103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5578

 

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. Provides that medical appliances, including, but not limited to, devices used to provide advanced life support services, and Class III medical devices that are used for cancer treatment pursuant to a prescription are exempt from the taxes imposed by those Acts. Effective January 1, 2025.


LRB103 38815 HLH 68952 b

 

 

A BILL FOR

 

HB5578LRB103 38815 HLH 68952 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
21provide advanced life support services, as defined by Section
223.10 of the Emergency Medical Services (EMS) Systems Act, and
23any other items designated as medical appliances by the
24Department by rule. This paragraph is exempt from the
25provisions of Section 3-90.
26(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,

 

 

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1Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
2eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
3Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
4eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
5revised 12-12-23.)
 
6    (35 ILCS 105/3-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9either the selling price or the fair market value, if any, of
10the tangible personal property. In all cases where property
11functionally used or consumed is the same as the property that
12was purchased at retail, then the tax is imposed on the selling
13price of the property. In all cases where property
14functionally used or consumed is a by-product or waste product
15that has been refined, manufactured, or produced from property
16purchased at retail, then the tax is imposed on the lower of
17the fair market value, if any, of the specific property so used
18in this State or on the selling price of the property purchased
19at retail. For purposes of this Section "fair market value"
20means the price at which property would change hands between a
21willing buyer and a willing seller, neither being under any
22compulsion to buy or sell and both having reasonable knowledge
23of the relevant facts. The fair market value shall be
24established by Illinois sales by the taxpayer of the same
25property as that functionally used or consumed, or if there

 

 

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1are no such sales by the taxpayer, then comparable sales or
2purchases of property of like kind and character in Illinois.
3    Beginning on July 1, 2000 and through December 31, 2000,
4with respect to motor fuel, as defined in Section 1.1 of the
5Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
6the Use Tax Act, the tax is imposed at the rate of 1.25%.
7    Beginning on August 6, 2010 through August 15, 2010, and
8beginning again on August 5, 2022 through August 14, 2022,
9with respect to sales tax holiday items as defined in Section
103-6 of this Act, the tax is imposed at the rate of 1.25%.
11    With respect to gasohol, the tax imposed by this Act
12applies to (i) 70% of the proceeds of sales made on or after
13January 1, 1990, and before July 1, 2003, (ii) 80% of the
14proceeds of sales made on or after July 1, 2003 and on or
15before July 1, 2017, (iii) 100% of the proceeds of sales made
16after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
17the proceeds of sales made on or after January 1, 2024 and on
18or before December 31, 2028, and (v) 100% of the proceeds of
19sales made after December 31, 2028. If, at any time, however,
20the tax under this Act on sales of gasohol is imposed at the
21rate of 1.25%, then the tax imposed by this Act applies to 100%
22of the proceeds of sales of gasohol made during that time.
23    With respect to mid-range ethanol blends, the tax imposed
24by this Act applies to (i) 80% of the proceeds of sales made on
25or after January 1, 2024 and on or before December 31, 2028 and
26(ii) 100% of the proceeds of sales made thereafter. If, at any

 

 

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1time, however, the tax under this Act on sales of mid-range
2ethanol blends is imposed at the rate of 1.25%, then the tax
3imposed by this Act applies to 100% of the proceeds of sales of
4mid-range ethanol blends made during that time.
5    With respect to majority blended ethanol fuel, the tax
6imposed by this Act does not apply to the proceeds of sales
7made on or after July 1, 2003 and on or before December 31,
82028 but applies to 100% of the proceeds of sales made
9thereafter.
10    With respect to biodiesel blends with no less than 1% and
11no more than 10% biodiesel, the tax imposed by this Act applies
12to (i) 80% of the proceeds of sales made on or after July 1,
132003 and on or before December 31, 2018 and (ii) 100% of the
14proceeds of sales made after December 31, 2018 and before
15January 1, 2024. On and after January 1, 2024 and on or before
16December 31, 2030, the taxation of biodiesel, renewable
17diesel, and biodiesel blends shall be as provided in Section
183-5.1. If, at any time, however, the tax under this Act on
19sales of biodiesel blends with no less than 1% and no more than
2010% biodiesel is imposed at the rate of 1.25%, then the tax
21imposed by this Act applies to 100% of the proceeds of sales of
22biodiesel blends with no less than 1% and no more than 10%
23biodiesel made during that time.
24    With respect to biodiesel and biodiesel blends with more
25than 10% but no more than 99% biodiesel, the tax imposed by
26this Act does not apply to the proceeds of sales made on or

 

 

HB5578- 28 -LRB103 38815 HLH 68952 b

1after July 1, 2003 and on or before December 31, 2023. On and
2after January 1, 2024 and on or before December 31, 2030, the
3taxation of biodiesel, renewable diesel, and biodiesel blends
4shall be as provided in Section 3-5.1.
5    Until July 1, 2022 and beginning again on July 1, 2023,
6with respect to food for human consumption that is to be
7consumed off the premises where it is sold (other than
8alcoholic beverages, food consisting of or infused with adult
9use cannabis, soft drinks, and food that has been prepared for
10immediate consumption), the tax is imposed at the rate of 1%.
11Beginning on July 1, 2022 and until July 1, 2023, with respect
12to food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages,
14food consisting of or infused with adult use cannabis, soft
15drinks, and food that has been prepared for immediate
16consumption), the tax is imposed at the rate of 0%.
17    With respect to prescription and nonprescription
18medicines, drugs, medical appliances, products classified as
19Class III medical devices by the United States Food and Drug
20Administration that are used for cancer treatment pursuant to
21a prescription, as well as any accessories and components
22related to those devices, modifications to a motor vehicle for
23the purpose of rendering it usable by a person with a
24disability, and insulin, blood sugar testing materials,
25syringes, and needles used by human diabetics (except to the
26extent that those items are exempt by the Department under

 

 

HB5578- 29 -LRB103 38815 HLH 68952 b

1paragraph (44) of Section 3-5), the tax is imposed at the rate
2of 1%. For the purposes of this Section, until September 1,
32009: the term "soft drinks" means any complete, finished,
4ready-to-use, non-alcoholic drink, whether carbonated or not,
5including, but not limited to, soda water, cola, fruit juice,
6vegetable juice, carbonated water, and all other preparations
7commonly known as soft drinks of whatever kind or description
8that are contained in any closed or sealed bottle, can,
9carton, or container, regardless of size; but "soft drinks"
10does not include coffee, tea, non-carbonated water, infant
11formula, milk or milk products as defined in the Grade A
12Pasteurized Milk and Milk Products Act, or drinks containing
1350% or more natural fruit or vegetable juice.
14    Notwithstanding any other provisions of this Act,
15beginning September 1, 2009, "soft drinks" means non-alcoholic
16beverages that contain natural or artificial sweeteners. "Soft
17drinks" does not include beverages that contain milk or milk
18products, soy, rice or similar milk substitutes, or greater
19than 50% of vegetable or fruit juice by volume.
20    Until August 1, 2009, and notwithstanding any other
21provisions of this Act, "food for human consumption that is to
22be consumed off the premises where it is sold" includes all
23food sold through a vending machine, except soft drinks and
24food products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine. Beginning
26August 1, 2009, and notwithstanding any other provisions of

 

 

HB5578- 30 -LRB103 38815 HLH 68952 b

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

 

 

HB5578- 31 -LRB103 38815 HLH 68952 b

1label includes:
2        (A) a "Drug Facts" panel; or
3        (B) a statement of the "active ingredient(s)" with a
4    list of those ingredients contained in the compound,
5    substance or preparation.
6    Beginning on January 1, 2014 (the effective date of Public
7Act 98-122), "prescription and nonprescription medicines and
8drugs" includes medical cannabis purchased from a registered
9dispensing organization under the Compassionate Use of Medical
10Cannabis Program Act.
11    As used in this Section, "adult use cannabis" means
12cannabis subject to tax under the Cannabis Cultivation
13Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
14and does not include cannabis subject to tax under the
15Compassionate Use of Medical Cannabis Program Act.
16    If the property that is purchased at retail from a
17retailer is acquired outside Illinois and used outside
18Illinois before being brought to Illinois for use here and is
19taxable under this Act, the "selling price" on which the tax is
20computed shall be reduced by an amount that represents a
21reasonable allowance for depreciation for the period of prior
22out-of-state use.
23(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
24Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
2560-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
264-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 

 

 

HB5578- 32 -LRB103 38815 HLH 68952 b

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

 

 

HB5578- 33 -LRB103 38815 HLH 68952 b

1organizations, local arts councils, visual arts organizations,
2and media arts organizations. On and after July 1, 2001 (the
3effective date of Public Act 92-35), however, an entity
4otherwise eligible for this exemption shall not make tax-free
5purchases unless it has an active identification number issued
6by the Department.
7    (4) Legal tender, currency, medallions, or gold or silver
8coinage issued by the State of Illinois, the government of the
9United States of America, or the government of any foreign
10country, and bullion.
11    (5) Until July 1, 2003 and beginning again on September 1,
122004 through August 30, 2014, graphic arts machinery and
13equipment, including repair and replacement parts, both new
14and used, and including that manufactured on special order or
15purchased for lease, certified by the purchaser to be used
16primarily for graphic arts production. Equipment includes
17chemicals or chemicals acting as catalysts but only if the
18chemicals or chemicals acting as catalysts effect a direct and
19immediate change upon a graphic arts product. Beginning on
20July 1, 2017, graphic arts machinery and equipment is included
21in the manufacturing and assembling machinery and equipment
22exemption under Section 2 of this Act.
23    (6) Personal property purchased from a teacher-sponsored
24student organization affiliated with an elementary or
25secondary school located in Illinois.
26    (7) Farm machinery and equipment, both new and used,

 

 

HB5578- 34 -LRB103 38815 HLH 68952 b

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

 

 

HB5578- 35 -LRB103 38815 HLH 68952 b

1    Farm machinery and equipment also includes computers,
2sensors, software, and related equipment used primarily in the
3computer-assisted operation of production agriculture
4facilities, equipment, and activities such as, but not limited
5to, the collection, monitoring, and correlation of animal and
6crop data for the purpose of formulating animal diets and
7agricultural chemicals.
8    Beginning on January 1, 2024, farm machinery and equipment
9also includes electrical power generation equipment used
10primarily for production agriculture.
11    This item (7) is exempt from the provisions of Section
123-75.
13    (8) Until June 30, 2013, fuel and petroleum products sold
14to or used by an air common carrier, certified by the carrier
15to be used for consumption, shipment, or storage in the
16conduct of its business as an air common carrier, for a flight
17destined for or returning from a location or locations outside
18the United States without regard to previous or subsequent
19domestic stopovers.
20    Beginning July 1, 2013, fuel and petroleum products sold
21to or used by an air carrier, certified by the carrier to be
22used for consumption, shipment, or storage in the conduct of
23its business as an air common carrier, for a flight that (i) is
24engaged in foreign trade or is engaged in trade between the
25United States and any of its possessions and (ii) transports
26at least one individual or package for hire from the city of

 

 

HB5578- 36 -LRB103 38815 HLH 68952 b

1origination to the city of final destination on the same
2aircraft, without regard to a change in the flight number of
3that aircraft.
4    (9) Proceeds of mandatory service charges separately
5stated on customers' bills for the purchase and consumption of
6food and beverages acquired as an incident to the purchase of a
7service from a serviceman, to the extent that the proceeds of
8the service charge are in fact turned over as tips or as a
9substitute for tips to the employees who participate directly
10in preparing, serving, hosting or cleaning up the food or
11beverage function with respect to which the service charge is
12imposed.
13    (10) 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    (11) Proceeds from the sale of photoprocessing machinery
24and equipment, including repair and replacement parts, both
25new and used, including that manufactured on special order,
26certified by the purchaser to be used primarily for

 

 

HB5578- 37 -LRB103 38815 HLH 68952 b

1photoprocessing, and including photoprocessing machinery and
2equipment purchased for lease.
3    (12) Until July 1, 2028, coal and aggregate exploration,
4mining, off-highway hauling, processing, maintenance, and
5reclamation equipment, including replacement parts and
6equipment, and including equipment purchased for lease, but
7excluding motor vehicles required to be registered under the
8Illinois Vehicle Code. The changes made to this Section by
9Public Act 97-767 apply on and after July 1, 2003, but no claim
10for credit or refund is allowed on or after August 16, 2013
11(the effective date of Public Act 98-456) for such taxes paid
12during the period beginning July 1, 2003 and ending on August
1316, 2013 (the effective date of Public Act 98-456).
14    (13) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (14) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (14) is exempt from the
22provisions of Section 3-75, and the exemption provided for
23under this item (14) applies for all periods beginning May 30,
241995, but no claim for credit or refund is allowed on or after
25January 1, 2008 (the effective date of Public Act 95-88) for
26such taxes paid during the period beginning May 30, 2000 and

 

 

HB5578- 38 -LRB103 38815 HLH 68952 b

1ending on January 1, 2008 (the effective date of Public Act
295-88).
3    (15) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients purchased by a
6lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time the lessor would
8otherwise be subject to the tax imposed by this Act, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of
11the Retailers' Occupation Tax Act. If the equipment is leased
12in a manner that does not qualify for this exemption or is used
13in any other non-exempt manner, the lessor shall be liable for
14the tax imposed under this Act or the Use Tax Act, as the case
15may be, based on the fair market value of the property at the
16time the non-qualifying use occurs. No lessor shall collect or
17attempt to collect an amount (however designated) that
18purports to reimburse that lessor for the tax imposed by this
19Act or the Use Tax Act, as the case may be, if the tax has not
20been paid by the lessor. If a lessor improperly collects any
21such amount from the lessee, the lessee shall have a legal
22right to claim a refund of that amount from the lessor. If,
23however, that amount is not refunded to the lessee for any
24reason, the lessor is liable to pay that amount to the
25Department.
26    (16) Personal property purchased by a lessor who leases

 

 

HB5578- 39 -LRB103 38815 HLH 68952 b

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

 

 

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1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (18) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in
7the performance of infrastructure repairs in this State,
8including, but not limited to, municipal roads and streets,
9access roads, bridges, sidewalks, waste disposal systems,
10water and sewer line extensions, water distribution and
11purification facilities, storm water drainage and retention
12facilities, and sewage treatment facilities, resulting from a
13State or federally declared disaster in Illinois or bordering
14Illinois when such repairs are initiated on facilities located
15in the declared disaster area within 6 months after the
16disaster.
17    (19) Beginning July 1, 1999, game or game birds purchased
18at a "game breeding and hunting preserve area" as that term is
19used in the Wildlife Code. This paragraph is exempt from the
20provisions of Section 3-75.
21    (20) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the
25Department to be organized and operated exclusively for
26educational purposes. For purposes of this exemption, "a

 

 

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

 

 

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1exempt from the provisions of Section 3-75.
2    (22) Beginning January 1, 2000 and through December 31,
32001, new or used automatic vending machines that prepare and
4serve hot food and beverages, including coffee, soup, and
5other items, and replacement parts for these machines.
6Beginning January 1, 2002 and through June 30, 2003, machines
7and parts for machines used in commercial, coin-operated
8amusement and vending business if a use or occupation tax is
9paid on the gross receipts derived from the use of the
10commercial, coin-operated amusement and vending machines. This
11paragraph is exempt from the provisions of Section 3-75.
12    (23) Beginning August 23, 2001 and through June 30, 2016,
13food for human consumption that is to be consumed off the
14premises where it is sold (other than alcoholic beverages,
15soft drinks, and food that has been prepared for immediate
16consumption) and prescription and nonprescription medicines,
17drugs, medical appliances, and insulin, urine testing
18materials, syringes, and needles used by diabetics, for human
19use, when purchased for use by a person receiving medical
20assistance under Article V of the Illinois Public Aid Code who
21resides in a licensed long-term care facility, as defined in
22the Nursing Home Care Act, or in a licensed facility as defined
23in the ID/DD Community Care Act, the MC/DD Act, or the
24Specialized Mental Health Rehabilitation Act of 2013.
25    (24) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227), computers and communications equipment

 

 

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

 

 

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

 

 

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1    (27) Beginning January 1, 2010 and continuing through
2December 31, 2029, materials, parts, equipment, components,
3and furnishings incorporated into or upon an aircraft as part
4of the modification, refurbishment, completion, replacement,
5repair, or maintenance of the aircraft. This exemption
6includes consumable supplies used in the modification,
7refurbishment, completion, replacement, repair, and
8maintenance of aircraft. However, until January 1, 2024, this
9exemption excludes any materials, parts, equipment,
10components, and consumable supplies used in the modification,
11replacement, repair, and maintenance of aircraft engines or
12power plants, whether such engines or power plants are
13installed or uninstalled upon any such aircraft. "Consumable
14supplies" include, but are not limited to, adhesive, tape,
15sandpaper, general purpose lubricants, cleaning solution,
16latex gloves, and protective films.
17    Beginning January 1, 2010 and continuing through December
1831, 2023, this exemption applies only to the use of qualifying
19tangible personal property transferred incident to the
20modification, refurbishment, completion, replacement, repair,
21or maintenance of aircraft by persons who (i) hold an Air
22Agency Certificate and are empowered to operate an approved
23repair station by the Federal Aviation Administration, (ii)
24have a Class IV Rating, and (iii) conduct operations in
25accordance with Part 145 of the Federal Aviation Regulations.
26From January 1, 2024 through December 31, 2029, this exemption

 

 

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1applies only to the use of qualifying tangible personal
2property by: (A) persons who modify, refurbish, complete,
3repair, replace, or maintain aircraft and who (i) hold an Air
4Agency Certificate and are empowered to operate an approved
5repair station by the Federal Aviation Administration, (ii)
6have a Class IV Rating, and (iii) conduct operations in
7accordance with Part 145 of the Federal Aviation Regulations;
8and (B) persons who engage in the modification, replacement,
9repair, and maintenance of aircraft engines or power plants
10without regard to whether or not those persons meet the
11qualifications of item (A).
12    The exemption does not include aircraft operated by a
13commercial air carrier providing scheduled passenger air
14service pursuant to authority issued under Part 121 or Part
15129 of the Federal Aviation Regulations. The changes made to
16this paragraph (27) by Public Act 98-534 are declarative of
17existing law. It is the intent of the General Assembly that the
18exemption under this paragraph (27) applies continuously from
19January 1, 2010 through December 31, 2024; however, no claim
20for credit or refund is allowed for taxes paid as a result of
21the disallowance of this exemption on or after January 1, 2015
22and prior to February 5, 2020 (the effective date of Public Act
23101-629).
24    (28) Tangible personal property purchased by a
25public-facilities corporation, as described in Section
2611-65-10 of the Illinois Municipal Code, for purposes of

 

 

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1constructing or furnishing a municipal convention hall, but
2only if the legal title to the municipal convention hall is
3transferred to the municipality without any further
4consideration by or on behalf of the municipality at the time
5of the completion of the municipal convention hall or upon the
6retirement or redemption of any bonds or other debt
7instruments issued by the public-facilities corporation in
8connection with the development of the municipal convention
9hall. This exemption includes existing public-facilities
10corporations as provided in Section 11-65-25 of the Illinois
11Municipal Code. This paragraph is exempt from the provisions
12of Section 3-75.
13    (29) Beginning January 1, 2017 and through December 31,
142026, menstrual pads, tampons, and menstrual cups.
15    (30) Tangible personal property transferred to a purchaser
16who is exempt from the tax imposed by this Act by operation of
17federal law. This paragraph is exempt from the provisions of
18Section 3-75.
19    (31) Qualified tangible personal property used in the
20construction or operation of a data center that has been
21granted a certificate of exemption by the Department of
22Commerce and Economic Opportunity, whether that tangible
23personal property is purchased by the owner, operator, or
24tenant of the data center or by a contractor or subcontractor
25of the owner, operator, or tenant. Data centers that would
26have qualified for a certificate of exemption prior to January

 

 

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11, 2020 had Public Act 101-31 been in effect, may apply for and
2obtain an exemption for subsequent purchases of computer
3equipment or enabling software purchased or leased to upgrade,
4supplement, or replace computer equipment or enabling software
5purchased or leased in the original investment that would have
6qualified.
7    The Department of Commerce and Economic Opportunity shall
8grant a certificate of exemption under this item (31) to
9qualified data centers as defined by Section 605-1025 of the
10Department of Commerce and Economic Opportunity Law of the
11Civil Administrative Code of Illinois.
12    For the purposes of this item (31):
13        "Data center" means a building or a series of
14    buildings rehabilitated or constructed to house working
15    servers in one physical location or multiple sites within
16    the State of Illinois.
17        "Qualified tangible personal property" means:
18    electrical systems and equipment; climate control and
19    chilling equipment and systems; mechanical systems and
20    equipment; monitoring and secure systems; emergency
21    generators; hardware; computers; servers; data storage
22    devices; network connectivity equipment; racks; cabinets;
23    telecommunications cabling infrastructure; raised floor
24    systems; peripheral components or systems; software;
25    mechanical, electrical, or plumbing systems; battery
26    systems; cooling systems and towers; temperature control

 

 

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1    systems; other cabling; and other data center
2    infrastructure equipment and systems necessary to operate
3    qualified tangible personal property, including fixtures;
4    and component parts of any of the foregoing, including
5    installation, maintenance, repair, refurbishment, and
6    replacement of qualified tangible personal property to
7    generate, transform, transmit, distribute, or manage
8    electricity necessary to operate qualified tangible
9    personal property; and all other tangible personal
10    property that is essential to the operations of a computer
11    data center. The term "qualified tangible personal
12    property" also includes building materials physically
13    incorporated into in to the qualifying data center. To
14    document the exemption allowed under this Section, the
15    retailer must obtain from the purchaser a copy of the
16    certificate of eligibility issued by the Department of
17    Commerce and Economic Opportunity.
18    This item (31) is exempt from the provisions of Section
193-75.
20    (32) Beginning July 1, 2022, breast pumps, breast pump
21collection and storage supplies, and breast pump kits. This
22item (32) is exempt from the provisions of Section 3-75. As
23used in this item (32):
24        "Breast pump" means an electrically controlled or
25    manually controlled pump device designed or marketed to be
26    used to express milk from a human breast during lactation,

 

 

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

 

 

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

 

 

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1    (35) Beginning on January 1, 2025, medical appliances and
2products that are classified as Class III medical devices by
3the United States Food and Drug Administration and that are
4used for cancer treatment pursuant to a prescription, as well
5as any accessories and components related to those appliances
6and devices. As used in this paragraph, "medical appliance"
7means a product that was classified as a medical appliance and
8was subject to a 1% rate of tax immediately prior to the
9effective date of this amendatory Act of the 103rd General
10Assembly, including, but not limited to, devices used to
11provide advanced life support services, as defined by Section
123.10 of the Emergency Medical Services (EMS) Systems Act, and
13any other items designated as medical appliances by the
14Department by rule. This paragraph is exempt from the
15provisions of Section 3-75.
16(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
17Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1875-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
19Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
20eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
21revised 12-12-23.)
 
22    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
23    Sec. 3-10. Rate of tax. Unless otherwise provided in this
24Section, the tax imposed by this Act is at the rate of 6.25% of
25the selling price of tangible personal property transferred as

 

 

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1an incident to the sale of service, but, for the purpose of
2computing this tax, in no event shall the selling price be less
3than the cost price of the property to the serviceman.
4    Beginning on July 1, 2000 and through December 31, 2000,
5with respect to motor fuel, as defined in Section 1.1 of the
6Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
7the Use Tax Act, the tax is imposed at the rate of 1.25%.
8    With respect to gasohol, as defined in the Use Tax Act, the
9tax imposed by this Act applies to (i) 70% of the selling price
10of property transferred as an incident to the sale of service
11on or after January 1, 1990, and before July 1, 2003, (ii) 80%
12of the selling price of property transferred as an incident to
13the sale of service on or after July 1, 2003 and on or before
14July 1, 2017, (iii) 100% of the selling price of property
15transferred as an incident to the sale of service after July 1,
162017 and before January 1, 2024, (iv) 90% of the selling price
17of property transferred as an incident to the sale of service
18on or after January 1, 2024 and on or before December 31, 2028,
19and (v) 100% of the selling price of property transferred as an
20incident to the sale of service after December 31, 2028. If, at
21any time, however, the tax under this Act on sales of gasohol,
22as defined in the Use Tax Act, is imposed at the rate of 1.25%,
23then the tax imposed by this Act applies to 100% of the
24proceeds of sales of gasohol made during that time.
25    With respect to mid-range ethanol blends, as defined in
26Section 3-44.3 of the Use Tax Act, the tax imposed by this Act

 

 

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1applies to (i) 80% of the selling price of property
2transferred as an incident to the sale of service on or after
3January 1, 2024 and on or before December 31, 2028 and (ii)
4100% of the selling price of property transferred as an
5incident to the sale of service after December 31, 2028. If, at
6any time, however, the tax under this Act on sales of mid-range
7ethanol blends is imposed at the rate of 1.25%, then the tax
8imposed by this Act applies to 100% of the selling price of
9mid-range ethanol blends transferred as an incident to the
10sale of service during that time.
11    With respect to majority blended ethanol fuel, as defined
12in the Use Tax Act, the tax imposed by this Act does not apply
13to the selling price of property transferred as an incident to
14the sale of service on or after July 1, 2003 and on or before
15December 31, 2028 but applies to 100% of the selling price
16thereafter.
17    With respect to biodiesel blends, as defined in the Use
18Tax Act, with no less than 1% and no more than 10% biodiesel,
19the tax imposed by this Act applies to (i) 80% of the selling
20price of property transferred as an incident to the sale of
21service on or after July 1, 2003 and on or before December 31,
222018 and (ii) 100% of the proceeds of the selling price after
23December 31, 2018 and before January 1, 2024. On and after
24January 1, 2024 and on or before December 31, 2030, the
25taxation of biodiesel, renewable diesel, and biodiesel blends
26shall be as provided in Section 3-5.1 of the Use Tax Act. If,

 

 

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1at any time, however, the tax under this Act on sales of
2biodiesel blends, as defined in the Use Tax Act, with no less
3than 1% and no more than 10% biodiesel is imposed at the rate
4of 1.25%, then the tax imposed by this Act applies to 100% of
5the proceeds of sales of biodiesel blends with no less than 1%
6and no more than 10% biodiesel made during that time.
7    With respect to biodiesel, as defined in the Use Tax Act,
8and biodiesel blends, as defined in the Use Tax Act, with more
9than 10% but no more than 99% biodiesel, the tax imposed by
10this Act does not apply to the proceeds of the selling price of
11property transferred as an incident to the sale of service on
12or after July 1, 2003 and on or before December 31, 2023. On
13and after January 1, 2024 and on or before December 31, 2030,
14the taxation of biodiesel, renewable diesel, and biodiesel
15blends shall be as provided in Section 3-5.1 of the Use Tax
16Act.
17    At the election of any registered serviceman made for each
18fiscal year, sales of service in which the aggregate annual
19cost price of tangible personal property transferred as an
20incident to the sales of service is less than 35%, or 75% in
21the case of servicemen transferring prescription drugs or
22servicemen engaged in graphic arts production, of the
23aggregate annual total gross receipts from all sales of
24service, the tax imposed by this Act shall be based on the
25serviceman's cost price of the tangible personal property
26transferred as an incident to the sale of those services.

 

 

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1    Until July 1, 2022 and beginning again on July 1, 2023, the
2tax shall be imposed at the rate of 1% on food prepared for
3immediate consumption and transferred incident to a sale of
4service subject to this Act or the Service Occupation Tax Act
5by an entity licensed under the Hospital Licensing Act, the
6Nursing Home Care Act, the Assisted Living and Shared Housing
7Act, the ID/DD Community Care Act, the MC/DD Act, the
8Specialized Mental Health Rehabilitation Act of 2013, or the
9Child Care Act of 1969, or an entity that holds a permit issued
10pursuant to the Life Care Facilities Act. Until July 1, 2022
11and beginning again on July 1, 2023, the tax shall also be
12imposed at the rate of 1% on food for human consumption that is
13to be consumed off the premises where it is sold (other than
14alcoholic beverages, food consisting of or infused with adult
15use cannabis, soft drinks, and food that has been prepared for
16immediate consumption and is not otherwise included in this
17paragraph).
18    Beginning on July 1, 2022 and until July 1, 2023, the tax
19shall be imposed at the rate of 0% on food prepared for
20immediate consumption and transferred incident to a sale of
21service subject to this Act or the Service Occupation Tax Act
22by an entity licensed under the Hospital Licensing Act, the
23Nursing Home Care Act, the Assisted Living and Shared Housing
24Act, the ID/DD Community Care Act, the MC/DD Act, the
25Specialized Mental Health Rehabilitation Act of 2013, or the
26Child Care Act of 1969, or an entity that holds a permit issued

 

 

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1pursuant to the Life Care Facilities Act. Beginning on July 1,
22022 and until July 1, 2023, the tax shall also be imposed at
3the rate of 0% on food for human consumption that is to be
4consumed off the premises where it is sold (other than
5alcoholic beverages, food consisting of or infused with adult
6use cannabis, soft drinks, and food that has been prepared for
7immediate consumption and is not otherwise included in this
8paragraph).
9    The tax shall also be imposed at the rate of 1% on
10prescription and nonprescription medicines, drugs, medical
11appliances, products classified as Class III medical devices
12by the United States Food and Drug Administration that are
13used for cancer treatment pursuant to a prescription, as well
14as any accessories and components related to those devices,
15modifications to a motor vehicle for the purpose of rendering
16it usable by a person with a disability, and insulin, blood
17sugar testing materials, syringes, and needles used by human
18diabetics (except to the extent that those items are exempt by
19the Department under paragraph (35) of Section 3-5). For the
20purposes of this Section, until September 1, 2009: the term
21"soft drinks" means any complete, finished, ready-to-use,
22non-alcoholic drink, whether carbonated or not, including, but
23not limited to, soda water, cola, fruit juice, vegetable
24juice, carbonated water, and all other preparations commonly
25known as soft drinks of whatever kind or description that are
26contained in any closed or sealed bottle, can, carton, or

 

 

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

 

 

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

 

 

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1dispensing organization under the Compassionate Use of Medical
2Cannabis Program Act.
3    As used in this Section, "adult use cannabis" means
4cannabis subject to tax under the Cannabis Cultivation
5Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
6and does not include cannabis subject to tax under the
7Compassionate Use of Medical Cannabis Program Act.
8    If the property that is acquired from a serviceman is
9acquired outside Illinois and used outside Illinois before
10being brought to Illinois for use here and is taxable under
11this Act, the "selling price" on which the tax is computed
12shall be reduced by an amount that represents a reasonable
13allowance for depreciation for the period of prior
14out-of-state use.
15(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
16102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
17Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
18103-154, eff. 6-30-23.)
 
19    Section 15. The Service Occupation Tax Act is amended by
20changing Sections 3-5 and 3-10 as follows:
 
21    (35 ILCS 115/3-5)
22    Sec. 3-5. Exemptions. The following tangible personal
23property is exempt from the tax imposed by this Act:
24    (1) Personal property sold by a corporation, society,

 

 

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

 

 

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

 

 

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1to be registered under Section 3-809 of the Illinois Vehicle
2Code, but excluding other motor vehicles required to be
3registered under the Illinois Vehicle Code. Horticultural
4polyhouses or hoop houses used for propagating, growing, or
5overwintering plants shall be considered farm machinery and
6equipment under this item (7). Agricultural chemical tender
7tanks and dry boxes shall include units sold separately from a
8motor vehicle required to be licensed and units sold mounted
9on a motor vehicle required to be licensed if the selling price
10of the tender is separately stated.
11    Farm machinery and equipment shall include precision
12farming equipment that is installed or purchased to be
13installed on farm machinery and equipment, including, but not
14limited to, tractors, harvesters, sprayers, planters, seeders,
15or spreaders. Precision farming equipment includes, but is not
16limited to, soil testing sensors, computers, monitors,
17software, global positioning and mapping systems, and other
18such equipment.
19    Farm machinery and equipment also includes computers,
20sensors, software, and related equipment used primarily in the
21computer-assisted operation of production agriculture
22facilities, equipment, and activities such as, but not limited
23to, the collection, monitoring, and correlation of animal and
24crop data for the purpose of formulating animal diets and
25agricultural chemicals.
26    Beginning on January 1, 2024, farm machinery and equipment

 

 

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1also includes electrical power generation equipment used
2primarily for production agriculture.
3    This item (7) is exempt from the provisions of Section
43-55.
5    (8) Until June 30, 2013, fuel and petroleum products sold
6to or used by an air common carrier, certified by the carrier
7to be used for consumption, shipment, or storage in the
8conduct of its business as an air common carrier, for a flight
9destined for or returning from a location or locations outside
10the United States without regard to previous or subsequent
11domestic stopovers.
12    Beginning July 1, 2013, fuel and petroleum products sold
13to or used by an air carrier, certified by the carrier to be
14used for consumption, shipment, or storage in the conduct of
15its business as an air common carrier, for a flight that (i) is
16engaged in foreign trade or is engaged in trade between the
17United States and any of its possessions and (ii) transports
18at least one individual or package for hire from the city of
19origination to the city of final destination on the same
20aircraft, without regard to a change in the flight number of
21that aircraft.
22    (9) Proceeds of mandatory service charges separately
23stated on customers' bills for the purchase and consumption of
24food and beverages, to the extent that the proceeds of the
25service charge are in fact turned over as tips or as a
26substitute for tips to the employees who participate directly

 

 

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1in preparing, serving, hosting or cleaning up the food or
2beverage function with respect to which the service charge is
3imposed.
4    (10) Until July 1, 2003, oil field exploration, drilling,
5and production equipment, including (i) rigs and parts of
6rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
7pipe and tubular goods, including casing and drill strings,
8(iii) pumps and pump-jack units, (iv) storage tanks and flow
9lines, (v) any individual replacement part for oil field
10exploration, drilling, and production equipment, and (vi)
11machinery and equipment purchased for lease; but excluding
12motor vehicles required to be registered under the Illinois
13Vehicle Code.
14    (11) Photoprocessing machinery and equipment, including
15repair and replacement parts, both new and used, including
16that manufactured on special order, certified by the purchaser
17to be used primarily for photoprocessing, and including
18photoprocessing machinery and equipment purchased for lease.
19    (12) Until July 1, 2028, coal and aggregate exploration,
20mining, off-highway hauling, processing, maintenance, and
21reclamation equipment, including replacement parts and
22equipment, and including equipment purchased for lease, but
23excluding motor vehicles required to be registered under the
24Illinois Vehicle Code. The changes made to this Section by
25Public Act 97-767 apply on and after July 1, 2003, but no claim
26for credit or refund is allowed on or after August 16, 2013

 

 

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1(the effective date of Public Act 98-456) for such taxes paid
2during the period beginning July 1, 2003 and ending on August
316, 2013 (the effective date of Public Act 98-456).
4    (13) Beginning January 1, 1992 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages,
7soft drinks and food that has been prepared for immediate
8consumption) and prescription and non-prescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or in a licensed facility as defined
15in the ID/DD Community Care Act, the MC/DD Act, or the
16Specialized Mental Health Rehabilitation Act of 2013.
17    (14) Semen used for artificial insemination of livestock
18for direct agricultural production.
19    (15) Horses, or interests in horses, registered with and
20meeting the requirements of any of the Arabian Horse Club
21Registry of America, Appaloosa Horse Club, American Quarter
22Horse Association, United States Trotting Association, or
23Jockey Club, as appropriate, used for purposes of breeding or
24racing for prizes. This item (15) is exempt from the
25provisions of Section 3-55, and the exemption provided for
26under this item (15) applies for all periods beginning May 30,

 

 

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11995, but no claim for credit or refund is allowed on or after
2January 1, 2008 (the effective date of Public Act 95-88) for
3such taxes paid during the period beginning May 30, 2000 and
4ending on January 1, 2008 (the effective date of Public Act
595-88).
6    (16) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients sold to a lessor
9who leases the equipment, under a lease of one year or longer
10executed or in effect at the time of the purchase, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of
13the Retailers' Occupation Tax Act.
14    (17) Personal property sold to a lessor who leases the
15property, under a lease of one year or longer executed or in
16effect at the time of the purchase, to a governmental body that
17has been issued an active tax exemption identification number
18by the Department under Section 1g of the Retailers'
19Occupation Tax Act.
20    (18) Beginning with taxable years ending on or after
21December 31, 1995 and ending with taxable years ending on or
22before December 31, 2004, personal property that is donated
23for disaster relief to be used in a State or federally declared
24disaster area in Illinois or bordering Illinois by a
25manufacturer or retailer that is registered in this State to a
26corporation, society, association, foundation, or institution

 

 

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1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (19) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in
7the performance of infrastructure repairs in this State,
8including, but not limited to, municipal roads and streets,
9access roads, bridges, sidewalks, waste disposal systems,
10water and sewer line extensions, water distribution and
11purification facilities, storm water drainage and retention
12facilities, and sewage treatment facilities, resulting from a
13State or federally declared disaster in Illinois or bordering
14Illinois when such repairs are initiated on facilities located
15in the declared disaster area within 6 months after the
16disaster.
17    (20) Beginning July 1, 1999, game or game birds sold at a
18"game breeding and hunting preserve area" as that term is used
19in the Wildlife Code. This paragraph is exempt from the
20provisions of Section 3-55.
21    (21) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the
25Department to be organized and operated exclusively for
26educational purposes. For purposes of this exemption, "a

 

 

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

 

 

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1exempt from the provisions of Section 3-55.
2    (23) Beginning January 1, 2000 and through December 31,
32001, new or used automatic vending machines that prepare and
4serve hot food and beverages, including coffee, soup, and
5other items, and replacement parts for these machines.
6Beginning January 1, 2002 and through June 30, 2003, machines
7and parts for machines used in commercial, coin-operated
8amusement and vending business if a use or occupation tax is
9paid on the gross receipts derived from the use of the
10commercial, coin-operated amusement and vending machines. This
11paragraph is exempt from the provisions of Section 3-55.
12    (24) Beginning on August 2, 2001 (the effective date of
13Public Act 92-227), computers and communications equipment
14utilized for any hospital purpose and equipment used in the
15diagnosis, analysis, or treatment of hospital patients sold to
16a lessor who leases the equipment, under a lease of one year or
17longer executed or in effect at the time of the purchase, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20the Retailers' Occupation Tax Act. This paragraph is exempt
21from the provisions of Section 3-55.
22    (25) Beginning on August 2, 2001 (the effective date of
23Public Act 92-227), personal property sold to a lessor who
24leases the property, under a lease of one year or longer
25executed or in effect at the time of the purchase, to a
26governmental body that has been issued an active tax exemption

 

 

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1identification number by the Department under Section 1g of
2the Retailers' Occupation Tax Act. This paragraph is exempt
3from the provisions of Section 3-55.
4    (26) Beginning on January 1, 2002 and through June 30,
52016, tangible personal property purchased from an Illinois
6retailer by a taxpayer engaged in centralized purchasing
7activities in Illinois who will, upon receipt of the property
8in Illinois, temporarily store the property in Illinois (i)
9for the purpose of subsequently transporting it outside this
10State for use or consumption thereafter solely outside this
11State or (ii) for the purpose of being processed, fabricated,
12or manufactured into, attached to, or incorporated into other
13tangible personal property to be transported outside this
14State and thereafter used or consumed solely outside this
15State. The Director of Revenue shall, pursuant to rules
16adopted in accordance with the Illinois Administrative
17Procedure Act, issue a permit to any taxpayer in good standing
18with the Department who is eligible for the exemption under
19this paragraph (26). The permit issued under this paragraph
20(26) shall authorize the holder, to the extent and in the
21manner specified in the rules adopted under this Act, to
22purchase tangible personal property from a retailer exempt
23from the taxes imposed by this Act. Taxpayers shall maintain
24all necessary books and records to substantiate the use and
25consumption of all such tangible personal property outside of
26the State of Illinois.

 

 

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1    (27) Beginning January 1, 2008, tangible personal property
2used in the construction or maintenance of a community water
3supply, as defined under Section 3.145 of the Environmental
4Protection Act, that is operated by a not-for-profit
5corporation that holds a valid water supply permit issued
6under Title IV of the Environmental Protection Act. This
7paragraph is exempt from the provisions of Section 3-55.
8    (28) Tangible personal property sold to a
9public-facilities corporation, as described in Section
1011-65-10 of the Illinois Municipal Code, for purposes of
11constructing or furnishing a municipal convention hall, but
12only if the legal title to the municipal convention hall is
13transferred to the municipality without any further
14consideration by or on behalf of the municipality at the time
15of the completion of the municipal convention hall or upon the
16retirement or redemption of any bonds or other debt
17instruments issued by the public-facilities corporation in
18connection with the development of the municipal convention
19hall. This exemption includes existing public-facilities
20corporations as provided in Section 11-65-25 of the Illinois
21Municipal Code. This paragraph is exempt from the provisions
22of Section 3-55.
23    (29) Beginning January 1, 2010 and continuing through
24December 31, 2029, materials, parts, equipment, components,
25and furnishings incorporated into or upon an aircraft as part
26of the modification, refurbishment, completion, replacement,

 

 

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1repair, or maintenance of the aircraft. This exemption
2includes consumable supplies used in the modification,
3refurbishment, completion, replacement, repair, and
4maintenance of aircraft. However, until January 1, 2024, this
5exemption excludes any materials, parts, equipment,
6components, and consumable supplies used in the modification,
7replacement, repair, and maintenance of aircraft engines or
8power plants, whether such engines or power plants are
9installed or uninstalled upon any such aircraft. "Consumable
10supplies" include, but are not limited to, adhesive, tape,
11sandpaper, general purpose lubricants, cleaning solution,
12latex gloves, and protective films.
13    Beginning January 1, 2010 and continuing through December
1431, 2023, this exemption applies only to the transfer of
15qualifying tangible personal property incident to the
16modification, refurbishment, completion, replacement, repair,
17or maintenance of an aircraft by persons who (i) hold an Air
18Agency Certificate and are empowered to operate an approved
19repair station by the Federal Aviation Administration, (ii)
20have a Class IV Rating, and (iii) conduct operations in
21accordance with Part 145 of the Federal Aviation Regulations.
22The exemption does not include aircraft operated by a
23commercial air carrier providing scheduled passenger air
24service pursuant to authority issued under Part 121 or Part
25129 of the Federal Aviation Regulations. From January 1, 2024
26through December 31, 2029, this exemption applies only to the

 

 

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1use of qualifying tangible personal property by: (A) persons
2who modify, refurbish, complete, repair, replace, or maintain
3aircraft and who (i) hold an Air Agency Certificate and are
4empowered to operate an approved repair station by the Federal
5Aviation Administration, (ii) have a Class IV Rating, and
6(iii) conduct operations in accordance with Part 145 of the
7Federal Aviation Regulations; and (B) persons who engage in
8the modification, replacement, repair, and maintenance of
9aircraft engines or power plants without regard to whether or
10not those persons meet the qualifications of item (A).
11    The changes made to this paragraph (29) by Public Act
1298-534 are declarative of existing law. It is the intent of the
13General Assembly that the exemption under this paragraph (29)
14applies continuously from January 1, 2010 through December 31,
152024; however, no claim for credit or refund is allowed for
16taxes paid as a result of the disallowance of this exemption on
17or after January 1, 2015 and prior to February 5, 2020 (the
18effective date of Public Act 101-629).
19    (30) Beginning January 1, 2017 and through December 31,
202026, menstrual pads, tampons, and menstrual cups.
21    (31) Tangible personal property transferred to a purchaser
22who is exempt from tax by operation of federal law. This
23paragraph is exempt from the provisions of Section 3-55.
24    (32) Qualified tangible personal property used in the
25construction or operation of a data center that has been
26granted a certificate of exemption by the Department of

 

 

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1Commerce and Economic Opportunity, whether that tangible
2personal property is purchased by the owner, operator, or
3tenant of the data center or by a contractor or subcontractor
4of the owner, operator, or tenant. Data centers that would
5have qualified for a certificate of exemption prior to January
61, 2020 had Public Act 101-31 been in effect, may apply for and
7obtain an exemption for subsequent purchases of computer
8equipment or enabling software purchased or leased to upgrade,
9supplement, or replace computer equipment or enabling software
10purchased or leased in the original investment that would have
11qualified.
12    The Department of Commerce and Economic Opportunity shall
13grant a certificate of exemption under this item (32) to
14qualified data centers as defined by Section 605-1025 of the
15Department of Commerce and Economic Opportunity Law of the
16Civil Administrative Code of Illinois.
17    For the purposes of this item (32):
18        "Data center" means a building or a series of
19    buildings rehabilitated or constructed to house working
20    servers in one physical location or multiple sites within
21    the State of Illinois.
22        "Qualified tangible personal property" means:
23    electrical systems and equipment; climate control and
24    chilling equipment and systems; mechanical systems and
25    equipment; monitoring and secure systems; emergency
26    generators; hardware; computers; servers; data storage

 

 

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1    devices; network connectivity equipment; racks; cabinets;
2    telecommunications cabling infrastructure; raised floor
3    systems; peripheral components or systems; software;
4    mechanical, electrical, or plumbing systems; battery
5    systems; cooling systems and towers; temperature control
6    systems; other cabling; and other data center
7    infrastructure equipment and systems necessary to operate
8    qualified tangible personal property, including fixtures;
9    and component parts of any of the foregoing, including
10    installation, maintenance, repair, refurbishment, and
11    replacement of qualified tangible personal property to
12    generate, transform, transmit, distribute, or manage
13    electricity necessary to operate qualified tangible
14    personal property; and all other tangible personal
15    property that is essential to the operations of a computer
16    data center. The term "qualified tangible personal
17    property" also includes building materials physically
18    incorporated into in to the qualifying data center. To
19    document the exemption allowed under this Section, the
20    retailer must obtain from the purchaser a copy of the
21    certificate of eligibility issued by the Department of
22    Commerce and Economic Opportunity.
23    This item (32) is exempt from the provisions of Section
243-55.
25    (33) Beginning July 1, 2022, breast pumps, breast pump
26collection and storage supplies, and breast pump kits. This

 

 

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1item (33) is exempt from the provisions of Section 3-55. As
2used in this item (33):
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    (34) Tangible personal property sold by or on behalf of
16the State Treasurer pursuant to the Revised Uniform Unclaimed
17Property Act. This item (34) is exempt from the provisions of
18Section 3-55.
19    (35) Beginning on January 1, 2024, tangible personal
20property purchased by an active duty member of the armed
21forces of the United States who presents valid military
22identification and purchases the property using a form of
23payment where the federal government is the payor. The member
24of the armed forces must complete, at the point of sale, a form
25prescribed by the Department of Revenue documenting that the
26transaction is eligible for the exemption under this

 

 

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1paragraph. Retailers must keep the form as documentation of
2the exemption in their records for a period of not less than 6
3years. "Armed forces of the United States" means the United
4States Army, Navy, Air Force, Marine Corps, or Coast Guard.
5This paragraph is exempt from the provisions of Section 3-55.
6    (36) Beginning on January 1, 2025, medical appliances and
7products that are classified as Class III medical devices by
8the United States Food and Drug Administration and that are
9used for cancer treatment pursuant to a prescription, as well
10as any accessories and components related to those appliances
11and devices. As used in this paragraph, "medical appliance"
12means a product that was classified as a medical appliance and
13was subject to a 1% rate of tax immediately prior to the
14effective date of this amendatory Act of the 103rd General
15Assembly, including, but not limited to, devices used to
16provide advanced life support services, as defined by Section
173.10 of the Emergency Medical Services (EMS) Systems Act, and
18any other items designated as medical appliances by the
19Department by rule. This paragraph is exempt from the
20provisions of Section 3-55.
21(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
22Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
2375-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
24Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
25eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
26revised 12-12-23.)
 

 

 

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1    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4the "selling price", as defined in Section 2 of the Service Use
5Tax Act, of the tangible personal property. For the purpose of
6computing this tax, in no event shall the "selling price" be
7less than the cost price to the serviceman of the tangible
8personal property transferred. The selling price of each item
9of tangible personal property transferred as an incident of a
10sale of service may be shown as a distinct and separate item on
11the serviceman's billing to the service customer. If the
12selling price is not so shown, the selling price of the
13tangible personal property is deemed to be 50% of the
14serviceman's entire billing to the service customer. When,
15however, a serviceman contracts to design, develop, and
16produce special order machinery or equipment, the tax imposed
17by this Act shall be based on the serviceman's cost price of
18the tangible personal property transferred incident to the
19completion of the contract.
20    Beginning on July 1, 2000 and through December 31, 2000,
21with respect to motor fuel, as defined in Section 1.1 of the
22Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
23the Use Tax Act, the tax is imposed at the rate of 1.25%.
24    With respect to gasohol, as defined in the Use Tax Act, the
25tax imposed by this Act shall apply to (i) 70% of the cost

 

 

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1price of property transferred as an incident to the sale of
2service on or after January 1, 1990, and before July 1, 2003,
3(ii) 80% of the selling price of property transferred as an
4incident to the sale of service on or after July 1, 2003 and on
5or before July 1, 2017, (iii) 100% of the selling price of
6property transferred as an incident to the sale of service
7after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
8the selling price of property transferred as an incident to
9the sale of service on or after January 1, 2024 and on or
10before December 31, 2028, and (v) 100% of the selling price of
11property transferred as an incident to the sale of service
12after December 31, 2028. If, at any time, however, the tax
13under this Act on sales of gasohol, as defined in the Use Tax
14Act, is imposed at the rate of 1.25%, then the tax imposed by
15this Act applies to 100% of the proceeds of sales of gasohol
16made during that time.
17    With respect to mid-range ethanol blends, as defined in
18Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
19applies to (i) 80% of the selling price of property
20transferred as an incident to the sale of service on or after
21January 1, 2024 and on or before December 31, 2028 and (ii)
22100% of the selling price of property transferred as an
23incident to the sale of service after December 31, 2028. If, at
24any time, however, the tax under this Act on sales of mid-range
25ethanol blends is imposed at the rate of 1.25%, then the tax
26imposed by this Act applies to 100% of the selling price of

 

 

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1mid-range ethanol blends transferred as an incident to the
2sale of service during that time.
3    With respect to majority blended ethanol fuel, as defined
4in the Use Tax Act, the tax imposed by this Act does not apply
5to the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7December 31, 2028 but applies to 100% of the selling price
8thereafter.
9    With respect to biodiesel blends, as defined in the Use
10Tax Act, with no less than 1% and no more than 10% biodiesel,
11the tax imposed by this Act applies to (i) 80% of the selling
12price of property transferred as an incident to the sale of
13service on or after July 1, 2003 and on or before December 31,
142018 and (ii) 100% of the proceeds of the selling price after
15December 31, 2018 and before January 1, 2024. On and after
16January 1, 2024 and on or before December 31, 2030, the
17taxation of biodiesel, renewable diesel, and biodiesel blends
18shall be as provided in Section 3-5.1 of the Use Tax Act. If,
19at any time, however, the tax under this Act on sales of
20biodiesel blends, as defined in the Use Tax Act, with no less
21than 1% and no more than 10% biodiesel is imposed at the rate
22of 1.25%, then the tax imposed by this Act applies to 100% of
23the proceeds of sales of biodiesel blends with no less than 1%
24and no more than 10% biodiesel made during that time.
25    With respect to biodiesel, as defined in the Use Tax Act,
26and biodiesel blends, as defined in the Use Tax Act, with more

 

 

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1than 10% but no more than 99% biodiesel material, the tax
2imposed by this Act does not apply to the proceeds of the
3selling price of property transferred as an incident to the
4sale of service on or after July 1, 2003 and on or before
5December 31, 2023. On and after January 1, 2024 and on or
6before December 31, 2030, the taxation of biodiesel, renewable
7diesel, and biodiesel blends shall be as provided in Section
83-5.1 of the Use Tax Act.
9    At the election of any registered serviceman made for each
10fiscal year, sales of service in which the aggregate annual
11cost price of tangible personal property transferred as an
12incident to the sales of service is less than 35%, or 75% in
13the case of servicemen transferring prescription drugs or
14servicemen engaged in graphic arts production, of the
15aggregate annual total gross receipts from all sales of
16service, the tax imposed by this Act shall be based on the
17serviceman's cost price of the tangible personal property
18transferred incident to the sale of those services.
19    Until July 1, 2022 and beginning again on July 1, 2023, the
20tax shall be imposed at the rate of 1% on food prepared for
21immediate consumption and transferred incident to a sale of
22service subject to this Act or the Service Use Tax Act by an
23entity licensed under the Hospital Licensing Act, the Nursing
24Home Care Act, the Assisted Living and Shared Housing Act, the
25ID/DD Community Care Act, the MC/DD Act, the Specialized
26Mental Health Rehabilitation Act of 2013, or the Child Care

 

 

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1Act of 1969, or an entity that holds a permit issued pursuant
2to the Life Care Facilities Act. Until July 1, 2022 and
3beginning again on July 1, 2023, the tax shall also be imposed
4at the rate of 1% on food for human consumption that is to be
5consumed off the premises where it is sold (other than
6alcoholic beverages, food consisting of or infused with adult
7use cannabis, soft drinks, and food that has been prepared for
8immediate consumption and is not otherwise included in this
9paragraph).
10    Beginning on July 1, 2022 and until July 1, 2023, the tax
11shall be imposed at the rate of 0% on food prepared for
12immediate consumption and transferred incident to a sale of
13service subject to this Act or the Service Use Tax Act by an
14entity licensed under the Hospital Licensing Act, the Nursing
15Home Care Act, the Assisted Living and Shared Housing Act, the
16ID/DD Community Care Act, the MC/DD Act, the Specialized
17Mental Health Rehabilitation Act of 2013, or the Child Care
18Act of 1969, or an entity that holds a permit issued pursuant
19to the Life Care Facilities Act. Beginning July 1, 2022 and
20until July 1, 2023, the tax shall also be imposed at the rate
21of 0% on food for human consumption that is to be consumed off
22the premises where it is sold (other than alcoholic beverages,
23food consisting of or infused with adult use cannabis, soft
24drinks, and food that has been prepared for immediate
25consumption and is not otherwise included in this paragraph).
26    The tax shall also be imposed at the rate of 1% on

 

 

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1prescription and nonprescription medicines, drugs, medical
2appliances, products classified as Class III medical devices
3by the United States Food and Drug Administration that are
4used for cancer treatment pursuant to a prescription, as well
5as any accessories and components related to those devices,
6modifications to a motor vehicle for the purpose of rendering
7it usable by a person with a disability, and insulin, blood
8sugar testing materials, syringes, and needles used by human
9diabetics (except to the extent that those items are exempt by
10the Department under paragraph (36) of Section 3-5). For the
11purposes of this Section, until September 1, 2009: the term
12"soft drinks" means any complete, finished, ready-to-use,
13non-alcoholic drink, whether carbonated or not, including, but
14not limited to, soda water, cola, fruit juice, vegetable
15juice, carbonated water, and all other preparations commonly
16known as soft drinks of whatever kind or description that are
17contained in any closed or sealed can, carton, or container,
18regardless of size; but "soft drinks" does not include coffee,
19tea, non-carbonated water, infant formula, milk or milk
20products as defined in the Grade A Pasteurized Milk and Milk
21Products Act, or drinks containing 50% or more natural fruit
22or vegetable juice.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "soft drinks" means non-alcoholic
25beverages that contain natural or artificial sweeteners. "Soft
26drinks" does not include beverages that contain milk or milk

 

 

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

 

 

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1purposes of this Section, "grooming and hygiene products"
2includes, but is not limited to, soaps and cleaning solutions,
3shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
4lotions and screens, unless those products are available by
5prescription only, regardless of whether the products meet the
6definition of "over-the-counter-drugs". For the purposes of
7this paragraph, "over-the-counter-drug" means a drug for human
8use that contains a label that identifies the product as a drug
9as required by 21 CFR 201.66. The "over-the-counter-drug"
10label includes:
11        (A) a "Drug Facts" panel; or
12        (B) a statement of the "active ingredient(s)" with a
13    list of those ingredients contained in the compound,
14    substance or preparation.
15    Beginning on January 1, 2014 (the effective date of Public
16Act 98-122), "prescription and nonprescription medicines and
17drugs" includes medical cannabis purchased from a registered
18dispensing organization under the Compassionate Use of Medical
19Cannabis Program Act.
20    As used in this Section, "adult use cannabis" means
21cannabis subject to tax under the Cannabis Cultivation
22Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
23and does not include cannabis subject to tax under the
24Compassionate Use of Medical Cannabis Program Act.
25(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
26102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,

 

 

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1Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
2103-154, eff. 6-30-23.)
 
3    Section 20. The Retailers' Occupation Tax Act is amended
4by changing Sections 2-5 and 2-10 as follows:
 
5    (35 ILCS 120/2-5)
6    Sec. 2-5. Exemptions. Gross receipts from proceeds from
7the sale of the following tangible personal property are
8exempt from the tax imposed by this Act:
9        (1) Farm chemicals.
10        (2) Farm machinery and equipment, both new and used,
11    including that manufactured on special order, certified by
12    the purchaser to be used primarily for production
13    agriculture or State or federal agricultural programs,
14    including individual replacement parts for the machinery
15    and equipment, including machinery and equipment purchased
16    for lease, and including implements of husbandry defined
17    in Section 1-130 of the Illinois Vehicle Code, farm
18    machinery and agricultural chemical and fertilizer
19    spreaders, and nurse wagons required to be registered
20    under Section 3-809 of the Illinois Vehicle Code, but
21    excluding other motor vehicles required to be registered
22    under the Illinois Vehicle Code. Horticultural polyhouses
23    or hoop houses used for propagating, growing, or
24    overwintering plants shall be considered farm machinery

 

 

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1    and equipment under this item (2). Agricultural chemical
2    tender tanks and dry boxes shall include units sold
3    separately from a motor vehicle required to be licensed
4    and units sold mounted on a motor vehicle required to be
5    licensed, if the selling price of the tender is separately
6    stated.
7        Farm machinery and equipment shall include precision
8    farming equipment that is installed or purchased to be
9    installed on farm machinery and equipment including, but
10    not limited to, tractors, harvesters, sprayers, planters,
11    seeders, or spreaders. Precision farming equipment
12    includes, but is not limited to, soil testing sensors,
13    computers, monitors, software, global positioning and
14    mapping systems, and other such equipment.
15        Farm machinery and equipment also includes computers,
16    sensors, software, and related equipment used primarily in
17    the computer-assisted operation of production agriculture
18    facilities, equipment, and activities such as, but not
19    limited to, the collection, monitoring, and correlation of
20    animal and crop data for the purpose of formulating animal
21    diets and agricultural chemicals.
22        Beginning on January 1, 2024, farm machinery and
23    equipment also includes electrical power generation
24    equipment used primarily for production agriculture.
25        This item (2) is exempt from the provisions of Section
26    2-70.

 

 

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

 

 

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

 

 

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1    the benefit of persons 65 years of age or older if the
2    personal property was not purchased by the enterprise for
3    the purpose of resale by the enterprise.
4        (11) Except as otherwise provided in this Section,
5    personal property sold to a governmental body, to a
6    corporation, society, association, foundation, or
7    institution organized and operated exclusively for
8    charitable, religious, or educational purposes, or to a
9    not-for-profit corporation, society, association,
10    foundation, institution, or organization that has no
11    compensated officers or employees and that is organized
12    and operated primarily for the recreation of persons 55
13    years of age or older. A limited liability company may
14    qualify for the exemption under this paragraph only if the
15    limited liability company is organized and operated
16    exclusively for educational purposes. On and after July 1,
17    1987, however, no entity otherwise eligible for this
18    exemption shall make tax-free purchases unless it has an
19    active identification number issued by the Department.
20        (12) (Blank).
21        (12-5) On and after July 1, 2003 and through June 30,
22    2004, motor vehicles of the second division with a gross
23    vehicle weight in excess of 8,000 pounds that are subject
24    to the commercial distribution fee imposed under Section
25    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
26    2004 and through June 30, 2005, the use in this State of

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    equivalent to the state's rate of tax on taxable property
2    in his or her state of residence and shall submit the
3    statement to the appropriate tax collection agency in his
4    or her state of residence. In addition, the retailer must
5    retain a signed copy of the statement in his or her
6    records. Nothing in this item shall be construed to
7    require the removal of the vehicle from this state
8    following the filing of an intent to title the vehicle in
9    the purchaser's state of residence if the purchaser titles
10    the vehicle in his or her state of residence within 30 days
11    after the date of sale. The tax collected under this Act in
12    accordance with this item (25-5) shall be proportionately
13    distributed as if the tax were collected at the 6.25%
14    general rate imposed under this Act.
15        (25-7) Beginning on July 1, 2007, no tax is imposed
16    under this Act on the sale of an aircraft, as defined in
17    Section 3 of the Illinois Aeronautics Act, if all of the
18    following conditions are met:
19            (1) the aircraft leaves this State within 15 days
20        after the later of either the issuance of the final
21        billing for the sale of the aircraft, or the
22        authorized approval for return to service, completion
23        of the maintenance record entry, and completion of the
24        test flight and ground test for inspection, as
25        required by 14 CFR 91.407;
26            (2) the aircraft is not based or registered in

 

 

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1        this State after the sale of the aircraft; and
2            (3) the seller retains in his or her books and
3        records and provides to the Department a signed and
4        dated certification from the purchaser, on a form
5        prescribed by the Department, certifying that the
6        requirements of this item (25-7) are met. The
7        certificate must also include the name and address of
8        the purchaser, the address of the location where the
9        aircraft is to be titled or registered, the address of
10        the primary physical location of the aircraft, and
11        other information that the Department may reasonably
12        require.
13        For purposes of this item (25-7):
14        "Based in this State" means hangared, stored, or
15    otherwise used, excluding post-sale customizations as
16    defined in this Section, for 10 or more days in each
17    12-month period immediately following the date of the sale
18    of the aircraft.
19        "Registered in this State" means an aircraft
20    registered with the Department of Transportation,
21    Aeronautics Division, or titled or registered with the
22    Federal Aviation Administration to an address located in
23    this State.
24        This paragraph (25-7) is exempt from the provisions of
25    Section 2-70.
26        (26) Semen used for artificial insemination of

 

 

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

 

 

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

 

 

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1    declared disaster area within 6 months after the disaster.
2        (32) Beginning July 1, 1999, game or game birds sold
3    at a "game breeding and hunting preserve area" as that
4    term is used in the Wildlife Code. This paragraph is
5    exempt from the provisions of Section 2-70.
6        (33) A motor vehicle, as that term is defined in
7    Section 1-146 of the Illinois Vehicle Code, that is
8    donated to a corporation, limited liability company,
9    society, association, foundation, or institution that is
10    determined by the Department to be organized and operated
11    exclusively for educational purposes. For purposes of this
12    exemption, "a corporation, limited liability company,
13    society, association, foundation, or institution organized
14    and operated exclusively for educational purposes" means
15    all tax-supported public schools, private schools that
16    offer systematic instruction in useful branches of
17    learning by methods common to public schools and that
18    compare favorably in their scope and intensity with the
19    course of study presented in tax-supported schools, and
20    vocational or technical schools or institutes organized
21    and operated exclusively to provide a course of study of
22    not less than 6 weeks duration and designed to prepare
23    individuals to follow a trade or to pursue a manual,
24    technical, mechanical, industrial, business, or commercial
25    occupation.
26        (34) Beginning January 1, 2000, personal property,

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    item (A).
2        The changes made to this paragraph (40) by Public Act
3    98-534 are declarative of existing law. It is the intent
4    of the General Assembly that the exemption under this
5    paragraph (40) applies continuously from January 1, 2010
6    through December 31, 2024; however, no claim for credit or
7    refund is allowed for taxes paid as a result of the
8    disallowance of this exemption on or after January 1, 2015
9    and prior to February 5, 2020 (the effective date of
10    Public Act 101-629).
11        (41) Tangible personal property sold to a
12    public-facilities corporation, as described in Section
13    11-65-10 of the Illinois Municipal Code, for purposes of
14    constructing or furnishing a municipal convention hall,
15    but only if the legal title to the municipal convention
16    hall is transferred to the municipality without any
17    further consideration by or on behalf of the municipality
18    at the time of the completion of the municipal convention
19    hall or upon the retirement or redemption of any bonds or
20    other debt instruments issued by the public-facilities
21    corporation in connection with the development of the
22    municipal convention hall. This exemption includes
23    existing public-facilities corporations as provided in
24    Section 11-65-25 of the Illinois Municipal Code. This
25    paragraph is exempt from the provisions of Section 2-70.
26        (42) Beginning January 1, 2017 and through December

 

 

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

 

 

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

 

 

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1        transform, transmit, distribute, or manage electricity
2        necessary to operate qualified tangible personal
3        property; and all other tangible personal property
4        that is essential to the operations of a computer data
5        center. The term "qualified tangible personal
6        property" also includes building materials physically
7        incorporated into the qualifying data center. To
8        document the exemption allowed under this Section, the
9        retailer must obtain from the purchaser a copy of the
10        certificate of eligibility issued by the Department of
11        Commerce and Economic Opportunity.
12        This item (44) is exempt from the provisions of
13    Section 2-70.
14        (45) Beginning January 1, 2020 and through December
15    31, 2020, sales of tangible personal property made by a
16    marketplace seller over a marketplace for which tax is due
17    under this Act but for which use tax has been collected and
18    remitted to the Department by a marketplace facilitator
19    under Section 2d of the Use Tax Act are exempt from tax
20    under this Act. A marketplace seller claiming this
21    exemption shall maintain books and records demonstrating
22    that the use tax on such sales has been collected and
23    remitted by a marketplace facilitator. Marketplace sellers
24    that have properly remitted tax under this Act on such
25    sales may file a claim for credit as provided in Section 6
26    of this Act. No claim is allowed, however, for such taxes

 

 

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1    for which a credit or refund has been issued to the
2    marketplace facilitator under the Use Tax Act, or for
3    which the marketplace facilitator has filed a claim for
4    credit or refund under the Use Tax Act.
5        (46) Beginning July 1, 2022, breast pumps, breast pump
6    collection and storage supplies, and breast pump kits.
7    This item (46) is exempt from the provisions of Section
8    2-70. As used in this item (46):
9        "Breast pump" means an electrically controlled or
10    manually controlled pump device designed or marketed to be
11    used to express milk from a human breast during lactation,
12    including the pump device and any battery, AC adapter, or
13    other power supply unit that is used to power the pump
14    device and is packaged and sold with the pump device at the
15    time of sale.
16        "Breast pump collection and storage supplies" means
17    items of tangible personal property designed or marketed
18    to be used in conjunction with a breast pump to collect
19    milk expressed from a human breast and to store collected
20    milk until it is ready for consumption.
21        "Breast pump collection and storage supplies"
22    includes, but is not limited to: breast shields and breast
23    shield connectors; breast pump tubes and tubing adapters;
24    breast pump valves and membranes; backflow protectors and
25    backflow protector adaptors; bottles and bottle caps
26    specific to the operation of the breast pump; and breast

 

 

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

 

 

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1    forces of the United States who presents valid military
2    identification and purchases the property using a form of
3    payment where the federal government is the payor. The
4    member of the armed forces must complete, at the point of
5    sale, a form prescribed by the Department of Revenue
6    documenting that the transaction is eligible for the
7    exemption under this paragraph. Retailers must keep the
8    form as documentation of the exemption in their records
9    for a period of not less than 6 years. "Armed forces of the
10    United States" means the United States Army, Navy, Air
11    Force, Marine Corps, or Coast Guard. This paragraph is
12    exempt from the provisions of Section 2-70.
13        (49) Beginning on January 1, 2025, medical appliances
14    and products that are classified as Class III medical
15    devices by the United States Food and Drug Administration
16    and that are used for cancer treatment pursuant to a
17    prescription, as well as any accessories and components
18    related to those appliances and devices. As used in this
19    paragraph, "medical appliance" means a product that was
20    classified as a medical appliance and was subject to a 1%
21    rate of tax immediately prior to the effective date of
22    this amendatory Act of the 103rd General Assembly,
23    including, but not limited to, devices used to provide
24    advanced life support services, as defined by Section 3.10
25    of the Emergency Medical Services (EMS) Systems Act, and
26    any other items designated as medical appliances by the

 

 

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1    Department by rule. This paragraph is exempt from the
2    provisions of Section 2-70.
3(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
4102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
5Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
65-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
75-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
86-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
912-12-23.)
 
10    (35 ILCS 120/2-10)
11    Sec. 2-10. Rate of tax. Unless otherwise provided in this
12Section, the tax imposed by this Act is at the rate of 6.25% of
13gross receipts from sales of tangible personal property made
14in the course of business.
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    Beginning on August 6, 2010 through August 15, 2010, and
20beginning again on August 5, 2022 through August 14, 2022,
21with respect to sales tax holiday items as defined in Section
222-8 of this Act, the tax is imposed at the rate of 1.25%.
23    Within 14 days after July 1, 2000 (the effective date of
24Public Act 91-872), each retailer of motor fuel and gasohol
25shall cause the following notice to be posted in a prominently

 

 

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1visible place on each retail dispensing device that is used to
2dispense motor fuel or gasohol in the State of Illinois: "As of
3July 1, 2000, the State of Illinois has eliminated the State's
4share of sales tax on motor fuel and gasohol through December
531, 2000. The price on this pump should reflect the
6elimination of the tax." The notice shall be printed in bold
7print on a sign that is no smaller than 4 inches by 8 inches.
8The sign shall be clearly visible to customers. Any retailer
9who fails to post or maintain a required sign through December
1031, 2000 is guilty of a petty offense for which the fine shall
11be $500 per day per each retail premises where a violation
12occurs.
13    With respect to gasohol, as defined in the Use Tax Act, the
14tax imposed by this Act applies to (i) 70% of the proceeds of
15sales made on or after January 1, 1990, and before July 1,
162003, (ii) 80% of the proceeds of sales made on or after July
171, 2003 and on or before July 1, 2017, (iii) 100% of the
18proceeds of sales made after July 1, 2017 and prior to January
191, 2024, (iv) 90% of the proceeds of sales made on or after
20January 1, 2024 and on or before December 31, 2028, and (v)
21100% of the proceeds of sales made after December 31, 2028. If,
22at any time, however, the tax under this Act on sales of
23gasohol, as defined in the Use Tax Act, is imposed at the rate
24of 1.25%, then the tax imposed by this Act applies to 100% of
25the proceeds of sales of gasohol made during that time.
26    With respect to mid-range ethanol blends, as defined in

 

 

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1Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
2applies to (i) 80% of the proceeds of sales made on or after
3January 1, 2024 and on or before December 31, 2028 and (ii)
4100% of the proceeds of sales made after December 31, 2028. If,
5at any time, however, the tax under this Act on sales of
6mid-range ethanol blends is imposed at the rate of 1.25%, then
7the tax imposed by this Act applies to 100% of the proceeds of
8sales of mid-range ethanol blends made during that time.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the proceeds of sales made on or after July 1, 2003 and on
12or before December 31, 2028 but applies to 100% of the proceeds
13of sales made thereafter.
14    With respect to biodiesel blends, as defined in the Use
15Tax Act, with no less than 1% and no more than 10% biodiesel,
16the tax imposed by this Act applies to (i) 80% of the proceeds
17of sales made on or after July 1, 2003 and on or before
18December 31, 2018 and (ii) 100% of the proceeds of sales made
19after December 31, 2018 and before January 1, 2024. On and
20after January 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 sales made on or
7after July 1, 2003 and on or before December 31, 2023. On and
8after January 1, 2024 and on or before December 31, 2030, the
9taxation of biodiesel, renewable diesel, and biodiesel blends
10shall be as provided in Section 3-5.1 of the Use Tax Act.
11    Until July 1, 2022 and beginning again on July 1, 2023,
12with respect to food for human consumption that is to be
13consumed off the premises where it is sold (other than
14alcoholic beverages, food consisting of or infused with adult
15use cannabis, soft drinks, and food that has been prepared for
16immediate consumption), the tax is imposed at the rate of 1%.
17Beginning July 1, 2022 and until July 1, 2023, with respect to
18food for human consumption that is to be consumed off the
19premises where it is sold (other than alcoholic beverages,
20food consisting of or infused with adult use cannabis, soft
21drinks, and food that has been prepared for immediate
22consumption), the tax is imposed at the rate of 0%.
23    With respect to prescription and nonprescription
24medicines, drugs, medical appliances, products classified as
25Class III medical devices by the United States Food and Drug
26Administration that are used for cancer treatment pursuant to

 

 

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1a prescription, as well as any accessories and components
2related to those devices, modifications to a motor vehicle for
3the purpose of rendering it usable by a person with a
4disability, and insulin, blood sugar testing materials,
5syringes, and needles used by human diabetics (except to the
6extent that those items are exempt by the Department under
7paragraph (49) of Section 2-5), the tax is imposed at the rate
8of 1%. For the purposes of this Section, until September 1,
92009: the term "soft drinks" means any complete, finished,
10ready-to-use, non-alcoholic drink, whether carbonated or not,
11including, but not limited to, soda water, cola, fruit juice,
12vegetable juice, carbonated water, and all other preparations
13commonly known as soft drinks of whatever kind or description
14that are contained in any closed or sealed bottle, can,
15carton, or container, regardless of size; but "soft drinks"
16does not include coffee, tea, non-carbonated water, infant
17formula, milk or milk products as defined in the Grade A
18Pasteurized Milk and Milk Products Act, or drinks containing
1950% or more natural fruit or vegetable juice.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "soft drinks" means non-alcoholic
22beverages that contain natural or artificial sweeteners. "Soft
23drinks" does not include beverages that contain milk or milk
24products, soy, rice or similar milk substitutes, or greater
25than 50% of vegetable or fruit juice by volume.
26    Until August 1, 2009, and notwithstanding any other

 

 

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

 

 

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1lotions and screens, unless those products are available by
2prescription only, regardless of whether the products meet the
3definition of "over-the-counter-drugs". For the purposes of
4this paragraph, "over-the-counter-drug" means a drug for human
5use that contains a label that identifies the product as a drug
6as required by 21 CFR 201.66. The "over-the-counter-drug"
7label includes:
8        (A) a "Drug Facts" panel; or
9        (B) a statement of the "active ingredient(s)" with a
10    list of those ingredients contained in the compound,
11    substance or preparation.
12    Beginning on January 1, 2014 (the effective date of Public
13Act 98-122), "prescription and nonprescription medicines and
14drugs" includes medical cannabis purchased from a registered
15dispensing organization under the Compassionate Use of Medical
16Cannabis Program Act.
17    As used in this Section, "adult use cannabis" means
18cannabis subject to tax under the Cannabis Cultivation
19Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
20and does not include cannabis subject to tax under the
21Compassionate Use of Medical Cannabis Program Act.
22(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
23Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
2460-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
254-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
 
26    Section 99. Effective date. This Act takes effect on

 

 

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1January 1, 2025.