103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5583

 

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

 

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

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on January 1, 2025
, with respect to firearms, the taxes under those Acts are imposed at the rate of 11%. Effective immediately.


LRB103 38110 HLH 68242 b

 

 

A BILL FOR

 

HB5583LRB103 38110 HLH 68242 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-10 as follows:
 
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

 

 

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1established by Illinois sales by the taxpayer of the same
2property as that functionally used or consumed, or if there
3are no such sales by the taxpayer, then comparable sales or
4purchases of property of like kind and character in Illinois.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning on August 6, 2010 through August 15, 2010, and
10beginning again on August 5, 2022 through August 14, 2022,
11with respect to sales tax holiday items as defined in Section
123-6 of this Act, the tax is imposed at the rate of 1.25%.
13    With respect to gasohol, the tax imposed by this Act
14applies to (i) 70% of the proceeds of sales made on or after
15January 1, 1990, and before July 1, 2003, (ii) 80% of the
16proceeds of sales made on or after July 1, 2003 and on or
17before July 1, 2017, (iii) 100% of the proceeds of sales made
18after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
19the proceeds of sales made on or after January 1, 2024 and on
20or before December 31, 2028, and (v) 100% of the proceeds of
21sales made after December 31, 2028. If, at any time, however,
22the tax under this Act on sales of gasohol is imposed at the
23rate of 1.25%, then the tax imposed by this Act applies to 100%
24of the proceeds of sales of gasohol made during that time.
25    With respect to mid-range ethanol blends, the tax imposed
26by this Act applies to (i) 80% of the proceeds of sales made on

 

 

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1or after January 1, 2024 and on or before December 31, 2028 and
2(ii) 100% of the proceeds of sales made thereafter. If, at any
3time, however, the tax under this Act on sales of mid-range
4ethanol blends is imposed at the rate of 1.25%, then the tax
5imposed by this Act applies to 100% of the proceeds of sales of
6mid-range ethanol blends made during that time.
7    With respect to majority blended ethanol fuel, the tax
8imposed by this Act does not apply to the proceeds of sales
9made on or after July 1, 2003 and on or before December 31,
102028 but applies to 100% of the proceeds of sales made
11thereafter.
12    With respect to biodiesel blends with no less than 1% and
13no more than 10% biodiesel, the tax imposed by this Act applies
14to (i) 80% of the proceeds of sales made on or after July 1,
152003 and on or before December 31, 2018 and (ii) 100% of the
16proceeds of sales made after December 31, 2018 and before
17January 1, 2024. On and after January 1, 2024 and on or before
18December 31, 2030, the taxation of biodiesel, renewable
19diesel, and biodiesel blends shall be as provided in Section
203-5.1. If, at any time, however, the tax under this Act on
21sales of biodiesel blends with no less than 1% and no more than
2210% biodiesel is imposed at the rate of 1.25%, then the tax
23imposed by this Act applies to 100% of the proceeds of sales of
24biodiesel blends with no less than 1% and no more than 10%
25biodiesel made during that time.
26    With respect to biodiesel and biodiesel blends with more

 

 

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1than 10% but no more than 99% biodiesel, the tax imposed by
2this Act does not apply to the proceeds of sales made on or
3after July 1, 2003 and on or before December 31, 2023. On and
4after January 1, 2024 and on or before December 31, 2030, the
5taxation of biodiesel, renewable diesel, and biodiesel blends
6shall be as provided in Section 3-5.1.
7    Until July 1, 2022 and beginning again on July 1, 2023,
8with respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, food consisting of or infused with adult
11use cannabis, soft drinks, and food that has been prepared for
12immediate consumption), the tax is imposed at the rate of 1%.
13Beginning on July 1, 2022 and until July 1, 2023, with respect
14to food for human consumption that is to be consumed off the
15premises where it is sold (other than alcoholic beverages,
16food consisting of or infused with adult use cannabis, soft
17drinks, and food that has been prepared for immediate
18consumption), the tax is imposed at the rate of 0%.
19    With respect to prescription and nonprescription
20medicines, drugs, medical appliances, products classified as
21Class III medical devices by the United States Food and Drug
22Administration that are used for cancer treatment pursuant to
23a prescription, as well as any accessories and components
24related to those devices, modifications to a motor vehicle for
25the purpose of rendering it usable by a person with a
26disability, and insulin, blood sugar testing materials,

 

 

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1syringes, and needles used by human diabetics, the tax is
2imposed at the rate of 1%. For the purposes of this Section,
3until September 1, 2009: the term "soft drinks" means any
4complete, finished, ready-to-use, non-alcoholic drink, whether
5carbonated or not, including, but not limited to, soda water,
6cola, fruit juice, vegetable juice, carbonated water, and all
7other preparations commonly known as soft drinks of whatever
8kind or description that are contained in any closed or sealed
9bottle, can, carton, or container, regardless of size; but
10"soft drinks" does not include coffee, tea, non-carbonated
11water, infant formula, milk or milk products as defined in the
12Grade A Pasteurized Milk and Milk Products Act, or drinks
13containing 50% 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

 

 

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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"

 

 

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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    Beginning on January 1, 2025, with respect to firearms,
24the tax is imposed at the rate of 11%.
25(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
26Section 20-5, eff. 4-19-22; 102-700, Article 60, Section

 

 

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160-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
24-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 
3    Section 10. The Service Use Tax Act is amended by changing
4Section 3-10 as follows:
 
5    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
6    Sec. 3-10. Rate of tax. Unless otherwise provided in this
7Section, the tax imposed by this Act is at the rate of 6.25% of
8the selling price of tangible personal property transferred as
9an incident to the sale of service, but, for the purpose of
10computing this tax, in no event shall the selling price be less
11than the cost price of the property to the serviceman.
12    Beginning on July 1, 2000 and through December 31, 2000,
13with respect to motor fuel, as defined in Section 1.1 of the
14Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
15the Use Tax Act, the tax is imposed at the rate of 1.25%.
16    With respect to gasohol, as defined in the Use Tax Act, the
17tax imposed by this Act applies to (i) 70% of the selling price
18of property transferred as an incident to the sale of service
19on or after January 1, 1990, and before July 1, 2003, (ii) 80%
20of the selling price of property transferred as an incident to
21the sale of service on or after July 1, 2003 and on or before
22July 1, 2017, (iii) 100% of the selling price of property
23transferred as an incident to the sale of service after July 1,
242017 and before January 1, 2024, (iv) 90% of the selling price

 

 

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1of property transferred as an incident to the sale of service
2on or after January 1, 2024 and on or before December 31, 2028,
3and (v) 100% of the selling price of property transferred as an
4incident to the sale of service after December 31, 2028. If, at
5any time, however, the tax under this Act on sales of gasohol,
6as defined in the Use Tax Act, is imposed at the rate of 1.25%,
7then the tax imposed by this Act applies to 100% of the
8proceeds of sales of gasohol made during that time.
9    With respect to mid-range ethanol blends, as defined in
10Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
11applies to (i) 80% of the selling price of property
12transferred as an incident to the sale of service on or after
13January 1, 2024 and on or before December 31, 2028 and (ii)
14100% of the selling price of property transferred as an
15incident to the sale of service after December 31, 2028. If, at
16any time, however, the tax under this Act on sales of mid-range
17ethanol blends is imposed at the rate of 1.25%, then the tax
18imposed by this Act applies to 100% of the selling price of
19mid-range ethanol blends transferred as an incident to the
20sale of service during that time.
21    With respect to majority blended ethanol fuel, as defined
22in the Use Tax Act, the tax imposed by this Act does not apply
23to the selling price of property transferred as an incident to
24the sale of service on or after July 1, 2003 and on or before
25December 31, 2028 but applies to 100% of the selling price
26thereafter.

 

 

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1    With respect to biodiesel blends, as defined in the Use
2Tax Act, with no less than 1% and no more than 10% biodiesel,
3the tax imposed by this Act applies to (i) 80% of the selling
4price of property transferred as an incident to the sale of
5service on or after July 1, 2003 and on or before December 31,
62018 and (ii) 100% of the proceeds of the selling price after
7December 31, 2018 and before January 1, 2024. On and after
8January 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. If,
11at any time, however, the tax under this Act on sales of
12biodiesel blends, as defined in the Use Tax Act, with no less
13than 1% and no more than 10% biodiesel is imposed at the rate
14of 1.25%, then the tax imposed by this Act applies to 100% of
15the proceeds of sales of biodiesel blends with no less than 1%
16and no more than 10% biodiesel made during that time.
17    With respect to biodiesel, as defined in the Use Tax Act,
18and biodiesel blends, as defined in the Use Tax Act, with more
19than 10% but no more than 99% biodiesel, the tax imposed by
20this Act does not apply to the proceeds of the selling price of
21property transferred as an incident to the sale of service on
22or after July 1, 2003 and on or before December 31, 2023. On
23and after January 1, 2024 and on or before December 31, 2030,
24the taxation of biodiesel, renewable diesel, and biodiesel
25blends shall be as provided in Section 3-5.1 of the Use Tax
26Act.

 

 

HB5583- 11 -LRB103 38110 HLH 68242 b

1    At the election of any registered serviceman made for each
2fiscal year, sales of service in which the aggregate annual
3cost price of tangible personal property transferred as an
4incident to the sales of service is less than 35%, or 75% in
5the case of servicemen transferring prescription drugs or
6servicemen engaged in graphic arts production, of the
7aggregate annual total gross receipts from all sales of
8service, the tax imposed by this Act shall be based on the
9serviceman's cost price of the tangible personal property
10transferred as an incident to the sale of those services.
11    Until July 1, 2022 and beginning again on July 1, 2023, the
12tax shall be imposed at the rate of 1% on food prepared for
13immediate consumption and transferred incident to a sale of
14service subject to this Act or the Service Occupation Tax Act
15by an entity licensed under the Hospital Licensing Act, the
16Nursing Home Care Act, the Assisted Living and Shared Housing
17Act, the ID/DD Community Care Act, the MC/DD Act, the
18Specialized Mental Health Rehabilitation Act of 2013, or the
19Child Care Act of 1969, or an entity that holds a permit issued
20pursuant to the Life Care Facilities Act. Until July 1, 2022
21and beginning again on July 1, 2023, the tax shall also be
22imposed at the rate of 1% on food for human consumption that is
23to be consumed off the premises where it is sold (other than
24alcoholic beverages, food consisting of or infused with adult
25use cannabis, soft drinks, and food that has been prepared for
26immediate consumption and is not otherwise included in this

 

 

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1paragraph).
2    Beginning on July 1, 2022 and until July 1, 2023, the tax
3shall be imposed at the rate of 0% on food prepared for
4immediate consumption and transferred incident to a sale of
5service subject to this Act or the Service Occupation Tax Act
6by an entity licensed under the Hospital Licensing Act, the
7Nursing Home Care Act, the Assisted Living and Shared Housing
8Act, the ID/DD Community Care Act, the MC/DD Act, the
9Specialized Mental Health Rehabilitation Act of 2013, or the
10Child Care Act of 1969, or an entity that holds a permit issued
11pursuant to the Life Care Facilities Act. Beginning on July 1,
122022 and until July 1, 2023, the tax shall also be imposed at
13the rate of 0% on food for human consumption that is to be
14consumed off the premises where it is sold (other than
15alcoholic beverages, food consisting of or infused with adult
16use cannabis, soft drinks, and food that has been prepared for
17immediate consumption and is not otherwise included in this
18paragraph).
19    The tax shall also be imposed at the rate of 1% on
20prescription and nonprescription medicines, drugs, medical
21appliances, products classified as Class III medical devices
22by the United States Food and Drug Administration that are
23used for cancer treatment pursuant to a prescription, as well
24as any accessories and components related to those devices,
25modifications to a motor vehicle for the purpose of rendering
26it usable by a person with a disability, and insulin, blood

 

 

HB5583- 13 -LRB103 38110 HLH 68242 b

1sugar testing materials, syringes, and needles used by human
2diabetics. For the purposes of this Section, until September
31, 2009: 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

 

 

HB5583- 14 -LRB103 38110 HLH 68242 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"

 

 

HB5583- 15 -LRB103 38110 HLH 68242 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    Beginning on January 1, 2025, with respect to firearms,
17the tax is imposed at the rate of 11%.
18    If the property that is acquired from a serviceman is
19acquired outside Illinois and used outside Illinois before
20being brought to Illinois for use here and is taxable under
21this Act, the "selling price" on which the tax is computed
22shall be reduced by an amount that represents a reasonable
23allowance for depreciation for the period of prior
24out-of-state use.
25(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
26102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,

 

 

HB5583- 16 -LRB103 38110 HLH 68242 b

1Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
2103-154, eff. 6-30-23.)
 
3    Section 15. The Service Occupation Tax Act is amended by
4changing Section 3-10 as follows:
 
5    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
6    Sec. 3-10. Rate of tax. Unless otherwise provided in this
7Section, the tax imposed by this Act is at the rate of 6.25% of
8the "selling price", as defined in Section 2 of the Service Use
9Tax Act, of the tangible personal property. For the purpose of
10computing this tax, in no event shall the "selling price" be
11less than the cost price to the serviceman of the tangible
12personal property transferred. The selling price of each item
13of tangible personal property transferred as an incident of a
14sale of service may be shown as a distinct and separate item on
15the serviceman's billing to the service customer. If the
16selling price is not so shown, the selling price of the
17tangible personal property is deemed to be 50% of the
18serviceman's entire billing to the service customer. When,
19however, a serviceman contracts to design, develop, and
20produce special order machinery or equipment, the tax imposed
21by this Act shall be based on the serviceman's cost price of
22the tangible personal property transferred incident to the
23completion of the contract.
24    Beginning on July 1, 2000 and through December 31, 2000,

 

 

HB5583- 17 -LRB103 38110 HLH 68242 b

1with respect to motor fuel, as defined in Section 1.1 of the
2Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
3the Use Tax Act, the tax is imposed at the rate of 1.25%.
4    With respect to gasohol, as defined in the Use Tax Act, the
5tax imposed by this Act shall apply to (i) 70% of the cost
6price of property transferred as an incident to the sale of
7service on or after January 1, 1990, and before July 1, 2003,
8(ii) 80% of the selling price of property transferred as an
9incident to the sale of service on or after July 1, 2003 and on
10or before July 1, 2017, (iii) 100% of the selling price of
11property transferred as an incident to the sale of service
12after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
13the selling price of property transferred as an incident to
14the sale of service on or after January 1, 2024 and on or
15before December 31, 2028, and (v) 100% of the selling price of
16property transferred as an incident to the sale of service
17after December 31, 2028. If, at any time, however, the tax
18under this Act on sales of gasohol, as defined in the Use Tax
19Act, is imposed at the rate of 1.25%, then the tax imposed by
20this Act applies to 100% of the proceeds of sales of gasohol
21made during that time.
22    With respect to mid-range ethanol blends, as defined in
23Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
24applies to (i) 80% of the selling price of property
25transferred as an incident to the sale of service on or after
26January 1, 2024 and on or before December 31, 2028 and (ii)

 

 

HB5583- 18 -LRB103 38110 HLH 68242 b

1100% of the selling price of property transferred as an
2incident to the sale of service after December 31, 2028. If, at
3any time, however, the tax under this Act on sales of mid-range
4ethanol blends is imposed at the rate of 1.25%, then the tax
5imposed by this Act applies to 100% of the selling price of
6mid-range ethanol blends transferred as an incident to the
7sale of service during that time.
8    With respect to majority blended ethanol fuel, as defined
9in the Use Tax Act, the tax imposed by this Act does not apply
10to the selling price of property transferred as an incident to
11the sale of service on or after July 1, 2003 and on or before
12December 31, 2028 but applies to 100% of the selling price
13thereafter.
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 selling
17price of property transferred as an incident to the sale of
18service on or after July 1, 2003 and on or before December 31,
192018 and (ii) 100% of the proceeds of the selling price after
20December 31, 2018 and before January 1, 2024. On and after
21January 1, 2024 and on or before December 31, 2030, the
22taxation of biodiesel, renewable diesel, and biodiesel blends
23shall be as provided in Section 3-5.1 of the Use Tax Act. If,
24at any time, however, the tax under this Act on sales of
25biodiesel blends, as defined in the Use Tax Act, with no less
26than 1% and no more than 10% biodiesel is imposed at the rate

 

 

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1of 1.25%, then the tax imposed by this Act applies to 100% of
2the proceeds of sales of biodiesel blends with no less than 1%
3and no more than 10% biodiesel made during that time.
4    With respect to biodiesel, as defined in the Use Tax Act,
5and biodiesel blends, as defined in the Use Tax Act, with more
6than 10% but no more than 99% biodiesel material, the tax
7imposed by this Act does not apply to the proceeds of the
8selling price of property transferred as an incident to the
9sale of service on or after July 1, 2003 and on or before
10December 31, 2023. On and after January 1, 2024 and on or
11before December 31, 2030, the taxation of biodiesel, renewable
12diesel, and biodiesel blends shall be as provided in Section
133-5.1 of the Use Tax Act.
14    At the election of any registered serviceman made for each
15fiscal year, sales of service in which the aggregate annual
16cost price of tangible personal property transferred as an
17incident to the sales of service is less than 35%, or 75% in
18the case of servicemen transferring prescription drugs or
19servicemen engaged in graphic arts production, of the
20aggregate annual total gross receipts from all sales of
21service, the tax imposed by this Act shall be based on the
22serviceman's cost price of the tangible personal property
23transferred incident to the sale of those services.
24    Until July 1, 2022 and beginning again on July 1, 2023, the
25tax shall be imposed at the rate of 1% on food prepared for
26immediate consumption and transferred incident to a sale of

 

 

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

 

 

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1the premises where it is sold (other than alcoholic beverages,
2food consisting of or infused with adult use cannabis, soft
3drinks, and food that has been prepared for immediate
4consumption and is not otherwise included in this paragraph).
5    The tax shall also be imposed at the rate of 1% on
6prescription and nonprescription medicines, drugs, medical
7appliances, products classified as Class III medical devices
8by the United States Food and Drug Administration that are
9used for cancer treatment pursuant to a prescription, as well
10as any accessories and components related to those devices,
11modifications to a motor vehicle for the purpose of rendering
12it usable by a person with a disability, and insulin, blood
13sugar testing materials, syringes, and needles used by human
14diabetics. For the purposes of this Section, until September
151, 2009: the term "soft drinks" means any complete, finished,
16ready-to-use, non-alcoholic drink, whether carbonated or not,
17including, but not limited to, soda water, cola, fruit juice,
18vegetable juice, carbonated water, and all other preparations
19commonly known as soft drinks of whatever kind or description
20that are contained in any closed or sealed can, carton, or
21container, regardless of size; but "soft drinks" does not
22include coffee, tea, non-carbonated water, infant formula,
23milk or milk products as defined in the Grade A Pasteurized
24Milk and Milk Products Act, or drinks containing 50% or more
25natural fruit or vegetable juice.
26    Notwithstanding any other provisions of this Act,

 

 

HB5583- 22 -LRB103 38110 HLH 68242 b

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

 

 

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

 

 

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1Compassionate Use of Medical Cannabis Program Act.
2    Beginning on January 1, 2025, with respect to firearms,
3the tax is imposed at the rate of 11%.
4(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
5102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
6Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
7103-154, eff. 6-30-23.)
 
8    Section 20. The Retailers' Occupation Tax Act is amended
9by changing Section 2-10 as follows:
 
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

 

 

HB5583- 25 -LRB103 38110 HLH 68242 b

1shall cause the following notice to be posted in a prominently
2visible place on each retail dispensing device that is used to
3dispense motor fuel or gasohol in the State of Illinois: "As of
4July 1, 2000, the State of Illinois has eliminated the State's
5share of sales tax on motor fuel and gasohol through December
631, 2000. The price on this pump should reflect the
7elimination of the tax." The notice shall be printed in bold
8print on a sign that is no smaller than 4 inches by 8 inches.
9The sign shall be clearly visible to customers. Any retailer
10who fails to post or maintain a required sign through December
1131, 2000 is guilty of a petty offense for which the fine shall
12be $500 per day per each retail premises where a violation
13occurs.
14    With respect to gasohol, as defined in the Use Tax Act, the
15tax imposed by this Act applies to (i) 70% of the proceeds of
16sales made on or after January 1, 1990, and before July 1,
172003, (ii) 80% of the proceeds of sales made on or after July
181, 2003 and on or before July 1, 2017, (iii) 100% of the
19proceeds of sales made after July 1, 2017 and prior to January
201, 2024, (iv) 90% of the proceeds of sales made on or after
21January 1, 2024 and on or before December 31, 2028, and (v)
22100% of the proceeds of sales made after December 31, 2028. If,
23at any time, however, the tax under this Act on sales of
24gasohol, as defined in the Use Tax Act, is imposed at the rate
25of 1.25%, then the tax imposed by this Act applies to 100% of
26the proceeds of sales of gasohol made during that time.

 

 

HB5583- 26 -LRB103 38110 HLH 68242 b

1    With respect to mid-range ethanol blends, as defined in
2Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
3applies to (i) 80% of the proceeds of sales made on or after
4January 1, 2024 and on or before December 31, 2028 and (ii)
5100% of the proceeds of sales made after December 31, 2028. If,
6at any time, however, the tax under this Act on sales of
7mid-range ethanol blends is imposed at the rate of 1.25%, then
8the tax imposed by this Act applies to 100% of the proceeds of
9sales of mid-range ethanol blends made during that time.
10    With respect to majority blended ethanol fuel, as defined
11in the Use Tax Act, the tax imposed by this Act does not apply
12to the proceeds of sales made on or after July 1, 2003 and on
13or before December 31, 2028 but applies to 100% of the proceeds
14of sales made thereafter.
15    With respect to biodiesel blends, as defined in the Use
16Tax Act, with no less than 1% and no more than 10% biodiesel,
17the tax imposed by this Act applies to (i) 80% of the proceeds
18of sales made on or after July 1, 2003 and on or before
19December 31, 2018 and (ii) 100% of the proceeds of sales made
20after December 31, 2018 and before January 1, 2024. On and
21after January 1, 2024 and on or before December 31, 2030, the
22taxation of biodiesel, renewable diesel, and biodiesel blends
23shall be as provided in Section 3-5.1 of the Use Tax Act. If,
24at any time, however, the tax under this Act on sales of
25biodiesel blends, as defined in the Use Tax Act, with no less
26than 1% and no more than 10% biodiesel is imposed at the rate

 

 

HB5583- 27 -LRB103 38110 HLH 68242 b

1of 1.25%, then the tax imposed by this Act applies to 100% of
2the proceeds of sales of biodiesel blends with no less than 1%
3and no more than 10% biodiesel made during that time.
4    With respect to biodiesel, as defined in the Use Tax Act,
5and biodiesel blends, as defined in the Use Tax Act, with more
6than 10% but no more than 99% biodiesel, the tax imposed by
7this Act does not apply to the proceeds of sales made on or
8after July 1, 2003 and on or before December 31, 2023. On and
9after January 1, 2024 and on or before December 31, 2030, the
10taxation of biodiesel, renewable diesel, and biodiesel blends
11shall be as provided in Section 3-5.1 of the Use Tax Act.
12    Until July 1, 2022 and beginning again on July 1, 2023,
13with respect to food for human consumption that is to be
14consumed off the premises where it is sold (other than
15alcoholic beverages, food consisting of or infused with adult
16use cannabis, soft drinks, and food that has been prepared for
17immediate consumption), the tax is imposed at the rate of 1%.
18Beginning July 1, 2022 and until July 1, 2023, with respect to
19food for human consumption that is to be consumed off the
20premises where it is sold (other than alcoholic beverages,
21food consisting of or infused with adult use cannabis, soft
22drinks, and food that has been prepared for immediate
23consumption), the tax is imposed at the rate of 0%.
24    With respect to prescription and nonprescription
25medicines, drugs, medical appliances, products classified as
26Class III medical devices by the United States Food and Drug

 

 

HB5583- 28 -LRB103 38110 HLH 68242 b

1Administration that are used for cancer treatment pursuant to
2a prescription, as well as any accessories and components
3related to those devices, modifications to a motor vehicle for
4the purpose of rendering it usable by a person with a
5disability, and insulin, blood sugar testing materials,
6syringes, and needles used by human diabetics, the tax is
7imposed at the rate of 1%. For the purposes of this Section,
8until September 1, 2009: the term "soft drinks" means any
9complete, finished, ready-to-use, non-alcoholic drink, whether
10carbonated or not, including, but not limited to, soda water,
11cola, fruit juice, vegetable juice, carbonated water, and all
12other preparations commonly known as soft drinks of whatever
13kind or description that are contained in any closed or sealed
14bottle, can, carton, or container, regardless of size; but
15"soft drinks" does not include coffee, tea, non-carbonated
16water, infant formula, milk or milk products as defined in the
17Grade A Pasteurized Milk and Milk Products Act, or drinks
18containing 50% or more natural fruit or vegetable juice.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "soft drinks" means non-alcoholic
21beverages that contain natural or artificial sweeteners. "Soft
22drinks" does not include beverages that contain milk or milk
23products, soy, rice or similar milk substitutes, or greater
24than 50% of vegetable or fruit juice by volume.
25    Until August 1, 2009, and notwithstanding any other
26provisions of this Act, "food for human consumption that is to

 

 

HB5583- 29 -LRB103 38110 HLH 68242 b

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

 

 

HB5583- 30 -LRB103 38110 HLH 68242 b

1prescription only, regardless of whether the products meet the
2definition of "over-the-counter-drugs". For the purposes of
3this paragraph, "over-the-counter-drug" means a drug for human
4use that contains a label that identifies the product as a drug
5as required by 21 CFR 201.66. The "over-the-counter-drug"
6label includes:
7        (A) a "Drug Facts" panel; or
8        (B) a statement of the "active ingredient(s)" with a
9    list of those ingredients contained in the compound,
10    substance or preparation.
11    Beginning on January 1, 2014 (the effective date of Public
12Act 98-122), "prescription and nonprescription medicines and
13drugs" includes medical cannabis purchased from a registered
14dispensing organization under the Compassionate Use of Medical
15Cannabis Program Act.
16    As used in this Section, "adult use cannabis" means
17cannabis subject to tax under the Cannabis Cultivation
18Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
19and does not include cannabis subject to tax under the
20Compassionate Use of Medical Cannabis Program Act.
21    Beginning on January 1, 2025, with respect to firearms,
22the tax is imposed at the rate of 11%.
23(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
24Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
2560-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
264-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
 

 

 

HB5583- 31 -LRB103 38110 HLH 68242 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.