, plus any cumulative deficiency in such
transfers for prior months, shall be transferred monthly into
the Build Illinois Fund and credited to the Build Illinois
Bond Account therein:
Fiscal Year Amount
1990 $2,700,000
1991 1,850,000
1992 2,750,000
1993 2,950,000
From Fiscal Year 1994 through Fiscal Year 2025 the
transfer shall total $3,150,000 monthly, plus any cumulative
deficiency in such transfers for prior months, and (v) the
remainder of the money paid into the State and Local Sales
Tax Reform Fund shall be transferred into the Local
Government Distributive Fund and, except for municipalities
with 1,000,000 or more inhabitants which shall receive no
portion of such remainder, shall be distributed, subject to
appropriation, in the manner provided by Section 2 of "An Act
in relation to State revenue sharing with local government
entities", approved July 31, 1969, as now or hereafter
amended. Municipalities with more than 50,000 inhabitants
according to the 1980 U.S. Census and located within the
Metro East Mass Transit District receiving funds pursuant to
provision (v) of this paragraph may expend such amounts to
fund and establish a program for developing and coordinating
public and private resources targeted to meet the affordable
housing needs of low-income and very low-income households
within such municipality.
(Source: P.A. 86-17; 86-44; 86-928; 86-953; 86-1028.)
(30 ILCS 105/6z-18) (from Ch. 127, par. 142z-18)
Sec. 6z-18. A portion of the money paid into the Local
Government Tax Fund from sales of food for human consumption
which is to be consumed off the premises where it is sold
(other than alcoholic beverages, soft drinks and food which
has been prepared for immediate consumption) and prescription
and nonprescription medicines, drugs, medical appliances and
insulin, urine testing materials, syringes and needles used
by diabetics, which occurred in municipalities, shall be
distributed to each municipality based upon the sales which
occurred in that municipality. The remainder shall be
distributed to each county based upon the sales which
occurred in the unincorporated area of that county.
A portion of the money paid into the Local Government Tax
Fund from the 6.25% general use tax rate on the selling price
of tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by any agency of this State's government shall be
distributed to municipalities as provided in this paragraph.
Each municipality shall receive the amount attributable to
sales for which Illinois addresses for titling or
registration purposes are given as being in such
municipality. The remainder of the money paid into the Local
Government Tax Fund from such sales shall be distributed to
counties. Each county shall receive the amount attributable
to sales for which Illinois addresses for titling or
registration purposes are given as being located in the
unincorporated area of such county.
A portion of the money paid into the Local Government Tax
Fund from the 6.25% general rate on sales subject to taxation
under the Retailers' Occupation Tax Act and the Service
Occupation Tax Act, which occurred in municipalities, shall
be distributed to each municipality, based upon the sales
which occurred in that municipality. The remainder shall be
distributed to each county, based upon the sales which
occurred in the unincorporated area of such county.
For the purpose of determining allocation to the local
government unit, a retail sale by a producer of coal or other
mineral mined in Illinois is a sale at retail at the place
where the coal or other mineral mined in Illinois is
extracted from the earth. This paragraph does not apply to
coal or other mineral when it is delivered or shipped by the
seller to the purchaser at a point outside Illinois so that
the sale is exempt under the United States Constitution as a
sale in interstate or foreign commerce.
Whenever the Department determines that a refund of money
paid into the Local Government Tax Fund should be made to a
claimant instead of issuing a credit memorandum, the
Department shall notify the State Comptroller, who shall
cause the order to be drawn for the amount specified, and to
the person named, in such notification from the Department.
Such refund shall be paid by the State Treasurer out of the
Local Government Tax Fund.
On or before the 25th day of each calendar month, the
Department shall prepare and certify to the Comptroller the
disbursement of stated sums of money to named municipalities
and counties, the municipalities and counties to be those
entitled to distribution of taxes or penalties paid to the
Department during the second preceding calendar month. The
amount to be paid to each municipality or county shall be the
amount (not including credit memoranda) collected during the
second preceding calendar month by the Department and paid
into the Local Government Tax Fund, plus an amount the
Department determines is necessary to offset any amounts
which were erroneously paid to a different taxing body, and
not including an amount equal to the amount of refunds made
during the second preceding calendar month by the Department,
and not including any amount which the Department determines
is necessary to offset any amounts which are payable to a
different taxing body but were erroneously paid to the
municipality or county. Within 10 days after receipt, by the
Comptroller, of the disbursement certification to the
municipalities and counties, provided for in this Section to
be given to the Comptroller by the Department, the
Comptroller shall cause the orders to be drawn for the
respective amounts in accordance with the directions
contained in such certification.
When certifying the amount of monthly disbursement to a
municipality or county under this Section, the Department
shall increase or decrease that amount by an amount necessary
to offset any misallocation of previous disbursements. The
offset amount shall be the amount erroneously disbursed
within the 6 months preceding the time a misallocation is
discovered.
The provisions directing the distributions from the
special fund in the State Treasury provided for in this
Section shall constitute an irrevocable and continuing
appropriation of all amounts as provided herein. The State
Treasurer and State Comptroller are hereby authorized to make
distributions as provided in this Section.
In construing any development, redevelopment, annexation,
preannexation or other lawful agreement in effect prior to
September 1, 1990, which describes or refers to receipts from
a county or municipal retailers' occupation tax, use tax or
service occupation tax which now cannot be imposed, such
description or reference shall be deemed to include the
replacement revenue for such abolished taxes, distributed
from the Local Government Tax Fund.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 110. The State Revenue Sharing Act is amended by
re-enacting Sections 0.1 and 2 as follows:
(30 ILCS 115/0.1) (from Ch. 85, par. 610)
Sec. 0.1. This Act shall be known and may be cited as
the State Revenue Sharing Act.
(Source: P.A. 85-1440.)
(30 ILCS 115/2) (from Ch. 85, par. 612)
Sec. 2. Allocation and Disbursement. As soon as may be
after the first day of each month, the Department of Revenue
shall allocate among the several municipalities and counties
of this State the amount available in the Local Government
Distributive Fund and in the Income Tax Surcharge Local
Government Distributive Fund, determined as provided in
Sections 1 and 1a above. Except as provided in Sections 13
and 13.1 of this Act, the Department shall then certify such
allocations to the State Comptroller, who shall pay over to
the several municipalities and counties the respective
amounts allocated to them. The amount of such Funds
allocable to each such municipality and county shall be in
proportion to the number of individual residents of such
municipality or county to the total population of the State,
determined in each case on the basis of the latest census of
the State, municipality or county conducted by the Federal
government and certified by the Secretary of State and for
annexations to municipalities, the latest Federal, State or
municipal census of the annexed area which has been certified
by the Department of Revenue. For the purpose of this
Section, the number of individual residents of a county shall
be reduced by the number of individuals residing therein in
municipalities, but the number of individual residents of the
State, county and municipality shall reflect the latest
census of any of them. The amounts transferred into the Local
Government Distributive Fund pursuant to Section 9 of the Use
Tax Act, Section 9 of the Service Use Tax Act, Section 9 of
the Service Occupation Tax Act, and Section 3 of the
Retailers' Occupation Tax Act, each as now or hereafter
amended, pursuant to the amendments of such Sections by
Public Act 85-1135, shall be distributed as provided in said
Sections.
(Source: P.A. 86-18.)
Section 115. The Use Tax Act is amended by re-enacting
Sections 3, 3-5, 3-10, 3-15, 3-20, 3-25, 3-30, 3-35, 3-40,
3-45, 3-50, 3-55, 3-60, 3-65, 3-70, 3-75, 3-80, and 9 as
follows:
(35 ILCS 105/3) (from Ch. 120, par. 439.3)
Sec. 3. Tax imposed. A tax is imposed upon the privilege
of using in this State tangible personal property purchased
at retail from a retailer, including computer software, and
including photographs, negatives, and positives that are the
product of photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
commercial exhibition.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475; 87-876.)
(35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit
music or dramatic arts organization that establishes, by
proof required by the Department by rule, that it has
received an exemption under Section 501(c)(3) of the Internal
Revenue Code and that is organized and operated for the
presentation of live public performances of musical or
theatrical works on a regular basis.
(4) Personal property purchased by a governmental body,
by a corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or by a
not-for-profit corporation, society, association, foundation,
institution, or organization that has no compensated officers
or employees and that is organized and operated primarily for
the recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active exemption identification number issued by the
Department.
(5) A passenger car that is a replacement vehicle to the
extent that the purchase price of the car is subject to the
Replacement Vehicle Tax.
(6) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order, certified by
the purchaser to be used primarily for graphic arts
production, and including machinery and equipment purchased
for lease.
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through to the living quarters from the driver's
seat, or a motor vehicle of the second division that is of
the van configuration designed for the transportation of not
less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(11) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
including machinery and equipment purchased for lease, and
including implements of husbandry defined in Section 1-130 of
the Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (11). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from
a motor vehicle required to be licensed and units sold
mounted on a motor vehicle required to be licensed if the
selling price of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (11) is exempt
from the provisions of Section 3-90.
(12) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(13) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages purchased at retail from a retailer, to
the extent that the proceeds of the service charge are in
fact turned over as tips or as a substitute for tips to the
employees who participate directly in preparing, serving,
hosting or cleaning up the food or beverage function with
respect to which the service charge is imposed.
(14) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(15) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(16) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(17) Distillation machinery and equipment, sold as a
unit or kit, assembled or installed by the retailer,
certified by the user to be used only for the production of
ethyl alcohol that will be used for consumption as motor fuel
or as a component of motor fuel for the personal use of the
user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and
equipment used primarily in the process of manufacturing or
assembling tangible personal property for wholesale or retail
sale or lease, whether that sale or lease is made directly by
the manufacturer or by some other person, whether the
materials used in the process are owned by the manufacturer
or some other person, or whether that sale or lease is made
apart from or as an incident to the seller's engaging in the
service occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar items of no commercial
value on special order for a particular purchaser.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is
leased in a manner that does not qualify for this exemption
or is used in any other non-exempt manner, the lessor shall
be liable for the tax imposed under this Act or the Service
Use Tax Act, as the case may be, based on the fair market
value of the property at the time the non-qualifying use
occurs. No lessor shall collect or attempt to collect an
amount (however designated) that purports to reimburse that
lessor for the tax imposed by this Act or the Service Use Tax
Act, as the case may be, if the tax has not been paid by the
lessor. If a lessor improperly collects any such amount from
the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department.
(23) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed
or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental
body that has been issued an active sales tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the property is leased
in a manner that does not qualify for this exemption or used
in any other non-exempt manner, the lessor shall be liable
for the tax imposed under this Act or the Service Use Tax
Act, as the case may be, based on the fair market value of
the property at the time the non-qualifying use occurs. No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that lessor for the
tax imposed by this Act or the Service Use Tax Act, as the
case may be, if the tax has not been paid by the lessor. If
a lessor improperly collects any such amount from the lessee,
the lessee shall have a legal right to claim a refund of that
amount from the lessor. If, however, that amount is not
refunded to the lessee for any reason, the lessor is liable
to pay that amount to the Department.
(24) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97; 90-605, eff. 6-30-98.)
(35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of either the selling price or the fair market value,
if any, of the tangible personal property. In all cases
where property functionally used or consumed is the same as
the property that was purchased at retail, then the tax is
imposed on the selling price of the property. In all cases
where property functionally used or consumed is a by-product
or waste product that has been refined, manufactured, or
produced from property purchased at retail, then the tax is
imposed on the lower of the fair market value, if any, of the
specific property so used in this State or on the selling
price of the property purchased at retail. For purposes of
this Section "fair market value" means the price at which
property would change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or
sell and both having reasonable knowledge of the relevant
facts. The fair market value shall be established by Illinois
sales by the taxpayer of the same property as that
functionally used or consumed, or if there are no such sales
by the taxpayer, then comparable sales or purchases of
property of like kind and character in Illinois.
With respect to gasohol, the tax imposed by this Act
applies to 70% of the proceeds of sales made on or after
January 1, 1990, and before July 1, 2003, and to 100% of the
proceeds of sales made thereafter.
With respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks, and food that has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For the purposes
of this Section, the term "soft drinks" means any complete,
finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold through a vending
machine, except soft drinks and food products that are
dispensed hot from a vending machine, regardless of the
location of the vending machine.
If the property that is purchased at retail from a
retailer is acquired outside Illinois and used outside
Illinois before being brought to Illinois for use here and is
taxable under this Act, the "selling price" on which the tax
is computed shall be reduced by an amount that represents a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96;
89-463, eff. 5-31-96; 89-626, eff. 8-9-96; 90-605, eff.
6-30-98; 90-606, eff. 6-30-98.)
(35 ILCS 105/3-15) (from Ch. 120, par. 439.3-15)
Sec. 3-15. Photoprocessing. For purposes of the tax
imposed on photographs, negatives, and positives by this Act,
"photoprocessing" includes, but is not limited to, developing
films, positives, negatives, and transparencies, and tinting,
coloring, making, and enlarging prints. Photoprocessing does
not include color separation, typesetting, and platemaking by
photographic means in the graphic arts industry and does not
include any procedure, process, or activity connected with
the creation of the images on the film from which the
negatives, positives, or photographs are derived. The charge
for in-house photoprocessing may not be less than the
photoprocessor's cost price of materials. In transactions in
which products of photoprocessing are sold in conjunction
with other services, if a charge for the photoprocessing
component is not separately stated, tax is imposed on 50% of
the entire selling price unless the sale is made by a
professional photographer, in which case tax is imposed on
10% of the entire selling price.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-20) (from Ch. 120, par. 439.3-20)
Sec. 3-20. Bullion. For purposes of the exemption
pertaining to bullion, "bullion" means gold, silver, or
platinum in a bulk state with a purity of not less than 980
parts per 1,000.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-25) (from Ch. 120, par. 439.3-25)
Sec. 3-25. Computer software. For the purposes of this
Act, "computer software" means a set of statements, data, or
instructions to be used directly or indirectly in a computer
in order to bring about a certain result in any form in which
those statements, data, or instructions may be embodied,
transmitted, or fixed, by any method now known or hereafter
developed, regardless of whether the statements, data, or
instructions are capable of being perceived by or
communicated to humans, and includes prewritten or canned
software that is held for repeated sale or lease, and all
associated documentation and materials, if any, whether
contained on magnetic tapes, discs, cards, or other devices
or media, but does not include software that is adapted to
specific individualized requirements of a purchaser,
custom-made and modified software designed for a particular
or limited use by a purchaser, or software used to operate
exempt machinery and equipment used in the process of
manufacturing or assembling tangible personal property for
wholesale or retail sale or lease.
For the purposes of this Act, computer software shall be
considered to be tangible personal property.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-30) (from Ch. 120, par. 439.3-30)
Sec. 3-30. Graphic arts production. For the purposes of
this Act, "graphic arts production" means printing by one or
more of the common processes or graphic arts production
services as those processes and services are defined in Major
Group 27 of the U. S. Standard Industrial Classification
Manual.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-35) (from Ch. 120, par. 439.3-35)
Sec. 3-35. Production agriculture. For purposes of this
Act, "production agriculture" means the raising of or the
propagation of livestock; crops for sale for human
consumption; crops for livestock consumption; and production
seed stock grown for the propagation of feed grains and the
husbandry of animals or for the purpose of providing a food
product, including the husbandry of blood stock as a main
source of providing a food product. "Production agriculture"
also means animal husbandry, floriculture, aquaculture,
horticulture, and viticulture.
(Source: P.A. 89-220, eff. 1-1-96.)
(35 ILCS 105/3-40) (from Ch. 120, par. 439.3-40)
Sec. 3-40. Gasohol. As used in this Act, "gasohol"
means motor fuel that is no more than 90% gasoline and at
least 10% denatured ethanol that contains no more than 1.25%
water by weight. Any person who knowingly sells or represents
as gasohol any fuel that does not qualify as gasohol under
this Act is guilty of a business offense and shall be fined
not more than $100 for each day that the sale or
representation takes place after notification from the
Department of Agriculture that the fuel in question does not
qualify as gasohol.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-45) (from Ch. 120, par. 439.3-45)
Sec. 3-45. Collection. The tax imposed by this Act
shall be collected from the purchaser by a retailer
maintaining a place of business in this State or a retailer
authorized by the Department under Section 6 of this Act, and
shall be remitted to the Department as provided in Section 9
of this Act.
The tax imposed by this Act that is not paid to a
retailer under this Section shall be paid to the Department
directly by any person using the property within this State
as provided in Section 10 of this Act.
Retailers shall collect the tax from users by adding the
tax to the selling price of tangible personal property, when
sold for use, in the manner prescribed by the Department.
The Department may adopt and promulgate reasonable rules and
regulations for the adding of the tax by retailers to selling
prices by prescribing bracket systems for the purpose of
enabling the retailers to add and collect, as far as
practicable, the amount of the tax.
If a seller collects use tax measured by receipts that
are not subject to use tax, or if a seller, in collecting use
tax measured by receipts that are subject to tax under this
Act, collects more from the purchaser than the required
amount of the use tax on the transaction, the purchaser shall
have a legal right to claim a refund of that amount from the
seller. If, however, that amount is not refunded to the
purchaser for any reason, the seller is liable to pay that
amount to the Department. This paragraph does not apply to
an amount collected by the seller as use tax on receipts that
are subject to tax under this Act as long as the collection
is made in compliance with the tax collection brackets
prescribed by the Department in its rules and regulations.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
Sec. 3-50. Manufacturing and assembly exemption. The
manufacturing and assembling machinery and equipment
exemption includes machinery and equipment that replaces
machinery and equipment in an existing manufacturing facility
as well as machinery and equipment that are for use in an
expanded or new manufacturing facility. The machinery and
equipment exemption also includes machinery and equipment
used in the general maintenance or repair of exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. For the purposes of this exemption, terms have
the following meanings:
(1) "Manufacturing process" means the production of
an article of tangible personal property, whether the
article is a finished product or an article for use in
the process of manufacturing or assembling a different
article of tangible personal property, by a procedure
commonly regarded as manufacturing, processing,
fabricating, or refining that changes some existing
material into a material with a different form, use, or
name. In relation to a recognized integrated business
composed of a series of operations that collectively
constitute manufacturing, or individually constitute
manufacturing operations, the manufacturing process
commences with the first operation or stage of production
in the series and does not end until the completion of
the final product in the last operation or stage of
production in the series. For purposes of this
exemption, photoprocessing is a manufacturing process of
tangible personal property for wholesale or retail sale.
(2) "Assembling process" means the production of an
article of tangible personal property, whether the
article is a finished product or an article for use in
the process of manufacturing or assembling a different
article of tangible personal property, by the combination
of existing materials in a manner commonly regarded as
assembling that results in an article or material of a
different form, use, or name.
(3) "Machinery" means major mechanical machines or
major components of those machines contributing to a
manufacturing or assembling process.
(4) "Equipment" includes an independent device or
tool separate from machinery but essential to an
integrated manufacturing or assembly process; including
computers used primarily in operating exempt machinery
and equipment in a computer assisted design, computer
assisted manufacturing (CAD/CAM) system; any subunit or
assembly comprising a component of any machinery or
auxiliary, adjunct, or attachment parts of machinery,
such as tools, dies, jigs, fixtures, patterns, and molds;
and any parts that require periodic replacement in the
course of normal operation; but does not include hand
tools.
The manufacturing and assembling machinery and equipment
exemption includes the sale of materials to a purchaser who
produces exempted types of machinery, equipment, or tools and
who rents or leases that machinery, equipment, or tools to a
manufacturer of tangible personal property. This exemption
also includes the sale of materials to a purchaser who
manufactures those materials into an exempted type of
machinery, equipment, or tools that the purchaser uses
himself or herself in the manufacturing of tangible personal
property. This exemption includes the sale of exempted types
of machinery or equipment to a purchaser who is not the
manufacturer, but who rents or leases the use of the property
to a manufacturer. The purchaser of the machinery and
equipment who has an active resale registration number shall
furnish that number to the seller at the time of purchase. A
user of the machinery, equipment, or tools without an active
resale registration number shall prepare a certificate of
exemption for each transaction stating facts establishing the
exemption for that transaction, and that certificate shall be
available to the Department for inspection or audit. The
Department shall prescribe the form of the certificate.
Informal rulings, opinions, or letters issued by the
Department in response to an inquiry or request for an
opinion from any person regarding the coverage and
applicability of this exemption to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion, or letter contains trade secrets or other
confidential information, where possible, the Department
shall delete that information before publication. Whenever
informal rulings, opinions, or letters contain a policy of
general applicability, the Department shall formulate and
adopt that policy as a rule in accordance with the Illinois
Administrative Procedure Act.
(Source: P.A. 88-505; 88-547.)
(35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
Sec. 3-55. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of tangible personal
property acquired outside this State by a nonresident
individual and brought into this State by the individual for
his or her own use while temporarily within this State or
while passing through this State.
(b) The use, in this State, of tangible personal
property by an interstate carrier for hire as rolling stock
moving in interstate commerce or by lessors under a lease of
one year or longer executed or in effect at the time of
purchase of tangible personal property by interstate carriers
for-hire for use as rolling stock moving in interstate
commerce as long as so used by the interstate carriers
for-hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed in
or affixed to aircraft moving in interstate commerce.
(c) The use, in this State, by owners, lessors, or
shippers of tangible personal property that is utilized by
interstate carriers for hire for use as rolling stock moving
in interstate commerce as long as so used by the interstate
carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d) The use, in this State, of tangible personal
property that is acquired outside this State and caused to be
brought into this State by a person who has already paid a
tax in another State in respect to the sale, purchase, or use
of that property, to the extent of the amount of the tax
properly due and paid in the other State.
(e) The temporary storage, in this State, of tangible
personal property that is acquired outside this State and
that, after being brought into this State and stored here
temporarily, is used solely outside this State or is
physically attached to or incorporated into other tangible
personal property that is used solely outside this State, or
is altered by converting, fabricating, manufacturing,
printing, processing, or shaping, and, as altered, is used
solely outside this State.
(f) The temporary storage in this State of building
materials and fixtures that are acquired either in this State
or outside this State by an Illinois registered combination
retailer and construction contractor, and that the purchaser
thereafter uses outside this State by incorporating that
property into real estate located outside this State.
(g) The use or purchase of tangible personal property by
a common carrier by rail or motor that receives the physical
possession of the property in Illinois, and that transports
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a standard
uniform bill of lading showing the seller of the property as
the shipper or consignor of the property to a destination
outside Illinois, for use outside Illinois.
(h) The use, in this State, of a motor vehicle that was
sold in this State to a nonresident, even though the motor
vehicle is delivered to the nonresident in this State, if the
motor vehicle is not to be titled in this State, and if a
driveaway decal permit is issued to the motor vehicle as
provided in Section 3-603 of the Illinois Vehicle Code or if
the nonresident purchaser has vehicle registration plates to
transfer to the motor vehicle upon returning to his or her
home state. The issuance of the driveaway decal permit or
having the out-of-state registration plates to be transferred
shall be prima facie evidence that the motor vehicle will not
be titled in this State.
(Source: P.A. 90-519, eff. 6-1-98; 90-552, eff. 12-12-97.)
(35 ILCS 105/3-60) (from Ch. 120, par. 439.3-60)
Sec. 3-60. Rolling stock exemption. The rolling stock
exemption applies to rolling stock used by an interstate
carrier for hire, even just between points in Illinois, if
the rolling stock transports, for hire, persons whose
journeys or property whose shipments originate or terminate
outside Illinois.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-65) (from Ch. 120, par. 439.3-65)
Sec. 3-65. R.O.T. nontaxability. If the seller of
tangible personal property for use would not be taxable under
the Retailers' Occupation Tax Act despite all elements of the
sale occurring in Illinois, then the tax imposed by this Act
does not apply to the use of the tangible personal property
in this State.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-70) (from Ch. 120, par. 439.3-70)
Sec. 3-70. Property acquired by nonresident. The tax
imposed by this Act does not apply to the use, in this State,
of tangible personal property that is acquired outside this
State by a nonresident individual who then brings the
property to this State for use here and who has used the
property outside this State for at least 3 months before
bringing the property to this State.
Where a business that is not operated in Illinois, but is
operated in another State, is moved to Illinois or opens an
office, plant, or other business facility in Illinois, that
business shall not be taxed on its use, in Illinois, of used
tangible personal property, other than items of tangible
personal property that must be titled or registered with the
State of Illinois or whose registration with the United
States Government must be filed with the State of Illinois,
that the business bought outside Illinois and used outside
Illinois in the operation of the business for at least 3
months before moving the used property to Illinois for use in
this State.
"Acquired outside this State", whenever used in this Act,
in addition to its usual and popular meaning, also means the
delivery, outside Illinois, of tangible personal property
that is purchased in this State and delivered from a point in
this State to a point of delivery outside this State.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475; 87-876.)
(35 ILCS 105/3-75) (from Ch. 120, par. 439.3-75)
Sec. 3-75. Serviceman transfer. Tangible personal
property purchased by a serviceman, as defined in Section 2
of the Service Occupation Tax Act, is subject to the tax
imposed by this Act when purchased for transfer by the
serviceman incidental to completion of a maintenance
agreement.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/3-80) (from Ch. 120, par. 439.3-80)
Sec. 3-80. Liability because of amendatory Act.
Revisions in Section 3 (now Sections 3 through 3-80) by
Public Act 85-1135 do not affect tax liability that arose
before January 1, 1990.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-953; 86-1394; 86-1475.)
(35 ILCS 105/9) (from Ch. 120, par. 439.9)
Sec. 9. Except as to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, each retailer required or
authorized to collect the tax imposed by this Act shall pay
to the Department the amount of such tax (except as otherwise
provided) at the time when he is required to file his return
for the period during which such tax was collected, less a
discount of 2.1% prior to January 1, 1990, and 1.75% on and
after January 1, 1990, or $5 per calendar year, whichever is
greater, which is allowed to reimburse the retailer for
expenses incurred in collecting the tax, keeping records,
preparing and filing returns, remitting the tax and supplying
data to the Department on request. In the case of retailers
who report and pay the tax on a transaction by transaction
basis, as provided in this Section, such discount shall be
taken with each such tax remittance instead of when such
retailer files his periodic return. A retailer need not
remit that part of any tax collected by him to the extent
that he is required to remit and does remit the tax imposed
by the Retailers' Occupation Tax Act, with respect to the
sale of the same property.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof,
is extended beyond the close of the period for which the
return is filed, the retailer, in collecting the tax (except
as to motor vehicles, watercraft, aircraft, and trailers that
are required to be registered with an agency of this State),
may collect for each tax return period, only the tax
applicable to that part of the selling price actually
received during such tax return period.
Except as provided in this Section, on or before the
twentieth day of each calendar month, such retailer shall
file a return for the preceding calendar month. Such return
shall be filed on forms prescribed by the Department and
shall furnish such information as the Department may
reasonably require.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. The term "average
monthly tax liability" means the sum of the taxpayer's
liabilities under this Act, and under all other State and
local occupation and use tax laws administered by the
Department, for the immediately preceding calendar year
divided by 12.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make
those payments for a minimum of one year beginning on October
1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
If the taxpayer's average monthly tax liability to the
Department under this Act, the Retailers' Occupation Tax Act,
the Service Occupation Tax Act, the Service Use Tax Act was
$10,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payments to the Department on or before the 7th, 15th, 22nd
and last day of the month during which such liability is
incurred. If the month during which such tax liability is
incurred began prior to January 1, 1985, each payment shall
be in an amount equal to 1/4 of the taxpayer's actual
liability for the month or an amount set by the Department
not to exceed 1/4 of the average monthly liability of the
taxpayer to the Department for the preceding 4 complete
calendar quarters (excluding the month of highest liability
and the month of lowest liability in such 4 quarter period).
If the month during which such tax liability is incurred
begins on or after January 1, 1985, and prior to January 1,
1987, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 27.5% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1987, and prior to
January 1, 1988, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or
26.25% of the taxpayer's liability for the same calendar
month of the preceding year. If the month during which such
tax liability is incurred begins on or after January 1, 1988,
and prior to January 1, 1989, or begins on or after January
1, 1996, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 25% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1989, and prior to
January 1, 1996, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or 25%
of the taxpayer's liability for the same calendar month of
the preceding year or 100% of the taxpayer's actual liability
for the quarter monthly reporting period. The amount of such
quarter monthly payments shall be credited against the final
tax liability of the taxpayer's return for that month. Once
applicable, the requirement of the making of quarter monthly
payments to the Department shall continue until such
taxpayer's average monthly liability to the Department during
the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability)
is less than $9,000, or until such taxpayer's average monthly
liability to the Department as computed for each calendar
quarter of the 4 preceding complete calendar quarter period
is less than $10,000. However, if a taxpayer can show the
Department that a substantial change in the taxpayer's
business has occurred which causes the taxpayer to anticipate
that his average monthly tax liability for the reasonably
foreseeable future will fall below $10,000, then such
taxpayer may petition the Department for change in such
taxpayer's reporting status. The Department shall change
such taxpayer's reporting status unless it finds that such
change is seasonal in nature and not likely to be long term.
If any such quarter monthly payment is not paid at the time
or in the amount required by this Section, then the taxpayer
shall be liable for penalties and interest on the difference
between the minimum amount due and the amount of such quarter
monthly payment actually and timely paid, except insofar as
the taxpayer has previously made payments for that month to
the Department in excess of the minimum payments previously
due as provided in this Section. The Department shall make
reasonable rules and regulations to govern the quarter
monthly payment amount and quarter monthly payment dates for
taxpayers who file on other than a calendar monthly basis.
If any such payment provided for in this Section exceeds
the taxpayer's liabilities under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act and the
Service Use Tax Act, as shown by an original monthly return,
the Department shall issue to the taxpayer a credit
memorandum no later than 30 days after the date of payment,
which memorandum may be submitted by the taxpayer to the
Department in payment of tax liability subsequently to be
remitted by the taxpayer to the Department or be assigned by
the taxpayer to a similar taxpayer under this Act, the
Retailers' Occupation Tax Act, the Service Occupation Tax Act
or the Service Use Tax Act, in accordance with reasonable
rules and regulations to be prescribed by the Department,
except that if such excess payment is shown on an original
monthly return and is made after December 31, 1986, no credit
memorandum shall be issued, unless requested by the taxpayer.
If no such request is made, the taxpayer may credit such
excess payment against tax liability subsequently to be
remitted by the taxpayer to the Department under this Act,
the Retailers' Occupation Tax Act, the Service Occupation Tax
Act or the Service Use Tax Act, in accordance with reasonable
rules and regulations prescribed by the Department. If the
Department subsequently determines that all or any part of
the credit taken was not actually due to the taxpayer, the
taxpayer's 2.1% or 1.75% vendor's discount shall be reduced
by 2.1% or 1.75% of the difference between the credit taken
and that actually due, and the taxpayer shall be liable for
penalties and interest on such difference.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February, and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of
a given year being due by October 20 of such year, and with
the return for October, November and December of a given year
being due by January 20 of the following year.
If the retailer is otherwise required to file a monthly
or quarterly return and if the retailer's average monthly tax
liability to the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January
20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a retailer may file his
return, in the case of any retailer who ceases to engage in a
kind of business which makes him responsible for filing
returns under this Act, such retailer shall file a final
return under this Act with the Department not more than one
month after discontinuing such business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, every retailer selling this
kind of tangible personal property shall file, with the
Department, upon a form to be prescribed and supplied by the
Department, a separate return for each such item of tangible
personal property which the retailer sells, except that
where, in the same transaction, a retailer of aircraft,
watercraft, motor vehicles or trailers transfers more than
one aircraft, watercraft, motor vehicle or trailer to another
aircraft, watercraft, motor vehicle or trailer retailer for
the purpose of resale, that seller for resale may report the
transfer of all the aircraft, watercraft, motor vehicles or
trailers involved in that transaction to the Department on
the same uniform invoice-transaction reporting return form.
For purposes of this Section, "watercraft" means a Class 2,
Class 3, or Class 4 watercraft as defined in Section 3-2 of
the Boat Registration and Safety Act, a personal watercraft,
or any boat equipped with an inboard motor.
The transaction reporting return in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the
Uniform Invoice referred to in Section 5-402 of the Illinois
Vehicle Code and must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale; a sufficient identification of
the property sold; such other information as is required in
Section 5-402 of the Illinois Vehicle Code, and such other
information as the Department may reasonably require.
The transaction reporting return in the case of
watercraft and aircraft must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale, a sufficient identification of
the property sold, and such other information as the
Department may reasonably require.
Such transaction reporting return shall be filed not
later than 20 days after the date of delivery of the item
that is being sold, but may be filed by the retailer at any
time sooner than that if he chooses to do so. The
transaction reporting return and tax remittance or proof of
exemption from the tax that is imposed by this Act may be
transmitted to the Department by way of the State agency with
which, or State officer with whom, the tangible personal
property must be titled or registered (if titling or
registration is required) if the Department and such agency
or State officer determine that this procedure will expedite
the processing of applications for title or registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a tax
receipt (or a certificate of exemption if the Department is
satisfied that the particular sale is tax exempt) which such
purchaser may submit to the agency with which, or State
officer with whom, he must title or register the tangible
personal property that is involved (if titling or
registration is required) in support of such purchaser's
application for an Illinois certificate or other evidence of
title or registration to such tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user
has paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of tax or proof of exemption made to the Department before
the retailer is willing to take these actions and such user
has not paid the tax to the retailer, such user may certify
to the fact of such delay by the retailer, and may (upon the
Department being satisfied of the truth of such
certification) transmit the information required by the
transaction reporting return and the remittance for tax or
proof of exemption directly to the Department and obtain his
tax receipt or exemption determination, in which event the
transaction reporting return and tax remittance (if a tax
payment was required) shall be credited by the Department to
the proper retailer's account with the Department, but
without the 2.1% or 1.75% discount provided for in this
Section being allowed. When the user pays the tax directly
to the Department, he shall pay the tax in the same amount
and in the same form in which it would be remitted if the tax
had been remitted to the Department by the retailer.
Where a retailer collects the tax with respect to the
selling price of tangible personal property which he sells
and the purchaser thereafter returns such tangible personal
property and the retailer refunds the selling price thereof
to the purchaser, such retailer shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the retailer may deduct the amount of the
tax so refunded by him to the purchaser from any other use
tax which such retailer may be required to pay or remit to
the Department, as shown by such return, if the amount of the
tax to be deducted was previously remitted to the Department
by such retailer. If the retailer has not previously
remitted the amount of such tax to the Department, he is
entitled to no deduction under this Act upon refunding such
tax to the purchaser.
Any retailer filing a return under this Section shall
also include (for the purpose of paying tax thereon) the
total tax covered by such return upon the selling price of
tangible personal property purchased by him at retail from a
retailer, but as to which the tax imposed by this Act was not
collected from the retailer filing such return, and such
retailer shall remit the amount of such tax to the Department
when filing such return.
If experience indicates such action to be practicable,
the Department may prescribe and furnish a combination or
joint return which will enable retailers, who are required to
file returns hereunder and also under the Retailers'
Occupation Tax Act, to furnish all the return information
required by both Acts on the one form.
Where the retailer has more than one business registered
with the Department under separate registration under this
Act, such retailer may not file each return that is due as a
single return covering all such registered businesses, but
shall file separate returns for each such registered
business.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury which is hereby created,
the net revenue realized for the preceding month from the 1%
tax on sales of food for human consumption which is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks and food which has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances and
insulin, urine testing materials, syringes and needles used
by diabetics.
Beginning January 1, 1990, each month the Department
shall pay into the County and Mass Transit District Fund 4%
of the net revenue realized for the preceding month from the
6.25% general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury, 20% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of tangible personal property, other
than tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by an agency of this State's government.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund 16% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to Section 3 of the Retailers' Occupation Tax Act, Section 9
of the Use Tax Act, Section 9 of the Service Use Tax Act, and
Section 9 of the Service Occupation Tax Act, such Acts being
hereinafter called the "Tax Acts" and such aggregate of 2.2%
or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount
(as defined in Section 3 of the Retailers' Occupation Tax
Act), an amount equal to the difference shall be immediately
paid into the Build Illinois Fund from other moneys received
by the Department pursuant to the Tax Acts; and further
provided, that if on the last business day of any month the
sum of (1) the Tax Act Amount required to be deposited into
the Build Illinois Bond Account in the Build Illinois Fund
during such month and (2) the amount transferred during such
month to the Build Illinois Fund from the State and Local
Sales Tax Reform Fund shall have been less than 1/12 of the
Annual Specified Amount, an amount equal to the difference
shall be immediately paid into the Build Illinois Fund from
other moneys received by the Department pursuant to the Tax
Acts; and, further provided, that in no event shall the
payments required under the preceding proviso result in
aggregate payments into the Build Illinois Fund pursuant to
this clause (b) for any fiscal year in excess of the greater
of (i) the Tax Act Amount or (ii) the Annual Specified Amount
for such fiscal year; and, further provided, that the amounts
payable into the Build Illinois Fund under this clause (b)
shall be payable only until such time as the aggregate amount
on deposit under each trust indenture securing Bonds issued
and outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and
on any Bonds expected to be issued thereafter and all fees
and costs payable with respect thereto, all as certified by
the Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of the
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of the sums designated
as "Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 84,000,000
2003 89,000,000
2004 93,000,000
2005 97,000,000
2006 102,000,000
2007 and 106,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority
Act, but not after fiscal year 2029.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year,
but not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendment thereto
hereafter enacted, each month the Department shall pay into
the Local Government Distributive Fund .4% of the net revenue
realized for the preceding month from the 5% general rate, or
.4% of 80% of the net revenue realized for the preceding
month from the 6.25% general rate, as the case may be, on the
selling price of tangible personal property which amount
shall, subject to appropriation, be distributed as provided
in Section 2 of the State Revenue Sharing Act. No payments or
distributions pursuant to this paragraph shall be made if the
tax imposed by this Act on photoprocessing products is
declared unconstitutional, or if the proceeds from such tax
are unavailable for distribution because of litigation.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, and the
Local Government Distributive Fund pursuant to the preceding
paragraphs or in any amendments thereto hereafter enacted,
beginning July 1, 1993, the Department shall each month pay
into the Illinois Tax Increment Fund 0.27% of 80% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the
State Treasury and 25% shall be reserved in a special account
and used only for the transfer to the Common School Fund as
part of the monthly transfer from the General Revenue Fund in
accordance with Section 8a of the State Finance Act.
As soon as possible after the first day of each month,
upon certification of the Department of Revenue, the
Comptroller shall order transferred and the Treasurer shall
transfer from the General Revenue Fund to the Motor Fuel Tax
Fund an amount equal to 1.7% of 80% of the net revenue
realized under this Act for the second preceding month;
except that this transfer shall not be made for the months
February through June of 1992.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, manufacturers,
importers and wholesalers whose products are sold at retail
in Illinois by numerous retailers, and who wish to do so, may
assume the responsibility for accounting and paying to the
Department all tax accruing under this Act with respect to
such sales, if the retailers who are affected do not make
written objection to the Department to this arrangement.
(Source: P.A. 89-379, eff. 1-1-96; 89-626, eff. 8-9-96;
90-491, eff. 1-1-99; 90-612, eff. 7-8-98.)
Section 120. The Service Use Tax Act is amended by
re-enacting Sections 2, 3, 3-5, 3-10, 3-15, 3-20, 3-25, 3-30,
3-35, 3-40, 3-45, 3-50, 3-55, 3-60, 3-65, 3d, 7a, 9, 10, and
15 as follows:
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
Sec. 2. "Use" means the exercise by any person of any
right or power over tangible personal property incident to
the ownership of that property, but does not include the sale
or use for demonstration by him of that property in any form
as tangible personal property in the regular course of
business. "Use" does not mean the interim use of tangible
personal property nor the physical incorporation of tangible
personal property, as an ingredient or constituent, into
other tangible personal property, (a) which is sold in the
regular course of business or (b) which the person
incorporating such ingredient or constituent therein has
undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside
the State of Illinois.
"Purchased from a serviceman" means the acquisition of
the ownership of, or title to, tangible personal property
through a sale of service.
"Purchaser" means any person who, through a sale of
service, acquires the ownership of, or title to, any tangible
personal property.
"Cost price" means the consideration paid by the
serviceman for a purchase valued in money, whether paid in
money or otherwise, including cash, credits and services, and
shall be determined without any deduction on account of the
supplier's cost of the property sold or on account of any
other expense incurred by the supplier. When a serviceman
contracts out part or all of the services required in his
sale of service, it shall be presumed that the cost price to
the serviceman of the property transferred to him or her by
his or her subcontractor is equal to 50% of the
subcontractor's charges to the serviceman in the absence of
proof of the consideration paid by the subcontractor for the
purchase of such property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits and service, and shall be determined without
any deduction on account of the serviceman's cost of the
property sold, the cost of materials used, labor or service
cost or any other expense whatsoever, but does not include
interest or finance charges which appear as separate items on
the bill of sale or sales contract nor charges that are added
to prices by sellers on account of the seller's duty to
collect, from the purchaser, the tax that is imposed by this
Act.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of service" means any transaction except:
(1) a retail sale of tangible personal property
taxable under the Retailers' Occupation Tax Act or under
the Use Tax Act.
(2) a sale of tangible personal property for the
purpose of resale made in compliance with Section 2c of
the Retailers' Occupation Tax Act.
(3) except as hereinafter provided, a sale or
transfer of tangible personal property as an incident to
the rendering of service for or by any governmental body,
or for or by any corporation, society, association,
foundation or institution organized and operated
exclusively for charitable, religious or educational
purposes or any not-for-profit corporation, society,
association, foundation, institution or organization
which has no compensated officers or employees and which
is organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability
company may qualify for the exemption under this
paragraph only if the limited liability company is
organized and operated exclusively for educational
purposes.
(4) a sale or transfer of tangible personal
property as an incident to the rendering of service for
interstate carriers for hire for use as rolling stock
moving in interstate commerce or by lessors under a lease
of one year or longer, executed or in effect at the time
of purchase of personal property, to interstate carriers
for hire for use as rolling stock moving in interstate
commerce so long as so used by such interstate carriers
for hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed
in or affixed to aircraft moving in interstate commerce.
(4a) a sale or transfer of tangible personal
property as an incident to the rendering of service for
owners, lessors, or shippers of tangible personal
property which is utilized by interstate carriers for
hire for use as rolling stock moving in interstate
commerce so long as so used by interstate carriers for
hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed
in or affixed to aircraft moving in interstate commerce.
(5) a sale or transfer of machinery and equipment
used primarily in the process of the manufacturing or
assembling, either in an existing, an expanded or a new
manufacturing facility, of tangible personal property for
wholesale or retail sale or lease, whether such sale or
lease is made directly by the manufacturer or by some
other person, whether the materials used in the process
are owned by the manufacturer or some other person, or
whether such sale or lease is made apart from or as an
incident to the seller's engaging in a service occupation
and the applicable tax is a Service Use Tax or Service
Occupation Tax, rather than Use Tax or Retailers'
Occupation Tax.
(5a) the repairing, reconditioning or remodeling,
for a common carrier by rail, of tangible personal
property which belongs to such carrier for hire, and as
to which such carrier receives the physical possession of
the repaired, reconditioned or remodeled item of tangible
personal property in Illinois, and which such carrier
transports, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a
destination outside Illinois, for use outside Illinois.
(5b) a sale or transfer of tangible personal
property which is produced by the seller thereof on
special order in such a way as to have made the
applicable tax the Service Occupation Tax or the Service
Use Tax, rather than the Retailers' Occupation Tax or the
Use Tax, for an interstate carrier by rail which receives
the physical possession of such property in Illinois, and
which transports such property, or shares with another
common carrier in the transportation of such property,
out of Illinois on a standard uniform bill of lading
showing the seller of the property as the shipper or
consignor of such property to a destination outside
Illinois, for use outside Illinois.
(6) a sale or transfer of distillation machinery
and equipment, sold as a unit or kit and assembled or
installed by the retailer, which machinery and equipment
is certified by the user to be used only for the
production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of such user and not subject to sale
or resale.
(7) at the election of any serviceman not required
to be otherwise registered as a retailer under Section 2a
of the Retailers' Occupation Tax Act, made for each
fiscal year sales of service in which the aggregate
annual cost price of tangible personal property
transferred as an incident to the sales of service is
less than 35%, or 75% in the case of servicemen
transferring prescription drugs or servicemen engaged in
graphic arts production, of the aggregate annual total
gross receipts from all sales of service. The purchase of
such tangible personal property by the serviceman shall
be subject to tax under the Retailers' Occupation Tax Act
and the Use Tax Act. However, if a primary serviceman
who has made the election described in this paragraph
subcontracts service work to a secondary serviceman who
has also made the election described in this paragraph,
the primary serviceman does not incur a Use Tax liability
if the secondary serviceman (i) has paid or will pay Use
Tax on his or her cost price of any tangible personal
property transferred to the primary serviceman and (ii)
certifies that fact in writing to the primary serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (5) also includes machinery and equipment used
in the general maintenance or repair of such exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. For the purposes of exemption (5), each of
these terms shall have the following meanings: (1)
"manufacturing process" shall mean the production of any
article of tangible personal property, whether such article
is a finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by procedures commonly regarded as
manufacturing, processing, fabricating, or refining which
changes some existing material or materials into a material
with a different form, use or name. In relation to a
recognized integrated business composed of a series of
operations which collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and
shall not be deemed to end until the completion of the final
product in the last operation or stage of production in the
series; and further, for purposes of exemption (5),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials
in a manner commonly regarded as assembling which results in
a material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to
an integrated manufacturing or assembly process; including
computers used primarily in operating exempt machinery and
equipment in a computer assisted design, computer assisted
manufacturing (CAD/CAM) system; or any subunit or assembly
comprising a component of any machinery or auxiliary, adjunct
or attachment parts of machinery, such as tools, dies, jigs,
fixtures, patterns and molds; or any parts which require
periodic replacement in the course of normal operation; but
shall not include hand tools. The purchaser of such machinery
and equipment who has an active resale registration number
shall furnish such number to the seller at the time of
purchase. The user of such machinery and equipment and tools
without an active resale registration number shall prepare a
certificate of exemption for each transaction stating facts
establishing the exemption for that transaction, which
certificate shall be available to the Department for
inspection or audit. The Department shall prescribe the form
of the certificate.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any
opinion from any person regarding the coverage and
applicability of exemption (5) to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion or letter contains trade secrets or other
confidential information, where possible the Department shall
delete such information prior to publication. Whenever such
informal rulings, opinions, or letters contain any policy of
general applicability, the Department shall formulate and
adopt such policy as a rule in accordance with the provisions
of the Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (3) of this Section shall make tax free
purchases unless it has an active exemption identification
number issued by the Department.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary
purpose of conveying news (with or without other information)
is not a purchase, use or sale of service or of tangible
personal property within the meaning of this Act.
"Serviceman" means any person who is engaged in the
occupation of making sales of service.
"Sale at retail" means "sale at retail" as defined in the
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as
an incident to a sale of service.
"Serviceman maintaining a place of business in this
State", or any like term, means and includes any serviceman:
1. having or maintaining within this State,
directly or by a subsidiary, an office, distribution
house, sales house, warehouse or other place of business,
or any agent or other representative operating within
this State under the authority of the serviceman or its
subsidiary, irrespective of whether such place of
business or agent or other representative is located here
permanently or temporarily, or whether such serviceman or
subsidiary is licensed to do business in this State;
2. soliciting orders for tangible personal property
by means of a telecommunication or television shopping
system (which utilizes toll free numbers) which is
intended by the retailer to be broadcast by cable
television or other means of broadcasting, to consumers
located in this State;
3. pursuant to a contract with a broadcaster or
publisher located in this State, soliciting orders for
tangible personal property by means of advertising which
is disseminated primarily to consumers located in this
State and only secondarily to bordering jurisdictions;
4. soliciting orders for tangible personal property
by mail if the solicitations are substantial and
recurring and if the retailer benefits from any banking,
financing, debt collection, telecommunication, or
marketing activities occurring in this State or benefits
from the location in this State of authorized
installation, servicing, or repair facilities;
5. being owned or controlled by the same interests
which own or control any retailer engaging in business in
the same or similar line of business in this State;
6. having a franchisee or licensee operating under
its trade name if the franchisee or licensee is required
to collect the tax under this Section;
7. pursuant to a contract with a cable television
operator located in this State, soliciting orders for
tangible personal property by means of advertising which
is transmitted or distributed over a cable television
system in this State; or
8. engaging in activities in Illinois, which
activities in the state in which the supply business
engaging in such activities is located would constitute
maintaining a place of business in that state.
(Source: P.A. 88-480; 88-505; 88-547; 88-670, eff. 12-2-94;
89-675, eff. 8-14-96.)
(35 ILCS 110/3) (from Ch. 120, par. 439.33)
Sec. 3. Tax imposed. A tax is imposed upon the
privilege of using in this State real or tangible personal
property acquired as an incident to the purchase of a service
from a serviceman, including computer software, and including
photographs, negatives, and positives that are the product of
photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
public commercial exhibition.
(Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
86-1028; 86-1475; 87-879.)
(35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a non-profit Illinois
county fair association for use in conducting, operating, or
promoting the county fair.
(3) Personal property purchased by a not-for-profit
music or dramatic arts organization that establishes, by
proof required by the Department by rule, that it has
received an exemption under Section 501(c)(3) of the Internal
Revenue Code and that is organized and operated for the
presentation of live public performances of musical or
theatrical works on a regular basis.
(4) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(5) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
including machinery and equipment purchased for lease, and
including implements of husbandry defined in Section 1-130 of
the Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (7). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from
a motor vehicle required to be licensed and units sold
mounted on a motor vehicle required to be licensed if the
selling price of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 3-75.
(8) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages acquired as an incident to the purchase
of a service from a serviceman, to the extent that the
proceeds of the service charge are in fact turned over as
tips or as a substitute for tips to the employees who
participate directly in preparing, serving, hosting or
cleaning up the food or beverage function with respect to
which the service charge is imposed.
(10) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(11) Proceeds from the sale of photoprocessing machinery
and equipment, including repair and replacement parts, both
new and used, including that manufactured on special order,
certified by the purchaser to be used primarily for
photoprocessing, and including photoprocessing machinery and
equipment purchased for lease.
(12) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(13) Semen used for artificial insemination of livestock
for direct agricultural production.
(14) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(15) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is
used in any other non-exempt manner, the lessor shall be
liable for the tax imposed under this Act or the Use Tax Act,
as the case may be, based on the fair market value of the
property at the time the non-qualifying use occurs. No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that lessor for the
tax imposed by this Act or the Use Tax Act, as the case may
be, if the tax has not been paid by the lessor. If a lessor
improperly collects any such amount from the lessee, the
lessee shall have a legal right to claim a refund of that
amount from the lessor. If, however, that amount is not
refunded to the lessee for any reason, the lessor is liable
to pay that amount to the Department.
(16) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed or
in effect at the time the lessor would otherwise be subject
to the tax imposed by this Act, to a governmental body that
has been issued an active tax exemption identification number
by the Department under Section 1g of the Retailers'
Occupation Tax Act. If the property is leased in a manner
that does not qualify for this exemption or is used in any
other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act, as the case
may be, based on the fair market value of the property at the
time the non-qualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Use Tax Act, as the case may be, if the tax has
not been paid by the lessor. If a lessor improperly collects
any such amount from the lessee, the lessee shall have a
legal right to claim a refund of that amount from the lessor.
If, however, that amount is not refunded to the lessee for
any reason, the lessor is liable to pay that amount to the
Department.
(17) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97; 90-605, eff. 6-30-98.)
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of the selling price of tangible personal property
transferred as an incident to the sale of service, but, for
the purpose of computing this tax, in no event shall the
selling price be less than the cost price of the property to
the serviceman.
With respect to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act applies to 70% of the selling
price of property transferred as an incident to the sale of
service on or after January 1, 1990, and before July 1, 2003,
and to 100% of the selling price thereafter.
At the election of any registered serviceman made for
each fiscal year, sales of service in which the aggregate
annual cost price of tangible personal property transferred
as an incident to the sales of service is less than 35%, or
75% in the case of servicemen transferring prescription drugs
or servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred as an incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food
prepared for immediate consumption and transferred incident
to a sale of service subject to this Act or the Service
Occupation Tax Act by an entity licensed under the Hospital
Licensing Act or the Nursing Home Care Act. The tax shall
also be imposed at the rate of 1% on food for human
consumption that is to be consumed off the premises where it
is sold (other than alcoholic beverages, soft drinks, and
food that has been prepared for immediate consumption and is
not otherwise included in this paragraph) and prescription
and nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use. For the purposes of this Section, the term "soft drinks"
means any complete, finished, ready-to-use, non-alcoholic
drink, whether carbonated or not, including but not limited
to soda water, cola, fruit juice, vegetable juice, carbonated
water, and all other preparations commonly known as soft
drinks of whatever kind or description that are contained in
any closed or sealed bottle, can, carton, or container,
regardless of size. "Soft drinks" does not include coffee,
tea, non-carbonated water, infant formula, milk or milk
products as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural fruit
or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" inclu