103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5545

 

Introduced 2/9/2024, by Rep. Jay Hoffman

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Property Tax Code. Provides that certain property may be certified by the Department of Commerce and Economic Opportunity as containing a megaproject. Provides that a "megaproject" is a project that meets certain investment and job creation specifications. Provides that the megaproject property is eligible for an assessment freeze. Provides that megaproject property may be granted an abatement. Provides that a company that operates a megaproject shall enter into an agreement with the municipality in which the project is located and other local taxing districts to make certain special payments. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that qualified tangible personal property used in the construction or development of a megaproject is exempt from the taxes imposed under those Acts. Effective June 1, 2024.


LRB103 38926 HLH 69063 b

 

 

A BILL FOR

 

HB5545LRB103 38926 HLH 69063 b

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

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Except as otherwise provided in this Act, personal
12property purchased by a governmental body, by a corporation,
13society, association, foundation, or institution organized and
14operated exclusively for charitable, religious, or educational
15purposes, or by a not-for-profit corporation, society,
16association, foundation, institution, or organization that has
17no compensated officers or employees and that is organized and
18operated primarily for the recreation of persons 55 years of
19age or older. A limited liability company may qualify for the
20exemption under this paragraph only if the limited liability
21company is organized and operated exclusively for educational
22purposes. On and after July 1, 1987, however, no entity
23otherwise eligible for this exemption shall make tax-free
24purchases unless it has an active exemption identification
25number 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.
9    Beginning on January 1, 2024, farm machinery and equipment
10also includes electrical power generation equipment used
11primarily for production agriculture.
12    This item (11) is exempt from the provisions of Section
133-90.
14    (12) Until June 30, 2013, fuel and petroleum products sold
15to or used by an air common carrier, certified by the carrier
16to be used for consumption, shipment, or storage in the
17conduct of its business as an air common carrier, for a flight
18destined for or returning from a location or locations outside
19the United States without regard to previous or subsequent
20domestic stopovers.
21    Beginning July 1, 2013, fuel and petroleum products sold
22to or used by an air carrier, certified by the carrier to be
23used for consumption, shipment, or storage in the conduct of
24its business as an air common carrier, for a flight that (i) is
25engaged in foreign trade or is engaged in trade between the
26United States and any of its possessions and (ii) transports

 

 

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

 

 

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1photoprocessing machinery and equipment purchased for lease.
2    (16) Until July 1, 2028, coal and aggregate exploration,
3mining, off-highway hauling, processing, maintenance, and
4reclamation equipment, including replacement parts and
5equipment, and including equipment purchased for lease, but
6excluding motor vehicles required to be registered under the
7Illinois Vehicle Code. The changes made to this Section by
8Public Act 97-767 apply on and after July 1, 2003, but no claim
9for credit or refund is allowed on or after August 16, 2013
10(the effective date of Public Act 98-456) for such taxes paid
11during the period beginning July 1, 2003 and ending on August
1216, 2013 (the effective date of Public Act 98-456).
13    (17) Until July 1, 2003, distillation machinery and
14equipment, sold as a unit or kit, assembled or installed by the
15retailer, certified by the user to be used only for the
16production of ethyl alcohol that will be used for consumption
17as motor fuel or as a component of motor fuel for the personal
18use of the user, and not subject to sale or resale.
19    (18) Manufacturing and assembling machinery and equipment
20used primarily in the process of manufacturing or assembling
21tangible personal property for wholesale or retail sale or
22lease, whether that sale or lease is made directly by the
23manufacturer or by some other person, whether the materials
24used in the process are owned by the manufacturer or some other
25person, or whether that sale or lease is made apart from or as
26an incident to the seller's engaging in the service occupation

 

 

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1of producing machines, tools, dies, jigs, patterns, gauges, or
2other similar items of no commercial value on special order
3for a particular purchaser. The exemption provided by this
4paragraph (18) includes production related tangible personal
5property, as defined in Section 3-50, purchased on or after
6July 1, 2019. The exemption provided by this paragraph (18)
7does not include machinery and equipment used in (i) the
8generation of electricity for wholesale or retail sale; (ii)
9the generation or treatment of natural or artificial gas for
10wholesale or retail sale that is delivered to customers
11through pipes, pipelines, or mains; or (iii) the treatment of
12water for wholesale or retail sale that is delivered to
13customers through pipes, pipelines, or mains. The provisions
14of Public Act 98-583 are declaratory of existing law as to the
15meaning and scope of this exemption. Beginning on July 1,
162017, the exemption provided by this paragraph (18) includes,
17but is not limited to, graphic arts machinery and equipment,
18as defined in paragraph (6) of this Section.
19    (19) Personal property delivered to a purchaser or
20purchaser's donee inside Illinois when the purchase order for
21that personal property was received by a florist located
22outside Illinois who has a florist located inside Illinois
23deliver the personal property.
24    (20) Semen used for artificial insemination of livestock
25for direct agricultural production.
26    (21) Horses, or interests in horses, registered with and

 

 

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1meeting the requirements of any of the Arabian Horse Club
2Registry of America, Appaloosa Horse Club, American Quarter
3Horse Association, United States Trotting Association, or
4Jockey Club, as appropriate, used for purposes of breeding or
5racing for prizes. This item (21) is exempt from the
6provisions of Section 3-90, and the exemption provided for
7under this item (21) applies for all periods beginning May 30,
81995, but no claim for credit or refund is allowed on or after
9January 1, 2008 for such taxes paid during the period
10beginning May 30, 2000 and ending on January 1, 2008.
11    (22) Computers and communications equipment utilized for
12any hospital purpose and equipment used in the diagnosis,
13analysis, or treatment of hospital patients purchased by a
14lessor who leases the equipment, under a lease of one year or
15longer executed or in effect at the time the lessor would
16otherwise be subject to the tax imposed by this Act, to a
17hospital that has been issued an active tax exemption
18identification number by the Department under Section 1g of
19the Retailers' Occupation Tax Act. If the equipment is leased
20in a manner that does not qualify for this exemption or is used
21in any other non-exempt manner, the lessor shall be liable for
22the tax imposed under this Act or the Service Use Tax Act, as
23the case may be, based on the fair market value of the property
24at the time the non-qualifying use occurs. No lessor shall
25collect or attempt to collect an amount (however designated)
26that purports to reimburse that lessor for the tax imposed by

 

 

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

 

 

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

 

 

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1at a "game breeding and hunting preserve area" as that term is
2used in the Wildlife Code. This paragraph is exempt from the
3provisions of Section 3-90.
4    (27) A motor vehicle, as that term is defined in Section
51-146 of the Illinois Vehicle Code, that is donated to a
6corporation, limited liability company, society, association,
7foundation, or institution that is determined by the
8Department to be organized and operated exclusively for
9educational purposes. For purposes of this exemption, "a
10corporation, limited liability company, society, association,
11foundation, or institution organized and operated exclusively
12for educational purposes" means all tax-supported public
13schools, private schools that offer systematic instruction in
14useful branches of learning by methods common to public
15schools and that compare favorably in their scope and
16intensity with the course of study presented in tax-supported
17schools, and vocational or technical schools or institutes
18organized and operated exclusively to provide a course of
19study of not less than 6 weeks duration and designed to prepare
20individuals to follow a trade or to pursue a manual,
21technical, mechanical, industrial, business, or commercial
22occupation.
23    (28) Beginning January 1, 2000, personal property,
24including food, purchased through fundraising events for the
25benefit of a public or private elementary or secondary school,
26a group of those schools, or one or more school districts if

 

 

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

 

 

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

 

 

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

 

 

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1for any reason, the lessor is liable to pay that amount to the
2Department. This paragraph is exempt from the provisions of
3Section 3-90.
4    (33) On and after July 1, 2003 and through June 30, 2004,
5the use in this State of motor vehicles of the second division
6with a gross vehicle weight in excess of 8,000 pounds and that
7are subject to the commercial distribution fee imposed under
8Section 3-815.1 of the Illinois Vehicle Code. Beginning on
9July 1, 2004 and through June 30, 2005, the use in this State
10of motor vehicles of the second division: (i) with a gross
11vehicle weight rating in excess of 8,000 pounds; (ii) that are
12subject to the commercial distribution fee imposed under
13Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
14are primarily used for commercial purposes. Through June 30,
152005, this exemption applies to repair and replacement parts
16added after the initial purchase of such a motor vehicle if
17that motor vehicle is used in a manner that would qualify for
18the rolling stock exemption otherwise provided for in this
19Act. For purposes of this paragraph, the term "used for
20commercial purposes" means the transportation of persons or
21property in furtherance of any commercial or industrial
22enterprise, whether for-hire or not.
23    (34) Beginning January 1, 2008, tangible personal property
24used in the construction or maintenance of a community water
25supply, as defined under Section 3.145 of the Environmental
26Protection Act, that is operated by a not-for-profit

 

 

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1corporation that holds a valid water supply permit issued
2under Title IV of the Environmental Protection Act. This
3paragraph is exempt from the provisions of Section 3-90.
4    (35) Beginning January 1, 2010 and continuing through
5December 31, 2029, materials, parts, equipment, components,
6and furnishings incorporated into or upon an aircraft as part
7of the modification, refurbishment, completion, replacement,
8repair, or maintenance of the aircraft. This exemption
9includes consumable supplies used in the modification,
10refurbishment, completion, replacement, repair, and
11maintenance of aircraft. However, until January 1, 2024, this
12exemption excludes any materials, parts, equipment,
13components, and consumable supplies used in the modification,
14replacement, repair, and maintenance of aircraft engines or
15power plants, whether such engines or power plants are
16installed or uninstalled upon any such aircraft. "Consumable
17supplies" include, but are not limited to, adhesive, tape,
18sandpaper, general purpose lubricants, cleaning solution,
19latex gloves, and protective films.
20    Beginning January 1, 2010 and continuing through December
2131, 2023, this exemption applies only to the use of qualifying
22tangible personal property by persons who modify, refurbish,
23complete, repair, replace, or maintain aircraft and who (i)
24hold an Air Agency Certificate and are empowered to operate an
25approved repair station by the Federal Aviation
26Administration, (ii) have a Class IV Rating, and (iii) conduct

 

 

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1operations in accordance with Part 145 of the Federal Aviation
2Regulations. From January 1, 2024 through December 31, 2029,
3this exemption applies only to the use of qualifying tangible
4personal property by: (A) persons who modify, refurbish,
5complete, repair, replace, or maintain aircraft and who (i)
6hold an Air Agency Certificate and are empowered to operate an
7approved repair station by the Federal Aviation
8Administration, (ii) have a Class IV Rating, and (iii) conduct
9operations in accordance with Part 145 of the Federal Aviation
10Regulations; and (B) persons who engage in the modification,
11replacement, repair, and maintenance of aircraft engines or
12power plants without regard to whether or not those persons
13meet the qualifications of item (A).
14    The exemption does not include aircraft operated by a
15commercial air carrier providing scheduled passenger air
16service pursuant to authority issued under Part 121 or Part
17129 of the Federal Aviation Regulations. The changes made to
18this paragraph (35) by Public Act 98-534 are declarative of
19existing law. It is the intent of the General Assembly that the
20exemption under this paragraph (35) applies continuously from
21January 1, 2010 through December 31, 2024; however, no claim
22for credit or refund is allowed for taxes paid as a result of
23the disallowance of this exemption on or after January 1, 2015
24and prior to February 5, 2020 (the effective date of Public Act
25101-629).
26    (36) Tangible personal property purchased by a

 

 

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1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt
9instruments issued by the public-facilities corporation in
10connection with the development of the municipal convention
11hall. This exemption includes existing public-facilities
12corporations as provided in Section 11-65-25 of the Illinois
13Municipal Code. This paragraph is exempt from the provisions
14of Section 3-90.
15    (37) Beginning January 1, 2017 and through December 31,
162026, menstrual pads, tampons, and menstrual cups.
17    (38) Merchandise that is subject to the Rental Purchase
18Agreement Occupation and Use Tax. The purchaser must certify
19that the item is purchased to be rented subject to a
20rental-purchase rental purchase agreement, as defined in the
21Rental-Purchase Rental Purchase Agreement Act, and provide
22proof of registration under the Rental Purchase Agreement
23Occupation and Use Tax Act. This paragraph is exempt from the
24provisions of Section 3-90.
25    (39) Tangible personal property purchased by a purchaser
26who is exempt from the tax imposed by this Act by operation of

 

 

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1federal law. This paragraph is exempt from the provisions of
2Section 3-90.
3    (40) Qualified tangible personal property used in the
4construction or operation of a data center that has been
5granted a certificate of exemption by the Department of
6Commerce and Economic Opportunity, whether that tangible
7personal property is purchased by the owner, operator, or
8tenant of the data center or by a contractor or subcontractor
9of the owner, operator, or tenant. Data centers that would
10have qualified for a certificate of exemption prior to January
111, 2020 had Public Act 101-31 been in effect may apply for and
12obtain an exemption for subsequent purchases of computer
13equipment or enabling software purchased or leased to upgrade,
14supplement, or replace computer equipment or enabling software
15purchased or leased in the original investment that would have
16qualified.
17    The Department of Commerce and Economic Opportunity shall
18grant a certificate of exemption under this item (40) to
19qualified data centers as defined by Section 605-1025 of the
20Department of Commerce and Economic Opportunity Law of the
21Civil Administrative Code of Illinois.
22    For the purposes of this item (40):
23        "Data center" means a building or a series of
24    buildings rehabilitated or constructed to house working
25    servers in one physical location or multiple sites within
26    the State of Illinois.

 

 

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

 

 

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1    Commerce and Economic Opportunity.
2    This item (40) is exempt from the provisions of Section
33-90.
4    (41) Beginning July 1, 2022, breast pumps, breast pump
5collection and storage supplies, and breast pump kits. This
6item (41) is exempt from the provisions of Section 3-90. As
7used in this item (41):
8        "Breast pump" means an electrically controlled or
9    manually controlled pump device designed or marketed to be
10    used to express milk from a human breast during lactation,
11    including the pump device and any battery, AC adapter, or
12    other power supply unit that is used to power the pump
13    device and is packaged and sold with the pump device at the
14    time of sale.
15        "Breast pump collection and storage supplies" means
16    items of tangible personal property designed or marketed
17    to be used in conjunction with a breast pump to collect
18    milk expressed from a human breast and to store collected
19    milk until it is ready for consumption.
20        "Breast pump collection and storage supplies"
21    includes, but is not limited to: breast shields and breast
22    shield connectors; breast pump tubes and tubing adapters;
23    breast pump valves and membranes; backflow protectors and
24    backflow protector adaptors; bottles and bottle caps
25    specific to the operation of the breast pump; and breast
26    milk storage bags.

 

 

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1        "Breast pump collection and storage supplies" does not
2    include: (1) bottles and bottle caps not specific to the
3    operation of the breast pump; (2) breast pump travel bags
4    and other similar carrying accessories, including ice
5    packs, labels, and other similar products; (3) breast pump
6    cleaning supplies; (4) nursing bras, bra pads, breast
7    shells, and other similar products; and (5) creams,
8    ointments, and other similar products that relieve
9    breastfeeding-related symptoms or conditions of the
10    breasts or nipples, unless sold as part of a breast pump
11    kit that is pre-packaged by the breast pump manufacturer
12    or distributor.
13        "Breast pump kit" means a kit that: (1) contains no
14    more than a breast pump, breast pump collection and
15    storage supplies, a rechargeable battery for operating the
16    breast pump, a breastmilk cooler, bottle stands, ice
17    packs, and a breast pump carrying case; and (2) is
18    pre-packaged as a breast pump kit by the breast pump
19    manufacturer or distributor.
20    (42) Tangible personal property sold by or on behalf of
21the State Treasurer pursuant to the Revised Uniform Unclaimed
22Property Act. This item (42) is exempt from the provisions of
23Section 3-90.
24    (43) Beginning on January 1, 2024, tangible personal
25property purchased by an active duty member of the armed
26forces of the United States who presents valid military

 

 

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1identification and purchases the property using a form of
2payment where the federal government is the payor. The member
3of the armed forces must complete, at the point of sale, a form
4prescribed by the Department of Revenue documenting that the
5transaction is eligible for the exemption under this
6paragraph. Retailers must keep the form as documentation of
7the exemption in their records for a period of not less than 6
8years. "Armed forces of the United States" means the United
9States Army, Navy, Air Force, Marine Corps, or Coast Guard.
10This paragraph is exempt from the provisions of Section 3-90.
11    (44) Qualified tangible personal property that is (i) used
12in the construction or development of a megaproject for which
13a certificate has been issued prior to December 31, 2030 by the
14Department of Commerce and Economic Opportunity under Division
1522 of Article 10 of the Property Tax Code and (ii) purchased
16prior to the Department's issuance of the megaproject
17certificate or during the investment period, whether that
18tangible personal property is purchased by the owner,
19operator, or tenant of the megaproject or by a contractor or
20subcontractor of the owner, operator, or tenant.
21    As used in this item (44):
22    "Facility" means a building or series of buildings.
23    "Investment period" means the period ending 7 years after
24the date on which the Department of Commerce and Economic
25Opportunity issues the megaproject certificate, or such other
26longer period of time as the local municipality, local taxing

 

 

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1districts, and the company may agree to, not to exceed an
2initial period of 10 years.
3    "Megaproject" means a facility that is rehabilitated or
4constructed as described in Division 22 of Article 10 of the
5Property Tax Code.
6    "Qualified tangible personal property" means all tangible
7personal property that is essential to the construction or
8development of a megaproject, including, but not limited to:
9electrical systems and equipment; climate control and chilling
10equipment and systems; mechanical systems and equipment;
11monitoring and secure systems; emergency generators; hardware;
12computers; servers; data storage devices; network connectivity
13equipment; racks; cabinets; telecommunications cabling
14infrastructure; raised floor systems; peripheral components or
15systems; software; mechanical, electrical, or plumbing
16systems; battery systems; cooling systems and towers;
17temperature control systems; other cabling; and other
18infrastructure, equipment, and systems necessary to operate
19qualified tangible personal property, including fixtures; and
20component parts of those items, including installation,
21maintenance, repair, refurbishment, and replacement of
22qualified tangible personal property to generate, transform,
23transmit, distribute, or manage electricity necessary to
24operate qualified tangible personal property. The term
25"qualified tangible personal property" also includes building
26materials to be incorporated into the megaproject. To document

 

 

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1the exemption allowed under this Section, the retailer,
2contractor, subcontractor, or supplier must obtain from the
3purchaser a copy of the certificate issued by the Department
4of Commerce and Economic Opportunity for the megaproject as
5described and defined in Division 22 of Article 10 of the
6Property Tax Code.
7(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
8Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
9eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
10Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
11eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
12revised 12-12-23.)
 
13    Section 10. The Service Use Tax Act is amended by changing
14Section 3-5 as follows:
 
15    (35 ILCS 110/3-5)
16    Sec. 3-5. Exemptions. Use of the following tangible
17personal property is exempt from the tax imposed by this Act:
18    (1) Personal property purchased from a corporation,
19society, association, foundation, institution, or
20organization, other than a limited liability company, that is
21organized and operated as a not-for-profit service enterprise
22for the benefit of persons 65 years of age or older if the
23personal property was not purchased by the enterprise for the
24purpose of resale by the enterprise.

 

 

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1    (2) Personal property purchased by a non-profit Illinois
2county fair association for use in conducting, operating, or
3promoting the county fair.
4    (3) Personal property purchased by a not-for-profit arts
5or cultural organization that establishes, by proof required
6by the Department by rule, that it has received an exemption
7under Section 501(c)(3) of the Internal Revenue Code and that
8is organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after July 1, 2001 (the
15effective date of Public Act 92-35), however, an entity
16otherwise eligible for this exemption shall not make tax-free
17purchases unless it has an active identification number issued
18by the Department.
19    (4) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (5) Until July 1, 2003 and beginning again on September 1,
242004 through August 30, 2014, graphic arts machinery and
25equipment, including repair and replacement parts, both new
26and used, and including that manufactured on special order or

 

 

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

 

 

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1tanks and dry boxes shall include units sold separately from a
2motor vehicle required to be licensed and units sold mounted
3on a motor vehicle required to be licensed if the selling price
4of the tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment, including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals.
20    Beginning on January 1, 2024, farm machinery and equipment
21also includes electrical power generation equipment used
22primarily for production agriculture.
23    This item (7) is exempt from the provisions of Section
243-75.
25    (8) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air common carrier, certified by the carrier

 

 

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

 

 

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1rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
2pipe and tubular goods, including casing and drill strings,
3(iii) pumps and pump-jack units, (iv) storage tanks and flow
4lines, (v) any individual replacement part for oil field
5exploration, drilling, and production equipment, and (vi)
6machinery and equipment purchased for lease; but excluding
7motor vehicles required to be registered under the Illinois
8Vehicle Code.
9    (11) Proceeds from the sale of photoprocessing machinery
10and equipment, including repair and replacement parts, both
11new and used, including that manufactured on special order,
12certified by the purchaser to be used primarily for
13photoprocessing, and including photoprocessing machinery and
14equipment purchased for lease.
15    (12) Until July 1, 2028, coal and aggregate exploration,
16mining, off-highway hauling, processing, maintenance, and
17reclamation equipment, including replacement parts and
18equipment, and including equipment purchased for lease, but
19excluding motor vehicles required to be registered under the
20Illinois Vehicle Code. The changes made to this Section by
21Public Act 97-767 apply on and after July 1, 2003, but no claim
22for credit or refund is allowed on or after August 16, 2013
23(the effective date of Public Act 98-456) for such taxes paid
24during the period beginning July 1, 2003 and ending on August
2516, 2013 (the effective date of Public Act 98-456).
26    (13) Semen used for artificial insemination of livestock

 

 

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1for direct agricultural production.
2    (14) Horses, or interests in horses, registered with and
3meeting the requirements of any of the Arabian Horse Club
4Registry of America, Appaloosa Horse Club, American Quarter
5Horse Association, United States Trotting Association, or
6Jockey Club, as appropriate, used for purposes of breeding or
7racing for prizes. This item (14) is exempt from the
8provisions of Section 3-75, and the exemption provided for
9under this item (14) applies for all periods beginning May 30,
101995, but no claim for credit or refund is allowed on or after
11January 1, 2008 (the effective date of Public Act 95-88) for
12such taxes paid during the period beginning May 30, 2000 and
13ending on January 1, 2008 (the effective date of Public Act
1495-88).
15    (15) Computers and communications equipment utilized for
16any hospital purpose and equipment used in the diagnosis,
17analysis, or treatment of hospital patients purchased by a
18lessor who leases the equipment, under a lease of one year or
19longer executed or in effect at the time the lessor would
20otherwise be subject to the tax imposed by this Act, to a
21hospital that has been issued an active tax exemption
22identification number by the Department under Section 1g of
23the Retailers' Occupation Tax Act. If the equipment is leased
24in a manner that does not qualify for this exemption or is used
25in any other non-exempt manner, the lessor shall be liable for
26the tax imposed under this Act or the Use Tax Act, as the case

 

 

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

 

 

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

 

 

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1in the declared disaster area within 6 months after the
2disaster.
3    (19) Beginning July 1, 1999, game or game birds purchased
4at a "game breeding and hunting preserve area" as that term is
5used in the Wildlife Code. This paragraph is exempt from the
6provisions of Section 3-75.
7    (20) A motor vehicle, as that term is defined in Section
81-146 of the Illinois Vehicle Code, that is donated to a
9corporation, limited liability company, society, association,
10foundation, or institution that is determined by the
11Department to be organized and operated exclusively for
12educational purposes. For purposes of this exemption, "a
13corporation, limited liability company, society, association,
14foundation, or institution organized and operated exclusively
15for educational purposes" means all tax-supported public
16schools, private schools that offer systematic instruction in
17useful branches of learning by methods common to public
18schools and that compare favorably in their scope and
19intensity with the course of study presented in tax-supported
20schools, and vocational or technical schools or institutes
21organized and operated exclusively to provide a course of
22study of not less than 6 weeks duration and designed to prepare
23individuals to follow a trade or to pursue a manual,
24technical, mechanical, industrial, business, or commercial
25occupation.
26    (21) Beginning January 1, 2000, personal property,

 

 

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1including food, purchased through fundraising events for the
2benefit of a public or private elementary or secondary school,
3a group of those schools, or one or more school districts if
4the events are sponsored by an entity recognized by the school
5district that consists primarily of volunteers and includes
6parents and teachers of the school children. This paragraph
7does not apply to fundraising events (i) for the benefit of
8private home instruction or (ii) for which the fundraising
9entity purchases the personal property sold at the events from
10another individual or entity that sold the property for the
11purpose of resale by the fundraising entity and that profits
12from the sale to the fundraising entity. This paragraph is
13exempt from the provisions of Section 3-75.
14    (22) Beginning January 1, 2000 and through December 31,
152001, new or used automatic vending machines that prepare and
16serve hot food and beverages, including coffee, soup, and
17other items, and replacement parts for these machines.
18Beginning January 1, 2002 and through June 30, 2003, machines
19and parts for machines used in commercial, coin-operated
20amusement and vending business if a use or occupation tax is
21paid on the gross receipts derived from the use of the
22commercial, coin-operated amusement and vending machines. This
23paragraph is exempt from the provisions of Section 3-75.
24    (23) Beginning August 23, 2001 and through June 30, 2016,
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages,

 

 

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

 

 

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

 

 

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1from the lessee, the lessee shall have a legal right to claim a
2refund of that amount from the lessor. If, however, that
3amount is not refunded to the lessee for any reason, the lessor
4is liable to pay that amount to the Department. This paragraph
5is exempt from the provisions of Section 3-75.
6    (26) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued
11under Title IV of the Environmental Protection Act. This
12paragraph is exempt from the provisions of Section 3-75.
13    (27) Beginning January 1, 2010 and continuing through
14December 31, 2029, materials, parts, equipment, components,
15and furnishings incorporated into or upon an aircraft as part
16of the modification, refurbishment, completion, replacement,
17repair, or maintenance of the aircraft. This exemption
18includes consumable supplies used in the modification,
19refurbishment, completion, replacement, repair, and
20maintenance of aircraft. However, until January 1, 2024, this
21exemption excludes any materials, parts, equipment,
22components, and consumable supplies used in the modification,
23replacement, repair, and maintenance of aircraft engines or
24power plants, whether such engines or power plants are
25installed or uninstalled upon any such aircraft. "Consumable
26supplies" include, but are not limited to, adhesive, tape,

 

 

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1sandpaper, general purpose lubricants, cleaning solution,
2latex gloves, and protective films.
3    Beginning January 1, 2010 and continuing through December
431, 2023, this exemption applies only to the use of qualifying
5tangible personal property transferred incident to the
6modification, refurbishment, completion, replacement, repair,
7or maintenance of aircraft by persons who (i) hold an Air
8Agency Certificate and are empowered to operate an approved
9repair station by the Federal Aviation Administration, (ii)
10have a Class IV Rating, and (iii) conduct operations in
11accordance with Part 145 of the Federal Aviation Regulations.
12From January 1, 2024 through December 31, 2029, this exemption
13applies only to the use of qualifying tangible personal
14property by: (A) persons who modify, refurbish, complete,
15repair, replace, or maintain aircraft and who (i) hold an Air
16Agency Certificate and are empowered to operate an approved
17repair station by the Federal Aviation Administration, (ii)
18have a Class IV Rating, and (iii) conduct operations in
19accordance with Part 145 of the Federal Aviation Regulations;
20and (B) persons who engage in the modification, replacement,
21repair, and maintenance of aircraft engines or power plants
22without regard to whether or not those persons meet the
23qualifications of item (A).
24    The exemption does not include aircraft operated by a
25commercial air carrier providing scheduled passenger air
26service pursuant to authority issued under Part 121 or Part

 

 

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1129 of the Federal Aviation Regulations. The changes made to
2this paragraph (27) by Public Act 98-534 are declarative of
3existing law. It is the intent of the General Assembly that the
4exemption under this paragraph (27) applies continuously from
5January 1, 2010 through December 31, 2024; however, no claim
6for credit or refund is allowed for taxes paid as a result of
7the disallowance of this exemption on or after January 1, 2015
8and prior to February 5, 2020 (the effective date of Public Act
9101-629).
10    (28) Tangible personal property purchased by a
11public-facilities corporation, as described in Section
1211-65-10 of the Illinois Municipal Code, for purposes of
13constructing or furnishing a municipal convention hall, but
14only if the legal title to the municipal convention hall is
15transferred to the municipality without any further
16consideration by or on behalf of the municipality at the time
17of the completion of the municipal convention hall or upon the
18retirement or redemption of any bonds or other debt
19instruments issued by the public-facilities corporation in
20connection with the development of the municipal convention
21hall. This exemption includes existing public-facilities
22corporations as provided in Section 11-65-25 of the Illinois
23Municipal Code. This paragraph is exempt from the provisions
24of Section 3-75.
25    (29) Beginning January 1, 2017 and through December 31,
262026, menstrual pads, tampons, and menstrual cups.

 

 

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1    (30) Tangible personal property transferred to a purchaser
2who is exempt from the tax imposed by this Act by operation of
3federal law. This paragraph is exempt from the provisions of
4Section 3-75.
5    (31) Qualified tangible personal property used in the
6construction or operation of a data center that has been
7granted a certificate of exemption by the Department of
8Commerce and Economic Opportunity, whether that tangible
9personal property is purchased by the owner, operator, or
10tenant of the data center or by a contractor or subcontractor
11of the owner, operator, or tenant. Data centers that would
12have qualified for a certificate of exemption prior to January
131, 2020 had Public Act 101-31 been in effect, may apply for and
14obtain an exemption for subsequent purchases of computer
15equipment or enabling software purchased or leased to upgrade,
16supplement, or replace computer equipment or enabling software
17purchased or leased in the original investment that would have
18qualified.
19    The Department of Commerce and Economic Opportunity shall
20grant a certificate of exemption under this item (31) to
21qualified data centers as defined by Section 605-1025 of the
22Department of Commerce and Economic Opportunity Law of the
23Civil Administrative Code of Illinois.
24    For the purposes of this item (31):
25        "Data center" means a building or a series of
26    buildings rehabilitated or constructed to house working

 

 

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

 

 

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1    retailer must obtain from the purchaser a copy of the
2    certificate of eligibility issued by the Department of
3    Commerce and Economic Opportunity.
4    This item (31) is exempt from the provisions of Section
53-75.
6    (32) Beginning July 1, 2022, breast pumps, breast pump
7collection and storage supplies, and breast pump kits. This
8item (32) is exempt from the provisions of Section 3-75. As
9used in this item (32):
10        "Breast pump" means an electrically controlled or
11    manually controlled pump device designed or marketed to be
12    used to express milk from a human breast during lactation,
13    including the pump device and any battery, AC adapter, or
14    other power supply unit that is used to power the pump
15    device and is packaged and sold with the pump device at the
16    time of sale.
17        "Breast pump collection and storage supplies" means
18    items of tangible personal property designed or marketed
19    to be used in conjunction with a breast pump to collect
20    milk expressed from a human breast and to store collected
21    milk until it is ready for consumption.
22        "Breast pump collection and storage supplies"
23    includes, but is not limited to: breast shields and breast
24    shield connectors; breast pump tubes and tubing adapters;
25    breast pump valves and membranes; backflow protectors and
26    backflow protector adaptors; bottles and bottle caps

 

 

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1    specific to the operation of the breast pump; and breast
2    milk storage bags.
3        "Breast pump collection and storage supplies" does not
4    include: (1) bottles and bottle caps not specific to the
5    operation of the breast pump; (2) breast pump travel bags
6    and other similar carrying accessories, including ice
7    packs, labels, and other similar products; (3) breast pump
8    cleaning supplies; (4) nursing bras, bra pads, breast
9    shells, and other similar products; and (5) creams,
10    ointments, and other similar products that relieve
11    breastfeeding-related symptoms or conditions of the
12    breasts or nipples, unless sold as part of a breast pump
13    kit that is pre-packaged by the breast pump manufacturer
14    or distributor.
15        "Breast pump kit" means a kit that: (1) contains no
16    more than a breast pump, breast pump collection and
17    storage supplies, a rechargeable battery for operating the
18    breast pump, a breastmilk cooler, bottle stands, ice
19    packs, and a breast pump carrying case; and (2) is
20    pre-packaged as a breast pump kit by the breast pump
21    manufacturer or distributor.
22    (33) Tangible personal property sold by or on behalf of
23the State Treasurer pursuant to the Revised Uniform Unclaimed
24Property Act. This item (33) is exempt from the provisions of
25Section 3-75.
26    (34) Beginning on January 1, 2024, tangible personal

 

 

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1property purchased by an active duty member of the armed
2forces of the United States who presents valid military
3identification and purchases the property using a form of
4payment where the federal government is the payor. The member
5of the armed forces must complete, at the point of sale, a form
6prescribed by the Department of Revenue documenting that the
7transaction is eligible for the exemption under this
8paragraph. Retailers must keep the form as documentation of
9the exemption in their records for a period of not less than 6
10years. "Armed forces of the United States" means the United
11States Army, Navy, Air Force, Marine Corps, or Coast Guard.
12This paragraph is exempt from the provisions of Section 3-75.
13    (35) Qualified tangible personal property that is (i) used
14in the construction or development of a megaproject for which
15a certificate has been issued prior to December 31, 2030 by the
16Department of Commerce and Economic Opportunity under Division
1722 of Article 10 of the Property Tax Code and (ii) purchased
18prior to the Department's issuance of the megaproject
19certificate or during the investment period, whether that
20tangible personal property is purchased by the owner,
21operator, or tenant of the megaproject or by a contractor or
22subcontractor of the owner, operator, or tenant.
23    As used in this item (35):
24    "Facility" means a building or series of buildings.
25    "Investment period" means the period ending 7 years after
26the date on which the Department of Commerce and Economic

 

 

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1Opportunity issues the megaproject certificate, or such other
2longer period of time as the local municipality, local taxing
3districts, and the company may agree to, not to exceed an
4initial period of 10 years.
5    "Megaproject" means a facility that is rehabilitated or
6constructed as described in Division 22 of Article 10 of the
7Property Tax Code.
8    "Qualified tangible personal property" means all tangible
9personal property that is essential to the construction or
10development of a megaproject, including, but not limited to:
11electrical systems and equipment; climate control and chilling
12equipment and systems; mechanical systems and equipment;
13monitoring and secure systems; emergency generators; hardware;
14computers; servers; data storage devices; network connectivity
15equipment; racks; cabinets; telecommunications cabling
16infrastructure; raised floor systems; peripheral components or
17systems; software; mechanical, electrical, or plumbing
18systems; battery systems; cooling systems and towers;
19temperature control systems; other cabling; and other
20infrastructure, equipment, and systems necessary to operate
21qualified tangible personal property, including fixtures; and
22component parts of those items, including installation,
23maintenance, repair, refurbishment, and replacement of
24qualified tangible personal property to generate, transform,
25transmit, distribute, or manage electricity necessary to
26operate qualified tangible personal property. The term

 

 

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1"qualified tangible personal property" also includes building
2materials to be incorporated into the megaproject. To document
3the exemption allowed under this Section, the retailer,
4contractor, subcontractor, or supplier must obtain from the
5purchaser a copy of the certificate issued by the Department
6of Commerce and Economic Opportunity for the megaproject as
7described and defined in Division 22 of Article 10 of the
8Property Tax Code.
9(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
10Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1175-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
12Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
13eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
14revised 12-12-23.)
 
15    Section 15. The Service Occupation Tax Act is amended by
16changing Section 3-5 as follows:
 
17    (35 ILCS 115/3-5)
18    Sec. 3-5. Exemptions. The following tangible personal
19property is exempt from the tax imposed by this Act:
20    (1) Personal property sold by a corporation, society,
21association, foundation, institution, or organization, other
22than a limited liability company, that is organized and
23operated as a not-for-profit service enterprise for the
24benefit of persons 65 years of age or older if the personal

 

 

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1property was not purchased by the enterprise for the purpose
2of resale by the enterprise.
3    (2) Personal property purchased by a not-for-profit
4Illinois county fair association for use in conducting,
5operating, or promoting the county fair.
6    (3) Personal property purchased by any not-for-profit arts
7or cultural organization that establishes, by proof required
8by the Department by rule, that it has received an exemption
9under Section 501(c)(3) of the Internal Revenue Code and that
10is organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after July 1, 2001 (the
17effective date of Public Act 92-35), however, an entity
18otherwise eligible for this exemption shall not make tax-free
19purchases unless it has an active identification number issued
20by the Department.
21    (4) Legal tender, currency, medallions, or gold or silver
22coinage issued by the State of Illinois, the government of the
23United States of America, or the government of any foreign
24country, and bullion.
25    (5) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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

 

 

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1overwintering plants shall be considered farm machinery and
2equipment under this item (7). Agricultural chemical tender
3tanks and dry boxes shall include units sold separately from a
4motor vehicle required to be licensed and units sold mounted
5on a motor vehicle required to be licensed if the selling price
6of the tender is separately stated.
7    Farm machinery and equipment shall include precision
8farming equipment that is installed or purchased to be
9installed on farm machinery and equipment, including, but not
10limited to, tractors, harvesters, sprayers, planters, seeders,
11or spreaders. Precision farming equipment includes, but is not
12limited to, soil testing sensors, computers, monitors,
13software, global positioning and mapping systems, and other
14such equipment.
15    Farm machinery and equipment also includes computers,
16sensors, software, and related equipment used primarily in the
17computer-assisted operation of production agriculture
18facilities, equipment, and activities such as, but not limited
19to, the collection, monitoring, and correlation of animal and
20crop data for the purpose of formulating animal diets and
21agricultural chemicals.
22    Beginning on January 1, 2024, farm machinery and equipment
23also includes electrical power generation equipment used
24primarily for production agriculture.
25    This item (7) is exempt from the provisions of Section
263-55.

 

 

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1    (8) Until June 30, 2013, fuel and petroleum products sold
2to or used by an air common carrier, certified by the carrier
3to be used for consumption, shipment, or storage in the
4conduct of its business as an air common carrier, for a flight
5destined for or returning from a location or locations outside
6the United States without regard to previous or subsequent
7domestic stopovers.
8    Beginning July 1, 2013, fuel and petroleum products sold
9to or used by an air carrier, certified by the carrier to be
10used for consumption, shipment, or storage in the conduct of
11its business as an air common carrier, for a flight that (i) is
12engaged in foreign trade or is engaged in trade between the
13United States and any of its possessions and (ii) transports
14at least one individual or package for hire from the city of
15origination to the city of final destination on the same
16aircraft, without regard to a change in the flight number of
17that aircraft.
18    (9) Proceeds of mandatory service charges separately
19stated on customers' bills for the purchase and consumption of
20food and beverages, to the extent that the proceeds of the
21service charge are in fact turned over as tips or as a
22substitute for tips to the employees who participate directly
23in preparing, serving, hosting or cleaning up the food or
24beverage function with respect to which the service charge is
25imposed.
26    (10) Until July 1, 2003, oil field exploration, drilling,

 

 

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1and production equipment, including (i) rigs and parts of
2rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
3pipe and tubular goods, including casing and drill strings,
4(iii) pumps and pump-jack units, (iv) storage tanks and flow
5lines, (v) any individual replacement part for oil field
6exploration, drilling, and production equipment, and (vi)
7machinery and equipment purchased for lease; but excluding
8motor vehicles required to be registered under the Illinois
9Vehicle Code.
10    (11) Photoprocessing machinery and equipment, including
11repair and replacement parts, both new and used, including
12that manufactured on special order, certified by the purchaser
13to be used primarily for photoprocessing, and including
14photoprocessing machinery and equipment purchased for lease.
15    (12) Until July 1, 2028, coal and aggregate exploration,
16mining, off-highway hauling, processing, maintenance, and
17reclamation equipment, including replacement parts and
18equipment, and including equipment purchased for lease, but
19excluding motor vehicles required to be registered under the
20Illinois Vehicle Code. The changes made to this Section by
21Public Act 97-767 apply on and after July 1, 2003, but no claim
22for credit or refund is allowed on or after August 16, 2013
23(the effective date of Public Act 98-456) for such taxes paid
24during the period beginning July 1, 2003 and ending on August
2516, 2013 (the effective date of Public Act 98-456).
26    (13) Beginning January 1, 1992 and through June 30, 2016,

 

 

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1food for human consumption that is to be consumed off the
2premises where it is sold (other than alcoholic beverages,
3soft drinks and food that has been prepared for immediate
4consumption) and prescription and non-prescription medicines,
5drugs, medical appliances, and insulin, urine testing
6materials, syringes, and needles used by diabetics, for human
7use, when purchased for use by a person receiving medical
8assistance under Article V of the Illinois Public Aid Code who
9resides in a licensed long-term care facility, as defined in
10the Nursing Home Care Act, or in a licensed facility as defined
11in the ID/DD Community Care Act, the MC/DD Act, or the
12Specialized Mental Health Rehabilitation Act of 2013.
13    (14) Semen used for artificial insemination of livestock
14for direct agricultural production.
15    (15) Horses, or interests in horses, registered with and
16meeting the requirements of any of the Arabian Horse Club
17Registry of America, Appaloosa Horse Club, American Quarter
18Horse Association, United States Trotting Association, or
19Jockey Club, as appropriate, used for purposes of breeding or
20racing for prizes. This item (15) is exempt from the
21provisions of Section 3-55, and the exemption provided for
22under this item (15) applies for all periods beginning May 30,
231995, but no claim for credit or refund is allowed on or after
24January 1, 2008 (the effective date of Public Act 95-88) for
25such taxes paid during the period beginning May 30, 2000 and
26ending on January 1, 2008 (the effective date of Public Act

 

 

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195-88).
2    (16) Computers and communications equipment utilized for
3any hospital purpose and equipment used in the diagnosis,
4analysis, or treatment of hospital patients sold to a lessor
5who leases the equipment, under a lease of one year or longer
6executed or in effect at the time of the purchase, to a
7hospital that has been issued an active tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act.
10    (17) Personal property sold to a lessor who leases the
11property, under a lease of one year or longer executed or in
12effect at the time of the purchase, to a governmental body that
13has been issued an active tax exemption identification number
14by the Department under Section 1g of the Retailers'
15Occupation Tax Act.
16    (18) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is donated
19for disaster relief to be used in a State or federally declared
20disaster area in Illinois or bordering Illinois by a
21manufacturer or retailer that is registered in this State to a
22corporation, society, association, foundation, or institution
23that has been issued a sales tax exemption identification
24number by the Department that assists victims of the disaster
25who reside within the declared disaster area.
26    (19) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in
3the performance of infrastructure repairs in this State,
4including, but not limited to, municipal roads and streets,
5access roads, bridges, sidewalks, waste disposal systems,
6water and sewer line extensions, water distribution and
7purification facilities, storm water drainage and retention
8facilities, and sewage treatment facilities, resulting from a
9State or federally declared disaster in Illinois or bordering
10Illinois when such repairs are initiated on facilities located
11in the declared disaster area within 6 months after the
12disaster.
13    (20) Beginning July 1, 1999, game or game birds sold at a
14"game breeding and hunting preserve area" as that term is used
15in the Wildlife Code. This paragraph is exempt from the
16provisions of Section 3-55.
17    (21) A motor vehicle, as that term is defined in Section
181-146 of the Illinois Vehicle Code, that is donated to a
19corporation, limited liability company, society, association,
20foundation, or institution that is determined by the
21Department to be organized and operated exclusively for
22educational purposes. For purposes of this exemption, "a
23corporation, limited liability company, society, association,
24foundation, or institution organized and operated exclusively
25for educational purposes" means all tax-supported public
26schools, private schools that offer systematic instruction in

 

 

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

 

 

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1other items, and replacement parts for these machines.
2Beginning January 1, 2002 and through June 30, 2003, machines
3and parts for machines used in commercial, coin-operated
4amusement and vending business if a use or occupation tax is
5paid on the gross receipts derived from the use of the
6commercial, coin-operated amusement and vending machines. This
7paragraph is exempt from the provisions of Section 3-55.
8    (24) Beginning on August 2, 2001 (the effective date of
9Public Act 92-227), computers and communications equipment
10utilized for any hospital purpose and equipment used in the
11diagnosis, analysis, or treatment of hospital patients sold to
12a lessor who leases the equipment, under a lease of one year or
13longer executed or in effect at the time of the purchase, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16the Retailers' Occupation Tax Act. This paragraph is exempt
17from the provisions of Section 3-55.
18    (25) Beginning on August 2, 2001 (the effective date of
19Public Act 92-227), personal property sold to a lessor who
20leases the property, under a lease of one year or longer
21executed or in effect at the time of the purchase, to a
22governmental body that has been issued an active tax exemption
23identification number by the Department under Section 1g of
24the Retailers' Occupation Tax Act. This paragraph is exempt
25from the provisions of Section 3-55.
26    (26) Beginning on January 1, 2002 and through June 30,

 

 

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

 

 

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1corporation that holds a valid water supply permit issued
2under Title IV of the Environmental Protection Act. This
3paragraph is exempt from the provisions of Section 3-55.
4    (28) Tangible personal property sold to a
5public-facilities corporation, as described in Section
611-65-10 of the Illinois Municipal Code, for purposes of
7constructing or furnishing a municipal convention hall, but
8only if the legal title to the municipal convention hall is
9transferred to the municipality without any further
10consideration by or on behalf of the municipality at the time
11of the completion of the municipal convention hall or upon the
12retirement or redemption of any bonds or other debt
13instruments issued by the public-facilities corporation in
14connection with the development of the municipal convention
15hall. This exemption includes existing public-facilities
16corporations as provided in Section 11-65-25 of the Illinois
17Municipal Code. This paragraph is exempt from the provisions
18of Section 3-55.
19    (29) Beginning January 1, 2010 and continuing through
20December 31, 2029, materials, parts, equipment, components,
21and furnishings incorporated into or upon an aircraft as part
22of the modification, refurbishment, completion, replacement,
23repair, or maintenance of the aircraft. This exemption
24includes consumable supplies used in the modification,
25refurbishment, completion, replacement, repair, and
26maintenance of aircraft. However, until January 1, 2024, this

 

 

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1exemption excludes any materials, parts, equipment,
2components, and consumable supplies used in the modification,
3replacement, repair, and maintenance of aircraft engines or
4power plants, whether such engines or power plants are
5installed or uninstalled upon any such aircraft. "Consumable
6supplies" include, but are not limited to, adhesive, tape,
7sandpaper, general purpose lubricants, cleaning solution,
8latex gloves, and protective films.
9    Beginning January 1, 2010 and continuing through December
1031, 2023, this exemption applies only to the transfer of
11qualifying tangible personal property incident to the
12modification, refurbishment, completion, replacement, repair,
13or maintenance of an aircraft by persons who (i) hold an Air
14Agency Certificate and are empowered to operate an approved
15repair station by the Federal Aviation Administration, (ii)
16have a Class IV Rating, and (iii) conduct operations in
17accordance with Part 145 of the Federal Aviation Regulations.
18The exemption does not include aircraft operated by a
19commercial air carrier providing scheduled passenger air
20service pursuant to authority issued under Part 121 or Part
21129 of the Federal Aviation Regulations. From January 1, 2024
22through December 31, 2029, this exemption applies only to the
23use of qualifying tangible personal property by: (A) persons
24who modify, refurbish, complete, repair, replace, or maintain
25aircraft and who (i) hold an Air Agency Certificate and are
26empowered to operate an approved repair station by the Federal

 

 

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1Aviation Administration, (ii) have a Class IV Rating, and
2(iii) conduct operations in accordance with Part 145 of the
3Federal Aviation Regulations; and (B) persons who engage in
4the modification, replacement, repair, and maintenance of
5aircraft engines or power plants without regard to whether or
6not those persons meet the qualifications of item (A).
7    The changes made to this paragraph (29) by Public Act
898-534 are declarative of existing law. It is the intent of the
9General Assembly that the exemption under this paragraph (29)
10applies continuously from January 1, 2010 through December 31,
112024; however, no claim for credit or refund is allowed for
12taxes paid as a result of the disallowance of this exemption on
13or after January 1, 2015 and prior to February 5, 2020 (the
14effective date of Public Act 101-629).
15    (30) Beginning January 1, 2017 and through December 31,
162026, menstrual pads, tampons, and menstrual cups.
17    (31) Tangible personal property transferred to a purchaser
18who is exempt from tax by operation of federal law. This
19paragraph is exempt from the provisions of Section 3-55.
20    (32) Qualified tangible personal property used in the
21construction or operation of a data center that has been
22granted a certificate of exemption by the Department of
23Commerce and Economic Opportunity, whether that tangible
24personal property is purchased by the owner, operator, or
25tenant of the data center or by a contractor or subcontractor
26of the owner, operator, or tenant. Data centers that would

 

 

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1have qualified for a certificate of exemption prior to January
21, 2020 had Public Act 101-31 been in effect, may apply for and
3obtain an exemption for subsequent purchases of computer
4equipment or enabling software purchased or leased to upgrade,
5supplement, or replace computer equipment or enabling software
6purchased or leased in the original investment that would have
7qualified.
8    The Department of Commerce and Economic Opportunity shall
9grant a certificate of exemption under this item (32) to
10qualified data centers as defined by Section 605-1025 of the
11Department of Commerce and Economic Opportunity Law of the
12Civil Administrative Code of Illinois.
13    For the purposes of this item (32):
14        "Data center" means a building or a series of
15    buildings rehabilitated or constructed to house working
16    servers in one physical location or multiple sites within
17    the State of Illinois.
18        "Qualified tangible personal property" means:
19    electrical systems and equipment; climate control and
20    chilling equipment and systems; mechanical systems and
21    equipment; monitoring and secure systems; emergency
22    generators; hardware; computers; servers; data storage
23    devices; network connectivity equipment; racks; cabinets;
24    telecommunications cabling infrastructure; raised floor
25    systems; peripheral components or systems; software;
26    mechanical, electrical, or plumbing systems; battery

 

 

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1    systems; cooling systems and towers; temperature control
2    systems; other cabling; and other data center
3    infrastructure equipment and systems necessary to operate
4    qualified tangible personal property, including fixtures;
5    and component parts of any of the foregoing, including
6    installation, maintenance, repair, refurbishment, and
7    replacement of qualified tangible personal property to
8    generate, transform, transmit, distribute, or manage
9    electricity necessary to operate qualified tangible
10    personal property; and all other tangible personal
11    property that is essential to the operations of a computer
12    data center. The term "qualified tangible personal
13    property" also includes building materials physically
14    incorporated into in to the qualifying data center. To
15    document the exemption allowed under this Section, the
16    retailer must obtain from the purchaser a copy of the
17    certificate of eligibility issued by the Department of
18    Commerce and Economic Opportunity.
19    This item (32) is exempt from the provisions of Section
203-55.
21    (33) Beginning July 1, 2022, breast pumps, breast pump
22collection and storage supplies, and breast pump kits. This
23item (33) is exempt from the provisions of Section 3-55. As
24used in this item (33):
25        "Breast pump" means an electrically controlled or
26    manually controlled pump device designed or marketed to be

 

 

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1    used to express milk from a human breast during lactation,
2    including the pump device and any battery, AC adapter, or
3    other power supply unit that is used to power the pump
4    device and is packaged and sold with the pump device at the
5    time of sale.
6        "Breast pump collection and storage supplies" means
7    items of tangible personal property designed or marketed
8    to be used in conjunction with a breast pump to collect
9    milk expressed from a human breast and to store collected
10    milk until it is ready for consumption.
11        "Breast pump collection and storage supplies"
12    includes, but is not limited to: breast shields and breast
13    shield connectors; breast pump tubes and tubing adapters;
14    breast pump valves and membranes; backflow protectors and
15    backflow protector adaptors; bottles and bottle caps
16    specific to the operation of the breast pump; and breast
17    milk storage bags.
18        "Breast pump collection and storage supplies" does not
19    include: (1) bottles and bottle caps not specific to the
20    operation of the breast pump; (2) breast pump travel bags
21    and other similar carrying accessories, including ice
22    packs, labels, and other similar products; (3) breast pump
23    cleaning supplies; (4) nursing bras, bra pads, breast
24    shells, and other similar products; and (5) creams,
25    ointments, and other similar products that relieve
26    breastfeeding-related symptoms or conditions of the

 

 

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1    breasts or nipples, unless sold as part of a breast pump
2    kit that is pre-packaged by the breast pump manufacturer
3    or distributor.
4        "Breast pump kit" means a kit that: (1) contains no
5    more than a breast pump, breast pump collection and
6    storage supplies, a rechargeable battery for operating the
7    breast pump, a breastmilk cooler, bottle stands, ice
8    packs, and a breast pump carrying case; and (2) is
9    pre-packaged as a breast pump kit by the breast pump
10    manufacturer or distributor.
11    (34) Tangible personal property sold by or on behalf of
12the State Treasurer pursuant to the Revised Uniform Unclaimed
13Property Act. This item (34) is exempt from the provisions of
14Section 3-55.
15    (35) Beginning on January 1, 2024, tangible personal
16property purchased by an active duty member of the armed
17forces of the United States who presents valid military
18identification and purchases the property using a form of
19payment where the federal government is the payor. The member
20of the armed forces must complete, at the point of sale, a form
21prescribed by the Department of Revenue documenting that the
22transaction is eligible for the exemption under this
23paragraph. Retailers must keep the form as documentation of
24the exemption in their records for a period of not less than 6
25years. "Armed forces of the United States" means the United
26States Army, Navy, Air Force, Marine Corps, or Coast Guard.

 

 

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1This paragraph is exempt from the provisions of Section 3-55.
2    (36) Qualified tangible personal property that is (i) used
3in the construction or development of a megaproject for which
4a certificate has been issued prior to December 31, 2030 by the
5Department of Commerce and Economic Opportunity under Division
622 of Article 10 of the Property Tax Code and (ii) purchased
7prior to the Department's issuance of the megaproject
8certificate or during the investment period, whether that
9tangible personal property is purchased by the owner,
10operator, or tenant of the megaproject or by a contractor or
11subcontractor of the owner, operator, or tenant.
12    As used in this item (36):
13    "Facility" means a building or series of buildings.
14    "Investment period" means the period ending 7 years after
15the date on which the Department of Commerce and Economic
16Opportunity issues the megaproject certificate, or such other
17longer period of time as the local municipality, local taxing
18districts, and the company may agree to, not to exceed an
19initial period of 10 years.
20    "Megaproject" means a facility that is rehabilitated or
21constructed as described in Division 22 of Article 10 of the
22Property Tax Code.
23    "Qualified tangible personal property" means all tangible
24personal property that is essential to the construction or
25development of a megaproject, including, but not limited to:
26electrical systems and equipment; climate control and chilling

 

 

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1equipment and systems; mechanical systems and equipment;
2monitoring and secure systems; emergency generators; hardware;
3computers; servers; data storage devices; network connectivity
4equipment; racks; cabinets; telecommunications cabling
5infrastructure; raised floor systems; peripheral components or
6systems; software; mechanical, electrical, or plumbing
7systems; battery systems; cooling systems and towers;
8temperature control systems; other cabling; and other
9infrastructure, equipment, and systems necessary to operate
10qualified tangible personal property, including fixtures; and
11component parts of those items, including installation,
12maintenance, repair, refurbishment, and replacement of
13qualified tangible personal property to generate, transform,
14transmit, distribute, or manage electricity necessary to
15operate qualified tangible personal property. The term
16"qualified tangible personal property" also includes building
17materials to be incorporated into the megaproject. To document
18the exemption allowed under this Section, the retailer,
19contractor, subcontractor, or supplier must obtain from the
20purchaser a copy of the certificate issued by the Department
21of Commerce and Economic Opportunity for the megaproject as
22described and defined in Division 22 of Article 10 of the
23Property Tax Code.
24(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
25Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
2675-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,

 

 

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1Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
2eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
3revised 12-12-23.)
 
4    Section 20. The Retailers' Occupation Tax Act is amended
5by changing Section 2-5 as follows:
 
6    (35 ILCS 120/2-5)
7    Sec. 2-5. Exemptions. Gross receipts from proceeds from
8the sale of the following tangible personal property are
9exempt from the tax imposed by this Act:
10        (1) Farm chemicals.
11        (2) Farm machinery and equipment, both new and used,
12    including that manufactured on special order, certified by
13    the purchaser to be used primarily for production
14    agriculture or State or federal agricultural programs,
15    including individual replacement parts for the machinery
16    and equipment, including machinery and equipment purchased
17    for lease, and including implements of husbandry defined
18    in Section 1-130 of the Illinois Vehicle Code, farm
19    machinery and agricultural chemical and fertilizer
20    spreaders, and nurse wagons required to be registered
21    under Section 3-809 of the Illinois Vehicle Code, but
22    excluding other motor vehicles required to be registered
23    under the Illinois Vehicle Code. Horticultural polyhouses
24    or hoop houses used for propagating, growing, or

 

 

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1    overwintering plants shall be considered farm machinery
2    and equipment under this item (2). Agricultural chemical
3    tender tanks and dry boxes shall include units sold
4    separately from a motor vehicle required to be licensed
5    and units sold mounted on a motor vehicle required to be
6    licensed, if the selling price of the tender is separately
7    stated.
8        Farm machinery and equipment shall include precision
9    farming equipment that is installed or purchased to be
10    installed on farm machinery and equipment including, but
11    not limited to, tractors, harvesters, sprayers, planters,
12    seeders, or spreaders. Precision farming equipment
13    includes, but is not limited to, soil testing sensors,
14    computers, monitors, software, global positioning and
15    mapping systems, and other such equipment.
16        Farm machinery and equipment also includes computers,
17    sensors, software, and related equipment used primarily in
18    the computer-assisted operation of production agriculture
19    facilities, equipment, and activities such as, but not
20    limited to, the collection, monitoring, and correlation of
21    animal and crop data for the purpose of formulating animal
22    diets and agricultural chemicals.
23        Beginning on January 1, 2024, farm machinery and
24    equipment also includes electrical power generation
25    equipment used primarily for production agriculture.
26        This item (2) is exempt from the provisions of Section

 

 

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

 

 

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1    student organization affiliated with an elementary or
2    secondary school located in Illinois.
3        (7) Until July 1, 2003, proceeds of that portion of
4    the selling price of a passenger car the sale of which is
5    subject to the Replacement Vehicle Tax.
6        (8) Personal property sold to an Illinois county fair
7    association for use in conducting, operating, or promoting
8    the county fair.
9        (9) Personal property sold to a not-for-profit arts or
10    cultural organization that establishes, by proof required
11    by the Department by rule, that it has received an
12    exemption under Section 501(c)(3) of the Internal Revenue
13    Code and that is organized and operated primarily for the
14    presentation or support of arts or cultural programming,
15    activities, or services. These organizations include, but
16    are not limited to, music and dramatic arts organizations
17    such as symphony orchestras and theatrical groups, arts
18    and cultural service organizations, local arts councils,
19    visual arts organizations, and media arts organizations.
20    On and after July 1, 2001 (the effective date of Public Act
21    92-35), however, an entity otherwise eligible for this
22    exemption shall not make tax-free purchases unless it has
23    an active identification number issued by the Department.
24        (10) Personal property sold by a corporation, society,
25    association, foundation, institution, or organization,
26    other than a limited liability company, that is organized

 

 

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1    and operated as a not-for-profit service enterprise for
2    the benefit of persons 65 years of age or older if the
3    personal property was not purchased by the enterprise for
4    the purpose of resale by the enterprise.
5        (11) Except as otherwise provided in this Section,
6    personal property sold to a governmental body, to a
7    corporation, society, association, foundation, or
8    institution organized and operated exclusively for
9    charitable, religious, or educational purposes, or to a
10    not-for-profit corporation, society, association,
11    foundation, institution, or organization that has no
12    compensated officers or employees and that is organized
13    and operated primarily for the recreation of persons 55
14    years of age or older. A limited liability company may
15    qualify for the exemption under this paragraph only if the
16    limited liability company is organized and operated
17    exclusively for educational purposes. On and after July 1,
18    1987, however, no entity otherwise eligible for this
19    exemption shall make tax-free purchases unless it has an
20    active identification number issued by the Department.
21        (12) (Blank).
22        (12-5) On and after July 1, 2003 and through June 30,
23    2004, motor vehicles of the second division with a gross
24    vehicle weight in excess of 8,000 pounds that are subject
25    to the commercial distribution fee imposed under Section
26    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,

 

 

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1    2004 and through June 30, 2005, the use in this State of
2    motor vehicles of the second division: (i) with a gross
3    vehicle weight rating in excess of 8,000 pounds; (ii) that
4    are subject to the commercial distribution fee imposed
5    under Section 3-815.1 of the Illinois Vehicle Code; and
6    (iii) that are primarily used for commercial purposes.
7    Through June 30, 2005, this exemption applies to repair
8    and replacement parts added after the initial purchase of
9    such a motor vehicle if that motor vehicle is used in a
10    manner that would qualify for the rolling stock exemption
11    otherwise provided for in this Act. For purposes of this
12    paragraph, "used for commercial purposes" means the
13    transportation of persons or property in furtherance of
14    any commercial or industrial enterprise whether for-hire
15    or not.
16        (13) Proceeds from sales to owners, lessors, or
17    shippers of tangible personal property that is utilized by
18    interstate carriers for hire for use as rolling stock
19    moving in interstate commerce and equipment operated by a
20    telecommunications provider, licensed as a common carrier
21    by the Federal Communications Commission, which is
22    permanently installed in or affixed to aircraft moving in
23    interstate commerce.
24        (14) Machinery and equipment that will be used by the
25    purchaser, or a lessee of the purchaser, primarily in the
26    process of manufacturing or assembling tangible personal

 

 

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

 

 

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1    service charge are in fact turned over as tips or as a
2    substitute for tips to the employees who participate
3    directly in preparing, serving, hosting or cleaning up the
4    food or beverage function with respect to which the
5    service charge is imposed.
6        (16) Tangible personal property sold to a purchaser if
7    the purchaser is exempt from use tax by operation of
8    federal law. This paragraph is exempt from the provisions
9    of Section 2-70.
10        (17) Tangible personal property sold to a common
11    carrier by rail or motor that receives the physical
12    possession of the property in Illinois and that transports
13    the property, or shares with another common carrier in the
14    transportation of the property, out of Illinois on a
15    standard uniform bill of lading showing the seller of the
16    property as the shipper or consignor of the property to a
17    destination outside Illinois, for use outside Illinois.
18        (18) Legal tender, currency, medallions, or gold or
19    silver coinage issued by the State of Illinois, the
20    government of the United States of America, or the
21    government of any foreign country, and bullion.
22        (19) Until July 1, 2003, oil field exploration,
23    drilling, and production equipment, including (i) rigs and
24    parts of rigs, rotary rigs, cable tool rigs, and workover
25    rigs, (ii) pipe and tubular goods, including casing and
26    drill strings, (iii) pumps and pump-jack units, (iv)

 

 

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1    storage tanks and flow lines, (v) any individual
2    replacement part for oil field exploration, drilling, and
3    production equipment, and (vi) machinery and equipment
4    purchased for lease; but excluding motor vehicles required
5    to be registered under the Illinois Vehicle Code.
6        (20) Photoprocessing machinery and equipment,
7    including repair and replacement parts, both new and used,
8    including that manufactured on special order, certified by
9    the purchaser to be used primarily for photoprocessing,
10    and including photoprocessing machinery and equipment
11    purchased for lease.
12        (21) Until July 1, 2028, coal and aggregate
13    exploration, mining, off-highway hauling, processing,
14    maintenance, and reclamation equipment, including
15    replacement parts and equipment, and including equipment
16    purchased for lease, but excluding motor vehicles required
17    to be registered under the Illinois Vehicle Code. The
18    changes made to this Section by Public Act 97-767 apply on
19    and after July 1, 2003, but no claim for credit or refund
20    is allowed on or after August 16, 2013 (the effective date
21    of Public Act 98-456) for such taxes paid during the
22    period beginning July 1, 2003 and ending on August 16,
23    2013 (the effective date of Public Act 98-456).
24        (22) Until June 30, 2013, fuel and petroleum products
25    sold to or used by an air carrier, certified by the carrier
26    to be used for consumption, shipment, or storage in the

 

 

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1    conduct of its business as an air common carrier, for a
2    flight destined for or returning from a location or
3    locations outside the United States without regard to
4    previous or subsequent domestic stopovers.
5        Beginning July 1, 2013, fuel and petroleum products
6    sold to or used by an air carrier, certified by the carrier
7    to be used for consumption, shipment, or storage in the
8    conduct of its business as an air common carrier, for a
9    flight that (i) is engaged in foreign trade or is engaged
10    in trade between the United States and any of its
11    possessions and (ii) transports at least one individual or
12    package for hire from the city of origination to the city
13    of final destination on the same aircraft, without regard
14    to a change in the flight number of that aircraft.
15        (23) A transaction in which the purchase order is
16    received by a florist who is located outside Illinois, but
17    who has a florist located in Illinois deliver the property
18    to the purchaser or the purchaser's donee in Illinois.
19        (24) Fuel consumed or used in the operation of ships,
20    barges, or vessels that are used primarily in or for the
21    transportation of property or the conveyance of persons
22    for hire on rivers bordering on this State if the fuel is
23    delivered by the seller to the purchaser's barge, ship, or
24    vessel while it is afloat upon that bordering river.
25        (25) Except as provided in item (25-5) of this
26    Section, a motor vehicle sold in this State to a

 

 

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1    nonresident even though the motor vehicle is delivered to
2    the nonresident in this State, if the motor vehicle is not
3    to be titled in this State, and if a drive-away permit is
4    issued to the motor vehicle as provided in Section 3-603
5    of the Illinois Vehicle Code or if the nonresident
6    purchaser has vehicle registration plates to transfer to
7    the motor vehicle upon returning to his or her home state.
8    The issuance of the drive-away permit or having the
9    out-of-state registration plates to be transferred is
10    prima facie evidence that the motor vehicle will not be
11    titled in this State.
12        (25-5) The exemption under item (25) does not apply if
13    the state in which the motor vehicle will be titled does
14    not allow a reciprocal exemption for a motor vehicle sold
15    and delivered in that state to an Illinois resident but
16    titled in Illinois. The tax collected under this Act on
17    the sale of a motor vehicle in this State to a resident of
18    another state that does not allow a reciprocal exemption
19    shall be imposed at a rate equal to the state's rate of tax
20    on taxable property in the state in which the purchaser is
21    a resident, except that the tax shall not exceed the tax
22    that would otherwise be imposed under this Act. At the
23    time of the sale, the purchaser shall execute a statement,
24    signed under penalty of perjury, of his or her intent to
25    title the vehicle in the state in which the purchaser is a
26    resident within 30 days after the sale and of the fact of

 

 

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1    the payment to the State of Illinois of tax in an amount
2    equivalent to the state's rate of tax on taxable property
3    in his or her state of residence and shall submit the
4    statement to the appropriate tax collection agency in his
5    or her state of residence. In addition, the retailer must
6    retain a signed copy of the statement in his or her
7    records. Nothing in this item shall be construed to
8    require the removal of the vehicle from this state
9    following the filing of an intent to title the vehicle in
10    the purchaser's state of residence if the purchaser titles
11    the vehicle in his or her state of residence within 30 days
12    after the date of sale. The tax collected under this Act in
13    accordance with this item (25-5) shall be proportionately
14    distributed as if the tax were collected at the 6.25%
15    general rate imposed under this Act.
16        (25-7) Beginning on July 1, 2007, no tax is imposed
17    under this Act on the sale of an aircraft, as defined in
18    Section 3 of the Illinois Aeronautics Act, if all of the
19    following conditions are met:
20            (1) the aircraft leaves this State within 15 days
21        after the later of either the issuance of the final
22        billing for the sale of the aircraft, or the
23        authorized approval for return to service, completion
24        of the maintenance record entry, and completion of the
25        test flight and ground test for inspection, as
26        required by 14 CFR 91.407;

 

 

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1            (2) the aircraft is not based or registered in
2        this State after the sale of the aircraft; and
3            (3) the seller retains in his or her books and
4        records and provides to the Department a signed and
5        dated certification from the purchaser, on a form
6        prescribed by the Department, certifying that the
7        requirements of this item (25-7) are met. The
8        certificate must also include the name and address of
9        the purchaser, the address of the location where the
10        aircraft is to be titled or registered, the address of
11        the primary physical location of the aircraft, and
12        other information that the Department may reasonably
13        require.
14        For purposes of this item (25-7):
15        "Based in this State" means hangared, stored, or
16    otherwise used, excluding post-sale customizations as
17    defined in this Section, for 10 or more days in each
18    12-month period immediately following the date of the sale
19    of the aircraft.
20        "Registered in this State" means an aircraft
21    registered with the Department of Transportation,
22    Aeronautics Division, or titled or registered with the
23    Federal Aviation Administration to an address located in
24    this State.
25        This paragraph (25-7) is exempt from the provisions of
26    Section 2-70.

 

 

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

 

 

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1    in effect at the time of the purchase, to a governmental
2    body that has been issued an active tax exemption
3    identification number by the Department under Section 1g
4    of this Act.
5        (30) Beginning with taxable years ending on or after
6    December 31, 1995 and ending with taxable years ending on
7    or before December 31, 2004, personal property that is
8    donated for disaster relief to be used in a State or
9    federally declared disaster area in Illinois or bordering
10    Illinois by a manufacturer or retailer that is registered
11    in this State to a corporation, society, association,
12    foundation, or institution that has been issued a sales
13    tax exemption identification number by the Department that
14    assists victims of the disaster who reside within the
15    declared disaster area.
16        (31) Beginning with taxable years ending on or after
17    December 31, 1995 and ending with taxable years ending on
18    or before December 31, 2004, personal property that is
19    used in the performance of infrastructure repairs in this
20    State, including, but not limited to, municipal roads and
21    streets, access roads, bridges, sidewalks, waste disposal
22    systems, water and sewer line extensions, water
23    distribution and purification facilities, storm water
24    drainage and retention facilities, and sewage treatment
25    facilities, resulting from a State or federally declared
26    disaster in Illinois or bordering Illinois when such

 

 

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1    repairs are initiated on facilities located in the
2    declared disaster area within 6 months after the disaster.
3        (32) Beginning July 1, 1999, game or game birds sold
4    at a "game breeding and hunting preserve area" as that
5    term is used in the Wildlife Code. This paragraph is
6    exempt from the provisions of Section 2-70.
7        (33) A motor vehicle, as that term is defined in
8    Section 1-146 of the Illinois Vehicle Code, that is
9    donated to a corporation, limited liability company,
10    society, association, foundation, or institution that is
11    determined by the Department to be organized and operated
12    exclusively for educational purposes. For purposes of this
13    exemption, "a corporation, limited liability company,
14    society, association, foundation, or institution organized
15    and operated exclusively for educational purposes" means
16    all tax-supported public schools, private schools that
17    offer systematic instruction in useful branches of
18    learning by methods common to public schools and that
19    compare favorably in their scope and intensity with the
20    course of study presented in tax-supported schools, and
21    vocational or technical schools or institutes organized
22    and operated exclusively to provide a course of study of
23    not less than 6 weeks duration and designed to prepare
24    individuals to follow a trade or to pursue a manual,
25    technical, mechanical, industrial, business, or commercial
26    occupation.

 

 

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1        (34) Beginning January 1, 2000, personal property,
2    including food, purchased through fundraising events for
3    the benefit of a public or private elementary or secondary
4    school, a group of those schools, or one or more school
5    districts if the events are sponsored by an entity
6    recognized by the school district that consists primarily
7    of volunteers and includes parents and teachers of the
8    school children. This paragraph does not apply to
9    fundraising events (i) for the benefit of private home
10    instruction or (ii) for which the fundraising entity
11    purchases the personal property sold at the events from
12    another individual or entity that sold the property for
13    the purpose of resale by the fundraising entity and that
14    profits from the sale to the fundraising entity. This
15    paragraph is exempt from the provisions of Section 2-70.
16        (35) Beginning January 1, 2000 and through December
17    31, 2001, new or used automatic vending machines that
18    prepare and serve hot food and beverages, including
19    coffee, soup, and other items, and replacement parts for
20    these machines. Beginning January 1, 2002 and through June
21    30, 2003, machines and parts for machines used in
22    commercial, coin-operated amusement and vending business
23    if a use or occupation tax is paid on the gross receipts
24    derived from the use of the commercial, coin-operated
25    amusement and vending machines. This paragraph is exempt
26    from the provisions of Section 2-70.

 

 

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1        (35-5) Beginning August 23, 2001 and through June 30,
2    2016, food for human consumption that is to be consumed
3    off the premises where it is sold (other than alcoholic
4    beverages, soft drinks, and food that has been prepared
5    for immediate consumption) and prescription and
6    nonprescription medicines, drugs, medical appliances, and
7    insulin, urine testing materials, syringes, and needles
8    used by diabetics, for human use, when purchased for use
9    by a person receiving medical assistance under Article V
10    of the Illinois Public Aid Code who resides in a licensed
11    long-term care facility, as defined in the Nursing Home
12    Care Act, or a licensed facility as defined in the ID/DD
13    Community Care Act, the MC/DD Act, or the Specialized
14    Mental Health Rehabilitation Act of 2013.
15        (36) Beginning August 2, 2001, computers and
16    communications equipment utilized for any hospital purpose
17    and equipment used in the diagnosis, analysis, or
18    treatment of hospital patients sold to a lessor who leases
19    the equipment, under a lease of one year or longer
20    executed or in effect at the time of the purchase, to a
21    hospital that has been issued an active tax exemption
22    identification number by the Department under Section 1g
23    of this Act. This paragraph is exempt from the provisions
24    of Section 2-70.
25        (37) Beginning August 2, 2001, personal property sold
26    to a lessor who leases the property, under a lease of one

 

 

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1    year or longer executed or in effect at the time of the
2    purchase, to a governmental body that has been issued an
3    active tax exemption identification number by the
4    Department under Section 1g of this Act. This paragraph is
5    exempt from the provisions of Section 2-70.
6        (38) Beginning on January 1, 2002 and through June 30,
7    2016, tangible personal property purchased from an
8    Illinois retailer by a taxpayer engaged in centralized
9    purchasing activities in Illinois who will, upon receipt
10    of the property in Illinois, temporarily store the
11    property in Illinois (i) for the purpose of subsequently
12    transporting it outside this State for use or consumption
13    thereafter solely outside this State or (ii) for the
14    purpose of being processed, fabricated, or manufactured
15    into, attached to, or incorporated into other tangible
16    personal property to be transported outside this State and
17    thereafter used or consumed solely outside this State. The
18    Director of Revenue shall, pursuant to rules adopted in
19    accordance with the Illinois Administrative Procedure Act,
20    issue a permit to any taxpayer in good standing with the
21    Department who is eligible for the exemption under this
22    paragraph (38). The permit issued under this paragraph
23    (38) shall authorize the holder, to the extent and in the
24    manner specified in the rules adopted under this Act, to
25    purchase tangible personal property from a retailer exempt
26    from the taxes imposed by this Act. Taxpayers shall

 

 

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1    maintain all necessary books and records to substantiate
2    the use and consumption of all such tangible personal
3    property outside of the State of Illinois.
4        (39) Beginning January 1, 2008, tangible personal
5    property used in the construction or maintenance of a
6    community water supply, as defined under Section 3.145 of
7    the Environmental Protection Act, that is operated by a
8    not-for-profit corporation that holds a valid water supply
9    permit issued under Title IV of the Environmental
10    Protection Act. This paragraph is exempt from the
11    provisions of Section 2-70.
12        (40) Beginning January 1, 2010 and continuing through
13    December 31, 2029, materials, parts, equipment,
14    components, and furnishings incorporated into or upon an
15    aircraft as part of the modification, refurbishment,
16    completion, replacement, repair, or maintenance of the
17    aircraft. This exemption includes consumable supplies used
18    in the modification, refurbishment, completion,
19    replacement, repair, and maintenance of aircraft. However,
20    until January 1, 2024, this exemption excludes any
21    materials, parts, equipment, components, and consumable
22    supplies used in the modification, replacement, repair,
23    and maintenance of aircraft engines or power plants,
24    whether such engines or power plants are installed or
25    uninstalled upon any such aircraft. "Consumable supplies"
26    include, but are not limited to, adhesive, tape,

 

 

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1    sandpaper, general purpose lubricants, cleaning solution,
2    latex gloves, and protective films.
3        Beginning January 1, 2010 and continuing through
4    December 31, 2023, this exemption applies only to the sale
5    of qualifying tangible personal property to persons who
6    modify, refurbish, complete, replace, or maintain an
7    aircraft and who (i) hold an Air Agency Certificate and
8    are empowered to operate an approved repair station by the
9    Federal Aviation Administration, (ii) have a Class IV
10    Rating, and (iii) conduct operations in accordance with
11    Part 145 of the Federal Aviation Regulations. The
12    exemption does not include aircraft operated by a
13    commercial air carrier providing scheduled passenger air
14    service pursuant to authority issued under Part 121 or
15    Part 129 of the Federal Aviation Regulations. From January
16    1, 2024 through December 31, 2029, this exemption applies
17    only to the use of qualifying tangible personal property
18    by: (A) persons who modify, refurbish, complete, repair,
19    replace, or maintain aircraft and who (i) hold an Air
20    Agency Certificate and are empowered to operate an
21    approved repair station by the Federal Aviation
22    Administration, (ii) have a Class IV Rating, and (iii)
23    conduct operations in accordance with Part 145 of the
24    Federal Aviation Regulations; and (B) persons who engage
25    in the modification, replacement, repair, and maintenance
26    of aircraft engines or power plants without regard to

 

 

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1    whether or not those persons meet the qualifications of
2    item (A).
3        The changes made to this paragraph (40) by Public Act
4    98-534 are declarative of existing law. It is the intent
5    of the General Assembly that the exemption under this
6    paragraph (40) applies continuously from January 1, 2010
7    through December 31, 2024; however, no claim for credit or
8    refund is allowed for taxes paid as a result of the
9    disallowance of this exemption on or after January 1, 2015
10    and prior to February 5, 2020 (the effective date of
11    Public Act 101-629).
12        (41) Tangible personal property sold to a
13    public-facilities corporation, as described in Section
14    11-65-10 of the Illinois Municipal Code, for purposes of
15    constructing or furnishing a municipal convention hall,
16    but only if the legal title to the municipal convention
17    hall is transferred to the municipality without any
18    further consideration by or on behalf of the municipality
19    at the time of the completion of the municipal convention
20    hall or upon the retirement or redemption of any bonds or
21    other debt instruments issued by the public-facilities
22    corporation in connection with the development of the
23    municipal convention hall. This exemption includes
24    existing public-facilities corporations as provided in
25    Section 11-65-25 of the Illinois Municipal Code. This
26    paragraph is exempt from the provisions of Section 2-70.

 

 

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1        (42) Beginning January 1, 2017 and through December
2    31, 2026, menstrual pads, tampons, and menstrual cups.
3        (43) Merchandise that is subject to the Rental
4    Purchase Agreement Occupation and Use Tax. The purchaser
5    must certify that the item is purchased to be rented
6    subject to a rental-purchase rental purchase agreement, as
7    defined in the Rental-Purchase Rental Purchase Agreement
8    Act, and provide proof of registration under the Rental
9    Purchase Agreement Occupation and Use Tax Act. This
10    paragraph is exempt from the provisions of Section 2-70.
11        (44) Qualified tangible personal property used in the
12    construction or operation of a data center that has been
13    granted a certificate of exemption by the Department of
14    Commerce and Economic Opportunity, whether that tangible
15    personal property is purchased by the owner, operator, or
16    tenant of the data center or by a contractor or
17    subcontractor of the owner, operator, or tenant. Data
18    centers that would have qualified for a certificate of
19    exemption prior to January 1, 2020 had Public Act 101-31
20    been in effect, may apply for and obtain an exemption for
21    subsequent purchases of computer equipment or enabling
22    software purchased or leased to upgrade, supplement, or
23    replace computer equipment or enabling software purchased
24    or leased in the original investment that would have
25    qualified.
26        The Department of Commerce and Economic Opportunity

 

 

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

 

 

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1        qualified tangible personal property to generate,
2        transform, transmit, distribute, or manage electricity
3        necessary to operate qualified tangible personal
4        property; and all other tangible personal property
5        that is essential to the operations of a computer data
6        center. The term "qualified tangible personal
7        property" also includes building materials physically
8        incorporated into the qualifying data center. To
9        document the exemption allowed under this Section, the
10        retailer must obtain from the purchaser a copy of the
11        certificate of eligibility issued by the Department of
12        Commerce and Economic Opportunity.
13        This item (44) is exempt from the provisions of
14    Section 2-70.
15        (45) Beginning January 1, 2020 and through December
16    31, 2020, sales of tangible personal property made by a
17    marketplace seller over a marketplace for which tax is due
18    under this Act but for which use tax has been collected and
19    remitted to the Department by a marketplace facilitator
20    under Section 2d of the Use Tax Act are exempt from tax
21    under this Act. A marketplace seller claiming this
22    exemption shall maintain books and records demonstrating
23    that the use tax on such sales has been collected and
24    remitted by a marketplace facilitator. Marketplace sellers
25    that have properly remitted tax under this Act on such
26    sales may file a claim for credit as provided in Section 6

 

 

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1    of this Act. No claim is allowed, however, for such taxes
2    for which a credit or refund has been issued to the
3    marketplace facilitator under the Use Tax Act, or for
4    which the marketplace facilitator has filed a claim for
5    credit or refund under the Use Tax Act.
6        (46) Beginning July 1, 2022, breast pumps, breast pump
7    collection and storage supplies, and breast pump kits.
8    This item (46) is exempt from the provisions of Section
9    2-70. As used in this item (46):
10        "Breast pump" means an electrically controlled or
11    manually controlled pump device designed or marketed to be
12    used to express milk from a human breast during lactation,
13    including the pump device and any battery, AC adapter, or
14    other power supply unit that is used to power the pump
15    device and is packaged and sold with the pump device at the
16    time of sale.
17        "Breast pump collection and storage supplies" means
18    items of tangible personal property designed or marketed
19    to be used in conjunction with a breast pump to collect
20    milk expressed from a human breast and to store collected
21    milk until it is ready for consumption.
22        "Breast pump collection and storage supplies"
23    includes, but is not limited to: breast shields and breast
24    shield connectors; breast pump tubes and tubing adapters;
25    breast pump valves and membranes; backflow protectors and
26    backflow protector adaptors; bottles and bottle caps

 

 

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1    specific to the operation of the breast pump; and breast
2    milk storage bags.
3        "Breast pump collection and storage supplies" does not
4    include: (1) bottles and bottle caps not specific to the
5    operation of the breast pump; (2) breast pump travel bags
6    and other similar carrying accessories, including ice
7    packs, labels, and other similar products; (3) breast pump
8    cleaning supplies; (4) nursing bras, bra pads, breast
9    shells, and other similar products; and (5) creams,
10    ointments, and other similar products that relieve
11    breastfeeding-related symptoms or conditions of the
12    breasts or nipples, unless sold as part of a breast pump
13    kit that is pre-packaged by the breast pump manufacturer
14    or distributor.
15        "Breast pump kit" means a kit that: (1) contains no
16    more than a breast pump, breast pump collection and
17    storage supplies, a rechargeable battery for operating the
18    breast pump, a breastmilk cooler, bottle stands, ice
19    packs, and a breast pump carrying case; and (2) is
20    pre-packaged as a breast pump kit by the breast pump
21    manufacturer or distributor.
22        (47) Tangible personal property sold by or on behalf
23    of the State Treasurer pursuant to the Revised Uniform
24    Unclaimed Property Act. This item (47) is exempt from the
25    provisions of Section 2-70.
26        (48) Beginning on January 1, 2024, tangible personal

 

 

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1    property purchased by an active duty member of the armed
2    forces of the United States who presents valid military
3    identification and purchases the property using a form of
4    payment where the federal government is the payor. The
5    member of the armed forces must complete, at the point of
6    sale, a form prescribed by the Department of Revenue
7    documenting that the transaction is eligible for the
8    exemption under this paragraph. Retailers must keep the
9    form as documentation of the exemption in their records
10    for a period of not less than 6 years. "Armed forces of the
11    United States" means the United States Army, Navy, Air
12    Force, Marine Corps, or Coast Guard. This paragraph is
13    exempt from the provisions of Section 2-70.
14        (49) Qualified tangible personal property that is (i)
15    used in the construction or development of a megaproject
16    for which a certificate has been issued prior to December
17    31, 2030 by the Department of Commerce and Economic
18    Opportunity under Division 22 of Article 10 of the
19    Property Tax Code and (ii) purchased prior to the
20    Department's issuance of the megaproject certificate or
21    during the investment period, whether that tangible
22    personal property is purchased by the owner, operator, or
23    tenant of the megaproject or by a contractor or
24    subcontractor of the owner, operator, or tenant.
25        As used in this item (49):
26        "Facility" means a building or series of buildings.

 

 

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1        "Investment period" means the period ending 7 years
2    after the date on which the Department of Commerce and
3    Economic Opportunity issues the megaproject certificate,
4    or such other longer period of time as the local
5    municipality, local taxing districts, and the company may
6    agree to, not to exceed an initial period of 10 years.
7        "Megaproject" means a facility that is rehabilitated
8    or constructed as described in Division 22 of Article 10
9    of the Property Tax Code.
10        "Qualified tangible personal property" means all
11    tangible personal property that is essential to the
12    construction or development of a megaproject, including,
13    but not limited to: electrical systems and equipment;
14    climate control and chilling equipment and systems;
15    mechanical systems and equipment; monitoring and secure
16    systems; emergency generators; hardware; computers;
17    servers; data storage devices; network connectivity
18    equipment; racks; cabinets; telecommunications cabling
19    infrastructure; raised floor systems; peripheral
20    components or systems; software; mechanical, electrical,
21    or plumbing systems; battery systems; cooling systems and
22    towers; temperature control systems; other cabling; and
23    other infrastructure, equipment, and systems necessary to
24    operate qualified tangible personal property, including
25    fixtures; and component parts of those items, including
26    installation, maintenance, repair, refurbishment, and

 

 

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1    replacement of qualified tangible personal property to
2    generate, transform, transmit, distribute, or manage
3    electricity necessary to operate qualified tangible
4    personal property. The term "qualified tangible personal
5    property" also includes building materials to be
6    incorporated into the megaproject. To document the
7    exemption allowed under this Section, the retailer,
8    contractor, subcontractor, or supplier must obtain from
9    the purchaser a copy of the certificate issued by the
10    Department of Commerce and Economic Opportunity for the
11    megaproject as described and defined in Division 22 of
12    Article 10 of the Property Tax Code.
13(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
14102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
15Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
165-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
175-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
186-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
1912-12-23.)
 
20    Section 25. The Property Tax Code is amended by adding
21Division 22 to Article 10 and changing as follows:

 
22    (35 ILCS 200/Art. 10 Div. 22 heading new)
23
Division 22. Megaprojects

 

 

 

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1    (35 ILCS 200/10-910 new)
2    Sec. 10-910. Megaproject Assessment Freeze and Payment
3Law; definitions. This Division 22 may be cited as the
4Megaproject Assessment Freeze and Payment Law.
5    As used in this Division:
6    "Assessment officer" means the chief county assessment
7officer of the county in which the megaproject is located.
8    "Assessment period" means the period beginning on the
9first day of the calendar year after the calendar year in which
10a megaproject is placed in service and ending on the date when
11the megaproject no longer qualifies as a megaproject under
12this Division.
13    "Base tax year" means the tax year prior to the first
14calendar year during which the Department issues a megaproject
15certificate under this Division.
16    "Base year" means:
17        (1) the calendar year prior to the calendar year in
18    which the Department issues the megaproject certificate,
19    if the Department issues a megaproject certificate for a
20    project located on the property without granting
21    preliminary approval for the project pursuant to Section
22    10-940; or
23        (2) the calendar year prior to the calendar year in
24    which the Department grants that preliminary approval, if
25    the Department grants preliminary approval pursuant to
26    Section 10-940 for a megaproject located on the property.

 

 

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1    "Base year valuation" means the assessed value, in the
2base year, of the property comprising the megaproject.
3    "Company" means one or more entities whose aggregate
4investment in the megaproject meets the minimum investment
5required under this Division. The term "company" includes a
6company affiliate unless the context clearly indicates
7otherwise.
8    "Company affiliate" means an entity that joins with or is
9an affiliate of a company and that participates in the
10investment in, or financing of, a megaproject.
11    "Consumer Price Index" means the index published by the
12Bureau of Labor Statistics of the United States Department of
13Labor that measures the average change in prices of goods and
14services purchased by all urban consumers, United States city
15average, all items, 1982-84 = 100.
16    "Department" means the Department of Commerce and Economic
17Opportunity.
18    "Eligible costs" means all costs incurred by or on behalf
19of, or allocated to, a company, prior to the Department's
20issuance of the megaproject certificate or during the
21investment period, to create or construct a megaproject.
22"Eligible costs" includes, without limitation:
23        (1) the purchase, site preparation, renovation,
24    rehabilitation, and construction of land, buildings,
25    structures, equipment, and furnishings used for or in the
26    megaproject;

 

 

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1        (2) any goods or services for the megaproject that are
2    purchased and capitalized under generally accepted
3    accounting principles, including any organizational costs
4    and research and development costs incurred in Illinois;
5        (3) capitalized lease costs for land, buildings,
6    structures, and equipment valued at their present value
7    using the interest rate at which the company borrows funds
8    prevailing at the time the company entered into the lease;
9        (4) infrastructure development costs;
10        (5) debt service and project financing costs;
11        (6) noncapitalized research and development costs;
12        (7) job training and education costs;
13        (8) lease and relocation costs; and
14        (9) amounts expended by a company or company affiliate
15    as a nonresponsible party pursuant to a voluntary program
16    of site remediation, including amounts expended to obtain
17    a certification of completion, if completion of
18    remediation is certified by the Illinois Environmental
19    Protection Agency.
20    "Entity" means a sole proprietor, partnership, firm,
21corporation, limited liability company, association, or other
22business enterprise.
23    "Full-time employee" means an individual who is employed
24for consideration for at least 35 hours each week or who
25renders any other standard of service generally accepted by
26industry custom or practice as a full-time employee. An

 

 

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1individual for whom a W-2 is issued by a professional employer
2organization is a full-time employee if he or she is employed
3in the service of the applicant for at least 35 hours each week
4or renders any other standard of service generally accepted by
5industry custom or practice as a full-time employment. An
6owner, operator, or tenant who employs labor or services at a
7specific site or facility under contract with another may
8declare one full-time job for every 1,820 man-hours worked per
9year under the contract. Vacations, paid holidays, and sick
10time are included in this computation, but overtime is not
11considered a part of regular hours.
12    "Incentive agreement" means an agreement between a
13company, a local municipality, and the local taxing districts
14obligating the company to make the special payment under this
15Division, in addition to paying property taxes, during the
16incentive period for a megaproject.
17    "Incentive period" means the period beginning on the first
18day of the calendar year after the calendar year in which the
19megaproject is placed in service and each calendar year
20thereafter until the earlier of (i) the expiration or
21termination of the incentive agreement or (ii) the revocation
22of the megaproject certificate.
23    "Inducement resolution" means a resolution adopted by the
24local municipality setting forth the commitment of the local
25municipality to enter into an incentive agreement.
26    "Investment period" means the period ending 7 years after

 

 

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1the date on which the Department issues the megaproject
2certificate, or such other longer period of time as the local
3municipality, the local taxing districts, and the company may
4agree to, not to exceed an initial period of 10 years.
5    "Local municipality" means the city, village, or
6incorporated town in which the megaproject is located or, if
7the megaproject is located in an unincorporated area, the
8county in which the megaproject is located.
9    "Local taxing district means a taxing district that levies
10taxes totaling 10% or more of the total property tax bill for
11the property on which the megaproject is located.
12    "Megaproject" means a project that satisfies the minimum
13investment and other requirements of this Division.
14    "Megaproject certificate" means a certificate issued by
15the Department that authorizes an assessment freeze as
16provided in this Division.
17    "Minimum investment" means an investment in the
18megaproject of at least $100,000,000 in eligible costs within
19the investment period.
20    "Minority person" means a person who is a citizen or
21lawful permanent resident of the United States and who is any
22of the following:
23        (1) American Indian or Alaska Native (a person having
24    origins in any of the original peoples of North and South
25    America, including Central America, and who maintains
26    tribal affiliation or community attachment).

 

 

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1        (2) Asian (a person having origins in any of the
2    original peoples of the Far East, Southeast Asia, or the
3    Indian subcontinent, including, but not limited to,
4    Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
5    the Philippine Islands, Thailand, and Vietnam).
6        (3) Black or African American (a person having origins
7    in any of the black racial groups of Africa).
8        (4) Hispanic or Latino (a person of Cuban, Mexican,
9    Puerto Rican, South or Central American, or other Spanish
10    culture or origin, regardless of race).
11        (5) Native Hawaiian or Other Pacific Islander (a
12    person having origins in any of the original peoples of
13    Hawaii, Guam, Samoa, or other Pacific Islands).
14    "Minority-owned business" means a business that is at
15least 51% owned by one or more minority persons, or that, in
16the case of a corporation, has at least 51% of its stock owned
17by one or more minority persons, and that, in either case, is
18managed and operated on a daily basis by one or more of the
19minority individuals who own the business.
20    "New full-time employee" means a full-time employee who
21first became employed by the owner, operator, contractor, or
22tenant of the megaproject during the incentive period or
23investment period and whose hiring results in a net increase
24in the owner, operator, contractor, or tenant's total number
25of full-time Illinois employees.
26    "New full-time employee" does not include:

 

 

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1        (1) a person who was previously employed in Illinois
2    by the applicant or a related family member prior to the
3    onset of the investment or incentive period; or
4        (2) an individual who has a direct or indirect
5    ownership interest of at least 5% in the profits, capital,
6    or value of the applicant.
7    "Placed in service" means that the company has commenced
8its business operations at the megaproject site and has met
9its job creation requirements under this Section by hiring or
10causing to be hired at least 100 new full-time employees who
11provide support to the megaproject's business operations and
12work in the State of Illinois. If a company pauses or shuts
13down its business operations for a period of more than 30 days,
14then the megaproject shall no longer be considered placed in
15service.
16    "Project" means land, buildings, and other improvements on
17the land, including water facilities, sewage treatment and
18disposal facilities, air pollution control facilities, and all
19other machinery, apparatuses, equipment, office facilities,
20related infrastructure, and furnishings that are considered
21necessary, suitable, or useful by a company and comprise the
22megaproject, including all such property subject to assessment
23under the Property Tax Code.
24    "Special payment" means the annual amount paid in addition
25to property taxes paid during the incentive period as provided
26in the incentive agreement.

 

 

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1    "Sports stadium" means a facility, stadium, arena, or
2other structure where athletic contests are held and sports
3teams practice and perform.
4    "Taxing district" has the meaning set forth in Section
51-150.
6    "Termination date" means the last day of a calendar year
7that is no later than the 23rd year following the first
8calendar year in which a megaproject is placed in service. A
9company may apply to the local municipality and local taxing
10districts prior to the termination date for an extension of
11the termination date beyond the 23rd year for up to 17
12additional years, for a total of 40 years. The corporate
13authorities of the local municipality and the local taxing
14districts shall approve an extension by resolution upon a
15finding of substantial public benefit. A copy of the
16resolution must be delivered to the Department within 30 days
17of the date the resolution was adopted. If the incentive
18agreement is terminated under Section 10-937, then the
19termination date is the date the agreement is terminated.
 
20    (35 ILCS 200/10-915 new)
21    Sec. 10-915. Valuation during incentive period;
22eligibility.
23    (a) Property certified by the Department as megaproject
24property pursuant to this Division is eligible for an
25assessment freeze, as provided in this Division, eliminating

 

 

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1from consideration, for assessment purposes during the
2incentive period, the value added to the property by the
3project and limiting the total valuation of the property
4during the incentive period to the base year valuation. If the
5company does not anticipate completing the project within the
6investment period, then the local municipality and local
7taxing districts may approve one or more extensions of time to
8complete the project. However, the local municipality and
9local taxing districts may not extend the project for a period
10that exceeds 5 years after the last day of the investment
11period. Unless approved as part of the original incentive
12agreement, the corporate authorities of the local municipality
13and local taxing districts may approve an extension under this
14subsection by resolution, a copy of which must be delivered to
15the Department within 30 days after the date the resolution is
16adopted.
17    (b) To qualify for a megaproject certificate, the company
18must:
19        (1) make the minimum investment in the megaproject
20    during the investment period;
21        (2) enter into an incentive agreement with the local
22    municipality and local taxing districts as described in
23    this Division;
24        (3) enter into a project labor agreement with the
25    applicable local building trades council prior to the
26    commencement of any demolition, building construction, or

 

 

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1    building renovation related to the project;
2        (4) establish the goal of awarding 20% of the total
3    dollar amount of contracts that are related to the project
4    and are awarded by the company during each calendar year
5    to minority-owned businesses; and
6        (5) enter into a memorandum of understanding with the
7    Department committing to the creation of at least 100 new
8    full-time jobs as a result of the megaproject.
9    (c) For purposes of this Division, if a single company
10enters into a financing arrangement of the type described in
11subsection (b) of Section 10-950, the investment in or
12financing of the property by a developer, lessor, financing
13entity, or other third party in accordance with this
14arrangement is considered investment by the company.
15Investment by a related person to the company is considered
16investment by the company.
 
17    (35 ILCS 200/10-920 new)
18    Sec. 10-920. Incentive agreement; assessment freeze for
19megaprojects; incentive period; inducement resolution;
20location of the project; criteria to qualify.
21    (a) To obtain the benefits provided in this Division, the
22company shall apply in writing to the local municipality and
23local taxing districts to enter into an incentive agreement
24with the municipality and local taxing districts, in the form
25and manner required by the local municipality and local taxing

 

 

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1districts, respectively, and shall certify to the facts
2asserted in the application.
3    (b) The corporate authorities of the local municipality,
4prior to entering into an incentive agreement under this
5Section, shall hold a public hearing to consider the
6application. The amount and terms of the proposed special
7payment and the duration of the incentive agreement shall be
8considered at the public hearing.
9    (c) Copies of the completed application shall be provided
10to each taxing district for which property taxes were assessed
11on the property for the immediately preceding tax year. Those
12copies shall be provided at least 30 days prior to the
13scheduled public hearing at which the corporate authorities of
14the local municipality will consider the application.
15    (d) The company, the local municipality, and the local
16taxing districts shall enter into an incentive agreement
17requiring the special payment described in Section 10-925. The
18corporate authorities of the local municipality shall adopt an
19ordinance approving the incentive agreement.
20    (e) If an incentive agreement is not executed within 5
21years after the local municipality's adoption of an inducement
22resolution, expenditures incurred by the company more than 5
23years prior to the execution of the incentive agreement shall
24not qualify as part of the minimum investment.
25    (f) To be eligible to enter into an incentive agreement
26under this Division, the company must commit to a project that

 

 

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1meets the minimum investment and new job creation requirements
2set forth in this Division.
 
3    (35 ILCS 200/10-925 new)
4    Sec. 10-925. Contents of incentive agreement.
5    (a) The incentive agreement under Section 10-920 must
6require the company to pay, or be responsible for the payment
7of, an annual special payment to the local municipality and
8the local taxing districts, beginning with the first tax year
9for which the assessment freeze under this Division is applied
10to the megaproject. The amount of the special payment shall be
11established by the local municipality and local taxing
12districts in the incentive agreement and may be a fixed amount
13for the duration of the incentive period or may be subject to
14adjustment (downward or upward) based on factors memorialized
15in the incentive agreement.
16    Unless the special payment is negotiated as a fixed
17payment for the duration of the incentive period, the parties
18shall conduct an impact analysis study on the megaproject
19every 5 years, and the special payment shall be adjusted based
20on the results of that study; provided, however, the
21adjustment shall not be less than the initial special payment
22adjusted for inflation as measured by the Consumer Price
23Index.
24    The portion of the special payment due to the local school
25districts shall be increased annually by the lesser of (i) 5%

 

 

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1or (ii) the percentage increase, if any, in the Consumer Price
2Index for the 12 months ending in September of the immediately
3preceding calendar year, and may be further increased or
4decreased every 5 years based on the results of the impact
5analysis study.
6    (b) The incentive agreement shall obligate the company to
7operate the megaproject at the designated project location for
8a minimum of 20 years.
9    (c) The incentive agreement may contain such other terms
10and conditions as are mutually agreeable to the local
11municipality, the local taxing districts, and the company and
12are consistent with the requirements of this Division,
13including, without limitation, operational and additional job
14creation requirements.
15    (d) In addition, all incentive agreements entered into
16pursuant to Section 10-920 must include, as the first portion
17of the document, a recapitulation of the remaining contents of
18the document, which shall include the following:
19        (1) the legal name of each party to the agreement;
20        (2) the street address of the project and the property
21    subject to the agreement;
22        (3) the agreed minimum investment;
23        (3.5) the agreed number of new jobs to be created;
24        (4) the term of the agreement;
25        (5) a schedule showing the amount of the special
26    payment and its calculation for each year of the

 

 

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1    agreement;
2        (6) a schedule showing the amount to be distributed
3    annually to each local taxing district, as set forth in
4    the incentive agreement;
5        (7) any other feature or aspect of the agreement which
6    may affect the calculation of items (5) and (6) of this
7    subsection; and
8        (8) the party or parties to the agreement who are
9    responsible for updating the information contained in the
10    summary document.
 
11    (35 ILCS 200/10-927 new)
12    Sec. 10-927. Minimum job creation requirements.
13    (a) The company must hire at least 100 new full-time
14employees as a result of the megaproject beginning no later
15than when the project is placed in service and lasting for the
16duration of the incentive period. These new full-time
17employees must be hired to support the business operations of
18the megaproject and be located within the State of Illinois.
19    (b) A company may not satisfy the requirements of this
20Section by relocating jobs from one site in Illinois to
21another site in Illinois.
 
22    (35 ILCS 200/10-930 new)
23    Sec. 10-930. Installment bills; distribution of special
24payments.

 

 

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1    (a) The local municipality shall prepare a bill for the
2company for each installment of the special payment according
3to the schedule set forth in paragraph (5) of subsection (d) of
4Section 10-925, or as modified pursuant to paragraph (7) of
5subsection (d) of Section 10-925, and the company shall make
6direct payments to the affected taxing entities according to
7the schedule in paragraph (6) of subsection (d) of Section
810-925 or as modified in paragraph (7) of subsection (d) of
9Section 10-925.
10    (b) The company shall make direct payments of the special
11payment to the local taxing districts associated with the
12megaproject within 30 days after receipt by the company of the
13bill prepared by the local municipality.
14    (c) Misallocations of the special payments may be
15corrected by adjusting later distributions, but these
16adjustments must be made in the next succeeding year following
17identification and resolution of the misallocation. To the
18extent that distributions have been made improperly in
19previous years, claims for adjustment must be made within one
20year of the distribution.
 
21    (35 ILCS 200/10-937 new)
22    Sec. 10-937. Termination of incentive agreement; automatic
23termination; minimum level of investment and new job creation
24required to remain qualified for assessment freeze.
25    (a) The local municipality, the local taxing districts,

 

 

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1and the company may mutually agree to terminate the incentive
2agreement at any time. From the date of termination, the
3megaproject is subject to assessment on the basis of the
4then-current fair cash value.
5    (b) An incentive agreement shall be terminated if the
6company fails to satisfy the minimum investment level or the
7job creation requirements provided in this Division. If the
8incentive agreement is terminated under this subsection, the
9megaproject is subject to assessment on the basis of the
10then-current fair cash value beginning in the tax year during
11which the termination occurs.
12    (c) An incentive agreement shall terminate if, at any
13time, the company no longer has the minimum level of new job
14creation and investment as provided in this Division, without
15regard to depreciation.
 
16    (35 ILCS 200/10-940 new)
17    Sec. 10-940. Megaproject applications; certification as a
18megaproject and revocation of certification.
19    (a) The Department shall receive applications for
20megaproject certificates under this Division in a form and
21manner provided by the Department by rule. The Department
22shall promptly notify the assessment officer when the
23Department receives an application under this Section. The
24Department's rules shall provide that an applicant may request
25preliminary approval of the megaproject before the project

 

 

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1begins, before the applicant has entered into a fully executed
2incentive agreement with the local municipality and local
3taxing districts, or before the project has been placed in
4service.
5    (b) An applicant for a megaproject certificate under this
6Division must provide evidence to the Department of a fully
7executed incentive agreement between the company, the local
8municipality, and the local taxing districts as described in
9this Division.
10    (c) An applicant for a megaproject certificate under this
11Division must provide evidence to the Department of a fully
12executed project labor agreement entered into with the
13applicable local building trades council prior to the
14commencement of any demolition, building construction, or
15building renovation at the project. If the demolition,
16building construction, or building renovation begins after the
17application is approved, then the applicant must transmit a
18copy of the fully executed project labor agreement to the
19Department as soon as possible after the agreement is
20executed.
21    (d) An applicant for a megaproject certificate under this
22Division must provide evidence to the Department that the
23company has established the goal of awarding 20% of the total
24dollar amount of contracts awarded during each calendar year
25by the company, that are related to the project, to
26minority-owned businesses.

 

 

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1    (d-1) An applicant for a megaproject certificate under
2this Division must provide evidence to the Department that the
3company has entered into a memorandum of understanding with
4the Department committing to the creation of at least 100 new
5full-time jobs that provide support to the business operations
6of the megaproject and are located within the State of
7Illinois.
8    (e) The Department shall approve an application for a
9megaproject certificate if the Department finds that the
10project meets the requirements of this Division.
11    (f) Upon approval of the application, the Department shall
12issue a megaproject certificate to the applicant and transmit
13a copy to the assessment officer. The certificate shall
14identify the property on which the megaproject is located.
15    (g) For each calendar year following issuance of the
16megaproject certificate, until the minimum investment and new
17job creation requirements have been met and the megaproject
18has been placed in service, the company shall deliver a report
19to the Department on the status of construction or creation of
20the megaproject and the amount of minimum investment made in
21the megaproject during the preceding calendar year. If the
22Department determines, in accordance with the Administrative
23Review Law and the Illinois Administrative Procedure Act, that
24a project for which a certificate has been issued has not met
25the minimum investment and job creation requirements of this
26Division within the investment period, the Department shall

 

 

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1revoke the certificate by written notice to the taxpayer of
2record and transmit a copy of the revocation to the assessment
3officer.
4    (h) If the local municipality notifies the Department that
5the incentive agreement between the company, the local
6municipality, and the local taxing districts has been
7terminated, the Department shall revoke the certificate by
8written notice to the taxpayer of record and transmit a copy of
9the revocation to the assessment officer.
 
10    (35 ILCS 200/10-945 new)
11    Sec. 10-945. Computation of valuation.
12    (a) Upon receipt of the megaproject certificate from the
13Department, the assessment officer shall determine the base
14year valuation and shall make a notation on each statement of
15assessment during the assessment period that the valuation of
16the project is based upon the issuance of a megaproject
17certificate.
18    (b) Upon revocation of a megaproject certificate, the
19assessment officer shall compute the assessed valuation of the
20project on the basis of the then-current fair cash value of the
21property.
 
22    (35 ILCS 200/10-950 new)
23    Sec. 10-950. Transfers of interest in a megaproject;
24sale-leaseback arrangement; requirements.

 

 

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1    (a) Subject to the terms of the incentive agreement
2between the company, the local municipality, and the local
3municipality, ownership of or any interest in the megaproject
4and any and all related project property, including, without
5limitation, transfers of indirect beneficial interests and
6equity interests in a company owning a megaproject, shall not
7affect the assessment freeze or the validity of the
8megaproject certificate issued under this Division.
9Notwithstanding the provisions of this subsection, the
10incentive agreement shall be a covenant running with the land.
11    (b) A company may enter into lending, financing, security,
12leasing, or similar arrangements, or a succession of such
13arrangements, with a financing entity concerning all or part
14of a project including, without limitation, a sale-leaseback
15arrangement, equipment lease, build-to-suit lease, synthetic
16lease, nordic lease, defeased tax benefit, or transfer lease,
17an assignment, sublease, or similar arrangement, or succession
18of those arrangements, with one or more financing entities
19concerning all or part of a project, regardless of the
20identity of the income tax or fee owner of the megaproject.
21Neither the original transfer to the financing entity nor the
22later transfer from the financing entity back to the company,
23pursuant to terms in the sale-leaseback agreement, shall
24affect the assessment freeze or the validity of the
25megaproject certificate issued under this Division, regardless
26of whether the income tax basis is changed for income tax

 

 

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1purposes.
2    (c) The Department must receive notice of all transfers
3undertaken with respect to other projects to effect a
4financing. Notice shall be made in writing within 60 days
5after the transfer, shall identify each transferee, and shall
6contain other information required by the Department with the
7appropriate returns. Failure to meet this notice requirement
8does not adversely affect the assessment freeze.
 
9    (35 ILCS 200/10-955 new)
10    Sec. 10-955. Minimum investment by company affiliates. To
11be eligible for the benefits of this Division, a company must
12invest the minimum investment. Investments by company
13affiliates during the investment period may be applied toward
14the minimum investment under this Division regardless of
15whether the company affiliate was part of the project. To
16qualify for the assessment freeze, the minimum investment must
17be made in connection with the megaproject.
 
18    (35 ILCS 200/10-960 new)
19    Sec. 10-960. Projects to be valued at fair cash value for
20purposes of bonded indebtedness and limitations on property
21tax extensions. Projects to which an assessment freeze applies
22pursuant to this Division shall be valued at their fair cash
23value for purposes of calculating a municipality's general
24obligation bond limits and a taxing district's limitation on

 

 

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1tax extensions.
 
2    (35 ILCS 200/10-965 new)
3    Sec. 10-965. Abatements. Any taxing district, upon a
4majority vote of its governing authority, may, after the
5determination of the assessed valuation as set forth in this
6Division, order the clerk of the appropriate municipality or
7county to abate any portion of real property taxes otherwise
8levied or extended by the taxing district on a megaproject.
 
9    (35 ILCS 200/10-970 new)
10    Sec. 10-970. Filing of returns, contracts, and other
11information; due date of payments and returns.
12    (a) The company and the local municipality shall file
13notices, reports, and other information as required by the
14Department.
15    (b) Special payments are due at the same time as property
16tax payments and property tax returns are due for the
17megaproject property.
18    (c) Failure to make a timely special payment results in
19the assessment of penalties as if the payment were a
20delinquent property tax payment or return.
21    (d) Within 30 days after the date of execution of an
22incentive agreement, a copy of the incentive agreement must be
23filed with the Department, the county assessor, and the county
24auditor for the county in which the megaproject is located.
 

 

 

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1    (35 ILCS 200/10-980 new)
2    Sec. 10-980. Rules. The Department may issue rulings and
3adopt rules as necessary to carry out the purpose of this
4Division.
 
5    (35 ILCS 200/10-985 new)
6    Sec. 10-985. Prohibition on multiple credits, exemptions,
7and freezes. An applicant for a megaproject certificate who
8qualifies for an assessment freeze under this Section is not
9entitled to any other property tax credits, exemptions, or
10assessment freezes relating to the megaproject.
 
11    (35 ILCS 200/10-990 new)
12    Sec. 10-990. Sports stadiums. An applicant is not
13eligible for a megaproject assessment freeze under this
14Section for the construction or development of a sports
15stadium unless, prior to the approval of the megaproject by
16the Department, the General Assembly approves the megaproject
17by joint resolution.
 
18    (35 ILCS 200/10-995 new)
19    Sec. 10-995. Tax Increment Financing districts. A project
20that is located and operated in a Tax Increment Financing
21(TIF) district or TIF designated area is not eligible for a
22megaproject assessment freeze under this Section. The

 

 

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1agreement shall provide that the megaproject certificate is
2void if an area on which the megaproject is located is
3designated as a TIF district or TIF designated area.
 
4    (35 ILCS 200/10-1000 new)
5    Sec. 10-1000. Invalidity. If all or any part of this
6Division is determined to be unconstitutional or otherwise
7unenforceable by a court of competent jurisdiction, a company
8has 180 days from the date of the determination to transfer the
9megaproject's title to an authorized economic development
10authority that qualifies for property tax assessment under
11this Division or is exempt from property taxes.
 
12    Section 97. Severability. The provisions of this Act are
13severable under Section 1.31 of the Statute on Statutes.
 
14    Section 99. Effective date. This Act takes effect June 1,
152024.

 

 

HB5545- 123 -LRB103 38926 HLH 69063 b

1 INDEX
2 Statutes amended in order of appearance
3    35 ILCS 105/3-5
4    35 ILCS 110/3-5
5    35 ILCS 115/3-5
6    35 ILCS 120/2-5
7    35 ILCS 200/Art. 10 Div.
8    22 heading new
9    35 ILCS 200/10-910 new
10    35 ILCS 200/10-915 new
11    35 ILCS 200/10-920 new
12    35 ILCS 200/10-925 new
13    35 ILCS 200/10-927 new
14    35 ILCS 200/10-930 new
15    35 ILCS 200/10-937 new
16    35 ILCS 200/10-940 new
17    35 ILCS 200/10-945 new
18    35 ILCS 200/10-950 new
19    35 ILCS 200/10-955 new
20    35 ILCS 200/10-960 new
21    35 ILCS 200/10-965 new
22    35 ILCS 200/10-970 new
23    35 ILCS 200/10-980 new
24    35 ILCS 200/10-985 new
25    35 ILCS 200/10-990 new

 

 

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1    35 ILCS 200/10-995 new
2    35 ILCS 200/10-1000 new