101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2036

 

Introduced 2/15/2019, by Sen. Napoleon Harris, III

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 120/5m new
35 ILCS 200/184.10 new
220 ILCS 5/9-222  from Ch. 111 2/3, par. 9-222
220 ILCS 5/9-222.1B new

    Creates the Big Empties Site Act. Provides that property located in the State consisting of one or more PINs but under common ownership at the time of the application, that contains at least one vacant and unused building of specified square footage, is qualified to be designated as a Big Empties Site. Provides that a county or municipality that has adopted an ordinance designating a qualified site as a Big Empties Site shall make written application to the Department of Commerce and Economic Opportunity to have that site certified by the Department as a Big Empties Site. Contains procedures for certification by the Department of Commerce and Economic Opportunity. Amends the Illinois Income Tax Act, the Use Tax Act, the Service Use Tax Act, and the Public Utilities Act to provide certain tax incentives for Big Empties Sites. Amends the Property Tax Code to provide that a taxing district may issue an abatement. Effective immediately.


LRB101 06745 HLH 51772 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2036LRB101 06745 HLH 51772 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 1. Short title. This Act may be cited as the Big
5Empties Site Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Department" means the Department of Commerce and Economic
8Opportunity.
9    "Qualified site" means property located in the State
10consisting of one or more PINs but under common ownership at
11the time of the application that contains at least one vacant
12and unused building of (i) 1,000,000 square feet or greater in
13Cook, DuPage, Kane, Kendall, Lake, McHenry, or Will County or
14(ii) 500,000 square feet or greater in any other county.
 
15    Section 10. Site designation; application. A county or
16municipality that has adopted an ordinance designating a
17qualified site as a Big Empties Site shall make written
18application to the Department to have that site certified by
19the Department as a Big Empties Site. The application shall
20include a copy of the ordinance designating the proposed site
21and such other information as the Department may, by rule,
22require. All applications which are to be considered and acted

 

 

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1upon by the Department during a calendar year must be received
2by the Department no later than December 31 of the preceding
3calendar year. Any application received after December 31 of
4any calendar year shall be held by the Department for
5consideration and action during the following calendar year.
 
6    Section 15. Certification. Certification of a
7Department-approved Big Empties Site shall be made by the
8Department by certification of the designating ordinance. The
9Department shall promptly issue a certificate for site upon
10approval. The certificate shall be signed by the Director of
11the Department, shall make specific reference to the
12designating ordinance, which shall be attached thereto, and
13shall be filed in the office of the Secretary of State. A
14certified copy of the certificate, or a duplicate original
15thereof, shall be recorded in the office of recorder of deeds
16of the county in which the site lies. Such certification shall
17have a term of no greater than 15 years.
 
18    Section 900. The Illinois Income Tax Act is amended by
19changing Section 201 as follows:
 
20    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
21    Sec. 201. Tax imposed.
22    (a) In general. A tax measured by net income is hereby
23imposed on every individual, corporation, trust and estate for

 

 

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1each taxable year ending after July 31, 1969 on the privilege
2of earning or receiving income in or as a resident of this
3State. Such tax shall be in addition to all other occupation or
4privilege taxes imposed by this State or by any municipal
5corporation or political subdivision thereof.
6    (b) Rates. The tax imposed by subsection (a) of this
7Section shall be determined as follows, except as adjusted by
8subsection (d-1):
9        (1) In the case of an individual, trust or estate, for
10    taxable years ending prior to July 1, 1989, an amount equal
11    to 2 1/2% of the taxpayer's net income for the taxable
12    year.
13        (2) In the case of an individual, trust or estate, for
14    taxable years beginning prior to July 1, 1989 and ending
15    after June 30, 1989, an amount equal to the sum of (i) 2
16    1/2% of the taxpayer's net income for the period prior to
17    July 1, 1989, as calculated under Section 202.3, and (ii)
18    3% of the taxpayer's net income for the period after June
19    30, 1989, as calculated under Section 202.3.
20        (3) In the case of an individual, trust or estate, for
21    taxable years beginning after June 30, 1989, and ending
22    prior to January 1, 2011, an amount equal to 3% of the
23    taxpayer's net income for the taxable year.
24        (4) In the case of an individual, trust, or estate, for
25    taxable years beginning prior to January 1, 2011, and
26    ending after December 31, 2010, an amount equal to the sum

 

 

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1    of (i) 3% of the taxpayer's net income for the period prior
2    to January 1, 2011, as calculated under Section 202.5, and
3    (ii) 5% of the taxpayer's net income for the period after
4    December 31, 2010, as calculated under Section 202.5.
5        (5) In the case of an individual, trust, or estate, for
6    taxable years beginning on or after January 1, 2011, and
7    ending prior to January 1, 2015, an amount equal to 5% of
8    the taxpayer's net income for the taxable year.
9        (5.1) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to January 1, 2015, and
11    ending after December 31, 2014, an amount equal to the sum
12    of (i) 5% of the taxpayer's net income for the period prior
13    to January 1, 2015, as calculated under Section 202.5, and
14    (ii) 3.75% of the taxpayer's net income for the period
15    after December 31, 2014, as calculated under Section 202.5.
16        (5.2) In the case of an individual, trust, or estate,
17    for taxable years beginning on or after January 1, 2015,
18    and ending prior to July 1, 2017, an amount equal to 3.75%
19    of the taxpayer's net income for the taxable year.
20        (5.3) In the case of an individual, trust, or estate,
21    for taxable years beginning prior to July 1, 2017, and
22    ending after June 30, 2017, an amount equal to the sum of
23    (i) 3.75% of the taxpayer's net income for the period prior
24    to July 1, 2017, as calculated under Section 202.5, and
25    (ii) 4.95% of the taxpayer's net income for the period
26    after June 30, 2017, as calculated under Section 202.5.

 

 

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1        (5.4) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after July 1, 2017, an
3    amount equal to 4.95% of the taxpayer's net income for the
4    taxable year.
5        (6) In the case of a corporation, for taxable years
6    ending prior to July 1, 1989, an amount equal to 4% of the
7    taxpayer's net income for the taxable year.
8        (7) In the case of a corporation, for taxable years
9    beginning prior to July 1, 1989 and ending after June 30,
10    1989, an amount equal to the sum of (i) 4% of the
11    taxpayer's net income for the period prior to July 1, 1989,
12    as calculated under Section 202.3, and (ii) 4.8% of the
13    taxpayer's net income for the period after June 30, 1989,
14    as calculated under Section 202.3.
15        (8) In the case of a corporation, for taxable years
16    beginning after June 30, 1989, and ending prior to January
17    1, 2011, an amount equal to 4.8% of the taxpayer's net
18    income for the taxable year.
19        (9) In the case of a corporation, for taxable years
20    beginning prior to January 1, 2011, and ending after
21    December 31, 2010, an amount equal to the sum of (i) 4.8%
22    of the taxpayer's net income for the period prior to
23    January 1, 2011, as calculated under Section 202.5, and
24    (ii) 7% of the taxpayer's net income for the period after
25    December 31, 2010, as calculated under Section 202.5.
26        (10) In the case of a corporation, for taxable years

 

 

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1    beginning on or after January 1, 2011, and ending prior to
2    January 1, 2015, an amount equal to 7% of the taxpayer's
3    net income for the taxable year.
4        (11) In the case of a corporation, for taxable years
5    beginning prior to January 1, 2015, and ending after
6    December 31, 2014, an amount equal to the sum of (i) 7% of
7    the taxpayer's net income for the period prior to January
8    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
9    of the taxpayer's net income for the period after December
10    31, 2014, as calculated under Section 202.5.
11        (12) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2015, and ending prior to
13    July 1, 2017, an amount equal to 5.25% of the taxpayer's
14    net income for the taxable year.
15        (13) In the case of a corporation, for taxable years
16    beginning prior to July 1, 2017, and ending after June 30,
17    2017, an amount equal to the sum of (i) 5.25% of the
18    taxpayer's net income for the period prior to July 1, 2017,
19    as calculated under Section 202.5, and (ii) 7% of the
20    taxpayer's net income for the period after June 30, 2017,
21    as calculated under Section 202.5.
22        (14) In the case of a corporation, for taxable years
23    beginning on or after July 1, 2017, an amount equal to 7%
24    of the taxpayer's net income for the taxable year.
25    The rates under this subsection (b) are subject to the
26provisions of Section 201.5.

 

 

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1    (c) Personal Property Tax Replacement Income Tax.
2Beginning on July 1, 1979 and thereafter, in addition to such
3income tax, there is also hereby imposed the Personal Property
4Tax Replacement Income Tax measured by net income on every
5corporation (including Subchapter S corporations), partnership
6and trust, for each taxable year ending after June 30, 1979.
7Such taxes are imposed on the privilege of earning or receiving
8income in or as a resident of this State. The Personal Property
9Tax Replacement Income Tax shall be in addition to the income
10tax imposed by subsections (a) and (b) of this Section and in
11addition to all other occupation or privilege taxes imposed by
12this State or by any municipal corporation or political
13subdivision thereof.
14    (d) Additional Personal Property Tax Replacement Income
15Tax Rates. The personal property tax replacement income tax
16imposed by this subsection and subsection (c) of this Section
17in the case of a corporation, other than a Subchapter S
18corporation and except as adjusted by subsection (d-1), shall
19be an additional amount equal to 2.85% of such taxpayer's net
20income for the taxable year, except that beginning on January
211, 1981, and thereafter, the rate of 2.85% specified in this
22subsection shall be reduced to 2.5%, and in the case of a
23partnership, trust or a Subchapter S corporation shall be an
24additional amount equal to 1.5% of such taxpayer's net income
25for the taxable year.
26    (d-1) Rate reduction for certain foreign insurers. In the

 

 

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1case of a foreign insurer, as defined by Section 35A-5 of the
2Illinois Insurance Code, whose state or country of domicile
3imposes on insurers domiciled in Illinois a retaliatory tax
4(excluding any insurer whose premiums from reinsurance assumed
5are 50% or more of its total insurance premiums as determined
6under paragraph (2) of subsection (b) of Section 304, except
7that for purposes of this determination premiums from
8reinsurance do not include premiums from inter-affiliate
9reinsurance arrangements), beginning with taxable years ending
10on or after December 31, 1999, the sum of the rates of tax
11imposed by subsections (b) and (d) shall be reduced (but not
12increased) to the rate at which the total amount of tax imposed
13under this Act, net of all credits allowed under this Act,
14shall equal (i) the total amount of tax that would be imposed
15on the foreign insurer's net income allocable to Illinois for
16the taxable year by such foreign insurer's state or country of
17domicile if that net income were subject to all income taxes
18and taxes measured by net income imposed by such foreign
19insurer's state or country of domicile, net of all credits
20allowed or (ii) a rate of zero if no such tax is imposed on such
21income by the foreign insurer's state of domicile. For the
22purposes of this subsection (d-1), an inter-affiliate includes
23a mutual insurer under common management.
24        (1) For the purposes of subsection (d-1), in no event
25    shall the sum of the rates of tax imposed by subsections
26    (b) and (d) be reduced below the rate at which the sum of:

 

 

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1            (A) the total amount of tax imposed on such foreign
2        insurer under this Act for a taxable year, net of all
3        credits allowed under this Act, plus
4            (B) the privilege tax imposed by Section 409 of the
5        Illinois Insurance Code, the fire insurance company
6        tax imposed by Section 12 of the Fire Investigation
7        Act, and the fire department taxes imposed under
8        Section 11-10-1 of the Illinois Municipal Code,
9    equals 1.25% for taxable years ending prior to December 31,
10    2003, or 1.75% for taxable years ending on or after
11    December 31, 2003, of the net taxable premiums written for
12    the taxable year, as described by subsection (1) of Section
13    409 of the Illinois Insurance Code. This paragraph will in
14    no event increase the rates imposed under subsections (b)
15    and (d).
16        (2) Any reduction in the rates of tax imposed by this
17    subsection shall be applied first against the rates imposed
18    by subsection (b) and only after the tax imposed by
19    subsection (a) net of all credits allowed under this
20    Section other than the credit allowed under subsection (i)
21    has been reduced to zero, against the rates imposed by
22    subsection (d).
23    This subsection (d-1) is exempt from the provisions of
24Section 250.
25    (e) Investment credit. A taxpayer shall be allowed a credit
26against the Personal Property Tax Replacement Income Tax for

 

 

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1investment in qualified property.
2        (1) A taxpayer shall be allowed a credit equal to .5%
3    of the basis of qualified property placed in service during
4    the taxable year, provided such property is placed in
5    service on or after July 1, 1984. There shall be allowed an
6    additional credit equal to .5% of the basis of qualified
7    property placed in service during the taxable year,
8    provided such property is placed in service on or after
9    July 1, 1986, and the taxpayer's base employment within
10    Illinois has increased by 1% or more over the preceding
11    year as determined by the taxpayer's employment records
12    filed with the Illinois Department of Employment Security.
13    Taxpayers who are new to Illinois shall be deemed to have
14    met the 1% growth in base employment for the first year in
15    which they file employment records with the Illinois
16    Department of Employment Security. The provisions added to
17    this Section by Public Act 85-1200 (and restored by Public
18    Act 87-895) shall be construed as declaratory of existing
19    law and not as a new enactment. If, in any year, the
20    increase in base employment within Illinois over the
21    preceding year is less than 1%, the additional credit shall
22    be limited to that percentage times a fraction, the
23    numerator of which is .5% and the denominator of which is
24    1%, but shall not exceed .5%. The investment credit shall
25    not be allowed to the extent that it would reduce a
26    taxpayer's liability in any tax year below zero, nor may

 

 

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1    any credit for qualified property be allowed for any year
2    other than the year in which the property was placed in
3    service in Illinois. For tax years ending on or after
4    December 31, 1987, and on or before December 31, 1988, the
5    credit shall be allowed for the tax year in which the
6    property is placed in service, or, if the amount of the
7    credit exceeds the tax liability for that year, whether it
8    exceeds the original liability or the liability as later
9    amended, such excess may be carried forward and applied to
10    the tax liability of the 5 taxable years following the
11    excess credit years if the taxpayer (i) makes investments
12    which cause the creation of a minimum of 2,000 full-time
13    equivalent jobs in Illinois, (ii) is located in an
14    enterprise zone established pursuant to the Illinois
15    Enterprise Zone Act and (iii) is certified by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity) as
18    complying with the requirements specified in clause (i) and
19    (ii) by July 1, 1986. The Department of Commerce and
20    Community Affairs (now Department of Commerce and Economic
21    Opportunity) shall notify the Department of Revenue of all
22    such certifications immediately. For tax years ending
23    after December 31, 1988, the credit shall be allowed for
24    the tax year in which the property is placed in service,
25    or, if the amount of the credit exceeds the tax liability
26    for that year, whether it exceeds the original liability or

 

 

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1    the liability as later amended, such excess may be carried
2    forward and applied to the tax liability of the 5 taxable
3    years following the excess credit years. The credit shall
4    be applied to the earliest year for which there is a
5    liability. If there is credit from more than one tax year
6    that is available to offset a liability, earlier credit
7    shall be applied first.
8        (2) The term "qualified property" means property
9    which:
10            (A) is tangible, whether new or used, including
11        buildings and structural components of buildings and
12        signs that are real property, but not including land or
13        improvements to real property that are not a structural
14        component of a building such as landscaping, sewer
15        lines, local access roads, fencing, parking lots, and
16        other appurtenances;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (e);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code;
24            (D) is used in Illinois by a taxpayer who is
25        primarily engaged in manufacturing, or in mining coal
26        or fluorite, or in retailing, or was placed in service

 

 

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1        on or after July 1, 2006 in a River Edge Redevelopment
2        Zone established pursuant to the River Edge
3        Redevelopment Zone Act; and
4            (E) has not previously been used in Illinois in
5        such a manner and by such a person as would qualify for
6        the credit provided by this subsection (e) or
7        subsection (f).
8        (3) For purposes of this subsection (e),
9    "manufacturing" means the material staging and production
10    of tangible personal property by procedures commonly
11    regarded as manufacturing, processing, fabrication, or
12    assembling which changes some existing material into new
13    shapes, new qualities, or new combinations. For purposes of
14    this subsection (e) the term "mining" shall have the same
15    meaning as the term "mining" in Section 613(c) of the
16    Internal Revenue Code. For purposes of this subsection (e),
17    the term "retailing" means the sale of tangible personal
18    property for use or consumption and not for resale, or
19    services rendered in conjunction with the sale of tangible
20    personal property for use or consumption and not for
21    resale. For purposes of this subsection (e), "tangible
22    personal property" has the same meaning as when that term
23    is used in the Retailers' Occupation Tax Act, and, for
24    taxable years ending after December 31, 2008, does not
25    include the generation, transmission, or distribution of
26    electricity.

 

 

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1        (4) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (5) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in Illinois by the taxpayer, the amount of such
7    increase shall be deemed property placed in service on the
8    date of such increase in basis.
9        (6) The term "placed in service" shall have the same
10    meaning as under Section 46 of the Internal Revenue Code.
11        (7) If during any taxable year, any property ceases to
12    be qualified property in the hands of the taxpayer within
13    48 months after being placed in service, or the situs of
14    any qualified property is moved outside Illinois within 48
15    months after being placed in service, the Personal Property
16    Tax Replacement Income Tax for such taxable year shall be
17    increased. Such increase shall be determined by (i)
18    recomputing the investment credit which would have been
19    allowed for the year in which credit for such property was
20    originally allowed by eliminating such property from such
21    computation and, (ii) subtracting such recomputed credit
22    from the amount of credit previously allowed. For the
23    purposes of this paragraph (7), a reduction of the basis of
24    qualified property resulting from a redetermination of the
25    purchase price shall be deemed a disposition of qualified
26    property to the extent of such reduction.

 

 

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1        (8) Unless the investment credit is extended by law,
2    the basis of qualified property shall not include costs
3    incurred after December 31, 2018, except for costs incurred
4    pursuant to a binding contract entered into on or before
5    December 31, 2018.
6        (9) Each taxable year ending before December 31, 2000,
7    a partnership may elect to pass through to its partners the
8    credits to which the partnership is entitled under this
9    subsection (e) for the taxable year. A partner may use the
10    credit allocated to him or her under this paragraph only
11    against the tax imposed in subsections (c) and (d) of this
12    Section. If the partnership makes that election, those
13    credits shall be allocated among the partners in the
14    partnership in accordance with the rules set forth in
15    Section 704(b) of the Internal Revenue Code, and the rules
16    promulgated under that Section, and the allocated amount of
17    the credits shall be allowed to the partners for that
18    taxable year. The partnership shall make this election on
19    its Personal Property Tax Replacement Income Tax return for
20    that taxable year. The election to pass through the credits
21    shall be irrevocable.
22        For taxable years ending on or after December 31, 2000,
23    a partner that qualifies its partnership for a subtraction
24    under subparagraph (I) of paragraph (2) of subsection (d)
25    of Section 203 or a shareholder that qualifies a Subchapter
26    S corporation for a subtraction under subparagraph (S) of

 

 

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1    paragraph (2) of subsection (b) of Section 203 shall be
2    allowed a credit under this subsection (e) equal to its
3    share of the credit earned under this subsection (e) during
4    the taxable year by the partnership or Subchapter S
5    corporation, determined in accordance with the
6    determination of income and distributive share of income
7    under Sections 702 and 704 and Subchapter S of the Internal
8    Revenue Code. This paragraph is exempt from the provisions
9    of Section 250.
10    (f) Investment credit; Enterprise Zone; River Edge
11Redevelopment Zone.
12        (1) A taxpayer shall be allowed a credit against the
13    tax imposed by subsections (a) and (b) of this Section for
14    investment in qualified property which is placed in service
15    in an Enterprise Zone created pursuant to the Illinois
16    Enterprise Zone Act or, for property placed in service on
17    or after July 1, 2006, a River Edge Redevelopment Zone
18    established pursuant to the River Edge Redevelopment Zone
19    Act. For partners, shareholders of Subchapter S
20    corporations, and owners of limited liability companies,
21    if the liability company is treated as a partnership for
22    purposes of federal and State income taxation, there shall
23    be allowed a credit under this subsection (f) to be
24    determined in accordance with the determination of income
25    and distributive share of income under Sections 702 and 704
26    and Subchapter S of the Internal Revenue Code. The credit

 

 

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1    shall be .5% of the basis for such property. The credit
2    shall be available only in the taxable year in which the
3    property is placed in service in the Enterprise Zone or
4    River Edge Redevelopment Zone and shall not be allowed to
5    the extent that it would reduce a taxpayer's liability for
6    the tax imposed by subsections (a) and (b) of this Section
7    to below zero. For tax years ending on or after December
8    31, 1985, the credit shall be allowed for the tax year in
9    which the property is placed in service, or, if the amount
10    of the credit exceeds the tax liability for that year,
11    whether it exceeds the original liability or the liability
12    as later amended, such excess may be carried forward and
13    applied to the tax liability of the 5 taxable years
14    following the excess credit year. The credit shall be
15    applied to the earliest year for which there is a
16    liability. If there is credit from more than one tax year
17    that is available to offset a liability, the credit
18    accruing first in time shall be applied first.
19        (2) The term qualified property means property which:
20            (A) is tangible, whether new or used, including
21        buildings and structural components of buildings;
22            (B) is depreciable pursuant to Section 167 of the
23        Internal Revenue Code, except that "3-year property"
24        as defined in Section 168(c)(2)(A) of that Code is not
25        eligible for the credit provided by this subsection
26        (f);

 

 

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1            (C) is acquired by purchase as defined in Section
2        179(d) of the Internal Revenue Code;
3            (D) is used in the Enterprise Zone or River Edge
4        Redevelopment Zone by the taxpayer; and
5            (E) has not been previously used in Illinois in
6        such a manner and by such a person as would qualify for
7        the credit provided by this subsection (f) or
8        subsection (e).
9        (3) The basis of qualified property shall be the basis
10    used to compute the depreciation deduction for federal
11    income tax purposes.
12        (4) If the basis of the property for federal income tax
13    depreciation purposes is increased after it has been placed
14    in service in the Enterprise Zone or River Edge
15    Redevelopment Zone by the taxpayer, the amount of such
16    increase shall be deemed property placed in service on the
17    date of such increase in basis.
18        (5) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (6) If during any taxable year, any property ceases to
21    be qualified property in the hands of the taxpayer within
22    48 months after being placed in service, or the situs of
23    any qualified property is moved outside the Enterprise Zone
24    or River Edge Redevelopment Zone within 48 months after
25    being placed in service, the tax imposed under subsections
26    (a) and (b) of this Section for such taxable year shall be

 

 

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1    increased. Such increase shall be determined by (i)
2    recomputing the investment credit which would have been
3    allowed for the year in which credit for such property was
4    originally allowed by eliminating such property from such
5    computation, and (ii) subtracting such recomputed credit
6    from the amount of credit previously allowed. For the
7    purposes of this paragraph (6), a reduction of the basis of
8    qualified property resulting from a redetermination of the
9    purchase price shall be deemed a disposition of qualified
10    property to the extent of such reduction.
11        (7) There shall be allowed an additional credit equal
12    to 0.5% of the basis of qualified property placed in
13    service during the taxable year in a River Edge
14    Redevelopment Zone, provided such property is placed in
15    service on or after July 1, 2006, and the taxpayer's base
16    employment within Illinois has increased by 1% or more over
17    the preceding year as determined by the taxpayer's
18    employment records filed with the Illinois Department of
19    Employment Security. Taxpayers who are new to Illinois
20    shall be deemed to have met the 1% growth in base
21    employment for the first year in which they file employment
22    records with the Illinois Department of Employment
23    Security. If, in any year, the increase in base employment
24    within Illinois over the preceding year is less than 1%,
25    the additional credit shall be limited to that percentage
26    times a fraction, the numerator of which is 0.5% and the

 

 

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1    denominator of which is 1%, but shall not exceed 0.5%.
2    (g) (Blank).
3    (h) Investment credit; High Impact Business.
4        (1) Subject to subsections (b) and (b-5) of Section 5.5
5    of the Illinois Enterprise Zone Act, a taxpayer shall be
6    allowed a credit against the tax imposed by subsections (a)
7    and (b) of this Section for investment in qualified
8    property which is placed in service by a Department of
9    Commerce and Economic Opportunity designated High Impact
10    Business. The credit shall be .5% of the basis for such
11    property. The credit shall not be available (i) until the
12    minimum investments in qualified property set forth in
13    subdivision (a)(3)(A) of Section 5.5 of the Illinois
14    Enterprise Zone Act have been satisfied or (ii) until the
15    time authorized in subsection (b-5) of the Illinois
16    Enterprise Zone Act for entities designated as High Impact
17    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
18    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
19    Act, and shall not be allowed to the extent that it would
20    reduce a taxpayer's liability for the tax imposed by
21    subsections (a) and (b) of this Section to below zero. The
22    credit applicable to such investments shall be taken in the
23    taxable year in which such investments have been completed.
24    The credit for additional investments beyond the minimum
25    investment by a designated high impact business authorized
26    under subdivision (a)(3)(A) of Section 5.5 of the Illinois

 

 

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1    Enterprise Zone Act shall be available only in the taxable
2    year in which the property is placed in service and shall
3    not be allowed to the extent that it would reduce a
4    taxpayer's liability for the tax imposed by subsections (a)
5    and (b) of this Section to below zero. For tax years ending
6    on or after December 31, 1987, the credit shall be allowed
7    for the tax year in which the property is placed in
8    service, or, if the amount of the credit exceeds the tax
9    liability for that year, whether it exceeds the original
10    liability or the liability as later amended, such excess
11    may be carried forward and applied to the tax liability of
12    the 5 taxable years following the excess credit year. The
13    credit shall be applied to the earliest year for which
14    there is a liability. If there is credit from more than one
15    tax year that is available to offset a liability, the
16    credit accruing first in time shall be applied first.
17        Changes made in this subdivision (h)(1) by Public Act
18    88-670 restore changes made by Public Act 85-1182 and
19    reflect existing law.
20        (2) The term qualified property means property which:
21            (A) is tangible, whether new or used, including
22        buildings and structural components of buildings;
23            (B) is depreciable pursuant to Section 167 of the
24        Internal Revenue Code, except that "3-year property"
25        as defined in Section 168(c)(2)(A) of that Code is not
26        eligible for the credit provided by this subsection

 

 

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1        (h);
2            (C) is acquired by purchase as defined in Section
3        179(d) of the Internal Revenue Code; and
4            (D) is not eligible for the Enterprise Zone
5        Investment Credit provided by subsection (f) of this
6        Section.
7        (3) The basis of qualified property shall be the basis
8    used to compute the depreciation deduction for federal
9    income tax purposes.
10        (4) If the basis of the property for federal income tax
11    depreciation purposes is increased after it has been placed
12    in service in a federally designated Foreign Trade Zone or
13    Sub-Zone located in Illinois by the taxpayer, the amount of
14    such increase shall be deemed property placed in service on
15    the date of such increase in basis.
16        (5) The term "placed in service" shall have the same
17    meaning as under Section 46 of the Internal Revenue Code.
18        (6) If during any taxable year ending on or before
19    December 31, 1996, any property ceases to be qualified
20    property in the hands of the taxpayer within 48 months
21    after being placed in service, or the situs of any
22    qualified property is moved outside Illinois within 48
23    months after being placed in service, the tax imposed under
24    subsections (a) and (b) of this Section for such taxable
25    year shall be increased. Such increase shall be determined
26    by (i) recomputing the investment credit which would have

 

 

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1    been allowed for the year in which credit for such property
2    was originally allowed by eliminating such property from
3    such computation, and (ii) subtracting such recomputed
4    credit from the amount of credit previously allowed. For
5    the purposes of this paragraph (6), a reduction of the
6    basis of qualified property resulting from a
7    redetermination of the purchase price shall be deemed a
8    disposition of qualified property to the extent of such
9    reduction.
10        (7) Beginning with tax years ending after December 31,
11    1996, if a taxpayer qualifies for the credit under this
12    subsection (h) and thereby is granted a tax abatement and
13    the taxpayer relocates its entire facility in violation of
14    the explicit terms and length of the contract under Section
15    18-183 of the Property Tax Code, the tax imposed under
16    subsections (a) and (b) of this Section shall be increased
17    for the taxable year in which the taxpayer relocated its
18    facility by an amount equal to the amount of credit
19    received by the taxpayer under this subsection (h).
20    (h-1) Investment credit; Big Empties Site. For taxable
21years beginning on or after January 1, 2020, a taxpayer shall
22be allowed a credit against the tax imposed by subsections (a)
23and (b) of this Section for investment in qualified property
24which is placed in service by a Department of Commerce and
25Economic Opportunity designated Big Empties Site. The credit
26shall be .5% of the basis for such property. As used in this

 

 

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1subsection (h-1), the terms "qualified property" and "placed in
2service" have the same meanings as in subsection (h). This
3subsection is exempt from the provisions of Section 250.
4    (i) Credit for Personal Property Tax Replacement Income
5Tax. For tax years ending prior to December 31, 2003, a credit
6shall be allowed against the tax imposed by subsections (a) and
7(b) of this Section for the tax imposed by subsections (c) and
8(d) of this Section. This credit shall be computed by
9multiplying the tax imposed by subsections (c) and (d) of this
10Section by a fraction, the numerator of which is base income
11allocable to Illinois and the denominator of which is Illinois
12base income, and further multiplying the product by the tax
13rate imposed by subsections (a) and (b) of this Section.
14    Any credit earned on or after December 31, 1986 under this
15subsection which is unused in the year the credit is computed
16because it exceeds the tax liability imposed by subsections (a)
17and (b) for that year (whether it exceeds the original
18liability or the liability as later amended) may be carried
19forward and applied to the tax liability imposed by subsections
20(a) and (b) of the 5 taxable years following the excess credit
21year, provided that no credit may be carried forward to any
22year ending on or after December 31, 2003. This credit shall be
23applied first to the earliest year for which there is a
24liability. If there is a credit under this subsection from more
25than one tax year that is available to offset a liability the
26earliest credit arising under this subsection shall be applied

 

 

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1first.
2    If, during any taxable year ending on or after December 31,
31986, the tax imposed by subsections (c) and (d) of this
4Section for which a taxpayer has claimed a credit under this
5subsection (i) is reduced, the amount of credit for such tax
6shall also be reduced. Such reduction shall be determined by
7recomputing the credit to take into account the reduced tax
8imposed by subsections (c) and (d). If any portion of the
9reduced amount of credit has been carried to a different
10taxable year, an amended return shall be filed for such taxable
11year to reduce the amount of credit claimed.
12    (j) Training expense credit. Beginning with tax years
13ending on or after December 31, 1986 and prior to December 31,
142003, a taxpayer shall be allowed a credit against the tax
15imposed by subsections (a) and (b) under this Section for all
16amounts paid or accrued, on behalf of all persons employed by
17the taxpayer in Illinois or Illinois residents employed outside
18of Illinois by a taxpayer, for educational or vocational
19training in semi-technical or technical fields or semi-skilled
20or skilled fields, which were deducted from gross income in the
21computation of taxable income. The credit against the tax
22imposed by subsections (a) and (b) shall be 1.6% of such
23training expenses. For partners, shareholders of subchapter S
24corporations, and owners of limited liability companies, if the
25liability company is treated as a partnership for purposes of
26federal and State income taxation, there shall be allowed a

 

 

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1credit under this subsection (j) to be determined in accordance
2with the determination of income and distributive share of
3income under Sections 702 and 704 and subchapter S of the
4Internal Revenue Code.
5    Any credit allowed under this subsection which is unused in
6the year the credit is earned may be carried forward to each of
7the 5 taxable years following the year for which the credit is
8first computed until it is used. This credit shall be applied
9first to the earliest year for which there is a liability. If
10there is a credit under this subsection from more than one tax
11year that is available to offset a liability the earliest
12credit arising under this subsection shall be applied first. No
13carryforward credit may be claimed in any tax year ending on or
14after December 31, 2003.
15    (k) Research and development credit. For tax years ending
16after July 1, 1990 and prior to December 31, 2003, and
17beginning again for tax years ending on or after December 31,
182004, and ending prior to January 1, 2022, a taxpayer shall be
19allowed a credit against the tax imposed by subsections (a) and
20(b) of this Section for increasing research activities in this
21State. The credit allowed against the tax imposed by
22subsections (a) and (b) shall be equal to 6 1/2% of the
23qualifying expenditures for increasing research activities in
24this State. For partners, shareholders of subchapter S
25corporations, and owners of limited liability companies, if the
26liability company is treated as a partnership for purposes of

 

 

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1federal and State income taxation, there shall be allowed a
2credit under this subsection to be determined in accordance
3with the determination of income and distributive share of
4income under Sections 702 and 704 and subchapter S of the
5Internal Revenue Code.
6    For purposes of this subsection, "qualifying expenditures"
7means the qualifying expenditures as defined for the federal
8credit for increasing research activities which would be
9allowable under Section 41 of the Internal Revenue Code and
10which are conducted in this State, "qualifying expenditures for
11increasing research activities in this State" means the excess
12of qualifying expenditures for the taxable year in which
13incurred over qualifying expenditures for the base period,
14"qualifying expenditures for the base period" means the average
15of the qualifying expenditures for each year in the base
16period, and "base period" means the 3 taxable years immediately
17preceding the taxable year for which the determination is being
18made.
19    Any credit in excess of the tax liability for the taxable
20year may be carried forward. A taxpayer may elect to have the
21unused credit shown on its final completed return carried over
22as a credit against the tax liability for the following 5
23taxable years or until it has been fully used, whichever occurs
24first; provided that no credit earned in a tax year ending
25prior to December 31, 2003 may be carried forward to any year
26ending on or after December 31, 2003.

 

 

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1    If an unused credit is carried forward to a given year from
22 or more earlier years, that credit arising in the earliest
3year will be applied first against the tax liability for the
4given year. If a tax liability for the given year still
5remains, the credit from the next earliest year will then be
6applied, and so on, until all credits have been used or no tax
7liability for the given year remains. Any remaining unused
8credit or credits then will be carried forward to the next
9following year in which a tax liability is incurred, except
10that no credit can be carried forward to a year which is more
11than 5 years after the year in which the expense for which the
12credit is given was incurred.
13    No inference shall be drawn from this amendatory Act of the
1491st General Assembly in construing this Section for taxable
15years beginning before January 1, 1999.
16    It is the intent of the General Assembly that the research
17and development credit under this subsection (k) shall apply
18continuously for all tax years ending on or after December 31,
192004 and ending prior to January 1, 2022, including, but not
20limited to, the period beginning on January 1, 2016 and ending
21on the effective date of this amendatory Act of the 100th
22General Assembly. All actions taken in reliance on the
23continuation of the credit under this subsection (k) by any
24taxpayer are hereby validated.
25    (l) Environmental Remediation Tax Credit.
26        (i) For tax years ending after December 31, 1997 and on

 

 

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1    or before December 31, 2001, a taxpayer shall be allowed a
2    credit against the tax imposed by subsections (a) and (b)
3    of this Section for certain amounts paid for unreimbursed
4    eligible remediation costs, as specified in this
5    subsection. For purposes of this Section, "unreimbursed
6    eligible remediation costs" means costs approved by the
7    Illinois Environmental Protection Agency ("Agency") under
8    Section 58.14 of the Environmental Protection Act that were
9    paid in performing environmental remediation at a site for
10    which a No Further Remediation Letter was issued by the
11    Agency and recorded under Section 58.10 of the
12    Environmental Protection Act. The credit must be claimed
13    for the taxable year in which Agency approval of the
14    eligible remediation costs is granted. The credit is not
15    available to any taxpayer if the taxpayer or any related
16    party caused or contributed to, in any material respect, a
17    release of regulated substances on, in, or under the site
18    that was identified and addressed by the remedial action
19    pursuant to the Site Remediation Program of the
20    Environmental Protection Act. After the Pollution Control
21    Board rules are adopted pursuant to the Illinois
22    Administrative Procedure Act for the administration and
23    enforcement of Section 58.9 of the Environmental
24    Protection Act, determinations as to credit availability
25    for purposes of this Section shall be made consistent with
26    those rules. For purposes of this Section, "taxpayer"

 

 

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1    includes a person whose tax attributes the taxpayer has
2    succeeded to under Section 381 of the Internal Revenue Code
3    and "related party" includes the persons disallowed a
4    deduction for losses by paragraphs (b), (c), and (f)(1) of
5    Section 267 of the Internal Revenue Code by virtue of being
6    a related taxpayer, as well as any of its partners. The
7    credit allowed against the tax imposed by subsections (a)
8    and (b) shall be equal to 25% of the unreimbursed eligible
9    remediation costs in excess of $100,000 per site, except
10    that the $100,000 threshold shall not apply to any site
11    contained in an enterprise zone as determined by the
12    Department of Commerce and Community Affairs (now
13    Department of Commerce and Economic Opportunity). The
14    total credit allowed shall not exceed $40,000 per year with
15    a maximum total of $150,000 per site. For partners and
16    shareholders of subchapter S corporations, there shall be
17    allowed a credit under this subsection to be determined in
18    accordance with the determination of income and
19    distributive share of income under Sections 702 and 704 and
20    subchapter S of the Internal Revenue Code.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. The
25    term "unused credit" does not include any amounts of
26    unreimbursed eligible remediation costs in excess of the

 

 

SB2036- 31 -LRB101 06745 HLH 51772 b

1    maximum credit per site authorized under paragraph (i).
2    This credit shall be applied first to the earliest year for
3    which there is a liability. If there is a credit under this
4    subsection from more than one tax year that is available to
5    offset a liability, the earliest credit arising under this
6    subsection shall be applied first. A credit allowed under
7    this subsection may be sold to a buyer as part of a sale of
8    all or part of the remediation site for which the credit
9    was granted. The purchaser of a remediation site and the
10    tax credit shall succeed to the unused credit and remaining
11    carry-forward period of the seller. To perfect the
12    transfer, the assignor shall record the transfer in the
13    chain of title for the site and provide written notice to
14    the Director of the Illinois Department of Revenue of the
15    assignor's intent to sell the remediation site and the
16    amount of the tax credit to be transferred as a portion of
17    the sale. In no event may a credit be transferred to any
18    taxpayer if the taxpayer or a related party would not be
19    eligible under the provisions of subsection (i).
20        (iii) For purposes of this Section, the term "site"
21    shall have the same meaning as under Section 58.2 of the
22    Environmental Protection Act.
23    (m) Education expense credit. Beginning with tax years
24ending after December 31, 1999, a taxpayer who is the custodian
25of one or more qualifying pupils shall be allowed a credit
26against the tax imposed by subsections (a) and (b) of this

 

 

SB2036- 32 -LRB101 06745 HLH 51772 b

1Section for qualified education expenses incurred on behalf of
2the qualifying pupils. The credit shall be equal to 25% of
3qualified education expenses, but in no event may the total
4credit under this subsection claimed by a family that is the
5custodian of qualifying pupils exceed (i) $500 for tax years
6ending prior to December 31, 2017, and (ii) $750 for tax years
7ending on or after December 31, 2017. In no event shall a
8credit under this subsection reduce the taxpayer's liability
9under this Act to less than zero. Notwithstanding any other
10provision of law, for taxable years beginning on or after
11January 1, 2017, no taxpayer may claim a credit under this
12subsection (m) if the taxpayer's adjusted gross income for the
13taxable year exceeds (i) $500,000, in the case of spouses
14filing a joint federal tax return or (ii) $250,000, in the case
15of all other taxpayers. This subsection is exempt from the
16provisions of Section 250 of this Act.
17    For purposes of this subsection:
18    "Qualifying pupils" means individuals who (i) are
19residents of the State of Illinois, (ii) are under the age of
2021 at the close of the school year for which a credit is
21sought, and (iii) during the school year for which a credit is
22sought were full-time pupils enrolled in a kindergarten through
23twelfth grade education program at any school, as defined in
24this subsection.
25    "Qualified education expense" means the amount incurred on
26behalf of a qualifying pupil in excess of $250 for tuition,

 

 

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1book fees, and lab fees at the school in which the pupil is
2enrolled during the regular school year.
3    "School" means any public or nonpublic elementary or
4secondary school in Illinois that is in compliance with Title
5VI of the Civil Rights Act of 1964 and attendance at which
6satisfies the requirements of Section 26-1 of the School Code,
7except that nothing shall be construed to require a child to
8attend any particular public or nonpublic school to qualify for
9the credit under this Section.
10    "Custodian" means, with respect to qualifying pupils, an
11Illinois resident who is a parent, the parents, a legal
12guardian, or the legal guardians of the qualifying pupils.
13    (n) River Edge Redevelopment Zone site remediation tax
14credit.
15        (i) For tax years ending on or after December 31, 2006,
16    a taxpayer shall be allowed a credit against the tax
17    imposed by subsections (a) and (b) of this Section for
18    certain amounts paid for unreimbursed eligible remediation
19    costs, as specified in this subsection. For purposes of
20    this Section, "unreimbursed eligible remediation costs"
21    means costs approved by the Illinois Environmental
22    Protection Agency ("Agency") under Section 58.14a of the
23    Environmental Protection Act that were paid in performing
24    environmental remediation at a site within a River Edge
25    Redevelopment Zone for which a No Further Remediation
26    Letter was issued by the Agency and recorded under Section

 

 

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1    58.10 of the Environmental Protection Act. The credit must
2    be claimed for the taxable year in which Agency approval of
3    the eligible remediation costs is granted. The credit is
4    not available to any taxpayer if the taxpayer or any
5    related party caused or contributed to, in any material
6    respect, a release of regulated substances on, in, or under
7    the site that was identified and addressed by the remedial
8    action pursuant to the Site Remediation Program of the
9    Environmental Protection Act. Determinations as to credit
10    availability for purposes of this Section shall be made
11    consistent with rules adopted by the Pollution Control
12    Board pursuant to the Illinois Administrative Procedure
13    Act for the administration and enforcement of Section 58.9
14    of the Environmental Protection Act. For purposes of this
15    Section, "taxpayer" includes a person whose tax attributes
16    the taxpayer has succeeded to under Section 381 of the
17    Internal Revenue Code and "related party" includes the
18    persons disallowed a deduction for losses by paragraphs
19    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
20    Code by virtue of being a related taxpayer, as well as any
21    of its partners. The credit allowed against the tax imposed
22    by subsections (a) and (b) shall be equal to 25% of the
23    unreimbursed eligible remediation costs in excess of
24    $100,000 per site.
25        (ii) A credit allowed under this subsection that is
26    unused in the year the credit is earned may be carried

 

 

SB2036- 35 -LRB101 06745 HLH 51772 b

1    forward to each of the 5 taxable years following the year
2    for which the credit is first earned until it is used. This
3    credit shall be applied first to the earliest year for
4    which there is a liability. If there is a credit under this
5    subsection from more than one tax year that is available to
6    offset a liability, the earliest credit arising under this
7    subsection shall be applied first. A credit allowed under
8    this subsection may be sold to a buyer as part of a sale of
9    all or part of the remediation site for which the credit
10    was granted. The purchaser of a remediation site and the
11    tax credit shall succeed to the unused credit and remaining
12    carry-forward period of the seller. To perfect the
13    transfer, the assignor shall record the transfer in the
14    chain of title for the site and provide written notice to
15    the Director of the Illinois Department of Revenue of the
16    assignor's intent to sell the remediation site and the
17    amount of the tax credit to be transferred as a portion of
18    the sale. In no event may a credit be transferred to any
19    taxpayer if the taxpayer or a related party would not be
20    eligible under the provisions of subsection (i).
21        (iii) For purposes of this Section, the term "site"
22    shall have the same meaning as under Section 58.2 of the
23    Environmental Protection Act.
24    (o) For each of taxable years during the Compassionate Use
25of Medical Cannabis Pilot Program, a surcharge is imposed on
26all taxpayers on income arising from the sale or exchange of

 

 

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1capital assets, depreciable business property, real property
2used in the trade or business, and Section 197 intangibles of
3an organization registrant under the Compassionate Use of
4Medical Cannabis Pilot Program Act. The amount of the surcharge
5is equal to the amount of federal income tax liability for the
6taxable year attributable to those sales and exchanges. The
7surcharge imposed does not apply if:
8        (1) the medical cannabis cultivation center
9    registration, medical cannabis dispensary registration, or
10    the property of a registration is transferred as a result
11    of any of the following:
12            (A) bankruptcy, a receivership, or a debt
13        adjustment initiated by or against the initial
14        registration or the substantial owners of the initial
15        registration;
16            (B) cancellation, revocation, or termination of
17        any registration by the Illinois Department of Public
18        Health;
19            (C) a determination by the Illinois Department of
20        Public Health that transfer of the registration is in
21        the best interests of Illinois qualifying patients as
22        defined by the Compassionate Use of Medical Cannabis
23        Pilot Program Act;
24            (D) the death of an owner of the equity interest in
25        a registrant;
26            (E) the acquisition of a controlling interest in

 

 

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1        the stock or substantially all of the assets of a
2        publicly traded company;
3            (F) a transfer by a parent company to a wholly
4        owned subsidiary; or
5            (G) the transfer or sale to or by one person to
6        another person where both persons were initial owners
7        of the registration when the registration was issued;
8        or
9        (2) the cannabis cultivation center registration,
10    medical cannabis dispensary registration, or the
11    controlling interest in a registrant's property is
12    transferred in a transaction to lineal descendants in which
13    no gain or loss is recognized or as a result of a
14    transaction in accordance with Section 351 of the Internal
15    Revenue Code in which no gain or loss is recognized.
16(Source: P.A. 100-22, eff. 7-6-17.)
 
17    Section 905. The Use Tax Act is amended by changing Section
183-5 as follows:
 
19    (35 ILCS 105/3-5)
20    Sec. 3-5. Exemptions. Use of the following tangible
21personal property is exempt from the tax imposed by this Act:
22    (1) Personal property purchased from a corporation,
23society, association, foundation, institution, or
24organization, other than a limited liability company, that is

 

 

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1organized and operated as a not-for-profit service enterprise
2for the benefit of persons 65 years of age or older if the
3personal property was not purchased by the enterprise for the
4purpose of resale by the enterprise.
5    (2) Personal property purchased by a not-for-profit
6Illinois county fair association for use in conducting,
7operating, or promoting the county fair.
8    (3) Personal property purchased by a not-for-profit arts or
9cultural organization that establishes, by proof required by
10the Department by rule, that it has received an exemption under
11Section 501(c)(3) of the Internal Revenue Code and that is
12organized and operated primarily for the presentation or
13support of arts or cultural programming, activities, or
14services. These organizations include, but are not limited to,
15music and dramatic arts organizations such as symphony
16orchestras and theatrical groups, arts and cultural service
17organizations, local arts councils, visual arts organizations,
18and media arts organizations. On and after July 1, 2001 (the
19effective date of Public Act 92-35), however, an entity
20otherwise eligible for this exemption shall not make tax-free
21purchases unless it has an active identification number issued
22by the Department.
23    (4) Personal property purchased by a governmental body, by
24a corporation, society, association, foundation, or
25institution organized and operated exclusively for charitable,
26religious, or educational purposes, or by a not-for-profit

 

 

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1corporation, society, association, foundation, institution, or
2organization that has no compensated officers or employees and
3that is organized and operated primarily for the recreation of
4persons 55 years of age or older. A limited liability company
5may qualify for the exemption under this paragraph only if the
6limited liability company is organized and operated
7exclusively for educational purposes. On and after July 1,
81987, however, no entity otherwise eligible for this exemption
9shall make tax-free purchases unless it has an active exemption
10identification number issued by the Department.
11    (5) Until July 1, 2003, a passenger car that is a
12replacement vehicle to the extent that the purchase price of
13the car is subject to the Replacement Vehicle Tax.
14    (6) Until July 1, 2003 and beginning again on September 1,
152004 through August 30, 2014, graphic arts machinery and
16equipment, including repair and replacement parts, both new and
17used, and including that manufactured on special order,
18certified by the purchaser to be used primarily for graphic
19arts production, and including machinery and equipment
20purchased for lease. Equipment includes chemicals or chemicals
21acting as catalysts but only if the chemicals or chemicals
22acting as catalysts effect a direct and immediate change upon a
23graphic arts product. Beginning on July 1, 2017, graphic arts
24machinery and equipment is included in the manufacturing and
25assembling machinery and equipment exemption under paragraph
26(18).

 

 

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1    (7) Farm chemicals.
2    (8) Legal tender, currency, medallions, or gold or silver
3coinage issued by the State of Illinois, the government of the
4United States of America, or the government of any foreign
5country, and bullion.
6    (9) Personal property purchased from a teacher-sponsored
7student organization affiliated with an elementary or
8secondary school located in Illinois.
9    (10) A motor vehicle that is used for automobile renting,
10as defined in the Automobile Renting Occupation and Use Tax
11Act.
12    (11) Farm machinery and equipment, both new and used,
13including that manufactured on special order, certified by the
14purchaser to be used primarily for production agriculture or
15State or federal agricultural programs, including individual
16replacement parts for the machinery and equipment, including
17machinery and equipment purchased for lease, and including
18implements of husbandry defined in Section 1-130 of the
19Illinois Vehicle Code, farm machinery and agricultural
20chemical and fertilizer spreaders, and nurse wagons required to
21be registered under Section 3-809 of the Illinois Vehicle Code,
22but excluding other motor vehicles required to be registered
23under the Illinois Vehicle Code. Horticultural polyhouses or
24hoop houses used for propagating, growing, or overwintering
25plants shall be considered farm machinery and equipment under
26this item (11). Agricultural chemical tender tanks and dry

 

 

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1boxes shall include units sold separately from a motor vehicle
2required to be licensed and units sold mounted on a motor
3vehicle required to be licensed if the selling price of the
4tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals. This item (11) is exempt from the
20provisions of Section 3-90.
21    (12) Until June 30, 2013, fuel and petroleum products sold
22to or used by an air common carrier, certified by the carrier
23to be used for consumption, shipment, or storage in the conduct
24of its business as an air common carrier, for a flight destined
25for or returning from a location or locations outside the
26United States without regard to previous or subsequent domestic

 

 

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1stopovers.
2    Beginning July 1, 2013, fuel and petroleum products sold to
3or used by an air carrier, certified by the carrier to be used
4for consumption, shipment, or storage in the conduct of its
5business as an air common carrier, for a flight that (i) is
6engaged in foreign trade or is engaged in trade between the
7United States and any of its possessions and (ii) transports at
8least one individual or package for hire from the city of
9origination to the city of final destination on the same
10aircraft, without regard to a change in the flight number of
11that aircraft.
12    (13) Proceeds of mandatory service charges separately
13stated on customers' bills for the purchase and consumption of
14food and beverages purchased at retail from a retailer, to the
15extent that the proceeds of the service charge are in fact
16turned over as tips or as a substitute for tips to the
17employees who participate directly in preparing, serving,
18hosting or cleaning up the food or beverage function with
19respect to which the service charge is imposed.
20    (14) Until July 1, 2003, oil field exploration, drilling,
21and production equipment, including (i) rigs and parts of rigs,
22rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
23tubular goods, including casing and drill strings, (iii) pumps
24and pump-jack units, (iv) storage tanks and flow lines, (v) any
25individual replacement part for oil field exploration,
26drilling, and production equipment, and (vi) machinery and

 

 

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1equipment purchased for lease; but excluding motor vehicles
2required to be registered under the Illinois Vehicle Code.
3    (15) Photoprocessing machinery and equipment, including
4repair and replacement parts, both new and used, including that
5manufactured on special order, certified by the purchaser to be
6used primarily for photoprocessing, and including
7photoprocessing machinery and equipment purchased for lease.
8    (16) Until July 1, 2023, coal and aggregate exploration,
9mining, off-highway hauling, processing, maintenance, and
10reclamation equipment, including replacement parts and
11equipment, and including equipment purchased for lease, but
12excluding motor vehicles required to be registered under the
13Illinois Vehicle Code. The changes made to this Section by
14Public Act 97-767 apply on and after July 1, 2003, but no claim
15for credit or refund is allowed on or after August 16, 2013
16(the effective date of Public Act 98-456) for such taxes paid
17during the period beginning July 1, 2003 and ending on August
1816, 2013 (the effective date of Public Act 98-456).
19    (17) Until July 1, 2003, distillation machinery and
20equipment, sold as a unit or kit, assembled or installed by the
21retailer, certified by the user to be used only for the
22production of ethyl alcohol that will be used for consumption
23as motor fuel or as a component of motor fuel for the personal
24use of the user, and not subject to sale or resale.
25    (18) Manufacturing and assembling machinery and equipment
26used primarily in the process of manufacturing or assembling

 

 

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

 

 

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1    (20) Semen used for artificial insemination of livestock
2for direct agricultural production.
3    (21) Horses, or interests in horses, registered with and
4meeting the requirements of any of the Arabian Horse Club
5Registry of America, Appaloosa Horse Club, American Quarter
6Horse Association, United States Trotting Association, or
7Jockey Club, as appropriate, used for purposes of breeding or
8racing for prizes. This item (21) is exempt from the provisions
9of Section 3-90, and the exemption provided for under this item
10(21) applies for all periods beginning May 30, 1995, but no
11claim for credit or refund is allowed on or after January 1,
122008 for such taxes paid during the period beginning May 30,
132000 and ending on January 1, 2008.
14    (22) 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 non-exempt manner, the lessor shall be liable for the
25tax imposed under this Act or the Service Use Tax Act, as the
26case may be, based on the fair market value of the property at

 

 

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

 

 

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

 

 

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1    (26) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-90.
5    (27) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the Department
9to be organized and operated exclusively for educational
10purposes. For purposes of this exemption, "a corporation,
11limited liability company, society, association, foundation,
12or institution organized and operated exclusively for
13educational purposes" means all tax-supported public schools,
14private schools that offer systematic instruction in useful
15branches of learning by methods common to public schools and
16that compare favorably in their scope and intensity with the
17course of study presented in tax-supported schools, and
18vocational or technical schools or institutes organized and
19operated exclusively to provide a course of study of not less
20than 6 weeks duration and designed to prepare individuals to
21follow a trade or to pursue a manual, technical, mechanical,
22industrial, business, or commercial occupation.
23    (28) Beginning January 1, 2000, personal property,
24including food, purchased through fundraising events for the
25benefit of a public or private elementary or secondary school,
26a group of those schools, or one or more school districts if

 

 

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1the events are sponsored by an entity recognized by the school
2district that consists primarily of volunteers and includes
3parents and teachers of the school children. This paragraph
4does not apply to fundraising events (i) for the benefit of
5private home instruction or (ii) for which the fundraising
6entity purchases the personal property sold at the events from
7another individual or entity that sold the property for the
8purpose of resale by the fundraising entity and that profits
9from the sale to the fundraising entity. This paragraph is
10exempt from the provisions of Section 3-90.
11    (29) Beginning January 1, 2000 and through December 31,
122001, new or used automatic vending machines that prepare and
13serve hot food and beverages, including coffee, soup, and other
14items, and replacement parts for these machines. Beginning
15January 1, 2002 and through June 30, 2003, machines and parts
16for machines used in commercial, coin-operated amusement and
17vending business if a use or occupation tax is paid on the
18gross receipts derived from the use of the commercial,
19coin-operated amusement and vending machines. This paragraph
20is exempt from the provisions of Section 3-90.
21    (30) Beginning January 1, 2001 and through June 30, 2016,
22food for human consumption that is to be consumed off the
23premises where it is sold (other than alcoholic beverages, soft
24drinks, and food that has been prepared for immediate
25consumption) and prescription and nonprescription medicines,
26drugs, medical appliances, and insulin, urine testing

 

 

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1materials, syringes, and needles used by diabetics, for human
2use, when purchased for use by a person receiving medical
3assistance under Article V of the Illinois Public Aid Code who
4resides in a licensed long-term care facility, as defined in
5the Nursing Home Care Act, or in a licensed facility as defined
6in the ID/DD Community Care Act, the MC/DD Act, or the
7Specialized Mental Health Rehabilitation Act of 2013.
8    (31) Beginning on August 2, 2001 (the effective date of
9Public Act 92-227), computers and communications equipment
10utilized for any hospital purpose and equipment used in the
11diagnosis, analysis, or treatment of hospital patients
12purchased by a lessor who leases the equipment, under a lease
13of one year or longer executed or in effect at the time the
14lessor would otherwise be subject to the tax imposed by this
15Act, to a hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act. If the equipment is leased in a
18manner that does not qualify for this exemption or is used in
19any other nonexempt manner, the lessor shall be liable for the
20tax imposed under this Act or the Service Use Tax Act, as the
21case may be, based on the fair market value of the property at
22the time the nonqualifying use occurs. No lessor shall collect
23or attempt to collect an amount (however designated) that
24purports to reimburse that lessor for the tax imposed by this
25Act or the Service Use Tax Act, as the case may be, if the tax
26has not been paid by the lessor. If a lessor improperly

 

 

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

 

 

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1lessor is liable to pay that amount to the Department. This
2paragraph is exempt from the provisions of Section 3-90.
3    (33) On and after July 1, 2003 and through June 30, 2004,
4the use in this State of motor vehicles of the second division
5with a gross vehicle weight in excess of 8,000 pounds and that
6are subject to the commercial distribution fee imposed under
7Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
81, 2004 and through June 30, 2005, the use in this State of
9motor vehicles of the second division: (i) with a gross vehicle
10weight rating in excess of 8,000 pounds; (ii) that are subject
11to the commercial distribution fee imposed under Section
123-815.1 of the Illinois Vehicle Code; and (iii) that are
13primarily used for commercial purposes. Through June 30, 2005,
14this exemption applies to repair and replacement parts added
15after the initial purchase of such a motor vehicle if that
16motor vehicle is used in a manner that would qualify for the
17rolling stock exemption otherwise provided for in this Act. For
18purposes of this paragraph, the term "used for commercial
19purposes" means the transportation of persons or property in
20furtherance of any commercial or industrial enterprise,
21whether for-hire or not.
22    (34) Beginning January 1, 2008, tangible personal property
23used in the construction or maintenance of a community water
24supply, as defined under Section 3.145 of the Environmental
25Protection Act, that is operated by a not-for-profit
26corporation that holds a valid water supply permit issued under

 

 

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1Title IV of the Environmental Protection Act. This paragraph is
2exempt from the provisions of Section 3-90.
3    (35) Beginning January 1, 2010, materials, parts,
4equipment, components, and furnishings incorporated into or
5upon an aircraft as part of the modification, refurbishment,
6completion, replacement, repair, or maintenance of the
7aircraft. This exemption includes consumable supplies used in
8the modification, refurbishment, completion, replacement,
9repair, and maintenance of aircraft, but excludes any
10materials, parts, equipment, components, and consumable
11supplies used in the modification, replacement, repair, and
12maintenance of aircraft engines or power plants, whether such
13engines or power plants are installed or uninstalled upon any
14such aircraft. "Consumable supplies" include, but are not
15limited to, adhesive, tape, sandpaper, general purpose
16lubricants, cleaning solution, latex gloves, and protective
17films. This exemption applies only to the use of qualifying
18tangible personal property by persons who modify, refurbish,
19complete, repair, replace, or maintain aircraft and who (i)
20hold an Air Agency Certificate and are empowered to operate an
21approved repair station by the Federal Aviation
22Administration, (ii) have a Class IV Rating, and (iii) conduct
23operations in accordance with Part 145 of the Federal Aviation
24Regulations. The exemption does not include aircraft operated
25by a commercial air carrier providing scheduled passenger air
26service pursuant to authority issued under Part 121 or Part 129

 

 

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1of the Federal Aviation Regulations. The changes made to this
2paragraph (35) by Public Act 98-534 are declarative of existing
3law.
4    (36) Tangible personal property purchased by 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 3-90.
18    (37) Beginning January 1, 2017, menstrual pads, tampons,
19and menstrual cups.
20    (38) Merchandise that is subject to the Rental Purchase
21Agreement Occupation and Use Tax. The purchaser must certify
22that the item is purchased to be rented subject to a rental
23purchase agreement, as defined in the Rental Purchase Agreement
24Act, and provide proof of registration under the Rental
25Purchase Agreement Occupation and Use Tax Act. This paragraph
26is exempt from the provisions of Section 3-90.

 

 

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1    (39) Tangible personal property purchased by a purchaser
2who is exempt from the tax imposed by this Act by operation of
3federal law. This paragraph is exempt from the provisions of
4Section 3-90.
5    (40) On and after January 1, 2020, any software purchased
6to lease, upgrade, supplement, or replace computer equipment or
7enabling software purchased or leased in the initial investment
8made at a Big Empties Site designated under the Big Empties
9Site Act. This paragraph is exempt from the provisions of
10Section 3-90.
11(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
12100-22, eff. 7-6-17; 100-437, eff. 1-1-18; 100-594, eff.
136-29-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; revised
141-8-19.)
 
15    Section 910. The Service Use Tax Act is amended by changing
16Section 3-5 as follows:
 
17    (35 ILCS 110/3-5)
18    Sec. 3-5. Exemptions. Use of the following tangible
19personal property is exempt from the tax imposed by this Act:
20    (1) Personal property purchased from a corporation,
21society, association, foundation, institution, or
22organization, other than a limited liability company, that is
23organized and operated as a not-for-profit service enterprise
24for the benefit of persons 65 years of age or older if the

 

 

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1personal property was not purchased by the enterprise for the
2purpose of resale by the enterprise.
3    (2) Personal property purchased by a non-profit Illinois
4county fair association for use in conducting, operating, or
5promoting the county fair.
6    (3) Personal property purchased by a not-for-profit arts or
7cultural organization that establishes, by proof required by
8the Department by rule, that it has received an exemption under
9Section 501(c)(3) of the Internal Revenue Code and that is
10organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after July 1, 2001 (the
17effective date of Public Act 92-35) this amendatory Act of the
1892nd General Assembly, however, an entity otherwise eligible
19for this exemption shall not make tax-free purchases unless it
20has an active identification number issued by the Department.
21    (4) Legal tender, currency, medallions, or gold or silver
22coinage issued by the State of Illinois, the government of the
23United States of America, or the government of any foreign
24country, and bullion.
25    (5) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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1equipment, including repair and replacement parts, both new and
2used, and including that manufactured on special order or
3purchased for lease, certified by the purchaser to be used
4primarily for graphic arts production. Equipment includes
5chemicals or chemicals acting as catalysts but only if the
6chemicals or chemicals acting as catalysts effect a direct and
7immediate change upon a graphic arts product. Beginning on July
81, 2017, graphic arts machinery and equipment is included in
9the manufacturing and assembling machinery and equipment
10exemption under Section 2 of this Act.
11    (6) Personal property purchased from a teacher-sponsored
12student organization affiliated with an elementary or
13secondary school located in Illinois.
14    (7) Farm machinery and equipment, both new and used,
15including that manufactured on special order, certified by the
16purchaser to be used primarily for production agriculture or
17State or federal agricultural programs, including individual
18replacement parts for the machinery and equipment, including
19machinery and equipment purchased for lease, and including
20implements of husbandry defined in Section 1-130 of the
21Illinois Vehicle Code, farm machinery and agricultural
22chemical and fertilizer spreaders, and nurse wagons required to
23be registered under Section 3-809 of the Illinois Vehicle Code,
24but excluding other motor vehicles required to be registered
25under the Illinois Vehicle Code. Horticultural polyhouses or
26hoop houses used for propagating, growing, or overwintering

 

 

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1plants shall be considered farm machinery and equipment under
2this item (7). Agricultural chemical tender tanks and dry boxes
3shall include units sold separately from a motor vehicle
4required to be licensed and units sold mounted on a motor
5vehicle required to be licensed if the selling price of the
6tender is separately stated.
7    Farm machinery and equipment shall include precision
8farming equipment that is installed or purchased to be
9installed on farm machinery and equipment including, but not
10limited to, tractors, harvesters, sprayers, planters, seeders,
11or spreaders. Precision farming equipment includes, but is not
12limited to, soil testing sensors, computers, monitors,
13software, global positioning and mapping systems, and other
14such equipment.
15    Farm machinery and equipment also includes computers,
16sensors, software, and related equipment used primarily in the
17computer-assisted operation of production agriculture
18facilities, equipment, and activities such as, but not limited
19to, the collection, monitoring, and correlation of animal and
20crop data for the purpose of formulating animal diets and
21agricultural chemicals. This item (7) is exempt from the
22provisions of Section 3-75.
23    (8) Until June 30, 2013, fuel and petroleum products sold
24to or used by an air common carrier, certified by the carrier
25to be used for consumption, shipment, or storage in the conduct
26of its business as an air common carrier, for a flight destined

 

 

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1for or returning from a location or locations outside the
2United States without regard to previous or subsequent domestic
3stopovers.
4    Beginning July 1, 2013, fuel and petroleum products sold to
5or used by an air carrier, certified by the carrier to be used
6for consumption, shipment, or storage in the conduct of its
7business as an air common carrier, for a flight that (i) is
8engaged in foreign trade or is engaged in trade between the
9United States and any of its possessions and (ii) transports at
10least one individual or package for hire from the city of
11origination to the city of final destination on the same
12aircraft, without regard to a change in the flight number of
13that aircraft.
14    (9) Proceeds of mandatory service charges separately
15stated on customers' bills for the purchase and consumption of
16food and beverages acquired as an incident to the purchase of a
17service from a serviceman, to the extent that the proceeds of
18the service charge are in fact turned over as tips or as a
19substitute for tips to the employees who participate directly
20in preparing, serving, hosting or cleaning up the food or
21beverage function with respect to which the service charge is
22imposed.
23    (10) Until July 1, 2003, oil field exploration, drilling,
24and production equipment, including (i) rigs and parts of rigs,
25rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
26tubular goods, including casing and drill strings, (iii) pumps

 

 

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1and pump-jack units, (iv) storage tanks and flow lines, (v) any
2individual replacement part for oil field exploration,
3drilling, and production equipment, and (vi) machinery and
4equipment purchased for lease; but excluding motor vehicles
5required to be registered under the Illinois Vehicle Code.
6    (11) Proceeds from the sale of photoprocessing machinery
7and equipment, including repair and replacement parts, both new
8and used, including that manufactured on special order,
9certified by the purchaser to be used primarily for
10photoprocessing, and including photoprocessing machinery and
11equipment purchased for lease.
12    (12) Until July 1, 2023, coal and aggregate exploration,
13mining, off-highway hauling, processing, maintenance, and
14reclamation equipment, including replacement parts and
15equipment, and including equipment purchased for lease, but
16excluding motor vehicles required to be registered under the
17Illinois Vehicle Code. The changes made to this Section by
18Public Act 97-767 apply on and after July 1, 2003, but no claim
19for credit or refund is allowed on or after August 16, 2013
20(the effective date of Public Act 98-456) for such taxes paid
21during the period beginning July 1, 2003 and ending on August
2216, 2013 (the effective date of Public Act 98-456).
23    (13) Semen used for artificial insemination of livestock
24for direct agricultural production.
25    (14) Horses, or interests in horses, registered with and
26meeting the requirements of any of the Arabian Horse Club

 

 

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1Registry of America, Appaloosa Horse Club, American Quarter
2Horse Association, United States Trotting Association, or
3Jockey Club, as appropriate, used for purposes of breeding or
4racing for prizes. This item (14) is exempt from the provisions
5of Section 3-75, and the exemption provided for under this item
6(14) applies for all periods beginning May 30, 1995, but no
7claim for credit or refund is allowed on or after January 1,
82008 (the effective date of Public Act 95-88) this amendatory
9Act of the 95th General Assembly for such taxes paid during the
10period beginning May 30, 2000 and ending on January 1, 2008
11(the effective date of Public Act 95-88) this amendatory Act of
12the 95th General Assembly.
13    (15) Computers and communications equipment utilized for
14any hospital purpose and equipment used in the diagnosis,
15analysis, or treatment of hospital patients purchased by a
16lessor who leases the equipment, under a lease of one year or
17longer executed or in effect at the time the lessor would
18otherwise be subject to the tax imposed by this Act, to a
19hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act. If the equipment is leased in a
22manner that does not qualify for this exemption or is used in
23any other non-exempt manner, the lessor shall be liable for the
24tax imposed under this Act or the Use Tax Act, as the case may
25be, based on the fair market value of the property at the time
26the non-qualifying use occurs. No lessor shall collect or

 

 

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

 

 

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1is not refunded to the lessee for any reason, the lessor is
2liable to pay that amount to the Department.
3    (17) 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 donated for
6disaster relief to be used in a State or federally declared
7disaster area in Illinois or bordering Illinois by a
8manufacturer or retailer that is registered in this State to a
9corporation, society, association, foundation, or institution
10that has been issued a sales tax exemption identification
11number by the Department that assists victims of the disaster
12who reside within the declared disaster area.
13    (18) Beginning with taxable years ending on or after
14December 31, 1995 and ending with taxable years ending on or
15before December 31, 2004, personal property that is used in the
16performance of infrastructure repairs in this State, including
17but not limited to municipal roads and streets, access roads,
18bridges, sidewalks, waste disposal systems, water and sewer
19line extensions, water distribution and purification
20facilities, storm water drainage and retention facilities, and
21sewage treatment facilities, resulting from a State or
22federally declared disaster in Illinois or bordering Illinois
23when such repairs are initiated on facilities located in the
24declared disaster area within 6 months after the disaster.
25    (19) Beginning July 1, 1999, game or game birds purchased
26at a "game breeding and hunting preserve area" as that term is

 

 

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1used in the Wildlife Code. This paragraph is exempt from the
2provisions of Section 3-75.
3    (20) A motor vehicle, as that term is defined in Section
41-146 of the Illinois Vehicle Code, that is donated to a
5corporation, limited liability company, society, association,
6foundation, or institution that is determined by the Department
7to be organized and operated exclusively for educational
8purposes. For purposes of this exemption, "a corporation,
9limited liability company, society, association, foundation,
10or institution organized and operated exclusively for
11educational purposes" means all tax-supported public schools,
12private schools that offer systematic instruction in useful
13branches of learning by methods common to public schools and
14that compare favorably in their scope and intensity with the
15course of study presented in tax-supported schools, and
16vocational or technical schools or institutes organized and
17operated exclusively to provide a course of study of not less
18than 6 weeks duration and designed to prepare individuals to
19follow a trade or to pursue a manual, technical, mechanical,
20industrial, business, or commercial occupation.
21    (21) Beginning January 1, 2000, personal property,
22including food, purchased through fundraising events for the
23benefit of a public or private elementary or secondary school,
24a group of those schools, or one or more school districts if
25the events are sponsored by an entity recognized by the school
26district that consists primarily of volunteers and includes

 

 

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1parents and teachers of the school children. This paragraph
2does not apply to fundraising events (i) for the benefit of
3private home instruction or (ii) for which the fundraising
4entity purchases the personal property sold at the events from
5another individual or entity that sold the property for the
6purpose of resale by the fundraising entity and that profits
7from the sale to the fundraising entity. This paragraph is
8exempt from the provisions of Section 3-75.
9    (22) Beginning January 1, 2000 and through December 31,
102001, new or used automatic vending machines that prepare and
11serve hot food and beverages, including coffee, soup, and other
12items, and replacement parts for these machines. Beginning
13January 1, 2002 and through June 30, 2003, machines and parts
14for machines used in commercial, coin-operated amusement and
15vending business if a use or occupation tax is paid on the
16gross receipts derived from the use of the commercial,
17coin-operated amusement and vending machines. This paragraph
18is exempt from the provisions of Section 3-75.
19    (23) Beginning August 23, 2001 and through June 30, 2016,
20food for human consumption that is to be consumed off the
21premises where it is sold (other than alcoholic beverages, soft
22drinks, and food that has been prepared for immediate
23consumption) and prescription and nonprescription medicines,
24drugs, medical appliances, and insulin, urine testing
25materials, syringes, and needles used by diabetics, for human
26use, when purchased for use by a person receiving medical

 

 

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1assistance under Article V of the Illinois Public Aid Code who
2resides in a licensed long-term care facility, as defined in
3the Nursing Home Care Act, or in a licensed facility as defined
4in the ID/DD Community Care Act, the MC/DD Act, or the
5Specialized Mental Health Rehabilitation Act of 2013.
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 purchased by a
11lessor who leases the equipment, under a lease of one year or
12longer executed or in effect at the time the lessor would
13otherwise be subject to the tax imposed by this Act, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of the
16Retailers' Occupation Tax Act. If the equipment is leased in a
17manner that does not qualify for this exemption or is used in
18any other nonexempt manner, the lessor shall be liable for the
19tax imposed under this Act or the Use Tax Act, as the case may
20be, based on the fair market value of the property at the time
21the nonqualifying use occurs. No lessor shall collect or
22attempt to collect an amount (however designated) that purports
23to reimburse that lessor for the tax imposed by this Act or the
24Use Tax Act, as the case may be, if the tax has not been paid by
25the lessor. If a lessor improperly collects any such amount
26from the lessee, the lessee shall have a legal right to claim a

 

 

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

 

 

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1from the provisions of Section 3-75.
2    (26) Beginning January 1, 2008, tangible personal property
3used in the construction or maintenance of a community water
4supply, as defined under Section 3.145 of the Environmental
5Protection Act, that is operated by a not-for-profit
6corporation that holds a valid water supply permit issued under
7Title IV of the Environmental Protection Act. This paragraph is
8exempt from the provisions of Section 3-75.
9    (27) Beginning January 1, 2010, materials, parts,
10equipment, components, and furnishings incorporated into or
11upon an aircraft as part of the modification, refurbishment,
12completion, replacement, repair, or maintenance of the
13aircraft. This exemption includes consumable supplies used in
14the modification, refurbishment, completion, replacement,
15repair, and maintenance of aircraft, but excludes any
16materials, parts, equipment, components, and consumable
17supplies used in the modification, replacement, repair, and
18maintenance of aircraft engines or power plants, whether such
19engines or power plants are installed or uninstalled upon any
20such aircraft. "Consumable supplies" include, but are not
21limited to, adhesive, tape, sandpaper, general purpose
22lubricants, cleaning solution, latex gloves, and protective
23films. This exemption applies only to the use of qualifying
24tangible personal property transferred incident to the
25modification, refurbishment, completion, replacement, repair,
26or maintenance of aircraft by persons who (i) hold an Air

 

 

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1Agency Certificate and are empowered to operate an approved
2repair station by the Federal Aviation Administration, (ii)
3have a Class IV Rating, and (iii) conduct operations in
4accordance with Part 145 of the Federal Aviation Regulations.
5The exemption does not include aircraft operated by a
6commercial air carrier providing scheduled passenger air
7service pursuant to authority issued under Part 121 or Part 129
8of the Federal Aviation Regulations. The changes made to this
9paragraph (27) by Public Act 98-534 are declarative of existing
10law.
11    (28) Tangible personal property purchased by a
12public-facilities corporation, as described in Section
1311-65-10 of the Illinois Municipal Code, for purposes of
14constructing or furnishing a municipal convention hall, but
15only if the legal title to the municipal convention hall is
16transferred to the municipality without any further
17consideration by or on behalf of the municipality at the time
18of the completion of the municipal convention hall or upon the
19retirement or redemption of any bonds or other debt instruments
20issued by the public-facilities corporation in connection with
21the development of the municipal convention hall. This
22exemption includes existing public-facilities corporations as
23provided in Section 11-65-25 of the Illinois Municipal Code.
24This paragraph is exempt from the provisions of Section 3-75.
25    (29) Beginning January 1, 2017, menstrual pads, tampons,
26and menstrual cups.

 

 

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1    (30) Tangible personal property transferred to a purchaser
2who is exempt from the tax imposed by this Act by operation of
3federal law. This paragraph is exempt from the provisions of
4Section 3-75.
5    (31) On and after January 1, 2020, any software purchased
6to lease, upgrade, supplement, or replace computer equipment or
7enabling software purchased or leased in the initial investment
8made at a Big Empties Site designated under the Big Empties
9Site Act. This paragraph is exempt from the provisions of
10Section 3-75.
11(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
12100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
131-4-19; revised 1-8-19.)
 
14    Section 915. The Service Occupation Tax Act is amended by
15changing Section 3-5 as follows:
 
16    (35 ILCS 115/3-5)
17    Sec. 3-5. Exemptions. The following tangible personal
18property is exempt from the tax imposed by this Act:
19    (1) Personal property sold by a corporation, society,
20association, foundation, institution, or organization, other
21than a limited liability company, that is organized and
22operated as a not-for-profit service enterprise for the benefit
23of persons 65 years of age or older if the personal property
24was not purchased by the enterprise for the purpose of resale

 

 

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1by the enterprise.
2    (2) Personal property purchased by a not-for-profit
3Illinois county fair association for use in conducting,
4operating, or promoting the county fair.
5    (3) Personal property purchased by any not-for-profit arts
6or cultural organization that establishes, by proof required by
7the Department by rule, that it has received an exemption under
8Section 501(c)(3) of the Internal Revenue Code and that is
9organized and operated primarily for the presentation or
10support of arts or cultural programming, activities, or
11services. These organizations include, but are not limited to,
12music and dramatic arts organizations such as symphony
13orchestras and theatrical groups, arts and cultural service
14organizations, local arts councils, visual arts organizations,
15and media arts organizations. On and after July 1, 2001 (the
16effective date of Public Act 92-35) this amendatory Act of the
1792nd General Assembly, however, an entity otherwise eligible
18for this exemption shall not make tax-free purchases unless it
19has an active identification number issued by the Department.
20    (4) Legal tender, currency, medallions, or gold or silver
21coinage issued by the State of Illinois, the government of the
22United States of America, or the government of any foreign
23country, and bullion.
24    (5) Until July 1, 2003 and beginning again on September 1,
252004 through August 30, 2014, graphic arts machinery and
26equipment, including repair and replacement parts, both new and

 

 

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1used, and including that manufactured on special order or
2purchased for lease, certified by the purchaser to be used
3primarily for graphic arts production. Equipment includes
4chemicals or chemicals acting as catalysts but only if the
5chemicals or chemicals acting as catalysts effect a direct and
6immediate change upon a graphic arts product. Beginning on July
71, 2017, graphic arts machinery and equipment is included in
8the manufacturing and assembling machinery and equipment
9exemption under Section 2 of this Act.
10    (6) Personal property sold by a teacher-sponsored student
11organization affiliated with an elementary or secondary school
12located in Illinois.
13    (7) Farm machinery and equipment, both new and used,
14including that manufactured on special order, certified by the
15purchaser to be used primarily for production agriculture or
16State or federal agricultural programs, including individual
17replacement parts for the machinery and equipment, including
18machinery and equipment purchased for lease, and including
19implements of husbandry defined in Section 1-130 of the
20Illinois Vehicle Code, farm machinery and agricultural
21chemical and fertilizer spreaders, and nurse wagons required to
22be registered under Section 3-809 of the Illinois Vehicle Code,
23but excluding other motor vehicles required to be registered
24under the Illinois Vehicle Code. Horticultural polyhouses or
25hoop houses used for propagating, growing, or overwintering
26plants shall be considered farm machinery and equipment under

 

 

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1this item (7). Agricultural chemical tender tanks and dry boxes
2shall include units sold separately from a motor vehicle
3required to be licensed and units sold mounted on a motor
4vehicle required to be licensed if the selling price of the
5tender is separately stated.
6    Farm machinery and equipment shall include precision
7farming equipment that is installed or purchased to be
8installed on farm machinery and equipment including, but not
9limited to, tractors, harvesters, sprayers, planters, seeders,
10or spreaders. Precision farming equipment includes, but is not
11limited to, soil testing sensors, computers, monitors,
12software, global positioning and mapping systems, and other
13such equipment.
14    Farm machinery and equipment also includes computers,
15sensors, software, and related equipment used primarily in the
16computer-assisted operation of production agriculture
17facilities, equipment, and activities such as, but not limited
18to, the collection, monitoring, and correlation of animal and
19crop data for the purpose of formulating animal diets and
20agricultural chemicals. This item (7) is exempt from the
21provisions of Section 3-55.
22    (8) Until June 30, 2013, fuel and petroleum products sold
23to or used by an air common carrier, certified by the carrier
24to be used for consumption, shipment, or storage in the conduct
25of its business as an air common carrier, for a flight destined
26for or returning from a location or locations outside the

 

 

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1United States without regard to previous or subsequent domestic
2stopovers.
3    Beginning July 1, 2013, fuel and petroleum products sold to
4or used by an air carrier, certified by the carrier to be used
5for consumption, shipment, or storage in the conduct of its
6business as an air common carrier, for a flight that (i) is
7engaged in foreign trade or is engaged in trade between the
8United States and any of its possessions and (ii) transports at
9least one individual or package for hire from the city of
10origination to the city of final destination on the same
11aircraft, without regard to a change in the flight number of
12that aircraft.
13    (9) Proceeds of mandatory service charges separately
14stated on customers' bills for the purchase and consumption of
15food and beverages, to the extent that the proceeds of the
16service charge are in fact turned over as tips or as a
17substitute for tips to the employees who participate directly
18in preparing, serving, hosting or cleaning up the food or
19beverage function with respect to which the service charge is
20imposed.
21    (10) Until July 1, 2003, oil field exploration, drilling,
22and production equipment, including (i) rigs and parts of rigs,
23rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
24tubular goods, including casing and drill strings, (iii) pumps
25and pump-jack units, (iv) storage tanks and flow lines, (v) any
26individual replacement part for oil field exploration,

 

 

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1drilling, and production equipment, and (vi) machinery and
2equipment purchased for lease; but excluding motor vehicles
3required to be registered under the Illinois Vehicle Code.
4    (11) Photoprocessing machinery and equipment, including
5repair and replacement parts, both new and used, including that
6manufactured on special order, certified by the purchaser to be
7used primarily for photoprocessing, and including
8photoprocessing machinery and equipment purchased for lease.
9    (12) Until July 1, 2023, coal and aggregate exploration,
10mining, off-highway hauling, processing, maintenance, and
11reclamation equipment, including replacement parts and
12equipment, and including equipment purchased for lease, but
13excluding motor vehicles required to be registered under the
14Illinois Vehicle Code. The changes made to this Section by
15Public Act 97-767 apply on and after July 1, 2003, but no claim
16for credit or refund is allowed on or after August 16, 2013
17(the effective date of Public Act 98-456) for such taxes paid
18during the period beginning July 1, 2003 and ending on August
1916, 2013 (the effective date of Public Act 98-456).
20    (13) Beginning January 1, 1992 and through June 30, 2016,
21food for human consumption that is to be consumed off the
22premises where it is sold (other than alcoholic beverages, soft
23drinks and food that has been prepared for immediate
24consumption) and prescription and non-prescription medicines,
25drugs, medical appliances, and insulin, urine testing
26materials, syringes, and needles used by diabetics, for human

 

 

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1use, when purchased for use by a person receiving medical
2assistance under Article V of the Illinois Public Aid Code who
3resides in a licensed long-term care facility, as defined in
4the Nursing Home Care Act, or in a licensed facility as defined
5in the ID/DD Community Care Act, the MC/DD Act, or the
6Specialized Mental Health Rehabilitation Act of 2013.
7    (14) Semen used for artificial insemination of livestock
8for direct agricultural production.
9    (15) Horses, or interests in horses, registered with and
10meeting the requirements of any of the Arabian Horse Club
11Registry of America, Appaloosa Horse Club, American Quarter
12Horse Association, United States Trotting Association, or
13Jockey Club, as appropriate, used for purposes of breeding or
14racing for prizes. This item (15) is exempt from the provisions
15of Section 3-55, and the exemption provided for under this item
16(15) applies for all periods beginning May 30, 1995, but no
17claim for credit or refund is allowed on or after January 1,
182008 (the effective date of Public Act 95-88) for such taxes
19paid during the period beginning May 30, 2000 and ending on
20January 1, 2008 (the effective date of Public Act 95-88).
21    (16) Computers and communications equipment utilized for
22any hospital purpose and equipment used in the diagnosis,
23analysis, or treatment of hospital patients sold to a lessor
24who leases the equipment, under a lease of one year or longer
25executed or in effect at the time of the purchase, to a
26hospital that has been issued an active tax exemption

 

 

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1identification number by the Department under Section 1g of the
2Retailers' Occupation Tax Act.
3    (17) Personal property sold to a lessor who leases the
4property, under a lease of one year or longer executed or in
5effect at the time of the purchase, to a governmental body that
6has been issued an active tax exemption identification number
7by the Department under Section 1g of the Retailers' Occupation
8Tax Act.
9    (18) 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    (19) 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

 

 

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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    (20) Beginning July 1, 1999, game or game birds sold at a
6"game breeding and hunting preserve area" as that term is used
7in the Wildlife Code. This paragraph is exempt from the
8provisions of Section 3-55.
9    (21) 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.

 

 

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1    (22) 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 3-55.
15    (23) 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 3-55.
25    (24) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227) this amendatory Act of the 92nd General

 

 

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1Assembly, computers and communications equipment utilized for
2any hospital purpose and equipment used in the diagnosis,
3analysis, or treatment of hospital patients sold to a lessor
4who leases the equipment, under a lease of one year or longer
5executed or in effect at the time of the purchase, to a
6hospital that has been issued an active tax exemption
7identification number by the Department under Section 1g of the
8Retailers' Occupation Tax Act. This paragraph is exempt from
9the provisions of Section 3-55.
10    (25) Beginning on August 2, 2001 (the effective date of
11Public Act 92-227) this amendatory Act of the 92nd General
12Assembly, personal property sold to a lessor who leases the
13property, under a lease of one year or longer executed or in
14effect at the time of the purchase, to a governmental body that
15has been issued an active tax exemption identification number
16by the Department under Section 1g of the Retailers' Occupation
17Tax Act. This paragraph is exempt from the provisions of
18Section 3-55.
19    (26) Beginning on January 1, 2002 and through June 30,
202016, tangible personal property purchased from an Illinois
21retailer by a taxpayer engaged in centralized purchasing
22activities in Illinois who will, upon receipt of the property
23in Illinois, temporarily store the property in Illinois (i) for
24the purpose of subsequently transporting it outside this State
25for use or consumption thereafter solely outside this State or
26(ii) for the purpose of being processed, fabricated, or

 

 

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1manufactured into, attached to, or incorporated into other
2tangible personal property to be transported outside this State
3and thereafter used or consumed solely outside this State. The
4Director of Revenue shall, pursuant to rules adopted in
5accordance with the Illinois Administrative Procedure Act,
6issue a permit to any taxpayer in good standing with the
7Department who is eligible for the exemption under this
8paragraph (26). The permit issued under this paragraph (26)
9shall authorize the holder, to the extent and in the manner
10specified in the rules adopted under this Act, to purchase
11tangible personal property from a retailer exempt from the
12taxes imposed by this Act. Taxpayers shall maintain all
13necessary books and records to substantiate the use and
14consumption of all such tangible personal property outside of
15the State of Illinois.
16    (27) Beginning January 1, 2008, tangible personal property
17used in the construction or maintenance of a community water
18supply, as defined under Section 3.145 of the Environmental
19Protection Act, that is operated by a not-for-profit
20corporation that holds a valid water supply permit issued under
21Title IV of the Environmental Protection Act. This paragraph is
22exempt from the provisions of Section 3-55.
23    (28) Tangible personal property sold to a
24public-facilities corporation, as described in Section
2511-65-10 of the Illinois Municipal Code, for purposes of
26constructing or furnishing a municipal convention hall, but

 

 

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1only if the legal title to the municipal convention hall is
2transferred to the municipality without any further
3consideration by or on behalf of the municipality at the time
4of the completion of the municipal convention hall or upon the
5retirement or redemption of any bonds or other debt instruments
6issued by the public-facilities corporation in connection with
7the development of the municipal convention hall. This
8exemption includes existing public-facilities corporations as
9provided in Section 11-65-25 of the Illinois Municipal Code.
10This paragraph is exempt from the provisions of Section 3-55.
11    (29) Beginning January 1, 2010, materials, parts,
12equipment, components, and furnishings incorporated into or
13upon an aircraft as part of the modification, refurbishment,
14completion, replacement, repair, or maintenance of the
15aircraft. This exemption includes consumable supplies used in
16the modification, refurbishment, completion, replacement,
17repair, and maintenance of aircraft, but excludes any
18materials, parts, equipment, components, and consumable
19supplies used in the modification, replacement, repair, and
20maintenance of aircraft engines or power plants, whether such
21engines or power plants are installed or uninstalled upon any
22such aircraft. "Consumable supplies" include, but are not
23limited to, adhesive, tape, sandpaper, general purpose
24lubricants, cleaning solution, latex gloves, and protective
25films. This exemption applies only to the transfer of
26qualifying tangible personal property incident to the

 

 

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1modification, refurbishment, completion, replacement, repair,
2or maintenance of an aircraft by persons who (i) hold an Air
3Agency Certificate and are empowered to operate an approved
4repair station by the Federal Aviation Administration, (ii)
5have a Class IV Rating, and (iii) conduct operations in
6accordance with Part 145 of the Federal Aviation Regulations.
7The exemption does not include aircraft operated by a
8commercial air carrier providing scheduled passenger air
9service pursuant to authority issued under Part 121 or Part 129
10of the Federal Aviation Regulations. The changes made to this
11paragraph (29) by Public Act 98-534 are declarative of existing
12law.
13    (30) Beginning January 1, 2017, menstrual pads, tampons,
14and menstrual cups.
15    (31) Tangible personal property transferred to a purchaser
16who is exempt from tax by operation of federal law. This
17paragraph is exempt from the provisions of Section 3-55.
18    (32) On and after January 1, 2020, any software purchased
19to lease, upgrade, supplement, or replace computer equipment or
20enabling software purchased or leased in the initial investment
21made at a Big Empties Site designated under the Big Empties
22Site Act. This paragraph is exempt from the provisions of
23Section 3-55.
24(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
25100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
261-4-19; revised 1-8-19.)
 

 

 

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1    Section 920. The Retailers' Occupation Tax Act is amended
2by changing Section 2-5 and by adding Section 5m as follows:
 
3    (35 ILCS 120/2-5)
4    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
5sale of the following tangible personal property are exempt
6from the tax imposed by this Act:
7        (1) Farm chemicals.
8        (2) Farm machinery and equipment, both new and used,
9    including that manufactured on special order, certified by
10    the purchaser to be used primarily for production
11    agriculture or State or federal agricultural programs,
12    including individual replacement parts for the machinery
13    and equipment, including machinery and equipment purchased
14    for lease, and including implements of husbandry defined in
15    Section 1-130 of the Illinois Vehicle Code, farm machinery
16    and agricultural chemical and fertilizer spreaders, and
17    nurse wagons required to be registered under Section 3-809
18    of the Illinois Vehicle Code, but excluding other motor
19    vehicles required to be registered under the Illinois
20    Vehicle Code. Horticultural polyhouses or hoop houses used
21    for propagating, growing, or overwintering plants shall be
22    considered farm machinery and equipment under this item
23    (2). Agricultural chemical tender tanks and dry boxes shall
24    include units sold separately from a motor vehicle required

 

 

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1    to be licensed and units sold mounted on a motor vehicle
2    required to be licensed, if the selling price of the tender
3    is separately stated.
4        Farm machinery and equipment shall include precision
5    farming equipment that is installed or purchased to be
6    installed on farm machinery and equipment including, but
7    not limited to, tractors, harvesters, sprayers, planters,
8    seeders, or spreaders. Precision farming equipment
9    includes, but is not limited to, soil testing sensors,
10    computers, monitors, software, global positioning and
11    mapping systems, and other such equipment.
12        Farm machinery and equipment also includes computers,
13    sensors, software, and related equipment used primarily in
14    the computer-assisted operation of production agriculture
15    facilities, equipment, and activities such as, but not
16    limited to, the collection, monitoring, and correlation of
17    animal and crop data for the purpose of formulating animal
18    diets and agricultural chemicals. This item (2) is exempt
19    from the provisions of Section 2-70.
20        (3) Until July 1, 2003, distillation machinery and
21    equipment, sold as a unit or kit, assembled or installed by
22    the retailer, certified by the user to be used only for the
23    production of ethyl alcohol that will be used for
24    consumption as motor fuel or as a component of motor fuel
25    for the personal use of the user, and not subject to sale
26    or resale.

 

 

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1        (4) Until July 1, 2003 and beginning again September 1,
2    2004 through August 30, 2014, graphic arts machinery and
3    equipment, including repair and replacement parts, both
4    new and used, and including that manufactured on special
5    order or purchased for lease, certified by the purchaser to
6    be used primarily for graphic arts production. Equipment
7    includes chemicals or chemicals acting as catalysts but
8    only if the chemicals or chemicals acting as catalysts
9    effect a direct and immediate change upon a graphic arts
10    product. Beginning on July 1, 2017, graphic arts machinery
11    and equipment is included in the manufacturing and
12    assembling machinery and equipment exemption under
13    paragraph (14).
14        (5) A motor vehicle that is used for automobile
15    renting, as defined in the Automobile Renting Occupation
16    and Use Tax Act. This paragraph is exempt from the
17    provisions of Section 2-70.
18        (6) Personal property sold by a teacher-sponsored
19    student organization affiliated with an elementary or
20    secondary school located in Illinois.
21        (7) Until July 1, 2003, proceeds of that portion of the
22    selling price of a passenger car the sale of which is
23    subject to the Replacement Vehicle Tax.
24        (8) Personal property sold to an Illinois county fair
25    association for use in conducting, operating, or promoting
26    the county fair.

 

 

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

 

 

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1    not-for-profit corporation, society, association,
2    foundation, institution, or organization that has no
3    compensated officers or employees and that is organized and
4    operated primarily for the recreation of persons 55 years
5    of age or older. A limited liability company may qualify
6    for the exemption under this paragraph only if the limited
7    liability company is organized and operated exclusively
8    for educational purposes. On and after July 1, 1987,
9    however, no entity otherwise eligible for this exemption
10    shall make tax-free purchases unless it has an active
11    identification number issued by the Department.
12        (12) (Blank).
13        (12-5) On and after July 1, 2003 and through June 30,
14    2004, motor vehicles of the second division with a gross
15    vehicle weight in excess of 8,000 pounds that are subject
16    to the commercial distribution fee imposed under Section
17    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
18    2004 and through June 30, 2005, the use in this State of
19    motor vehicles of the second division: (i) with a gross
20    vehicle weight rating in excess of 8,000 pounds; (ii) that
21    are subject to the commercial distribution fee imposed
22    under Section 3-815.1 of the Illinois Vehicle Code; and
23    (iii) that are primarily used for commercial purposes.
24    Through June 30, 2005, this exemption applies to repair and
25    replacement parts added after the initial purchase of such
26    a motor vehicle if that motor vehicle is used in a manner

 

 

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1    that would qualify for the rolling stock exemption
2    otherwise provided for in this Act. For purposes of this
3    paragraph, "used for commercial purposes" means the
4    transportation of persons or property in furtherance of any
5    commercial or industrial enterprise whether for-hire or
6    not.
7        (13) Proceeds from sales to owners, lessors, or
8    shippers of tangible personal property that is utilized by
9    interstate carriers for hire for use as rolling stock
10    moving in interstate commerce and equipment operated by a
11    telecommunications provider, licensed as a common carrier
12    by the Federal Communications Commission, which is
13    permanently installed in or affixed to aircraft moving in
14    interstate commerce.
15        (14) Machinery and equipment that will be used by the
16    purchaser, or a lessee of the purchaser, primarily in the
17    process of manufacturing or assembling tangible personal
18    property for wholesale or retail sale or lease, whether the
19    sale or lease is made directly by the manufacturer or by
20    some other person, whether the materials used in the
21    process are owned by the manufacturer or some other person,
22    or whether the sale or lease is made apart from or as an
23    incident to the seller's engaging in the service occupation
24    of producing machines, tools, dies, jigs, patterns,
25    gauges, or other similar items of no commercial value on
26    special order for a particular purchaser. The exemption

 

 

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1    provided by this paragraph (14) does not include machinery
2    and equipment used in (i) the generation of electricity for
3    wholesale or retail sale; (ii) the generation or treatment
4    of natural or artificial gas for wholesale or retail sale
5    that is delivered to customers through pipes, pipelines, or
6    mains; or (iii) the treatment of water for wholesale or
7    retail sale that is delivered to customers through pipes,
8    pipelines, or mains. The provisions of Public Act 98-583
9    are declaratory of existing law as to the meaning and scope
10    of this exemption. Beginning on July 1, 2017, the exemption
11    provided by this paragraph (14) includes, but is not
12    limited to, graphic arts machinery and equipment, as
13    defined in paragraph (4) of this Section.
14        (15) Proceeds of mandatory service charges separately
15    stated on customers' bills for purchase and consumption of
16    food and beverages, to the extent that the proceeds of the
17    service charge are in fact turned over as tips or as a
18    substitute for tips to the employees who participate
19    directly in preparing, serving, hosting or cleaning up the
20    food or beverage function with respect to which the service
21    charge is imposed.
22        (16) Tangible personal property sold to a purchaser if
23    the purchaser is exempt from use tax by operation of
24    federal law. This paragraph is exempt from the provisions
25    of Section 2-70.
26        (17) Tangible personal property sold to a common

 

 

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1    carrier by rail or motor that receives the physical
2    possession of the property in Illinois and that transports
3    the property, or shares with another common carrier in the
4    transportation of the property, out of Illinois on a
5    standard uniform bill of lading showing the seller of the
6    property as the shipper or consignor of the property to a
7    destination outside Illinois, for use outside Illinois.
8        (18) Legal tender, currency, medallions, or gold or
9    silver coinage issued by the State of Illinois, the
10    government of the United States of America, or the
11    government of any foreign country, and bullion.
12        (19) Until July 1, 2003, oil field exploration,
13    drilling, and production equipment, including (i) rigs and
14    parts of rigs, rotary rigs, cable tool rigs, and workover
15    rigs, (ii) pipe and tubular goods, including casing and
16    drill strings, (iii) pumps and pump-jack units, (iv)
17    storage tanks and flow lines, (v) any individual
18    replacement part for oil field exploration, drilling, and
19    production equipment, and (vi) machinery and equipment
20    purchased for lease; but excluding motor vehicles required
21    to be registered under the Illinois Vehicle Code.
22        (20) Photoprocessing machinery and equipment,
23    including repair and replacement parts, both new and used,
24    including that manufactured on special order, certified by
25    the purchaser to be used primarily for photoprocessing, and
26    including photoprocessing machinery and equipment

 

 

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1    purchased for lease.
2        (21) Until July 1, 2023, coal and aggregate
3    exploration, mining, off-highway hauling, processing,
4    maintenance, and reclamation equipment, including
5    replacement parts and equipment, and including equipment
6    purchased for lease, but excluding motor vehicles required
7    to be registered under the Illinois Vehicle Code. The
8    changes made to this Section by Public Act 97-767 apply on
9    and after July 1, 2003, but no claim for credit or refund
10    is allowed on or after August 16, 2013 (the effective date
11    of Public Act 98-456) for such taxes paid during the period
12    beginning July 1, 2003 and ending on August 16, 2013 (the
13    effective date of Public Act 98-456).
14        (22) Until June 30, 2013, fuel and petroleum products
15    sold to or used by an air carrier, certified by the carrier
16    to be used for consumption, shipment, or storage in the
17    conduct of its business as an air common carrier, for a
18    flight destined for or returning from a location or
19    locations outside the United States without regard to
20    previous or subsequent domestic stopovers.
21        Beginning July 1, 2013, fuel and petroleum products
22    sold to or used by an air carrier, certified by the carrier
23    to be used for consumption, shipment, or storage in the
24    conduct of its business as an air common carrier, for a
25    flight that (i) is engaged in foreign trade or is engaged
26    in trade between the United States and any of its

 

 

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1    possessions and (ii) transports at least one individual or
2    package for hire from the city of origination to the city
3    of final destination on the same aircraft, without regard
4    to a change in the flight number of that aircraft.
5        (23) A transaction in which the purchase order is
6    received by a florist who is located outside Illinois, but
7    who has a florist located in Illinois deliver the property
8    to the purchaser or the purchaser's donee in Illinois.
9        (24) Fuel consumed or used in the operation of ships,
10    barges, or vessels that are used primarily in or for the
11    transportation of property or the conveyance of persons for
12    hire on rivers bordering on this State if the fuel is
13    delivered by the seller to the purchaser's barge, ship, or
14    vessel while it is afloat upon that bordering river.
15        (25) Except as provided in item (25-5) of this Section,
16    a motor vehicle sold in this State to a nonresident even
17    though the motor vehicle is delivered to the nonresident in
18    this State, if the motor vehicle is not to be titled in
19    this State, and if a drive-away permit is issued to the
20    motor vehicle as provided in Section 3-603 of the Illinois
21    Vehicle Code or if the nonresident purchaser has vehicle
22    registration plates to transfer to the motor vehicle upon
23    returning to his or her home state. The issuance of the
24    drive-away permit or having the out-of-state registration
25    plates to be transferred is prima facie evidence that the
26    motor vehicle will not be titled in this State.

 

 

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1        (25-5) The exemption under item (25) does not apply if
2    the state in which the motor vehicle will be titled does
3    not allow a reciprocal exemption for a motor vehicle sold
4    and delivered in that state to an Illinois resident but
5    titled in Illinois. The tax collected under this Act on the
6    sale of a motor vehicle in this State to a resident of
7    another state that does not allow a reciprocal exemption
8    shall be imposed at a rate equal to the state's rate of tax
9    on taxable property in the state in which the purchaser is
10    a resident, except that the tax shall not exceed the tax
11    that would otherwise be imposed under this Act. At the time
12    of the sale, the purchaser shall execute a statement,
13    signed under penalty of perjury, of his or her intent to
14    title the vehicle in the state in which the purchaser is a
15    resident within 30 days after the sale and of the fact of
16    the payment to the State of Illinois of tax in an amount
17    equivalent to the state's rate of tax on taxable property
18    in his or her state of residence and shall submit the
19    statement to the appropriate tax collection agency in his
20    or her state of residence. In addition, the retailer must
21    retain a signed copy of the statement in his or her
22    records. Nothing in this item shall be construed to require
23    the removal of the vehicle from this state following the
24    filing of an intent to title the vehicle in the purchaser's
25    state of residence if the purchaser titles the vehicle in
26    his or her state of residence within 30 days after the date

 

 

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1    of sale. The tax collected under this Act in accordance
2    with this item (25-5) shall be proportionately distributed
3    as if the tax were collected at the 6.25% general rate
4    imposed under this Act.
5        (25-7) Beginning on July 1, 2007, no tax is imposed
6    under this Act on the sale of an aircraft, as defined in
7    Section 3 of the Illinois Aeronautics Act, if all of the
8    following conditions are met:
9            (1) the aircraft leaves this State within 15 days
10        after the later of either the issuance of the final
11        billing for the sale of the aircraft, or the authorized
12        approval for return to service, completion of the
13        maintenance record entry, and completion of the test
14        flight and ground test for inspection, as required by
15        14 C.F.R. 91.407;
16            (2) the aircraft is not based or registered in this
17        State after the sale of the aircraft; and
18            (3) the seller retains in his or her books and
19        records and provides to the Department a signed and
20        dated certification from the purchaser, on a form
21        prescribed by the Department, certifying that the
22        requirements of this item (25-7) are met. The
23        certificate must also include the name and address of
24        the purchaser, the address of the location where the
25        aircraft is to be titled or registered, the address of
26        the primary physical location of the aircraft, and

 

 

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1        other information that the Department may reasonably
2        require.
3        For purposes of this item (25-7):
4        "Based in this State" means hangared, stored, or
5    otherwise used, excluding post-sale customizations as
6    defined in this Section, for 10 or more days in each
7    12-month period immediately following the date of the sale
8    of the aircraft.
9        "Registered in this State" means an aircraft
10    registered with the Department of Transportation,
11    Aeronautics Division, or titled or registered with the
12    Federal Aviation Administration to an address located in
13    this State.
14        This paragraph (25-7) is exempt from the provisions of
15    Section 2-70.
16        (26) Semen used for artificial insemination of
17    livestock for direct agricultural production.
18        (27) Horses, or interests in horses, registered with
19    and meeting the requirements of any of the Arabian Horse
20    Club Registry of America, Appaloosa Horse Club, American
21    Quarter Horse Association, United States Trotting
22    Association, or Jockey Club, as appropriate, used for
23    purposes of breeding or racing for prizes. This item (27)
24    is exempt from the provisions of Section 2-70, and the
25    exemption provided for under this item (27) applies for all
26    periods beginning May 30, 1995, but no claim for credit or

 

 

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1    refund is allowed on or after January 1, 2008 (the
2    effective date of Public Act 95-88) for such taxes paid
3    during the period beginning May 30, 2000 and ending on
4    January 1, 2008 (the effective date of Public Act 95-88).
5        (28) Computers and communications equipment utilized
6    for any hospital purpose and equipment used in the
7    diagnosis, analysis, or treatment of hospital patients
8    sold to a lessor who leases the equipment, under a lease of
9    one year or longer executed or in effect at the time of the
10    purchase, to a hospital that has been issued an active tax
11    exemption identification number by the Department under
12    Section 1g of this Act.
13        (29) Personal property sold to a lessor who leases the
14    property, under a lease of one year or longer executed or
15    in effect at the time of the purchase, to a governmental
16    body that has been issued an active tax exemption
17    identification number by the Department under Section 1g of
18    this Act.
19        (30) Beginning with taxable years ending on or after
20    December 31, 1995 and ending with taxable years ending on
21    or before December 31, 2004, personal property that is
22    donated for disaster relief to be used in a State or
23    federally declared disaster area in Illinois or bordering
24    Illinois by a manufacturer or retailer that is registered
25    in this State to a corporation, society, association,
26    foundation, or institution that has been issued a sales tax

 

 

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1    exemption identification number by the Department that
2    assists victims of the disaster who reside within the
3    declared disaster area.
4        (31) Beginning with taxable years ending on or after
5    December 31, 1995 and ending with taxable years ending on
6    or before December 31, 2004, personal property that is used
7    in the performance of infrastructure repairs in this State,
8    including but not limited to municipal roads and streets,
9    access roads, bridges, sidewalks, waste disposal systems,
10    water and sewer line extensions, water distribution and
11    purification facilities, storm water drainage and
12    retention facilities, and sewage treatment facilities,
13    resulting from a State or federally declared disaster in
14    Illinois or bordering Illinois when such repairs are
15    initiated on facilities located in the declared disaster
16    area within 6 months after the disaster.
17        (32) Beginning July 1, 1999, game or game birds sold at
18    a "game breeding and hunting preserve area" as that term is
19    used in the Wildlife Code. This paragraph is exempt from
20    the provisions of Section 2-70.
21        (33) A motor vehicle, as that term is defined in
22    Section 1-146 of the Illinois Vehicle Code, that is donated
23    to a corporation, limited liability company, society,
24    association, foundation, or institution that is determined
25    by the Department to be organized and operated exclusively
26    for educational purposes. For purposes of this exemption,

 

 

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

 

 

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1    purpose of resale by the fundraising entity and that
2    profits from the sale to the fundraising entity. This
3    paragraph is exempt from the provisions of Section 2-70.
4        (35) Beginning January 1, 2000 and through December 31,
5    2001, new or used automatic vending machines that prepare
6    and serve hot food and beverages, including coffee, soup,
7    and other items, and replacement parts for these machines.
8    Beginning January 1, 2002 and through June 30, 2003,
9    machines and parts for machines used in commercial,
10    coin-operated amusement and vending business if a use or
11    occupation tax is paid on the gross receipts derived from
12    the use of the commercial, coin-operated amusement and
13    vending machines. This paragraph is exempt from the
14    provisions of Section 2-70.
15        (35-5) Beginning August 23, 2001 and through June 30,
16    2016, food for human consumption that is to be consumed off
17    the premises where it is sold (other than alcoholic
18    beverages, soft drinks, and food that has been prepared for
19    immediate consumption) and prescription and
20    nonprescription medicines, drugs, medical appliances, and
21    insulin, urine testing materials, syringes, and needles
22    used by diabetics, for human use, when purchased for use by
23    a person receiving medical assistance under Article V of
24    the Illinois Public Aid Code who resides in a licensed
25    long-term care facility, as defined in the Nursing Home
26    Care Act, or a licensed facility as defined in the ID/DD

 

 

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1    Community Care Act, the MC/DD Act, or the Specialized
2    Mental Health Rehabilitation Act of 2013.
3        (36) Beginning August 2, 2001, computers and
4    communications equipment utilized for any hospital purpose
5    and equipment used in the diagnosis, analysis, or treatment
6    of hospital patients sold to a lessor who leases the
7    equipment, under a lease of one year or longer executed or
8    in effect at the time of the purchase, to a hospital that
9    has been issued an active tax exemption identification
10    number by the Department under Section 1g of this Act. This
11    paragraph is exempt from the provisions of Section 2-70.
12        (37) Beginning August 2, 2001, personal property sold
13    to a lessor who leases the property, under a lease of one
14    year or longer executed or in effect at the time of the
15    purchase, to a governmental body that has been issued an
16    active tax exemption identification number by the
17    Department under Section 1g of this Act. This paragraph is
18    exempt from the provisions of Section 2-70.
19        (38) Beginning on January 1, 2002 and through June 30,
20    2016, tangible personal property purchased from an
21    Illinois retailer by a taxpayer engaged in centralized
22    purchasing activities in Illinois who will, upon receipt of
23    the property in Illinois, temporarily store the property in
24    Illinois (i) for the purpose of subsequently transporting
25    it outside this State for use or consumption thereafter
26    solely outside this State or (ii) for the purpose of being

 

 

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1    processed, fabricated, or manufactured into, attached to,
2    or incorporated into other tangible personal property to be
3    transported outside this State and thereafter used or
4    consumed solely outside this State. The Director of Revenue
5    shall, pursuant to rules adopted in accordance with the
6    Illinois Administrative Procedure Act, issue a permit to
7    any taxpayer in good standing with the Department who is
8    eligible for the exemption under this paragraph (38). The
9    permit issued under this paragraph (38) shall authorize the
10    holder, to the extent and in the manner specified in the
11    rules adopted under this Act, to purchase tangible personal
12    property from a retailer exempt from the taxes imposed by
13    this Act. Taxpayers shall maintain all necessary books and
14    records to substantiate the use and consumption of all such
15    tangible personal property outside of the State of
16    Illinois.
17        (39) Beginning January 1, 2008, tangible personal
18    property used in the construction or maintenance of a
19    community water supply, as defined under Section 3.145 of
20    the Environmental Protection Act, that is operated by a
21    not-for-profit corporation that holds a valid water supply
22    permit issued under Title IV of the Environmental
23    Protection Act. This paragraph is exempt from the
24    provisions of Section 2-70.
25        (40) Beginning January 1, 2010, materials, parts,
26    equipment, components, and furnishings incorporated into

 

 

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1    or upon an aircraft as part of the modification,
2    refurbishment, completion, replacement, repair, or
3    maintenance of the aircraft. This exemption includes
4    consumable supplies used in the modification,
5    refurbishment, completion, replacement, repair, and
6    maintenance of aircraft, but excludes any materials,
7    parts, equipment, components, and consumable supplies used
8    in the modification, replacement, repair, and maintenance
9    of aircraft engines or power plants, whether such engines
10    or power plants are installed or uninstalled upon any such
11    aircraft. "Consumable supplies" include, but are not
12    limited to, adhesive, tape, sandpaper, general purpose
13    lubricants, cleaning solution, latex gloves, and
14    protective films. This exemption applies only to the sale
15    of qualifying tangible personal property to persons who
16    modify, refurbish, complete, replace, or maintain an
17    aircraft and who (i) hold an Air Agency Certificate and are
18    empowered to operate an approved repair station by the
19    Federal Aviation Administration, (ii) have a Class IV
20    Rating, and (iii) conduct operations in accordance with
21    Part 145 of the Federal Aviation Regulations. The exemption
22    does not include aircraft operated by a commercial air
23    carrier providing scheduled passenger air service pursuant
24    to authority issued under Part 121 or Part 129 of the
25    Federal Aviation Regulations. The changes made to this
26    paragraph (40) by Public Act 98-534 are declarative of

 

 

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1    existing law.
2        (41) Tangible personal property sold to a
3    public-facilities corporation, as described in Section
4    11-65-10 of the Illinois Municipal Code, for purposes of
5    constructing or furnishing a municipal convention hall,
6    but only if the legal title to the municipal convention
7    hall is transferred to the municipality without any further
8    consideration by or on behalf of the municipality at the
9    time of the completion of the municipal convention hall or
10    upon the retirement or redemption of any bonds or other
11    debt instruments issued by the public-facilities
12    corporation in connection with the development of the
13    municipal convention hall. This exemption includes
14    existing public-facilities corporations as provided in
15    Section 11-65-25 of the Illinois Municipal Code. This
16    paragraph is exempt from the provisions of Section 2-70.
17        (42) Beginning January 1, 2017, menstrual pads,
18    tampons, and menstrual cups.
19        (43) Merchandise that is subject to the Rental Purchase
20    Agreement Occupation and Use Tax. The purchaser must
21    certify that the item is purchased to be rented subject to
22    a rental purchase agreement, as defined in the Rental
23    Purchase Agreement Act, and provide proof of registration
24    under the Rental Purchase Agreement Occupation and Use Tax
25    Act. This paragraph is exempt from the provisions of
26    Section 2-70.

 

 

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1        (44) On and after January 1, 2020, any software
2    purchased to lease, upgrade, supplement, or replace
3    computer equipment or enabling software purchased or
4    leased in the initial investment made at a Big Empties Site
5    designated under the Big Empties Site Act. This paragraph
6    is exempt from the provisions of Section 2-70.
7(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
8100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
91-1-18; 100-594, eff. 6-29-18; 100-863, eff. 8-14-18;
10100-1171, eff. 1-4-19; revised 1-8-19.)
 
11    (35 ILCS 120/5m new)
12    Sec. 5m. Building materials exemption; Big Empties Site.
13Beginning January 1, 2020, each retailer who makes a sale of
14building materials that will be incorporated into a Big Empties
15site, as designated by the Department of Commerce and Economic
16Opportunity, may deduct receipts from such sales when
17calculating any State or local use and occupation taxes. Upon
18request from the owner of the Big Empties Site, the Department
19shall issue a High Impact Business Building Materials Exemption
20Certificate for each construction contractor or other entity
21identified by the designated High Impact Business. The retailer
22must obtain from the purchaser the purchaser's exemption
23certificate number issued by the Department. A construction
24contractor or other entity shall not make tax-free purchases
25unless it has an active Exemption Certificate issued by the

 

 

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1Department at the time of purchase. This Section is exempt from
2the provisions of Section 2-70.
 
3    Section 925. The Property Tax Code is amended by adding
4Section 184.10 as follows:
 
5    (35 ILCS 200/184.10 new)
6    Sec. 184.10. Abatement for Big Empties Sites. Any taxing
7district may, upon a majority vote of its governing authority
8and after the determination of the assessed valuation of its
9property, order the clerk of that county to abate up to 50% of
10its taxes imposed on a Big Empties Site designated by the
11Department of Commerce and Economic Opportunity.
 
12    Section 930. The Public Utilities Act is amended by
13changing Section 9-222 and by adding Section 9-222.1B as
14follows:
 
15    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
16    Sec. 9-222. Whenever a tax is imposed upon a public utility
17engaged in the business of distributing, supplying,
18furnishing, or selling gas for use or consumption pursuant to
19Section 2 of the Gas Revenue Tax Act, or whenever a tax is
20required to be collected by a delivering supplier pursuant to
21Section 2-7 of the Electricity Excise Tax Act, or whenever a
22tax is imposed upon a public utility pursuant to Section 2-202

 

 

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1of this Act, such utility may charge its customers, other than
2customers who are high impact businesses under Section 5.5 of
3the Illinois Enterprise Zone Act, owners of certified big
4empties sites, or certified business enterprises under Section
59-222.1 of this Act, to the extent of such exemption and during
6the period in which such exemption is in effect, in addition to
7any rate authorized by this Act, an additional charge equal to
8the total amount of such taxes. The exemption of this Section
9relating to high impact businesses shall be subject to the
10provisions of subsections (a), (b), and (b-5) of Section 5.5 of
11the Illinois Enterprise Zone Act. This requirement shall not
12apply to taxes on invested capital imposed pursuant to the
13Messages Tax Act, the Gas Revenue Tax Act and the Public
14Utilities Revenue Act. Such utility shall file with the
15Commission a supplemental schedule which shall specify such
16additional charge and which shall become effective upon filing
17without further notice. Such additional charge shall be shown
18separately on the utility bill to each customer. The Commission
19shall have the power to investigate whether or not such
20supplemental schedule correctly specifies such additional
21charge, but shall have no power to suspend such supplemental
22schedule. If the Commission finds, after a hearing, that such
23supplemental schedule does not correctly specify such
24additional charge, it shall by order require a refund to the
25appropriate customers of the excess, if any, with interest, in
26such manner as it shall deem just and reasonable, and in and by

 

 

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1such order shall require the utility to file an amended
2supplemental schedule corresponding to the finding and order of
3the Commission. Except with respect to taxes imposed on
4invested capital, such tax liabilities shall be recovered from
5customers solely by means of the additional charges authorized
6by this Section.
7(Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
 
8    (220 ILCS 5/9-222.1B new)
9    Sec. 9-222.1B. Big Empties exemption. The owner of a site
10designated as a Big Empties Site under the Big Empties Site Act
11shall be exempt from the additional charges added to the
12business enterprise's utility bills as a pass-on of State
13utility taxes under Section 9-222 of this Act if the owner
14makes an investment of at least $75,000,000 at the site. The
15Department of Commerce and Economic Opportunity shall
16determine the period during which such exemption from the
17charges imposed under Section 9-222 is in effect which shall
18not exceed 15 years or the certified term of the site,
19whichever period is shorter.
 
20    Section 999. Effective date. This Act takes effect upon
21becoming law.