101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2945

 

Introduced 2/4/2020, by Sen. Dale Fowler

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Exempts sales of feed, including hay, for livestock, horses, and poultry from taxation under the Acts. Effective immediately.


LRB101 18127 HLH 67567 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2945LRB101 18127 HLH 67567 b

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1Illinois Vehicle Code. The changes made to this Section by
2Public Act 97-767 apply on and after July 1, 2003, but no claim
3for credit or refund is allowed on or after August 16, 2013
4(the effective date of Public Act 98-456) for such taxes paid
5during the period beginning July 1, 2003 and ending on August
616, 2013 (the effective date of Public Act 98-456).
7    (17) Until July 1, 2003, distillation machinery and
8equipment, sold as a unit or kit, assembled or installed by the
9retailer, certified by the user to be used only for the
10production of ethyl alcohol that will be used for consumption
11as motor fuel or as a component of motor fuel for the personal
12use of the user, and not subject to sale or resale.
13    (18) Manufacturing and assembling machinery and equipment
14used primarily in the process of manufacturing or assembling
15tangible personal property for wholesale or retail sale or
16lease, whether that sale or lease is made directly by the
17manufacturer or by some other person, whether the materials
18used in the process are owned by the manufacturer or some other
19person, or whether that sale or lease is made apart from or as
20an incident to the seller's engaging in the service occupation
21of producing machines, tools, dies, jigs, patterns, gauges, or
22other similar items of no commercial value on special order for
23a particular purchaser. The exemption provided by this
24paragraph (18) includes production related tangible personal
25property, as defined in Section 3-50, purchased on or after
26July 1, 2019. The exemption provided by this paragraph (18)

 

 

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1does not include machinery and equipment used in (i) the
2generation of electricity for wholesale or retail sale; (ii)
3the generation or treatment of natural or artificial gas for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains; or (iii) the treatment of water for
6wholesale or retail sale that is delivered to customers through
7pipes, pipelines, or mains. The provisions of Public Act 98-583
8are declaratory of existing law as to the meaning and scope of
9this exemption. Beginning on July 1, 2017, the exemption
10provided by this paragraph (18) includes, but is not limited
11to, graphic arts machinery and equipment, as defined in
12paragraph (6) of this Section.
13    (19) Personal property delivered to a purchaser or
14purchaser's donee inside Illinois when the purchase order for
15that personal property was received by a florist located
16outside Illinois who has a florist located inside Illinois
17deliver the personal property.
18    (20) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (21) Horses, or interests in horses, registered with and
21meeting the requirements of any of the Arabian Horse Club
22Registry of America, Appaloosa Horse Club, American Quarter
23Horse Association, United States Trotting Association, or
24Jockey Club, as appropriate, used for purposes of breeding or
25racing for prizes. This item (21) is exempt from the provisions
26of Section 3-90, and the exemption provided for under this item

 

 

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1(21) applies for all periods beginning May 30, 1995, but no
2claim for credit or refund is allowed on or after January 1,
32008 for such taxes paid during the period beginning May 30,
42000 and ending on January 1, 2008.
5    (22) Computers and communications equipment utilized for
6any hospital purpose and equipment used in the diagnosis,
7analysis, or treatment of hospital patients purchased by a
8lessor who leases the equipment, under a lease of one year or
9longer executed or in effect at the time the lessor would
10otherwise be subject to the tax imposed by this Act, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of the
13Retailers' Occupation Tax Act. If the equipment is leased in a
14manner that does not qualify for this exemption or is used in
15any other non-exempt manner, the lessor shall be liable for the
16tax imposed under this Act or the Service Use Tax Act, as the
17case may be, based on the fair market value of the property at
18the time the non-qualifying use occurs. No lessor shall collect
19or attempt to collect an amount (however designated) that
20purports to reimburse that lessor for the tax imposed by this
21Act or the Service Use Tax Act, as the case may be, if the tax
22has not been paid by the lessor. If a lessor improperly
23collects any such amount from the lessee, the lessee shall have
24a legal right to claim a refund of that amount from the lessor.
25If, however, that amount is not refunded to the lessee for any
26reason, the lessor is liable to pay that amount to the

 

 

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

 

 

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1manufacturer or retailer that is registered in this State to a
2corporation, society, association, foundation, or institution
3that has been issued a sales tax exemption identification
4number by the Department that assists victims of the disaster
5who reside within the declared disaster area.
6    (25) Beginning with taxable years ending on or after
7December 31, 1995 and ending with taxable years ending on or
8before December 31, 2004, personal property that is used in the
9performance of infrastructure repairs in this State, including
10but not limited to municipal roads and streets, access roads,
11bridges, sidewalks, waste disposal systems, water and sewer
12line extensions, water distribution and purification
13facilities, storm water drainage and retention facilities, and
14sewage treatment facilities, resulting from a State or
15federally declared disaster in Illinois or bordering Illinois
16when such repairs are initiated on facilities located in the
17declared disaster area within 6 months after the disaster.
18    (26) Beginning July 1, 1999, game or game birds purchased
19at a "game breeding and hunting preserve area" as that term is
20used in the Wildlife Code. This paragraph is exempt from the
21provisions of Section 3-90.
22    (27) A motor vehicle, as that term is defined in Section
231-146 of the Illinois Vehicle Code, that is donated to a
24corporation, limited liability company, society, association,
25foundation, or institution that is determined by the Department
26to be organized and operated exclusively for educational

 

 

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

 

 

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1exempt from the provisions of Section 3-90.
2    (29) Beginning January 1, 2000 and through December 31,
32001, new or used automatic vending machines that prepare and
4serve hot food and beverages, including coffee, soup, and other
5items, and replacement parts for these machines. Beginning
6January 1, 2002 and through June 30, 2003, machines and parts
7for machines used in commercial, coin-operated amusement and
8vending business if a use or occupation tax is paid on the
9gross receipts derived from the use of the commercial,
10coin-operated amusement and vending machines. This paragraph
11is exempt from the provisions of Section 3-90.
12    (30) Beginning January 1, 2001 and through June 30, 2016,
13food for human consumption that is to be consumed off the
14premises where it is sold (other than alcoholic beverages, soft
15drinks, and food that has been prepared for immediate
16consumption) and prescription and nonprescription medicines,
17drugs, medical appliances, and insulin, urine testing
18materials, syringes, and needles used by diabetics, for human
19use, when purchased for use by a person receiving medical
20assistance under Article V of the Illinois Public Aid Code who
21resides in a licensed long-term care facility, as defined in
22the Nursing Home Care Act, or in a licensed facility as defined
23in the ID/DD Community Care Act, the MC/DD Act, or the
24Specialized Mental Health Rehabilitation Act of 2013.
25    (31) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227), computers and communications equipment

 

 

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

 

 

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1executed or in effect at the time the lessor would otherwise be
2subject to the tax imposed by this Act, to a governmental body
3that has been issued an active sales tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the property is leased in a
6manner that does not qualify for this exemption or used in any
7other nonexempt manner, the lessor shall be liable for the tax
8imposed under this Act or the Service Use Tax Act, as the case
9may be, based on the fair market value of the property at the
10time the nonqualifying use occurs. No lessor shall collect or
11attempt to collect an amount (however designated) that purports
12to reimburse that lessor for the tax imposed by this Act or the
13Service Use Tax Act, as the case may be, if the tax has not been
14paid by the lessor. If a lessor improperly collects any such
15amount from the lessee, the lessee shall have a legal right to
16claim a refund of that amount from the lessor. If, however,
17that amount is not refunded to the lessee for any reason, the
18lessor is liable to pay that amount to the Department. This
19paragraph is exempt from the provisions of Section 3-90.
20    (33) On and after July 1, 2003 and through June 30, 2004,
21the use in this State of motor vehicles of the second division
22with a gross vehicle weight in excess of 8,000 pounds and that
23are subject to the commercial distribution fee imposed under
24Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
251, 2004 and through June 30, 2005, the use in this State of
26motor vehicles of the second division: (i) with a gross vehicle

 

 

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1weight rating in excess of 8,000 pounds; (ii) that are subject
2to the commercial distribution fee imposed under Section
33-815.1 of the Illinois Vehicle Code; and (iii) that are
4primarily used for commercial purposes. Through June 30, 2005,
5this exemption applies to repair and replacement parts added
6after the initial purchase of such a motor vehicle if that
7motor vehicle is used in a manner that would qualify for the
8rolling stock exemption otherwise provided for in this Act. For
9purposes of this paragraph, the term "used for commercial
10purposes" means the transportation of persons or property in
11furtherance of any commercial or industrial enterprise,
12whether for-hire or not.
13    (34) Beginning January 1, 2008, tangible personal property
14used in the construction or maintenance of a community water
15supply, as defined under Section 3.145 of the Environmental
16Protection Act, that is operated by a not-for-profit
17corporation that holds a valid water supply permit issued under
18Title IV of the Environmental Protection Act. This paragraph is
19exempt from the provisions of Section 3-90.
20    (35) Beginning January 1, 2010, materials, parts,
21equipment, components, and furnishings incorporated into or
22upon an aircraft as part of the modification, refurbishment,
23completion, replacement, repair, or maintenance of the
24aircraft. This exemption includes consumable supplies used in
25the modification, refurbishment, completion, replacement,
26repair, and maintenance of aircraft, but excludes any

 

 

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1materials, parts, equipment, components, and consumable
2supplies used in the modification, replacement, repair, and
3maintenance of aircraft engines or power plants, whether such
4engines or power plants are installed or uninstalled upon any
5such aircraft. "Consumable supplies" include, but are not
6limited to, adhesive, tape, sandpaper, general purpose
7lubricants, cleaning solution, latex gloves, and protective
8films. This exemption applies only to the use of qualifying
9tangible personal property by persons who modify, refurbish,
10complete, repair, replace, or maintain aircraft and who (i)
11hold an Air Agency Certificate and are empowered to operate an
12approved repair station by the Federal Aviation
13Administration, (ii) have a Class IV Rating, and (iii) conduct
14operations in accordance with Part 145 of the Federal Aviation
15Regulations. The exemption does not include aircraft operated
16by a commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part 129
18of the Federal Aviation Regulations. The changes made to this
19paragraph (35) by Public Act 98-534 are declarative of existing
20law.
21    (36) Tangible personal property purchased by a
22public-facilities corporation, as described in Section
2311-65-10 of the Illinois Municipal Code, for purposes of
24constructing or furnishing a municipal convention hall, but
25only if the legal title to the municipal convention hall is
26transferred to the municipality without any further

 

 

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1consideration by or on behalf of the municipality at the time
2of the completion of the municipal convention hall or upon the
3retirement or redemption of any bonds or other debt instruments
4issued by the public-facilities corporation in connection with
5the development of the municipal convention hall. This
6exemption includes existing public-facilities corporations as
7provided in Section 11-65-25 of the Illinois Municipal Code.
8This paragraph is exempt from the provisions of Section 3-90.
9    (37) Beginning January 1, 2017, menstrual pads, tampons,
10and menstrual cups.
11    (38) Merchandise that is subject to the Rental Purchase
12Agreement Occupation and Use Tax. The purchaser must certify
13that the item is purchased to be rented subject to a rental
14purchase agreement, as defined in the Rental Purchase Agreement
15Act, and provide proof of registration under the Rental
16Purchase Agreement Occupation and Use Tax Act. This paragraph
17is exempt from the provisions of Section 3-90.
18    (39) Tangible personal property purchased by a purchaser
19who is exempt from the tax imposed by this Act by operation of
20federal law. This paragraph is exempt from the provisions of
21Section 3-90.
22    (40) Qualified tangible personal property used in the
23construction or operation of a data center that has been
24granted a certificate of exemption by the Department of
25Commerce and Economic Opportunity, whether that tangible
26personal property is purchased by the owner, operator, or

 

 

SB2945- 19 -LRB101 18127 HLH 67567 b

1tenant of the data center or by a contractor or subcontractor
2of the owner, operator, or tenant. Data centers that would have
3qualified for a certificate of exemption prior to January 1,
42020 had Public Act 101-31 this amendatory Act of the 101st
5General Assembly been in effect, may apply for and obtain an
6exemption for subsequent purchases of computer equipment or
7enabling software purchased or leased to upgrade, supplement,
8or replace computer equipment or enabling software purchased or
9leased in the original investment that would have qualified.
10    The Department of Commerce and Economic Opportunity shall
11grant a certificate of exemption under this item (40) to
12qualified data centers as defined by Section 605-1025 of the
13Department of Commerce and Economic Opportunity Law of the
14Civil Administrative Code of Illinois.
15    For the purposes of this item (40):
16        "Data center" means a building or a series of buildings
17    rehabilitated or constructed to house working servers in
18    one physical location or multiple sites within the State of
19    Illinois.
20        "Qualified tangible personal property" means:
21    electrical systems and equipment; climate control and
22    chilling equipment and systems; mechanical systems and
23    equipment; monitoring and secure systems; emergency
24    generators; hardware; computers; servers; data storage
25    devices; network connectivity equipment; racks; cabinets;
26    telecommunications cabling infrastructure; raised floor

 

 

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1    systems; peripheral components or systems; software;
2    mechanical, electrical, or plumbing systems; battery
3    systems; cooling systems and towers; temperature control
4    systems; other cabling; and other data center
5    infrastructure equipment and systems necessary to operate
6    qualified tangible personal property, including fixtures;
7    and component parts of any of the foregoing, including
8    installation, maintenance, repair, refurbishment, and
9    replacement of qualified tangible personal property to
10    generate, transform, transmit, distribute, or manage
11    electricity necessary to operate qualified tangible
12    personal property; and all other tangible personal
13    property that is essential to the operations of a computer
14    data center. The term "qualified tangible personal
15    property" also includes building materials physically
16    incorporated in to the qualifying data center. To document
17    the exemption allowed under this Section, the retailer must
18    obtain from the purchaser a copy of the certificate of
19    eligibility issued by the Department of Commerce and
20    Economic Opportunity.
21    This item (40) is exempt from the provisions of Section
223-90.
23    (41) Beginning on January 1, 2021, feed, including hay, for
24livestock, horses, and poultry. This item (41) is exempt from
25the provisions of Section 3-90.
26(Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18;

 

 

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1100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff.
21-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff.
37-12-19; revised 9-23-19.)
 
4    Section 10. The Service Use Tax Act is amended by changing
5Section 3-5 as follows:
 
6    (35 ILCS 110/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a non-profit Illinois
17county fair association for use in conducting, operating, or
18promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or
24support of arts or cultural programming, activities, or

 

 

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1services. These organizations include, but are not limited to,
2music and dramatic arts organizations such as symphony
3orchestras and theatrical groups, arts and cultural service
4organizations, local arts councils, visual arts organizations,
5and media arts organizations. On and after July 1, 2001 (the
6effective date of Public Act 92-35), however, an entity
7otherwise eligible for this exemption shall not make tax-free
8purchases unless it has an active identification number issued
9by the Department.
10    (4) Legal tender, currency, medallions, or gold or silver
11coinage issued by the State of Illinois, the government of the
12United States of America, or the government of any foreign
13country, and bullion.
14    (5) 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 or
18purchased for lease, certified by the purchaser to be used
19primarily for graphic arts production. Equipment includes
20chemicals or chemicals acting as catalysts but only if the
21chemicals or chemicals acting as catalysts effect a direct and
22immediate change upon a graphic arts product. Beginning on July
231, 2017, graphic arts machinery and equipment is included in
24the manufacturing and assembling machinery and equipment
25exemption under Section 2 of this Act.
26    (6) Personal property purchased from a teacher-sponsored

 

 

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

 

 

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1limited to, soil testing sensors, computers, monitors,
2software, global positioning and mapping systems, and other
3such equipment.
4    Farm machinery and equipment also includes computers,
5sensors, software, and related equipment used primarily in the
6computer-assisted operation of production agriculture
7facilities, equipment, and activities such as, but not limited
8to, the collection, monitoring, and correlation of animal and
9crop data for the purpose of formulating animal diets and
10agricultural chemicals. This item (7) is exempt from the
11provisions of Section 3-75.
12    (8) Until June 30, 2013, fuel and petroleum products sold
13to or used by an air common carrier, certified by the carrier
14to be used for consumption, shipment, or storage in the conduct
15of its business as an air common carrier, for a flight destined
16for or returning from a location or locations outside the
17United States without regard to previous or subsequent domestic
18stopovers.
19    Beginning July 1, 2013, fuel and petroleum products sold to
20or used by an air carrier, certified by the carrier to be used
21for consumption, shipment, or storage in the conduct of its
22business as an air common carrier, for a flight that (i) is
23engaged in foreign trade or is engaged in trade between the
24United States and any of its possessions and (ii) transports at
25least one individual or package for hire from the city of
26origination to the city of final destination on the same

 

 

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1aircraft, without regard to a change in the flight number of
2that aircraft.
3    (9) Proceeds of mandatory service charges separately
4stated on customers' bills for the purchase and consumption of
5food and beverages acquired as an incident to the purchase of a
6service from a serviceman, to the extent that the proceeds of
7the service charge are in fact turned over as tips or as a
8substitute for tips to the employees who participate directly
9in preparing, serving, hosting or cleaning up the food or
10beverage function with respect to which the service charge is
11imposed.
12    (10) Until July 1, 2003, oil field exploration, drilling,
13and production equipment, including (i) rigs and parts of rigs,
14rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
15tubular goods, including casing and drill strings, (iii) pumps
16and pump-jack units, (iv) storage tanks and flow lines, (v) any
17individual replacement part for oil field exploration,
18drilling, and production equipment, and (vi) machinery and
19equipment purchased for lease; but excluding motor vehicles
20required to be registered under the Illinois Vehicle Code.
21    (11) Proceeds from the sale of photoprocessing machinery
22and equipment, including repair and replacement parts, both new
23and used, including that manufactured on special order,
24certified by the purchaser to be used primarily for
25photoprocessing, and including photoprocessing machinery and
26equipment purchased for lease.

 

 

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1    (12) Until July 1, 2023, coal and aggregate exploration,
2mining, off-highway hauling, processing, maintenance, and
3reclamation equipment, including replacement parts and
4equipment, and including equipment purchased for lease, but
5excluding motor vehicles required to be registered under the
6Illinois Vehicle Code. The changes made to this Section by
7Public Act 97-767 apply on and after July 1, 2003, but no claim
8for credit or refund is allowed on or after August 16, 2013
9(the effective date of Public Act 98-456) for such taxes paid
10during the period beginning July 1, 2003 and ending on August
1116, 2013 (the effective date of Public Act 98-456).
12    (13) Semen used for artificial insemination of livestock
13for direct agricultural production.
14    (14) Horses, or interests in horses, registered with and
15meeting the requirements of any of the Arabian Horse Club
16Registry of America, Appaloosa Horse Club, American Quarter
17Horse Association, United States Trotting Association, or
18Jockey Club, as appropriate, used for purposes of breeding or
19racing for prizes. This item (14) is exempt from the provisions
20of Section 3-75, and the exemption provided for under this item
21(14) applies for all periods beginning May 30, 1995, but no
22claim for credit or refund is allowed on or after January 1,
232008 (the effective date of Public Act 95-88) for such taxes
24paid during the period beginning May 30, 2000 and ending on
25January 1, 2008 (the effective date of Public Act 95-88).
26    (15) Computers and communications equipment utilized for

 

 

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

 

 

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

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in the
3performance of infrastructure repairs in this State, including
4but not limited to municipal roads and streets, access roads,
5bridges, sidewalks, waste disposal systems, water and sewer
6line extensions, water distribution and purification
7facilities, storm water drainage and retention facilities, and
8sewage treatment facilities, resulting from a State or
9federally declared disaster in Illinois or bordering Illinois
10when such repairs are initiated on facilities located in the
11declared disaster area within 6 months after the disaster.
12    (19) Beginning July 1, 1999, game or game birds purchased
13at a "game breeding and hunting preserve area" as that term is
14used in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 3-75.
16    (20) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the Department
20to be organized and operated exclusively for educational
21purposes. For purposes of this exemption, "a corporation,
22limited liability company, society, association, foundation,
23or institution organized and operated exclusively for
24educational purposes" means all tax-supported public schools,
25private schools that offer systematic instruction in useful
26branches of learning by methods common to public schools and

 

 

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1that compare favorably in their scope and intensity with the
2course of study presented in tax-supported schools, and
3vocational or technical schools or institutes organized and
4operated exclusively to provide a course of study of not less
5than 6 weeks duration and designed to prepare individuals to
6follow a trade or to pursue a manual, technical, mechanical,
7industrial, business, or commercial occupation.
8    (21) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 3-75.
22    (22) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and other
25items, and replacement parts for these machines. Beginning
26January 1, 2002 and through June 30, 2003, machines and parts

 

 

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1for machines used in commercial, coin-operated amusement and
2vending business if a use or occupation tax is paid on the
3gross receipts derived from the use of the commercial,
4coin-operated amusement and vending machines. This paragraph
5is exempt from the provisions of Section 3-75.
6    (23) Beginning August 23, 2001 and through June 30, 2016,
7food for human consumption that is to be consumed off the
8premises where it is sold (other than alcoholic beverages, soft
9drinks, and food that has been prepared for immediate
10consumption) and prescription and nonprescription medicines,
11drugs, medical appliances, and insulin, urine testing
12materials, syringes, and needles used by diabetics, for human
13use, when purchased for use by a person receiving medical
14assistance under Article V of the Illinois Public Aid Code who
15resides in a licensed long-term care facility, as defined in
16the Nursing Home Care Act, or in a licensed facility as defined
17in the ID/DD Community Care Act, the MC/DD Act, or the
18Specialized Mental Health Rehabilitation Act of 2013.
19    (24) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227), computers and communications equipment
21utilized for any hospital purpose and equipment used in the
22diagnosis, analysis, or treatment of hospital patients
23purchased by a lessor who leases the equipment, under a lease
24of one year or longer executed or in effect at the time the
25lessor would otherwise be subject to the tax imposed by this
26Act, to a hospital 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. If the equipment is leased in a
3manner that does not qualify for this exemption or is used in
4any other nonexempt manner, the lessor shall be liable for the
5tax imposed under this Act or the Use Tax Act, as the case may
6be, based on the fair market value of the property at the time
7the nonqualifying use occurs. No lessor shall collect or
8attempt to collect an amount (however designated) that purports
9to reimburse that lessor for the tax imposed by this Act or the
10Use Tax Act, as the case may be, if the tax has not been paid by
11the lessor. If a lessor improperly collects any such amount
12from the lessee, the lessee shall have a legal right to claim a
13refund of that amount from the lessor. If, however, that amount
14is not refunded to the lessee for any reason, the lessor is
15liable to pay that amount to the Department. This paragraph is
16exempt from the provisions of Section 3-75.
17    (25) Beginning on August 2, 2001 (the effective date of
18Public Act 92-227), personal property purchased by a lessor who
19leases the property, under a lease of one year or longer
20executed or in effect at the time the lessor would otherwise be
21subject to the tax imposed by this Act, to a governmental body
22that has been issued an active tax exemption identification
23number by the Department under Section 1g of the Retailers'
24Occupation Tax Act. If the property is leased in a manner that
25does not qualify for this exemption or is used in any other
26nonexempt manner, the lessor shall be liable for the tax

 

 

SB2945- 33 -LRB101 18127 HLH 67567 b

1imposed under this Act or the Use Tax Act, as the case may be,
2based on the fair market value of the property at the time the
3nonqualifying use occurs. No lessor shall collect or attempt to
4collect an amount (however designated) that purports to
5reimburse that lessor for the tax imposed by this Act or the
6Use Tax Act, as the case may be, if the tax has not been paid by
7the lessor. If a lessor improperly collects any such amount
8from the lessee, the lessee shall have a legal right to claim a
9refund of that amount from the lessor. If, however, that amount
10is not refunded to the lessee for any reason, the lessor is
11liable to pay that amount to the Department. This paragraph is
12exempt from the provisions of Section 3-75.
13    (26) Beginning January 1, 2008, tangible personal property
14used in the construction or maintenance of a community water
15supply, as defined under Section 3.145 of the Environmental
16Protection Act, that is operated by a not-for-profit
17corporation that holds a valid water supply permit issued under
18Title IV of the Environmental Protection Act. This paragraph is
19exempt from the provisions of Section 3-75.
20    (27) Beginning January 1, 2010, materials, parts,
21equipment, components, and furnishings incorporated into or
22upon an aircraft as part of the modification, refurbishment,
23completion, replacement, repair, or maintenance of the
24aircraft. This exemption includes consumable supplies used in
25the modification, refurbishment, completion, replacement,
26repair, and maintenance of aircraft, but excludes any

 

 

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1materials, parts, equipment, components, and consumable
2supplies used in the modification, replacement, repair, and
3maintenance of aircraft engines or power plants, whether such
4engines or power plants are installed or uninstalled upon any
5such aircraft. "Consumable supplies" include, but are not
6limited to, adhesive, tape, sandpaper, general purpose
7lubricants, cleaning solution, latex gloves, and protective
8films. This exemption applies only to the use of qualifying
9tangible personal property transferred incident to the
10modification, refurbishment, completion, replacement, repair,
11or maintenance of aircraft by persons who (i) hold an Air
12Agency Certificate and are empowered to operate an approved
13repair station by the Federal Aviation Administration, (ii)
14have a Class IV Rating, and (iii) conduct operations in
15accordance with Part 145 of the Federal Aviation Regulations.
16The exemption does not include aircraft operated by a
17commercial air carrier providing scheduled passenger air
18service pursuant to authority issued under Part 121 or Part 129
19of the Federal Aviation Regulations. The changes made to this
20paragraph (27) by Public Act 98-534 are declarative of existing
21law.
22    (28) Tangible personal property purchased by a
23public-facilities corporation, as described in Section
2411-65-10 of the Illinois Municipal Code, for purposes of
25constructing or furnishing a municipal convention hall, but
26only if the legal title to the municipal convention hall is

 

 

SB2945- 35 -LRB101 18127 HLH 67567 b

1transferred to the municipality without any further
2consideration by or on behalf of the municipality at the time
3of the completion of the municipal convention hall or upon the
4retirement or redemption of any bonds or other debt instruments
5issued by the public-facilities corporation in connection with
6the development of the municipal convention hall. This
7exemption includes existing public-facilities corporations as
8provided in Section 11-65-25 of the Illinois Municipal Code.
9This paragraph is exempt from the provisions of Section 3-75.
10    (29) Beginning January 1, 2017, menstrual pads, tampons,
11and menstrual cups.
12    (30) Tangible personal property transferred to a purchaser
13who is exempt from the tax imposed by this Act by operation of
14federal law. This paragraph is exempt from the provisions of
15Section 3-75.
16    (31) Qualified tangible personal property used in the
17construction or operation of a data center that has been
18granted a certificate of exemption by the Department of
19Commerce and Economic Opportunity, whether that tangible
20personal property is purchased by the owner, operator, or
21tenant of the data center or by a contractor or subcontractor
22of the owner, operator, or tenant. Data centers that would have
23qualified for a certificate of exemption prior to January 1,
242020 had this amendatory Act of the 101st General Assembly been
25in effect, may apply for and obtain an exemption for subsequent
26purchases of computer equipment or enabling software purchased

 

 

SB2945- 36 -LRB101 18127 HLH 67567 b

1or leased to upgrade, supplement, or replace computer equipment
2or enabling software purchased or leased in the original
3investment that would have qualified.
4    The Department of Commerce and Economic Opportunity shall
5grant a certificate of exemption under this item (31) to
6qualified data centers as defined by Section 605-1025 of the
7Department of Commerce and Economic Opportunity Law of the
8Civil Administrative Code of Illinois.
9    For the purposes of this item (31):
10        "Data center" means a building or a series of buildings
11    rehabilitated or constructed to house working servers in
12    one physical location or multiple sites within the State of
13    Illinois.
14        "Qualified tangible personal property" means:
15    electrical systems and equipment; climate control and
16    chilling equipment and systems; mechanical systems and
17    equipment; monitoring and secure systems; emergency
18    generators; hardware; computers; servers; data storage
19    devices; network connectivity equipment; racks; cabinets;
20    telecommunications cabling infrastructure; raised floor
21    systems; peripheral components or systems; software;
22    mechanical, electrical, or plumbing systems; battery
23    systems; cooling systems and towers; temperature control
24    systems; other cabling; and other data center
25    infrastructure equipment and systems necessary to operate
26    qualified tangible personal property, including fixtures;

 

 

SB2945- 37 -LRB101 18127 HLH 67567 b

1    and component parts of any of the foregoing, including
2    installation, maintenance, repair, refurbishment, and
3    replacement of qualified tangible personal property to
4    generate, transform, transmit, distribute, or manage
5    electricity necessary to operate qualified tangible
6    personal property; and all other tangible personal
7    property that is essential to the operations of a computer
8    data center. The term "qualified tangible personal
9    property" also includes building materials physically
10    incorporated in to the qualifying data center. To document
11    the exemption allowed under this Section, the retailer must
12    obtain from the purchaser a copy of the certificate of
13    eligibility issued by the Department of Commerce and
14    Economic Opportunity.
15    This item (31) is exempt from the provisions of Section
163-75.
17    (32) Beginning on January 1, 2021, feed, including hay, for
18livestock, horses, and poultry. This item (32) is exempt from
19the provisions of Section 3-75.
20(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
21100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
227-12-19.)
 
23    Section 15. The Service Occupation Tax Act is amended by
24changing Section 3-5 as follows:
 

 

 

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1    (35 ILCS 115/3-5)
2    Sec. 3-5. Exemptions. The following tangible personal
3property is exempt from the tax imposed by this Act:
4    (1) Personal property sold by a corporation, society,
5association, foundation, institution, or organization, other
6than a limited liability company, that is organized and
7operated as a not-for-profit service enterprise for the benefit
8of persons 65 years of age or older if the personal property
9was not purchased by the enterprise for the purpose of resale
10by the enterprise.
11    (2) Personal property purchased by a not-for-profit
12Illinois county fair association for use in conducting,
13operating, or promoting the county fair.
14    (3) Personal property purchased by any not-for-profit arts
15or cultural organization that establishes, by proof required by
16the Department by rule, that it has received an exemption under
17Section 501(c)(3) of the Internal Revenue Code and that is
18organized and operated primarily for the presentation or
19support of arts or cultural programming, activities, or
20services. These organizations include, but are not limited to,
21music and dramatic arts organizations such as symphony
22orchestras and theatrical groups, arts and cultural service
23organizations, local arts councils, visual arts organizations,
24and media arts organizations. On and after July 1, 2001 (the
25effective date of Public Act 92-35), however, an entity
26otherwise eligible for this exemption shall not make tax-free

 

 

SB2945- 39 -LRB101 18127 HLH 67567 b

1purchases unless it has an active identification number issued
2by the Department.
3    (4) Legal tender, currency, medallions, or gold or silver
4coinage issued by the State of Illinois, the government of the
5United States of America, or the government of any foreign
6country, and bullion.
7    (5) Until July 1, 2003 and beginning again on September 1,
82004 through August 30, 2014, graphic arts machinery and
9equipment, including repair and replacement parts, both new and
10used, and including that manufactured on special order or
11purchased for lease, certified by the purchaser to be used
12primarily for graphic arts production. Equipment includes
13chemicals or chemicals acting as catalysts but only if the
14chemicals or chemicals acting as catalysts effect a direct and
15immediate change upon a graphic arts product. Beginning on July
161, 2017, graphic arts machinery and equipment is included in
17the manufacturing and assembling machinery and equipment
18exemption under Section 2 of this Act.
19    (6) Personal property sold by a teacher-sponsored student
20organization affiliated with an elementary or secondary school
21located in Illinois.
22    (7) Farm machinery and equipment, both new and used,
23including that manufactured on special order, certified by the
24purchaser to be used primarily for production agriculture or
25State or federal agricultural programs, including individual
26replacement parts for the machinery and equipment, including

 

 

SB2945- 40 -LRB101 18127 HLH 67567 b

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

 

 

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

 

 

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

 

 

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1during the period beginning July 1, 2003 and ending on August
216, 2013 (the effective date of Public Act 98-456).
3    (13) Beginning January 1, 1992 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages, soft
6drinks and food that has been prepared for immediate
7consumption) and prescription and non-prescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16    (14) Semen used for artificial insemination of livestock
17for direct agricultural production.
18    (15) Horses, or interests in horses, registered with and
19meeting the requirements of any of the Arabian Horse Club
20Registry of America, Appaloosa Horse Club, American Quarter
21Horse Association, United States Trotting Association, or
22Jockey Club, as appropriate, used for purposes of breeding or
23racing for prizes. This item (15) is exempt from the provisions
24of Section 3-55, and the exemption provided for under this item
25(15) applies for all periods beginning May 30, 1995, but no
26claim for credit or refund is allowed on or after January 1,

 

 

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12008 (the effective date of Public Act 95-88) for such taxes
2paid during the period beginning May 30, 2000 and ending on
3January 1, 2008 (the effective date of Public Act 95-88).
4    (16) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients sold to a lessor
7who leases the equipment, under a lease of one year or longer
8executed or in effect at the time of the purchase, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act.
12    (17) 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.
18    (18) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is donated for
21disaster relief to be used in a State or federally declared
22disaster area in Illinois or bordering Illinois by a
23manufacturer or retailer that is registered in this State to a
24corporation, society, association, foundation, or institution
25that has been issued a sales tax exemption identification
26number by the Department that assists victims of the disaster

 

 

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1who reside within the declared disaster area.
2    (19) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is used in the
5performance of infrastructure repairs in this State, including
6but not limited to municipal roads and streets, access roads,
7bridges, sidewalks, waste disposal systems, water and sewer
8line extensions, water distribution and purification
9facilities, storm water drainage and retention facilities, and
10sewage treatment facilities, resulting from a State or
11federally declared disaster in Illinois or bordering Illinois
12when such repairs are initiated on facilities located in the
13declared disaster area within 6 months after the disaster.
14    (20) Beginning July 1, 1999, game or game birds sold at a
15"game breeding and hunting preserve area" as that term is used
16in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-55.
18    (21) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the Department
22to be organized and operated exclusively for educational
23purposes. For purposes of this exemption, "a corporation,
24limited liability company, society, association, foundation,
25or institution organized and operated exclusively for
26educational purposes" means all tax-supported public schools,

 

 

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1private schools that offer systematic instruction in useful
2branches of learning by methods common to public schools and
3that compare favorably in their scope and intensity with the
4course of study presented in tax-supported schools, and
5vocational or technical schools or institutes organized and
6operated exclusively to provide a course of study of not less
7than 6 weeks duration and designed to prepare individuals to
8follow a trade or to pursue a manual, technical, mechanical,
9industrial, business, or commercial occupation.
10    (22) Beginning January 1, 2000, personal property,
11including food, purchased through fundraising events for the
12benefit of a public or private elementary or secondary school,
13a group of those schools, or one or more school districts if
14the events are sponsored by an entity recognized by the school
15district that consists primarily of volunteers and includes
16parents and teachers of the school children. This paragraph
17does not apply to fundraising events (i) for the benefit of
18private home instruction or (ii) for which the fundraising
19entity purchases the personal property sold at the events from
20another individual or entity that sold the property for the
21purpose of resale by the fundraising entity and that profits
22from the sale to the fundraising entity. This paragraph is
23exempt from the provisions of Section 3-55.
24    (23) Beginning January 1, 2000 and through December 31,
252001, new or used automatic vending machines that prepare and
26serve hot food and beverages, including coffee, soup, and other

 

 

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1items, and replacement parts for these machines. Beginning
2January 1, 2002 and through June 30, 2003, machines and parts
3for machines used in commercial, coin-operated amusement and
4vending business if a use or occupation tax is paid on the
5gross receipts derived from the use of the commercial,
6coin-operated amusement and vending machines. This paragraph
7is exempt from the provisions of Section 3-55.
8    (24) 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 sold to
12a lessor who leases the equipment, under a lease of one year or
13longer executed or in effect at the time of the purchase, 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. This paragraph is exempt from
17the provisions of Section 3-55.
18    (25) Beginning on August 2, 2001 (the effective date of
19Public Act 92-227), personal property sold to a lessor who
20leases the property, under a lease of one year or longer
21executed or in effect at the time of the purchase, to a
22governmental body that has been issued an active tax exemption
23identification number by the Department under Section 1g of the
24Retailers' Occupation Tax Act. This paragraph is exempt from
25the provisions of Section 3-55.
26    (26) Beginning on January 1, 2002 and through June 30,

 

 

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

 

 

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

 

 

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

 

 

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1granted a certificate of exemption by the Department of
2Commerce and Economic Opportunity, whether that tangible
3personal property is purchased by the owner, operator, or
4tenant of the data center or by a contractor or subcontractor
5of the owner, operator, or tenant. Data centers that would have
6qualified for a certificate of exemption prior to January 1,
72020 had this amendatory Act of the 101st General Assembly been
8in effect, may apply for and obtain an exemption for subsequent
9purchases of computer equipment or enabling software purchased
10or leased to upgrade, supplement, or replace computer equipment
11or enabling software purchased or leased in the original
12investment that would have qualified.
13    The Department of Commerce and Economic Opportunity shall
14grant a certificate of exemption under this item (32) to
15qualified data centers as defined by Section 605-1025 of the
16Department of Commerce and Economic Opportunity Law of the
17Civil Administrative Code of Illinois.
18    For the purposes of this item (32):
19        "Data center" means a building or a series of buildings
20    rehabilitated or constructed to house working servers in
21    one physical location or multiple sites within the State of
22    Illinois.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency

 

 

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1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. The term "qualified tangible personal
18    property" also includes building materials physically
19    incorporated in to the qualifying data center. To document
20    the exemption allowed under this Section, the retailer must
21    obtain from the purchaser a copy of the certificate of
22    eligibility issued by the Department of Commerce and
23    Economic Opportunity.
24    This item (32) is exempt from the provisions of Section
253-55.
26    (33) Beginning on January 1, 2021, feed, including hay, for

 

 

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1livestock, horses, and poultry. This item (33) is exempt from
2the provisions of Section 3-55.
3(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
4100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
57-12-19.)
 
6    Section 20. The Retailers' Occupation Tax Act is amended by
7changing Section 2-5 as follows:
 
8    (35 ILCS 120/2-5)
9    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
10sale of the following tangible personal property are exempt
11from the tax imposed by this Act:
12        (1) Farm chemicals.
13        (2) Farm machinery and equipment, both new and used,
14    including that manufactured on special order, certified by
15    the purchaser to be used primarily for production
16    agriculture or State or federal agricultural programs,
17    including individual replacement parts for the machinery
18    and equipment, including machinery and equipment purchased
19    for lease, and including implements of husbandry defined in
20    Section 1-130 of the Illinois Vehicle Code, farm machinery
21    and agricultural chemical and fertilizer spreaders, and
22    nurse wagons required to be registered under Section 3-809
23    of the Illinois Vehicle Code, but excluding other motor
24    vehicles required to be registered under the Illinois

 

 

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1    Vehicle Code. Horticultural polyhouses or hoop houses used
2    for propagating, growing, or overwintering plants shall be
3    considered farm machinery and equipment under this item
4    (2). Agricultural chemical tender tanks and dry boxes shall
5    include units sold separately from a motor vehicle required
6    to be licensed and units sold mounted on a motor vehicle
7    required to be licensed, if the selling price of the tender
8    is separately stated.
9        Farm machinery and equipment shall include precision
10    farming equipment that is installed or purchased to be
11    installed on farm machinery and equipment including, but
12    not limited to, tractors, harvesters, sprayers, planters,
13    seeders, or spreaders. Precision farming equipment
14    includes, but is not limited to, soil testing sensors,
15    computers, monitors, software, global positioning and
16    mapping systems, and other such equipment.
17        Farm machinery and equipment also includes computers,
18    sensors, software, and related equipment used primarily in
19    the computer-assisted operation of production agriculture
20    facilities, equipment, and activities such as, but not
21    limited to, the collection, monitoring, and correlation of
22    animal and crop data for the purpose of formulating animal
23    diets and agricultural chemicals. This item (2) is exempt
24    from the provisions of Section 2-70.
25        (3) Until July 1, 2003, distillation machinery and
26    equipment, sold as a unit or kit, assembled or installed by

 

 

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1    the retailer, certified by the user to be used only for the
2    production of ethyl alcohol that will be used for
3    consumption as motor fuel or as a component of motor fuel
4    for the personal use of the user, and not subject to sale
5    or resale.
6        (4) Until July 1, 2003 and beginning again September 1,
7    2004 through August 30, 2014, graphic arts machinery and
8    equipment, including repair and replacement parts, both
9    new and used, and including that manufactured on special
10    order or purchased for lease, certified by the purchaser to
11    be used primarily for graphic arts production. Equipment
12    includes chemicals or chemicals acting as catalysts but
13    only if the chemicals or chemicals acting as catalysts
14    effect a direct and immediate change upon a graphic arts
15    product. Beginning on July 1, 2017, graphic arts machinery
16    and equipment is included in the manufacturing and
17    assembling machinery and equipment exemption under
18    paragraph (14).
19        (5) A motor vehicle that is used for automobile
20    renting, as defined in the Automobile Renting Occupation
21    and Use Tax Act. This paragraph is exempt from the
22    provisions of Section 2-70.
23        (6) Personal property sold by a teacher-sponsored
24    student organization affiliated with an elementary or
25    secondary school located in Illinois.
26        (7) Until July 1, 2003, proceeds of that portion of the

 

 

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

 

 

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

 

 

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1    under Section 3-815.1 of the Illinois Vehicle Code; and
2    (iii) that are primarily used for commercial purposes.
3    Through June 30, 2005, this exemption applies to repair and
4    replacement parts added after the initial purchase of such
5    a motor vehicle if that motor vehicle is used in a manner
6    that would qualify for the rolling stock exemption
7    otherwise provided for in this Act. For purposes of this
8    paragraph, "used for commercial purposes" means the
9    transportation of persons or property in furtherance of any
10    commercial or industrial enterprise whether for-hire or
11    not.
12        (13) Proceeds from sales to owners, lessors, or
13    shippers of tangible personal property that is utilized by
14    interstate carriers for hire for use as rolling stock
15    moving in interstate commerce and equipment operated by a
16    telecommunications provider, licensed as a common carrier
17    by the Federal Communications Commission, which is
18    permanently installed in or affixed to aircraft moving in
19    interstate commerce.
20        (14) Machinery and equipment that will be used by the
21    purchaser, or a lessee of the purchaser, primarily in the
22    process of manufacturing or assembling tangible personal
23    property for wholesale or retail sale or lease, whether the
24    sale or lease is made directly by the manufacturer or by
25    some other person, whether the materials used in the
26    process are owned by the manufacturer or some other person,

 

 

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1    or whether the sale or lease is made apart from or as an
2    incident to the seller's engaging in the service occupation
3    of producing machines, tools, dies, jigs, patterns,
4    gauges, or other similar items of no commercial value on
5    special order for a particular purchaser. The exemption
6    provided by this paragraph (14) does not include machinery
7    and equipment used in (i) the generation of electricity for
8    wholesale or retail sale; (ii) the generation or treatment
9    of natural or artificial gas for wholesale or retail sale
10    that is delivered to customers through pipes, pipelines, or
11    mains; or (iii) the treatment of water for wholesale or
12    retail sale that is delivered to customers through pipes,
13    pipelines, or mains. The provisions of Public Act 98-583
14    are declaratory of existing law as to the meaning and scope
15    of this exemption. Beginning on July 1, 2017, the exemption
16    provided by this paragraph (14) includes, but is not
17    limited to, graphic arts machinery and equipment, as
18    defined in paragraph (4) of this Section.
19        (15) Proceeds of mandatory service charges separately
20    stated on customers' bills for purchase and consumption of
21    food and beverages, to the extent that the proceeds of the
22    service charge are in fact turned over as tips or as a
23    substitute for tips to the employees who participate
24    directly in preparing, serving, hosting or cleaning up the
25    food or beverage function with respect to which the service
26    charge is imposed.

 

 

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1        (16) Tangible personal property sold to a purchaser if
2    the purchaser is exempt from use tax by operation of
3    federal law. This paragraph is exempt from the provisions
4    of Section 2-70.
5        (17) Tangible personal property sold to a common
6    carrier by rail or motor that receives the physical
7    possession of the property in Illinois and that transports
8    the property, or shares with another common carrier in the
9    transportation of the property, out of Illinois on a
10    standard uniform bill of lading showing the seller of the
11    property as the shipper or consignor of the property to a
12    destination outside Illinois, for use outside Illinois.
13        (18) Legal tender, currency, medallions, or gold or
14    silver coinage issued by the State of Illinois, the
15    government of the United States of America, or the
16    government of any foreign country, and bullion.
17        (19) Until July 1, 2003, oil field exploration,
18    drilling, and production equipment, including (i) rigs and
19    parts of rigs, rotary rigs, cable tool rigs, and workover
20    rigs, (ii) pipe and tubular goods, including casing and
21    drill strings, (iii) pumps and pump-jack units, (iv)
22    storage tanks and flow lines, (v) any individual
23    replacement part for oil field exploration, drilling, and
24    production equipment, and (vi) machinery and equipment
25    purchased for lease; but excluding motor vehicles required
26    to be registered under the Illinois Vehicle Code.

 

 

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

 

 

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1    sold to or used by an air carrier, certified by the carrier
2    to be used for consumption, shipment, or storage in the
3    conduct of its business as an air common carrier, for a
4    flight that (i) is engaged in foreign trade or is engaged
5    in trade between the United States and any of its
6    possessions and (ii) transports at least one individual or
7    package for hire from the city of origination to the city
8    of final destination on the same aircraft, without regard
9    to a change in the flight number of that aircraft.
10        (23) A transaction in which the purchase order is
11    received by a florist who is located outside Illinois, but
12    who has a florist located in Illinois deliver the property
13    to the purchaser or the purchaser's donee in Illinois.
14        (24) Fuel consumed or used in the operation of ships,
15    barges, or vessels that are used primarily in or for the
16    transportation of property or the conveyance of persons for
17    hire on rivers bordering on this State if the fuel is
18    delivered by the seller to the purchaser's barge, ship, or
19    vessel while it is afloat upon that bordering river.
20        (25) Except as provided in item (25-5) of this Section,
21    a motor vehicle sold in this State to a nonresident even
22    though the motor vehicle is delivered to the nonresident in
23    this State, if the motor vehicle is not to be titled in
24    this State, and if a drive-away permit is issued to the
25    motor vehicle as provided in Section 3-603 of the Illinois
26    Vehicle Code or if the nonresident purchaser has vehicle

 

 

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1    registration plates to transfer to the motor vehicle upon
2    returning to his or her home state. The issuance of the
3    drive-away permit or having the out-of-state registration
4    plates to be transferred is prima facie evidence that the
5    motor vehicle will not be titled in this State.
6        (25-5) The exemption under item (25) does not apply if
7    the state in which the motor vehicle will be titled does
8    not allow a reciprocal exemption for a motor vehicle sold
9    and delivered in that state to an Illinois resident but
10    titled in Illinois. The tax collected under this Act on the
11    sale of a motor vehicle in this State to a resident of
12    another state that does not allow a reciprocal exemption
13    shall be imposed at a rate equal to the state's rate of tax
14    on taxable property in the state in which the purchaser is
15    a resident, except that the tax shall not exceed the tax
16    that would otherwise be imposed under this Act. At the time
17    of the sale, the purchaser shall execute a statement,
18    signed under penalty of perjury, of his or her intent to
19    title the vehicle in the state in which the purchaser is a
20    resident within 30 days after the sale and of the fact of
21    the payment to the State of Illinois of tax in an amount
22    equivalent to the state's rate of tax on taxable property
23    in his or her state of residence and shall submit the
24    statement to the appropriate tax collection agency in his
25    or her state of residence. In addition, the retailer must
26    retain a signed copy of the statement in his or her

 

 

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1    records. Nothing in this item shall be construed to require
2    the removal of the vehicle from this state following the
3    filing of an intent to title the vehicle in the purchaser's
4    state of residence if the purchaser titles the vehicle in
5    his or her state of residence within 30 days after the date
6    of sale. The tax collected under this Act in accordance
7    with this item (25-5) shall be proportionately distributed
8    as if the tax were collected at the 6.25% general rate
9    imposed under this Act.
10        (25-7) Beginning on July 1, 2007, no tax is imposed
11    under this Act on the sale of an aircraft, as defined in
12    Section 3 of the Illinois Aeronautics Act, if all of the
13    following conditions are met:
14            (1) the aircraft leaves this State within 15 days
15        after the later of either the issuance of the final
16        billing for the sale of the aircraft, or the authorized
17        approval for return to service, completion of the
18        maintenance record entry, and completion of the test
19        flight and ground test for inspection, as required by
20        14 C.F.R. 91.407;
21            (2) the aircraft is not based or registered in this
22        State after the sale of the aircraft; and
23            (3) the seller retains in his or her books and
24        records and provides to the Department a signed and
25        dated certification from the purchaser, on a form
26        prescribed by the Department, certifying that the

 

 

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1        requirements of this item (25-7) are met. The
2        certificate must also include the name and address of
3        the purchaser, the address of the location where the
4        aircraft is to be titled or registered, the address of
5        the primary physical location of the aircraft, and
6        other information that the Department may reasonably
7        require.
8        For purposes of this item (25-7):
9        "Based in this State" means hangared, stored, or
10    otherwise used, excluding post-sale customizations as
11    defined in this Section, for 10 or more days in each
12    12-month period immediately following the date of the sale
13    of the aircraft.
14        "Registered in this State" means an aircraft
15    registered with the Department of Transportation,
16    Aeronautics Division, or titled or registered with the
17    Federal Aviation Administration to an address located in
18    this State.
19        This paragraph (25-7) is exempt from the provisions of
20    Section 2-70.
21        (26) Semen used for artificial insemination of
22    livestock for direct agricultural production.
23        (27) Horses, or interests in horses, registered with
24    and meeting the requirements of any of the Arabian Horse
25    Club Registry of America, Appaloosa Horse Club, American
26    Quarter Horse Association, United States Trotting

 

 

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1    Association, or Jockey Club, as appropriate, used for
2    purposes of breeding or racing for prizes. This item (27)
3    is exempt from the provisions of Section 2-70, and the
4    exemption provided for under this item (27) applies for all
5    periods beginning May 30, 1995, but no claim for credit or
6    refund is allowed on or after January 1, 2008 (the
7    effective date of Public Act 95-88) for such taxes paid
8    during the period beginning May 30, 2000 and ending on
9    January 1, 2008 (the effective date of Public Act 95-88).
10        (28) Computers and communications equipment utilized
11    for any hospital purpose and equipment used in the
12    diagnosis, analysis, or treatment of hospital patients
13    sold to a lessor who leases the equipment, under a lease of
14    one year or longer executed or in effect at the time of the
15    purchase, to a hospital that has been issued an active tax
16    exemption identification number by the Department under
17    Section 1g of this Act.
18        (29) Personal property sold to a lessor who leases the
19    property, under a lease of one year or longer executed or
20    in effect at the time of the purchase, to a governmental
21    body that has been issued an active tax exemption
22    identification number by the Department under Section 1g of
23    this Act.
24        (30) Beginning with taxable years ending on or after
25    December 31, 1995 and ending with taxable years ending on
26    or before December 31, 2004, personal property that is

 

 

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

 

 

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

 

 

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1    school children. This paragraph does not apply to
2    fundraising events (i) for the benefit of private home
3    instruction or (ii) for which the fundraising entity
4    purchases the personal property sold at the events from
5    another individual or entity that sold the property for the
6    purpose of resale by the fundraising entity and that
7    profits from the sale to the fundraising entity. This
8    paragraph is exempt from the provisions of Section 2-70.
9        (35) Beginning January 1, 2000 and through December 31,
10    2001, new or used automatic vending machines that prepare
11    and serve hot food and beverages, including coffee, soup,
12    and other items, and replacement parts for these machines.
13    Beginning January 1, 2002 and through June 30, 2003,
14    machines and parts for machines used in commercial,
15    coin-operated amusement and vending business if a use or
16    occupation tax is paid on the gross receipts derived from
17    the use of the commercial, coin-operated amusement and
18    vending machines. This paragraph is exempt from the
19    provisions of Section 2-70.
20        (35-5) Beginning August 23, 2001 and through June 30,
21    2016, food for human consumption that is to be consumed off
22    the premises where it is sold (other than alcoholic
23    beverages, soft drinks, and food that has been prepared for
24    immediate consumption) and prescription and
25    nonprescription medicines, drugs, medical appliances, and
26    insulin, urine testing materials, syringes, and needles

 

 

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1    used by diabetics, for human use, when purchased for use by
2    a person receiving medical assistance under Article V of
3    the Illinois Public Aid Code who resides in a licensed
4    long-term care facility, as defined in the Nursing Home
5    Care Act, or a licensed facility as defined in the ID/DD
6    Community Care Act, the MC/DD Act, or the Specialized
7    Mental Health Rehabilitation Act of 2013.
8        (36) Beginning August 2, 2001, computers and
9    communications equipment utilized for any hospital purpose
10    and equipment used in the diagnosis, analysis, or treatment
11    of hospital patients sold to a lessor who leases the
12    equipment, under a lease of one year or longer executed or
13    in effect at the time of the purchase, to a hospital that
14    has been issued an active tax exemption identification
15    number by the Department under Section 1g of this Act. This
16    paragraph is exempt from the provisions of Section 2-70.
17        (37) Beginning August 2, 2001, personal property sold
18    to a lessor who leases the property, under a lease of one
19    year or longer executed or in effect at the time of the
20    purchase, to a governmental body that has been issued an
21    active tax exemption identification number by the
22    Department under Section 1g of this Act. This paragraph is
23    exempt from the provisions of Section 2-70.
24        (38) Beginning on January 1, 2002 and through June 30,
25    2016, tangible personal property purchased from an
26    Illinois retailer by a taxpayer engaged in centralized

 

 

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

 

 

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1    permit issued under Title IV of the Environmental
2    Protection Act. This paragraph is exempt from the
3    provisions of Section 2-70.
4        (40) Beginning January 1, 2010, materials, parts,
5    equipment, components, and furnishings incorporated into
6    or upon an aircraft as part of the modification,
7    refurbishment, completion, replacement, repair, or
8    maintenance of the aircraft. This exemption includes
9    consumable supplies used in the modification,
10    refurbishment, completion, replacement, repair, and
11    maintenance of aircraft, but excludes any materials,
12    parts, equipment, components, and consumable supplies used
13    in the modification, replacement, repair, and maintenance
14    of aircraft engines or power plants, whether such engines
15    or power plants are installed or uninstalled upon any such
16    aircraft. "Consumable supplies" include, but are not
17    limited to, adhesive, tape, sandpaper, general purpose
18    lubricants, cleaning solution, latex gloves, and
19    protective films. This exemption applies only to the sale
20    of qualifying tangible personal property to persons who
21    modify, refurbish, complete, replace, or maintain an
22    aircraft and who (i) hold an Air Agency Certificate and are
23    empowered to operate an approved repair station by the
24    Federal Aviation Administration, (ii) have a Class IV
25    Rating, and (iii) conduct operations in accordance with
26    Part 145 of the Federal Aviation Regulations. The exemption

 

 

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1    does not include aircraft operated by a commercial air
2    carrier providing scheduled passenger air service pursuant
3    to authority issued under Part 121 or Part 129 of the
4    Federal Aviation Regulations. The changes made to this
5    paragraph (40) by Public Act 98-534 are declarative of
6    existing law.
7        (41) Tangible personal property sold to a
8    public-facilities corporation, as described in Section
9    11-65-10 of the Illinois Municipal Code, for purposes of
10    constructing or furnishing a municipal convention hall,
11    but only if the legal title to the municipal convention
12    hall is transferred to the municipality without any further
13    consideration by or on behalf of the municipality at the
14    time of the completion of the municipal convention hall or
15    upon the retirement or redemption of any bonds or other
16    debt instruments issued by the public-facilities
17    corporation in connection with the development of the
18    municipal convention hall. This exemption includes
19    existing public-facilities corporations as provided in
20    Section 11-65-25 of the Illinois Municipal Code. This
21    paragraph is exempt from the provisions of Section 2-70.
22        (42) Beginning January 1, 2017, menstrual pads,
23    tampons, and menstrual cups.
24        (43) Merchandise that is subject to the Rental Purchase
25    Agreement Occupation and Use Tax. The purchaser must
26    certify that the item is purchased to be rented subject to

 

 

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1    a rental purchase agreement, as defined in the Rental
2    Purchase Agreement Act, and provide proof of registration
3    under the Rental Purchase Agreement Occupation and Use Tax
4    Act. This paragraph is exempt from the provisions of
5    Section 2-70.
6        (44) Qualified tangible personal property used in the
7    construction or operation of a data center that has been
8    granted a certificate of exemption by the Department of
9    Commerce and Economic Opportunity, whether that tangible
10    personal property is purchased by the owner, operator, or
11    tenant of the data center or by a contractor or
12    subcontractor of the owner, operator, or tenant. Data
13    centers that would have qualified for a certificate of
14    exemption prior to January 1, 2020 had this amendatory Act
15    of the 101st General Assembly been in effect, may apply for
16    and obtain an exemption for subsequent purchases of
17    computer equipment or enabling software purchased or
18    leased to upgrade, supplement, or replace computer
19    equipment or enabling software purchased or leased in the
20    original investment that would have qualified.
21        The Department of Commerce and Economic Opportunity
22    shall grant a certificate of exemption under this item (44)
23    to qualified data centers as defined by Section 605-1025 of
24    the Department of Commerce and Economic Opportunity Law of
25    the Civil Administrative Code of Illinois.
26        For the purposes of this item (44):

 

 

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1            "Data center" means a building or a series of
2        buildings rehabilitated or constructed to house
3        working servers in one physical location or multiple
4        sites within the State of Illinois.
5            "Qualified tangible personal property" means:
6        electrical systems and equipment; climate control and
7        chilling equipment and systems; mechanical systems and
8        equipment; monitoring and secure systems; emergency
9        generators; hardware; computers; servers; data storage
10        devices; network connectivity equipment; racks;
11        cabinets; telecommunications cabling infrastructure;
12        raised floor systems; peripheral components or
13        systems; software; mechanical, electrical, or plumbing
14        systems; battery systems; cooling systems and towers;
15        temperature control systems; other cabling; and other
16        data center infrastructure equipment and systems
17        necessary to operate qualified tangible personal
18        property, including fixtures; and component parts of
19        any of the foregoing, including installation,
20        maintenance, repair, refurbishment, and replacement of
21        qualified tangible personal property to generate,
22        transform, transmit, distribute, or manage electricity
23        necessary to operate qualified tangible personal
24        property; and all other tangible personal property
25        that is essential to the operations of a computer data
26        center. The term "qualified tangible personal

 

 

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1        property" also includes building materials physically
2        incorporated in to the qualifying data center. To
3        document the exemption allowed under this Section, the
4        retailer must obtain from the purchaser a copy of the
5        certificate of eligibility issued by the Department of
6        Commerce and Economic Opportunity.
7        This item (44) is exempt from the provisions of Section
8    2-70.
9        (45) Beginning on January 1, 2021, feed, including hay,
10    for livestock, horses, and poultry. This item (45) is
11    exempt from the provisions of Section 2-70.
12(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
13100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.
148-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
15eff. 7-12-19.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.