101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3221

 

Introduced 2/11/2020, by Sen. Craig Wilcox

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-55  from Ch. 120, par. 439.3-55
35 ILCS 110/3-45  from Ch. 120, par. 439.33-45
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. Reinstates the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois. Provides that the exemption sunsets on June 30, 2022 (currently, June 30, 2016). Effective immediately.


LRB101 18081 HLH 67520 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3221LRB101 18081 HLH 67520 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
53-55 as follows:
 
6    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
7    Sec. 3-55. Multistate exemption. To prevent actual or
8likely multistate taxation, the tax imposed by this Act does
9not apply to the use of tangible personal property in this
10State under the following circumstances:
11    (a) The use, in this State, of tangible personal property
12acquired outside this State by a nonresident individual and
13brought into this State by the individual for his or her own
14use while temporarily within this State or while passing
15through this State.
16    (b) (Blank).
17    (c) The use, in this State, by owners, lessors, or shippers
18of tangible personal property that is utilized by interstate
19carriers for hire for use as rolling stock moving in interstate
20commerce as long as so used by the interstate carriers for
21hire, and equipment operated by a telecommunications provider,
22licensed as a common carrier by the Federal Communications
23Commission, which is permanently installed in or affixed to

 

 

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1aircraft moving in interstate commerce.
2    (d) The use, in this State, of tangible personal property
3that is acquired outside this State and caused to be brought
4into this State by a person who has already paid a tax in
5another State in respect to the sale, purchase, or use of that
6property, to the extent of the amount of the tax properly due
7and paid in the other State.
8    (e) The temporary storage, in this State, of tangible
9personal property that is acquired outside this State and that,
10after being brought into this State and stored here
11temporarily, is used solely outside this State or is physically
12attached to or incorporated into other tangible personal
13property that is used solely outside this State, or is altered
14by converting, fabricating, manufacturing, printing,
15processing, or shaping, and, as altered, is used solely outside
16this State.
17    (f) The temporary storage in this State of building
18materials and fixtures that are acquired either in this State
19or outside this State by an Illinois registered combination
20retailer and construction contractor, and that the purchaser
21thereafter uses outside this State by incorporating that
22property into real estate located outside this State.
23    (g) The use or purchase of tangible personal property by a
24common carrier by rail or motor that receives the physical
25possession of the property in Illinois, and that transports the
26property, or shares with another common carrier in the

 

 

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1transportation of the property, out of Illinois on a standard
2uniform bill of lading showing the seller of the property as
3the shipper or consignor of the property to a destination
4outside Illinois, for use outside Illinois.
5    (h) Except as provided in subsection (h-1), the use, in
6this State, of a motor vehicle that was sold in this State to a
7nonresident, even though the motor vehicle is delivered to the
8nonresident in this State, if the motor vehicle is not to be
9titled in this State, and if a drive-away permit is issued to
10the motor vehicle as provided in Section 3-603 of the Illinois
11Vehicle Code or if the nonresident purchaser has vehicle
12registration plates to transfer to the motor vehicle upon
13returning to his or her home state. The issuance of the
14drive-away permit or having the out-of-state registration
15plates to be transferred shall be prima facie evidence that the
16motor vehicle will not be titled in this State.
17    (h-1) The exemption under subsection (h) does not apply if
18the state in which the motor vehicle will be titled does not
19allow a reciprocal exemption for the use in that state of a
20motor vehicle sold and delivered in that state to an Illinois
21resident but titled in Illinois. The tax collected under this
22Act on the sale of a motor vehicle in this State to a resident
23of another state that does not allow a reciprocal exemption
24shall be imposed at a rate equal to the state's rate of tax on
25taxable property in the state in which the purchaser is a
26resident, except that the tax shall not exceed the tax that

 

 

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1would otherwise be imposed under this Act. At the time of the
2sale, the purchaser shall execute a statement, signed under
3penalty of perjury, of his or her intent to title the vehicle
4in the state in which the purchaser is a resident within 30
5days after the sale and of the fact of the payment to the State
6of Illinois of tax in an amount equivalent to the state's rate
7of tax on taxable property in his or her state of residence and
8shall submit the statement to the appropriate tax collection
9agency in his or her state of residence. In addition, the
10retailer must retain a signed copy of the statement in his or
11her records. Nothing in this subsection shall be construed to
12require the removal of the vehicle from this state following
13the filing of an intent to title the vehicle in the purchaser's
14state of residence if the purchaser titles the vehicle in his
15or her state of residence within 30 days after the date of
16sale. The tax collected under this Act in accordance with this
17subsection (h-1) shall be proportionately distributed as if the
18tax were collected at the 6.25% general rate imposed under this
19Act.
20    (h-2) The following exemptions apply with respect to
21certain aircraft:
22        (1) Beginning on July 1, 2007, no tax is imposed under
23    this Act on the purchase of an aircraft, as defined in
24    Section 3 of the Illinois Aeronautics Act, if all of the
25    following conditions are met:
26            (A) the aircraft leaves this State within 15 days

 

 

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1        after the later of either the issuance of the final
2        billing for the purchase of the aircraft or the
3        authorized approval for return to service, completion
4        of the maintenance record entry, and completion of the
5        test flight and ground test for inspection, as required
6        by 14 C.F.R. 91.407;
7            (B) the aircraft is not based or registered in this
8        State after the purchase of the aircraft; and
9            (C) the purchaser provides the Department with a
10        signed and dated certification, on a form prescribed by
11        the Department, certifying that the requirements of
12        this item (1) are met. The certificate must also
13        include the name and address of the purchaser, the
14        address of the location where the aircraft is to be
15        titled or registered, the address of the primary
16        physical location of the aircraft, and other
17        information that the Department may reasonably
18        require.
19        (2) Beginning on July 1, 2007, no tax is imposed under
20    this Act on the use of an aircraft, as defined in Section 3
21    of the Illinois Aeronautics Act, that is temporarily
22    located in this State for the purpose of a prepurchase
23    evaluation if all of the following conditions are met:
24            (A) the aircraft is not based or registered in this
25        State after the prepurchase evaluation; and
26            (B) the purchaser provides the Department with a

 

 

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1        signed and dated certification, on a form prescribed by
2        the Department, certifying that the requirements of
3        this item (2) are met. The certificate must also
4        include the name and address of the purchaser, the
5        address of the location where the aircraft is to be
6        titled or registered, the address of the primary
7        physical location of the aircraft, and other
8        information that the Department may reasonably
9        require.
10        (3) Beginning on July 1, 2007, no tax is imposed under
11    this Act on the use of an aircraft, as defined in Section 3
12    of the Illinois Aeronautics Act, that is temporarily
13    located in this State for the purpose of a post-sale
14    customization if all of the following conditions are met:
15            (A) the aircraft leaves this State within 15 days
16        after the authorized approval for return to service,
17        completion of the maintenance record entry, and
18        completion of the test flight and ground test for
19        inspection, as required by 14 C.F.R. 91.407;
20            (B) the aircraft is not based or registered in this
21        State either before or after the post-sale
22        customization; and
23            (C) the purchaser provides the Department with a
24        signed and dated certification, on a form prescribed by
25        the Department, certifying that the requirements of
26        this item (3) are met. The certificate must also

 

 

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1        include the name and address of the purchaser, the
2        address of the location where the aircraft is to be
3        titled or registered, the address of the primary
4        physical location of the aircraft, and other
5        information that the Department may reasonably
6        require.
7    If tax becomes due under this subsection (h-2) because of
8the purchaser's use of the aircraft in this State, the
9purchaser shall file a return with the Department and pay the
10tax on the fair market value of the aircraft. This return and
11payment of the tax must be made no later than 30 days after the
12aircraft is used in a taxable manner in this State. The tax is
13based on the fair market value of the aircraft on the date that
14it is first used in a taxable manner in this State.
15    For purposes of this subsection (h-2):
16    "Based in this State" means hangared, stored, or otherwise
17used, excluding post-sale customizations as defined in this
18Section, for 10 or more days in each 12-month period
19immediately following the date of the sale of the aircraft.
20    "Post-sale customization" means any improvement,
21maintenance, or repair that is performed on an aircraft
22following a transfer of ownership of the aircraft.
23    "Prepurchase evaluation" means an examination of an
24aircraft to provide a potential purchaser with information
25relevant to the potential purchase.
26    "Registered in this State" means an aircraft registered

 

 

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1with the Department of Transportation, Aeronautics Division,
2or titled or registered with the Federal Aviation
3Administration to an address located in this State.
4    This subsection (h-2) is exempt from the provisions of
5Section 3-90.
6    (i) Beginning July 1, 1999, the use, in this State, of fuel
7acquired outside this State and brought into this State in the
8fuel supply tanks of locomotives engaged in freight hauling and
9passenger service for interstate commerce. This subsection is
10exempt from the provisions of Section 3-90.
11    (j) Beginning on January 1, 2002 and through June 30, 2016,
12and beginning again on the first day of the first month to
13occur on or after the effective date of this amendatory Act of
14the 101st General Assembly and through June 30, 2022, the use
15of tangible personal property purchased from an Illinois
16retailer by a taxpayer engaged in centralized purchasing
17activities in Illinois who will, upon receipt of the property
18in Illinois, temporarily store the property in Illinois (i) for
19the purpose of subsequently transporting it outside this State
20for use or consumption thereafter solely outside this State or
21(ii) for the purpose of being processed, fabricated, or
22manufactured into, attached to, or incorporated into other
23tangible personal property to be transported outside this State
24and thereafter used or consumed solely outside this State. The
25Director of Revenue shall, pursuant to rules adopted in
26accordance with the Illinois Administrative Procedure Act,

 

 

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1issue a permit to any taxpayer in good standing with the
2Department who is eligible for the exemption under this
3subsection (j). The permit issued under this subsection (j)
4shall authorize the holder, to the extent and in the manner
5specified in the rules adopted under this Act, to purchase
6tangible personal property from a retailer exempt from the
7taxes imposed by this Act. Taxpayers shall maintain all
8necessary books and records to substantiate the use and
9consumption of all such tangible personal property outside of
10the State of Illinois.
11(Source: P.A. 100-321, eff. 8-24-17.)
 
12    Section 10. The Service Use Tax Act is amended by changing
13Section 3-45 as follows:
 
14    (35 ILCS 110/3-45)  (from Ch. 120, par. 439.33-45)
15    Sec. 3-45. Multistate exemption. To prevent actual or
16likely multistate taxation, the tax imposed by this Act does
17not apply to the use of tangible personal property in this
18State under the following circumstances:
19    (a) The use, in this State, of property acquired outside
20this State by a nonresident individual and brought into this
21State by the individual for his or her own use while
22temporarily within this State or while passing through this
23State.
24    (b) The use, in this State, of property that is acquired

 

 

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1outside this State and that is moved into this State for use as
2rolling stock moving in interstate commerce.
3    (c) The use, in this State, of property that is acquired
4outside this State and caused to be brought into this State by
5a person who has already paid a tax in another state in respect
6to the sale, purchase, or use of that property, to the extent
7of the amount of the tax properly due and paid in the other
8state.
9    (d) The temporary storage, in this State, of property that
10is acquired outside this State and that after being brought
11into this State and stored here temporarily, is used solely
12outside this State or is physically attached to or incorporated
13into other property that is used solely outside this State, or
14is altered by converting, fabricating, manufacturing,
15printing, processing, or shaping, and, as altered, is used
16solely outside this State.
17    (e) Beginning July 1, 1999, the use, in this State, of fuel
18acquired outside this State and brought into this State in the
19fuel supply tanks of locomotives engaged in freight hauling and
20passenger service for interstate commerce. This subsection is
21exempt from the provisions of Section 3-75.
22    (f) Beginning on January 1, 2002 and through June 30, 2016,
23and beginning again on the first day of the first month to
24occur on or after the effective date of this amendatory Act of
25the 101st General Assembly and through June 30, 2022, the use
26of tangible personal property purchased from an Illinois

 

 

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1retailer by a taxpayer engaged in centralized purchasing
2activities in Illinois who will, upon receipt of the property
3in Illinois, temporarily store the property in Illinois (i) for
4the purpose of subsequently transporting it outside this State
5for use or consumption thereafter solely outside this State or
6(ii) for the purpose of being processed, fabricated, or
7manufactured into, attached to, or incorporated into other
8tangible personal property to be transported outside this State
9and thereafter used or consumed solely outside this State. The
10Director of Revenue shall, pursuant to rules adopted in
11accordance with the Illinois Administrative Procedure Act,
12issue a permit to any taxpayer in good standing with the
13Department who is eligible for the exemption under this
14subsection (f). The permit issued under this subsection (f)
15shall authorize the holder, to the extent and in the manner
16specified in the rules adopted under this Act, to purchase
17tangible personal property from a retailer exempt from the
18taxes imposed by this Act. Taxpayers shall maintain all
19necessary books and records to substantiate the use and
20consumption of all such tangible personal property outside of
21the State of Illinois.
22(Source: P.A. 97-73, eff. 6-30-11.)
 
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

 

 

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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

 

 

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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, and beginning again on the first day of the first month
2to occur on or after the effective date of this amendatory Act
3of the 101st General Assembly and through June 30, 2022,
4tangible personal property purchased from an Illinois retailer
5by a taxpayer engaged in centralized purchasing activities in
6Illinois who will, upon receipt of the property in Illinois,
7temporarily store the property in Illinois (i) for the purpose
8of subsequently transporting it outside this State for use or
9consumption thereafter solely outside this State or (ii) for
10the purpose of being processed, fabricated, or manufactured
11into, attached to, or incorporated into other tangible personal
12property to be transported outside this State and thereafter
13used or consumed solely outside this State. The Director of
14Revenue shall, pursuant to rules adopted in accordance with the
15Illinois Administrative Procedure Act, issue a permit to any
16taxpayer in good standing with the Department who is eligible
17for the exemption under this paragraph (26). The permit issued
18under this paragraph (26) shall authorize the holder, to the
19extent and in the manner specified in the rules adopted under
20this Act, to purchase tangible personal property from a
21retailer exempt from the taxes imposed by this Act. Taxpayers
22shall maintain all necessary books and records to substantiate
23the use and consumption of all such tangible personal property
24outside of the State of Illinois.
25    (27) Beginning January 1, 2008, tangible personal property
26used in the construction or maintenance of a community water

 

 

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1supply, as defined under Section 3.145 of the Environmental
2Protection Act, that is operated by a not-for-profit
3corporation that holds a valid water supply permit issued under
4Title IV of the Environmental Protection Act. This paragraph is
5exempt from the provisions of Section 3-55.
6    (28) Tangible personal property sold to a
7public-facilities corporation, as described in Section
811-65-10 of the Illinois Municipal Code, for purposes of
9constructing or furnishing a municipal convention hall, but
10only if the legal title to the municipal convention hall is
11transferred to the municipality without any further
12consideration by or on behalf of the municipality at the time
13of the completion of the municipal convention hall or upon the
14retirement or redemption of any bonds or other debt instruments
15issued by the public-facilities corporation in connection with
16the development of the municipal convention hall. This
17exemption includes existing public-facilities corporations as
18provided in Section 11-65-25 of the Illinois Municipal Code.
19This paragraph is exempt from the provisions of Section 3-55.
20    (29) 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 transfer of
9qualifying tangible personal property incident to the
10modification, refurbishment, completion, replacement, repair,
11or maintenance of an 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 (29) by Public Act 98-534 are declarative of existing
21law.
22    (30) Beginning January 1, 2017, menstrual pads, tampons,
23and menstrual cups.
24    (31) Tangible personal property transferred to a purchaser
25who is exempt from tax by operation of federal law. This
26paragraph is exempt from the provisions of Section 3-55.

 

 

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1    (32) Qualified tangible personal property used in the
2construction or operation of a data center that has been
3granted a certificate of exemption by the Department of
4Commerce and Economic Opportunity, whether that tangible
5personal property is purchased by the owner, operator, or
6tenant of the data center or by a contractor or subcontractor
7of the owner, operator, or tenant. Data centers that would have
8qualified for a certificate of exemption prior to January 1,
92020 had this amendatory Act of the 101st General Assembly been
10in effect, may apply for and obtain an exemption for subsequent
11purchases of computer equipment or enabling software purchased
12or leased to upgrade, supplement, or replace computer equipment
13or enabling software purchased or leased in the original
14investment that would have qualified.
15    The Department of Commerce and Economic Opportunity shall
16grant a certificate of exemption under this item (32) to
17qualified data centers as defined by Section 605-1025 of the
18Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois.
20    For the purposes of this item (32):
21        "Data center" means a building or a series of buildings
22    rehabilitated or constructed to house working servers in
23    one physical location or multiple sites within the State of
24    Illinois.
25        "Qualified tangible personal property" means:
26    electrical systems and equipment; climate control and

 

 

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

 

 

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13-55.
2(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
3100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
47-12-19.)
 
5    Section 20. The Retailers' Occupation Tax Act is amended by
6changing Section 2-5 as follows:
 
7    (35 ILCS 120/2-5)
8    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
9sale of the following tangible personal property are exempt
10from the tax imposed by this Act:
11        (1) Farm chemicals.
12        (2) Farm machinery and equipment, both new and used,
13    including that manufactured on special order, certified by
14    the purchaser to be used primarily for production
15    agriculture or State or federal agricultural programs,
16    including individual replacement parts for the machinery
17    and equipment, including machinery and equipment purchased
18    for lease, and including implements of husbandry defined in
19    Section 1-130 of the Illinois Vehicle Code, farm machinery
20    and agricultural chemical and fertilizer spreaders, and
21    nurse wagons required to be registered under Section 3-809
22    of the Illinois Vehicle Code, but excluding other motor
23    vehicles required to be registered under the Illinois
24    Vehicle Code. Horticultural polyhouses or hoop houses used

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    the removal of the vehicle from this state following the
2    filing of an intent to title the vehicle in the purchaser's
3    state of residence if the purchaser titles the vehicle in
4    his or her state of residence within 30 days after the date
5    of sale. The tax collected under this Act in accordance
6    with this item (25-5) shall be proportionately distributed
7    as if the tax were collected at the 6.25% general rate
8    imposed under this Act.
9        (25-7) Beginning on July 1, 2007, no tax is imposed
10    under this Act on the sale of an aircraft, as defined in
11    Section 3 of the Illinois Aeronautics Act, if all of the
12    following conditions are met:
13            (1) the aircraft leaves this State within 15 days
14        after the later of either the issuance of the final
15        billing for the sale of the aircraft, or the authorized
16        approval for return to service, completion of the
17        maintenance record entry, and completion of the test
18        flight and ground test for inspection, as required by
19        14 C.F.R. 91.407;
20            (2) the aircraft is not based or registered in this
21        State after the sale of the aircraft; and
22            (3) the seller retains in his or her books and
23        records and provides to the Department a signed and
24        dated certification from the purchaser, on a form
25        prescribed by the Department, certifying that the
26        requirements of this item (25-7) are met. The

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    fundraising events (i) for the benefit of private home
2    instruction or (ii) for which the fundraising entity
3    purchases the personal property sold at the events from
4    another individual or entity that sold the property for the
5    purpose of resale by the fundraising entity and that
6    profits from the sale to the fundraising entity. This
7    paragraph is exempt from the provisions of Section 2-70.
8        (35) Beginning January 1, 2000 and through December 31,
9    2001, new or used automatic vending machines that prepare
10    and serve hot food and beverages, including coffee, soup,
11    and other items, and replacement parts for these machines.
12    Beginning January 1, 2002 and through June 30, 2003,
13    machines and parts for machines used in commercial,
14    coin-operated amusement and vending business if a use or
15    occupation tax is paid on the gross receipts derived from
16    the use of the commercial, coin-operated amusement and
17    vending machines. This paragraph is exempt from the
18    provisions of Section 2-70.
19        (35-5) Beginning August 23, 2001 and through June 30,
20    2016, food for human consumption that is to be consumed off
21    the premises where it is sold (other than alcoholic
22    beverages, soft drinks, and food that has been prepared for
23    immediate consumption) and prescription and
24    nonprescription medicines, drugs, medical appliances, and
25    insulin, urine testing materials, syringes, and needles
26    used by diabetics, for human use, when purchased for use by

 

 

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1    a person receiving medical assistance under Article V of
2    the Illinois Public Aid Code who resides in a licensed
3    long-term care facility, as defined in the Nursing Home
4    Care Act, or a licensed facility as defined in the ID/DD
5    Community Care Act, the MC/DD Act, or the Specialized
6    Mental Health Rehabilitation Act of 2013.
7        (36) Beginning August 2, 2001, computers and
8    communications equipment utilized for any hospital purpose
9    and equipment used in the diagnosis, analysis, or treatment
10    of hospital patients sold to a lessor who leases the
11    equipment, under a lease of one year or longer executed or
12    in effect at the time of the purchase, to a hospital that
13    has been issued an active tax exemption identification
14    number by the Department under Section 1g of this Act. This
15    paragraph is exempt from the provisions of Section 2-70.
16        (37) Beginning August 2, 2001, personal property sold
17    to a lessor who leases the property, under a lease of one
18    year or longer executed or in effect at the time of the
19    purchase, to a governmental body that has been issued an
20    active tax exemption identification number by the
21    Department under Section 1g of this Act. This paragraph is
22    exempt from the provisions of Section 2-70.
23        (38) Beginning on January 1, 2002 and through June 30,
24    2016, and beginning again on the first day of the first
25    month to occur on or after the effective date of this
26    amendatory Act of the 101st General Assembly and through

 

 

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1    June 30, 2022, tangible personal property purchased from an
2    Illinois retailer by a taxpayer engaged in centralized
3    purchasing activities in Illinois who will, upon receipt of
4    the property in Illinois, temporarily store the property in
5    Illinois (i) for the purpose of subsequently transporting
6    it outside this State for use or consumption thereafter
7    solely outside this State or (ii) for the purpose of being
8    processed, fabricated, or manufactured into, attached to,
9    or incorporated into other tangible personal property to be
10    transported outside this State and thereafter used or
11    consumed solely outside this State. The Director of Revenue
12    shall, pursuant to rules adopted in accordance with the
13    Illinois Administrative Procedure Act, issue a permit to
14    any taxpayer in good standing with the Department who is
15    eligible for the exemption under this paragraph (38). The
16    permit issued under this paragraph (38) shall authorize the
17    holder, to the extent and in the manner specified in the
18    rules adopted under this Act, to purchase tangible personal
19    property from a retailer exempt from the taxes imposed by
20    this Act. Taxpayers shall maintain all necessary books and
21    records to substantiate the use and consumption of all such
22    tangible personal property outside of the State of
23    Illinois.
24        (39) Beginning January 1, 2008, tangible personal
25    property used in the construction or maintenance of a
26    community water supply, as defined under Section 3.145 of

 

 

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

 

 

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1    Rating, and (iii) conduct operations in accordance with
2    Part 145 of the Federal Aviation Regulations. The exemption
3    does not include aircraft operated by a commercial air
4    carrier providing scheduled passenger air service pursuant
5    to authority issued under Part 121 or Part 129 of the
6    Federal Aviation Regulations. The changes made to this
7    paragraph (40) by Public Act 98-534 are declarative of
8    existing law.
9        (41) Tangible personal property sold to a
10    public-facilities corporation, as described in Section
11    11-65-10 of the Illinois Municipal Code, for purposes of
12    constructing or furnishing a municipal convention hall,
13    but only if the legal title to the municipal convention
14    hall is transferred to the municipality without any further
15    consideration by or on behalf of the municipality at the
16    time of the completion of the municipal convention hall or
17    upon the retirement or redemption of any bonds or other
18    debt instruments issued by the public-facilities
19    corporation in connection with the development of the
20    municipal convention hall. This exemption includes
21    existing public-facilities corporations as provided in
22    Section 11-65-25 of the Illinois Municipal Code. This
23    paragraph is exempt from the provisions of Section 2-70.
24        (42) Beginning January 1, 2017, menstrual pads,
25    tampons, and menstrual cups.
26        (43) Merchandise that is subject to the Rental Purchase

 

 

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

 

 

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1    the Civil Administrative Code of Illinois.
2        For the purposes of this item (44):
3            "Data center" means a building or a series of
4        buildings rehabilitated or constructed to house
5        working servers in one physical location or multiple
6        sites within the State of Illinois.
7            "Qualified tangible personal property" means:
8        electrical systems and equipment; climate control and
9        chilling equipment and systems; mechanical systems and
10        equipment; monitoring and secure systems; emergency
11        generators; hardware; computers; servers; data storage
12        devices; network connectivity equipment; racks;
13        cabinets; telecommunications cabling infrastructure;
14        raised floor systems; peripheral components or
15        systems; software; mechanical, electrical, or plumbing
16        systems; battery systems; cooling systems and towers;
17        temperature control systems; other cabling; and other
18        data center infrastructure equipment and systems
19        necessary to operate qualified tangible personal
20        property, including fixtures; and component parts of
21        any of the foregoing, including installation,
22        maintenance, repair, refurbishment, and replacement of
23        qualified tangible personal property to generate,
24        transform, transmit, distribute, or manage electricity
25        necessary to operate qualified tangible personal
26        property; and all other tangible personal property

 

 

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1        that is essential to the operations of a computer data
2        center. The term "qualified tangible personal
3        property" also includes building materials physically
4        incorporated in to the qualifying data center. To
5        document the exemption allowed under this Section, the
6        retailer must obtain from the purchaser a copy of the
7        certificate of eligibility issued by the Department of
8        Commerce and Economic Opportunity.
9        This item (44) is exempt from the provisions of Section
10    2-70.
11(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
12100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.
138-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
14eff. 7-12-19.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.