103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5577

 

Introduced 2/9/2024, by Rep. Hoan Huynh

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for medical appliances, including, but not limited to, devices used to treat amyotrophic lateral sclerosis. Effective January 1, 2025.


LRB103 38816 HLH 68953 b

 

 

A BILL FOR

 

HB5577LRB103 38816 HLH 68953 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Sections
53-5 and 3-10 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) Beginning on January 1, 2025, medical appliances and
12products that are classified as Class III medical devices by
13the United States Food and Drug Administration and that are
14used for cancer treatment pursuant to a prescription, as well
15as any accessories and components related to those appliances
16and devices. As used in this paragraph, "medical appliance"
17means a product that was classified as a medical appliance and
18was subject to a 1% rate of tax immediately prior to the
19effective date of this amendatory Act of the 103rd General
20Assembly, including, but not limited to, devices used to treat
21amyotrophic lateral sclerosis, as well as other items as
22determined by the Department by rule. This paragraph is exempt
23from the provisions of Section 3-90.
24(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
25Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
26eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,

 

 

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1Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
2eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
3revised 12-12-23.)
 
4    (35 ILCS 105/3-10)
5    Sec. 3-10. Rate of tax. Unless otherwise provided in this
6Section, the tax imposed by this Act is at the rate of 6.25% of
7either the selling price or the fair market value, if any, of
8the tangible personal property. In all cases where property
9functionally used or consumed is the same as the property that
10was purchased at retail, then the tax is imposed on the selling
11price of the property. In all cases where property
12functionally used or consumed is a by-product or waste product
13that has been refined, manufactured, or produced from property
14purchased at retail, then the tax is imposed on the lower of
15the fair market value, if any, of the specific property so used
16in this State or on the selling price of the property purchased
17at retail. For purposes of this Section "fair market value"
18means the price at which property would change hands between a
19willing buyer and a willing seller, neither being under any
20compulsion to buy or sell and both having reasonable knowledge
21of the relevant facts. The fair market value shall be
22established by Illinois sales by the taxpayer of the same
23property as that functionally used or consumed, or if there
24are no such sales by the taxpayer, then comparable sales or
25purchases of property of like kind and character in Illinois.

 

 

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1    Beginning on July 1, 2000 and through December 31, 2000,
2with respect to motor fuel, as defined in Section 1.1 of the
3Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
4the Use Tax Act, the tax is imposed at the rate of 1.25%.
5    Beginning on August 6, 2010 through August 15, 2010, and
6beginning again on August 5, 2022 through August 14, 2022,
7with respect to sales tax holiday items as defined in Section
83-6 of this Act, the tax is imposed at the rate of 1.25%.
9    With respect to gasohol, the tax imposed by this Act
10applies to (i) 70% of the proceeds of sales made on or after
11January 1, 1990, and before July 1, 2003, (ii) 80% of the
12proceeds of sales made on or after July 1, 2003 and on or
13before July 1, 2017, (iii) 100% of the proceeds of sales made
14after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
15the proceeds of sales made on or after January 1, 2024 and on
16or before December 31, 2028, and (v) 100% of the proceeds of
17sales made after December 31, 2028. If, at any time, however,
18the tax under this Act on sales of gasohol is imposed at the
19rate of 1.25%, then the tax imposed by this Act applies to 100%
20of the proceeds of sales of gasohol made during that time.
21    With respect to mid-range ethanol blends, the tax imposed
22by this Act applies to (i) 80% of the proceeds of sales made on
23or after January 1, 2024 and on or before December 31, 2028 and
24(ii) 100% of the proceeds of sales made thereafter. If, at any
25time, however, the tax under this Act on sales of mid-range
26ethanol blends is imposed at the rate of 1.25%, then the tax

 

 

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1imposed by this Act applies to 100% of the proceeds of sales of
2mid-range ethanol blends made during that time.
3    With respect to majority blended ethanol fuel, the tax
4imposed by this Act does not apply to the proceeds of sales
5made on or after July 1, 2003 and on or before December 31,
62028 but applies to 100% of the proceeds of sales made
7thereafter.
8    With respect to biodiesel blends with no less than 1% and
9no more than 10% biodiesel, the tax imposed by this Act applies
10to (i) 80% of the proceeds of sales made on or after July 1,
112003 and on or before December 31, 2018 and (ii) 100% of the
12proceeds of sales made after December 31, 2018 and before
13January 1, 2024. On and after January 1, 2024 and on or before
14December 31, 2030, the taxation of biodiesel, renewable
15diesel, and biodiesel blends shall be as provided in Section
163-5.1. If, at any time, however, the tax under this Act on
17sales of biodiesel blends with no less than 1% and no more than
1810% biodiesel is imposed at the rate of 1.25%, then the tax
19imposed by this Act applies to 100% of the proceeds of sales of
20biodiesel blends with no less than 1% and no more than 10%
21biodiesel made during that time.
22    With respect to biodiesel and biodiesel blends with more
23than 10% but no more than 99% biodiesel, the tax imposed by
24this Act does not apply to the proceeds of sales made on or
25after July 1, 2003 and on or before December 31, 2023. On and
26after January 1, 2024 and on or before December 31, 2030, the

 

 

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1taxation of biodiesel, renewable diesel, and biodiesel blends
2shall be as provided in Section 3-5.1.
3    Until July 1, 2022 and beginning again on July 1, 2023,
4with respect to food for human consumption that is to be
5consumed off the premises where it is sold (other than
6alcoholic beverages, food consisting of or infused with adult
7use cannabis, soft drinks, and food that has been prepared for
8immediate consumption), the tax is imposed at the rate of 1%.
9Beginning on July 1, 2022 and until July 1, 2023, with respect
10to food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages,
12food consisting of or infused with adult use cannabis, soft
13drinks, and food that has been prepared for immediate
14consumption), the tax is imposed at the rate of 0%.
15    With respect to prescription and nonprescription
16medicines, drugs, medical appliances, products classified as
17Class III medical devices by the United States Food and Drug
18Administration that are used for cancer treatment pursuant to
19a prescription, as well as any accessories and components
20related to those devices, modifications to a motor vehicle for
21the purpose of rendering it usable by a person with a
22disability, and insulin, blood sugar testing materials,
23syringes, and needles used by human diabetics (except to the
24extent that those items are exempt by the Department under
25paragraph (44) of Section 3-5), the tax is imposed at the rate
26of 1%. For the purposes of this Section, until September 1,

 

 

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12009: the term "soft drinks" means any complete, finished,
2ready-to-use, non-alcoholic drink, whether carbonated or not,
3including, but not limited to, soda water, cola, fruit juice,
4vegetable juice, carbonated water, and all other preparations
5commonly known as soft drinks of whatever kind or description
6that are contained in any closed or sealed bottle, can,
7carton, or container, regardless of size; but "soft drinks"
8does not include coffee, tea, non-carbonated water, infant
9formula, milk or milk products as defined in the Grade A
10Pasteurized Milk and Milk Products Act, or drinks containing
1150% or more natural fruit or vegetable juice.
12    Notwithstanding any other provisions of this Act,
13beginning September 1, 2009, "soft drinks" means non-alcoholic
14beverages that contain natural or artificial sweeteners. "Soft
15drinks" does not include beverages that contain milk or milk
16products, soy, rice or similar milk substitutes, or greater
17than 50% of vegetable or fruit juice by volume.
18    Until August 1, 2009, and notwithstanding any other
19provisions of this Act, "food for human consumption that is to
20be consumed off the premises where it is sold" includes all
21food sold through a vending machine, except soft drinks and
22food products that are dispensed hot from a vending machine,
23regardless of the location of the vending machine. Beginning
24August 1, 2009, and notwithstanding any other provisions of
25this Act, "food for human consumption that is to be consumed
26off the premises where it is sold" includes all food sold

 

 

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1through a vending machine, except soft drinks, candy, and food
2products that are dispensed hot from a vending machine,
3regardless of the location of the vending machine.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "food for human consumption that
6is to be consumed off the premises where it is sold" does not
7include candy. For purposes of this Section, "candy" means a
8preparation of sugar, honey, or other natural or artificial
9sweeteners in combination with chocolate, fruits, nuts or
10other ingredients or flavorings in the form of bars, drops, or
11pieces. "Candy" does not include any preparation that contains
12flour or requires refrigeration.
13    Notwithstanding any other provisions of this Act,
14beginning September 1, 2009, "nonprescription medicines and
15drugs" does not include grooming and hygiene products. For
16purposes of this Section, "grooming and hygiene products"
17includes, but is not limited to, soaps and cleaning solutions,
18shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
19lotions and screens, unless those products are available by
20prescription only, regardless of whether the products meet the
21definition of "over-the-counter-drugs". For the purposes of
22this paragraph, "over-the-counter-drug" means a drug for human
23use that contains a label that identifies the product as a drug
24as required by 21 CFR 201.66. The "over-the-counter-drug"
25label includes:
26        (A) a "Drug Facts" panel; or

 

 

HB5577- 31 -LRB103 38816 HLH 68953 b

1        (B) a statement of the "active ingredient(s)" with a
2    list of those ingredients contained in the compound,
3    substance or preparation.
4    Beginning on January 1, 2014 (the effective date of Public
5Act 98-122), "prescription and nonprescription medicines and
6drugs" includes medical cannabis purchased from a registered
7dispensing organization under the Compassionate Use of Medical
8Cannabis Program Act.
9    As used in this Section, "adult use cannabis" means
10cannabis subject to tax under the Cannabis Cultivation
11Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
12and does not include cannabis subject to tax under the
13Compassionate Use of Medical Cannabis Program Act.
14    If the property that is purchased at retail from a
15retailer is acquired outside Illinois and used outside
16Illinois before being brought to Illinois for use here and is
17taxable under this Act, the "selling price" on which the tax is
18computed shall be reduced by an amount that represents a
19reasonable allowance for depreciation for the period of prior
20out-of-state use.
21(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
22Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
2360-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
244-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 
25    Section 10. The Service Use Tax Act is amended by changing

 

 

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1Sections 3-5 and 3-10 as follows:
 
2    (35 ILCS 110/3-5)
3    Sec. 3-5. Exemptions. Use of the following tangible
4personal property is exempt from the tax imposed by this Act:
5    (1) Personal property purchased from a corporation,
6society, association, foundation, institution, or
7organization, other than a limited liability company, that is
8organized and operated as a not-for-profit service enterprise
9for the benefit of persons 65 years of age or older if the
10personal property was not purchased by the enterprise for the
11purpose of resale by the enterprise.
12    (2) Personal property purchased by a non-profit Illinois
13county fair association for use in conducting, operating, or
14promoting the county fair.
15    (3) Personal property purchased by a not-for-profit arts
16or cultural organization that establishes, by proof required
17by the Department by rule, that it has received an exemption
18under Section 501(c)(3) of the Internal Revenue Code and that
19is organized and operated primarily for the presentation or
20support of arts or cultural programming, activities, or
21services. These organizations include, but are not limited to,
22music and dramatic arts organizations such as symphony
23orchestras and theatrical groups, arts and cultural service
24organizations, local arts councils, visual arts organizations,
25and media arts organizations. On and after July 1, 2001 (the

 

 

HB5577- 33 -LRB103 38816 HLH 68953 b

1effective date of Public Act 92-35), however, an entity
2otherwise eligible for this exemption shall not make tax-free
3purchases unless it has an active identification number issued
4by the Department.
5    (4) Legal tender, currency, medallions, or gold or silver
6coinage issued by the State of Illinois, the government of the
7United States of America, or the government of any foreign
8country, and bullion.
9    (5) Until July 1, 2003 and beginning again on September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new
12and used, and including that manufactured on special order or
13purchased for lease, certified by the purchaser to be used
14primarily for graphic arts production. Equipment includes
15chemicals or chemicals acting as catalysts but only if the
16chemicals or chemicals acting as catalysts effect a direct and
17immediate change upon a graphic arts product. Beginning on
18July 1, 2017, graphic arts machinery and equipment is included
19in the manufacturing and assembling machinery and equipment
20exemption under Section 2 of this Act.
21    (6) Personal property purchased from a teacher-sponsored
22student organization affiliated with an elementary or
23secondary school located in Illinois.
24    (7) Farm machinery and equipment, both new and used,
25including that manufactured on special order, certified by the
26purchaser to be used primarily for production agriculture or

 

 

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

 

 

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1computer-assisted operation of production agriculture
2facilities, equipment, and activities such as, but not limited
3to, the collection, monitoring, and correlation of animal and
4crop data for the purpose of formulating animal diets and
5agricultural chemicals.
6    Beginning on January 1, 2024, farm machinery and equipment
7also includes electrical power generation equipment used
8primarily for production agriculture.
9    This item (7) is exempt from the provisions of Section
103-75.
11    (8) Until June 30, 2013, fuel and petroleum products sold
12to or used by an air common carrier, certified by the carrier
13to be used for consumption, shipment, or storage in the
14conduct of its business as an air common carrier, for a flight
15destined for or returning from a location or locations outside
16the United States without regard to previous or subsequent
17domestic stopovers.
18    Beginning July 1, 2013, fuel and petroleum products sold
19to or used by an air carrier, certified by the carrier to be
20used for consumption, shipment, or storage in the conduct of
21its business as an air common carrier, for a flight that (i) is
22engaged in foreign trade or is engaged in trade between the
23United States and any of its possessions and (ii) transports
24at least one individual or package for hire from the city of
25origination to the city of final destination on the same
26aircraft, without regard to a change in the flight number of

 

 

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

 

 

HB5577- 37 -LRB103 38816 HLH 68953 b

1    (12) Until July 1, 2028, coal and aggregate exploration,
2mining, off-highway hauling, processing, maintenance, and
3reclamation equipment, including replacement parts and
4equipment, and including equipment purchased for lease, but
5excluding motor vehicles required to be registered under the
6Illinois Vehicle Code. The changes made to this Section by
7Public Act 97-767 apply on and after July 1, 2003, but no claim
8for credit or refund is allowed on or after August 16, 2013
9(the effective date of Public Act 98-456) for such taxes paid
10during the period beginning July 1, 2003 and ending on August
1116, 2013 (the effective date of Public Act 98-456).
12    (13) Semen used for artificial insemination of livestock
13for direct agricultural production.
14    (14) Horses, or interests in horses, registered with and
15meeting the requirements of any of the Arabian Horse Club
16Registry of America, Appaloosa Horse Club, American Quarter
17Horse Association, United States Trotting Association, or
18Jockey Club, as appropriate, used for purposes of breeding or
19racing for prizes. This item (14) is exempt from the
20provisions of Section 3-75, and the exemption provided for
21under this item (14) applies for all periods beginning May 30,
221995, but no claim for credit or refund is allowed on or after
23January 1, 2008 (the effective date of Public Act 95-88) for
24such taxes paid during the period beginning May 30, 2000 and
25ending on January 1, 2008 (the effective date of Public Act
2695-88).

 

 

HB5577- 38 -LRB103 38816 HLH 68953 b

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

 

 

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

 

 

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1who reside within the declared disaster area.
2    (18) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is used in
5the performance of infrastructure repairs in this State,
6including, but not limited to, municipal roads and streets,
7access roads, bridges, sidewalks, waste disposal systems,
8water and sewer line extensions, water distribution and
9purification facilities, storm water drainage and retention
10facilities, and sewage treatment facilities, resulting from a
11State or federally declared disaster in Illinois or bordering
12Illinois when such repairs are initiated on facilities located
13in the declared disaster area within 6 months after the
14disaster.
15    (19) Beginning July 1, 1999, game or game birds purchased
16at a "game breeding and hunting preserve area" as that term is
17used in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 3-75.
19    (20) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the
23Department to be organized and operated exclusively for
24educational purposes. For purposes of this exemption, "a
25corporation, limited liability company, society, association,
26foundation, or institution organized and operated exclusively

 

 

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1for educational purposes" means all tax-supported public
2schools, private schools that offer systematic instruction in
3useful branches of learning by methods common to public
4schools and that compare favorably in their scope and
5intensity with the course of study presented in tax-supported
6schools, and vocational or technical schools or institutes
7organized and operated exclusively to provide a course of
8study of not less than 6 weeks duration and designed to prepare
9individuals to follow a trade or to pursue a manual,
10technical, mechanical, industrial, business, or commercial
11occupation.
12    (21) Beginning January 1, 2000, personal property,
13including food, purchased through fundraising events for the
14benefit of a public or private elementary or secondary school,
15a group of those schools, or one or more school districts if
16the events are sponsored by an entity recognized by the school
17district that consists primarily of volunteers and includes
18parents and teachers of the school children. This paragraph
19does not apply to fundraising events (i) for the benefit of
20private home instruction or (ii) for which the fundraising
21entity purchases the personal property sold at the events from
22another individual or entity that sold the property for the
23purpose of resale by the fundraising entity and that profits
24from the sale to the fundraising entity. This paragraph is
25exempt from the provisions of Section 3-75.
26    (22) Beginning January 1, 2000 and through December 31,

 

 

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12001, new or used automatic vending machines that prepare and
2serve hot food and beverages, including coffee, soup, and
3other items, and replacement parts for these machines.
4Beginning January 1, 2002 and through June 30, 2003, machines
5and parts for machines used in commercial, coin-operated
6amusement and vending business if a use or occupation tax is
7paid on the gross receipts derived from the use of the
8commercial, coin-operated amusement and vending machines. This
9paragraph is exempt from the provisions of Section 3-75.
10    (23) Beginning August 23, 2001 and through June 30, 2016,
11food for human consumption that is to be consumed off the
12premises where it is sold (other than alcoholic beverages,
13soft drinks, and food that has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, and insulin, urine testing
16materials, syringes, and needles used by diabetics, for human
17use, when purchased for use by a person receiving medical
18assistance under Article V of the Illinois Public Aid Code who
19resides in a licensed long-term care facility, as defined in
20the Nursing Home Care Act, or in a licensed facility as defined
21in the ID/DD Community Care Act, the MC/DD Act, or the
22Specialized Mental Health Rehabilitation Act of 2013.
23    (24) Beginning on August 2, 2001 (the effective date of
24Public Act 92-227), computers and communications equipment
25utilized for any hospital purpose and equipment used in the
26diagnosis, analysis, or treatment of hospital patients

 

 

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

 

 

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1that has been issued an active tax exemption identification
2number by the Department under Section 1g of the Retailers'
3Occupation Tax Act. If the property is leased in a manner that
4does not qualify for this exemption or is used in any other
5nonexempt manner, the lessor shall be liable for the tax
6imposed under this Act or the Use Tax Act, as the case may be,
7based on the fair market value of the property at the time the
8nonqualifying use occurs. No lessor shall collect or attempt
9to collect an amount (however designated) that purports to
10reimburse that lessor for the tax imposed by this Act or the
11Use Tax Act, as the case may be, if the tax has not been paid
12by the lessor. If a lessor improperly collects any such amount
13from the lessee, the lessee shall have a legal right to claim a
14refund of that amount from the lessor. If, however, that
15amount is not refunded to the lessee for any reason, the lessor
16is liable to pay that amount to the Department. This paragraph
17is exempt from the provisions of Section 3-75.
18    (26) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued
23under Title IV of the Environmental Protection Act. This
24paragraph is exempt from the provisions of Section 3-75.
25    (27) Beginning January 1, 2010 and continuing through
26December 31, 2029, materials, parts, equipment, components,

 

 

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1and furnishings incorporated into or upon an aircraft as part
2of the modification, refurbishment, completion, replacement,
3repair, or maintenance of the aircraft. This exemption
4includes consumable supplies used in the modification,
5refurbishment, completion, replacement, repair, and
6maintenance of aircraft. However, until January 1, 2024, this
7exemption excludes any materials, parts, equipment,
8components, and consumable supplies used in the modification,
9replacement, repair, and maintenance of aircraft engines or
10power plants, whether such engines or power plants are
11installed or uninstalled upon any such aircraft. "Consumable
12supplies" include, but are not limited to, adhesive, tape,
13sandpaper, general purpose lubricants, cleaning solution,
14latex gloves, and protective films.
15    Beginning January 1, 2010 and continuing through December
1631, 2023, this exemption applies only to the use of qualifying
17tangible personal property transferred incident to the
18modification, refurbishment, completion, replacement, repair,
19or maintenance of aircraft by persons who (i) hold an Air
20Agency Certificate and are empowered to operate an approved
21repair station by the Federal Aviation Administration, (ii)
22have a Class IV Rating, and (iii) conduct operations in
23accordance with Part 145 of the Federal Aviation Regulations.
24From January 1, 2024 through December 31, 2029, this exemption
25applies only to the use of qualifying tangible personal
26property by: (A) persons who modify, refurbish, complete,

 

 

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1repair, replace, or maintain aircraft and who (i) hold an Air
2Agency Certificate and are empowered to operate an approved
3repair station by the Federal Aviation Administration, (ii)
4have a Class IV Rating, and (iii) conduct operations in
5accordance with Part 145 of the Federal Aviation Regulations;
6and (B) persons who engage in the modification, replacement,
7repair, and maintenance of aircraft engines or power plants
8without regard to whether or not those persons meet the
9qualifications of item (A).
10    The exemption does not include aircraft operated by a
11commercial air carrier providing scheduled passenger air
12service pursuant to authority issued under Part 121 or Part
13129 of the Federal Aviation Regulations. The changes made to
14this paragraph (27) by Public Act 98-534 are declarative of
15existing law. It is the intent of the General Assembly that the
16exemption under this paragraph (27) applies continuously from
17January 1, 2010 through December 31, 2024; however, no claim
18for credit or refund is allowed for taxes paid as a result of
19the disallowance of this exemption on or after January 1, 2015
20and prior to February 5, 2020 (the effective date of Public Act
21101-629).
22    (28) Tangible personal property purchased by a
23public-facilities corporation, as described in Section
2411-65-10 of the Illinois Municipal Code, for purposes of
25constructing or furnishing a municipal convention hall, but
26only if the legal title to the municipal convention hall is

 

 

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1transferred to the municipality without any further
2consideration by or on behalf of the municipality at the time
3of the completion of the municipal convention hall or upon the
4retirement or redemption of any bonds or other debt
5instruments issued by the public-facilities corporation in
6connection with the development of the municipal convention
7hall. This exemption includes existing public-facilities
8corporations as provided in Section 11-65-25 of the Illinois
9Municipal Code. This paragraph is exempt from the provisions
10of Section 3-75.
11    (29) Beginning January 1, 2017 and through December 31,
122026, menstrual pads, tampons, and menstrual cups.
13    (30) Tangible personal property transferred to a purchaser
14who is exempt from the tax imposed by this Act by operation of
15federal law. This paragraph is exempt from the provisions of
16Section 3-75.
17    (31) Qualified tangible personal property used in the
18construction or operation of a data center that has been
19granted a certificate of exemption by the Department of
20Commerce and Economic Opportunity, whether that tangible
21personal property is purchased by the owner, operator, or
22tenant of the data center or by a contractor or subcontractor
23of the owner, operator, or tenant. Data centers that would
24have qualified for a certificate of exemption prior to January
251, 2020 had Public Act 101-31 been in effect, may apply for and
26obtain an exemption for subsequent purchases of computer

 

 

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

 

 

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1    qualified tangible personal property, including fixtures;
2    and component parts of any of the foregoing, including
3    installation, maintenance, repair, refurbishment, and
4    replacement of qualified tangible personal property to
5    generate, transform, transmit, distribute, or manage
6    electricity necessary to operate qualified tangible
7    personal property; and all other tangible personal
8    property that is essential to the operations of a computer
9    data center. The term "qualified tangible personal
10    property" also includes building materials physically
11    incorporated into in to the qualifying data center. To
12    document the exemption allowed under this Section, the
13    retailer must obtain from the purchaser a copy of the
14    certificate of eligibility issued by the Department of
15    Commerce and Economic Opportunity.
16    This item (31) is exempt from the provisions of Section
173-75.
18    (32) Beginning July 1, 2022, breast pumps, breast pump
19collection and storage supplies, and breast pump kits. This
20item (32) is exempt from the provisions of Section 3-75. As
21used in this item (32):
22        "Breast pump" means an electrically controlled or
23    manually controlled pump device designed or marketed to be
24    used to express milk from a human breast during lactation,
25    including the pump device and any battery, AC adapter, or
26    other power supply unit that is used to power the pump

 

 

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

 

 

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1        "Breast pump kit" means a kit that: (1) contains no
2    more than a breast pump, breast pump collection and
3    storage supplies, a rechargeable battery for operating the
4    breast pump, a breastmilk cooler, bottle stands, ice
5    packs, and a breast pump carrying case; and (2) is
6    pre-packaged as a breast pump kit by the breast pump
7    manufacturer or distributor.
8    (33) Tangible personal property sold by or on behalf of
9the State Treasurer pursuant to the Revised Uniform Unclaimed
10Property Act. This item (33) is exempt from the provisions of
11Section 3-75.
12    (34) Beginning on January 1, 2024, tangible personal
13property purchased by an active duty member of the armed
14forces of the United States who presents valid military
15identification and purchases the property using a form of
16payment where the federal government is the payor. The member
17of the armed forces must complete, at the point of sale, a form
18prescribed by the Department of Revenue documenting that the
19transaction is eligible for the exemption under this
20paragraph. Retailers must keep the form as documentation of
21the exemption in their records for a period of not less than 6
22years. "Armed forces of the United States" means the United
23States Army, Navy, Air Force, Marine Corps, or Coast Guard.
24This paragraph is exempt from the provisions of Section 3-75.
25    (35) Beginning on January 1, 2025, medical appliances and
26products that are classified as Class III medical devices by

 

 

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1the United States Food and Drug Administration and that are
2used for cancer treatment pursuant to a prescription, as well
3as any accessories and components related to those appliances
4and devices. As used in this paragraph, "medical appliance"
5means a product that was classified as a medical appliance and
6was subject to a 1% rate of tax immediately prior to the
7effective date of this amendatory Act of the 103rd General
8Assembly, including, but not limited to, devices used to treat
9amyotrophic lateral sclerosis, as well as other items as
10determined by the Department by rule. This paragraph is exempt
11from the provisions of Section 3-75.
12(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
13Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1475-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
15Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
16eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
17revised 12-12-23.)
 
18    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
19    Sec. 3-10. Rate of tax. Unless otherwise provided in this
20Section, the tax imposed by this Act is at the rate of 6.25% of
21the selling price of tangible personal property transferred as
22an incident to the sale of service, but, for the purpose of
23computing this tax, in no event shall the selling price be less
24than the cost price of the property to the serviceman.
25    Beginning on July 1, 2000 and through December 31, 2000,

 

 

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1with respect to motor fuel, as defined in Section 1.1 of the
2Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
3the Use Tax Act, the tax is imposed at the rate of 1.25%.
4    With respect to gasohol, as defined in the Use Tax Act, the
5tax imposed by this Act applies to (i) 70% of the selling price
6of property transferred as an incident to the sale of service
7on or after January 1, 1990, and before July 1, 2003, (ii) 80%
8of the selling price of property transferred as an incident to
9the sale of service on or after July 1, 2003 and on or before
10July 1, 2017, (iii) 100% of the selling price of property
11transferred as an incident to the sale of service after July 1,
122017 and before January 1, 2024, (iv) 90% of the selling price
13of property transferred as an incident to the sale of service
14on or after January 1, 2024 and on or before December 31, 2028,
15and (v) 100% of the selling price of property transferred as an
16incident to the sale of service after December 31, 2028. If, at
17any time, however, the tax under this Act on sales of gasohol,
18as defined in the Use Tax Act, is imposed at the rate of 1.25%,
19then the tax imposed by this Act applies to 100% of the
20proceeds of sales of gasohol made during that time.
21    With respect to mid-range ethanol blends, as defined in
22Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
23applies to (i) 80% of the selling price of property
24transferred as an incident to the sale of service on or after
25January 1, 2024 and on or before December 31, 2028 and (ii)
26100% of the selling price of property transferred as an

 

 

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1incident to the sale of service after December 31, 2028. If, at
2any time, however, the tax under this Act on sales of mid-range
3ethanol blends is imposed at the rate of 1.25%, then the tax
4imposed by this Act applies to 100% of the selling price of
5mid-range ethanol blends transferred as an incident to the
6sale of service during that time.
7    With respect to majority blended ethanol fuel, as defined
8in the Use Tax Act, the tax imposed by this Act does not apply
9to the selling price of property transferred as an incident to
10the sale of service on or after July 1, 2003 and on or before
11December 31, 2028 but applies to 100% of the selling price
12thereafter.
13    With respect to biodiesel blends, as defined in the Use
14Tax Act, with no less than 1% and no more than 10% biodiesel,
15the tax imposed by this Act applies to (i) 80% of the selling
16price of property transferred as an incident to the sale of
17service on or after July 1, 2003 and on or before December 31,
182018 and (ii) 100% of the proceeds of the selling price after
19December 31, 2018 and before January 1, 2024. On and after
20January 1, 2024 and on or before December 31, 2030, the
21taxation of biodiesel, renewable diesel, and biodiesel blends
22shall be as provided in Section 3-5.1 of the Use Tax Act. If,
23at any time, however, the tax under this Act on sales of
24biodiesel blends, as defined in the Use Tax Act, with no less
25than 1% and no more than 10% biodiesel is imposed at the rate
26of 1.25%, then the tax imposed by this Act applies to 100% of

 

 

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1the proceeds of sales of biodiesel blends with no less than 1%
2and no more than 10% biodiesel made during that time.
3    With respect to biodiesel, as defined in the Use Tax Act,
4and biodiesel blends, as defined in the Use Tax Act, with more
5than 10% but no more than 99% biodiesel, the tax imposed by
6this Act does not apply to the proceeds of the selling price of
7property transferred as an incident to the sale of service on
8or after July 1, 2003 and on or before December 31, 2023. On
9and after January 1, 2024 and on or before December 31, 2030,
10the taxation of biodiesel, renewable diesel, and biodiesel
11blends shall be as provided in Section 3-5.1 of the Use Tax
12Act.
13    At the election of any registered serviceman made for each
14fiscal year, sales of service in which the aggregate annual
15cost price of tangible personal property transferred as an
16incident to the sales of service is less than 35%, or 75% in
17the case of servicemen transferring prescription drugs or
18servicemen engaged in graphic arts production, of the
19aggregate annual total gross receipts from all sales of
20service, the tax imposed by this Act shall be based on the
21serviceman's cost price of the tangible personal property
22transferred as an incident to the sale of those services.
23    Until July 1, 2022 and beginning again on July 1, 2023, the
24tax shall be imposed at the rate of 1% on food prepared for
25immediate consumption and transferred incident to a sale of
26service subject to this Act or the Service Occupation Tax Act

 

 

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1by an entity licensed under the Hospital Licensing Act, the
2Nursing Home Care Act, the Assisted Living and Shared Housing
3Act, the ID/DD Community Care Act, the MC/DD Act, the
4Specialized Mental Health Rehabilitation Act of 2013, or the
5Child Care Act of 1969, or an entity that holds a permit issued
6pursuant to the Life Care Facilities Act. Until July 1, 2022
7and beginning again on July 1, 2023, the tax shall also be
8imposed at the rate of 1% on food for human consumption that is
9to be consumed off the premises where it is sold (other than
10alcoholic beverages, food consisting of or infused with adult
11use cannabis, soft drinks, and food that has been prepared for
12immediate consumption and is not otherwise included in this
13paragraph).
14    Beginning on July 1, 2022 and until July 1, 2023, the tax
15shall be imposed at the rate of 0% on food prepared for
16immediate consumption and transferred incident to a sale of
17service subject to this Act or the Service Occupation Tax Act
18by an entity licensed under the Hospital Licensing Act, the
19Nursing Home Care Act, the Assisted Living and Shared Housing
20Act, the ID/DD Community Care Act, the MC/DD Act, the
21Specialized Mental Health Rehabilitation Act of 2013, or the
22Child Care Act of 1969, or an entity that holds a permit issued
23pursuant to the Life Care Facilities Act. Beginning on July 1,
242022 and until July 1, 2023, the tax shall also be imposed at
25the rate of 0% on food for human consumption that is to be
26consumed off the premises where it is sold (other than

 

 

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1alcoholic beverages, food consisting of or infused with adult
2use cannabis, soft drinks, and food that has been prepared for
3immediate consumption and is not otherwise included in this
4paragraph).
5    The tax shall also be imposed at the rate of 1% on
6prescription and nonprescription medicines, drugs, medical
7appliances, products classified as Class III medical devices
8by the United States Food and Drug Administration that are
9used for cancer treatment pursuant to a prescription, as well
10as any accessories and components related to those devices,
11modifications to a motor vehicle for the purpose of rendering
12it usable by a person with a disability, and insulin, blood
13sugar testing materials, syringes, and needles used by human
14diabetics (except to the extent that those items are exempt by
15the Department under paragraph (35) of Section 3-5). For the
16purposes of this Section, until September 1, 2009: the term
17"soft drinks" means any complete, finished, ready-to-use,
18non-alcoholic drink, whether carbonated or not, including, but
19not limited to, soda water, cola, fruit juice, vegetable
20juice, carbonated water, and all other preparations commonly
21known as soft drinks of whatever kind or description that are
22contained in any closed or sealed bottle, can, carton, or
23container, regardless of size; but "soft drinks" does not
24include coffee, tea, non-carbonated water, infant formula,
25milk or milk products as defined in the Grade A Pasteurized
26Milk and Milk Products Act, or drinks containing 50% or more

 

 

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

 

 

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

 

 

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1Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
2and does not include cannabis subject to tax under the
3Compassionate Use of Medical Cannabis Program Act.
4    If the property that is acquired from a serviceman is
5acquired outside Illinois and used outside Illinois before
6being brought to Illinois for use here and is taxable under
7this Act, the "selling price" on which the tax is computed
8shall be reduced by an amount that represents a reasonable
9allowance for depreciation for the period of prior
10out-of-state use.
11(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
12102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
13Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
14103-154, eff. 6-30-23.)
 
15    Section 15. The Service Occupation Tax Act is amended by
16changing Sections 3-5 and 3-10 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

 

 

HB5577- 76 -LRB103 38816 HLH 68953 b

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) Beginning on January 1, 2025, medical appliances and
3products that are classified as Class III medical devices by
4the United States Food and Drug Administration and that are
5used for cancer treatment pursuant to a prescription, as well
6as any accessories and components related to those appliances
7and devices. As used in this paragraph, "medical appliance"
8means a product that was classified as a medical appliance and
9was subject to a 1% rate of tax immediately prior to the
10effective date of this amendatory Act of the 103rd General
11Assembly, including, but not limited to, devices used to treat
12amyotrophic lateral sclerosis, as well as other items as
13determined by the Department by rule. This paragraph is exempt
14from the provisions of Section 3-55.
15(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
16Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
1775-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
18Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
19eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
20revised 12-12-23.)
 
21    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
22    Sec. 3-10. Rate of tax. Unless otherwise provided in this
23Section, the tax imposed by this Act is at the rate of 6.25% of
24the "selling price", as defined in Section 2 of the Service Use
25Tax Act, of the tangible personal property. For the purpose of

 

 

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1computing this tax, in no event shall the "selling price" be
2less than the cost price to the serviceman of the tangible
3personal property transferred. The selling price of each item
4of tangible personal property transferred as an incident of a
5sale of service may be shown as a distinct and separate item on
6the serviceman's billing to the service customer. If the
7selling price is not so shown, the selling price of the
8tangible personal property is deemed to be 50% of the
9serviceman's entire billing to the service customer. When,
10however, a serviceman contracts to design, develop, and
11produce special order machinery or equipment, the tax imposed
12by this Act shall be based on the serviceman's cost price of
13the tangible personal property transferred incident to the
14completion of the contract.
15    Beginning on July 1, 2000 and through December 31, 2000,
16with respect to motor fuel, as defined in Section 1.1 of the
17Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
18the Use Tax Act, the tax is imposed at the rate of 1.25%.
19    With respect to gasohol, as defined in the Use Tax Act, the
20tax imposed by this Act shall apply to (i) 70% of the cost
21price of property transferred as an incident to the sale of
22service on or after January 1, 1990, and before July 1, 2003,
23(ii) 80% of the selling price of property transferred as an
24incident to the sale of service on or after July 1, 2003 and on
25or before July 1, 2017, (iii) 100% of the selling price of
26property transferred as an incident to the sale of service

 

 

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1after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
2the selling price of property transferred as an incident to
3the sale of service on or after January 1, 2024 and on or
4before December 31, 2028, and (v) 100% of the selling price of
5property transferred as an incident to the sale of service
6after December 31, 2028. If, at any time, however, the tax
7under this Act on sales of gasohol, as defined in the Use Tax
8Act, is imposed at the rate of 1.25%, then the tax imposed by
9this Act applies to 100% of the proceeds of sales of gasohol
10made during that time.
11    With respect to mid-range ethanol blends, as defined in
12Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
13applies to (i) 80% of the selling price of property
14transferred as an incident to the sale of service on or after
15January 1, 2024 and on or before December 31, 2028 and (ii)
16100% of the selling price of property transferred as an
17incident to the sale of service after December 31, 2028. If, at
18any time, however, the tax under this Act on sales of mid-range
19ethanol blends is imposed at the rate of 1.25%, then the tax
20imposed by this Act applies to 100% of the selling price of
21mid-range ethanol blends transferred as an incident to the
22sale of service during that time.
23    With respect to majority blended ethanol fuel, as defined
24in the Use Tax Act, the tax imposed by this Act does not apply
25to the selling price of property transferred as an incident to
26the sale of service on or after July 1, 2003 and on or before

 

 

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1December 31, 2028 but applies to 100% of the selling price
2thereafter.
3    With respect to biodiesel blends, as defined in the Use
4Tax Act, with no less than 1% and no more than 10% biodiesel,
5the tax imposed by this Act applies to (i) 80% of the selling
6price of property transferred as an incident to the sale of
7service on or after July 1, 2003 and on or before December 31,
82018 and (ii) 100% of the proceeds of the selling price after
9December 31, 2018 and before January 1, 2024. On and after
10January 1, 2024 and on or before December 31, 2030, the
11taxation of biodiesel, renewable diesel, and biodiesel blends
12shall be as provided in Section 3-5.1 of the Use Tax Act. If,
13at any time, however, the tax under this Act on sales of
14biodiesel blends, as defined in the Use Tax Act, with no less
15than 1% and no more than 10% biodiesel is imposed at the rate
16of 1.25%, then the tax imposed by this Act applies to 100% of
17the proceeds of sales of biodiesel blends with no less than 1%
18and no more than 10% biodiesel made during that time.
19    With respect to biodiesel, as defined in the Use Tax Act,
20and biodiesel blends, as defined in the Use Tax Act, with more
21than 10% but no more than 99% biodiesel material, the tax
22imposed by this Act does not apply to the proceeds of the
23selling price of property transferred as an incident to the
24sale of service on or after July 1, 2003 and on or before
25December 31, 2023. On and after January 1, 2024 and on or
26before December 31, 2030, the taxation of biodiesel, renewable

 

 

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1diesel, and biodiesel blends shall be as provided in Section
23-5.1 of the Use Tax Act.
3    At the election of any registered serviceman made for each
4fiscal year, sales of service in which the aggregate annual
5cost price of tangible personal property transferred as an
6incident to the sales of service is less than 35%, or 75% in
7the case of servicemen transferring prescription drugs or
8servicemen engaged in graphic arts production, of the
9aggregate annual total gross receipts from all sales of
10service, the tax imposed by this Act shall be based on the
11serviceman's cost price of the tangible personal property
12transferred incident to the sale of those services.
13    Until July 1, 2022 and beginning again on July 1, 2023, the
14tax shall be imposed at the rate of 1% on food prepared for
15immediate consumption and transferred incident to a sale of
16service subject to this Act or the Service Use Tax Act by an
17entity licensed under the Hospital Licensing Act, the Nursing
18Home Care Act, the Assisted Living and Shared Housing Act, the
19ID/DD Community Care Act, the MC/DD Act, the Specialized
20Mental Health Rehabilitation Act of 2013, or the Child Care
21Act of 1969, or an entity that holds a permit issued pursuant
22to the Life Care Facilities Act. Until July 1, 2022 and
23beginning again on July 1, 2023, the tax shall also be imposed
24at the rate of 1% on food for human consumption that is to be
25consumed off the premises where it is sold (other than
26alcoholic beverages, food consisting of or infused with adult

 

 

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1use cannabis, soft drinks, and food that has been prepared for
2immediate consumption and is not otherwise included in this
3paragraph).
4    Beginning on July 1, 2022 and until July 1, 2023, the tax
5shall be imposed at the rate of 0% on food prepared for
6immediate consumption and transferred incident to a sale of
7service subject to this Act or the Service Use Tax Act by an
8entity licensed under the Hospital Licensing Act, the Nursing
9Home Care Act, the Assisted Living and Shared Housing Act, the
10ID/DD Community Care Act, the MC/DD Act, the Specialized
11Mental Health Rehabilitation Act of 2013, or the Child Care
12Act of 1969, or an entity that holds a permit issued pursuant
13to the Life Care Facilities Act. Beginning July 1, 2022 and
14until July 1, 2023, the tax shall also be imposed at the rate
15of 0% on food for human consumption that is to be consumed off
16the premises where it is sold (other than alcoholic beverages,
17food consisting of or infused with adult use cannabis, soft
18drinks, and food that has been prepared for immediate
19consumption and is not otherwise included in this paragraph).
20    The tax shall also be imposed at the rate of 1% on
21prescription and nonprescription medicines, drugs, medical
22appliances, products classified as Class III medical devices
23by the United States Food and Drug Administration that are
24used for cancer treatment pursuant to a prescription, as well
25as any accessories and components related to those devices,
26modifications to a motor vehicle for the purpose of rendering

 

 

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1it usable by a person with a disability, and insulin, blood
2sugar testing materials, syringes, and needles used by human
3diabetics (except to the extent that those items are exempt by
4the Department under paragraph (36) of Section 3-5). For the
5purposes of this Section, until September 1, 2009: the term
6"soft drinks" means any complete, finished, ready-to-use,
7non-alcoholic drink, whether carbonated or not, including, but
8not limited to, soda water, cola, fruit juice, vegetable
9juice, carbonated water, and all other preparations commonly
10known as soft drinks of whatever kind or description that are
11contained in any closed or sealed can, carton, or container,
12regardless of size; but "soft drinks" does not include coffee,
13tea, non-carbonated water, infant formula, milk or milk
14products as defined in the Grade A Pasteurized Milk and Milk
15Products Act, or drinks containing 50% or more natural fruit
16or vegetable juice.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "soft drinks" means non-alcoholic
19beverages that contain natural or artificial sweeteners. "Soft
20drinks" does not include beverages that contain milk or milk
21products, soy, rice or similar milk substitutes, or greater
22than 50% of vegetable or fruit juice by volume.
23    Until August 1, 2009, and notwithstanding any other
24provisions of this Act, "food for human consumption that is to
25be consumed off the premises where it is sold" includes all
26food sold through a vending machine, except soft drinks and

 

 

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1food products that are dispensed hot from a vending machine,
2regardless of the location of the vending machine. Beginning
3August 1, 2009, and notwithstanding any other provisions of
4this Act, "food for human consumption that is to be consumed
5off the premises where it is sold" includes all food sold
6through a vending machine, except soft drinks, candy, and food
7products that are dispensed hot from a vending machine,
8regardless of the location of the vending machine.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "food for human consumption that
11is to be consumed off the premises where it is sold" does not
12include candy. For purposes of this Section, "candy" means a
13preparation of sugar, honey, or other natural or artificial
14sweeteners in combination with chocolate, fruits, nuts or
15other ingredients or flavorings in the form of bars, drops, or
16pieces. "Candy" does not include any preparation that contains
17flour or requires refrigeration.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "nonprescription medicines and
20drugs" does not include grooming and hygiene products. For
21purposes of this Section, "grooming and hygiene products"
22includes, but is not limited to, soaps and cleaning solutions,
23shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
24lotions and screens, unless those products are available by
25prescription only, regardless of whether the products meet the
26definition of "over-the-counter-drugs". For the purposes of

 

 

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1this paragraph, "over-the-counter-drug" means a drug for human
2use that contains a label that identifies the product as a drug
3as required by 21 CFR 201.66. The "over-the-counter-drug"
4label includes:
5        (A) a "Drug Facts" panel; or
6        (B) a statement of the "active ingredient(s)" with a
7    list of those ingredients contained in the compound,
8    substance or preparation.
9    Beginning on January 1, 2014 (the effective date of Public
10Act 98-122), "prescription and nonprescription medicines and
11drugs" includes medical cannabis purchased from a registered
12dispensing organization under the Compassionate Use of Medical
13Cannabis Program Act.
14    As used in this Section, "adult use cannabis" means
15cannabis subject to tax under the Cannabis Cultivation
16Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
17and does not include cannabis subject to tax under the
18Compassionate Use of Medical Cannabis Program Act.
19(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
20102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
21Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
22103-154, eff. 6-30-23.)
 
23    Section 20. The Retailers' Occupation Tax Act is amended
24by changing Sections 2-5 and 2-10 as follows:
 

 

 

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

 

 

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1        Farm machinery and equipment shall include precision
2    farming equipment that is installed or purchased to be
3    installed on farm machinery and equipment including, but
4    not limited to, tractors, harvesters, sprayers, planters,
5    seeders, or spreaders. Precision farming equipment
6    includes, but is not limited to, soil testing sensors,
7    computers, monitors, software, global positioning and
8    mapping systems, and other such equipment.
9        Farm machinery and equipment also includes computers,
10    sensors, software, and related equipment used primarily in
11    the computer-assisted operation of production agriculture
12    facilities, equipment, and activities such as, but not
13    limited to, the collection, monitoring, and correlation of
14    animal and crop data for the purpose of formulating animal
15    diets and agricultural chemicals.
16        Beginning on January 1, 2024, farm machinery and
17    equipment also includes electrical power generation
18    equipment used primarily for production agriculture.
19        This item (2) is exempt from the provisions of Section
20    2-70.
21        (3) Until July 1, 2003, distillation machinery and
22    equipment, sold as a unit or kit, assembled or installed
23    by the retailer, certified by the user to be used only for
24    the production of ethyl alcohol that will be used for
25    consumption as motor fuel or as a component of motor fuel
26    for the personal use of the user, and not subject to sale

 

 

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1    or resale.
2        (4) Until July 1, 2003 and beginning again September
3    1, 2004 through August 30, 2014, graphic arts machinery
4    and equipment, including repair and replacement parts,
5    both new and used, and including that manufactured on
6    special order or purchased for lease, certified by the
7    purchaser to be used primarily for graphic arts
8    production. Equipment includes chemicals or chemicals
9    acting as catalysts but only if the chemicals or chemicals
10    acting as catalysts effect a direct and immediate change
11    upon a graphic arts product. Beginning on July 1, 2017,
12    graphic arts machinery and equipment is included in the
13    manufacturing and assembling machinery and equipment
14    exemption under paragraph (14).
15        (5) A motor vehicle that is used for automobile
16    renting, as defined in the Automobile Renting Occupation
17    and Use Tax Act. This paragraph is exempt from the
18    provisions of Section 2-70.
19        (6) Personal property sold by a teacher-sponsored
20    student organization affiliated with an elementary or
21    secondary school located in Illinois.
22        (7) Until July 1, 2003, proceeds of that portion of
23    the selling price of a passenger car the sale of which is
24    subject to the Replacement Vehicle Tax.
25        (8) Personal property sold to an Illinois county fair
26    association for use in conducting, operating, or promoting

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    including that manufactured on special order, certified by
2    the purchaser to be used primarily for photoprocessing,
3    and including photoprocessing machinery and equipment
4    purchased for lease.
5        (21) Until July 1, 2028, coal and aggregate
6    exploration, mining, off-highway hauling, processing,
7    maintenance, and reclamation equipment, including
8    replacement parts and equipment, and including equipment
9    purchased for lease, but excluding motor vehicles required
10    to be registered under the Illinois Vehicle Code. The
11    changes made to this Section by Public Act 97-767 apply on
12    and after July 1, 2003, but no claim for credit or refund
13    is allowed on or after August 16, 2013 (the effective date
14    of Public Act 98-456) for such taxes paid during the
15    period beginning July 1, 2003 and ending on August 16,
16    2013 (the effective date of Public Act 98-456).
17        (22) Until June 30, 2013, fuel and petroleum products
18    sold to or used by an air carrier, certified by the carrier
19    to be used for consumption, shipment, or storage in the
20    conduct of its business as an air common carrier, for a
21    flight destined for or returning from a location or
22    locations outside the United States without regard to
23    previous or subsequent domestic stopovers.
24        Beginning July 1, 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 that (i) is engaged in foreign trade or is engaged
3    in trade between the United States and any of its
4    possessions and (ii) transports at least one individual or
5    package for hire from the city of origination to the city
6    of final destination on the same aircraft, without regard
7    to a change in the flight number of that aircraft.
8        (23) A transaction in which the purchase order is
9    received by a florist who is located outside Illinois, but
10    who has a florist located in Illinois deliver the property
11    to the purchaser or the purchaser's donee in Illinois.
12        (24) Fuel consumed or used in the operation of ships,
13    barges, or vessels that are used primarily in or for the
14    transportation of property or the conveyance of persons
15    for hire on rivers bordering on this State if the fuel is
16    delivered by the seller to the purchaser's barge, ship, or
17    vessel while it is afloat upon that bordering river.
18        (25) Except as provided in item (25-5) of this
19    Section, a motor vehicle sold in this State to a
20    nonresident even though the motor vehicle is delivered to
21    the nonresident in this State, if the motor vehicle is not
22    to be titled in this State, and if a drive-away permit is
23    issued to the motor vehicle as provided in Section 3-603
24    of the Illinois Vehicle Code or if the nonresident
25    purchaser has vehicle registration plates to transfer to
26    the motor vehicle upon returning to his or her home state.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    not-for-profit corporation that holds a valid water supply
2    permit issued under Title IV of the Environmental
3    Protection Act. This paragraph is exempt from the
4    provisions of Section 2-70.
5        (40) Beginning January 1, 2010 and continuing through
6    December 31, 2029, materials, parts, equipment,
7    components, and furnishings incorporated into or upon an
8    aircraft as part of the modification, refurbishment,
9    completion, replacement, repair, or maintenance of the
10    aircraft. This exemption includes consumable supplies used
11    in the modification, refurbishment, completion,
12    replacement, repair, and maintenance of aircraft. However,
13    until January 1, 2024, this exemption excludes any
14    materials, parts, equipment, components, and consumable
15    supplies used in the modification, replacement, repair,
16    and maintenance of aircraft engines or power plants,
17    whether such engines or power plants are installed or
18    uninstalled upon any such aircraft. "Consumable supplies"
19    include, but are not limited to, adhesive, tape,
20    sandpaper, general purpose lubricants, cleaning solution,
21    latex gloves, and protective films.
22        Beginning January 1, 2010 and continuing through
23    December 31, 2023, this exemption applies only to the sale
24    of qualifying tangible personal property to persons who
25    modify, refurbish, complete, replace, or maintain an
26    aircraft and who (i) hold an Air Agency Certificate and

 

 

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1    are empowered to operate an approved repair station by the
2    Federal Aviation Administration, (ii) have a Class IV
3    Rating, and (iii) conduct operations in accordance with
4    Part 145 of the Federal Aviation Regulations. The
5    exemption does not include aircraft operated by a
6    commercial air carrier providing scheduled passenger air
7    service pursuant to authority issued under Part 121 or
8    Part 129 of the Federal Aviation Regulations. From January
9    1, 2024 through December 31, 2029, this exemption applies
10    only to the use of qualifying tangible personal property
11    by: (A) persons who modify, refurbish, complete, repair,
12    replace, or maintain aircraft and who (i) hold an Air
13    Agency Certificate and are empowered to operate an
14    approved repair station by the Federal Aviation
15    Administration, (ii) have a Class IV Rating, and (iii)
16    conduct operations in accordance with Part 145 of the
17    Federal Aviation Regulations; and (B) persons who engage
18    in the modification, replacement, repair, and maintenance
19    of aircraft engines or power plants without regard to
20    whether or not those persons meet the qualifications of
21    item (A).
22        The changes made to this paragraph (40) by Public Act
23    98-534 are declarative of existing law. It is the intent
24    of the General Assembly that the exemption under this
25    paragraph (40) applies continuously from January 1, 2010
26    through December 31, 2024; however, no claim for credit or

 

 

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1    refund is allowed for taxes paid as a result of the
2    disallowance of this exemption on or after January 1, 2015
3    and prior to February 5, 2020 (the effective date of
4    Public Act 101-629).
5        (41) Tangible personal property sold to a
6    public-facilities corporation, as described in Section
7    11-65-10 of the Illinois Municipal Code, for purposes of
8    constructing or furnishing a municipal convention hall,
9    but only if the legal title to the municipal convention
10    hall is transferred to the municipality without any
11    further consideration by or on behalf of the municipality
12    at the time of the completion of the municipal convention
13    hall or upon the retirement or redemption of any bonds or
14    other debt instruments issued by the public-facilities
15    corporation in connection with the development of the
16    municipal convention hall. This exemption includes
17    existing public-facilities corporations as provided in
18    Section 11-65-25 of the Illinois Municipal Code. This
19    paragraph is exempt from the provisions of Section 2-70.
20        (42) Beginning January 1, 2017 and through December
21    31, 2026, menstrual pads, tampons, and menstrual cups.
22        (43) Merchandise that is subject to the Rental
23    Purchase Agreement Occupation and Use Tax. The purchaser
24    must certify that the item is purchased to be rented
25    subject to a rental-purchase rental purchase agreement, as
26    defined in the Rental-Purchase Rental Purchase Agreement

 

 

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1    Act, and provide proof of registration under the Rental
2    Purchase Agreement Occupation and Use Tax Act. This
3    paragraph is exempt from the provisions of Section 2-70.
4        (44) Qualified tangible personal property used in the
5    construction or operation of a data center that has been
6    granted a certificate of exemption by the Department of
7    Commerce and Economic Opportunity, whether that tangible
8    personal property is purchased by the owner, operator, or
9    tenant of the data center or by a contractor or
10    subcontractor of the owner, operator, or tenant. Data
11    centers that would have qualified for a certificate of
12    exemption prior to January 1, 2020 had Public Act 101-31
13    been in effect, may apply for and obtain an exemption for
14    subsequent purchases of computer equipment or enabling
15    software purchased or leased to upgrade, supplement, or
16    replace computer equipment or enabling software purchased
17    or leased in the original investment that would have
18    qualified.
19        The Department of Commerce and Economic Opportunity
20    shall grant a certificate of exemption under this item
21    (44) to qualified data centers as defined by Section
22    605-1025 of the Department of Commerce and Economic
23    Opportunity Law of the Civil Administrative Code of
24    Illinois.
25        For the purposes of this item (44):
26            "Data center" means a building or a series of

 

 

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

 

 

HB5577- 112 -LRB103 38816 HLH 68953 b

1        incorporated into the qualifying data center. To
2        document the exemption allowed under this Section, the
3        retailer must obtain from the purchaser a copy of the
4        certificate of eligibility issued by the Department of
5        Commerce and Economic Opportunity.
6        This item (44) is exempt from the provisions of
7    Section 2-70.
8        (45) Beginning January 1, 2020 and through December
9    31, 2020, sales of tangible personal property made by a
10    marketplace seller over a marketplace for which tax is due
11    under this Act but for which use tax has been collected and
12    remitted to the Department by a marketplace facilitator
13    under Section 2d of the Use Tax Act are exempt from tax
14    under this Act. A marketplace seller claiming this
15    exemption shall maintain books and records demonstrating
16    that the use tax on such sales has been collected and
17    remitted by a marketplace facilitator. Marketplace sellers
18    that have properly remitted tax under this Act on such
19    sales may file a claim for credit as provided in Section 6
20    of this Act. No claim is allowed, however, for such taxes
21    for which a credit or refund has been issued to the
22    marketplace facilitator under the Use Tax Act, or for
23    which the marketplace facilitator has filed a claim for
24    credit or refund under the Use Tax Act.
25        (46) Beginning July 1, 2022, breast pumps, breast pump
26    collection and storage supplies, and breast pump kits.

 

 

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1    This item (46) is exempt from the provisions of Section
2    2-70. As used in this item (46):
3        "Breast pump" means an electrically controlled or
4    manually controlled pump device designed or marketed to be
5    used to express milk from a human breast during lactation,
6    including the pump device and any battery, AC adapter, or
7    other power supply unit that is used to power the pump
8    device and is packaged and sold with the pump device at the
9    time of sale.
10        "Breast pump collection and storage supplies" means
11    items of tangible personal property designed or marketed
12    to be used in conjunction with a breast pump to collect
13    milk expressed from a human breast and to store collected
14    milk until it is ready for consumption.
15        "Breast pump collection and storage supplies"
16    includes, but is not limited to: breast shields and breast
17    shield connectors; breast pump tubes and tubing adapters;
18    breast pump valves and membranes; backflow protectors and
19    backflow protector adaptors; bottles and bottle caps
20    specific to the operation of the breast pump; and breast
21    milk storage bags.
22        "Breast pump collection and storage supplies" does not
23    include: (1) bottles and bottle caps not specific to the
24    operation of the breast pump; (2) breast pump travel bags
25    and other similar carrying accessories, including ice
26    packs, labels, and other similar products; (3) breast pump

 

 

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1    cleaning supplies; (4) nursing bras, bra pads, breast
2    shells, and other similar products; and (5) creams,
3    ointments, and other similar products that relieve
4    breastfeeding-related symptoms or conditions of the
5    breasts or nipples, unless sold as part of a breast pump
6    kit that is pre-packaged by the breast pump manufacturer
7    or distributor.
8        "Breast pump kit" means a kit that: (1) contains no
9    more than a breast pump, breast pump collection and
10    storage supplies, a rechargeable battery for operating the
11    breast pump, a breastmilk cooler, bottle stands, ice
12    packs, and a breast pump carrying case; and (2) is
13    pre-packaged as a breast pump kit by the breast pump
14    manufacturer or distributor.
15        (47) Tangible personal property sold by or on behalf
16    of the State Treasurer pursuant to the Revised Uniform
17    Unclaimed Property Act. This item (47) is exempt from the
18    provisions of Section 2-70.
19        (48) Beginning on January 1, 2024, tangible personal
20    property purchased by an active duty member of the armed
21    forces of the United States who presents valid military
22    identification and purchases the property using a form of
23    payment where the federal government is the payor. The
24    member of the armed forces must complete, at the point of
25    sale, a form prescribed by the Department of Revenue
26    documenting that the transaction is eligible for the

 

 

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1    exemption under this paragraph. Retailers must keep the
2    form as documentation of the exemption in their records
3    for a period of not less than 6 years. "Armed forces of the
4    United States" means the United States Army, Navy, Air
5    Force, Marine Corps, or Coast Guard. This paragraph is
6    exempt from the provisions of Section 2-70.
7        (49) Beginning on January 1, 2025, medical appliances
8    and products that are classified as Class III medical
9    devices by the United States Food and Drug Administration
10    and that are used for cancer treatment pursuant to a
11    prescription, as well as any accessories and components
12    related to those appliances and devices. As used in this
13    paragraph, "medical appliance" means a product that was
14    classified as a medical appliance and was subject to a 1%
15    rate of tax immediately prior to the effective date of
16    this amendatory Act of the 103rd General Assembly,
17    including, but not limited to, devices used to treat
18    amyotrophic lateral sclerosis, as well as other items as
19    determined by the Department by rule. This paragraph is
20    exempt from the provisions of Section 2-70.
21(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
22102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
23Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
245-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
255-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
266-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised

 

 

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112-12-23.)
 
2    (35 ILCS 120/2-10)
3    Sec. 2-10. Rate of tax. Unless otherwise provided in this
4Section, the tax imposed by this Act is at the rate of 6.25% of
5gross receipts from sales of tangible personal property made
6in the course of business.
7    Beginning on July 1, 2000 and through December 31, 2000,
8with respect to motor fuel, as defined in Section 1.1 of the
9Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
10the Use Tax Act, the tax is imposed at the rate of 1.25%.
11    Beginning on August 6, 2010 through August 15, 2010, and
12beginning again on August 5, 2022 through August 14, 2022,
13with respect to sales tax holiday items as defined in Section
142-8 of this Act, the tax is imposed at the rate of 1.25%.
15    Within 14 days after July 1, 2000 (the effective date of
16Public Act 91-872), each retailer of motor fuel and gasohol
17shall cause the following notice to be posted in a prominently
18visible place on each retail dispensing device that is used to
19dispense motor fuel or gasohol in the State of Illinois: "As of
20July 1, 2000, the State of Illinois has eliminated the State's
21share of sales tax on motor fuel and gasohol through December
2231, 2000. The price on this pump should reflect the
23elimination of the tax." The notice shall be printed in bold
24print on a sign that is no smaller than 4 inches by 8 inches.
25The sign shall be clearly visible to customers. Any retailer

 

 

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1who fails to post or maintain a required sign through December
231, 2000 is guilty of a petty offense for which the fine shall
3be $500 per day per each retail premises where a violation
4occurs.
5    With respect to gasohol, as defined in the Use Tax Act, the
6tax imposed by this Act applies to (i) 70% of the proceeds of
7sales made on or after January 1, 1990, and before July 1,
82003, (ii) 80% of the proceeds of sales made on or after July
91, 2003 and on or before July 1, 2017, (iii) 100% of the
10proceeds of sales made after July 1, 2017 and prior to January
111, 2024, (iv) 90% of the proceeds of sales made on or after
12January 1, 2024 and on or before December 31, 2028, and (v)
13100% of the proceeds of sales made after December 31, 2028. If,
14at any time, however, the tax under this Act on sales of
15gasohol, as defined in the Use Tax Act, is imposed at the rate
16of 1.25%, then the tax imposed by this Act applies to 100% of
17the proceeds of sales of gasohol made during that time.
18    With respect to mid-range ethanol blends, as defined in
19Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
20applies to (i) 80% of the proceeds of sales made on or after
21January 1, 2024 and on or before December 31, 2028 and (ii)
22100% of the proceeds of sales made after December 31, 2028. If,
23at any time, however, the tax under this Act on sales of
24mid-range ethanol blends is imposed at the rate of 1.25%, then
25the tax imposed by this Act applies to 100% of the proceeds of
26sales of mid-range ethanol blends made during that time.

 

 

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1    With respect to majority blended ethanol fuel, as defined
2in the Use Tax Act, the tax imposed by this Act does not apply
3to the proceeds of sales made on or after July 1, 2003 and on
4or before December 31, 2028 but applies to 100% of the proceeds
5of sales made thereafter.
6    With respect to biodiesel blends, as defined in the Use
7Tax Act, with no less than 1% and no more than 10% biodiesel,
8the tax imposed by this Act applies to (i) 80% of the proceeds
9of sales made on or after July 1, 2003 and on or before
10December 31, 2018 and (ii) 100% of the proceeds of sales made
11after December 31, 2018 and before January 1, 2024. On and
12after January 1, 2024 and on or before December 31, 2030, the
13taxation of biodiesel, renewable diesel, and biodiesel blends
14shall be as provided in Section 3-5.1 of the Use Tax Act. If,
15at any time, however, the tax under this Act on sales of
16biodiesel blends, as defined in the Use Tax Act, with no less
17than 1% and no more than 10% biodiesel is imposed at the rate
18of 1.25%, then the tax imposed by this Act applies to 100% of
19the proceeds of sales of biodiesel blends with no less than 1%
20and no more than 10% biodiesel made during that time.
21    With respect to biodiesel, as defined in the Use Tax Act,
22and biodiesel blends, as defined in the Use Tax Act, with more
23than 10% but no more than 99% biodiesel, the tax imposed by
24this Act does not apply to the proceeds of sales made on or
25after July 1, 2003 and on or before December 31, 2023. On and
26after January 1, 2024 and on or before December 31, 2030, the

 

 

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1taxation of biodiesel, renewable diesel, and biodiesel blends
2shall be as provided in Section 3-5.1 of the Use Tax Act.
3    Until July 1, 2022 and beginning again on July 1, 2023,
4with respect to food for human consumption that is to be
5consumed off the premises where it is sold (other than
6alcoholic beverages, food consisting of or infused with adult
7use cannabis, soft drinks, and food that has been prepared for
8immediate consumption), the tax is imposed at the rate of 1%.
9Beginning July 1, 2022 and until July 1, 2023, with respect to
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages,
12food consisting of or infused with adult use cannabis, soft
13drinks, and food that has been prepared for immediate
14consumption), the tax is imposed at the rate of 0%.
15    With respect to prescription and nonprescription
16medicines, drugs, medical appliances, products classified as
17Class III medical devices by the United States Food and Drug
18Administration that are used for cancer treatment pursuant to
19a prescription, as well as any accessories and components
20related to those devices, modifications to a motor vehicle for
21the purpose of rendering it usable by a person with a
22disability, and insulin, blood sugar testing materials,
23syringes, and needles used by human diabetics (except to the
24extent that those items are exempt by the Department under
25paragraph (49) of Section 2-5), the tax is imposed at the rate
26of 1%. For the purposes of this Section, until September 1,

 

 

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12009: the term "soft drinks" means any complete, finished,
2ready-to-use, non-alcoholic drink, whether carbonated or not,
3including, but not limited to, soda water, cola, fruit juice,
4vegetable juice, carbonated water, and all other preparations
5commonly known as soft drinks of whatever kind or description
6that are contained in any closed or sealed bottle, can,
7carton, or container, regardless of size; but "soft drinks"
8does not include coffee, tea, non-carbonated water, infant
9formula, milk or milk products as defined in the Grade A
10Pasteurized Milk and Milk Products Act, or drinks containing
1150% or more natural fruit or vegetable juice.
12    Notwithstanding any other provisions of this Act,
13beginning September 1, 2009, "soft drinks" means non-alcoholic
14beverages that contain natural or artificial sweeteners. "Soft
15drinks" does not include beverages that contain milk or milk
16products, soy, rice or similar milk substitutes, or greater
17than 50% of vegetable or fruit juice by volume.
18    Until August 1, 2009, and notwithstanding any other
19provisions of this Act, "food for human consumption that is to
20be consumed off the premises where it is sold" includes all
21food sold through a vending machine, except soft drinks and
22food products that are dispensed hot from a vending machine,
23regardless of the location of the vending machine. Beginning
24August 1, 2009, and notwithstanding any other provisions of
25this Act, "food for human consumption that is to be consumed
26off the premises where it is sold" includes all food sold

 

 

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1through a vending machine, except soft drinks, candy, and food
2products that are dispensed hot from a vending machine,
3regardless of the location of the vending machine.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "food for human consumption that
6is to be consumed off the premises where it is sold" does not
7include candy. For purposes of this Section, "candy" means a
8preparation of sugar, honey, or other natural or artificial
9sweeteners in combination with chocolate, fruits, nuts or
10other ingredients or flavorings in the form of bars, drops, or
11pieces. "Candy" does not include any preparation that contains
12flour or requires refrigeration.
13    Notwithstanding any other provisions of this Act,
14beginning September 1, 2009, "nonprescription medicines and
15drugs" does not include grooming and hygiene products. For
16purposes of this Section, "grooming and hygiene products"
17includes, but is not limited to, soaps and cleaning solutions,
18shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
19lotions and screens, unless those products are available by
20prescription only, regardless of whether the products meet the
21definition of "over-the-counter-drugs". For the purposes of
22this paragraph, "over-the-counter-drug" means a drug for human
23use that contains a label that identifies the product as a drug
24as required by 21 CFR 201.66. The "over-the-counter-drug"
25label includes:
26        (A) a "Drug Facts" panel; or

 

 

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1        (B) a statement of the "active ingredient(s)" with a
2    list of those ingredients contained in the compound,
3    substance or preparation.
4    Beginning on January 1, 2014 (the effective date of Public
5Act 98-122), "prescription and nonprescription medicines and
6drugs" includes medical cannabis purchased from a registered
7dispensing organization under the Compassionate Use of Medical
8Cannabis Program Act.
9    As used in this Section, "adult use cannabis" means
10cannabis subject to tax under the Cannabis Cultivation
11Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
12and does not include cannabis subject to tax under the
13Compassionate Use of Medical Cannabis Program Act.
14(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
15Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
1660-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
174-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)

 
18    Section 99. Effective date. This Act takes effect January
191, 2025
.