101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1555

 

Introduced 2/15/2019, by Sen. Paul Schimpf

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
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, beginning on January 1, 2020, sales of motor fuel are exempt from taxation under the Acts. Effective immediately.


LRB101 09384 HLH 54482 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1555LRB101 09384 HLH 54482 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 Use Tax Act is amended by changing Sections
53-5 and 3-10 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active exemption
24identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new and
5used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon a
11graphic arts product. Beginning on July 1, 2017, graphic arts
12machinery and equipment is included in the manufacturing and
13assembling machinery and equipment exemption under paragraph
14(18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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1including that manufactured on special order, certified by the
2purchaser to be used primarily for production agriculture or
3State or federal agricultural programs, including individual
4replacement parts for the machinery and equipment, including
5machinery and equipment purchased for lease, and including
6implements of husbandry defined in Section 1-130 of the
7Illinois Vehicle Code, farm machinery and agricultural
8chemical and fertilizer spreaders, and nurse wagons required to
9be registered under Section 3-809 of the Illinois Vehicle Code,
10but excluding other motor vehicles required to be registered
11under the Illinois Vehicle Code. Horticultural polyhouses or
12hoop houses used for propagating, growing, or overwintering
13plants shall be considered farm machinery and equipment under
14this item (11). Agricultural chemical tender tanks and dry
15boxes shall include units sold separately from a motor vehicle
16required to be licensed and units sold mounted on a motor
17vehicle required to be licensed if the selling price of the
18tender is separately stated.
19    Farm machinery and equipment shall include precision
20farming equipment that is installed or purchased to be
21installed on farm machinery and equipment including, but not
22limited to, tractors, harvesters, sprayers, planters, seeders,
23or spreaders. Precision farming equipment includes, but is not
24limited to, soil testing sensors, computers, monitors,
25software, global positioning and mapping systems, and other
26such equipment.

 

 

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1    Farm machinery and equipment also includes computers,
2sensors, software, and related equipment used primarily in the
3computer-assisted operation of production agriculture
4facilities, equipment, and activities such as, but not limited
5to, the collection, monitoring, and correlation of animal and
6crop data for the purpose of formulating animal diets and
7agricultural chemicals. This item (11) is exempt from the
8provisions of Section 3-90.
9    (12) Until June 30, 2013, fuel and petroleum products sold
10to or used by an air common carrier, certified by the carrier
11to be used for consumption, shipment, or storage in the conduct
12of its business as an air common carrier, for a flight destined
13for or returning from a location or locations outside the
14United States without regard to previous or subsequent domestic
15stopovers.
16    Beginning July 1, 2013, fuel and petroleum products sold to
17or used by an air carrier, certified by the carrier to be used
18for consumption, shipment, or storage in the conduct of its
19business as an air common carrier, for a flight that (i) is
20engaged in foreign trade or is engaged in trade between the
21United States and any of its possessions and (ii) transports at
22least one individual or package for hire from the city of
23origination to the city of final destination on the same
24aircraft, without regard to a change in the flight number of
25that aircraft.
26    (13) Proceeds of mandatory service charges separately

 

 

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1stated on customers' bills for the purchase and consumption of
2food and beverages purchased at retail from a retailer, to the
3extent that the proceeds of the service charge are in fact
4turned over as tips or as a substitute for tips to the
5employees who participate directly in preparing, serving,
6hosting or cleaning up the food or beverage function with
7respect to which the service charge is imposed.
8    (14) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of rigs,
10rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
11tubular goods, including casing and drill strings, (iii) pumps
12and pump-jack units, (iv) storage tanks and flow lines, (v) any
13individual replacement part for oil field exploration,
14drilling, and production equipment, and (vi) machinery and
15equipment purchased for lease; but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code.
17    (15) Photoprocessing machinery and equipment, including
18repair and replacement parts, both new and used, including that
19manufactured on special order, certified by the purchaser to be
20used primarily for photoprocessing, and including
21photoprocessing machinery and equipment purchased for lease.
22    (16) Until July 1, 2023, coal and aggregate exploration,
23mining, off-highway hauling, processing, maintenance, and
24reclamation equipment, including replacement parts and
25equipment, and including equipment purchased for lease, but
26excluding motor vehicles required to be registered under the

 

 

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1Illinois Vehicle Code. The changes made to this Section by
2Public Act 97-767 apply on and after July 1, 2003, but no claim
3for credit or refund is allowed on or after August 16, 2013
4(the effective date of Public Act 98-456) for such taxes paid
5during the period beginning July 1, 2003 and ending on August
616, 2013 (the effective date of Public Act 98-456).
7    (17) Until July 1, 2003, distillation machinery and
8equipment, sold as a unit or kit, assembled or installed by the
9retailer, certified by the user to be used only for the
10production of ethyl alcohol that will be used for consumption
11as motor fuel or as a component of motor fuel for the personal
12use of the user, and not subject to sale or resale.
13    (18) Manufacturing and assembling machinery and equipment
14used primarily in the process of manufacturing or assembling
15tangible personal property for wholesale or retail sale or
16lease, whether that sale or lease is made directly by the
17manufacturer or by some other person, whether the materials
18used in the process are owned by the manufacturer or some other
19person, or whether that sale or lease is made apart from or as
20an incident to the seller's engaging in the service occupation
21of producing machines, tools, dies, jigs, patterns, gauges, or
22other similar items of no commercial value on special order for
23a particular purchaser. The exemption provided by this
24paragraph (18) does not include machinery and equipment used in
25(i) the generation of electricity for wholesale or retail sale;
26(ii) the generation or treatment of natural or artificial gas

 

 

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1for wholesale or retail sale that is delivered to customers
2through pipes, pipelines, or mains; or (iii) the treatment of
3water for wholesale or retail sale that is delivered to
4customers through pipes, pipelines, or mains. The provisions of
5Public Act 98-583 are declaratory of existing law as to the
6meaning and scope of this exemption. Beginning on July 1, 2017,
7the exemption provided by this paragraph (18) includes, but is
8not limited to, graphic arts machinery and equipment, as
9defined in paragraph (6) of this Section.
10    (19) Personal property delivered to a purchaser or
11purchaser's donee inside Illinois when the purchase order for
12that personal property was received by a florist located
13outside Illinois who has a florist located inside Illinois
14deliver the personal property.
15    (20) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (21) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (21) is exempt from the provisions
23of Section 3-90, and the exemption provided for under this item
24(21) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after January 1,
262008 for such taxes paid during the period beginning May 30,

 

 

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12000 and ending on January 1, 2008.
2    (22) Computers and communications equipment utilized for
3any hospital purpose and equipment used in the diagnosis,
4analysis, or treatment of hospital patients purchased by a
5lessor who leases the equipment, under a lease of one year or
6longer executed or in effect at the time the lessor would
7otherwise be subject to the tax imposed by this Act, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of the
10Retailers' Occupation Tax Act. If the equipment is leased in a
11manner that does not qualify for this exemption or is used in
12any other non-exempt manner, the lessor shall be liable for the
13tax imposed under this Act or the Service Use Tax Act, as the
14case may be, based on the fair market value of the property at
15the time the non-qualifying use occurs. No lessor shall collect
16or attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall have
21a legal right to claim a refund of that amount from the lessor.
22If, however, that amount is not refunded to the lessee for any
23reason, the lessor is liable to pay that amount to the
24Department.
25    (23) Personal property purchased by a lessor who leases the
26property, under a lease of one year or longer executed or in

 

 

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1effect at the time the lessor would otherwise be subject to the
2tax imposed by this Act, to a governmental body that has been
3issued an active sales tax exemption identification number by
4the Department under Section 1g of the Retailers' Occupation
5Tax Act. If the property is leased in a manner that does not
6qualify for this exemption or used in any other non-exempt
7manner, the lessor shall be liable for the tax imposed under
8this Act or the Service Use Tax Act, as the case may be, based
9on the fair market value of the property at the time the
10non-qualifying use occurs. No lessor shall collect or attempt
11to collect an amount (however designated) that purports to
12reimburse that lessor for the tax imposed by this Act or the
13Service Use Tax Act, as the case may be, if the tax has not been
14paid by the lessor. If a lessor improperly collects any such
15amount from the lessee, the lessee shall have a legal right to
16claim a refund of that amount from the lessor. If, however,
17that amount is not refunded to the lessee for any reason, the
18lessor is liable to pay that amount to the Department.
19    (24) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is donated for
22disaster relief to be used in a State or federally declared
23disaster area in Illinois or bordering Illinois by a
24manufacturer or retailer that is registered in this State to a
25corporation, society, association, foundation, or institution
26that has been issued a sales tax exemption identification

 

 

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1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (25) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (26) Beginning July 1, 1999, game or game birds purchased
16at a "game breeding and hunting preserve area" as that term is
17used in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 3-90.
19    (27) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the Department
23to be organized and operated exclusively for educational
24purposes. For purposes of this exemption, "a corporation,
25limited liability company, society, association, foundation,
26or institution organized and operated exclusively for

 

 

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1educational purposes" means all tax-supported public schools,
2private schools that offer systematic instruction in useful
3branches of learning by methods common to public schools and
4that compare favorably in their scope and intensity with the
5course of study presented in tax-supported schools, and
6vocational or technical schools or institutes organized and
7operated exclusively to provide a course of study of not less
8than 6 weeks duration and designed to prepare individuals to
9follow a trade or to pursue a manual, technical, mechanical,
10industrial, business, or commercial occupation.
11    (28) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 3-90.
25    (29) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

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1serve hot food and beverages, including coffee, soup, and other
2items, and replacement parts for these machines. Beginning
3January 1, 2002 and through June 30, 2003, machines and parts
4for machines used in commercial, coin-operated amusement and
5vending business if a use or occupation tax is paid on the
6gross receipts derived from the use of the commercial,
7coin-operated amusement and vending machines. This paragraph
8is exempt from the provisions of Section 3-90.
9    (30) Beginning January 1, 2001 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks, and food that has been prepared for immediate
13consumption) and prescription and nonprescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or in a licensed facility as defined
20in the ID/DD Community Care Act, the MC/DD Act, or the
21Specialized Mental Health Rehabilitation Act of 2013.
22    (31) Beginning on August 2, 2001 (the effective date of
23Public Act 92-227), computers and communications equipment
24utilized for any hospital purpose and equipment used in the
25diagnosis, analysis, or treatment of hospital patients
26purchased by a lessor who leases the equipment, under a lease

 

 

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1of one year or longer executed or in effect at the time the
2lessor would otherwise be subject to the tax imposed by this
3Act, to a hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the equipment is leased in a
6manner that does not qualify for this exemption or is used in
7any other nonexempt manner, the lessor shall be liable for the
8tax imposed under this Act or the Service Use Tax Act, as the
9case may be, based on the fair market value of the property at
10the time the nonqualifying use occurs. No lessor shall collect
11or attempt to collect an amount (however designated) that
12purports to reimburse that lessor for the tax imposed by this
13Act or the Service Use Tax Act, as the case may be, if the tax
14has not been paid by the lessor. If a lessor improperly
15collects any such amount from the lessee, the lessee shall have
16a legal right to claim a refund of that amount from the lessor.
17If, however, that amount is not refunded to the lessee for any
18reason, the lessor is liable to pay that amount to the
19Department. This paragraph is exempt from the provisions of
20Section 3-90.
21    (32) Beginning on August 2, 2001 (the effective date of
22Public Act 92-227), personal property purchased by a lessor who
23leases the property, under a lease of one year or longer
24executed or in effect at the time the lessor would otherwise be
25subject to the tax imposed by this Act, to a governmental body
26that has been issued an active sales tax exemption

 

 

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1identification number by the Department under Section 1g of the
2Retailers' Occupation Tax Act. If the property is leased in a
3manner that does not qualify for this exemption or used in any
4other nonexempt manner, the lessor shall be liable for the tax
5imposed under this Act or the Service Use Tax Act, as the case
6may be, based on the fair market value of the property at the
7time the nonqualifying use occurs. No lessor shall collect or
8attempt to collect an amount (however designated) that purports
9to reimburse that lessor for the tax imposed by this Act or the
10Service Use Tax Act, as the case may be, if the tax has not been
11paid by the lessor. If a lessor improperly collects any such
12amount from the lessee, the lessee shall have a legal right to
13claim a refund of that amount from the lessor. If, however,
14that amount is not refunded to the lessee for any reason, the
15lessor is liable to pay that amount to the Department. This
16paragraph is exempt from the provisions of Section 3-90.
17    (33) On and after July 1, 2003 and through June 30, 2004,
18the use in this State of motor vehicles of the second division
19with a gross vehicle weight in excess of 8,000 pounds and that
20are subject to the commercial distribution fee imposed under
21Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
221, 2004 and through June 30, 2005, the use in this State of
23motor vehicles of the second division: (i) with a gross vehicle
24weight rating in excess of 8,000 pounds; (ii) that are subject
25to the commercial distribution fee imposed under Section
263-815.1 of the Illinois Vehicle Code; and (iii) that are

 

 

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1primarily used for commercial purposes. Through June 30, 2005,
2this exemption applies to repair and replacement parts added
3after the initial purchase of such a motor vehicle if that
4motor vehicle is used in a manner that would qualify for the
5rolling stock exemption otherwise provided for in this Act. For
6purposes of this paragraph, the term "used for commercial
7purposes" means the transportation of persons or property in
8furtherance of any commercial or industrial enterprise,
9whether for-hire or not.
10    (34) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 3-90.
17    (35) Beginning January 1, 2010, materials, parts,
18equipment, components, and furnishings incorporated into or
19upon an aircraft as part of the modification, refurbishment,
20completion, replacement, repair, or maintenance of the
21aircraft. This exemption includes consumable supplies used in
22the modification, refurbishment, completion, replacement,
23repair, and maintenance of aircraft, but excludes any
24materials, parts, equipment, components, and consumable
25supplies used in the modification, replacement, repair, and
26maintenance of aircraft engines or power plants, whether such

 

 

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1engines or power plants are installed or uninstalled upon any
2such aircraft. "Consumable supplies" include, but are not
3limited to, adhesive, tape, sandpaper, general purpose
4lubricants, cleaning solution, latex gloves, and protective
5films. This exemption applies only to the use of qualifying
6tangible personal property by persons who modify, refurbish,
7complete, repair, replace, or maintain aircraft and who (i)
8hold an Air Agency Certificate and are empowered to operate an
9approved repair station by the Federal Aviation
10Administration, (ii) have a Class IV Rating, and (iii) conduct
11operations in accordance with Part 145 of the Federal Aviation
12Regulations. The exemption does not include aircraft operated
13by a commercial air carrier providing scheduled passenger air
14service pursuant to authority issued under Part 121 or Part 129
15of the Federal Aviation Regulations. The changes made to this
16paragraph (35) by Public Act 98-534 are declarative of existing
17law.
18    (36) Tangible personal property purchased by a
19public-facilities corporation, as described in Section
2011-65-10 of the Illinois Municipal Code, for purposes of
21constructing or furnishing a municipal convention hall, but
22only if the legal title to the municipal convention hall is
23transferred to the municipality without any further
24consideration by or on behalf of the municipality at the time
25of the completion of the municipal convention hall or upon the
26retirement or redemption of any bonds or other debt instruments

 

 

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1issued by the public-facilities corporation in connection with
2the development of the municipal convention hall. This
3exemption includes existing public-facilities corporations as
4provided in Section 11-65-25 of the Illinois Municipal Code.
5This paragraph is exempt from the provisions of Section 3-90.
6    (37) Beginning January 1, 2017, menstrual pads, tampons,
7and menstrual cups.
8    (38) Merchandise that is subject to the Rental Purchase
9Agreement Occupation and Use Tax. The purchaser must certify
10that the item is purchased to be rented subject to a rental
11purchase agreement, as defined in the Rental Purchase Agreement
12Act, and provide proof of registration under the Rental
13Purchase Agreement Occupation and Use Tax Act. This paragraph
14is exempt from the provisions of Section 3-90.
15    (39) Tangible personal property purchased by a purchaser
16who is exempt from the tax imposed by this Act by operation of
17federal law. This paragraph is exempt from the provisions of
18Section 3-90.
19    (40) Beginning on January 1, 2020, sales of motor fuel, as
20defined in Section 1.1 of the Motor Fuel Tax Law. This
21paragraph is exempt from the provisions of Section 3-90.
22(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
23100-22, eff. 7-6-17; 100-437, eff. 1-1-18; 100-594, eff.
246-29-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; revised
251-8-19.)
 

 

 

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1    (35 ILCS 105/3-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4either the selling price or the fair market value, if any, of
5the tangible personal property. In all cases where property
6functionally used or consumed is the same as the property that
7was purchased at retail, then the tax is imposed on the selling
8price of the property. In all cases where property functionally
9used or consumed is a by-product or waste product that has been
10refined, manufactured, or produced from property purchased at
11retail, then the tax is imposed on the lower of the fair market
12value, if any, of the specific property so used in this State
13or on the selling price of the property purchased at retail.
14For purposes of this Section "fair market value" means the
15price at which property would change hands between a willing
16buyer and a willing seller, neither being under any compulsion
17to buy or sell and both having reasonable knowledge of the
18relevant facts. The fair market value shall be established by
19Illinois sales by the taxpayer of the same property as that
20functionally used or consumed, or if there are no such sales by
21the taxpayer, then comparable sales or purchases of property of
22like kind and character in Illinois.
23    Beginning on July 1, 2000 and through December 31, 2000,
24with respect to motor fuel, as defined in Section 1.1 of the
25Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
26the Use Tax Act, the tax is imposed at the rate of 1.25%.

 

 

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1    Beginning on August 6, 2010 through August 15, 2010, with
2respect to sales tax holiday items as defined in Section 3-6 of
3this Act, the tax is imposed at the rate of 1.25%.
4    With respect to gasohol, the tax imposed by this Act
5applies to (i) 70% of the proceeds of sales made on or after
6January 1, 1990, and before July 1, 2003, (ii) 80% of the
7proceeds of sales made on or after July 1, 2003 and on or
8before July 1, 2017, and (iii) 100% of the proceeds of sales
9made thereafter. If, at any time, however, the tax under this
10Act on sales of gasohol is imposed at the rate of 1.25%, then
11the tax imposed by this Act applies to 100% of the proceeds of
12sales of gasohol made during that time. Beginning on January 1,
132020, sales of gasohol that qualify as sales of motor fuel
14under Section 1.1 of the Motor Fuel Tax Law are exempt.
15    With respect to majority blended ethanol fuel, the tax
16imposed by this Act does not apply to the proceeds of sales
17made on or after July 1, 2003 and on or before December 31,
182023 but applies to 100% of the proceeds of sales made
19thereafter. Beginning on January 1, 2020, sales of majority
20blended ethanol fuel that qualify as sales of motor fuel under
21Section 1.1 of the Motor Fuel Tax Law are exempt.
22    With respect to biodiesel blends with no less than 1% and
23no more than 10% biodiesel, the tax imposed by this Act applies
24to (i) 80% of the proceeds of sales made on or after July 1,
252003 and on or before December 31, 2018 and (ii) 100% of the
26proceeds of sales made thereafter. If, at any time, however,

 

 

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1the tax under this Act on sales of biodiesel blends with no
2less than 1% and no more than 10% biodiesel is imposed at the
3rate of 1.25%, then the tax imposed by this Act applies to 100%
4of the proceeds of sales of biodiesel blends with no less than
51% and no more than 10% biodiesel made during that time.
6Beginning on January 1, 2020, sales of biodiesel blends that
7qualify as sales of motor fuel under Section 1.1 of the Motor
8Fuel Tax Law are exempt.
9    With respect to 100% biodiesel and biodiesel blends with
10more than 10% but no more than 99% biodiesel, the tax imposed
11by this Act does not apply to the proceeds of sales made on or
12after July 1, 2003 and on or before December 31, 2023 but
13applies to 100% of the proceeds of sales made thereafter.
14Beginning on January 1, 2020, sales of biodiesel and biodiesel
15blends that qualify as sales of motor fuel under Section 1.1 of
16the Motor Fuel Tax Law are exempt.
17    With respect to food for human consumption that is to be
18consumed off the premises where it is sold (other than
19alcoholic beverages, soft drinks, and food that has been
20prepared for immediate consumption) and prescription and
21nonprescription medicines, drugs, medical appliances, products
22classified as Class III medical devices by the United States
23Food and Drug Administration that are used for cancer treatment
24pursuant to a prescription, as well as any accessories and
25components related to those devices, modifications to a motor
26vehicle for the purpose of rendering it usable by a person with

 

 

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

 

 

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

 

 

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1as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
2label includes:
3        (A) A "Drug Facts" panel; or
4        (B) A statement of the "active ingredient(s)" with a
5    list of those ingredients contained in the compound,
6    substance or preparation.
7    Beginning on the effective date of this amendatory Act of
8the 98th General Assembly, "prescription and nonprescription
9medicines and drugs" includes medical cannabis purchased from a
10registered dispensing organization under the Compassionate Use
11of Medical Cannabis Pilot Program Act.
12    If the property that is purchased at retail from a retailer
13is acquired outside Illinois and used outside Illinois before
14being brought to Illinois for use here and is taxable under
15this Act, the "selling price" on which the tax is computed
16shall be reduced by an amount that represents a reasonable
17allowance for depreciation for the period of prior out-of-state
18use.
19(Source: P.A. 99-143, eff. 7-27-15; 99-858, eff. 8-19-16;
20100-22, eff. 7-6-17.)
 
21    Section 10. The Service Use Tax Act is amended by changing
22Sections 3-5 and 3-10 as follows:
 
23    (35 ILCS 110/3-5)
24    Sec. 3-5. Exemptions. Use of the following tangible

 

 

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1personal property is exempt from the tax imposed by this Act:
2    (1) Personal property purchased from a corporation,
3society, association, foundation, institution, or
4organization, other than a limited liability company, that is
5organized and operated as a not-for-profit service enterprise
6for the benefit of persons 65 years of age or older if the
7personal property was not purchased by the enterprise for the
8purpose of resale by the enterprise.
9    (2) Personal property purchased by a non-profit Illinois
10county fair association for use in conducting, operating, or
11promoting the county fair.
12    (3) Personal property purchased by a not-for-profit arts or
13cultural organization that establishes, by proof required by
14the Department by rule, that it has received an exemption under
15Section 501(c)(3) of the Internal Revenue Code and that is
16organized and operated primarily for the presentation or
17support of arts or cultural programming, activities, or
18services. These organizations include, but are not limited to,
19music and dramatic arts organizations such as symphony
20orchestras and theatrical groups, arts and cultural service
21organizations, local arts councils, visual arts organizations,
22and media arts organizations. On and after July 1, 2001 (the
23effective date of Public Act 92-35) this amendatory Act of the
2492nd General Assembly, however, an entity otherwise eligible
25for this exemption shall not make tax-free purchases unless it
26has an active identification number issued by the Department.

 

 

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1    (4) Legal tender, currency, medallions, or gold or silver
2coinage issued by the State of Illinois, the government of the
3United States of America, or the government of any foreign
4country, and bullion.
5    (5) Until July 1, 2003 and beginning again on September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order or
9purchased for lease, certified by the purchaser to be used
10primarily for graphic arts production. Equipment includes
11chemicals or chemicals acting as catalysts but only if the
12chemicals or chemicals acting as catalysts effect a direct and
13immediate change upon a graphic arts product. Beginning on July
141, 2017, graphic arts machinery and equipment is included in
15the manufacturing and assembling machinery and equipment
16exemption under Section 2 of this Act.
17    (6) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (7) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including
25machinery and equipment purchased for lease, and including
26implements of husbandry defined in Section 1-130 of the

 

 

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1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (7). Agricultural chemical tender tanks and dry boxes
9shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

SB1555- 28 -LRB101 09384 HLH 54482 b

1agricultural chemicals. This item (7) is exempt from the
2provisions of Section 3-75.
3    (8) Until June 30, 2013, fuel and petroleum products sold
4to or used by an air common carrier, certified by the carrier
5to be used for consumption, shipment, or storage in the conduct
6of its business as an air common carrier, for a flight destined
7for or returning from a location or locations outside the
8United States without regard to previous or subsequent domestic
9stopovers.
10    Beginning July 1, 2013, fuel and petroleum products sold to
11or used by an air carrier, certified by the carrier to be used
12for consumption, shipment, or storage in the conduct of its
13business as an air common carrier, for a flight that (i) is
14engaged in foreign trade or is engaged in trade between the
15United States and any of its possessions and (ii) transports at
16least one individual or package for hire from the city of
17origination to the city of final destination on the same
18aircraft, without regard to a change in the flight number of
19that aircraft.
20    (9) Proceeds of mandatory service charges separately
21stated on customers' bills for the purchase and consumption of
22food and beverages acquired as an incident to the purchase of a
23service from a serviceman, to the extent that the proceeds of
24the service charge are in fact turned over as tips or as a
25substitute for tips to the employees who participate directly
26in preparing, serving, hosting or cleaning up the food or

 

 

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1beverage function with respect to which the service charge is
2imposed.
3    (10) Until July 1, 2003, oil field exploration, drilling,
4and production equipment, including (i) rigs and parts of rigs,
5rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
6tubular goods, including casing and drill strings, (iii) pumps
7and pump-jack units, (iv) storage tanks and flow lines, (v) any
8individual replacement part for oil field exploration,
9drilling, and production equipment, and (vi) machinery and
10equipment purchased for lease; but excluding motor vehicles
11required to be registered under the Illinois Vehicle Code.
12    (11) Proceeds from the sale of photoprocessing machinery
13and equipment, including repair and replacement parts, both new
14and used, including that manufactured on special order,
15certified by the purchaser to be used primarily for
16photoprocessing, and including photoprocessing machinery and
17equipment purchased for lease.
18    (12) Until July 1, 2023, coal and aggregate exploration,
19mining, off-highway hauling, processing, maintenance, and
20reclamation equipment, including replacement parts and
21equipment, and including equipment purchased for lease, but
22excluding motor vehicles required to be registered under the
23Illinois Vehicle Code. The changes made to this Section by
24Public Act 97-767 apply on and after July 1, 2003, but no claim
25for credit or refund is allowed on or after August 16, 2013
26(the effective date of Public Act 98-456) for such taxes paid

 

 

SB1555- 30 -LRB101 09384 HLH 54482 b

1during the period beginning July 1, 2003 and ending on August
216, 2013 (the effective date of Public Act 98-456).
3    (13) Semen used for artificial insemination of livestock
4for direct agricultural production.
5    (14) Horses, or interests in horses, registered with and
6meeting the requirements of any of the Arabian Horse Club
7Registry of America, Appaloosa Horse Club, American Quarter
8Horse Association, United States Trotting Association, or
9Jockey Club, as appropriate, used for purposes of breeding or
10racing for prizes. This item (14) is exempt from the provisions
11of Section 3-75, and the exemption provided for under this item
12(14) applies for all periods beginning May 30, 1995, but no
13claim for credit or refund is allowed on or after January 1,
142008 (the effective date of Public Act 95-88) this amendatory
15Act of the 95th General Assembly for such taxes paid during the
16period beginning May 30, 2000 and ending on January 1, 2008
17(the effective date of Public Act 95-88) this amendatory Act of
18the 95th General Assembly.
19    (15) Computers and communications equipment utilized for
20any hospital purpose and equipment used in the diagnosis,
21analysis, or treatment of hospital patients purchased by a
22lessor who leases the equipment, under a lease of one year or
23longer executed or in effect at the time the lessor would
24otherwise be subject to the tax imposed by this Act, to a
25hospital that has been issued an active tax exemption
26identification number by the Department under Section 1g of the

 

 

SB1555- 31 -LRB101 09384 HLH 54482 b

1Retailers' Occupation Tax Act. If the equipment is leased in a
2manner that does not qualify for this exemption or is used in
3any other non-exempt manner, the lessor shall be liable for the
4tax imposed under this Act or the Use Tax Act, as the case may
5be, based on the fair market value of the property at the time
6the non-qualifying use occurs. No lessor shall collect or
7attempt to collect an amount (however designated) that purports
8to reimburse that lessor for the tax imposed by this Act or the
9Use Tax Act, as the case may be, if the tax has not been paid by
10the lessor. If a lessor improperly collects any such amount
11from the lessee, the lessee shall have a legal right to claim a
12refund of that amount from the lessor. If, however, that amount
13is not refunded to the lessee for any reason, the lessor is
14liable to pay that amount to the Department.
15    (16) Personal property purchased by a lessor who leases the
16property, under a lease of one year or longer executed or in
17effect at the time the lessor would otherwise be subject to the
18tax imposed by this Act, to a governmental body that has been
19issued an active tax exemption identification number by the
20Department under Section 1g of the Retailers' Occupation Tax
21Act. If the property is leased in a manner that does not
22qualify for this exemption or is used in any other non-exempt
23manner, the lessor shall be liable for the tax imposed under
24this Act or the Use Tax Act, as the case may be, based on the
25fair market value of the property at the time the
26non-qualifying use occurs. No lessor shall collect or attempt

 

 

SB1555- 32 -LRB101 09384 HLH 54482 b

1to collect an amount (however designated) that purports to
2reimburse that lessor for the tax imposed by this Act or the
3Use Tax Act, as the case may be, if the tax has not been paid by
4the lessor. If a lessor improperly collects any such amount
5from the lessee, the lessee shall have a legal right to claim a
6refund of that amount from the lessor. If, however, that amount
7is not refunded to the lessee for any reason, the lessor is
8liable to pay that amount to the Department.
9    (17) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is donated for
12disaster relief to be used in a State or federally declared
13disaster area in Illinois or bordering Illinois by a
14manufacturer or retailer that is registered in this State to a
15corporation, society, association, foundation, or institution
16that has been issued a sales tax exemption identification
17number by the Department that assists victims of the disaster
18who reside within the declared disaster area.
19    (18) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is used in the
22performance of infrastructure repairs in this State, including
23but not limited to municipal roads and streets, access roads,
24bridges, sidewalks, waste disposal systems, water and sewer
25line extensions, water distribution and purification
26facilities, storm water drainage and retention facilities, and

 

 

SB1555- 33 -LRB101 09384 HLH 54482 b

1sewage treatment facilities, resulting from a State or
2federally declared disaster in Illinois or bordering Illinois
3when such repairs are initiated on facilities located in the
4declared disaster area within 6 months after the disaster.
5    (19) Beginning July 1, 1999, game or game birds purchased
6at a "game breeding and hunting preserve area" as that term is
7used in the Wildlife Code. This paragraph is exempt from the
8provisions of Section 3-75.
9    (20) A motor vehicle, as that term is defined in Section
101-146 of the Illinois Vehicle Code, that is donated to a
11corporation, limited liability company, society, association,
12foundation, or institution that is determined by the Department
13to be organized and operated exclusively for educational
14purposes. For purposes of this exemption, "a corporation,
15limited liability company, society, association, foundation,
16or institution organized and operated exclusively for
17educational purposes" means all tax-supported public schools,
18private schools that offer systematic instruction in useful
19branches of learning by methods common to public schools and
20that compare favorably in their scope and intensity with the
21course of study presented in tax-supported schools, and
22vocational or technical schools or institutes organized and
23operated exclusively to provide a course of study of not less
24than 6 weeks duration and designed to prepare individuals to
25follow a trade or to pursue a manual, technical, mechanical,
26industrial, business, or commercial occupation.

 

 

SB1555- 34 -LRB101 09384 HLH 54482 b

1    (21) Beginning January 1, 2000, personal property,
2including food, purchased through fundraising events for the
3benefit of a public or private elementary or secondary school,
4a group of those schools, or one or more school districts if
5the events are sponsored by an entity recognized by the school
6district that consists primarily of volunteers and includes
7parents and teachers of the school children. This paragraph
8does not apply to fundraising events (i) for the benefit of
9private home instruction or (ii) for which the fundraising
10entity purchases the personal property sold at the events from
11another individual or entity that sold the property for the
12purpose of resale by the fundraising entity and that profits
13from the sale to the fundraising entity. This paragraph is
14exempt from the provisions of Section 3-75.
15    (22) Beginning January 1, 2000 and through December 31,
162001, new or used automatic vending machines that prepare and
17serve hot food and beverages, including coffee, soup, and other
18items, and replacement parts for these machines. Beginning
19January 1, 2002 and through June 30, 2003, machines and parts
20for machines used in commercial, coin-operated amusement and
21vending business if a use or occupation tax is paid on the
22gross receipts derived from the use of the commercial,
23coin-operated amusement and vending machines. This paragraph
24is exempt from the provisions of Section 3-75.
25    (23) Beginning August 23, 2001 and through June 30, 2016,
26food for human consumption that is to be consumed off the

 

 

SB1555- 35 -LRB101 09384 HLH 54482 b

1premises where it is sold (other than alcoholic beverages, soft
2drinks, and food that has been prepared for immediate
3consumption) and prescription and nonprescription medicines,
4drugs, medical appliances, and insulin, urine testing
5materials, syringes, and needles used by diabetics, for human
6use, when purchased for use by a person receiving medical
7assistance under Article V of the Illinois Public Aid Code who
8resides in a licensed long-term care facility, as defined in
9the Nursing Home Care Act, or in a licensed facility as defined
10in the ID/DD Community Care Act, the MC/DD Act, or the
11Specialized Mental Health Rehabilitation Act of 2013.
12    (24) Beginning on August 2, 2001 (the effective date of
13Public Act 92-227) this amendatory Act of the 92nd General
14Assembly, computers and communications equipment utilized for
15any hospital purpose and equipment used in the diagnosis,
16analysis, or treatment of hospital patients purchased by a
17lessor who leases the equipment, under a lease of one year or
18longer executed or in effect at the time the lessor would
19otherwise be subject to the tax imposed by this Act, to a
20hospital that has been issued an active tax exemption
21identification number by the Department under Section 1g of the
22Retailers' Occupation Tax Act. If the equipment is leased in a
23manner that does not qualify for this exemption or is used in
24any other nonexempt manner, the lessor shall be liable for the
25tax imposed under this Act or the Use Tax Act, as the case may
26be, based on the fair market value of the property at the time

 

 

SB1555- 36 -LRB101 09384 HLH 54482 b

1the nonqualifying use occurs. No lessor shall collect or
2attempt to collect an amount (however designated) that purports
3to reimburse that lessor for the tax imposed by this Act or the
4Use Tax Act, as the case may be, if the tax has not been paid by
5the lessor. If a lessor improperly collects any such amount
6from the lessee, the lessee shall have a legal right to claim a
7refund of that amount from the lessor. If, however, that amount
8is not refunded to the lessee for any reason, the lessor is
9liable to pay that amount to the Department. This paragraph is
10exempt from the provisions of Section 3-75.
11    (25) Beginning on August 2, 2001 (the effective date of
12Public Act 92-227) this amendatory Act of the 92nd General
13Assembly, personal property purchased by a lessor who leases
14the property, under a lease of one year or longer executed or
15in effect at the time the lessor would otherwise be subject to
16the tax imposed by this Act, to a governmental body that has
17been issued an active tax exemption identification number by
18the Department under Section 1g of the Retailers' Occupation
19Tax Act. If the property is leased in a manner that does not
20qualify for this exemption or is used in any other nonexempt
21manner, the lessor shall be liable for the tax imposed under
22this Act or the Use Tax Act, as the case may be, based on the
23fair market value of the property at the time the nonqualifying
24use occurs. No lessor shall collect or attempt to collect an
25amount (however designated) that purports to reimburse that
26lessor for the tax imposed by this Act or the Use Tax Act, as

 

 

SB1555- 37 -LRB101 09384 HLH 54482 b

1the case may be, if the tax has not been paid by the lessor. If
2a lessor improperly collects any such amount from the lessee,
3the lessee shall have a legal right to claim a refund of that
4amount from the lessor. If, however, that amount is not
5refunded to the lessee for any reason, the lessor is liable to
6pay that amount to the Department. This paragraph is exempt
7from the provisions of Section 3-75.
8    (26) Beginning January 1, 2008, tangible personal property
9used in the construction or maintenance of a community water
10supply, as defined under Section 3.145 of the Environmental
11Protection Act, that is operated by a not-for-profit
12corporation that holds a valid water supply permit issued under
13Title IV of the Environmental Protection Act. This paragraph is
14exempt from the provisions of Section 3-75.
15    (27) Beginning January 1, 2010, materials, parts,
16equipment, components, and furnishings incorporated into or
17upon an aircraft as part of the modification, refurbishment,
18completion, replacement, repair, or maintenance of the
19aircraft. This exemption includes consumable supplies used in
20the modification, refurbishment, completion, replacement,
21repair, and maintenance of aircraft, but excludes any
22materials, parts, equipment, components, and consumable
23supplies used in the modification, replacement, repair, and
24maintenance of aircraft engines or power plants, whether such
25engines or power plants are installed or uninstalled upon any
26such aircraft. "Consumable supplies" include, but are not

 

 

SB1555- 38 -LRB101 09384 HLH 54482 b

1limited to, adhesive, tape, sandpaper, general purpose
2lubricants, cleaning solution, latex gloves, and protective
3films. This exemption applies only to the use of qualifying
4tangible personal property transferred incident to the
5modification, refurbishment, completion, replacement, repair,
6or maintenance of aircraft by persons who (i) hold an Air
7Agency Certificate and are empowered to operate an approved
8repair station by the Federal Aviation Administration, (ii)
9have a Class IV Rating, and (iii) conduct operations in
10accordance with Part 145 of the Federal Aviation Regulations.
11The exemption does not include aircraft operated by a
12commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (27) by Public Act 98-534 are declarative of existing
16law.
17    (28) Tangible personal property purchased by a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

SB1555- 39 -LRB101 09384 HLH 54482 b

1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 3-75.
5    (29) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7    (30) Tangible personal property transferred to a purchaser
8who is exempt from the tax imposed by this Act by operation of
9federal law. This paragraph is exempt from the provisions of
10Section 3-75.
11    (31) Beginning on January 1, 2020, sales of motor fuel, as
12defined in Section 1.1 of the Motor Fuel Tax Law. This
13paragraph is exempt from the provisions of Section 3-75.
14(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
15100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
161-4-19; revised 1-8-19.)
 
17    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
18    Sec. 3-10. Rate of tax. Unless otherwise provided in this
19Section, the tax imposed by this Act is at the rate of 6.25% of
20the selling price of tangible personal property transferred as
21an incident to the sale of service, but, for the purpose of
22computing this tax, in no event shall the selling price be less
23than the cost price of the property to the serviceman.
24    Beginning on July 1, 2000 and through December 31, 2000,
25with respect to motor fuel, as defined in Section 1.1 of the

 

 

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1Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
2the Use Tax Act, the tax is imposed at the rate of 1.25%.
3    With respect to gasohol, as defined in the Use Tax Act, the
4tax imposed by this Act applies to (i) 70% of the selling price
5of property transferred as an incident to the sale of service
6on or after January 1, 1990, and before July 1, 2003, (ii) 80%
7of the selling price of property transferred as an incident to
8the sale of service on or after July 1, 2003 and on or before
9July 1, 2017, and (iii) 100% of the selling price thereafter.
10If, at any time, however, the tax under this Act on sales of
11gasohol, as defined in the Use Tax Act, is imposed at the rate
12of 1.25%, then the tax imposed by this Act applies to 100% of
13the proceeds of sales of gasohol made during that time.
14Beginning on January 1, 2020, sales of gasohol that qualify as
15sales of motor fuel under Section 1.1 of the Motor Fuel Tax Law
16are exempt.
17    With respect to majority blended ethanol fuel, as defined
18in the Use Tax Act, the tax imposed by this Act does not apply
19to the selling price of property transferred as an incident to
20the sale of service on or after July 1, 2003 and on or before
21December 31, 2023 but applies to 100% of the selling price
22thereafter. Beginning on January 1, 2020, sales of majority
23blended ethanol fuel that qualify as sales of motor fuel under
24Section 1.1 of the Motor Fuel Tax Law are exempt.
25    With respect to biodiesel blends, as defined in the Use Tax
26Act, with no less than 1% and no more than 10% biodiesel, the

 

 

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1tax imposed by this Act applies to (i) 80% of the selling price
2of property transferred as an incident to the sale of service
3on or after July 1, 2003 and on or before December 31, 2018 and
4(ii) 100% of the proceeds of the selling price thereafter. If,
5at any time, however, the tax under this Act on sales of
6biodiesel blends, as defined in the Use Tax Act, with no less
7than 1% and no more than 10% biodiesel is imposed at the rate
8of 1.25%, then the tax imposed by this Act applies to 100% of
9the proceeds of sales of biodiesel blends with no less than 1%
10and no more than 10% biodiesel made during that time. Beginning
11on January 1, 2020, sales of biodiesel blends that qualify as
12sales of motor fuel under Section 1.1 of the Motor Fuel Tax Law
13are exempt.
14    With respect to 100% biodiesel, as defined in the Use Tax
15Act, and biodiesel blends, as defined in the Use Tax Act, with
16more than 10% but no more than 99% biodiesel, the tax imposed
17by this Act does not apply to the proceeds of the selling price
18of property transferred as an incident to the sale of service
19on or after July 1, 2003 and on or before December 31, 2023 but
20applies to 100% of the selling price thereafter. Beginning on
21January 1, 2020, sales of biodiesel and biodiesel blends that
22qualify as sales of motor fuel under Section 1.1 of the Motor
23Fuel Tax Law are exempt.
24    At the election of any registered serviceman made for each
25fiscal year, sales of service in which the aggregate annual
26cost price of tangible personal property transferred as an

 

 

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

 

 

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

 

 

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1this Act, "food for human consumption that is to be consumed
2off the premises where it is sold" includes all food sold
3through a vending machine, except soft drinks, candy, and food
4products that are dispensed hot from a vending machine,
5regardless of the location of the vending machine.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "food for human consumption that
8is to be consumed off the premises where it is sold" does not
9include candy. For purposes of this Section, "candy" means a
10preparation of sugar, honey, or other natural or artificial
11sweeteners in combination with chocolate, fruits, nuts or other
12ingredients or flavorings in the form of bars, drops, or
13pieces. "Candy" does not include any preparation that contains
14flour or requires refrigeration.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "nonprescription medicines and
17drugs" does not include grooming and hygiene products. For
18purposes of this Section, "grooming and hygiene products"
19includes, but is not limited to, soaps and cleaning solutions,
20shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
21lotions and screens, unless those products are available by
22prescription only, regardless of whether the products meet the
23definition of "over-the-counter-drugs". For the purposes of
24this paragraph, "over-the-counter-drug" means a drug for human
25use that contains a label that identifies the product as a drug
26as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"

 

 

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1label includes:
2        (A) A "Drug Facts" panel; or
3        (B) A statement of the "active ingredient(s)" with a
4    list of those ingredients contained in the compound,
5    substance or preparation.
6    Beginning on January 1, 2014 (the effective date of Public
7Act 98-122), "prescription and nonprescription medicines and
8drugs" includes medical cannabis purchased from a registered
9dispensing organization under the Compassionate Use of Medical
10Cannabis Pilot Program Act.
11    If the property that is acquired from a serviceman is
12acquired outside Illinois and used outside Illinois before
13being brought to Illinois for use here and is taxable under
14this Act, the "selling price" on which the tax is computed
15shall be reduced by an amount that represents a reasonable
16allowance for depreciation for the period of prior out-of-state
17use.
18(Source: P.A. 99-143, eff. 7-27-15; 99-180, eff. 7-29-15;
1999-642, eff. 7-28-16; 99-858, eff. 8-19-16; 100-22, eff.
207-6-17.)
 
21    Section 15. The Service Occupation Tax Act is amended by
22changing Sections 3-5 and 3-10 as follows:
 
23    (35 ILCS 115/3-5)
24    Sec. 3-5. Exemptions. The following tangible personal

 

 

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1property is exempt from the tax imposed by this Act:
2    (1) Personal property sold by a corporation, society,
3association, foundation, institution, or organization, other
4than a limited liability company, that is organized and
5operated as a not-for-profit service enterprise for the benefit
6of persons 65 years of age or older if the personal property
7was not purchased by the enterprise for the purpose of resale
8by the enterprise.
9    (2) Personal property purchased by a not-for-profit
10Illinois county fair association for use in conducting,
11operating, or promoting the county fair.
12    (3) Personal property purchased by any not-for-profit arts
13or cultural organization that establishes, by proof required by
14the Department by rule, that it has received an exemption under
15Section 501(c)(3) of the Internal Revenue Code and that is
16organized and operated primarily for the presentation or
17support of arts or cultural programming, activities, or
18services. These organizations include, but are not limited to,
19music and dramatic arts organizations such as symphony
20orchestras and theatrical groups, arts and cultural service
21organizations, local arts councils, visual arts organizations,
22and media arts organizations. On and after July 1, 2001 (the
23effective date of Public Act 92-35) this amendatory Act of the
2492nd General Assembly, however, an entity otherwise eligible
25for this exemption shall not make tax-free purchases unless it
26has an active identification number issued by the Department.

 

 

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1    (4) Legal tender, currency, medallions, or gold or silver
2coinage issued by the State of Illinois, the government of the
3United States of America, or the government of any foreign
4country, and bullion.
5    (5) Until July 1, 2003 and beginning again on September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order or
9purchased for lease, certified by the purchaser to be used
10primarily for graphic arts production. Equipment includes
11chemicals or chemicals acting as catalysts but only if the
12chemicals or chemicals acting as catalysts effect a direct and
13immediate change upon a graphic arts product. Beginning on July
141, 2017, graphic arts machinery and equipment is included in
15the manufacturing and assembling machinery and equipment
16exemption under Section 2 of this Act.
17    (6) Personal property sold by a teacher-sponsored student
18organization affiliated with an elementary or secondary school
19located in Illinois.
20    (7) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including
25machinery and equipment purchased for lease, and including
26implements of husbandry defined in Section 1-130 of the

 

 

SB1555- 48 -LRB101 09384 HLH 54482 b

1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (7). Agricultural chemical tender tanks and dry boxes
9shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

SB1555- 49 -LRB101 09384 HLH 54482 b

1agricultural chemicals. This item (7) is exempt from the
2provisions of Section 3-55.
3    (8) Until June 30, 2013, fuel and petroleum products sold
4to or used by an air common carrier, certified by the carrier
5to be used for consumption, shipment, or storage in the conduct
6of its business as an air common carrier, for a flight destined
7for or returning from a location or locations outside the
8United States without regard to previous or subsequent domestic
9stopovers.
10    Beginning July 1, 2013, fuel and petroleum products sold to
11or used by an air carrier, certified by the carrier to be used
12for consumption, shipment, or storage in the conduct of its
13business as an air common carrier, for a flight that (i) is
14engaged in foreign trade or is engaged in trade between the
15United States and any of its possessions and (ii) transports at
16least one individual or package for hire from the city of
17origination to the city of final destination on the same
18aircraft, without regard to a change in the flight number of
19that aircraft.
20    (9) Proceeds of mandatory service charges separately
21stated on customers' bills for the purchase and consumption of
22food and beverages, to the extent that the proceeds of the
23service charge are in fact turned over as tips or as a
24substitute for tips to the employees who participate directly
25in preparing, serving, hosting or cleaning up the food or
26beverage function with respect to which the service charge is

 

 

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1imposed.
2    (10) Until July 1, 2003, oil field exploration, drilling,
3and production equipment, including (i) rigs and parts of rigs,
4rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
5tubular goods, including casing and drill strings, (iii) pumps
6and pump-jack units, (iv) storage tanks and flow lines, (v) any
7individual replacement part for oil field exploration,
8drilling, and production equipment, and (vi) machinery and
9equipment purchased for lease; but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code.
11    (11) Photoprocessing machinery and equipment, including
12repair and replacement parts, both new and used, including that
13manufactured on special order, certified by the purchaser to be
14used primarily for photoprocessing, and including
15photoprocessing machinery and equipment purchased for lease.
16    (12) Until July 1, 2023, coal and aggregate exploration,
17mining, off-highway hauling, processing, maintenance, and
18reclamation equipment, including replacement parts and
19equipment, and including equipment purchased for lease, but
20excluding motor vehicles required to be registered under the
21Illinois Vehicle Code. The changes made to this Section by
22Public Act 97-767 apply on and after July 1, 2003, but no claim
23for credit or refund is allowed on or after August 16, 2013
24(the effective date of Public Act 98-456) for such taxes paid
25during the period beginning July 1, 2003 and ending on August
2616, 2013 (the effective date of Public Act 98-456).

 

 

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1    (13) Beginning January 1, 1992 and through June 30, 2016,
2food for human consumption that is to be consumed off the
3premises where it is sold (other than alcoholic beverages, soft
4drinks and food that has been prepared for immediate
5consumption) and prescription and non-prescription medicines,
6drugs, medical appliances, and insulin, urine testing
7materials, syringes, and needles used by diabetics, for human
8use, when purchased for use by a person receiving medical
9assistance under Article V of the Illinois Public Aid Code who
10resides in a licensed long-term care facility, as defined in
11the Nursing Home Care Act, or in a licensed facility as defined
12in the ID/DD Community Care Act, the MC/DD Act, or the
13Specialized Mental Health Rehabilitation Act of 2013.
14    (14) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (15) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (15) is exempt from the provisions
22of Section 3-55, and the exemption provided for under this item
23(15) applies for all periods beginning May 30, 1995, but no
24claim for credit or refund is allowed on or after January 1,
252008 (the effective date of Public Act 95-88) for such taxes
26paid during the period beginning May 30, 2000 and ending on

 

 

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1January 1, 2008 (the effective date of Public Act 95-88).
2    (16) Computers and communications equipment utilized for
3any hospital purpose and equipment used in the diagnosis,
4analysis, or treatment of hospital patients sold to a lessor
5who leases the equipment, under a lease of one year or longer
6executed or in effect at the time of the purchase, to a
7hospital that has been issued an active tax exemption
8identification number by the Department under Section 1g of the
9Retailers' Occupation Tax Act.
10    (17) Personal property sold to a lessor who leases the
11property, under a lease of one year or longer executed or in
12effect at the time of the purchase, to a governmental body that
13has been issued an active tax exemption identification number
14by the Department under Section 1g of the Retailers' Occupation
15Tax Act.
16    (18) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is donated for
19disaster relief to be used in a State or federally declared
20disaster area in Illinois or bordering Illinois by a
21manufacturer or retailer that is registered in this State to a
22corporation, society, association, foundation, or institution
23that has been issued a sales tax exemption identification
24number by the Department that assists victims of the disaster
25who reside within the declared disaster area.
26    (19) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in the
3performance of infrastructure repairs in this State, including
4but not limited to municipal roads and streets, access roads,
5bridges, sidewalks, waste disposal systems, water and sewer
6line extensions, water distribution and purification
7facilities, storm water drainage and retention facilities, and
8sewage treatment facilities, resulting from a State or
9federally declared disaster in Illinois or bordering Illinois
10when such repairs are initiated on facilities located in the
11declared disaster area within 6 months after the disaster.
12    (20) Beginning July 1, 1999, game or game birds sold at a
13"game breeding and hunting preserve area" as that term is used
14in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 3-55.
16    (21) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the Department
20to be organized and operated exclusively for educational
21purposes. For purposes of this exemption, "a corporation,
22limited liability company, society, association, foundation,
23or institution organized and operated exclusively for
24educational purposes" means all tax-supported public schools,
25private schools that offer systematic instruction in useful
26branches of learning by methods common to public schools and

 

 

SB1555- 54 -LRB101 09384 HLH 54482 b

1that compare favorably in their scope and intensity with the
2course of study presented in tax-supported schools, and
3vocational or technical schools or institutes organized and
4operated exclusively to provide a course of study of not less
5than 6 weeks duration and designed to prepare individuals to
6follow a trade or to pursue a manual, technical, mechanical,
7industrial, business, or commercial occupation.
8    (22) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 3-55.
22    (23) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and other
25items, and replacement parts for these machines. Beginning
26January 1, 2002 and through June 30, 2003, machines and parts

 

 

SB1555- 55 -LRB101 09384 HLH 54482 b

1for machines used in commercial, coin-operated amusement and
2vending business if a use or occupation tax is paid on the
3gross receipts derived from the use of the commercial,
4coin-operated amusement and vending machines. This paragraph
5is exempt from the provisions of Section 3-55.
6    (24) Beginning on August 2, 2001 (the effective date of
7Public Act 92-227) this amendatory Act of the 92nd General
8Assembly, computers and communications equipment utilized for
9any hospital purpose and equipment used in the diagnosis,
10analysis, or treatment of hospital patients sold to a lessor
11who leases the equipment, under a lease of one year or longer
12executed or in effect at the time of the purchase, to a
13hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of the
15Retailers' Occupation Tax Act. This paragraph is exempt from
16the provisions of Section 3-55.
17    (25) Beginning on August 2, 2001 (the effective date of
18Public Act 92-227) this amendatory Act of the 92nd General
19Assembly, personal property sold to a lessor who leases the
20property, under a lease of one year or longer executed or in
21effect at the time of the purchase, to a governmental body that
22has been issued an active tax exemption identification number
23by the Department under Section 1g of the Retailers' Occupation
24Tax Act. This paragraph is exempt from the provisions of
25Section 3-55.
26    (26) Beginning on January 1, 2002 and through June 30,

 

 

SB1555- 56 -LRB101 09384 HLH 54482 b

12016, tangible personal property purchased from an Illinois
2retailer by a taxpayer engaged in centralized purchasing
3activities in Illinois who will, upon receipt of the property
4in Illinois, temporarily store the property in Illinois (i) for
5the purpose of subsequently transporting it outside this State
6for use or consumption thereafter solely outside this State or
7(ii) for the purpose of being processed, fabricated, or
8manufactured into, attached to, or incorporated into other
9tangible personal property to be transported outside this State
10and thereafter used or consumed solely outside this State. The
11Director of Revenue shall, pursuant to rules adopted in
12accordance with the Illinois Administrative Procedure Act,
13issue a permit to any taxpayer in good standing with the
14Department who is eligible for the exemption under this
15paragraph (26). The permit issued under this paragraph (26)
16shall authorize the holder, to the extent and in the manner
17specified in the rules adopted under this Act, to purchase
18tangible personal property from a retailer exempt from the
19taxes imposed by this Act. Taxpayers shall maintain all
20necessary books and records to substantiate the use and
21consumption of all such tangible personal property outside of
22the State of Illinois.
23    (27) Beginning January 1, 2008, tangible personal property
24used in the construction or maintenance of a community water
25supply, as defined under Section 3.145 of the Environmental
26Protection Act, that is operated by a not-for-profit

 

 

SB1555- 57 -LRB101 09384 HLH 54482 b

1corporation that holds a valid water supply permit issued under
2Title IV of the Environmental Protection Act. This paragraph is
3exempt from the provisions of Section 3-55.
4    (28) Tangible personal property sold to a
5public-facilities corporation, as described in Section
611-65-10 of the Illinois Municipal Code, for purposes of
7constructing or furnishing a municipal convention hall, but
8only if the legal title to the municipal convention hall is
9transferred to the municipality without any further
10consideration by or on behalf of the municipality at the time
11of the completion of the municipal convention hall or upon the
12retirement or redemption of any bonds or other debt instruments
13issued by the public-facilities corporation in connection with
14the development of the municipal convention hall. This
15exemption includes existing public-facilities corporations as
16provided in Section 11-65-25 of the Illinois Municipal Code.
17This paragraph is exempt from the provisions of Section 3-55.
18    (29) Beginning January 1, 2010, materials, parts,
19equipment, components, and furnishings incorporated into or
20upon an aircraft as part of the modification, refurbishment,
21completion, replacement, repair, or maintenance of the
22aircraft. This exemption includes consumable supplies used in
23the modification, refurbishment, completion, replacement,
24repair, and maintenance of aircraft, but excludes any
25materials, parts, equipment, components, and consumable
26supplies used in the modification, replacement, repair, and

 

 

SB1555- 58 -LRB101 09384 HLH 54482 b

1maintenance of aircraft engines or power plants, whether such
2engines or power plants are installed or uninstalled upon any
3such aircraft. "Consumable supplies" include, but are not
4limited to, adhesive, tape, sandpaper, general purpose
5lubricants, cleaning solution, latex gloves, and protective
6films. This exemption applies only to the transfer of
7qualifying tangible personal property incident to the
8modification, refurbishment, completion, replacement, repair,
9or maintenance of an aircraft by persons who (i) hold an Air
10Agency Certificate and are empowered to operate an approved
11repair station by the Federal Aviation Administration, (ii)
12have a Class IV Rating, and (iii) conduct operations in
13accordance with Part 145 of the Federal Aviation Regulations.
14The exemption does not include aircraft operated by a
15commercial air carrier providing scheduled passenger air
16service pursuant to authority issued under Part 121 or Part 129
17of the Federal Aviation Regulations. The changes made to this
18paragraph (29) by Public Act 98-534 are declarative of existing
19law.
20    (30) Beginning January 1, 2017, menstrual pads, tampons,
21and menstrual cups.
22    (31) Tangible personal property transferred to a purchaser
23who is exempt from tax by operation of federal law. This
24paragraph is exempt from the provisions of Section 3-55.
25    (32) Beginning on January 1, 2020, sales of motor fuel, as
26defined in Section 1.1 of the Motor Fuel Tax Law. This

 

 

SB1555- 59 -LRB101 09384 HLH 54482 b

1paragraph is exempt from the provisions of Section 3-55.
2(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
3100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
41-4-19; revised 1-8-19.)
 
5    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
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", as defined in Section 2 of the Service Use
9Tax Act, of the tangible personal property. For the purpose of
10computing this tax, in no event shall the "selling price" be
11less than the cost price to the serviceman of the tangible
12personal property transferred. The selling price of each item
13of tangible personal property transferred as an incident of a
14sale of service may be shown as a distinct and separate item on
15the serviceman's billing to the service customer. If the
16selling price is not so shown, the selling price of the
17tangible personal property is deemed to be 50% of the
18serviceman's entire billing to the service customer. When,
19however, a serviceman contracts to design, develop, and produce
20special order machinery or equipment, the tax imposed by this
21Act shall be based on the serviceman's cost price of the
22tangible personal property transferred incident to the
23completion of the contract.
24    Beginning on July 1, 2000 and through December 31, 2000,
25with respect to motor fuel, as defined in Section 1.1 of the

 

 

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1Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
2the Use Tax Act, the tax is imposed at the rate of 1.25%.
3    With respect to gasohol, as defined in the Use Tax Act, the
4tax imposed by this Act shall apply to (i) 70% of the cost
5price of property transferred as an incident to the sale of
6service on or after January 1, 1990, and before July 1, 2003,
7(ii) 80% of the selling price of property transferred as an
8incident to the sale of service on or after July 1, 2003 and on
9or before July 1, 2017, and (iii) 100% of the cost price
10thereafter. If, at any time, however, the tax under this Act on
11sales of gasohol, as defined in the Use Tax Act, is imposed at
12the rate of 1.25%, then the tax imposed by this Act applies to
13100% of the proceeds of sales of gasohol made during that time.
14Beginning on January 1, 2020, sales of gasohol that qualify as
15sales of motor fuel under Section 1.1 of the Motor Fuel Tax Law
16are exempt.
17    With respect to majority blended ethanol fuel, as defined
18in the Use Tax Act, the tax imposed by this Act does not apply
19to the selling price of property transferred as an incident to
20the sale of service on or after July 1, 2003 and on or before
21December 31, 2023 but applies to 100% of the selling price
22thereafter. Beginning on January 1, 2020, sales of majority
23blended ethanol fuel that qualify as sales of motor fuel under
24Section 1.1 of the Motor Fuel Tax Law are exempt.
25    With respect to biodiesel blends, as defined in the Use Tax
26Act, with no less than 1% and no more than 10% biodiesel, the

 

 

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1tax imposed by this Act applies to (i) 80% of the selling price
2of property transferred as an incident to the sale of service
3on or after July 1, 2003 and on or before December 31, 2018 and
4(ii) 100% of the proceeds of the selling price thereafter. If,
5at any time, however, the tax under this Act on sales of
6biodiesel blends, as defined in the Use Tax Act, with no less
7than 1% and no more than 10% biodiesel is imposed at the rate
8of 1.25%, then the tax imposed by this Act applies to 100% of
9the proceeds of sales of biodiesel blends with no less than 1%
10and no more than 10% biodiesel made during that time. Beginning
11on January 1, 2020, sales of biodiesel blends that qualify as
12sales of motor fuel under Section 1.1 of the Motor Fuel Tax Law
13are exempt.
14    With respect to 100% biodiesel, as defined in the Use Tax
15Act, and biodiesel blends, as defined in the Use Tax Act, with
16more than 10% but no more than 99% biodiesel material, the tax
17imposed by this Act does not apply to the proceeds of the
18selling price of property transferred as an incident to the
19sale of service on or after July 1, 2003 and on or before
20December 31, 2023 but applies to 100% of the selling price
21thereafter. Beginning on January 1, 2020, sales of biodiesel
22that qualify as sales of motor fuel under Section 1.1 of the
23Motor Fuel Tax Law are exempt.
24    At the election of any registered serviceman made for each
25fiscal year, sales of service in which the aggregate annual
26cost price of tangible personal property transferred as an

 

 

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

 

 

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

 

 

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1this Act, "food for human consumption that is to be consumed
2off the premises where it is sold" includes all food sold
3through a vending machine, except soft drinks, candy, and food
4products that are dispensed hot from a vending machine,
5regardless of the location of the vending machine.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "food for human consumption that
8is to be consumed off the premises where it is sold" does not
9include candy. For purposes of this Section, "candy" means a
10preparation of sugar, honey, or other natural or artificial
11sweeteners in combination with chocolate, fruits, nuts or other
12ingredients or flavorings in the form of bars, drops, or
13pieces. "Candy" does not include any preparation that contains
14flour or requires refrigeration.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "nonprescription medicines and
17drugs" does not include grooming and hygiene products. For
18purposes of this Section, "grooming and hygiene products"
19includes, but is not limited to, soaps and cleaning solutions,
20shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
21lotions and screens, unless those products are available by
22prescription only, regardless of whether the products meet the
23definition of "over-the-counter-drugs". For the purposes of
24this paragraph, "over-the-counter-drug" means a drug for human
25use that contains a label that identifies the product as a drug
26as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"

 

 

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1label includes:
2        (A) A "Drug Facts" panel; or
3        (B) A statement of the "active ingredient(s)" with a
4    list of those ingredients contained in the compound,
5    substance or preparation.
6    Beginning on January 1, 2014 (the effective date of Public
7Act 98-122), "prescription and nonprescription medicines and
8drugs" includes medical cannabis purchased from a registered
9dispensing organization under the Compassionate Use of Medical
10Cannabis Pilot Program Act.
11(Source: P.A. 99-143, eff. 7-27-15; 99-180, eff. 7-29-15;
1299-642, eff. 7-28-16; 99-858, eff. 8-19-16; 100-22, eff.
137-6-17.)
 
14    Section 20. The Retailers' Occupation Tax Act is amended by
15changing Sections 2-5 and 2-10 as follows:
 
16    (35 ILCS 120/2-5)
17    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
18sale of the following tangible personal property are exempt
19from the tax imposed by this Act:
20        (1) Farm chemicals.
21        (2) Farm machinery and equipment, both new and used,
22    including that manufactured on special order, certified by
23    the purchaser to be used primarily for production
24    agriculture or State or federal agricultural programs,

 

 

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1    including individual replacement parts for the machinery
2    and equipment, including machinery and equipment purchased
3    for lease, and including implements of husbandry defined in
4    Section 1-130 of the Illinois Vehicle Code, farm machinery
5    and agricultural chemical and fertilizer spreaders, and
6    nurse wagons required to be registered under Section 3-809
7    of the Illinois Vehicle Code, but excluding other motor
8    vehicles required to be registered under the Illinois
9    Vehicle Code. Horticultural polyhouses or hoop houses used
10    for propagating, growing, or overwintering plants shall be
11    considered farm machinery and equipment under this item
12    (2). Agricultural chemical tender tanks and dry boxes shall
13    include units sold separately from a motor vehicle required
14    to be licensed and units sold mounted on a motor vehicle
15    required to be licensed, if the selling price of the tender
16    is separately stated.
17        Farm machinery and equipment shall include precision
18    farming equipment that is installed or purchased to be
19    installed on farm machinery and equipment including, but
20    not limited to, tractors, harvesters, sprayers, planters,
21    seeders, or spreaders. Precision farming equipment
22    includes, but is not limited to, soil testing sensors,
23    computers, monitors, software, global positioning and
24    mapping systems, and other such equipment.
25        Farm machinery and equipment also includes computers,
26    sensors, software, and related equipment used primarily in

 

 

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1    the computer-assisted operation of production agriculture
2    facilities, equipment, and activities such as, but not
3    limited to, the collection, monitoring, and correlation of
4    animal and crop data for the purpose of formulating animal
5    diets and agricultural chemicals. This item (2) is exempt
6    from the provisions of Section 2-70.
7        (3) Until July 1, 2003, distillation machinery and
8    equipment, sold as a unit or kit, assembled or installed by
9    the retailer, certified by the user to be used only for the
10    production of ethyl alcohol that will be used for
11    consumption as motor fuel or as a component of motor fuel
12    for the personal use of the user, and not subject to sale
13    or resale.
14        (4) Until July 1, 2003 and beginning again September 1,
15    2004 through August 30, 2014, graphic arts machinery and
16    equipment, including repair and replacement parts, both
17    new and used, and including that manufactured on special
18    order or purchased for lease, certified by the purchaser to
19    be used primarily for graphic arts production. Equipment
20    includes chemicals or chemicals acting as catalysts but
21    only if the chemicals or chemicals acting as catalysts
22    effect a direct and immediate change upon a graphic arts
23    product. Beginning on July 1, 2017, graphic arts machinery
24    and equipment is included in the manufacturing and
25    assembling machinery and equipment exemption under
26    paragraph (14).

 

 

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1        (5) A motor vehicle that is used for automobile
2    renting, as defined in the Automobile Renting Occupation
3    and Use Tax Act. This paragraph is exempt from the
4    provisions of Section 2-70.
5        (6) Personal property sold by a teacher-sponsored
6    student organization affiliated with an elementary or
7    secondary school located in Illinois.
8        (7) Until July 1, 2003, proceeds of that portion of the
9    selling price of a passenger car the sale of which is
10    subject to the Replacement Vehicle Tax.
11        (8) Personal property sold to an Illinois county fair
12    association for use in conducting, operating, or promoting
13    the county fair.
14        (9) Personal property sold to a not-for-profit arts or
15    cultural organization that establishes, by proof required
16    by the Department by rule, that it has received an
17    exemption under Section 501(c)(3) of the Internal Revenue
18    Code and that is organized and operated primarily for the
19    presentation or support of arts or cultural programming,
20    activities, or services. These organizations include, but
21    are not limited to, music and dramatic arts organizations
22    such as symphony orchestras and theatrical groups, arts and
23    cultural service organizations, local arts councils,
24    visual arts organizations, and media arts organizations.
25    On and after July 1, 2001 (the effective date of Public Act
26    92-35), however, an entity otherwise eligible for this

 

 

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1    exemption shall not make tax-free purchases unless it has
2    an active identification number issued by the Department.
3        (10) Personal property sold by a corporation, society,
4    association, foundation, institution, or organization,
5    other than a limited liability company, that is organized
6    and operated as a not-for-profit service enterprise for the
7    benefit of persons 65 years of age or older if the personal
8    property was not purchased by the enterprise for the
9    purpose of resale by the enterprise.
10        (11) Personal property sold to a governmental body, to
11    a corporation, society, association, foundation, or
12    institution organized and operated exclusively for
13    charitable, religious, or educational purposes, or to a
14    not-for-profit corporation, society, association,
15    foundation, institution, or organization that has no
16    compensated officers or employees and that is organized and
17    operated primarily for the recreation of persons 55 years
18    of age or older. A limited liability company may qualify
19    for the exemption under this paragraph only if the limited
20    liability company is organized and operated exclusively
21    for educational purposes. On and after July 1, 1987,
22    however, no entity otherwise eligible for this exemption
23    shall make tax-free purchases unless it has an active
24    identification number issued by the Department.
25        (12) (Blank).
26        (12-5) On and after July 1, 2003 and through June 30,

 

 

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1    2004, motor vehicles of the second division with a gross
2    vehicle weight in excess of 8,000 pounds that are subject
3    to the commercial distribution fee imposed under Section
4    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
5    2004 and through June 30, 2005, the use in this State of
6    motor vehicles of the second division: (i) with a gross
7    vehicle weight rating in excess of 8,000 pounds; (ii) that
8    are subject to the commercial distribution fee imposed
9    under Section 3-815.1 of the Illinois Vehicle Code; and
10    (iii) that are primarily used for commercial purposes.
11    Through June 30, 2005, this exemption applies to repair and
12    replacement parts added after the initial purchase of such
13    a motor vehicle if that motor vehicle is used in a manner
14    that would qualify for the rolling stock exemption
15    otherwise provided for in this Act. For purposes of this
16    paragraph, "used for commercial purposes" means the
17    transportation of persons or property in furtherance of any
18    commercial or industrial enterprise whether for-hire or
19    not.
20        (13) Proceeds from sales to owners, lessors, or
21    shippers of tangible personal property that is utilized by
22    interstate carriers for hire for use as rolling stock
23    moving in interstate commerce and equipment operated by a
24    telecommunications provider, licensed as a common carrier
25    by the Federal Communications Commission, which is
26    permanently installed in or affixed to aircraft moving in

 

 

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1    interstate commerce.
2        (14) Machinery and equipment that will be used by the
3    purchaser, or a lessee of the purchaser, primarily in the
4    process of manufacturing or assembling tangible personal
5    property for wholesale or retail sale or lease, whether the
6    sale or lease is made directly by the manufacturer or by
7    some other person, whether the materials used in the
8    process are owned by the manufacturer or some other person,
9    or whether the sale or lease is made apart from or as an
10    incident to the seller's engaging in the service occupation
11    of producing machines, tools, dies, jigs, patterns,
12    gauges, or other similar items of no commercial value on
13    special order for a particular purchaser. The exemption
14    provided by this paragraph (14) does not include machinery
15    and equipment used in (i) the generation of electricity for
16    wholesale or retail sale; (ii) the generation or treatment
17    of natural or artificial gas for wholesale or retail sale
18    that is delivered to customers through pipes, pipelines, or
19    mains; or (iii) the treatment of water for wholesale or
20    retail sale that is delivered to customers through pipes,
21    pipelines, or mains. The provisions of Public Act 98-583
22    are declaratory of existing law as to the meaning and scope
23    of this exemption. Beginning on July 1, 2017, the exemption
24    provided by this paragraph (14) includes, but is not
25    limited to, graphic arts machinery and equipment, as
26    defined in paragraph (4) of this Section.

 

 

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1        (15) Proceeds of mandatory service charges separately
2    stated on customers' bills for purchase and consumption of
3    food and beverages, to the extent that the proceeds of the
4    service charge are in fact turned over as tips or as a
5    substitute for tips to the employees who participate
6    directly in preparing, serving, hosting or cleaning up the
7    food or beverage function with respect to which the service
8    charge is imposed.
9        (16) Tangible personal property sold to a purchaser if
10    the purchaser is exempt from use tax by operation of
11    federal law. This paragraph is exempt from the provisions
12    of Section 2-70.
13        (17) Tangible personal property sold to a common
14    carrier by rail or motor that receives the physical
15    possession of the property in Illinois and that transports
16    the property, or shares with another common carrier in the
17    transportation of the property, out of Illinois on a
18    standard uniform bill of lading showing the seller of the
19    property as the shipper or consignor of the property to a
20    destination outside Illinois, for use outside Illinois.
21        (18) Legal tender, currency, medallions, or gold or
22    silver coinage issued by the State of Illinois, the
23    government of the United States of America, or the
24    government of any foreign country, and bullion.
25        (19) Until July 1, 2003, oil field exploration,
26    drilling, and production equipment, including (i) rigs and

 

 

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1    parts of rigs, rotary rigs, cable tool rigs, and workover
2    rigs, (ii) pipe and tubular goods, including casing and
3    drill strings, (iii) pumps and pump-jack units, (iv)
4    storage tanks and flow lines, (v) any individual
5    replacement part for oil field exploration, drilling, and
6    production equipment, and (vi) machinery and equipment
7    purchased for lease; but excluding motor vehicles required
8    to be registered under the Illinois Vehicle Code.
9        (20) Photoprocessing machinery and equipment,
10    including repair and replacement parts, both new and used,
11    including that manufactured on special order, certified by
12    the purchaser to be used primarily for photoprocessing, and
13    including photoprocessing machinery and equipment
14    purchased for lease.
15        (21) Until July 1, 2023, coal and aggregate
16    exploration, mining, off-highway hauling, processing,
17    maintenance, and reclamation equipment, including
18    replacement parts and equipment, and including equipment
19    purchased for lease, but excluding motor vehicles required
20    to be registered under the Illinois Vehicle Code. The
21    changes made to this Section by Public Act 97-767 apply on
22    and after July 1, 2003, but no claim for credit or refund
23    is allowed on or after August 16, 2013 (the effective date
24    of Public Act 98-456) for such taxes paid during the period
25    beginning July 1, 2003 and ending on August 16, 2013 (the
26    effective date of Public Act 98-456).

 

 

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1        (22) Until June 30, 2013, fuel and petroleum products
2    sold to or used by an air carrier, certified by the carrier
3    to be used for consumption, shipment, or storage in the
4    conduct of its business as an air common carrier, for a
5    flight destined for or returning from a location or
6    locations outside the United States without regard to
7    previous or subsequent domestic stopovers.
8        Beginning July 1, 2013, fuel and petroleum products
9    sold to or used by an air carrier, certified by the carrier
10    to be used for consumption, shipment, or storage in the
11    conduct of its business as an air common carrier, for a
12    flight that (i) is engaged in foreign trade or is engaged
13    in trade between the United States and any of its
14    possessions and (ii) transports at least one individual or
15    package for hire from the city of origination to the city
16    of final destination on the same aircraft, without regard
17    to a change in the flight number of that aircraft.
18        (23) A transaction in which the purchase order is
19    received by a florist who is located outside Illinois, but
20    who has a florist located in Illinois deliver the property
21    to the purchaser or the purchaser's donee in Illinois.
22        (24) Fuel consumed or used in the operation of ships,
23    barges, or vessels that are used primarily in or for the
24    transportation of property or the conveyance of persons for
25    hire on rivers bordering on this State if the fuel is
26    delivered by the seller to the purchaser's barge, ship, or

 

 

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1    vessel while it is afloat upon that bordering river.
2        (25) Except as provided in item (25-5) of this Section,
3    a motor vehicle sold in this State to a nonresident even
4    though the motor vehicle is delivered to the nonresident in
5    this State, if the motor vehicle is not to be titled in
6    this State, and if a drive-away permit is issued to the
7    motor vehicle as provided in Section 3-603 of the Illinois
8    Vehicle Code or if the nonresident purchaser has vehicle
9    registration plates to transfer to the motor vehicle upon
10    returning to his or her home state. The issuance of the
11    drive-away permit or having the out-of-state registration
12    plates to be transferred is prima facie evidence that the
13    motor vehicle will not be titled in this State.
14        (25-5) The exemption under item (25) does not apply if
15    the state in which the motor vehicle will be titled does
16    not allow a reciprocal exemption for a motor vehicle sold
17    and delivered in that state to an Illinois resident but
18    titled in Illinois. The tax collected under this Act on the
19    sale of a motor vehicle in this State to a resident of
20    another state that does not allow a reciprocal exemption
21    shall be imposed at a rate equal to the state's rate of tax
22    on taxable property in the state in which the purchaser is
23    a resident, except that the tax shall not exceed the tax
24    that would otherwise be imposed under this Act. At the time
25    of the sale, the purchaser shall execute a statement,
26    signed under penalty of perjury, of his or her intent to

 

 

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1    title the vehicle in the state in which the purchaser is a
2    resident within 30 days after the sale and of the fact of
3    the payment to the State of Illinois of tax in an amount
4    equivalent to the state's rate of tax on taxable property
5    in his or her state of residence and shall submit the
6    statement to the appropriate tax collection agency in his
7    or her state of residence. In addition, the retailer must
8    retain a signed copy of the statement in his or her
9    records. Nothing in this item shall be construed to require
10    the removal of the vehicle from this state following the
11    filing of an intent to title the vehicle in the purchaser's
12    state of residence if the purchaser titles the vehicle in
13    his or her state of residence within 30 days after the date
14    of sale. The tax collected under this Act in accordance
15    with this item (25-5) shall be proportionately distributed
16    as if the tax were collected at the 6.25% general rate
17    imposed under this Act.
18        (25-7) Beginning on July 1, 2007, no tax is imposed
19    under this Act on the sale of an aircraft, as defined in
20    Section 3 of the Illinois Aeronautics Act, if all of the
21    following conditions are met:
22            (1) the aircraft leaves this State within 15 days
23        after the later of either the issuance of the final
24        billing for the sale of the aircraft, or the authorized
25        approval for return to service, completion of the
26        maintenance record entry, and completion of the test

 

 

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1        flight and ground test for inspection, as required by
2        14 C.F.R. 91.407;
3            (2) the aircraft is not based or registered in this
4        State after the sale of the aircraft; and
5            (3) the seller retains in his or her books and
6        records and provides to the Department a signed and
7        dated certification from the purchaser, on a form
8        prescribed by the Department, certifying that the
9        requirements of this item (25-7) are met. The
10        certificate must also include the name and address of
11        the purchaser, the address of the location where the
12        aircraft is to be titled or registered, the address of
13        the primary physical location of the aircraft, and
14        other information that the Department may reasonably
15        require.
16        For purposes of this item (25-7):
17        "Based in this State" means hangared, stored, or
18    otherwise used, excluding post-sale customizations as
19    defined in this Section, for 10 or more days in each
20    12-month period immediately following the date of the sale
21    of the aircraft.
22        "Registered in this State" means an aircraft
23    registered with the Department of Transportation,
24    Aeronautics Division, or titled or registered with the
25    Federal Aviation Administration to an address located in
26    this State.

 

 

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1        This paragraph (25-7) is exempt from the provisions of
2    Section 2-70.
3        (26) Semen used for artificial insemination of
4    livestock for direct agricultural production.
5        (27) Horses, or interests in horses, registered with
6    and meeting the requirements of any of the Arabian Horse
7    Club Registry of America, Appaloosa Horse Club, American
8    Quarter Horse Association, United States Trotting
9    Association, or Jockey Club, as appropriate, used for
10    purposes of breeding or racing for prizes. This item (27)
11    is exempt from the provisions of Section 2-70, and the
12    exemption provided for under this item (27) applies for all
13    periods beginning May 30, 1995, but no claim for credit or
14    refund is allowed on or after January 1, 2008 (the
15    effective date of Public Act 95-88) for such taxes paid
16    during the period beginning May 30, 2000 and ending on
17    January 1, 2008 (the effective date of Public Act 95-88).
18        (28) Computers and communications equipment utilized
19    for any hospital purpose and equipment used in the
20    diagnosis, analysis, or treatment of hospital patients
21    sold to a lessor who leases the equipment, under a lease of
22    one year or longer executed or in effect at the time of the
23    purchase, to a hospital that has been issued an active tax
24    exemption identification number by the Department under
25    Section 1g of this Act.
26        (29) Personal property sold to a lessor who leases the

 

 

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1    property, under a lease of one year or longer executed or
2    in effect at the time of the purchase, to a governmental
3    body that has been issued an active tax exemption
4    identification number by the Department under Section 1g of
5    this Act.
6        (30) Beginning with taxable years ending on or after
7    December 31, 1995 and ending with taxable years ending on
8    or before December 31, 2004, personal property that is
9    donated for disaster relief to be used in a State or
10    federally declared disaster area in Illinois or bordering
11    Illinois by a manufacturer or retailer that is registered
12    in this State to a corporation, society, association,
13    foundation, or institution that has been issued a sales tax
14    exemption identification number by the Department that
15    assists victims of the disaster who reside within the
16    declared disaster area.
17        (31) Beginning with taxable years ending on or after
18    December 31, 1995 and ending with taxable years ending on
19    or before December 31, 2004, personal property that is used
20    in the performance of infrastructure repairs in this State,
21    including but not limited to municipal roads and streets,
22    access roads, bridges, sidewalks, waste disposal systems,
23    water and sewer line extensions, water distribution and
24    purification facilities, storm water drainage and
25    retention facilities, and sewage treatment facilities,
26    resulting from a State or federally declared disaster in

 

 

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1    Illinois or bordering Illinois when such repairs are
2    initiated on facilities located in the declared disaster
3    area within 6 months after the disaster.
4        (32) Beginning July 1, 1999, game or game birds sold at
5    a "game breeding and hunting preserve area" as that term is
6    used in the Wildlife Code. This paragraph is exempt from
7    the provisions of Section 2-70.
8        (33) A motor vehicle, as that term is defined in
9    Section 1-146 of the Illinois Vehicle Code, that is donated
10    to a corporation, limited liability company, society,
11    association, foundation, or institution that is determined
12    by the Department to be organized and operated exclusively
13    for educational purposes. For purposes of this exemption,
14    "a corporation, limited liability company, society,
15    association, foundation, or institution organized and
16    operated exclusively for educational purposes" means all
17    tax-supported public schools, private schools that offer
18    systematic instruction in useful branches of learning by
19    methods common to public schools and that compare favorably
20    in their scope and intensity with the course of study
21    presented in tax-supported schools, and vocational or
22    technical schools or institutes organized and operated
23    exclusively to provide a course of study of not less than 6
24    weeks duration and designed to prepare individuals to
25    follow a trade or to pursue a manual, technical,
26    mechanical, industrial, business, or commercial

 

 

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1    occupation.
2        (34) Beginning January 1, 2000, personal property,
3    including food, purchased through fundraising events for
4    the benefit of a public or private elementary or secondary
5    school, a group of those schools, or one or more school
6    districts if the events are sponsored by an entity
7    recognized by the school district that consists primarily
8    of volunteers and includes parents and teachers of the
9    school children. This paragraph does not apply to
10    fundraising events (i) for the benefit of private home
11    instruction or (ii) for which the fundraising entity
12    purchases the personal property sold at the events from
13    another individual or entity that sold the property for the
14    purpose of resale by the fundraising entity and that
15    profits from the sale to the fundraising entity. This
16    paragraph is exempt from the provisions of Section 2-70.
17        (35) Beginning January 1, 2000 and through December 31,
18    2001, new or used automatic vending machines that prepare
19    and serve hot food and beverages, including coffee, soup,
20    and other items, and replacement parts for these machines.
21    Beginning January 1, 2002 and through June 30, 2003,
22    machines and parts for machines used in commercial,
23    coin-operated amusement and vending business if a use or
24    occupation tax is paid on the gross receipts derived from
25    the use of the commercial, coin-operated amusement and
26    vending machines. This paragraph is exempt from the

 

 

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1    provisions of Section 2-70.
2        (35-5) Beginning August 23, 2001 and through June 30,
3    2016, food for human consumption that is to be consumed off
4    the premises where it is sold (other than alcoholic
5    beverages, soft drinks, and food that has been prepared for
6    immediate consumption) and prescription and
7    nonprescription medicines, drugs, medical appliances, and
8    insulin, urine testing materials, syringes, and needles
9    used by diabetics, for human use, when purchased for use by
10    a person receiving medical assistance under Article V of
11    the Illinois Public Aid Code who resides in a licensed
12    long-term care facility, as defined in the Nursing Home
13    Care Act, or a licensed facility as defined in the ID/DD
14    Community Care Act, the MC/DD Act, or the Specialized
15    Mental Health Rehabilitation Act of 2013.
16        (36) Beginning August 2, 2001, computers and
17    communications equipment utilized for any hospital purpose
18    and equipment used in the diagnosis, analysis, or treatment
19    of hospital patients sold to a lessor who leases the
20    equipment, under a lease of one year or longer executed or
21    in effect at the time of the purchase, to a hospital that
22    has been issued an active tax exemption identification
23    number by the Department under Section 1g of this Act. This
24    paragraph is exempt from the provisions of Section 2-70.
25        (37) Beginning August 2, 2001, personal property sold
26    to a lessor who leases the property, under a lease of one

 

 

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1    year or longer executed or in effect at the time of the
2    purchase, to a governmental body that has been issued an
3    active tax exemption identification number by the
4    Department under Section 1g of this Act. This paragraph is
5    exempt from the provisions of Section 2-70.
6        (38) Beginning on January 1, 2002 and through June 30,
7    2016, tangible personal property purchased from an
8    Illinois retailer by a taxpayer engaged in centralized
9    purchasing activities in Illinois who will, upon receipt of
10    the property in Illinois, temporarily store the property in
11    Illinois (i) for the purpose of subsequently transporting
12    it outside this State for use or consumption thereafter
13    solely outside this State or (ii) for the purpose of being
14    processed, fabricated, or manufactured into, attached to,
15    or incorporated into other tangible personal property to be
16    transported outside this State and thereafter used or
17    consumed solely outside this State. The Director of Revenue
18    shall, pursuant to rules adopted in accordance with the
19    Illinois Administrative Procedure Act, issue a permit to
20    any taxpayer in good standing with the Department who is
21    eligible for the exemption under this paragraph (38). The
22    permit issued under this paragraph (38) shall authorize the
23    holder, to the extent and in the manner specified in the
24    rules adopted under this Act, to purchase tangible personal
25    property from a retailer exempt from the taxes imposed by
26    this Act. Taxpayers shall maintain all necessary books and

 

 

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1    records to substantiate the use and consumption of all such
2    tangible personal property outside of the State of
3    Illinois.
4        (39) Beginning January 1, 2008, tangible personal
5    property used in the construction or maintenance of a
6    community water supply, as defined under Section 3.145 of
7    the Environmental Protection Act, that is operated by a
8    not-for-profit corporation that holds a valid water supply
9    permit issued under Title IV of the Environmental
10    Protection Act. This paragraph is exempt from the
11    provisions of Section 2-70.
12        (40) Beginning January 1, 2010, materials, parts,
13    equipment, components, and furnishings incorporated into
14    or upon an aircraft as part of the modification,
15    refurbishment, completion, replacement, repair, or
16    maintenance of the aircraft. This exemption includes
17    consumable supplies used in the modification,
18    refurbishment, completion, replacement, repair, and
19    maintenance of aircraft, but excludes any materials,
20    parts, equipment, components, and consumable supplies used
21    in the modification, replacement, repair, and maintenance
22    of aircraft engines or power plants, whether such engines
23    or power plants are installed or uninstalled upon any such
24    aircraft. "Consumable supplies" include, but are not
25    limited to, adhesive, tape, sandpaper, general purpose
26    lubricants, cleaning solution, latex gloves, and

 

 

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1    protective films. This exemption applies only to the sale
2    of qualifying tangible personal property to persons who
3    modify, refurbish, complete, replace, or maintain an
4    aircraft and who (i) hold an Air Agency Certificate and are
5    empowered to operate an approved repair station by the
6    Federal Aviation Administration, (ii) have a Class IV
7    Rating, and (iii) conduct operations in accordance with
8    Part 145 of the Federal Aviation Regulations. The exemption
9    does not include aircraft operated by a commercial air
10    carrier providing scheduled passenger air service pursuant
11    to authority issued under Part 121 or Part 129 of the
12    Federal Aviation Regulations. The changes made to this
13    paragraph (40) by Public Act 98-534 are declarative of
14    existing law.
15        (41) Tangible personal property sold to a
16    public-facilities corporation, as described in Section
17    11-65-10 of the Illinois Municipal Code, for purposes of
18    constructing or furnishing a municipal convention hall,
19    but only if the legal title to the municipal convention
20    hall is transferred to the municipality without any further
21    consideration by or on behalf of the municipality at the
22    time of the completion of the municipal convention hall or
23    upon the retirement or redemption of any bonds or other
24    debt instruments issued by the public-facilities
25    corporation in connection with the development of the
26    municipal convention hall. This exemption includes

 

 

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1    existing public-facilities corporations as provided in
2    Section 11-65-25 of the Illinois Municipal Code. This
3    paragraph is exempt from the provisions of Section 2-70.
4        (42) Beginning January 1, 2017, menstrual pads,
5    tampons, and menstrual cups.
6        (43) Merchandise that is subject to the Rental Purchase
7    Agreement Occupation and Use Tax. The purchaser must
8    certify that the item is purchased to be rented subject to
9    a rental purchase agreement, as defined in the Rental
10    Purchase Agreement Act, and provide proof of registration
11    under the Rental Purchase Agreement Occupation and Use Tax
12    Act. This paragraph is exempt from the provisions of
13    Section 2-70.
14        (42) Beginning on January 1, 2020, sales of motor fuel,
15    as defined in Section 1.1 of the Motor Fuel Tax Law. This
16    paragraph is exempt from the provisions of Section 2-70.
17(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
18100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
191-1-18; 100-594, eff. 6-29-18; 100-863, eff. 8-14-18;
20100-1171, eff. 1-4-19; revised 1-8-19.)
 
21    (35 ILCS 120/2-10)
22    Sec. 2-10. Rate of tax. Unless otherwise provided in this
23Section, the tax imposed by this Act is at the rate of 6.25% of
24gross receipts from sales of tangible personal property made in
25the course of business.

 

 

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1    Beginning on July 1, 2000 and through December 31, 2000,
2with respect to motor fuel, as defined in Section 1.1 of the
3Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
4the Use Tax Act, the tax is imposed at the rate of 1.25%.
5    Beginning on August 6, 2010 through August 15, 2010, with
6respect to sales tax holiday items as defined in Section 2-8 of
7this Act, the tax is imposed at the rate of 1.25%.
8    Within 14 days after the effective date of this amendatory
9Act of the 91st General Assembly, each retailer of motor fuel
10and gasohol shall cause the following notice to be posted in a
11prominently visible place on each retail dispensing device that
12is used to dispense motor fuel or gasohol in the State of
13Illinois: "As of July 1, 2000, the State of Illinois has
14eliminated the State's share of sales tax on motor fuel and
15gasohol through December 31, 2000. The price on this pump
16should reflect the elimination of the tax." The notice shall be
17printed in bold print on a sign that is no smaller than 4
18inches by 8 inches. The sign shall be clearly visible to
19customers. Any retailer who fails to post or maintain a
20required sign through December 31, 2000 is guilty of a petty
21offense for which the fine shall be $500 per day per each
22retail premises where a violation occurs.
23    With respect to gasohol, as defined in the Use Tax Act, the
24tax imposed by this Act applies to (i) 70% of the proceeds of
25sales made on or after January 1, 1990, and before July 1,
262003, (ii) 80% of the proceeds of sales made on or after July

 

 

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11, 2003 and on or before July 1, 2017, and (iii) 100% of the
2proceeds of sales made thereafter. If, at any time, however,
3the tax under this Act on sales of gasohol, as defined in the
4Use Tax Act, is imposed at the rate of 1.25%, then the tax
5imposed by this Act applies to 100% of the proceeds of sales of
6gasohol made during that time. Beginning on January 1, 2020,
7sales of gasohol that qualify as sales of motor fuel under
8Section 1.1 of the Motor Fuel Tax Law are exempt.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the proceeds of sales made on or after July 1, 2003 and on or
12before December 31, 2023 but applies to 100% of the proceeds of
13sales made thereafter. Beginning on January 1, 2020, sales of
14majority blended ethanol fuel that qualify as sales of motor
15fuel under Section 1.1 of the Motor Fuel Tax Law are exempt.
16    With respect to biodiesel blends, as defined in the Use Tax
17Act, with no less than 1% and no more than 10% biodiesel, the
18tax imposed by this Act applies to (i) 80% of the proceeds of
19sales made on or after July 1, 2003 and on or before December
2031, 2018 and (ii) 100% of the proceeds of sales made
21thereafter. If, at any time, however, the tax under this Act on
22sales of biodiesel blends, as defined in the Use Tax Act, with
23no less than 1% and no more than 10% biodiesel is imposed at
24the rate of 1.25%, then the tax imposed by this Act applies to
25100% of the proceeds of sales of biodiesel blends with no less
26than 1% and no more than 10% biodiesel made during that time.

 

 

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1Beginning on January 1, 2020, sales of biodiesel blends that
2qualify as sales of motor fuel under Section 1.1 of the Motor
3Fuel Tax Law are exempt.
4    With respect to 100% biodiesel, as defined in the Use Tax
5Act, and biodiesel blends, as defined in the Use Tax Act, with
6more than 10% but no more than 99% biodiesel, the tax imposed
7by this Act does not apply to the proceeds of sales made on or
8after July 1, 2003 and on or before December 31, 2023 but
9applies to 100% of the proceeds of sales made thereafter.
10Beginning on January 1, 2020, sales of biodiesel that qualify
11as sales of motor fuel under Section 1.1 of the Motor Fuel Tax
12Law are exempt.
13    With respect to food for human consumption that is to be
14consumed off the premises where it is sold (other than
15alcoholic beverages, soft drinks, and food that has been
16prepared for immediate consumption) and prescription and
17nonprescription medicines, drugs, medical appliances, products
18classified as Class III medical devices by the United States
19Food and Drug Administration that are used for cancer treatment
20pursuant to a prescription, as well as any accessories and
21components related to those devices, modifications to a motor
22vehicle for the purpose of rendering it usable by a person with
23a disability, and insulin, urine testing materials, syringes,
24and needles used by diabetics, for human use, the tax is
25imposed at the rate of 1%. For the purposes of this Section,
26until September 1, 2009: the term "soft drinks" means any

 

 

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1complete, finished, ready-to-use, non-alcoholic drink, whether
2carbonated or not, including but not limited to soda water,
3cola, fruit juice, vegetable juice, carbonated water, and all
4other preparations commonly known as soft drinks of whatever
5kind or description that are contained in any closed or sealed
6bottle, can, carton, or container, regardless of size; but
7"soft drinks" does not include coffee, tea, non-carbonated
8water, infant formula, milk or milk products as defined in the
9Grade A Pasteurized Milk and Milk Products Act, or drinks
10containing 50% or more natural fruit or vegetable juice.
11    Notwithstanding any other provisions of this Act,
12beginning September 1, 2009, "soft drinks" means non-alcoholic
13beverages that contain natural or artificial sweeteners. "Soft
14drinks" do not include beverages that contain milk or milk
15products, soy, rice or similar milk substitutes, or greater
16than 50% of vegetable or fruit juice by volume.
17    Until August 1, 2009, and notwithstanding any other
18provisions of this Act, "food for human consumption that is to
19be consumed off the premises where it is sold" includes all
20food sold through a vending machine, except soft drinks and
21food products that are dispensed hot from a vending machine,
22regardless of the location of the vending machine. Beginning
23August 1, 2009, and notwithstanding any other provisions of
24this Act, "food for human consumption that is to be consumed
25off the premises where it is sold" includes all food sold
26through a vending machine, except soft drinks, candy, and food

 

 

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1products that are dispensed hot from a vending machine,
2regardless of the location of the vending machine.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "food for human consumption that
5is to be consumed off the premises where it is sold" does not
6include candy. For purposes of this Section, "candy" means a
7preparation of sugar, honey, or other natural or artificial
8sweeteners in combination with chocolate, fruits, nuts or other
9ingredients or flavorings in the form of bars, drops, or
10pieces. "Candy" does not include any preparation that contains
11flour or requires refrigeration.
12    Notwithstanding any other provisions of this Act,
13beginning September 1, 2009, "nonprescription medicines and
14drugs" does not include grooming and hygiene products. For
15purposes of this Section, "grooming and hygiene products"
16includes, but is not limited to, soaps and cleaning solutions,
17shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
18lotions and screens, unless those products are available by
19prescription only, regardless of whether the products meet the
20definition of "over-the-counter-drugs". For the purposes of
21this paragraph, "over-the-counter-drug" means a drug for human
22use that contains a label that identifies the product as a drug
23as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
24label includes:
25        (A) A "Drug Facts" panel; or
26        (B) A statement of the "active ingredient(s)" with a

 

 

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1    list of those ingredients contained in the compound,
2    substance or preparation.
3    Beginning on the effective date of this amendatory Act of
4the 98th General Assembly, "prescription and nonprescription
5medicines and drugs" includes medical cannabis purchased from a
6registered dispensing organization under the Compassionate Use
7of Medical Cannabis Pilot Program Act.
8(Source: P.A. 99-143, eff. 7-27-15; 99-858, eff. 8-19-16;
9100-22, eff. 7-6-17.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.