102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2428

 

Introduced 2/26/2021, by Sen. Bill Cunningham

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-10
35 ILCS 105/3-40  from Ch. 120, par. 439.3-40
35 ILCS 105/3-44
35 ILCS 105/3-44.3 new
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the tax imposed on mid-range ethanol blends applies to (i) 80% of the proceeds of sales made on or after July 1, 2019 and on or before December 31, 2023 and (ii) 100% of the proceeds of sales made thereafter. Provides that the term "mid-range ethanol blend" means a blend of gasoline and denatured ethanol that contains not less than 20% but less than 51% denatured ethanol. Makes changes to the definitions of "gasohol" and "majority blended ethanol fuel" to adjust the required percentage of ethanol. Provides that, on and after July 1, 2021 and prior to July 1, 2024, the tax shall be imposed on 90% of the proceeds of sales of gasohol. Effective immediately.


LRB102 10895 HLH 16225 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2428LRB102 10895 HLH 16225 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 10. The Use Tax Act is amended by changing
5Sections 3-10, 3-40, and 3-44 and by adding Section 3-44.3 as
6follows:
 
7    (35 ILCS 105/3-10)
8    Sec. 3-10. Rate of tax. Unless otherwise provided in this
9Section, the tax imposed by this Act is at the rate of 6.25% of
10either the selling price or the fair market value, if any, of
11the tangible personal property. In all cases where property
12functionally used or consumed is the same as the property that
13was purchased at retail, then the tax is imposed on the selling
14price of the property. In all cases where property
15functionally used or consumed is a by-product or waste product
16that has been refined, manufactured, or produced from property
17purchased at retail, then the tax is imposed on the lower of
18the fair market value, if any, of the specific property so used
19in this State or on the selling price of the property purchased
20at retail. For purposes of this Section "fair market value"
21means the price at which property would change hands between a
22willing buyer and a willing seller, neither being under any
23compulsion to buy or sell and both having reasonable knowledge

 

 

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1of the relevant facts. The fair market value shall be
2established by Illinois sales by the taxpayer of the same
3property as that functionally used or consumed, or if there
4are no such sales by the taxpayer, then comparable sales or
5purchases of property of like kind and character in Illinois.
6    Beginning on July 1, 2000 and through December 31, 2000,
7with respect to motor fuel, as defined in Section 1.1 of the
8Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
9the Use Tax Act, the tax is imposed at the rate of 1.25%.
10    Beginning on August 6, 2010 through August 15, 2010, with
11respect to sales tax holiday items as defined in Section 3-6 of
12this Act, the tax is imposed at the rate of 1.25%.
13    With respect to gasohol, the tax imposed by this Act
14applies to (i) 70% of the proceeds of sales made on or after
15January 1, 1990, and before July 1, 2003, (ii) 80% of the
16proceeds of sales made on or after July 1, 2003 and on or
17before July 1, 2017, and (iii) 100% of the proceeds of sales
18made after July 1, 2017 and prior to July 1, 2021, (iv) 90% of
19the proceeds of sales made on or after July 1, 2021 and prior
20to July 1, 2024, and (v) 100% of the proceeds of sales made
21thereafter. If, at any time, however, the tax under this Act on
22sales of gasohol is imposed at the rate of 1.25%, then the tax
23imposed by this Act applies to 100% of the proceeds of sales of
24gasohol made during that time.
25    With respect to mid-range ethanol blends, the tax imposed
26by this Act applies to (i) 80% of the proceeds of sales made on

 

 

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1or after July 1, 2021 and on or before December 31, 2025 and
2(ii) 100% of the proceeds of sales made thereafter. If, at any
3time, however, the tax under this Act on sales of mid-range
4ethanol blends is imposed at the rate of 1.25%, then the tax
5imposed by this Act applies to 100% of the proceeds of sales of
6mid-range ethanol blends made during that time.
7    With respect to majority blended ethanol fuel, the tax
8imposed by this Act does not apply to the proceeds of sales
9made on or after July 1, 2003 and on or before December 31,
102023 but applies to 100% of the proceeds of sales made
11thereafter.
12    With respect to biodiesel blends with no less than 1% and
13no more than 10% biodiesel, the tax imposed by this Act applies
14to (i) 80% of the proceeds of sales made on or after July 1,
152003 and on or before December 31, 2018 and (ii) 100% of the
16proceeds of sales made thereafter. If, at any time, however,
17the tax under this Act on sales of biodiesel blends with no
18less than 1% and no more than 10% biodiesel is imposed at the
19rate of 1.25%, then the tax imposed by this Act applies to 100%
20of the proceeds of sales of biodiesel blends with no less than
211% and no more than 10% biodiesel made during that time.
22    With respect to 100% biodiesel and biodiesel blends with
23more than 10% but no more than 99% biodiesel, the tax imposed
24by this Act does not apply to the proceeds of sales made on or
25after July 1, 2003 and on or before December 31, 2023 but
26applies to 100% of the proceeds of sales made thereafter.

 

 

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1    With respect to food for human consumption that is to be
2consumed off the premises where it is sold (other than
3alcoholic beverages, food consisting of or infused with adult
4use cannabis, soft drinks, and food that has been prepared for
5immediate consumption) and prescription and nonprescription
6medicines, drugs, medical appliances, products classified as
7Class III medical devices by the United States Food and Drug
8Administration that are used for cancer treatment pursuant to
9a prescription, as well as any accessories and components
10related to those devices, modifications to a motor vehicle for
11the purpose of rendering it usable by a person with a
12disability, and insulin, urine testing materials, syringes,
13and needles used by diabetics, for human use, the tax is
14imposed at the rate of 1%. For the purposes of this Section,
15until September 1, 2009: the term "soft drinks" means any
16complete, finished, ready-to-use, non-alcoholic drink, whether
17carbonated or not, including but not limited to soda water,
18cola, fruit juice, vegetable juice, carbonated water, and all
19other preparations commonly known as soft drinks of whatever
20kind or description that are contained in any closed or sealed
21bottle, can, carton, or container, regardless of size; but
22"soft drinks" does not include coffee, tea, non-carbonated
23water, infant formula, milk or milk products as defined in the
24Grade A Pasteurized Milk and Milk Products Act, or drinks
25containing 50% or more natural fruit or vegetable juice.
26    Notwithstanding any other provisions of this Act,

 

 

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1beginning September 1, 2009, "soft drinks" means non-alcoholic
2beverages that contain natural or artificial sweeteners. "Soft
3drinks" do not include beverages that contain milk or milk
4products, soy, rice or similar milk substitutes, or greater
5than 50% of vegetable or fruit juice by volume.
6    Until August 1, 2009, and notwithstanding any other
7provisions of this Act, "food for human consumption that is to
8be consumed off the premises where it is sold" includes all
9food sold through a vending machine, except soft drinks and
10food products that are dispensed hot from a vending machine,
11regardless of the location of the vending machine. Beginning
12August 1, 2009, and notwithstanding any other provisions of
13this Act, "food for human consumption that is to be consumed
14off the premises where it is sold" includes all food sold
15through a vending machine, except soft drinks, candy, and food
16products that are dispensed hot from a vending machine,
17regardless of the location of the vending machine.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "food for human consumption that
20is to be consumed off the premises where it is sold" does not
21include candy. For purposes of this Section, "candy" means a
22preparation of sugar, honey, or other natural or artificial
23sweeteners in combination with chocolate, fruits, nuts or
24other ingredients or flavorings in the form of bars, drops, or
25pieces. "Candy" does not include any preparation that contains
26flour or requires refrigeration.

 

 

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1    Notwithstanding any other provisions of this Act,
2beginning September 1, 2009, "nonprescription medicines and
3drugs" does not include grooming and hygiene products. For
4purposes of this Section, "grooming and hygiene products"
5includes, but is not limited to, soaps and cleaning solutions,
6shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
7lotions and screens, unless those products are available by
8prescription only, regardless of whether the products meet the
9definition of "over-the-counter-drugs". For the purposes of
10this paragraph, "over-the-counter-drug" means a drug for human
11use that contains a label that identifies the product as a drug
12as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
13label includes:
14        (A) A "Drug Facts" panel; or
15        (B) A statement of the "active ingredient(s)" with a
16    list of those ingredients contained in the compound,
17    substance or preparation.
18    Beginning on the effective date of this amendatory Act of
19the 98th General Assembly, "prescription and nonprescription
20medicines and drugs" includes medical cannabis purchased from
21a registered dispensing organization under the Compassionate
22Use of Medical Cannabis Program Act.
23    As used in this Section, "adult use cannabis" means
24cannabis subject to tax under the Cannabis Cultivation
25Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
26and does not include cannabis subject to tax under the

 

 

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1Compassionate Use of Medical Cannabis Program Act.
2    If the property that is purchased at retail from a
3retailer is acquired outside Illinois and used outside
4Illinois before being brought to Illinois for use here and is
5taxable under this Act, the "selling price" on which the tax is
6computed shall be reduced by an amount that represents a
7reasonable allowance for depreciation for the period of prior
8out-of-state use.
9(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
10101-593, eff. 12-4-19.)
 
11    (35 ILCS 105/3-40)  (from Ch. 120, par. 439.3-40)
12    Sec. 3-40. Gasohol. As used in this Act, "gasohol" means
13motor fuel that is a denatured ethanol and gasoline blend of
14denatured ethanol and gasoline that contains (i) no more than
151.25% water by weight and (ii) the maximum proportion of
16ethanol authorized by the United States Environmental
17Protection Agency under Section 211 of the Clean Air Act. The
18blend must contain 90% gasoline and 10% denatured ethanol. A
19maximum of one percent error factor in the amount of denatured
20ethanol used in the blend is allowable to compensate for
21blending equipment variations. Any person who knowingly sells
22or represents as gasohol any fuel that does not qualify as
23gasohol under this Act is guilty of a business offense and
24shall be fined not more than $100 for each day that the sale or
25representation takes place after notification from the

 

 

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1Department of Agriculture that the fuel in question does not
2qualify as gasohol.
3(Source: P.A. 93-724, eff. 7-13-04.)
 
4    (35 ILCS 105/3-44)
5    Sec. 3-44. Majority blended ethanol fuel. "Majority
6blended ethanol fuel" means motor fuel that (i) contains not
7less than 51% and no more than 83% by volume ethanol, as
8specified in ASTM Standard DS798-11 and (ii) is capable of
9being used in the operation of flexible fuel vehicles. 70% and
10no more than 90% denatured ethanol and no less than 10% and no
11more than 30% gasoline.
12(Source: P.A. 93-17, eff. 6-11-03.)
 
13    (35 ILCS 105/3-44.3 new)
14    Sec. 3-44.3. Mid-range ethanol blend. "Mid-range ethanol
15blend" means a blend of gasoline and denatured ethanol that
16contains not less than 20% but less than 51% denatured
17ethanol.
 
18    Section 15. The Service Use Tax Act is amended by changing
19Section 3-10 as follows:
 
20    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
21    Sec. 3-10. Rate of tax. Unless otherwise provided in this
22Section, the tax imposed by this Act is at the rate of 6.25% of

 

 

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1the selling price of tangible personal property transferred as
2an incident to the sale of service, but, for the purpose of
3computing this tax, in no event shall the selling price be less
4than the cost price of the property to the serviceman.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    With respect to gasohol, as defined in the Use Tax Act, the
10tax imposed by this Act applies to (i) 70% of the selling price
11of property transferred as an incident to the sale of service
12on or after January 1, 1990, and before July 1, 2003, (ii) 80%
13of the selling price of property transferred as an incident to
14the sale of service on or after July 1, 2003 and on or before
15July 1, 2017, and (iii) 100% of the selling price of property
16transferred as an incident to the sale of service after July 1,
172017 and prior to July 1, 2021, (iv) 90% of the selling price
18of property transferred as an incident to the sale of service
19on or after July 1, 2021 and prior to July 1, 2024, and (v)
20100% of the selling price of property transferred as an
21incident to the sale of service thereafter. If, at any time,
22however, the tax under this Act on sales of gasohol, as defined
23in the Use Tax Act, is imposed at the rate of 1.25%, then the
24tax imposed by this Act applies to 100% of the proceeds of
25sales of gasohol made during that time.
26    With respect to mid-range ethanol blends, as defined in

 

 

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1the Use Tax Act, the tax imposed by this Act applies to (i) 80%
2of the proceeds of sales made on or after July 1, 2021 and on
3or before December 31, 2025 and (ii) 100% of the proceeds of
4sales made thereafter. If, at any time, however, the tax under
5this Act on sales of mid-range ethanol blends is imposed at the
6rate of 1.25%, then the tax imposed by this Act applies to 100%
7of the proceeds of sales of mid-range ethanol blends made
8during that time.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the selling price of property transferred as an incident to
12the sale of service on or after July 1, 2003 and on or before
13December 31, 2023 but applies to 100% of the selling price
14thereafter.
15    With respect to biodiesel blends, as defined in the Use
16Tax Act, with no less than 1% and no more than 10% biodiesel,
17the tax imposed by this Act applies to (i) 80% of the selling
18price of property transferred as an incident to the sale of
19service on or after July 1, 2003 and on or before December 31,
202018 and (ii) 100% of the proceeds of the selling price
21thereafter. If, at any time, however, the tax under this Act on
22sales of biodiesel blends, as defined in the Use Tax Act, with
23no less than 1% and no more than 10% biodiesel is imposed at
24the rate of 1.25%, then the tax imposed by this Act applies to
25100% of the proceeds of sales of biodiesel blends with no less
26than 1% and no more than 10% biodiesel made during that time.

 

 

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1    With respect to 100% biodiesel, as defined in the Use Tax
2Act, and biodiesel blends, as defined in the Use Tax Act, with
3more than 10% but no more than 99% biodiesel, the tax imposed
4by this Act does not apply to the proceeds of the selling price
5of property transferred as an incident to the sale of service
6on or after July 1, 2003 and on or before December 31, 2023 but
7applies to 100% of the selling price thereafter.
8    At the election of any registered serviceman made for each
9fiscal year, sales of service in which the aggregate annual
10cost price of tangible personal property transferred as an
11incident to the sales of service is less than 35%, or 75% in
12the case of servicemen transferring prescription drugs or
13servicemen engaged in graphic arts production, of the
14aggregate annual total gross receipts from all sales of
15service, the tax imposed by this Act shall be based on the
16serviceman's cost price of the tangible personal property
17transferred as an incident to the sale of those services.
18    The tax shall be imposed at the rate of 1% on food prepared
19for immediate consumption and transferred incident to a sale
20of service subject to this Act or the Service Occupation Tax
21Act by an entity licensed under the Hospital Licensing Act,
22the Nursing Home Care Act, the ID/DD Community Care Act, the
23MC/DD Act, the Specialized Mental Health Rehabilitation Act of
242013, or the Child Care Act of 1969. The tax shall also be
25imposed at the rate of 1% on food for human consumption that is
26to be consumed off the premises where it is sold (other than

 

 

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1alcoholic beverages, food consisting of or infused with adult
2use cannabis, soft drinks, and food that has been prepared for
3immediate consumption and is not otherwise included in this
4paragraph) and prescription and nonprescription medicines,
5drugs, medical appliances, products classified as Class III
6medical devices by the United States Food and Drug
7Administration that are used for cancer treatment pursuant to
8a prescription, as well as any accessories and components
9related to those devices, modifications to a motor vehicle for
10the purpose of rendering it usable by a person with a
11disability, and insulin, urine testing materials, syringes,
12and needles used by diabetics, for human use. For the purposes
13of this Section, until September 1, 2009: the term "soft
14drinks" means any complete, finished, ready-to-use,
15non-alcoholic drink, whether carbonated or not, including but
16not limited to soda water, cola, fruit juice, vegetable juice,
17carbonated water, and all other preparations commonly known as
18soft drinks of whatever kind or description that are contained
19in any closed or sealed bottle, can, carton, or container,
20regardless of size; but "soft drinks" does not include coffee,
21tea, non-carbonated water, infant formula, milk or milk
22products as defined in the Grade A Pasteurized Milk and Milk
23Products Act, or drinks containing 50% or more natural fruit
24or vegetable juice.
25    Notwithstanding any other provisions of this Act,
26beginning September 1, 2009, "soft drinks" means non-alcoholic

 

 

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1beverages that contain natural or artificial sweeteners. "Soft
2drinks" do not include beverages that contain milk or milk
3products, soy, rice or similar milk substitutes, or greater
4than 50% of vegetable or fruit juice by volume.
5    Until August 1, 2009, and notwithstanding any other
6provisions of this Act, "food for human consumption that is to
7be consumed off the premises where it is sold" includes all
8food sold through a vending machine, except soft drinks and
9food products that are dispensed hot from a vending machine,
10regardless of the location of the vending machine. Beginning
11August 1, 2009, and notwithstanding any other provisions of
12this Act, "food for human consumption that is to be consumed
13off the premises where it is sold" includes all food sold
14through a vending machine, except soft drinks, candy, and food
15products that are dispensed hot from a vending machine,
16regardless of the location of the vending machine.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "food for human consumption that
19is to be consumed off the premises where it is sold" does not
20include candy. For purposes of this Section, "candy" means a
21preparation of sugar, honey, or other natural or artificial
22sweeteners in combination with chocolate, fruits, nuts or
23other ingredients or flavorings in the form of bars, drops, or
24pieces. "Candy" does not include any preparation that contains
25flour or requires refrigeration.
26    Notwithstanding any other provisions of this Act,

 

 

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1beginning September 1, 2009, "nonprescription medicines and
2drugs" does not include grooming and hygiene products. For
3purposes of this Section, "grooming and hygiene products"
4includes, but is not limited to, soaps and cleaning solutions,
5shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
6lotions and screens, unless those products are available by
7prescription only, regardless of whether the products meet the
8definition of "over-the-counter-drugs". For the purposes of
9this paragraph, "over-the-counter-drug" means a drug for human
10use that contains a label that identifies the product as a drug
11as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
12label includes:
13        (A) A "Drug Facts" panel; or
14        (B) A statement of the "active ingredient(s)" with a
15    list of those ingredients contained in the compound,
16    substance or preparation.
17    Beginning on January 1, 2014 (the effective date of Public
18Act 98-122), "prescription and nonprescription medicines and
19drugs" includes medical cannabis purchased from a registered
20dispensing organization under the Compassionate Use of Medical
21Cannabis Program Act.
22    As used in this Section, "adult use cannabis" means
23cannabis subject to tax under the Cannabis Cultivation
24Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
25and does not include cannabis subject to tax under the
26Compassionate Use of Medical Cannabis Program Act.

 

 

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1    If the property that is acquired from a serviceman is
2acquired outside Illinois and used outside Illinois before
3being brought to Illinois for use here and is taxable under
4this Act, the "selling price" on which the tax is computed
5shall be reduced by an amount that represents a reasonable
6allowance for depreciation for the period of prior
7out-of-state use.
8(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
9101-593, eff. 12-4-19.)
 
10    Section 20. The Service Occupation Tax Act is amended by
11changing Section 3-10 as follows:
 
12    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
13    Sec. 3-10. Rate of tax. Unless otherwise provided in this
14Section, the tax imposed by this Act is at the rate of 6.25% of
15the "selling price", as defined in Section 2 of the Service Use
16Tax Act, of the tangible personal property. For the purpose of
17computing this tax, in no event shall the "selling price" be
18less than the cost price to the serviceman of the tangible
19personal property transferred. The selling price of each item
20of tangible personal property transferred as an incident of a
21sale of service may be shown as a distinct and separate item on
22the serviceman's billing to the service customer. If the
23selling price is not so shown, the selling price of the
24tangible personal property is deemed to be 50% of the

 

 

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1serviceman's entire billing to the service customer. When,
2however, a serviceman contracts to design, develop, and
3produce special order machinery or equipment, the tax imposed
4by this Act shall be based on the serviceman's cost price of
5the tangible personal property transferred incident to the
6completion of the contract.
7    Beginning on July 1, 2000 and through December 31, 2000,
8with respect to motor fuel, as defined in Section 1.1 of the
9Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
10the Use Tax Act, the tax is imposed at the rate of 1.25%.
11    With respect to gasohol, as defined in the Use Tax Act, the
12tax imposed by this Act shall apply to (i) 70% of the cost
13price of property transferred as an incident to the sale of
14service on or after January 1, 1990, and before July 1, 2003,
15(ii) 80% of the selling price of property transferred as an
16incident to the sale of service on or after July 1, 2003 and on
17or before July 1, 2017, and (iii) 100% of the cost price of
18property transferred as an incident to the sale of service
19after July 1, 2017 and prior to July 1, 2021, (iv) 90% of the
20cost price of property transferred as an incident to the sale
21of service on or after July 1, 2021 and prior to July 1, 2024,
22and (v) 100% of the cost price of property transferred as an
23incident to the sale of service thereafter. If, at any time,
24however, the tax under this Act on sales of gasohol, as defined
25in the Use Tax Act, is imposed at the rate of 1.25%, then the
26tax imposed by this Act applies to 100% of the proceeds of

 

 

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1sales of gasohol made during that time.
2    With respect to mid-range ethanol blends, as defined in
3the Use Tax Act, the tax imposed by this Act applies to (i) 80%
4of the selling price of property transferred as an incident to
5the sale of service on or after July 1, 2021 and on or before
6December 31, 2025 and (ii) 100% of the selling price
7thereafter. If, at any time, however, the tax under this Act on
8sales of mid-range ethanol blends is imposed at the rate of
91.25%, then the tax imposed by this Act applies to 100% of the
10proceeds of sales of mid-range ethanol blends made during that
11time.
12    With respect to majority blended ethanol fuel, as defined
13in the Use Tax Act, the tax imposed by this Act does not apply
14to the selling price of property transferred as an incident to
15the sale of service on or after July 1, 2003 and on or before
16December 31, 2023 but applies to 100% of the selling price
17thereafter.
18    With respect to biodiesel blends, as defined in the Use
19Tax Act, with no less than 1% and no more than 10% biodiesel,
20the tax imposed by this Act applies to (i) 80% of the selling
21price of property transferred as an incident to the sale of
22service on or after July 1, 2003 and on or before December 31,
232018 and (ii) 100% of the proceeds of the selling price
24thereafter. If, at any time, however, the tax under this Act on
25sales of biodiesel blends, as defined in the Use Tax Act, with
26no less than 1% and no more than 10% biodiesel is imposed at

 

 

SB2428- 18 -LRB102 10895 HLH 16225 b

1the rate of 1.25%, then the tax imposed by this Act applies to
2100% of the proceeds of sales of biodiesel blends with no less
3than 1% and no more than 10% biodiesel made during that time.
4    With respect to 100% biodiesel, as defined in the Use Tax
5Act, and biodiesel blends, as defined in the Use Tax Act, with
6more than 10% but no more than 99% biodiesel material, the tax
7imposed by this Act does not apply to the proceeds of the
8selling price of property transferred as an incident to the
9sale of service on or after July 1, 2003 and on or before
10December 31, 2023 but applies to 100% of the selling price
11thereafter.
12    At the election of any registered serviceman made for each
13fiscal year, sales of service in which the aggregate annual
14cost price of tangible personal property transferred as an
15incident to the sales of service is less than 35%, or 75% in
16the case of servicemen transferring prescription drugs or
17servicemen engaged in graphic arts production, of the
18aggregate annual total gross receipts from all sales of
19service, the tax imposed by this Act shall be based on the
20serviceman's cost price of the tangible personal property
21transferred incident to the sale of those services.
22    The tax shall be imposed at the rate of 1% on food prepared
23for immediate consumption and transferred incident to a sale
24of service subject to this Act or the Service Occupation Tax
25Act by an entity licensed under the Hospital Licensing Act,
26the Nursing Home Care Act, the ID/DD Community Care Act, the

 

 

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1MC/DD Act, the Specialized Mental Health Rehabilitation Act of
22013, or the Child Care Act of 1969. The tax shall also be
3imposed at the rate of 1% on food for human consumption that is
4to be consumed off the premises where it is sold (other than
5alcoholic beverages, food consisting of or infused with adult
6use cannabis, soft drinks, and food that has been prepared for
7immediate consumption and is not otherwise included in this
8paragraph) and prescription and nonprescription medicines,
9drugs, medical appliances, products classified as Class III
10medical devices by the United States Food and Drug
11Administration that are used for cancer treatment pursuant to
12a prescription, as well as any accessories and components
13related to those devices, modifications to a motor vehicle for
14the purpose of rendering it usable by a person with a
15disability, and insulin, urine testing materials, syringes,
16and needles used by diabetics, for human use. For the purposes
17of this Section, until September 1, 2009: the term "soft
18drinks" means any complete, finished, ready-to-use,
19non-alcoholic drink, whether carbonated or not, including but
20not limited to soda water, cola, fruit juice, vegetable juice,
21carbonated water, and all other preparations commonly known as
22soft drinks of whatever kind or description that are contained
23in any closed or sealed can, carton, or container, regardless
24of size; but "soft drinks" does not include coffee, tea,
25non-carbonated water, infant formula, milk or milk products as
26defined in the Grade A Pasteurized Milk and Milk Products Act,

 

 

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1or drinks containing 50% or more natural fruit or vegetable
2juice.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "soft drinks" means non-alcoholic
5beverages that contain natural or artificial sweeteners. "Soft
6drinks" do not include beverages that contain milk or milk
7products, soy, rice or similar milk substitutes, or greater
8than 50% of vegetable or fruit juice by volume.
9    Until August 1, 2009, and notwithstanding any other
10provisions of this Act, "food for human consumption that is to
11be consumed off the premises where it is sold" includes all
12food sold through a vending machine, except soft drinks and
13food products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine. Beginning
15August 1, 2009, and notwithstanding any other provisions of
16this Act, "food for human consumption that is to be consumed
17off the premises where it is sold" includes all food sold
18through a vending machine, except soft drinks, candy, and food
19products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "food for human consumption that
23is to be consumed off the premises where it is sold" does not
24include candy. For purposes of this Section, "candy" means a
25preparation of sugar, honey, or other natural or artificial
26sweeteners in combination with chocolate, fruits, nuts or

 

 

SB2428- 21 -LRB102 10895 HLH 16225 b

1other ingredients or flavorings in the form of bars, drops, or
2pieces. "Candy" does not include any preparation that contains
3flour or requires refrigeration.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "nonprescription medicines and
6drugs" does not include grooming and hygiene products. For
7purposes of this Section, "grooming and hygiene products"
8includes, but is not limited to, soaps and cleaning solutions,
9shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
10lotions and screens, unless those products are available by
11prescription only, regardless of whether the products meet the
12definition of "over-the-counter-drugs". For the purposes of
13this paragraph, "over-the-counter-drug" means a drug for human
14use that contains a label that identifies the product as a drug
15as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
16label includes:
17        (A) A "Drug Facts" panel; or
18        (B) A statement of the "active ingredient(s)" with a
19    list of those ingredients contained in the compound,
20    substance or preparation.
21    Beginning on January 1, 2014 (the effective date of Public
22Act 98-122), "prescription and nonprescription medicines and
23drugs" includes medical cannabis purchased from a registered
24dispensing organization under the Compassionate Use of Medical
25Cannabis Program Act.
26    As used in this Section, "adult use cannabis" means

 

 

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1cannabis subject to tax under the Cannabis Cultivation
2Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
3and does not include cannabis subject to tax under the
4Compassionate Use of Medical Cannabis Program Act.
5(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
6101-593, eff. 12-4-19.)
 
7    Section 25. The Retailers' Occupation Tax Act is amended
8by changing Section 2-10 as follows:
 
9    (35 ILCS 120/2-10)
10    Sec. 2-10. Rate of tax. Unless otherwise provided in this
11Section, the tax imposed by this Act is at the rate of 6.25% of
12gross receipts from sales of tangible personal property made
13in the course of business.
14    Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18    Beginning on August 6, 2010 through August 15, 2010, with
19respect to sales tax holiday items as defined in Section 2-8 of
20this Act, the tax is imposed at the rate of 1.25%.
21    Within 14 days after the effective date of this amendatory
22Act of the 91st General Assembly, each retailer of motor fuel
23and gasohol shall cause the following notice to be posted in a
24prominently visible place on each retail dispensing device

 

 

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1that is used to dispense motor fuel or gasohol in the State of
2Illinois: "As of July 1, 2000, the State of Illinois has
3eliminated the State's share of sales tax on motor fuel and
4gasohol through December 31, 2000. The price on this pump
5should reflect the elimination of the tax." The notice shall
6be printed in bold print on a sign that is no smaller than 4
7inches by 8 inches. The sign shall be clearly visible to
8customers. Any retailer who fails to post or maintain a
9required sign through December 31, 2000 is guilty of a petty
10offense for which the fine shall be $500 per day per each
11retail premises where a violation occurs.
12    With respect to gasohol, as defined in the Use Tax Act, the
13tax imposed by this Act applies to (i) 70% of the proceeds of
14sales made on or after January 1, 1990, and before July 1,
152003, (ii) 80% of the proceeds of sales made on or after July
161, 2003 and on or before July 1, 2017, and (iii) 100% of the
17proceeds of sales made after July 1, 2017 and prior to July 1,
182021, (iv) 90% of the proceeds of sales made on or after July
191, 2021 and prior to July 1, 2024, and (v) 100% of the proceeds
20of sales made thereafter. If, at any time, however, the tax
21under this Act on sales of gasohol, as defined in the Use Tax
22Act, is imposed at the rate of 1.25%, then the tax imposed by
23this Act applies to 100% of the proceeds of sales of gasohol
24made during that time.
25    With respect to mid-range ethanol blends, as defined in
26the Use Tax Act, the tax imposed by this Act applies to (i) 80%

 

 

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1of the proceeds of sales made on or after July 1, 2021 and on
2or before December 31, 2025 and (ii) 100% of the proceeds of
3sales made thereafter. If, at any time, however, the tax under
4this Act on sales of mid-range ethanol blends is imposed at the
5rate of 1.25%, then the tax imposed by this Act applies to 100%
6of the proceeds of sales of mid-range ethanol blends made
7during that time.
8    With respect to majority blended ethanol fuel, as defined
9in the Use Tax Act, the tax imposed by this Act does not apply
10to the proceeds of sales made on or after July 1, 2003 and on
11or before December 31, 2023 but applies to 100% of the proceeds
12of sales made thereafter.
13    With respect to biodiesel blends, as defined in the Use
14Tax Act, with no less than 1% and no more than 10% biodiesel,
15the tax imposed by this Act applies to (i) 80% of the proceeds
16of sales made on or after July 1, 2003 and on or before
17December 31, 2018 and (ii) 100% of the proceeds of sales made
18thereafter. If, at any time, however, the tax under this Act on
19sales of biodiesel blends, as defined in the Use Tax Act, with
20no less than 1% and no more than 10% biodiesel is imposed at
21the rate of 1.25%, then the tax imposed by this Act applies to
22100% of the proceeds of sales of biodiesel blends with no less
23than 1% and no more than 10% biodiesel made during that time.
24    With respect to 100% biodiesel, as defined in the Use Tax
25Act, and biodiesel blends, as defined in the Use Tax Act, with
26more than 10% but no more than 99% biodiesel, the tax imposed

 

 

SB2428- 25 -LRB102 10895 HLH 16225 b

1by this Act does not apply to the proceeds of sales made on or
2after July 1, 2003 and on or before December 31, 2023 but
3applies to 100% of the proceeds of sales made thereafter.
4    With respect to food for human consumption that is to be
5consumed off the premises where it is sold (other than
6alcoholic beverages, food consisting of or infused with adult
7use cannabis, soft drinks, and food that has been prepared for
8immediate consumption) and prescription and nonprescription
9medicines, drugs, medical appliances, products classified as
10Class III medical devices by the United States Food and Drug
11Administration that are used for cancer treatment pursuant to
12a prescription, as well as any accessories and components
13related to those devices, modifications to a motor vehicle for
14the purpose of rendering it usable by a person with a
15disability, and insulin, urine testing materials, syringes,
16and needles used by diabetics, for human use, the tax is
17imposed at the rate of 1%. For the purposes of this Section,
18until September 1, 2009: the term "soft drinks" means any
19complete, finished, ready-to-use, non-alcoholic drink, whether
20carbonated or not, including but not limited to soda water,
21cola, fruit juice, vegetable juice, carbonated water, and all
22other preparations commonly known as soft drinks of whatever
23kind or description that are contained in any closed or sealed
24bottle, can, carton, or container, regardless of size; but
25"soft drinks" does not include coffee, tea, non-carbonated
26water, infant formula, milk or milk products as defined in the

 

 

SB2428- 26 -LRB102 10895 HLH 16225 b

1Grade A Pasteurized Milk and Milk Products Act, or drinks
2containing 50% or more natural fruit or vegetable juice.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "soft drinks" means non-alcoholic
5beverages that contain natural or artificial sweeteners. "Soft
6drinks" do not include beverages that contain milk or milk
7products, soy, rice or similar milk substitutes, or greater
8than 50% of vegetable or fruit juice by volume.
9    Until August 1, 2009, and notwithstanding any other
10provisions of this Act, "food for human consumption that is to
11be consumed off the premises where it is sold" includes all
12food sold through a vending machine, except soft drinks and
13food products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine. Beginning
15August 1, 2009, and notwithstanding any other provisions of
16this Act, "food for human consumption that is to be consumed
17off the premises where it is sold" includes all food sold
18through a vending machine, except soft drinks, candy, and food
19products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "food for human consumption that
23is to be consumed off the premises where it is sold" does not
24include candy. For purposes of this Section, "candy" means a
25preparation of sugar, honey, or other natural or artificial
26sweeteners in combination with chocolate, fruits, nuts or

 

 

SB2428- 27 -LRB102 10895 HLH 16225 b

1other ingredients or flavorings in the form of bars, drops, or
2pieces. "Candy" does not include any preparation that contains
3flour or requires refrigeration.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "nonprescription medicines and
6drugs" does not include grooming and hygiene products. For
7purposes of this Section, "grooming and hygiene products"
8includes, but is not limited to, soaps and cleaning solutions,
9shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
10lotions and screens, unless those products are available by
11prescription only, regardless of whether the products meet the
12definition of "over-the-counter-drugs". For the purposes of
13this paragraph, "over-the-counter-drug" means a drug for human
14use that contains a label that identifies the product as a drug
15as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
16label includes:
17        (A) A "Drug Facts" panel; or
18        (B) A statement of the "active ingredient(s)" with a
19    list of those ingredients contained in the compound,
20    substance or preparation.
21    Beginning on the effective date of this amendatory Act of
22the 98th General Assembly, "prescription and nonprescription
23medicines and drugs" includes medical cannabis purchased from
24a registered dispensing organization under the Compassionate
25Use of Medical Cannabis Program Act.
26    As used in this Section, "adult use cannabis" means

 

 

SB2428- 28 -LRB102 10895 HLH 16225 b

1cannabis subject to tax under the Cannabis Cultivation
2Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
3and does not include cannabis subject to tax under the
4Compassionate Use of Medical Cannabis Program Act.
5(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
6101-593, eff. 12-4-19.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.