101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2873

 

Introduced , by Rep. Martin J. Moylan

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 105/6z-18  from Ch. 127, par. 142z-18
30 ILCS 105/6z-20  from Ch. 127, par. 142z-20
35 ILCS 105/3-10
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, during the week of Veterans Day each year, food for human consumption that is to be consumed off the premises where it is sold as well as prescription and nonprescription medications and certain medical appliances are exempt from the tax imposed under the Acts if the item is purchased by a veteran. Provides that the tax imposed on other merchandise is imposed at the rate of 5% during the same period if the item is purchased by a veteran. Effective immediately.


LRB101 10383 HLH 55489 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2873LRB101 10383 HLH 55489 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Finance Act is amended by changing
5Sections 6z-18 and 6z-20 as follows:
 
6    (30 ILCS 105/6z-18)  (from Ch. 127, par. 142z-18)
7    Sec. 6z-18. Local Government Tax Fund. A portion of the
8money paid into the Local Government Tax Fund from sales of
9tangible personal property taxed at the 1% rate under the
10Retailers' Occupation Tax Act and the Service Occupation Tax
11Act, which occurred in municipalities, shall be distributed to
12each municipality based upon the sales which occurred in that
13municipality. The remainder shall be distributed to each county
14based upon the sales which occurred in the unincorporated area
15of that county.
16    A portion of the money paid into the Local Government Tax
17Fund from the 6.25% general use tax rate on the selling price
18of tangible personal property which is purchased outside
19Illinois at retail from a retailer and which is titled or
20registered by any agency of this State's government shall be
21distributed to municipalities as provided in this paragraph.
22Each municipality shall receive the amount attributable to
23sales for which Illinois addresses for titling or registration

 

 

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1purposes are given as being in such municipality. The remainder
2of the money paid into the Local Government Tax Fund from such
3sales shall be distributed to counties. Each county shall
4receive the amount attributable to sales for which Illinois
5addresses for titling or registration purposes are given as
6being located in the unincorporated area of such county.
7    A portion of the money paid into the Local Government Tax
8Fund from the 6.25% general rate (and, beginning July 1, 2000
9and through December 31, 2000, the 1.25% rate on motor fuel and
10gasohol, and beginning on August 6, 2010 through August 15,
112010, the 1.25% rate on sales tax holiday items, and during the
12week of Veterans Day each year, the sales tax holiday rate on
13items sold to veterans) on sales subject to taxation under the
14Retailers' Occupation Tax Act and the Service Occupation Tax
15Act, which occurred in municipalities, shall be distributed to
16each municipality, based upon the sales which occurred in that
17municipality. The remainder shall be distributed to each
18county, based upon the sales which occurred in the
19unincorporated area of such county.
20    For the purpose of determining allocation to the local
21government unit, a retail sale by a producer of coal or other
22mineral mined in Illinois is a sale at retail at the place
23where the coal or other mineral mined in Illinois is extracted
24from the earth. This paragraph does not apply to coal or other
25mineral when it is delivered or shipped by the seller to the
26purchaser at a point outside Illinois so that the sale is

 

 

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1exempt under the United States Constitution as a sale in
2interstate or foreign commerce.
3    Whenever the Department determines that a refund of money
4paid into the Local Government Tax Fund should be made to a
5claimant instead of issuing a credit memorandum, the Department
6shall notify the State Comptroller, who shall cause the order
7to be drawn for the amount specified, and to the person named,
8in such notification from the Department. Such refund shall be
9paid by the State Treasurer out of the Local Government Tax
10Fund.
11    As soon as possible after the first day of each month,
12beginning January 1, 2011, upon certification of the Department
13of Revenue, the Comptroller shall order transferred, and the
14Treasurer shall transfer, to the STAR Bonds Revenue Fund the
15local sales tax increment, as defined in the Innovation
16Development and Economy Act, collected during the second
17preceding calendar month for sales within a STAR bond district
18and deposited into the Local Government Tax Fund, less 3% of
19that amount, which shall be transferred into the Tax Compliance
20and Administration Fund and shall be used by the Department,
21subject to appropriation, to cover the costs of the Department
22in administering the Innovation Development and Economy Act.
23    After the monthly transfer to the STAR Bonds Revenue Fund,
24on or before the 25th day of each calendar month, the
25Department shall prepare and certify to the Comptroller the
26disbursement of stated sums of money to named municipalities

 

 

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1and counties, the municipalities and counties to be those
2entitled to distribution of taxes or penalties paid to the
3Department during the second preceding calendar month. The
4amount to be paid to each municipality or county shall be the
5amount (not including credit memoranda) collected during the
6second preceding calendar month by the Department and paid into
7the Local Government Tax Fund, plus an amount the Department
8determines is necessary to offset any amounts which were
9erroneously paid to a different taxing body, and not including
10an amount equal to the amount of refunds made during the second
11preceding calendar month by the Department, and not including
12any amount which the Department determines is necessary to
13offset any amounts which are payable to a different taxing body
14but were erroneously paid to the municipality or county, and
15not including any amounts that are transferred to the STAR
16Bonds Revenue Fund. Within 10 days after receipt, by the
17Comptroller, of the disbursement certification to the
18municipalities and counties, provided for in this Section to be
19given to the Comptroller by the Department, the Comptroller
20shall cause the orders to be drawn for the respective amounts
21in accordance with the directions contained in such
22certification.
23    When certifying the amount of monthly disbursement to a
24municipality or county under this Section, the Department shall
25increase or decrease that amount by an amount necessary to
26offset any misallocation of previous disbursements. The offset

 

 

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1amount shall be the amount erroneously disbursed within the 6
2months preceding the time a misallocation is discovered.
3    The provisions directing the distributions from the
4special fund in the State Treasury provided for in this Section
5shall constitute an irrevocable and continuing appropriation
6of all amounts as provided herein. The State Treasurer and
7State Comptroller are hereby authorized to make distributions
8as provided in this Section.
9    In construing any development, redevelopment, annexation,
10preannexation or other lawful agreement in effect prior to
11September 1, 1990, which describes or refers to receipts from a
12county or municipal retailers' occupation tax, use tax or
13service occupation tax which now cannot be imposed, such
14description or reference shall be deemed to include the
15replacement revenue for such abolished taxes, distributed from
16the Local Government Tax Fund.
17    As soon as possible after the effective date of this
18amendatory Act of the 98th General Assembly, the State
19Comptroller shall order and the State Treasurer shall transfer
20$6,600,000 from the Local Government Tax Fund to the Illinois
21State Medical Disciplinary Fund.
22(Source: P.A. 100-1171, eff. 1-4-19.)
 
23    (30 ILCS 105/6z-20)  (from Ch. 127, par. 142z-20)
24    Sec. 6z-20. County and Mass Transit District Fund. Of the
25money received from the 6.25% general rate (and, beginning July

 

 

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11, 2000 and through December 31, 2000, the 1.25% rate on motor
2fuel and gasohol, and beginning on August 6, 2010 through
3August 15, 2010, the 1.25% rate on sales tax holiday items, and
4during the week of Veterans Day each year, the sales tax
5holiday rate on items sold to veterans) on sales subject to
6taxation under the Retailers' Occupation Tax Act and Service
7Occupation Tax Act and paid into the County and Mass Transit
8District Fund, distribution to the Regional Transportation
9Authority tax fund, created pursuant to Section 4.03 of the
10Regional Transportation Authority Act, for deposit therein
11shall be made based upon the retail sales occurring in a county
12having more than 3,000,000 inhabitants. The remainder shall be
13distributed to each county having 3,000,000 or fewer
14inhabitants based upon the retail sales occurring in each such
15county.
16    For the purpose of determining allocation to the local
17government unit, a retail sale by a producer of coal or other
18mineral mined in Illinois is a sale at retail at the place
19where the coal or other mineral mined in Illinois is extracted
20from the earth. This paragraph does not apply to coal or other
21mineral when it is delivered or shipped by the seller to the
22purchaser at a point outside Illinois so that the sale is
23exempt under the United States Constitution as a sale in
24interstate or foreign commerce.
25    Of the money received from the 6.25% general use tax rate
26on tangible personal property which is purchased outside

 

 

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1Illinois at retail from a retailer and which is titled or
2registered by any agency of this State's government and paid
3into the County and Mass Transit District Fund, the amount for
4which Illinois addresses for titling or registration purposes
5are given as being in each county having more than 3,000,000
6inhabitants shall be distributed into the Regional
7Transportation Authority tax fund, created pursuant to Section
84.03 of the Regional Transportation Authority Act. The
9remainder of the money paid from such sales shall be
10distributed to each county based on sales for which Illinois
11addresses for titling or registration purposes are given as
12being located in the county. Any money paid into the Regional
13Transportation Authority Occupation and Use Tax Replacement
14Fund from the County and Mass Transit District Fund prior to
15January 14, 1991, which has not been paid to the Authority
16prior to that date, shall be transferred to the Regional
17Transportation Authority tax fund.
18    Whenever the Department determines that a refund of money
19paid into the County and Mass Transit District Fund should be
20made to a claimant instead of issuing a credit memorandum, the
21Department shall notify the State Comptroller, who shall cause
22the order to be drawn for the amount specified, and to the
23person named, in such notification from the Department. Such
24refund shall be paid by the State Treasurer out of the County
25and Mass Transit District Fund.
26    As soon as possible after the first day of each month,

 

 

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1beginning January 1, 2011, upon certification of the Department
2of Revenue, the Comptroller shall order transferred, and the
3Treasurer shall transfer, to the STAR Bonds Revenue Fund the
4local sales tax increment, as defined in the Innovation
5Development and Economy Act, collected during the second
6preceding calendar month for sales within a STAR bond district
7and deposited into the County and Mass Transit District Fund,
8less 3% of that amount, which shall be transferred into the Tax
9Compliance and Administration Fund and shall be used by the
10Department, subject to appropriation, to cover the costs of the
11Department in administering the Innovation Development and
12Economy Act.
13    After the monthly transfer to the STAR Bonds Revenue Fund,
14on or before the 25th day of each calendar month, the
15Department shall prepare and certify to the Comptroller the
16disbursement of stated sums of money to the Regional
17Transportation Authority and to named counties, the counties to
18be those entitled to distribution, as hereinabove provided, of
19taxes or penalties paid to the Department during the second
20preceding calendar month. The amount to be paid to the Regional
21Transportation Authority and each county having 3,000,000 or
22fewer inhabitants shall be the amount (not including credit
23memoranda) collected during the second preceding calendar
24month by the Department and paid into the County and Mass
25Transit District Fund, plus an amount the Department determines
26is necessary to offset any amounts which were erroneously paid

 

 

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1to a different taxing body, and not including an amount equal
2to the amount of refunds made during the second preceding
3calendar month by the Department, and not including any amount
4which the Department determines is necessary to offset any
5amounts which were payable to a different taxing body but were
6erroneously paid to the Regional Transportation Authority or
7county, and not including any amounts that are transferred to
8the STAR Bonds Revenue Fund, less 1.5% of the amount to be paid
9to the Regional Transportation Authority, which shall be
10transferred into the Tax Compliance and Administration Fund.
11The Department, at the time of each monthly disbursement to the
12Regional Transportation Authority, shall prepare and certify
13to the State Comptroller the amount to be transferred into the
14Tax Compliance and Administration Fund under this Section.
15Within 10 days after receipt, by the Comptroller, of the
16disbursement certification to the Regional Transportation
17Authority, counties, and the Tax Compliance and Administration
18Fund provided for in this Section to be given to the
19Comptroller by the Department, the Comptroller shall cause the
20orders to be drawn for the respective amounts in accordance
21with the directions contained in such certification.
22    When certifying the amount of a monthly disbursement to the
23Regional Transportation Authority or to a county under this
24Section, the Department shall increase or decrease that amount
25by an amount necessary to offset any misallocation of previous
26disbursements. The offset amount shall be the amount

 

 

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1erroneously disbursed within the 6 months preceding the time a
2misallocation is discovered.
3    The provisions directing the distributions from the
4special fund in the State Treasury provided for in this Section
5and from the Regional Transportation Authority tax fund created
6by Section 4.03 of the Regional Transportation Authority Act
7shall constitute an irrevocable and continuing appropriation
8of all amounts as provided herein. The State Treasurer and
9State Comptroller are hereby authorized to make distributions
10as provided in this Section.
11    In construing any development, redevelopment, annexation,
12preannexation or other lawful agreement in effect prior to
13September 1, 1990, which describes or refers to receipts from a
14county or municipal retailers' occupation tax, use tax or
15service occupation tax which now cannot be imposed, such
16description or reference shall be deemed to include the
17replacement revenue for such abolished taxes, distributed from
18the County and Mass Transit District Fund or Local Government
19Distributive Fund, as the case may be.
20(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18.)
 
21    Section 10. The Use Tax Act is amended by changing Section
223-10 as follows:
 
23    (35 ILCS 105/3-10)
24    Sec. 3-10. Rate of tax. Unless otherwise provided in this

 

 

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1Section, the tax imposed by this Act is at the rate of 6.25% of
2either the selling price or the fair market value, if any, of
3the tangible personal property. In all cases where property
4functionally used or consumed is the same as the property that
5was purchased at retail, then the tax is imposed on the selling
6price of the property. In all cases where property functionally
7used or consumed is a by-product or waste product that has been
8refined, manufactured, or produced from property purchased at
9retail, then the tax is imposed on the lower of the fair market
10value, if any, of the specific property so used in this State
11or on the selling price of the property purchased at retail.
12For purposes of this Section "fair market value" means the
13price at which property would change hands between a willing
14buyer and a willing seller, neither being under any compulsion
15to buy or sell and both having reasonable knowledge of the
16relevant facts. The fair market value shall be established by
17Illinois sales by the taxpayer of the same property as that
18functionally used or consumed, or if there are no such sales by
19the taxpayer, then comparable sales or purchases of property of
20like kind and character in Illinois.
21    Beginning on July 1, 2000 and through December 31, 2000,
22with respect to motor fuel, as defined in Section 1.1 of the
23Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
24the Use Tax Act, the tax is imposed at the rate of 1.25%.
25    Beginning on August 6, 2010 through August 15, 2010, with
26respect to sales tax holiday items as defined in Section 3-6 of

 

 

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1this Act, the tax is imposed at the rate of 1.25%.
2    With respect to gasohol, the tax imposed by this Act
3applies to (i) 70% of the proceeds of sales made on or after
4January 1, 1990, and before July 1, 2003, (ii) 80% of the
5proceeds of sales made on or after July 1, 2003 and on or
6before July 1, 2017, and (iii) 100% of the proceeds of sales
7made thereafter. If, at any time, however, the tax under this
8Act on sales of gasohol is imposed at the rate of 1.25%, then
9the tax imposed by this Act applies to 100% of the proceeds of
10sales of gasohol made during that time.
11    With respect to majority blended ethanol fuel, the tax
12imposed by this Act does not apply to the proceeds of sales
13made on or after July 1, 2003 and on or before December 31,
142023 but applies to 100% of the proceeds of sales made
15thereafter.
16    With respect to biodiesel blends with no less than 1% and
17no more than 10% biodiesel, the tax imposed by this Act applies
18to (i) 80% of the proceeds of sales made on or after July 1,
192003 and on or before December 31, 2018 and (ii) 100% of the
20proceeds of sales made thereafter. If, at any time, however,
21the tax under this Act on sales of biodiesel blends with no
22less than 1% and no more than 10% biodiesel is imposed at the
23rate of 1.25%, then the tax imposed by this Act applies to 100%
24of the proceeds of sales of biodiesel blends with no less than
251% and no more than 10% biodiesel made during that time.
26    With respect to 100% biodiesel and biodiesel blends with

 

 

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1more than 10% but no more than 99% biodiesel, the tax imposed
2by this Act does not apply to the proceeds of sales made on or
3after July 1, 2003 and on or before December 31, 2023 but
4applies to 100% of the proceeds of sales made thereafter.
5    With respect to food for human consumption that is to be
6consumed off the premises where it is sold (other than
7alcoholic beverages, soft drinks, and food that has been
8prepared for immediate consumption) and prescription and
9nonprescription medicines, drugs, medical appliances, products
10classified as Class III medical devices by the United States
11Food and Drug Administration that are used for cancer treatment
12pursuant to a prescription, as well as any accessories and
13components related to those devices, modifications to a motor
14vehicle for the purpose of rendering it usable by a person with
15a disability, and insulin, urine testing materials, syringes,
16and needles used by diabetics, for human use, the tax is
17imposed at the rate of 1%. For the purposes of this Section,
18until September 1, 2009: the term "soft drinks" means any
19complete, finished, ready-to-use, non-alcoholic drink, whether
20carbonated or not, including but not limited to soda water,
21cola, fruit juice, vegetable juice, carbonated water, and all
22other preparations commonly known as soft drinks of whatever
23kind or description that are contained in any closed or sealed
24bottle, can, carton, or container, regardless of size; but
25"soft drinks" does not include coffee, tea, non-carbonated
26water, infant formula, milk or milk products as defined in the

 

 

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1Grade A Pasteurized Milk and Milk Products Act, or drinks
2containing 50% or more natural fruit or vegetable juice.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "soft drinks" means non-alcoholic
5beverages that contain natural or artificial sweeteners. "Soft
6drinks" do not include beverages that contain milk or milk
7products, soy, rice or similar milk substitutes, or greater
8than 50% of vegetable or fruit juice by volume.
9    Until August 1, 2009, and notwithstanding any other
10provisions of this Act, "food for human consumption that is to
11be consumed off the premises where it is sold" includes all
12food sold through a vending machine, except soft drinks and
13food products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine. Beginning
15August 1, 2009, and notwithstanding any other provisions of
16this Act, "food for human consumption that is to be consumed
17off the premises where it is sold" includes all food sold
18through a vending machine, except soft drinks, candy, and food
19products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "food for human consumption that
23is to be consumed off the premises where it is sold" does not
24include candy. For purposes of this Section, "candy" means a
25preparation of sugar, honey, or other natural or artificial
26sweeteners in combination with chocolate, fruits, nuts or other

 

 

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1ingredients or flavorings in the form of bars, drops, or
2pieces. "Candy" does not include any preparation that contains
3flour or requires refrigeration.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "nonprescription medicines and
6drugs" does not include grooming and hygiene products. For
7purposes of this Section, "grooming and hygiene products"
8includes, but is not limited to, soaps and cleaning solutions,
9shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
10lotions and screens, unless those products are available by
11prescription only, regardless of whether the products meet the
12definition of "over-the-counter-drugs". For the purposes of
13this paragraph, "over-the-counter-drug" means a drug for human
14use that contains a label that identifies the product as a drug
15as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
16label includes:
17        (A) A "Drug Facts" panel; or
18        (B) A statement of the "active ingredient(s)" with a
19    list of those ingredients contained in the compound,
20    substance or preparation.
21    Beginning on the effective date of this amendatory Act of
22the 98th General Assembly, "prescription and nonprescription
23medicines and drugs" includes medical cannabis purchased from a
24registered dispensing organization under the Compassionate Use
25of Medical Cannabis Pilot Program Act.
26    Notwithstanding any other provision of law, during the week

 

 

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1of Veterans Day each year, the following items are exempt from
2the tax imposed under this Act if the item is purchased by a
3veteran of the United States Armed Forces: food for human
4consumption that is to be consumed off the premises where it is
5sold (other than alcoholic beverages, soft drinks, and food
6that has been prepared for immediate consumption) and
7prescription and nonprescription medicines, drugs, medical
8appliances, products classified as Class III medical devices by
9the United States Food and Drug Administration that are used
10for cancer treatment pursuant to a prescription, as well as any
11accessories and components related to those devices,
12modifications to a motor vehicle for the purpose of rendering
13it usable by a person with a disability, and insulin, urine
14testing materials, syringes, and needles used by diabetics, for
15human use. During the week of Veterans Day each year, the tax
16on general merchandise shall be imposed at the rate of 5% if
17the merchandise is purchased by a veteran of the United States
18Armed Forces. The exemption and reduction under this paragraph
19is exempt from the provisions of Section 3-90.
20    If the property that is purchased at retail from a retailer
21is acquired outside Illinois and used outside Illinois before
22being brought to Illinois for use here and is taxable under
23this Act, the "selling price" on which the tax is computed
24shall be reduced by an amount that represents a reasonable
25allowance for depreciation for the period of prior out-of-state
26use.

 

 

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1(Source: P.A. 99-143, eff. 7-27-15; 99-858, eff. 8-19-16;
2100-22, eff. 7-6-17.)
 
3    Section 15. The Service Use Tax Act is amended by changing
4Section 3-10 as follows:
 
5    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
6    Sec. 3-10. Rate of tax. Unless otherwise provided in this
7Section, the tax imposed by this Act is at the rate of 6.25% of
8the selling price of tangible personal property transferred as
9an incident to the sale of service, but, for the purpose of
10computing this tax, in no event shall the selling price be less
11than the cost price of the property to the serviceman.
12    Beginning on July 1, 2000 and through December 31, 2000,
13with respect to motor fuel, as defined in Section 1.1 of the
14Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
15the Use Tax Act, the tax is imposed at the rate of 1.25%.
16    With respect to gasohol, as defined in the Use Tax Act, the
17tax imposed by this Act applies to (i) 70% of the selling price
18of property transferred as an incident to the sale of service
19on or after January 1, 1990, and before July 1, 2003, (ii) 80%
20of the selling price of property transferred as an incident to
21the sale of service on or after July 1, 2003 and on or before
22July 1, 2017, and (iii) 100% of the selling price thereafter.
23If, at any time, however, the tax under this Act on sales of
24gasohol, as defined in the Use Tax Act, is imposed at the rate

 

 

HB2873- 18 -LRB101 10383 HLH 55489 b

1of 1.25%, then the tax imposed by this Act applies to 100% of
2the proceeds of sales of gasohol made during that time.
3    With respect to majority blended ethanol fuel, as defined
4in the Use Tax Act, the tax imposed by this Act does not apply
5to the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7December 31, 2023 but applies to 100% of the selling price
8thereafter.
9    With respect to biodiesel blends, as defined in the Use Tax
10Act, with no less than 1% and no more than 10% biodiesel, the
11tax imposed by this Act applies to (i) 80% of the selling price
12of property transferred as an incident to the sale of service
13on or after July 1, 2003 and on or before December 31, 2018 and
14(ii) 100% of the proceeds of the selling price thereafter. If,
15at any time, however, the tax under this Act on sales of
16biodiesel blends, as defined in the Use Tax Act, with no less
17than 1% and no more than 10% biodiesel is imposed at the rate
18of 1.25%, then the tax imposed by this Act applies to 100% of
19the proceeds of sales of biodiesel blends with no less than 1%
20and no more than 10% biodiesel made during that time.
21    With respect to 100% biodiesel, as defined in the Use Tax
22Act, and biodiesel blends, as defined in the Use Tax Act, with
23more than 10% but no more than 99% biodiesel, the tax imposed
24by this Act does not apply to the proceeds of the selling price
25of property transferred as an incident to the sale of service
26on or after July 1, 2003 and on or before December 31, 2023 but

 

 

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1applies to 100% of the selling price thereafter.
2    At the election of any registered serviceman made for each
3fiscal year, sales of service in which the aggregate annual
4cost price of tangible personal property transferred as an
5incident to the sales of service is less than 35%, or 75% in
6the case of servicemen transferring prescription drugs or
7servicemen engaged in graphic arts production, of the aggregate
8annual total gross receipts from all sales of service, the tax
9imposed by this Act shall be based on the serviceman's cost
10price of the tangible personal property transferred as an
11incident to the sale of those services.
12    The tax shall be imposed at the rate of 1% on food prepared
13for immediate consumption and transferred incident to a sale of
14service subject to this Act or the Service Occupation Tax Act
15by an entity licensed under the Hospital Licensing Act, the
16Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
17Act, the Specialized Mental Health Rehabilitation Act of 2013,
18or the Child Care Act of 1969. The tax shall also be imposed at
19the rate of 1% on food for human consumption that is to be
20consumed off the premises where it is sold (other than
21alcoholic beverages, soft drinks, and food that has been
22prepared for immediate consumption and is not otherwise
23included in this paragraph) and prescription and
24nonprescription medicines, drugs, medical appliances, products
25classified as Class III medical devices by the United States
26Food and Drug Administration that are used for cancer treatment

 

 

HB2873- 20 -LRB101 10383 HLH 55489 b

1pursuant to a prescription, as well as any accessories and
2components related to those devices, modifications to a motor
3vehicle for the purpose of rendering it usable by a person with
4a disability, and insulin, urine testing materials, syringes,
5and needles used by diabetics, for human use. For the purposes
6of this Section, until September 1, 2009: the term "soft
7drinks" means any complete, finished, ready-to-use,
8non-alcoholic drink, whether carbonated or not, including but
9not limited to soda water, cola, fruit juice, vegetable juice,
10carbonated water, and all other preparations commonly known as
11soft drinks of whatever kind or description that are contained
12in any closed or sealed bottle, can, carton, or container,
13regardless of size; but "soft drinks" does not include coffee,
14tea, non-carbonated water, infant formula, milk or milk
15products as defined in the Grade A Pasteurized Milk and Milk
16Products Act, or drinks containing 50% or more natural fruit or
17vegetable juice.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "soft drinks" means non-alcoholic
20beverages that contain natural or artificial sweeteners. "Soft
21drinks" do not include beverages that contain milk or milk
22products, soy, rice or similar milk substitutes, or greater
23than 50% of vegetable or fruit juice by volume.
24    Until August 1, 2009, and notwithstanding any other
25provisions of this Act, "food for human consumption that is to
26be consumed off the premises where it is sold" includes all

 

 

HB2873- 21 -LRB101 10383 HLH 55489 b

1food sold through a vending machine, except soft drinks and
2food products that are dispensed hot from a vending machine,
3regardless of the location of the vending machine. Beginning
4August 1, 2009, and notwithstanding any other provisions of
5this Act, "food for human consumption that is to be consumed
6off the premises where it is sold" includes all food sold
7through a vending machine, except soft drinks, candy, and food
8products that are dispensed hot from a vending machine,
9regardless of the location of the vending machine.
10    Notwithstanding any other provisions of this Act,
11beginning September 1, 2009, "food for human consumption that
12is to be consumed off the premises where it is sold" does not
13include candy. For purposes of this Section, "candy" means a
14preparation of sugar, honey, or other natural or artificial
15sweeteners in combination with chocolate, fruits, nuts or other
16ingredients or flavorings in the form of bars, drops, or
17pieces. "Candy" does not include any preparation that contains
18flour or requires refrigeration.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "nonprescription medicines and
21drugs" does not include grooming and hygiene products. For
22purposes of this Section, "grooming and hygiene products"
23includes, but is not limited to, soaps and cleaning solutions,
24shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
25lotions and screens, unless those products are available by
26prescription only, regardless of whether the products meet the

 

 

HB2873- 22 -LRB101 10383 HLH 55489 b

1definition of "over-the-counter-drugs". For the purposes of
2this paragraph, "over-the-counter-drug" means a drug for human
3use that contains a label that identifies the product as a drug
4as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
5label includes:
6        (A) A "Drug Facts" panel; or
7        (B) A statement of the "active ingredient(s)" with a
8    list of those ingredients contained in the compound,
9    substance or preparation.
10    Beginning on January 1, 2014 (the effective date of Public
11Act 98-122), "prescription and nonprescription medicines and
12drugs" includes medical cannabis purchased from a registered
13dispensing organization under the Compassionate Use of Medical
14Cannabis Pilot Program Act.
15    Notwithstanding any other provision of law, during the week
16of Veterans Day each year, the following items are exempt from
17the tax imposed under this Act if the item is purchased by a
18veteran of the United States Armed Forces: food for human
19consumption that is to be consumed off the premises where it is
20sold (other than alcoholic beverages, soft drinks, and food
21that has been prepared for immediate consumption) and
22prescription and nonprescription medicines, drugs, medical
23appliances, products classified as Class III medical devices by
24the United States Food and Drug Administration that are used
25for cancer treatment pursuant to a prescription, as well as any
26accessories and components related to those devices,

 

 

HB2873- 23 -LRB101 10383 HLH 55489 b

1modifications to a motor vehicle for the purpose of rendering
2it usable by a person with a disability, and insulin, urine
3testing materials, syringes, and needles used by diabetics, for
4human use. During the week of Veterans Day each year, the tax
5on general merchandise shall be imposed at the rate of 5% if
6the merchandise is purchased by a veteran of the United States
7Armed Forces. The exemption and reduction under this paragraph
8is exempt from the provisions of Section 3-75.
9    If the property that is acquired from a serviceman is
10acquired outside Illinois and used outside Illinois before
11being brought to Illinois for use here and is taxable under
12this Act, the "selling price" on which the tax is computed
13shall be reduced by an amount that represents a reasonable
14allowance for depreciation for the period of prior out-of-state
15use.
16(Source: P.A. 99-143, eff. 7-27-15; 99-180, eff. 7-29-15;
1799-642, eff. 7-28-16; 99-858, eff. 8-19-16; 100-22, eff.
187-6-17.)
 
19    Section 20. The Service Occupation Tax Act is amended by
20changing Section 3-10 as follows:
 
21    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
22    Sec. 3-10. Rate of tax. Unless otherwise provided in this
23Section, the tax imposed by this Act is at the rate of 6.25% of
24the "selling price", as defined in Section 2 of the Service Use

 

 

HB2873- 24 -LRB101 10383 HLH 55489 b

1Tax Act, of the tangible personal property. For the purpose of
2computing this tax, in no event shall the "selling price" be
3less than the cost price to the serviceman of the tangible
4personal property transferred. The selling price of each item
5of tangible personal property transferred as an incident of a
6sale of service may be shown as a distinct and separate item on
7the serviceman's billing to the service customer. If the
8selling price is not so shown, the selling price of the
9tangible personal property is deemed to be 50% of the
10serviceman's entire billing to the service customer. When,
11however, a serviceman contracts to design, develop, and produce
12special order machinery or equipment, the tax imposed by this
13Act shall be based on the serviceman's cost price of the
14tangible personal property transferred incident to the
15completion of the contract.
16    Beginning on July 1, 2000 and through December 31, 2000,
17with respect to motor fuel, as defined in Section 1.1 of the
18Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
19the Use Tax Act, the tax is imposed at the rate of 1.25%.
20    With respect to gasohol, as defined in the Use Tax Act, the
21tax imposed by this Act shall apply to (i) 70% of the cost
22price of property transferred as an incident to the sale of
23service on or after January 1, 1990, and before July 1, 2003,
24(ii) 80% of the selling price of property transferred as an
25incident to the sale of service on or after July 1, 2003 and on
26or before July 1, 2017, and (iii) 100% of the cost price

 

 

HB2873- 25 -LRB101 10383 HLH 55489 b

1thereafter. If, at any time, however, the tax under this Act on
2sales of gasohol, as defined in the Use Tax Act, is imposed at
3the rate of 1.25%, then the tax imposed by this Act applies to
4100% of the proceeds of sales of gasohol made during that time.
5    With respect to majority blended ethanol fuel, as defined
6in the Use Tax Act, the tax imposed by this Act does not apply
7to the selling price of property transferred as an incident to
8the sale of service on or after July 1, 2003 and on or before
9December 31, 2023 but applies to 100% of the selling price
10thereafter.
11    With respect to biodiesel blends, as defined in the Use Tax
12Act, with no less than 1% and no more than 10% biodiesel, the
13tax imposed by this Act applies to (i) 80% of the selling price
14of property transferred as an incident to the sale of service
15on or after July 1, 2003 and on or before December 31, 2018 and
16(ii) 100% of the proceeds of the selling price thereafter. If,
17at any time, however, the tax under this Act on sales of
18biodiesel blends, as defined in the Use Tax Act, with no less
19than 1% and no more than 10% biodiesel is imposed at the rate
20of 1.25%, then the tax imposed by this Act applies to 100% of
21the proceeds of sales of biodiesel blends with no less than 1%
22and no more than 10% biodiesel made during that time.
23    With respect to 100% biodiesel, as defined in the Use Tax
24Act, and biodiesel blends, as defined in the Use Tax Act, with
25more than 10% but no more than 99% biodiesel material, the tax
26imposed by this Act does not apply to the proceeds of the

 

 

HB2873- 26 -LRB101 10383 HLH 55489 b

1selling price of property transferred as an incident to the
2sale of service on or after July 1, 2003 and on or before
3December 31, 2023 but applies to 100% of the selling price
4thereafter.
5    At the election of any registered serviceman made for each
6fiscal year, sales of service in which the aggregate annual
7cost price of tangible personal property transferred as an
8incident to the sales of service is less than 35%, or 75% in
9the case of servicemen transferring prescription drugs or
10servicemen engaged in graphic arts production, of the aggregate
11annual total gross receipts from all sales of service, the tax
12imposed by this Act shall be based on the serviceman's cost
13price of the tangible personal property transferred incident to
14the sale of those services.
15    The tax shall be imposed at the rate of 1% on food prepared
16for immediate consumption and transferred incident to a sale of
17service subject to this Act or the Service Occupation Tax Act
18by an entity licensed under the Hospital Licensing Act, the
19Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
20Act, the Specialized Mental Health Rehabilitation Act of 2013,
21or the Child Care Act of 1969. The tax shall also be imposed at
22the rate of 1% on food for human consumption that is to be
23consumed off the premises where it is sold (other than
24alcoholic beverages, soft drinks, and food that has been
25prepared for immediate consumption and is not otherwise
26included in this paragraph) and prescription and

 

 

HB2873- 27 -LRB101 10383 HLH 55489 b

1nonprescription medicines, drugs, medical appliances, products
2classified as Class III medical devices by the United States
3Food and Drug Administration that are used for cancer treatment
4pursuant to a prescription, as well as any accessories and
5components related to those devices, modifications to a motor
6vehicle for the purpose of rendering it usable by a person with
7a disability, and insulin, urine testing materials, syringes,
8and needles used by diabetics, for human use. For the purposes
9of this Section, until September 1, 2009: the term "soft
10drinks" means any complete, finished, ready-to-use,
11non-alcoholic drink, whether carbonated or not, including but
12not limited to soda water, cola, fruit juice, vegetable juice,
13carbonated water, and all other preparations commonly known as
14soft drinks of whatever kind or description that are contained
15in any closed or sealed can, carton, or container, regardless
16of size; but "soft drinks" does not include coffee, tea,
17non-carbonated water, infant formula, milk or milk products as
18defined in the Grade A Pasteurized Milk and Milk Products Act,
19or drinks containing 50% or more natural fruit or vegetable
20juice.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "soft drinks" means non-alcoholic
23beverages that contain natural or artificial sweeteners. "Soft
24drinks" do not include beverages that contain milk or milk
25products, soy, rice or similar milk substitutes, or greater
26than 50% of vegetable or fruit juice by volume.

 

 

HB2873- 28 -LRB101 10383 HLH 55489 b

1    Until August 1, 2009, and notwithstanding any other
2provisions of this Act, "food for human consumption that is to
3be consumed off the premises where it is sold" includes all
4food sold through a vending machine, except soft drinks and
5food products that are dispensed hot from a vending machine,
6regardless of the location of the vending machine. Beginning
7August 1, 2009, and notwithstanding any other provisions of
8this Act, "food for human consumption that is to be consumed
9off the premises where it is sold" includes all food sold
10through a vending machine, except soft drinks, candy, and food
11products that are dispensed hot from a vending machine,
12regardless of the location of the vending machine.
13    Notwithstanding any other provisions of this Act,
14beginning September 1, 2009, "food for human consumption that
15is to be consumed off the premises where it is sold" does not
16include candy. For purposes of this Section, "candy" means a
17preparation of sugar, honey, or other natural or artificial
18sweeteners in combination with chocolate, fruits, nuts or other
19ingredients or flavorings in the form of bars, drops, or
20pieces. "Candy" does not include any preparation that contains
21flour or requires refrigeration.
22    Notwithstanding any other provisions of this Act,
23beginning September 1, 2009, "nonprescription medicines and
24drugs" does not include grooming and hygiene products. For
25purposes of this Section, "grooming and hygiene products"
26includes, but is not limited to, soaps and cleaning solutions,

 

 

HB2873- 29 -LRB101 10383 HLH 55489 b

1shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
2lotions and screens, unless those products are available by
3prescription only, regardless of whether the products meet the
4definition of "over-the-counter-drugs". For the purposes of
5this paragraph, "over-the-counter-drug" means a drug for human
6use that contains a label that identifies the product as a drug
7as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
8label includes:
9        (A) A "Drug Facts" panel; or
10        (B) A statement of the "active ingredient(s)" with a
11    list of those ingredients contained in the compound,
12    substance or preparation.
13    Notwithstanding any other provision of law, during the week
14of Veterans Day each year, the following items are exempt from
15the tax imposed under this Act if the item is purchased by a
16veteran of the United States Armed Forces: food for human
17consumption that is to be consumed off the premises where it is
18sold (other than alcoholic beverages, soft drinks, and food
19that has been prepared for immediate consumption) and
20prescription and nonprescription medicines, drugs, medical
21appliances, products classified as Class III medical devices by
22the United States Food and Drug Administration that are used
23for cancer treatment pursuant to a prescription, as well as any
24accessories and components related to those devices,
25modifications to a motor vehicle for the purpose of rendering
26it usable by a person with a disability, and insulin, urine

 

 

HB2873- 30 -LRB101 10383 HLH 55489 b

1testing materials, syringes, and needles used by diabetics, for
2human use. During the week of Veterans Day each year, the tax
3on general merchandise shall be imposed at the rate of 5% if
4the merchandise is purchased by a veteran of the United States
5Armed Forces. The exemption and reduction under this paragraph
6is exempt from the provisions of Section 3-55.
7    Beginning on January 1, 2014 (the effective date of Public
8Act 98-122), "prescription and nonprescription medicines and
9drugs" includes medical cannabis purchased from a registered
10dispensing organization under the Compassionate Use of Medical
11Cannabis Pilot Program Act.
12(Source: P.A. 99-143, eff. 7-27-15; 99-180, eff. 7-29-15;
1399-642, eff. 7-28-16; 99-858, eff. 8-19-16; 100-22, eff.
147-6-17.)
 
15    Section 25. The Retailers' Occupation Tax Act is amended by
16changing Section 2-10 as follows:
 
17    (35 ILCS 120/2-10)
18    Sec. 2-10. Rate of tax. Unless otherwise provided in this
19Section, the tax imposed by this Act is at the rate of 6.25% of
20gross receipts from sales of tangible personal property made in
21the course of business.
22    Beginning on July 1, 2000 and through December 31, 2000,
23with respect to motor fuel, as defined in Section 1.1 of the
24Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

 

 

HB2873- 31 -LRB101 10383 HLH 55489 b

1the Use Tax Act, the tax is imposed at the rate of 1.25%.
2    Beginning on August 6, 2010 through August 15, 2010, with
3respect to sales tax holiday items as defined in Section 2-8 of
4this Act, the tax is imposed at the rate of 1.25%.
5    Within 14 days after the effective date of this amendatory
6Act of the 91st General Assembly, each retailer of motor fuel
7and gasohol shall cause the following notice to be posted in a
8prominently visible place on each retail dispensing device that
9is used to dispense motor fuel or gasohol in the State of
10Illinois: "As of July 1, 2000, the State of Illinois has
11eliminated the State's share of sales tax on motor fuel and
12gasohol through December 31, 2000. The price on this pump
13should reflect the elimination of the tax." The notice shall be
14printed in bold print on a sign that is no smaller than 4
15inches by 8 inches. The sign shall be clearly visible to
16customers. Any retailer who fails to post or maintain a
17required sign through December 31, 2000 is guilty of a petty
18offense for which the fine shall be $500 per day per each
19retail premises where a violation occurs.
20    With respect to gasohol, as defined in the Use Tax Act, the
21tax imposed by this Act applies to (i) 70% of the proceeds of
22sales made on or after January 1, 1990, and before July 1,
232003, (ii) 80% of the proceeds of sales made on or after July
241, 2003 and on or before July 1, 2017, and (iii) 100% of the
25proceeds of sales made thereafter. If, at any time, however,
26the tax under this Act on sales of gasohol, as defined in the

 

 

HB2873- 32 -LRB101 10383 HLH 55489 b

1Use Tax Act, is imposed at the rate of 1.25%, then the tax
2imposed by this Act applies to 100% of the proceeds of sales of
3gasohol made during that time.
4    With respect to majority blended ethanol fuel, as defined
5in the Use Tax Act, the tax imposed by this Act does not apply
6to the proceeds of sales made on or after July 1, 2003 and on or
7before December 31, 2023 but applies to 100% of the proceeds of
8sales made thereafter.
9    With respect to biodiesel blends, as defined in the Use Tax
10Act, with no less than 1% and no more than 10% biodiesel, the
11tax imposed by this Act applies to (i) 80% of the proceeds of
12sales made on or after July 1, 2003 and on or before December
1331, 2018 and (ii) 100% of the proceeds of sales made
14thereafter. If, at any time, however, the tax under this Act on
15sales of biodiesel blends, as defined in the Use Tax Act, with
16no less than 1% and no more than 10% biodiesel is imposed at
17the rate of 1.25%, then the tax imposed by this Act applies to
18100% of the proceeds of sales of biodiesel blends with no less
19than 1% and no more than 10% biodiesel made during that time.
20    With respect to 100% biodiesel, as defined in the Use Tax
21Act, and biodiesel blends, as defined in the Use Tax Act, with
22more than 10% but no more than 99% biodiesel, the tax imposed
23by this Act does not apply to the proceeds of sales made on or
24after July 1, 2003 and on or before December 31, 2023 but
25applies to 100% of the proceeds of sales made thereafter.
26    With respect to food for human consumption that is to be

 

 

HB2873- 33 -LRB101 10383 HLH 55489 b

1consumed off the premises where it is sold (other than
2alcoholic beverages, soft drinks, and food that has been
3prepared for immediate consumption) and prescription and
4nonprescription medicines, drugs, medical appliances, products
5classified as Class III medical devices by the United States
6Food and Drug Administration that are used for cancer treatment
7pursuant to a prescription, as well as any accessories and
8components related to those devices, modifications to a motor
9vehicle for the purpose of rendering it usable by a person with
10a disability, and insulin, urine testing materials, syringes,
11and needles used by diabetics, for human use, the tax is
12imposed at the rate of 1%. For the purposes of this Section,
13until September 1, 2009: the term "soft drinks" means any
14complete, finished, ready-to-use, non-alcoholic drink, whether
15carbonated or not, including but not limited to soda water,
16cola, fruit juice, vegetable juice, carbonated water, and all
17other preparations commonly known as soft drinks of whatever
18kind or description that are contained in any closed or sealed
19bottle, can, carton, or container, regardless of size; but
20"soft drinks" does not include coffee, tea, non-carbonated
21water, infant formula, milk or milk products as defined in the
22Grade A Pasteurized Milk and Milk Products Act, or drinks
23containing 50% or more natural fruit or vegetable juice.
24    Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "soft drinks" means non-alcoholic
26beverages that contain natural or artificial sweeteners. "Soft

 

 

HB2873- 34 -LRB101 10383 HLH 55489 b

1drinks" do not include beverages that contain milk or milk
2products, soy, rice or similar milk substitutes, or greater
3than 50% of vegetable or fruit juice by volume.
4    Until August 1, 2009, and notwithstanding any other
5provisions of this Act, "food for human consumption that is to
6be consumed off the premises where it is sold" includes all
7food sold through a vending machine, except soft drinks and
8food products that are dispensed hot from a vending machine,
9regardless of the location of the vending machine. Beginning
10August 1, 2009, and notwithstanding any other provisions of
11this Act, "food for human consumption that is to be consumed
12off the premises where it is sold" includes all food sold
13through a vending machine, except soft drinks, candy, and food
14products that are dispensed hot from a vending machine,
15regardless of the location of the vending machine.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "food for human consumption that
18is to be consumed off the premises where it is sold" does not
19include candy. For purposes of this Section, "candy" means a
20preparation of sugar, honey, or other natural or artificial
21sweeteners in combination with chocolate, fruits, nuts or other
22ingredients or flavorings in the form of bars, drops, or
23pieces. "Candy" does not include any preparation that contains
24flour or requires refrigeration.
25    Notwithstanding any other provisions of this Act,
26beginning September 1, 2009, "nonprescription medicines and

 

 

HB2873- 35 -LRB101 10383 HLH 55489 b

1drugs" does not include grooming and hygiene products. For
2purposes of this Section, "grooming and hygiene products"
3includes, but is not limited to, soaps and cleaning solutions,
4shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
5lotions and screens, unless those products are available by
6prescription only, regardless of whether the products meet the
7definition of "over-the-counter-drugs". For the purposes of
8this paragraph, "over-the-counter-drug" means a drug for human
9use that contains a label that identifies the product as a drug
10as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
11label includes:
12        (A) A "Drug Facts" panel; or
13        (B) A statement of the "active ingredient(s)" with a
14    list of those ingredients contained in the compound,
15    substance or preparation.
16    Notwithstanding any other provision of law, during the week
17of Veterans Day each year, the following items are exempt from
18the tax imposed under this Act if the item is purchased by a
19veteran of the United States Armed Forces: food for human
20consumption that is to be consumed off the premises where it is
21sold (other than alcoholic beverages, soft drinks, and food
22that has been prepared for immediate consumption) and
23prescription and nonprescription medicines, drugs, medical
24appliances, products classified as Class III medical devices by
25the United States Food and Drug Administration that are used
26for cancer treatment pursuant to a prescription, as well as any

 

 

HB2873- 36 -LRB101 10383 HLH 55489 b

1accessories and components related to those devices,
2modifications to a motor vehicle for the purpose of rendering
3it usable by a person with a disability, and insulin, urine
4testing materials, syringes, and needles used by diabetics, for
5human use. During the week of Veterans Day each year, the tax
6on general merchandise shall be imposed at the rate of 5% if
7the merchandise is purchased by a veteran of the United States
8Armed Forces. The exemption and reduction under this paragraph
9is exempt from the provisions of Section 2-70.
10    Beginning on the effective date of this amendatory Act of
11the 98th General Assembly, "prescription and nonprescription
12medicines and drugs" includes medical cannabis purchased from a
13registered dispensing organization under the Compassionate Use
14of Medical Cannabis Pilot Program Act.
15(Source: P.A. 99-143, eff. 7-27-15; 99-858, eff. 8-19-16;
16100-22, eff. 7-6-17.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.