102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2180

 

Introduced 2/26/2021, by Sen. Elgie R. Sims, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 105/3-5
35 ILCS 120/1  from Ch. 120, par. 440
35 ILCS 120/2-5
35 ILCS 120/2c  from Ch. 120, par. 441c

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, for any leased property (currently, for motor vehicles only), "selling price" means the consideration received by the lessor pursuant to the lease contract and includes certain amounts received by the lessor that are not calculated at the time the lease is executed. Provides for an exemption to the extent of any personal property lease transaction tax paid to a home rule municipality. Provides that a sale of tangible personal property shall be made tax-free on the ground of being a sale for resale or lease (currently, for resale) if the purchaser has an active registration number or resale number from the Department of Revenue and furnishes that number to the seller in connection with certifying to the seller that any sale to such purchaser is nontaxable because of being a sale for resale or lease (currently, for resale). Effective immediately.


LRB102 13518 HLH 18865 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2180LRB102 13518 HLH 18865 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Sections
52 and 3-5 as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the
10ownership of that property, except that it does not include
11the sale of such property in any form as tangible personal
12property in the regular course of business to the extent that
13such property is not first subjected to a use for which it was
14purchased, and does not include the use of such property by its
15owner for demonstration purposes: Provided that the property
16purchased is deemed to be purchased for the purpose of resale,
17despite first being used, to the extent to which it is resold
18as an ingredient of an intentionally produced product or
19by-product of manufacturing. "Use" does not mean the
20demonstration use or interim use of tangible personal property
21by a retailer before he sells that tangible personal property.
22For watercraft or aircraft, if the period of demonstration use
23or interim use by the retailer exceeds 18 months, the retailer

 

 

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1shall pay on the retailers' original cost price the tax
2imposed by this Act, and no credit for that tax is permitted if
3the watercraft or aircraft is subsequently sold by the
4retailer. "Use" does not mean the physical incorporation of
5tangible personal property, to the extent not first subjected
6to a use for which it was purchased, as an ingredient or
7constituent, into other tangible personal property (a) which
8is sold in the regular course of business or (b) which the
9person incorporating such ingredient or constituent therein
10has undertaken at the time of such purchase to cause to be
11transported in interstate commerce to destinations outside the
12State of Illinois: Provided that the property purchased is
13deemed to be purchased for the purpose of resale, despite
14first being used, to the extent to which it is resold as an
15ingredient of an intentionally produced product or by-product
16of manufacturing.
17    "Watercraft" means a Class 2, Class 3, or Class 4
18watercraft as defined in Section 3-2 of the Boat Registration
19and Safety Act, a personal watercraft, or any boat equipped
20with an inboard motor.
21    "Purchase at retail" means the acquisition of the
22ownership of or title to tangible personal property through a
23sale at retail.
24    "Purchaser" means anyone who, through a sale at retail,
25acquires the ownership of tangible personal property for a
26valuable consideration.

 

 

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1    "Sale at retail" means any transfer of the ownership of or
2title to tangible personal property to a purchaser, for the
3purpose of use, and not for the purpose of resale in any form
4as tangible personal property to the extent not first
5subjected to a use for which it was purchased, for a valuable
6consideration: Provided that the property purchased is deemed
7to be purchased for the purpose of resale, despite first being
8used, to the extent to which it is resold as an ingredient of
9an intentionally produced product or by-product of
10manufacturing. For this purpose, slag produced as an incident
11to manufacturing pig iron or steel and sold is considered to be
12an intentionally produced by-product of manufacturing. "Sale
13at retail" includes any such transfer made for resale unless
14made in compliance with Section 2c of the Retailers'
15Occupation Tax Act, as incorporated by reference into Section
1612 of this Act. Transactions whereby the possession of the
17property is transferred but the seller retains the title as
18security for payment of the selling price are sales.
19    "Sale at retail" shall also be construed to include any
20Illinois florist's sales transaction in which the purchase
21order is received in Illinois by a florist and the sale is for
22use or consumption, but the Illinois florist has a florist in
23another state deliver the property to the purchaser or the
24purchaser's donee in such other state.
25    Nonreusable tangible personal property that is used by
26persons engaged in the business of operating a restaurant,

 

 

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1cafeteria, or drive-in is a sale for resale when it is
2transferred to customers in the ordinary course of business as
3part of the sale of food or beverages and is used to deliver,
4package, or consume food or beverages, regardless of where
5consumption of the food or beverages occurs. Examples of those
6items include, but are not limited to nonreusable, paper and
7plastic cups, plates, baskets, boxes, sleeves, buckets or
8other containers, utensils, straws, placemats, napkins, doggie
9bags, and wrapping or packaging materials that are transferred
10to customers as part of the sale of food or beverages in the
11ordinary course of business.
12    The purchase, employment and transfer of such tangible
13personal property as newsprint and ink for the primary purpose
14of conveying news (with or without other information) is not a
15purchase, use or sale of tangible personal property.
16    "Selling price" means the consideration for a sale valued
17in money whether received in money or otherwise, including
18cash, credits, property other than as hereinafter provided,
19and services, but, prior to January 1, 2020, not including the
20value of or credit given for traded-in tangible personal
21property where the item that is traded-in is of like kind and
22character as that which is being sold; beginning January 1,
232020, "selling price" includes the portion of the value of or
24credit given for traded-in motor vehicles of the First
25Division as defined in Section 1-146 of the Illinois Vehicle
26Code of like kind and character as that which is being sold

 

 

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1that exceeds $10,000. "Selling price" shall be determined
2without any deduction on account of the cost of the property
3sold, the cost of materials used, labor or service cost or any
4other expense whatsoever, but does not include interest or
5finance charges which appear as separate items on the bill of
6sale or sales contract nor charges that are added to prices by
7sellers on account of the seller's tax liability under the
8Retailers' Occupation Tax Act, or on account of the seller's
9duty to collect, from the purchaser, the tax that is imposed by
10this Act, or, except as otherwise provided with respect to any
11cigarette tax imposed by a home rule unit, on account of the
12seller's tax liability under any local occupation tax
13administered by the Department, or, except as otherwise
14provided with respect to any cigarette tax imposed by a home
15rule unit on account of the seller's duty to collect, from the
16purchasers, the tax that is imposed under any local use tax
17administered by the Department. Effective December 1, 1985,
18"selling price" shall include charges that are added to prices
19by sellers on account of the seller's tax liability under the
20Cigarette Tax Act, on account of the seller's duty to collect,
21from the purchaser, the tax imposed under the Cigarette Use
22Tax Act, and on account of the seller's duty to collect, from
23the purchaser, any cigarette tax imposed by a home rule unit.
24    Notwithstanding any law to the contrary, for any motor
25vehicle, as defined in Section 1-146 of the Vehicle Code, that
26is sold on or after January 1, 2015 for the purpose of leasing

 

 

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1the vehicle for a defined period that is longer than one year
2and (1) is a motor vehicle of the second division that: (A) is
3a self-contained motor vehicle designed or permanently
4converted to provide living quarters for recreational,
5camping, or travel use, with direct walk through access to the
6living quarters from the driver's seat; (B) is of the van
7configuration designed for the transportation of not less than
87 nor more than 16 passengers; or (C) has a gross vehicle
9weight rating of 8,000 pounds or less or (2) is a motor vehicle
10of the first division, and, on and after January 1, 2022, for
11any item of tangible personal property, other than computer
12software and property subject to the Rental Purchase Agreement
13Occupation and Use Tax Act, that the purchaser certifies is
14purchased for the purpose of leasing, hereinafter referenced
15to as "leased property", "selling price" or "amount of sale"
16means the consideration received by the lessor pursuant to the
17motor vehicle lease contract, or oral or written agreement for
18other leased property, including amounts due at lease signing
19and all monthly or other regular payments charged over the
20term of the lease. Also included in the selling price is any
21amount received by the lessor from the lessee for the leased
22vehicle or other leased property that is not calculated at the
23time the lease is executed, including, but not limited to,
24excess mileage charges and charges for excess wear and tear.
25For sales that occur in Illinois, with respect to any amount
26received by the lessor from the lessee for the leased vehicle

 

 

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1or other leased property that is not calculated at the time the
2lease is executed, the lessor who purchased the motor vehicle
3or other leased property does not incur the tax imposed by the
4Use Tax Act on those amounts, and the retailer who makes the
5retail sale of the motor vehicle to the lessor is not required
6to collect the tax imposed by this Act or to pay the tax
7imposed by the Retailers' Occupation Tax Act on those amounts.
8However, the lessor who purchased the motor vehicle or other
9leased property assumes the liability for reporting and paying
10the tax on those amounts directly to the Department in the same
11form (Illinois Retailers' Occupation Tax, and local retailers'
12occupation taxes, if applicable) in which the retailer would
13have reported and paid such tax if the retailer had accounted
14for the tax to the Department. For amounts received by the
15lessor from the lessee that are not calculated at the time the
16lease is executed, the lessor must file the return and pay the
17tax to the Department by the due date otherwise required by
18this Act for returns other than transaction returns. If the
19retailer is entitled under this Act to a discount for
20collecting and remitting the tax imposed under this Act to the
21Department with respect to the sale of the motor vehicle or
22other leased property to the lessor, then the right to the
23discount provided in this Act shall be transferred to the
24lessor with respect to the tax paid by the lessor for any
25amount received by the lessor from the lessee for the leased
26vehicle or other leased property that is not calculated at the

 

 

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1time the lease is executed; provided that the discount is only
2allowed if the return is timely filed and for amounts timely
3paid. The "selling price" of a motor vehicle that is sold on or
4after January 1, 2015 for the purpose of leasing for a defined
5period of longer than one year shall not be reduced by the
6value of or credit given for traded-in tangible personal
7property owned by the lessor, nor shall it be reduced by the
8value of or credit given for traded-in tangible personal
9property owned by the lessee, regardless of whether the
10trade-in value thereof is assigned by the lessee to the
11lessor. In the case of a motor vehicle that is sold for the
12purpose of leasing for a defined period of longer than one
13year, the sale occurs at the time of the delivery of the
14vehicle, regardless of the due date of any lease payments. A
15lessor who incurs a Retailers' Occupation Tax liability on the
16sale of a motor vehicle coming off lease may not take a credit
17against that liability for the Use Tax the lessor paid upon the
18purchase of the motor vehicle (or for any tax the lessor paid
19with respect to any amount received by the lessor from the
20lessee for the leased vehicle that was not calculated at the
21time the lease was executed) if the selling price of the motor
22vehicle at the time of purchase was calculated using the
23definition of "selling price" as defined in this paragraph.
24Notwithstanding any other provision of this Act to the
25contrary, lessors shall file all returns and make all payments
26required under this paragraph to the Department by electronic

 

 

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1means in the manner and form as required by the Department.
2This paragraph does not apply to leases of motor vehicles for
3which, at the time the lease is entered into, the term of the
4lease is not a defined period, including leases with a defined
5initial period with the option to continue the lease on a
6month-to-month or other basis beyond the initial defined
7period.
8    The phrase "like kind and character" shall be liberally
9construed (including but not limited to any form of motor
10vehicle for any form of motor vehicle, or any kind of farm or
11agricultural implement for any other kind of farm or
12agricultural implement), while not including a kind of item
13which, if sold at retail by that retailer, would be exempt from
14retailers' occupation tax and use tax as an isolated or
15occasional sale.
16    "Department" means the Department of Revenue.
17    "Person" means any natural individual, firm, partnership,
18association, joint stock company, joint adventure, public or
19private corporation, limited liability company, or a receiver,
20executor, trustee, guardian or other representative appointed
21by order of any court.
22    "Retailer" means and includes every person engaged in the
23business of making sales at retail as defined in this Section.
24    A person who holds himself or herself out as being engaged
25(or who habitually engages) in selling tangible personal
26property at retail is a retailer hereunder with respect to

 

 

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1such sales (and not primarily in a service occupation)
2notwithstanding the fact that such person designs and produces
3such tangible personal property on special order for the
4purchaser and in such a way as to render the property of value
5only to such purchaser, if such tangible personal property so
6produced on special order serves substantially the same
7function as stock or standard items of tangible personal
8property that are sold at retail.
9    A person whose activities are organized and conducted
10primarily as a not-for-profit service enterprise, and who
11engages in selling tangible personal property at retail
12(whether to the public or merely to members and their guests)
13is a retailer with respect to such transactions, excepting
14only a person organized and operated exclusively for
15charitable, religious or educational purposes either (1), to
16the extent of sales by such person to its members, students,
17patients or inmates of tangible personal property to be used
18primarily for the purposes of such person, or (2), to the
19extent of sales by such person of tangible personal property
20which is not sold or offered for sale by persons organized for
21profit. The selling of school books and school supplies by
22schools at retail to students is not "primarily for the
23purposes of" the school which does such selling. This
24paragraph does not apply to nor subject to taxation occasional
25dinners, social or similar activities of a person organized
26and operated exclusively for charitable, religious or

 

 

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1educational purposes, whether or not such activities are open
2to the public.
3    A person who is the recipient of a grant or contract under
4Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
5serves meals to participants in the federal Nutrition Program
6for the Elderly in return for contributions established in
7amount by the individual participant pursuant to a schedule of
8suggested fees as provided for in the federal Act is not a
9retailer under this Act with respect to such transactions.
10    Persons who engage in the business of transferring
11tangible personal property upon the redemption of trading
12stamps are retailers hereunder when engaged in such business.
13    The isolated or occasional sale of tangible personal
14property at retail by a person who does not hold himself out as
15being engaged (or who does not habitually engage) in selling
16such tangible personal property at retail or a sale through a
17bulk vending machine does not make such person a retailer
18hereunder. However, any person who is engaged in a business
19which is not subject to the tax imposed by the Retailers'
20Occupation Tax Act because of involving the sale of or a
21contract to sell real estate or a construction contract to
22improve real estate, but who, in the course of conducting such
23business, transfers tangible personal property to users or
24consumers in the finished form in which it was purchased, and
25which does not become real estate, under any provision of a
26construction contract or real estate sale or real estate sales

 

 

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1agreement entered into with some other person arising out of
2or because of such nontaxable business, is a retailer to the
3extent of the value of the tangible personal property so
4transferred. If, in such transaction, a separate charge is
5made for the tangible personal property so transferred, the
6value of such property, for the purposes of this Act, is the
7amount so separately charged, but not less than the cost of
8such property to the transferor; if no separate charge is
9made, the value of such property, for the purposes of this Act,
10is the cost to the transferor of such tangible personal
11property.
12    "Retailer maintaining a place of business in this State",
13or any like term, means and includes any of the following
14retailers:
15        (1) A retailer having or maintaining within this
16    State, directly or by a subsidiary, an office,
17    distribution house, sales house, warehouse or other place
18    of business, or any agent or other representative
19    operating within this State under the authority of the
20    retailer or its subsidiary, irrespective of whether such
21    place of business or agent or other representative is
22    located here permanently or temporarily, or whether such
23    retailer or subsidiary is licensed to do business in this
24    State. However, the ownership of property that is located
25    at the premises of a printer with which the retailer has
26    contracted for printing and that consists of the final

 

 

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1    printed product, property that becomes a part of the final
2    printed product, or copy from which the printed product is
3    produced shall not result in the retailer being deemed to
4    have or maintain an office, distribution house, sales
5    house, warehouse, or other place of business within this
6    State.
7        (1.1) A retailer having a contract with a person
8    located in this State under which the person, for a
9    commission or other consideration based upon the sale of
10    tangible personal property by the retailer, directly or
11    indirectly refers potential customers to the retailer by
12    providing to the potential customers a promotional code or
13    other mechanism that allows the retailer to track
14    purchases referred by such persons. Examples of mechanisms
15    that allow the retailer to track purchases referred by
16    such persons include but are not limited to the use of a
17    link on the person's Internet website, promotional codes
18    distributed through the person's hand-delivered or mailed
19    material, and promotional codes distributed by the person
20    through radio or other broadcast media. The provisions of
21    this paragraph (1.1) shall apply only if the cumulative
22    gross receipts from sales of tangible personal property by
23    the retailer to customers who are referred to the retailer
24    by all persons in this State under such contracts exceed
25    $10,000 during the preceding 4 quarterly periods ending on
26    the last day of March, June, September, and December. A

 

 

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1    retailer meeting the requirements of this paragraph (1.1)
2    shall be presumed to be maintaining a place of business in
3    this State but may rebut this presumption by submitting
4    proof that the referrals or other activities pursued
5    within this State by such persons were not sufficient to
6    meet the nexus standards of the United States Constitution
7    during the preceding 4 quarterly periods.
8        (1.2) Beginning July 1, 2011, a retailer having a
9    contract with a person located in this State under which:
10            (A) the retailer sells the same or substantially
11        similar line of products as the person located in this
12        State and does so using an identical or substantially
13        similar name, trade name, or trademark as the person
14        located in this State; and
15            (B) the retailer provides a commission or other
16        consideration to the person located in this State
17        based upon the sale of tangible personal property by
18        the retailer.
19        The provisions of this paragraph (1.2) shall apply
20    only if the cumulative gross receipts from sales of
21    tangible personal property by the retailer to customers in
22    this State under all such contracts exceed $10,000 during
23    the preceding 4 quarterly periods ending on the last day
24    of March, June, September, and December.
25        (2) (Blank).
26        (3) (Blank).

 

 

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1        (4) (Blank).
2        (5) (Blank).
3        (6) (Blank).
4        (7) (Blank).
5        (8) (Blank).
6        (9) Beginning October 1, 2018, a retailer making sales
7    of tangible personal property to purchasers in Illinois
8    from outside of Illinois if:
9            (A) the cumulative gross receipts from sales of
10        tangible personal property to purchasers in Illinois
11        are $100,000 or more; or
12            (B) the retailer enters into 200 or more separate
13        transactions for the sale of tangible personal
14        property to purchasers in Illinois.
15        The retailer shall determine on a quarterly basis,
16    ending on the last day of March, June, September, and
17    December, whether he or she meets the criteria of either
18    subparagraph (A) or (B) of this paragraph (9) for the
19    preceding 12-month period. If the retailer meets the
20    threshold of either subparagraph (A) or (B) for a 12-month
21    period, he or she is considered a retailer maintaining a
22    place of business in this State and is required to collect
23    and remit the tax imposed under this Act and file returns
24    for one year. At the end of that one-year period, the
25    retailer shall determine whether he or she met the
26    threshold of either subparagraph (A) or (B) during the

 

 

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1    preceding 12-month period. If the retailer met the
2    criteria in either subparagraph (A) or (B) for the
3    preceding 12-month period, he or she is considered a
4    retailer maintaining a place of business in this State and
5    is required to collect and remit the tax imposed under
6    this Act and file returns for the subsequent year. If at
7    the end of a one-year period a retailer that was required
8    to collect and remit the tax imposed under this Act
9    determines that he or she did not meet the threshold in
10    either subparagraph (A) or (B) during the preceding
11    12-month period, the retailer shall subsequently determine
12    on a quarterly basis, ending on the last day of March,
13    June, September, and December, whether he or she meets the
14    threshold of either subparagraph (A) or (B) for the
15    preceding 12-month period.
16        Beginning January 1, 2020, neither the gross receipts
17    from nor the number of separate transactions for sales of
18    tangible personal property to purchasers in Illinois that
19    a retailer makes through a marketplace facilitator and for
20    which the retailer has received a certification from the
21    marketplace facilitator pursuant to Section 2d of this Act
22    shall be included for purposes of determining whether he
23    or she has met the thresholds of this paragraph (9).
24        (10) Beginning January 1, 2020, a marketplace
25    facilitator that meets a threshold set forth in subsection
26    (b) of Section 2d of this Act.

 

 

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1    "Bulk vending machine" means a vending machine, containing
2unsorted confections, nuts, toys, or other items designed
3primarily to be used or played with by children which, when a
4coin or coins of a denomination not larger than $0.50 are
5inserted, are dispensed in equal portions, at random and
6without selection by the customer.
7(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19;
8101-31, eff. 1-1-20; 101-604, eff. 1-1-20.)
 
9    (35 ILCS 105/3-5)
10    Sec. 3-5. Exemptions. Use of the following tangible
11personal property is exempt from the tax imposed by this Act:
12    (1) Personal property purchased from a corporation,
13society, association, foundation, institution, or
14organization, other than a limited liability company, that is
15organized and operated as a not-for-profit service enterprise
16for the benefit of persons 65 years of age or older if the
17personal property was not purchased by the enterprise for the
18purpose of resale by the enterprise.
19    (2) Personal property purchased by a not-for-profit
20Illinois county fair association for use in conducting,
21operating, or promoting the county fair.
22    (3) Personal property purchased by a not-for-profit arts
23or cultural organization that establishes, by proof required
24by the Department by rule, that it has received an exemption
25under Section 501(c)(3) of the Internal Revenue Code and that

 

 

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1is organized and operated primarily for the presentation or
2support of arts or cultural programming, activities, or
3services. These organizations include, but are not limited to,
4music and dramatic arts organizations such as symphony
5orchestras and theatrical groups, arts and cultural service
6organizations, local arts councils, visual arts organizations,
7and media arts organizations. On and after July 1, 2001 (the
8effective date of Public Act 92-35), however, an entity
9otherwise eligible for this exemption shall not make tax-free
10purchases unless it has an active identification number issued
11by the Department.
12    (4) Personal property purchased by a governmental body, by
13a corporation, society, association, foundation, or
14institution organized and operated exclusively for charitable,
15religious, or educational purposes, or by a not-for-profit
16corporation, society, association, foundation, institution, or
17organization that has no compensated officers or employees and
18that is organized and operated primarily for the recreation of
19persons 55 years of age or older. A limited liability company
20may qualify for the exemption under this paragraph only if the
21limited liability company is organized and operated
22exclusively for educational purposes. On and after July 1,
231987, however, no entity otherwise eligible for this exemption
24shall make tax-free purchases unless it has an active
25exemption identification number issued by the Department.
26    (5) Until July 1, 2003, a passenger car that is a

 

 

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1replacement vehicle to the extent that the purchase price of
2the car is subject to the Replacement Vehicle Tax.
3    (6) Until July 1, 2003 and beginning again on September 1,
42004 through August 30, 2014, graphic arts machinery and
5equipment, including repair and replacement parts, both new
6and used, and including that manufactured on special order,
7certified by the purchaser to be used primarily for graphic
8arts production, and including machinery and equipment
9purchased for lease. Equipment includes chemicals or chemicals
10acting as catalysts but only if the chemicals or chemicals
11acting as catalysts effect a direct and immediate change upon
12a graphic arts product. Beginning on July 1, 2017, graphic
13arts machinery and equipment is included in the manufacturing
14and assembling machinery and equipment exemption under
15paragraph (18).
16    (7) Farm chemicals.
17    (8) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21    (9) Personal property purchased from a teacher-sponsored
22student organization affiliated with an elementary or
23secondary school located in Illinois.
24    (10) A motor vehicle that is used for automobile renting,
25as defined in the Automobile Renting Occupation and Use Tax
26Act.

 

 

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

 

 

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

 

 

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

 

 

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1equipment, and including equipment purchased for lease, but
2excluding motor vehicles required to be registered under the
3Illinois Vehicle Code. The changes made to this Section by
4Public Act 97-767 apply on and after July 1, 2003, but no claim
5for credit or refund is allowed on or after August 16, 2013
6(the effective date of Public Act 98-456) for such taxes paid
7during the period beginning July 1, 2003 and ending on August
816, 2013 (the effective date of Public Act 98-456).
9    (17) Until July 1, 2003, distillation machinery and
10equipment, sold as a unit or kit, assembled or installed by the
11retailer, certified by the user to be used only for the
12production of ethyl alcohol that will be used for consumption
13as motor fuel or as a component of motor fuel for the personal
14use of the user, and not subject to sale or resale.
15    (18) Manufacturing and assembling machinery and equipment
16used primarily in the process of manufacturing or assembling
17tangible personal property for wholesale or retail sale or
18lease, whether that sale or lease is made directly by the
19manufacturer or by some other person, whether the materials
20used in the process are owned by the manufacturer or some other
21person, or whether that sale or lease is made apart from or as
22an incident to the seller's engaging in the service occupation
23of producing machines, tools, dies, jigs, patterns, gauges, or
24other similar items of no commercial value on special order
25for a particular purchaser. The exemption provided by this
26paragraph (18) includes production related tangible personal

 

 

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1property, as defined in Section 3-50, purchased on or after
2July 1, 2019. The exemption provided by this paragraph (18)
3does not include machinery and equipment used in (i) the
4generation of electricity for wholesale or retail sale; (ii)
5the generation or treatment of natural or artificial gas for
6wholesale or retail sale that is delivered to customers
7through pipes, pipelines, or mains; or (iii) the treatment of
8water for wholesale or retail sale that is delivered to
9customers through pipes, pipelines, or mains. The provisions
10of Public Act 98-583 are declaratory of existing law as to the
11meaning and scope of this exemption. Beginning on July 1,
122017, the exemption provided by this paragraph (18) includes,
13but is not limited to, graphic arts machinery and equipment,
14as defined in paragraph (6) of this Section.
15    (19) Personal property delivered to a purchaser or
16purchaser's donee inside Illinois when the purchase order for
17that personal property was received by a florist located
18outside Illinois who has a florist located inside Illinois
19deliver the personal property.
20    (20) Semen used for artificial insemination of livestock
21for direct agricultural production.
22    (21) Horses, or interests in horses, registered with and
23meeting the requirements of any of the Arabian Horse Club
24Registry of America, Appaloosa Horse Club, American Quarter
25Horse Association, United States Trotting Association, or
26Jockey Club, as appropriate, used for purposes of breeding or

 

 

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1racing for prizes. This item (21) is exempt from the
2provisions of Section 3-90, and the exemption provided for
3under this item (21) applies for all periods beginning May 30,
41995, but no claim for credit or refund is allowed on or after
5January 1, 2008 for such taxes paid during the period
6beginning May 30, 2000 and ending on January 1, 2008.
7    (22) Computers and communications equipment utilized for
8any hospital purpose and equipment used in the diagnosis,
9analysis, or treatment of hospital patients purchased by a
10lessor who leases the equipment, under a lease of one year or
11longer executed or in effect at the time the lessor would
12otherwise be subject to the tax imposed by this Act, to a
13hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of
15the Retailers' Occupation Tax Act. If the equipment is leased
16in a manner that does not qualify for this exemption or is used
17in any other non-exempt manner, the lessor shall be liable for
18the tax imposed under this Act or the Service Use Tax Act, as
19the case may be, based on the fair market value of the property
20at the time the non-qualifying use occurs. No lessor shall
21collect or attempt to collect an amount (however designated)
22that purports to reimburse that lessor for the tax imposed by
23this Act or the Service Use Tax Act, as the case may be, if the
24tax has not been paid by the lessor. If a lessor improperly
25collects any such amount from the lessee, the lessee shall
26have a legal right to claim a refund of that amount from the

 

 

SB2180- 26 -LRB102 13518 HLH 18865 b

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

 

 

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1before December 31, 2004, personal property that is donated
2for disaster relief to be used in a State or federally declared
3disaster area in Illinois or bordering Illinois by a
4manufacturer or retailer that is registered in this State to a
5corporation, society, association, foundation, or institution
6that has been issued a sales tax exemption identification
7number by the Department that assists victims of the disaster
8who reside within the declared disaster area.
9    (25) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is used in
12the performance of infrastructure repairs in this State,
13including but not limited to municipal roads and streets,
14access roads, bridges, sidewalks, waste disposal systems,
15water and sewer line extensions, water distribution and
16purification facilities, storm water drainage and retention
17facilities, and sewage treatment facilities, resulting from a
18State or federally declared disaster in Illinois or bordering
19Illinois when such repairs are initiated on facilities located
20in the declared disaster area within 6 months after the
21disaster.
22    (26) Beginning July 1, 1999, game or game birds purchased
23at a "game breeding and hunting preserve area" as that term is
24used in the Wildlife Code. This paragraph is exempt from the
25provisions of Section 3-90.
26    (27) A motor vehicle, as that term is defined in Section

 

 

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

 

 

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1private home instruction or (ii) for which the fundraising
2entity purchases the personal property sold at the events from
3another individual or entity that sold the property for the
4purpose of resale by the fundraising entity and that profits
5from the sale to the fundraising entity. This paragraph is
6exempt from the provisions of Section 3-90.
7    (29) Beginning January 1, 2000 and through December 31,
82001, new or used automatic vending machines that prepare and
9serve hot food and beverages, including coffee, soup, and
10other items, and replacement parts for these machines.
11Beginning January 1, 2002 and through June 30, 2003, machines
12and parts for machines used in commercial, coin-operated
13amusement and vending business if a use or occupation tax is
14paid on the gross receipts derived from the use of the
15commercial, coin-operated amusement and vending machines. This
16paragraph is exempt from the provisions of Section 3-90.
17    (30) Beginning January 1, 2001 and through June 30, 2016,
18food for human consumption that is to be consumed off the
19premises where it is sold (other than alcoholic beverages,
20soft drinks, and food that has been prepared for immediate
21consumption) and prescription and nonprescription medicines,
22drugs, medical appliances, and insulin, urine testing
23materials, syringes, and needles used by diabetics, for human
24use, when purchased for use by a person receiving medical
25assistance under Article V of the Illinois Public Aid Code who
26resides in a licensed long-term care facility, as defined in

 

 

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

 

 

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1Department. This paragraph is exempt from the provisions of
2Section 3-90.
3    (32) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), personal property purchased by a lessor
5who leases the property, under a lease of one year or longer
6executed or in effect at the time the lessor would otherwise be
7subject to the tax imposed by this Act, to a governmental body
8that has been issued an active sales tax exemption
9identification number by the Department under Section 1g of
10the Retailers' Occupation Tax Act. If the property is leased
11in a manner that does not qualify for this exemption or used in
12any other nonexempt manner, the lessor shall be liable for the
13tax imposed under this Act or the Service Use Tax Act, as the
14case may be, based on the fair market value of the property at
15the time the nonqualifying use occurs. No lessor shall collect
16or attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall
21have a legal right to claim a refund of that amount from the
22lessor. If, however, that amount is not refunded to the lessee
23for any reason, the lessor is liable to pay that amount to the
24Department. This paragraph is exempt from the provisions of
25Section 3-90.
26    (33) On and after July 1, 2003 and through June 30, 2004,

 

 

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1the use in this State of motor vehicles of the second division
2with a gross vehicle weight in excess of 8,000 pounds and that
3are subject to the commercial distribution fee imposed under
4Section 3-815.1 of the Illinois Vehicle Code. Beginning on
5July 1, 2004 and through June 30, 2005, the use in this State
6of motor vehicles of the second division: (i) with a gross
7vehicle weight rating in excess of 8,000 pounds; (ii) that are
8subject to the commercial distribution fee imposed under
9Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
10are primarily used for commercial purposes. Through June 30,
112005, this exemption applies to repair and replacement parts
12added after the initial purchase of such a motor vehicle if
13that motor vehicle is used in a manner that would qualify for
14the rolling stock exemption otherwise provided for in this
15Act. For purposes of this paragraph, the term "used for
16commercial purposes" means the transportation of persons or
17property in furtherance of any commercial or industrial
18enterprise, whether for-hire or not.
19    (34) Beginning January 1, 2008, tangible personal property
20used in the construction or maintenance of a community water
21supply, as defined under Section 3.145 of the Environmental
22Protection Act, that is operated by a not-for-profit
23corporation that holds a valid water supply permit issued
24under Title IV of the Environmental Protection Act. This
25paragraph is exempt from the provisions of Section 3-90.
26    (35) Beginning January 1, 2010 and continuing through

 

 

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1December 31, 2024, materials, parts, equipment, components,
2and furnishings incorporated into or upon an aircraft as part
3of the modification, refurbishment, completion, replacement,
4repair, or maintenance of the aircraft. This exemption
5includes consumable supplies used in the modification,
6refurbishment, completion, replacement, repair, and
7maintenance of aircraft, but excludes any materials, parts,
8equipment, components, and consumable supplies used in the
9modification, replacement, repair, and maintenance of aircraft
10engines or power plants, whether such engines or power plants
11are installed or uninstalled upon any such aircraft.
12"Consumable supplies" include, but are not limited to,
13adhesive, tape, sandpaper, general purpose lubricants,
14cleaning solution, latex gloves, and protective films. This
15exemption applies only to the use of qualifying tangible
16personal property by persons who modify, refurbish, complete,
17repair, replace, or maintain aircraft and who (i) hold an Air
18Agency Certificate and are empowered to operate an approved
19repair station by the Federal Aviation Administration, (ii)
20have a Class IV Rating, and (iii) conduct operations in
21accordance with Part 145 of the Federal Aviation Regulations.
22The exemption does not include aircraft operated by a
23commercial air carrier providing scheduled passenger air
24service pursuant to authority issued under Part 121 or Part
25129 of the Federal Aviation Regulations. The changes made to
26this paragraph (35) by Public Act 98-534 are declarative of

 

 

SB2180- 34 -LRB102 13518 HLH 18865 b

1existing law. It is the intent of the General Assembly that the
2exemption under this paragraph (35) applies continuously from
3January 1, 2010 through December 31, 2024; however, no claim
4for credit or refund is allowed for taxes paid as a result of
5the disallowance of this exemption on or after January 1, 2015
6and prior to the effective date of this amendatory Act of the
7101st General Assembly.
8    (36) Tangible personal property purchased by a
9public-facilities corporation, as described in Section
1011-65-10 of the Illinois Municipal Code, for purposes of
11constructing or furnishing a municipal convention hall, but
12only if the legal title to the municipal convention hall is
13transferred to the municipality without any further
14consideration by or on behalf of the municipality at the time
15of the completion of the municipal convention hall or upon the
16retirement or redemption of any bonds or other debt
17instruments issued by the public-facilities corporation in
18connection with the development of the municipal convention
19hall. This exemption includes existing public-facilities
20corporations as provided in Section 11-65-25 of the Illinois
21Municipal Code. This paragraph is exempt from the provisions
22of Section 3-90.
23    (37) Beginning January 1, 2017, menstrual pads, tampons,
24and menstrual cups.
25    (38) Merchandise that is subject to the Rental Purchase
26Agreement Occupation and Use Tax. The purchaser must certify

 

 

SB2180- 35 -LRB102 13518 HLH 18865 b

1that the item is purchased to be rented subject to a rental
2purchase agreement, as defined in the Rental Purchase
3Agreement Act, and provide proof of registration under the
4Rental Purchase Agreement Occupation and Use Tax Act. This
5paragraph is exempt from the provisions of Section 3-90.
6    (39) Tangible personal property purchased by a purchaser
7who is exempt from the tax imposed by this Act by operation of
8federal law. This paragraph is exempt from the provisions of
9Section 3-90.
10    (40) Qualified tangible personal property used in the
11construction or operation of a data center that has been
12granted a certificate of exemption by the Department of
13Commerce and Economic Opportunity, whether that tangible
14personal property is purchased by the owner, operator, or
15tenant of the data center or by a contractor or subcontractor
16of the owner, operator, or tenant. Data centers that would
17have qualified for a certificate of exemption prior to January
181, 2020 had Public Act 101-31 been in effect may apply for and
19obtain an exemption for subsequent purchases of computer
20equipment or enabling software purchased or leased to upgrade,
21supplement, or replace computer equipment or enabling software
22purchased or leased in the original investment that would have
23qualified.
24    The Department of Commerce and Economic Opportunity shall
25grant a certificate of exemption under this item (40) to
26qualified data centers as defined by Section 605-1025 of the

 

 

SB2180- 36 -LRB102 13518 HLH 18865 b

1Department of Commerce and Economic Opportunity Law of the
2Civil Administrative Code of Illinois.
3    For the purposes of this item (40):
4        "Data center" means a building or a series of
5    buildings rehabilitated or constructed to house working
6    servers in one physical location or multiple sites within
7    the State of Illinois.
8        "Qualified tangible personal property" means:
9    electrical systems and equipment; climate control and
10    chilling equipment and systems; mechanical systems and
11    equipment; monitoring and secure systems; emergency
12    generators; hardware; computers; servers; data storage
13    devices; network connectivity equipment; racks; cabinets;
14    telecommunications cabling infrastructure; raised floor
15    systems; peripheral components or systems; software;
16    mechanical, electrical, or plumbing systems; battery
17    systems; cooling systems and towers; temperature control
18    systems; other cabling; and other data center
19    infrastructure equipment and systems necessary to operate
20    qualified tangible personal property, including fixtures;
21    and component parts of any of the foregoing, including
22    installation, maintenance, repair, refurbishment, and
23    replacement of qualified tangible personal property to
24    generate, transform, transmit, distribute, or manage
25    electricity necessary to operate qualified tangible
26    personal property; and all other tangible personal

 

 

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1    property that is essential to the operations of a computer
2    data center. The term "qualified tangible personal
3    property" also includes building materials physically
4    incorporated in to the qualifying data center. To document
5    the exemption allowed under this Section, the retailer
6    must obtain from the purchaser a copy of the certificate
7    of eligibility issued by the Department of Commerce and
8    Economic Opportunity.
9    This item (40) is exempt from the provisions of Section
103-90.
11    (41) Beginning on January 1, 2022, non-titled tangible
12personal property. other than computer software and property
13subject to the Rental Purchase Agreement Occupation and Use
14Tax Act, to the extent of a personal property lease
15transaction tax paid to a home rule municipality. This
16exemption does not extend to any locally imposed retailers'
17occupation tax imposed under the Illinois Municipal Code or
18Counties Code and administered and collected by the
19Department. This item (41) is exempt from the provisions of
20Section 3-90.
21(Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18;
22100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff.
231-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff.
247-12-19; 101-629, eff. 2-5-20.)
 
25    Section 10. The Retailers' Occupation Tax Act is amended

 

 

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1by changing Sections 1, 2-5, and 2c as follows:
 
2    (35 ILCS 120/1)  (from Ch. 120, par. 440)
3    Sec. 1. Definitions. "Sale at retail" means any transfer
4of the ownership of or title to tangible personal property to a
5purchaser, for the purpose of use or consumption, and not for
6the purpose of resale in any form as tangible personal
7property to the extent not first subjected to a use for which
8it was purchased, for a valuable consideration: Provided that
9the property purchased is deemed to be purchased for the
10purpose of resale, despite first being used, to the extent to
11which it is resold as an ingredient of an intentionally
12produced product or byproduct of manufacturing. For this
13purpose, slag produced as an incident to manufacturing pig
14iron or steel and sold is considered to be an intentionally
15produced byproduct of manufacturing. Transactions whereby the
16possession of the property is transferred but the seller
17retains the title as security for payment of the selling price
18shall be deemed to be sales.
19    "Sale at retail" shall be construed to include any
20transfer of the ownership of or title to tangible personal
21property to a purchaser, for use or consumption by any other
22person to whom such purchaser may transfer the tangible
23personal property without a valuable consideration, and to
24include any transfer, whether made for or without a valuable
25consideration, for resale in any form as tangible personal

 

 

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1property unless made in compliance with Section 2c of this
2Act.
3    Sales of tangible personal property, which property, to
4the extent not first subjected to a use for which it was
5purchased, as an ingredient or constituent, goes into and
6forms a part of tangible personal property subsequently the
7subject of a "Sale at retail", are not sales at retail as
8defined in this Act: Provided that the property purchased is
9deemed to be purchased for the purpose of resale, despite
10first being used, to the extent to which it is resold as an
11ingredient of an intentionally produced product or byproduct
12of manufacturing.
13    "Sale at retail" shall be construed to include any
14Illinois florist's sales transaction in which the purchase
15order is received in Illinois by a florist and the sale is for
16use or consumption, but the Illinois florist has a florist in
17another state deliver the property to the purchaser or the
18purchaser's donee in such other state.
19    Nonreusable tangible personal property that is used by
20persons engaged in the business of operating a restaurant,
21cafeteria, or drive-in is a sale for resale when it is
22transferred to customers in the ordinary course of business as
23part of the sale of food or beverages and is used to deliver,
24package, or consume food or beverages, regardless of where
25consumption of the food or beverages occurs. Examples of those
26items include, but are not limited to nonreusable, paper and

 

 

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1plastic cups, plates, baskets, boxes, sleeves, buckets or
2other containers, utensils, straws, placemats, napkins, doggie
3bags, and wrapping or packaging materials that are transferred
4to customers as part of the sale of food or beverages in the
5ordinary course of business.
6    The purchase, employment and transfer of such tangible
7personal property as newsprint and ink for the primary purpose
8of conveying news (with or without other information) is not a
9purchase, use or sale of tangible personal property.
10    A person whose activities are organized and conducted
11primarily as a not-for-profit service enterprise, and who
12engages in selling tangible personal property at retail
13(whether to the public or merely to members and their guests)
14is engaged in the business of selling tangible personal
15property at retail with respect to such transactions,
16excepting only a person organized and operated exclusively for
17charitable, religious or educational purposes either (1), to
18the extent of sales by such person to its members, students,
19patients or inmates of tangible personal property to be used
20primarily for the purposes of such person, or (2), to the
21extent of sales by such person of tangible personal property
22which is not sold or offered for sale by persons organized for
23profit. The selling of school books and school supplies by
24schools at retail to students is not "primarily for the
25purposes of" the school which does such selling. The
26provisions of this paragraph shall not apply to nor subject to

 

 

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1taxation occasional dinners, socials or similar activities of
2a person organized and operated exclusively for charitable,
3religious or educational purposes, whether or not such
4activities are open to the public.
5    A person who is the recipient of a grant or contract under
6Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
7serves meals to participants in the federal Nutrition Program
8for the Elderly in return for contributions established in
9amount by the individual participant pursuant to a schedule of
10suggested fees as provided for in the federal Act is not
11engaged in the business of selling tangible personal property
12at retail with respect to such transactions.
13    "Purchaser" means anyone who, through a sale at retail,
14acquires the ownership of or title to tangible personal
15property for a valuable consideration.
16    "Reseller of motor fuel" means any person engaged in the
17business of selling or delivering or transferring title of
18motor fuel to another person other than for use or
19consumption. No person shall act as a reseller of motor fuel
20within this State without first being registered as a reseller
21pursuant to Section 2c or a retailer pursuant to Section 2a.
22    "Selling price" or the "amount of sale" means the
23consideration for a sale valued in money whether received in
24money or otherwise, including cash, credits, property, other
25than as hereinafter provided, and services, but, prior to
26January 1, 2020, not including the value of or credit given for

 

 

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1traded-in tangible personal property where the item that is
2traded-in is of like kind and character as that which is being
3sold; beginning January 1, 2020, "selling price" includes the
4portion of the value of or credit given for traded-in motor
5vehicles of the First Division as defined in Section 1-146 of
6the Illinois Vehicle Code of like kind and character as that
7which is being sold that exceeds $10,000. "Selling price"
8shall be determined without any deduction on account of the
9cost of the property sold, the cost of materials used, labor or
10service cost or any other expense whatsoever, but does not
11include charges that are added to prices by sellers on account
12of the seller's tax liability under this Act, or on account of
13the seller's duty to collect, from the purchaser, the tax that
14is imposed by the Use Tax Act, or, except as otherwise provided
15with respect to any cigarette tax imposed by a home rule unit,
16on account of the seller's tax liability under any local
17occupation tax administered by the Department, or, except as
18otherwise provided with respect to any cigarette tax imposed
19by a home rule unit on account of the seller's duty to collect,
20from the purchasers, the tax that is imposed under any local
21use tax administered by the Department. Effective December 1,
221985, "selling price" shall include charges that are added to
23prices by sellers on account of the seller's tax liability
24under the Cigarette Tax Act, on account of the sellers' duty to
25collect, from the purchaser, the tax imposed under the
26Cigarette Use Tax Act, and on account of the seller's duty to

 

 

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1collect, from the purchaser, any cigarette tax imposed by a
2home rule unit.
3    Notwithstanding any law to the contrary, for any motor
4vehicle, as defined in Section 1-146 of the Vehicle Code, that
5is sold on or after January 1, 2015 for the purpose of leasing
6the vehicle for a defined period that is longer than one year
7and (1) is a motor vehicle of the second division that: (A) is
8a self-contained motor vehicle designed or permanently
9converted to provide living quarters for recreational,
10camping, or travel use, with direct walk through access to the
11living quarters from the driver's seat; (B) is of the van
12configuration designed for the transportation of not less than
137 nor more than 16 passengers; or (C) has a gross vehicle
14weight rating of 8,000 pounds or less or (2) is a motor vehicle
15of the first division, and, on and after January 1, 2022, for
16any item of tangible personal property, other than computer
17software and property subject to the Rental Purchase Agreement
18Occupation and Use Tax Act, that the purchaser certifies is
19purchased for the purpose of leasing, hereinafter referenced
20to as "leased property", "selling price" or "amount of sale"
21means the consideration received by the lessor pursuant to the
22motor vehicle lease contract, or oral or written agreement for
23other leased property, including amounts due at lease signing
24and all monthly or other regular payments charged over the
25term of the lease. Also included in the selling price is any
26amount received by the lessor from the lessee for the leased

 

 

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1vehicle or other leased property that is not calculated at the
2time the lease is executed, including, but not limited to,
3excess mileage charges and charges for excess wear and tear.
4For sales that occur in Illinois, with respect to any amount
5received by the lessor from the lessee for the leased vehicle
6or other leased property that is not calculated at the time the
7lease is executed, the lessor who purchased the motor vehicle
8or other leased property does not incur the tax imposed by the
9Use Tax Act on those amounts, and the retailer who makes the
10retail sale of the motor vehicle to the lessor is not required
11to collect the tax imposed by the Use Tax Act or to pay the tax
12imposed by this Act on those amounts. However, the lessor who
13purchased the motor vehicle assumes the liability for
14reporting and paying the tax on those amounts directly to the
15Department in the same form (Illinois Retailers' Occupation
16Tax, and local retailers' occupation taxes, if applicable) in
17which the retailer would have reported and paid such tax if the
18retailer had accounted for the tax to the Department. For
19amounts received by the lessor from the lessee that are not
20calculated at the time the lease is executed, the lessor must
21file the return and pay the tax to the Department by the due
22date otherwise required by this Act for returns other than
23transaction returns. If the retailer is entitled under this
24Act to a discount for collecting and remitting the tax imposed
25under this Act to the Department with respect to the sale of
26the motor vehicle or other leased property to the lessor, then

 

 

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1the right to the discount provided in this Act shall be
2transferred to the lessor with respect to the tax paid by the
3lessor for any amount received by the lessor from the lessee
4for the leased vehicle or other leased property that is not
5calculated at the time the lease is executed; provided that
6the discount is only allowed if the return is timely filed and
7for amounts timely paid. The "selling price" of a motor
8vehicle that is sold on or after January 1, 2015 for the
9purpose of leasing for a defined period of longer than one year
10shall not be reduced by the value of or credit given for
11traded-in tangible personal property owned by the lessor, nor
12shall it be reduced by the value of or credit given for
13traded-in tangible personal property owned by the lessee,
14regardless of whether the trade-in value thereof is assigned
15by the lessee to the lessor. In the case of a motor vehicle
16that is sold for the purpose of leasing for a defined period of
17longer than one year, the sale occurs at the time of the
18delivery of the vehicle, regardless of the due date of any
19lease payments. A lessor who incurs a Retailers' Occupation
20Tax liability on the sale of a motor vehicle coming off lease
21may not take a credit against that liability for the Use Tax
22the lessor paid upon the purchase of the motor vehicle (or for
23any tax the lessor paid with respect to any amount received by
24the lessor from the lessee for the leased vehicle that was not
25calculated at the time the lease was executed) if the selling
26price of the motor vehicle at the time of purchase was

 

 

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1calculated using the definition of "selling price" as defined
2in this paragraph. Notwithstanding any other provision of this
3Act to the contrary, lessors shall file all returns and make
4all payments required under this paragraph to the Department
5by electronic means in the manner and form as required by the
6Department. This paragraph does not apply to leases of motor
7vehicles for which, at the time the lease is entered into, the
8term of the lease is not a defined period, including leases
9with a defined initial period with the option to continue the
10lease on a month-to-month or other basis beyond the initial
11defined period.
12    The phrase "like kind and character" shall be liberally
13construed (including but not limited to any form of motor
14vehicle for any form of motor vehicle, or any kind of farm or
15agricultural implement for any other kind of farm or
16agricultural implement), while not including a kind of item
17which, if sold at retail by that retailer, would be exempt from
18retailers' occupation tax and use tax as an isolated or
19occasional sale.
20    "Gross receipts" from the sales of tangible personal
21property at retail means the total selling price or the amount
22of such sales, as hereinbefore defined. In the case of charge
23and time sales, the amount thereof shall be included only as
24and when payments are received by the seller. Receipts or
25other consideration derived by a seller from the sale,
26transfer or assignment of accounts receivable to a wholly

 

 

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1owned subsidiary will not be deemed payments prior to the time
2the purchaser makes payment on such accounts.
3    "Department" means the Department of Revenue.
4    "Person" means any natural individual, firm, partnership,
5association, joint stock company, joint adventure, public or
6private corporation, limited liability company, or a receiver,
7executor, trustee, guardian or other representative appointed
8by order of any court.
9    The isolated or occasional sale of tangible personal
10property at retail by a person who does not hold himself out as
11being engaged (or who does not habitually engage) in selling
12such tangible personal property at retail, or a sale through a
13bulk vending machine, does not constitute engaging in a
14business of selling such tangible personal property at retail
15within the meaning of this Act; provided that any person who is
16engaged in a business which is not subject to the tax imposed
17by this Act because of involving the sale of or a contract to
18sell real estate or a construction contract to improve real
19estate or a construction contract to engineer, install, and
20maintain an integrated system of products, but who, in the
21course of conducting such business, transfers tangible
22personal property to users or consumers in the finished form
23in which it was purchased, and which does not become real
24estate or was not engineered and installed, under any
25provision of a construction contract or real estate sale or
26real estate sales agreement entered into with some other

 

 

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1person arising out of or because of such nontaxable business,
2is engaged in the business of selling tangible personal
3property at retail to the extent of the value of the tangible
4personal property so transferred. If, in such a transaction, a
5separate charge is made for the tangible personal property so
6transferred, the value of such property, for the purpose of
7this Act, shall be the amount so separately charged, but not
8less than the cost of such property to the transferor; if no
9separate charge is made, the value of such property, for the
10purposes of this Act, is the cost to the transferor of such
11tangible personal property. Construction contracts for the
12improvement of real estate consisting of engineering,
13installation, and maintenance of voice, data, video, security,
14and all telecommunication systems do not constitute engaging
15in a business of selling tangible personal property at retail
16within the meaning of this Act if they are sold at one
17specified contract price.
18    A person who holds himself or herself out as being engaged
19(or who habitually engages) in selling tangible personal
20property at retail is a person engaged in the business of
21selling tangible personal property at retail hereunder with
22respect to such sales (and not primarily in a service
23occupation) notwithstanding the fact that such person designs
24and produces such tangible personal property on special order
25for the purchaser and in such a way as to render the property
26of value only to such purchaser, if such tangible personal

 

 

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1property so produced on special order serves substantially the
2same function as stock or standard items of tangible personal
3property that are sold at retail.
4    Persons who engage in the business of transferring
5tangible personal property upon the redemption of trading
6stamps are engaged in the business of selling such property at
7retail and shall be liable for and shall pay the tax imposed by
8this Act on the basis of the retail value of the property
9transferred upon redemption of such stamps.
10    "Bulk vending machine" means a vending machine, containing
11unsorted confections, nuts, toys, or other items designed
12primarily to be used or played with by children which, when a
13coin or coins of a denomination not larger than $0.50 are
14inserted, are dispensed in equal portions, at random and
15without selection by the customer.
16    "Remote retailer" means a retailer that does not maintain
17within this State, directly or by a subsidiary, an office,
18distribution house, sales house, warehouse or other place of
19business, or any agent or other representative operating
20within this State under the authority of the retailer or its
21subsidiary, irrespective of whether such place of business or
22agent is located here permanently or temporarily or whether
23such retailer or subsidiary is licensed to do business in this
24State.
25    "Marketplace" means a physical or electronic place, forum,
26platform, application, or other method by which a marketplace

 

 

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1seller sells or offers to sell items.
2    "Marketplace facilitator" means a person who, pursuant to
3an agreement with an unrelated third-party marketplace seller,
4directly or indirectly through one or more affiliates
5facilitates a retail sale by an unrelated third party
6marketplace seller by:
7        (1) listing or advertising for sale by the marketplace
8    seller in a marketplace, tangible personal property that
9    is subject to tax under this Act; and
10        (2) either directly or indirectly, through agreements
11    or arrangements with third parties, collecting payment
12    from the customer and transmitting that payment to the
13    marketplace seller regardless of whether the marketplace
14    facilitator receives compensation or other consideration
15    in exchange for its services.
16    A person who provides advertising services, including
17listing products for sale, is not considered a marketplace
18facilitator, so long as the advertising service platform or
19forum does not engage, directly or indirectly through one or
20more affiliated persons, in the activities described in
21paragraph (2) of this definition of "marketplace facilitator".
22    "Marketplace seller" means a person that makes sales
23through a marketplace operated by an unrelated third party
24marketplace facilitator.
25(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
 

 

 

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

 

 

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1        Farm machinery and equipment shall include precision
2    farming equipment that is installed or purchased to be
3    installed on farm machinery and equipment including, but
4    not limited to, tractors, harvesters, sprayers, planters,
5    seeders, or spreaders. Precision farming equipment
6    includes, but is not limited to, soil testing sensors,
7    computers, monitors, software, global positioning and
8    mapping systems, and other such equipment.
9        Farm machinery and equipment also includes computers,
10    sensors, software, and related equipment used primarily in
11    the computer-assisted operation of production agriculture
12    facilities, equipment, and activities such as, but not
13    limited to, the collection, monitoring, and correlation of
14    animal and crop data for the purpose of formulating animal
15    diets and agricultural chemicals. This item (2) is exempt
16    from the provisions of Section 2-70.
17        (3) Until July 1, 2003, distillation machinery and
18    equipment, sold as a unit or kit, assembled or installed
19    by the retailer, certified by the user to be used only for
20    the production of ethyl alcohol that will be used for
21    consumption as motor fuel or as a component of motor fuel
22    for the personal use of the user, and not subject to sale
23    or resale.
24        (4) Until July 1, 2003 and beginning again September
25    1, 2004 through August 30, 2014, graphic arts machinery
26    and equipment, including repair and replacement parts,

 

 

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1    both new and used, and including that manufactured on
2    special order or purchased for lease, certified by the
3    purchaser to be used primarily for graphic arts
4    production. Equipment includes chemicals or chemicals
5    acting as catalysts but only if the chemicals or chemicals
6    acting as catalysts effect a direct and immediate change
7    upon a graphic arts product. Beginning on July 1, 2017,
8    graphic arts machinery and equipment is included in the
9    manufacturing and assembling machinery and equipment
10    exemption under paragraph (14).
11        (5) A motor vehicle that is used for automobile
12    renting, as defined in the Automobile Renting Occupation
13    and Use Tax Act. This paragraph is exempt from the
14    provisions of Section 2-70.
15        (6) Personal property sold by a teacher-sponsored
16    student organization affiliated with an elementary or
17    secondary school located in Illinois.
18        (7) Until July 1, 2003, proceeds of that portion of
19    the selling price of a passenger car the sale of which is
20    subject to the Replacement Vehicle Tax.
21        (8) Personal property sold to an Illinois county fair
22    association for use in conducting, operating, or promoting
23    the county fair.
24        (9) Personal property sold to a not-for-profit arts or
25    cultural organization that establishes, by proof required
26    by the Department by rule, that it has received an

 

 

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1    exemption under Section 501(c)(3) of the Internal Revenue
2    Code and that is organized and operated primarily for the
3    presentation or support of arts or cultural programming,
4    activities, or services. These organizations include, but
5    are not limited to, music and dramatic arts organizations
6    such as symphony orchestras and theatrical groups, arts
7    and cultural service organizations, local arts councils,
8    visual arts organizations, and media arts organizations.
9    On and after July 1, 2001 (the effective date of Public Act
10    92-35), however, an entity otherwise eligible for this
11    exemption shall not make tax-free purchases unless it has
12    an active identification number issued by the Department.
13        (10) Personal property sold by a corporation, society,
14    association, foundation, institution, or organization,
15    other than a limited liability company, that is organized
16    and operated as a not-for-profit service enterprise for
17    the benefit of persons 65 years of age or older if the
18    personal property was not purchased by the enterprise for
19    the purpose of resale by the enterprise.
20        (11) Personal property sold to a governmental body, to
21    a corporation, society, association, foundation, or
22    institution organized and operated exclusively for
23    charitable, religious, or educational purposes, or to a
24    not-for-profit corporation, society, association,
25    foundation, institution, or organization that has no
26    compensated officers or employees and that is organized

 

 

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1    and operated primarily for the recreation of persons 55
2    years of age or older. A limited liability company may
3    qualify for the exemption under this paragraph only if the
4    limited liability company is organized and operated
5    exclusively for educational purposes. On and after July 1,
6    1987, however, no entity otherwise eligible for this
7    exemption shall make tax-free purchases unless it has an
8    active identification number issued by the Department.
9        (12) (Blank).
10        (12-5) On and after July 1, 2003 and through June 30,
11    2004, motor vehicles of the second division with a gross
12    vehicle weight in excess of 8,000 pounds that are subject
13    to the commercial distribution fee imposed under Section
14    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
15    2004 and through June 30, 2005, the use in this State of
16    motor vehicles of the second division: (i) with a gross
17    vehicle weight rating in excess of 8,000 pounds; (ii) that
18    are subject to the commercial distribution fee imposed
19    under Section 3-815.1 of the Illinois Vehicle Code; and
20    (iii) that are primarily used for commercial purposes.
21    Through June 30, 2005, this exemption applies to repair
22    and replacement parts added after the initial purchase of
23    such a motor vehicle if that motor vehicle is used in a
24    manner that would qualify for the rolling stock exemption
25    otherwise provided for in this Act. For purposes of this
26    paragraph, "used for commercial purposes" means the

 

 

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

 

 

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

 

 

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1    the property, or shares with another common carrier in the
2    transportation of the property, out of Illinois on a
3    standard uniform bill of lading showing the seller of the
4    property as the shipper or consignor of the property to a
5    destination outside Illinois, for use outside Illinois.
6        (18) Legal tender, currency, medallions, or gold or
7    silver coinage issued by the State of Illinois, the
8    government of the United States of America, or the
9    government of any foreign country, and bullion.
10        (19) Until July 1, 2003, oil field exploration,
11    drilling, and production equipment, including (i) rigs and
12    parts of rigs, rotary rigs, cable tool rigs, and workover
13    rigs, (ii) pipe and tubular goods, including casing and
14    drill strings, (iii) pumps and pump-jack units, (iv)
15    storage tanks and flow lines, (v) any individual
16    replacement part for oil field exploration, drilling, and
17    production equipment, and (vi) machinery and equipment
18    purchased for lease; but excluding motor vehicles required
19    to be registered under the Illinois Vehicle Code.
20        (20) Photoprocessing machinery and equipment,
21    including repair and replacement parts, both new and used,
22    including that manufactured on special order, certified by
23    the purchaser to be used primarily for photoprocessing,
24    and including photoprocessing machinery and equipment
25    purchased for lease.
26        (21) Until July 1, 2023, coal and aggregate

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        require.
2        For purposes of this item (25-7):
3        "Based in this State" means hangared, stored, or
4    otherwise used, excluding post-sale customizations as
5    defined in this Section, for 10 or more days in each
6    12-month period immediately following the date of the sale
7    of the aircraft.
8        "Registered in this State" means an aircraft
9    registered with the Department of Transportation,
10    Aeronautics Division, or titled or registered with the
11    Federal Aviation Administration to an address located in
12    this State.
13        This paragraph (25-7) is exempt from the provisions of
14    Section 2-70.
15        (26) Semen used for artificial insemination of
16    livestock for direct agricultural production.
17        (27) Horses, or interests in horses, registered with
18    and meeting the requirements of any of the Arabian Horse
19    Club Registry of America, Appaloosa Horse Club, American
20    Quarter Horse Association, United States Trotting
21    Association, or Jockey Club, as appropriate, used for
22    purposes of breeding or racing for prizes. This item (27)
23    is exempt from the provisions of Section 2-70, and the
24    exemption provided for under this item (27) applies for
25    all periods beginning May 30, 1995, but no claim for
26    credit or refund is allowed on or after January 1, 2008

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    December 31, 2024, materials, parts, equipment,
2    components, and furnishings incorporated into or upon an
3    aircraft as part of the modification, refurbishment,
4    completion, replacement, repair, or maintenance of the
5    aircraft. This exemption includes consumable supplies used
6    in the modification, refurbishment, completion,
7    replacement, repair, and maintenance of aircraft, but
8    excludes any materials, parts, equipment, components, and
9    consumable supplies used in the modification, replacement,
10    repair, and maintenance of aircraft engines or power
11    plants, whether such engines or power plants are installed
12    or uninstalled upon any such aircraft. "Consumable
13    supplies" include, but are not limited to, adhesive, tape,
14    sandpaper, general purpose lubricants, cleaning solution,
15    latex gloves, and protective films. This exemption applies
16    only to the sale of qualifying tangible personal property
17    to persons who modify, refurbish, complete, replace, or
18    maintain an aircraft and who (i) hold an Air Agency
19    Certificate and are empowered to operate an approved
20    repair station by the Federal Aviation Administration,
21    (ii) have a Class IV Rating, and (iii) conduct operations
22    in accordance with Part 145 of the Federal Aviation
23    Regulations. The exemption does not include aircraft
24    operated by a commercial air carrier providing scheduled
25    passenger air service pursuant to authority issued under
26    Part 121 or Part 129 of the Federal Aviation Regulations.

 

 

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1    The changes made to this paragraph (40) by Public Act
2    98-534 are declarative of existing law. It is the intent
3    of the General Assembly that the exemption under this
4    paragraph (40) applies continuously from January 1, 2010
5    through December 31, 2024; however, no claim for credit or
6    refund is allowed for taxes paid as a result of the
7    disallowance of this exemption on or after January 1, 2015
8    and prior to the effective date of this amendatory Act of
9    the 101st General Assembly.
10        (41) Tangible personal property sold to a
11    public-facilities corporation, as described in Section
12    11-65-10 of the Illinois Municipal Code, for purposes of
13    constructing or furnishing a municipal convention hall,
14    but only if the legal title to the municipal convention
15    hall is transferred to the municipality without any
16    further consideration by or on behalf of the municipality
17    at the time of the completion of the municipal convention
18    hall or upon the retirement or redemption of any bonds or
19    other debt instruments issued by the public-facilities
20    corporation in connection with the development of the
21    municipal convention hall. This exemption includes
22    existing public-facilities corporations as provided in
23    Section 11-65-25 of the Illinois Municipal Code. This
24    paragraph is exempt from the provisions of Section 2-70.
25        (42) Beginning January 1, 2017, menstrual pads,
26    tampons, and menstrual cups.

 

 

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

 

 

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1    605-1025 of the Department of Commerce and Economic
2    Opportunity Law of the Civil Administrative Code of
3    Illinois.
4        For the purposes of this item (44):
5            "Data center" means a building or a series of
6        buildings rehabilitated or constructed to house
7        working servers in one physical location or multiple
8        sites within the State of Illinois.
9            "Qualified tangible personal property" means:
10        electrical systems and equipment; climate control and
11        chilling equipment and systems; mechanical systems and
12        equipment; monitoring and secure systems; emergency
13        generators; hardware; computers; servers; data storage
14        devices; network connectivity equipment; racks;
15        cabinets; telecommunications cabling infrastructure;
16        raised floor systems; peripheral components or
17        systems; software; mechanical, electrical, or plumbing
18        systems; battery systems; cooling systems and towers;
19        temperature control systems; other cabling; and other
20        data center infrastructure equipment and systems
21        necessary to operate qualified tangible personal
22        property, including fixtures; and component parts of
23        any of the foregoing, including installation,
24        maintenance, repair, refurbishment, and replacement of
25        qualified tangible personal property to generate,
26        transform, transmit, distribute, or manage electricity

 

 

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1        necessary to operate qualified tangible personal
2        property; and all other tangible personal property
3        that is essential to the operations of a computer data
4        center. The term "qualified tangible personal
5        property" also includes building materials physically
6        incorporated in to the qualifying data center. To
7        document the exemption allowed under this Section, the
8        retailer must obtain from the purchaser a copy of the
9        certificate of eligibility issued by the Department of
10        Commerce and Economic Opportunity.
11        This item (44) is exempt from the provisions of
12    Section 2-70.
13        (45) Beginning on January 1, 2022, non-titled tangible
14    personal property, other than computer software and
15    property subject to the Rental Purchase Agreement
16    Occupation and Use Tax Act, to the extent of a personal
17    property lease transaction tax paid to a home rule
18    municipality. This exemption does not extend to any
19    locally imposed retailers' occupation tax imposed under
20    the Illinois Municipal Code or Counties Code and
21    administered and collected by the Department. This item
22    (45) is exempt from the provisions of Section 2-70.
23(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
24100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.
258-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
26eff. 7-12-19; 101-629, eff. 2-5-20.)
 

 

 

SB2180- 75 -LRB102 13518 HLH 18865 b

1    (35 ILCS 120/2c)  (from Ch. 120, par. 441c)
2    Sec. 2c. If the purchaser is not registered with the
3Department as a taxpayer, but claims to be a reseller of the
4tangible personal property in such a way that such resales are
5not taxable under this Act or under some other tax law which
6the Department may administer, such purchaser (except in the
7case of an out-of-State purchaser who will always resell and
8deliver the property to his customers outside Illinois) shall
9apply to the Department for a resale number. Such applicant
10shall state facts which will show the Department why such
11applicant is not liable for tax under this Act or under some
12other tax law which the Department may administer on any of his
13resales and shall furnish such additional information as the
14Department may reasonably require.
15    Upon approval of the application, the Department shall
16assign a resale number to the applicant and shall certify such
17number to him. The Department may cancel any such number which
18is obtained through misrepresentation, or which is used to
19make a purchase tax-free when the purchase in fact is not a
20purchase for resale, or which no longer applies because of the
21purchaser's having discontinued the making of tax exempt
22resales of the property.
23    The Department may restrict the use of the number to one
24year at a time or to some other definite period if the
25Department finds it impracticable or otherwise inadvisable to

 

 

SB2180- 76 -LRB102 13518 HLH 18865 b

1issue such numbers for indefinite periods.
2    Except as provided hereinabove in this Section, a sale
3shall be made tax-free on the ground of being a sale for resale
4or lease if the purchaser has an active registration number or
5resale number from the Department and furnishes that number to
6the seller in connection with certifying to the seller that
7any sale to such purchaser is nontaxable because of being a
8sale for resale or lease.
9    Failure to present an active registration number or resale
10number and a certification to the seller that a sale is for
11resale or lease creates a presumption that a sale is not for
12resale or lease. This presumption may be rebutted by other
13evidence that all of the seller's sales are sale for resale or
14lease, or that a particular sale is a sale for resale or lease.
15(Source: P.A. 83-1463.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.