093_SB2102

 
                                     SRS093 00123 NAD 00123 b

 1        AN ACT in relation to taxation.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Use  Tax  Act  is  amended by changing
 5    Section 3-5 as follows:

 6        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 7        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
 8    personal property is exempt from the tax imposed by this Act:
 9        (1)  Personal  property  purchased  from  a  corporation,
10    society,    association,    foundation,    institution,    or
11    organization, other than a limited liability company, that is
12    organized and operated as a not-for-profit service enterprise
13    for  the  benefit  of persons 65 years of age or older if the
14    personal property was not purchased by the enterprise for the
15    purpose of resale by the enterprise.
16        (2)  Personal  property  purchased  by  a  not-for-profit
17    Illinois county  fair  association  for  use  in  conducting,
18    operating, or promoting the county fair.
19        (3)  Personal property purchased by a not-for-profit arts
20    or  cultural organization that establishes, by proof required
21    by the Department by rule, that it has received an  exemption
22    under Section 501(c)(3) of the Internal Revenue Code and that
23    is  organized  and operated primarily for the presentation or
24    support of  arts  or  cultural  programming,  activities,  or
25    services.   These  organizations include, but are not limited
26    to, music and dramatic arts organizations  such  as  symphony
27    orchestras  and  theatrical groups, arts and cultural service
28    organizations,   local    arts    councils,    visual    arts
29    organizations, and media arts organizations. On and after the
30    effective  date  of  this  amendatory Act of the 92nd General
31    Assembly, however, an  entity  otherwise  eligible  for  this
 
                            -2-      SRS093 00123 NAD 00123 b
 1    exemption  shall not make tax-free purchases unless it has an
 2    active identification number issued by the Department.
 3        (4)  Personal property purchased by a governmental  body,
 4    by   a  corporation,  society,  association,  foundation,  or
 5    institution   organized   and   operated   exclusively    for
 6    charitable,  religious,  or  educational  purposes,  or  by a
 7    not-for-profit corporation, society, association, foundation,
 8    institution, or organization that has no compensated officers
 9    or employees and that is organized and operated primarily for
10    the recreation of persons 55 years of age or older. A limited
11    liability company may qualify for the  exemption  under  this
12    paragraph  only if the limited liability company is organized
13    and operated exclusively for  educational  purposes.  On  and
14    after July 1, 1987, however, no entity otherwise eligible for
15    this exemption shall make tax-free purchases unless it has an
16    active   exemption   identification   number  issued  by  the
17    Department.
18        (5)  Until July 1,  2003,  a  passenger  car  that  is  a
19    replacement  vehicle to the extent that the purchase price of
20    the car is subject to the Replacement Vehicle Tax.
21        (6)  Until July  1,  2003,  graphic  arts  machinery  and
22    equipment,  including  repair and replacement parts, both new
23    and used, and including that manufactured on  special  order,
24    certified  by  the purchaser to be used primarily for graphic
25    arts  production,  and  including  machinery  and   equipment
26    purchased   for  lease.    Equipment  includes  chemicals  or
27    chemicals acting as catalysts but only if  the  chemicals  or
28    chemicals  acting  as catalysts effect a direct and immediate
29    change upon a graphic arts product.
30        (7)  Farm chemicals.
31        (8)  Legal  tender,  currency,  medallions,  or  gold  or
32    silver  coinage  issued  by  the  State  of   Illinois,   the
33    government of the United States of America, or the government
34    of any foreign country, and bullion.
 
                            -3-      SRS093 00123 NAD 00123 b
 1        (9)  Personal property purchased from a teacher-sponsored
 2    student   organization   affiliated  with  an  elementary  or
 3    secondary school located in Illinois.
 4        (10)  A motor vehicle of  the  first  division,  a  motor
 5    vehicle of the second division that is a self-contained motor
 6    vehicle  designed  or permanently converted to provide living
 7    quarters for  recreational,  camping,  or  travel  use,  with
 8    direct  walk through to the living quarters from the driver's
 9    seat, or a motor vehicle of the second division  that  is  of
10    the  van configuration designed for the transportation of not
11    less than 7 nor  more  than  16  passengers,  as  defined  in
12    Section  1-146 of the Illinois Vehicle Code, that is used for
13    automobile renting, as  defined  in  the  Automobile  Renting
14    Occupation and Use Tax Act.
15        (11)  Farm  machinery  and  equipment, both new and used,
16    including that manufactured on special  order,  certified  by
17    the purchaser to be used primarily for production agriculture
18    or   State   or   federal  agricultural  programs,  including
19    individual replacement parts for the machinery and equipment,
20    including machinery and equipment purchased  for  lease,  and
21    including implements of husbandry defined in Section 1-130 of
22    the  Illinois  Vehicle  Code, farm machinery and agricultural
23    chemical and fertilizer spreaders, and nurse wagons  required
24    to  be registered under Section 3-809 of the Illinois Vehicle
25    Code, but excluding  other  motor  vehicles  required  to  be
26    registered  under  the  Illinois  Vehicle Code. Horticultural
27    polyhouses or hoop houses used for propagating,  growing,  or
28    overwintering  plants  shall be considered farm machinery and
29    equipment under this item (11). Agricultural chemical  tender
30    tanks  and dry boxes shall include units sold separately from
31    a motor vehicle  required  to  be  licensed  and  units  sold
32    mounted  on  a  motor  vehicle required to be licensed if the
33    selling price of the tender is separately stated.
34        Farm machinery  and  equipment  shall  include  precision
 
                            -4-      SRS093 00123 NAD 00123 b
 1    farming  equipment  that  is  installed  or  purchased  to be
 2    installed on farm machinery and equipment including, but  not
 3    limited   to,   tractors,   harvesters,  sprayers,  planters,
 4    seeders, or spreaders. Precision farming equipment  includes,
 5    but  is  not  limited  to,  soil  testing sensors, computers,
 6    monitors, software, global positioning and  mapping  systems,
 7    and other such equipment.
 8        Farm  machinery  and  equipment  also includes computers,
 9    sensors, software, and related equipment  used  primarily  in
10    the  computer-assisted  operation  of  production agriculture
11    facilities,  equipment,  and  activities  such  as,  but  not
12    limited to, the collection, monitoring,  and  correlation  of
13    animal  and  crop  data for the purpose of formulating animal
14    diets and agricultural chemicals.  This item (11)  is  exempt
15    from the provisions of Section 3-90.
16        (12)  Fuel  and  petroleum products sold to or used by an
17    air common carrier, certified by the carrier to be  used  for
18    consumption,  shipment,  or  storage  in  the  conduct of its
19    business as an air common carrier, for a flight destined  for
20    or  returning from a location or locations outside the United
21    States without regard  to  previous  or  subsequent  domestic
22    stopovers.
23        (13)  Proceeds  of  mandatory  service charges separately
24    stated on customers' bills for the purchase  and  consumption
25    of food and beverages purchased at retail from a retailer, to
26    the  extent  that  the  proceeds of the service charge are in
27    fact turned over as tips or as a substitute for tips  to  the
28    employees  who  participate  directly  in preparing, serving,
29    hosting or cleaning up the food  or  beverage  function  with
30    respect to which the service charge is imposed.
31        (14)  Until  July  1,  2003  and  beginning  again on the
32    effective date of this amendatory Act  of  the  93rd  General
33    Assembly,  oil  field  exploration,  drilling, and production
34    equipment, including (i) rigs and parts of rigs, rotary rigs,
 
                            -5-      SRS093 00123 NAD 00123 b
 1    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
 2    goods,  including  casing  and drill strings, (iii) pumps and
 3    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
 4    individual   replacement  part  for  oil  field  exploration,
 5    drilling, and production equipment, and  (vi)  machinery  and
 6    equipment  purchased  for lease; but excluding motor vehicles
 7    required to be registered under the  Illinois  Vehicle  Code.
 8    This paragraph is exempt from the provisions of Section 3-90.
 9        (15)  Photoprocessing  machinery and equipment, including
10    repair and replacement parts, both new  and  used,  including
11    that   manufactured   on  special  order,  certified  by  the
12    purchaser to  be  used  primarily  for  photoprocessing,  and
13    including  photoprocessing  machinery and equipment purchased
14    for lease.
15        (16)  Until July 1,  2003  and  beginning  again  on  the
16    effective  date  of  this  amendatory Act of the 93rd General
17    Assembly,  coal  exploration,  mining,  offhighway   hauling,
18    processing, maintenance, and reclamation equipment, including
19    replacement  parts  and  equipment,  and  including equipment
20    purchased for lease, but excluding motor vehicles required to
21    be registered under the Illinois Vehicle Code. This paragraph
22    is exempt from the provisions of Section 3-90.
23        (17)  Until July  1,  2003,  distillation  machinery  and
24    equipment,  sold  as a unit or kit, assembled or installed by
25    the retailer, certified by the user to be used only  for  the
26    production of ethyl alcohol that will be used for consumption
27    as  motor  fuel  or  as  a  component  of  motor fuel for the
28    personal use of the user, and not subject to sale or resale.
29        (18)  Manufacturing   and   assembling   machinery    and
30    equipment  used  primarily in the process of manufacturing or
31    assembling tangible personal property for wholesale or retail
32    sale or lease, whether that sale or lease is made directly by
33    the  manufacturer  or  by  some  other  person,  whether  the
34    materials used in the process are owned by  the  manufacturer
 
                            -6-      SRS093 00123 NAD 00123 b
 1    or  some  other person, or whether that sale or lease is made
 2    apart from or as an incident to the seller's engaging in  the
 3    service  occupation of producing machines, tools, dies, jigs,
 4    patterns, gauges, or other similar  items  of  no  commercial
 5    value on special order for a particular purchaser.
 6        (19)  Personal  property  delivered  to  a  purchaser  or
 7    purchaser's donee inside Illinois when the purchase order for
 8    that  personal  property  was  received  by a florist located
 9    outside Illinois who has a florist  located  inside  Illinois
10    deliver the personal property.
11        (20)  Semen used for artificial insemination of livestock
12    for direct agricultural production.
13        (21)  Horses, or interests in horses, registered with and
14    meeting  the  requirements  of  any of the Arabian Horse Club
15    Registry of America, Appaloosa Horse Club,  American  Quarter
16    Horse  Association,  United  States  Trotting Association, or
17    Jockey Club, as appropriate, used for purposes of breeding or
18    racing for prizes.
19        (22)  Computers and communications equipment utilized for
20    any hospital purpose and equipment  used  in  the  diagnosis,
21    analysis,  or  treatment  of hospital patients purchased by a
22    lessor who leases the equipment, under a lease of one year or
23    longer executed or in effect at the  time  the  lessor  would
24    otherwise  be  subject  to  the tax imposed by this Act, to a
25    hospital  that  has  been  issued  an  active  tax  exemption
26    identification  number  by the Department under Section 1g of
27    the Retailers' Occupation  Tax  Act.   If  the  equipment  is
28    leased  in  a manner that does not qualify for this exemption
29    or is used in any other non-exempt manner, the  lessor  shall
30    be  liable  for the tax imposed under this Act or the Service
31    Use Tax Act, as the case may be, based  on  the  fair  market
32    value  of  the  property  at  the time the non-qualifying use
33    occurs.  No lessor shall collect or  attempt  to  collect  an
34    amount  (however  designated) that purports to reimburse that
 
                            -7-      SRS093 00123 NAD 00123 b
 1    lessor for the tax imposed by this Act or the Service Use Tax
 2    Act, as the case may be, if the tax has not been paid by  the
 3    lessor.  If a lessor improperly collects any such amount from
 4    the  lessee,  the  lessee shall have a legal right to claim a
 5    refund of that amount from the  lessor.   If,  however,  that
 6    amount  is  not  refunded  to  the lessee for any reason, the
 7    lessor is liable to pay that amount to the Department.
 8        (23)  Personal property purchased by a lessor who  leases
 9    the  property,  under a lease of  one year or longer executed
10    or in effect at  the  time  the  lessor  would  otherwise  be
11    subject  to  the  tax  imposed by this Act, to a governmental
12    body that has been  issued  an  active  sales  tax  exemption
13    identification  number  by the Department under Section 1g of
14    the Retailers' Occupation Tax Act. If the property is  leased
15    in  a manner that does not qualify for this exemption or used
16    in any other non-exempt manner, the lessor  shall  be  liable
17    for  the  tax  imposed  under this Act or the Service Use Tax
18    Act, as the case may be, based on the fair  market  value  of
19    the  property  at the time the non-qualifying use occurs.  No
20    lessor shall collect or attempt to collect an amount (however
21    designated) that purports to reimburse that  lessor  for  the
22    tax  imposed  by  this Act or the Service Use Tax Act, as the
23    case may be, if the tax has not been paid by the lessor.   If
24    a lessor improperly collects any such amount from the lessee,
25    the lessee shall have a legal right to claim a refund of that
26    amount  from  the  lessor.   If,  however, that amount is not
27    refunded to the lessee for any reason, the lessor  is  liable
28    to pay that amount to the Department.
29        (24)  Beginning  with  taxable  years  ending on or after
30    December 31, 1995 and ending with taxable years ending on  or
31    before  December  31, 2004, personal property that is donated
32    for disaster relief to  be  used  in  a  State  or  federally
33    declared disaster area in Illinois or bordering Illinois by a
34    manufacturer  or retailer that is registered in this State to
 
                            -8-      SRS093 00123 NAD 00123 b
 1    a   corporation,   society,   association,   foundation,   or
 2    institution that  has  been  issued  a  sales  tax  exemption
 3    identification  number by the Department that assists victims
 4    of the disaster who reside within the declared disaster area.
 5        (25)  Beginning with taxable years  ending  on  or  after
 6    December  31, 1995 and ending with taxable years ending on or
 7    before December 31, 2004, personal property that is  used  in
 8    the  performance  of  infrastructure  repairs  in this State,
 9    including but not limited to  municipal  roads  and  streets,
10    access  roads,  bridges,  sidewalks,  waste disposal systems,
11    water and  sewer  line  extensions,  water  distribution  and
12    purification  facilities,  storm water drainage and retention
13    facilities, and sewage treatment facilities, resulting from a
14    State or federally declared disaster in Illinois or bordering
15    Illinois  when  such  repairs  are  initiated  on  facilities
16    located in the declared disaster area within 6  months  after
17    the disaster.
18        (26)  Beginning   July   1,  1999,  game  or  game  birds
19    purchased at a "game breeding and hunting preserve  area"  or
20    an  "exotic game hunting area" as those terms are used in the
21    Wildlife Code or at  a  hunting  enclosure  approved  through
22    rules  adopted  by the Department of Natural Resources.  This
23    paragraph is exempt from the provisions of Section 3-90.
24        (27)  A motor vehicle, as that term is defined in Section
25    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
26    corporation, limited liability company, society, association,
27    foundation,   or   institution  that  is  determined  by  the
28    Department to  be  organized  and  operated  exclusively  for
29    educational  purposes.    For  purposes of this exemption, "a
30    corporation, limited liability company, society, association,
31    foundation, or institution organized and operated exclusively
32    for educational  purposes"  means  all  tax-supported  public
33    schools, private schools that offer systematic instruction in
34    useful  branches  of  learning  by  methods  common to public
 
                            -9-      SRS093 00123 NAD 00123 b
 1    schools  and  that  compare  favorably  in  their  scope  and
 2    intensity with the course of study presented in tax-supported
 3    schools, and vocational or technical  schools  or  institutes
 4    organized  and  operated  exclusively  to provide a course of
 5    study of not less than  6  weeks  duration  and  designed  to
 6    prepare  individuals to follow a trade or to pursue a manual,
 7    technical, mechanical, industrial,  business,  or  commercial
 8    occupation.
 9        (28)  Beginning  January  1,  2000,   personal  property,
10    including  food, purchased through fundraising events for the
11    benefit of  a  public  or  private  elementary  or  secondary
12    school,  a  group  of  those  schools,  or one or more school
13    districts if the events are sponsored by an entity recognized
14    by the school district that consists primarily of  volunteers
15    and  includes  parents  and  teachers of the school children.
16    This paragraph does not apply to fundraising events  (i)  for
17    the benefit of private home instruction or (ii) for which the
18    fundraising  entity  purchases  the personal property sold at
19    the events from another individual or entity  that  sold  the
20    property  for the purpose of resale by the fundraising entity
21    and that profits from the sale  to  the  fundraising  entity.
22    This paragraph is exempt from the provisions of Section 3-90.
23        (29)  Beginning  January 1, 2000 and through December 31,
24    2001, new or used automatic vending machines that prepare and
25    serve hot food and beverages,  including  coffee,  soup,  and
26    other  items,  and  replacement  parts  for  these  machines.
27    Beginning January 1, 2002 and through June 30, 2003, machines
28    and  parts  for  machines  used  in commercial, coin-operated
29    amusement and vending business if a use or occupation tax  is
30    paid  on  the  gross  receipts  derived  from  the use of the
31    commercial, coin-operated  amusement  and  vending  machines.
32    This paragraph is exempt from the provisions of Section 3-90.
33        (30)  Food  for  human consumption that is to be consumed
34    off the premises where  it  is  sold  (other  than  alcoholic
 
                            -10-     SRS093 00123 NAD 00123 b
 1    beverages,  soft  drinks, and food that has been prepared for
 2    immediate consumption) and prescription  and  nonprescription
 3    medicines,  drugs,  medical  appliances,  and  insulin, urine
 4    testing materials, syringes, and needles used  by  diabetics,
 5    for  human  use, when purchased for use by a person receiving
 6    medical assistance under Article 5 of the Illinois Public Aid
 7    Code who resides in a licensed long-term  care  facility,  as
 8    defined in the Nursing Home Care Act.
 9        (31)  Beginning  on the effective date of this amendatory
10    Act   of   the   92nd   General   Assembly,   computers   and
11    communications equipment utilized for  any  hospital  purpose
12    and  equipment  used in the diagnosis, analysis, or treatment
13    of hospital patients purchased by a  lessor  who  leases  the
14    equipment, under a lease of one year or longer executed or in
15    effect  at  the time the lessor would otherwise be subject to
16    the tax imposed by this Act, to  a  hospital  that  has  been
17    issued  an  active tax exemption identification number by the
18    Department under Section 1g of the Retailers' Occupation  Tax
19    Act.   If  the  equipment is leased in a manner that does not
20    qualify for this exemption or is used in any other  nonexempt
21    manner,  the lessor shall be liable for the tax imposed under
22    this Act or the Service Use Tax Act,  as  the  case  may  be,
23    based  on  the  fair market value of the property at the time
24    the nonqualifying use occurs.  No  lessor  shall  collect  or
25    attempt  to  collect  an  amount  (however  designated)  that
26    purports to reimburse that lessor for the tax imposed by this
27    Act  or  the  Service Use Tax Act, as the case may be, if the
28    tax has not been paid by the lessor.  If a lessor  improperly
29    collects  any  such  amount from the lessee, the lessee shall
30    have a legal right to claim a refund of that amount from  the
31    lessor.   If,  however,  that  amount  is not refunded to the
32    lessee for any reason, the  lessor  is  liable  to  pay  that
33    amount  to  the Department. This paragraph is exempt from the
34    provisions of Section 3-90.
 
                            -11-     SRS093 00123 NAD 00123 b
 1        (32)  Beginning on the effective date of this  amendatory
 2    Act of the 92nd General Assembly, personal property purchased
 3    by  a  lessor  who  leases the property, under a lease of one
 4    year or longer executed or in effect at the time  the  lessor
 5    would otherwise be subject to the tax imposed by this Act, to
 6    a  governmental body that has been issued an active sales tax
 7    exemption  identification  number  by  the  Department  under
 8    Section 1g of the Retailers'  Occupation  Tax  Act.   If  the
 9    property is leased in a manner that does not qualify for this
10    exemption  or  used in any other nonexempt manner, the lessor
11    shall be liable for the tax imposed under  this  Act  or  the
12    Service  Use  Tax  Act, as the case may be, based on the fair
13    market value of the property at the  time  the  nonqualifying
14    use occurs.  No lessor shall collect or attempt to collect an
15    amount  (however  designated) that purports to reimburse that
16    lessor for the tax imposed by this Act or the Service Use Tax
17    Act, as the case may be, if the tax has not been paid by  the
18    lessor.  If a lessor improperly collects any such amount from
19    the  lessee,  the  lessee shall have a legal right to claim a
20    refund of that amount from the  lessor.   If,  however,  that
21    amount  is  not  refunded  to  the lessee for any reason, the
22    lessor is liable to pay that amount to the Department.   This
23    paragraph is exempt from the provisions of Section 3-90.
24        (33)  On and after July 1, 2003, the use in this State of
25    motor  vehicles  of  the second division with a gross vehicle
26    weight in excess of 8,000 pounds and that are subject to  the
27    commercial  distribution fee imposed under Section 3-815.1 of
28    the Illinois Vehicle Code. This exemption applies  to  repair
29    and  replacement  parts  added  after the initial purchase of
30    such a motor vehicle if that  motor  vehicle  is  used  in  a
31    manner  that  would  qualify  for the rolling stock exemption
32    otherwise provided for in this Act.
33    (Source:  P.A.  92-35,  eff.  7-1-01;  92-227,  eff.  8-2-01;
34    92-337, eff. 8-10-01;  92-484,  eff.  8-23-01;  92-651,  eff.
 
                            -12-     SRS093 00123 NAD 00123 b
 1    7-11-02;  93-23,  eff.  6-20-03; 93-24, eff. 6-20-03; revised
 2    9-11-03.)

 3        Section 10.  The  Service  Use  Tax  Act  is  amended  by
 4    changing Section 3-5 as follows:

 5        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
 6        Sec.  3-5.   Exemptions.   Use  of the following tangible
 7    personal property is exempt from the tax imposed by this Act:
 8        (1)  Personal  property  purchased  from  a  corporation,
 9    society,    association,    foundation,    institution,    or
10    organization, other than a limited liability company, that is
11    organized and operated as a not-for-profit service enterprise
12    for the benefit of persons 65 years of age or  older  if  the
13    personal property was not purchased by the enterprise for the
14    purpose of resale by the enterprise.
15        (2)  Personal property purchased by a non-profit Illinois
16    county  fair association for use in conducting, operating, or
17    promoting the county fair.
18        (3)  Personal property purchased by a not-for-profit arts
19    or cultural organization that establishes, by proof  required
20    by  the Department by rule, that it has received an exemption
21    under Section 501(c)(3) of the Internal Revenue Code and that
22    is organized and operated primarily for the  presentation  or
23    support  of  arts  or  cultural  programming,  activities, or
24    services.  These organizations include, but are  not  limited
25    to,  music  and  dramatic arts organizations such as symphony
26    orchestras and theatrical groups, arts and  cultural  service
27    organizations,    local    arts    councils,    visual   arts
28    organizations, and media arts organizations. On and after the
29    effective date of this amendatory Act  of  the  92nd  General
30    Assembly,  however,  an  entity  otherwise  eligible for this
31    exemption shall not make tax-free purchases unless it has  an
32    active identification number issued by the Department.
 
                            -13-     SRS093 00123 NAD 00123 b
 1        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 2    silver   coinage   issued  by  the  State  of  Illinois,  the
 3    government of the United States of America, or the government
 4    of any foreign country, and bullion.
 5        (5)  Until July  1,  2003,  graphic  arts  machinery  and
 6    equipment,  including  repair and replacement parts, both new
 7    and used, and including that manufactured on special order or
 8    purchased for lease, certified by the purchaser  to  be  used
 9    primarily  for  graphic  arts  production. Equipment includes
10    chemicals or chemicals acting as catalysts but  only  if  the
11    chemicals  or  chemicals  acting as catalysts effect a direct
12    and immediate change upon a graphic arts product.
13        (6)  Personal property purchased from a teacher-sponsored
14    student  organization  affiliated  with  an   elementary   or
15    secondary school located in Illinois.
16        (7)  Farm  machinery  and  equipment,  both new and used,
17    including that manufactured on special  order,  certified  by
18    the purchaser to be used primarily for production agriculture
19    or   State   or   federal  agricultural  programs,  including
20    individual replacement parts for the machinery and equipment,
21    including machinery and equipment purchased  for  lease,  and
22    including implements of husbandry defined in Section 1-130 of
23    the  Illinois  Vehicle  Code, farm machinery and agricultural
24    chemical and fertilizer spreaders, and nurse wagons  required
25    to  be registered under Section 3-809 of the Illinois Vehicle
26    Code, but excluding  other  motor  vehicles  required  to  be
27    registered  under  the  Illinois  Vehicle Code. Horticultural
28    polyhouses or hoop houses used for propagating,  growing,  or
29    overwintering  plants  shall be considered farm machinery and
30    equipment under this item (7). Agricultural  chemical  tender
31    tanks  and dry boxes shall include units sold separately from
32    a motor vehicle  required  to  be  licensed  and  units  sold
33    mounted  on  a  motor  vehicle required to be licensed if the
34    selling price of the tender is separately stated.
 
                            -14-     SRS093 00123 NAD 00123 b
 1        Farm machinery  and  equipment  shall  include  precision
 2    farming  equipment  that  is  installed  or  purchased  to be
 3    installed on farm machinery and equipment including, but  not
 4    limited   to,   tractors,   harvesters,  sprayers,  planters,
 5    seeders, or spreaders. Precision farming equipment  includes,
 6    but  is  not  limited  to,  soil  testing sensors, computers,
 7    monitors, software, global positioning and  mapping  systems,
 8    and other such equipment.
 9        Farm  machinery  and  equipment  also includes computers,
10    sensors, software, and related equipment  used  primarily  in
11    the  computer-assisted  operation  of  production agriculture
12    facilities,  equipment,  and  activities  such  as,  but  not
13    limited to, the collection, monitoring,  and  correlation  of
14    animal  and  crop  data for the purpose of formulating animal
15    diets and agricultural chemicals.  This item  (7)  is  exempt
16    from the provisions of Section 3-75.
17        (8)  Fuel  and  petroleum  products sold to or used by an
18    air common carrier, certified by the carrier to be  used  for
19    consumption,  shipment,  or  storage  in  the  conduct of its
20    business as an air common carrier, for a flight destined  for
21    or  returning from a location or locations outside the United
22    States without regard  to  previous  or  subsequent  domestic
23    stopovers.
24        (9)  Proceeds  of  mandatory  service  charges separately
25    stated on customers' bills for the purchase  and  consumption
26    of food and beverages acquired as an incident to the purchase
27    of  a  service  from  a  serviceman,  to  the extent that the
28    proceeds of the service charge are in  fact  turned  over  as
29    tips  or  as  a  substitute  for  tips  to  the employees who
30    participate  directly  in  preparing,  serving,  hosting   or
31    cleaning  up  the  food  or beverage function with respect to
32    which the service charge is imposed.
33        (10)  Until July 1,  2003  and  beginning  again  on  the
34    effective  date  of  this  amendatory Act of the 93rd General
 
                            -15-     SRS093 00123 NAD 00123 b
 1    Assembly, oil field  exploration,  drilling,  and  production
 2    equipment, including (i) rigs and parts of rigs, rotary rigs,
 3    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 4    goods, including casing and drill strings,  (iii)  pumps  and
 5    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
 6    individual  replacement  part  for  oil  field   exploration,
 7    drilling,  and  production  equipment, and (vi) machinery and
 8    equipment purchased for lease; but excluding  motor  vehicles
 9    required  to  be  registered under the Illinois Vehicle Code.
10    This paragraph is exempt from the provisions of Section 3-75.
11        (11)  Proceeds from the sale of photoprocessing machinery
12    and equipment, including repair and replacement  parts,  both
13    new  and  used, including that manufactured on special order,
14    certified  by  the  purchaser  to  be  used   primarily   for
15    photoprocessing,  and including photoprocessing machinery and
16    equipment purchased for lease.
17        (12)  Until July 1,  2003  and  beginning  again  on  the
18    effective  date  of  this  amendatory Act of the 93rd General
19    Assembly,  coal  exploration,  mining,  offhighway   hauling,
20    processing, maintenance, and reclamation equipment, including
21    replacement  parts  and  equipment,  and  including equipment
22    purchased for lease, but excluding motor vehicles required to
23    be registered under the Illinois Vehicle Code. This paragraph
24    is exempt from the provisions of Section 3-75.
25        (13)  Semen used for artificial insemination of livestock
26    for direct agricultural production.
27        (14)  Horses, or interests in horses, registered with and
28    meeting the requirements of any of  the  Arabian  Horse  Club
29    Registry  of  America, Appaloosa Horse Club, American Quarter
30    Horse Association, United  States  Trotting  Association,  or
31    Jockey Club, as appropriate, used for purposes of breeding or
32    racing for prizes.
33        (15)  Computers and communications equipment utilized for
34    any  hospital  purpose  and  equipment used in the diagnosis,
 
                            -16-     SRS093 00123 NAD 00123 b
 1    analysis, or treatment of hospital patients  purchased  by  a
 2    lessor who leases the equipment, under a lease of one year or
 3    longer  executed  or  in  effect at the time the lessor would
 4    otherwise be subject to the tax imposed by  this  Act,  to  a
 5    hospital  that  has  been  issued  an  active  tax  exemption
 6    identification  number  by the Department under Section 1g of
 7    the Retailers' Occupation Tax Act. If the equipment is leased
 8    in a manner that does not qualify for this  exemption  or  is
 9    used  in  any  other  non-exempt  manner, the lessor shall be
10    liable for the tax imposed under this Act or the Use Tax Act,
11    as the case may be, based on the fair  market  value  of  the
12    property  at  the  time  the  non-qualifying  use occurs.  No
13    lessor shall collect or attempt to collect an amount (however
14    designated) that purports to reimburse that  lessor  for  the
15    tax  imposed  by this Act or the Use Tax Act, as the case may
16    be, if the tax has not been paid by the lessor.  If a  lessor
17    improperly  collects  any  such  amount  from the lessee, the
18    lessee shall have a legal right to claim  a  refund  of  that
19    amount  from  the  lessor.   If,  however, that amount is not
20    refunded to the lessee for any reason, the lessor  is  liable
21    to pay that amount to the Department.
22        (16)  Personal  property purchased by a lessor who leases
23    the property, under a lease of one year or longer executed or
24    in effect at the time the lessor would otherwise  be  subject
25    to  the  tax imposed by this Act, to a governmental body that
26    has been issued an active tax exemption identification number
27    by  the  Department  under  Section  1g  of  the   Retailers'
28    Occupation  Tax  Act.   If the property is leased in a manner
29    that does not qualify for this exemption or is  used  in  any
30    other  non-exempt  manner, the lessor shall be liable for the
31    tax imposed under this Act or the Use Tax Act,  as  the  case
32    may be, based on the fair market value of the property at the
33    time  the non-qualifying use occurs.  No lessor shall collect
34    or attempt to collect an  amount  (however  designated)  that
 
                            -17-     SRS093 00123 NAD 00123 b
 1    purports to reimburse that lessor for the tax imposed by this
 2    Act  or  the  Use Tax Act, as the case may be, if the tax has
 3    not been paid by the lessor.  If a lessor improperly collects
 4    any such amount from the lessee,  the  lessee  shall  have  a
 5    legal right to claim a refund of that amount from the lessor.
 6    If,  however,  that  amount is not refunded to the lessee for
 7    any reason, the lessor is liable to pay that  amount  to  the
 8    Department.
 9        (17)  Beginning  with  taxable  years  ending on or after
10    December 31, 1995 and ending with taxable years ending on  or
11    before  December  31, 2004, personal property that is donated
12    for disaster relief to  be  used  in  a  State  or  federally
13    declared disaster area in Illinois or bordering Illinois by a
14    manufacturer  or retailer that is registered in this State to
15    a   corporation,   society,   association,   foundation,   or
16    institution that  has  been  issued  a  sales  tax  exemption
17    identification  number by the Department that assists victims
18    of the disaster who reside within the declared disaster area.
19        (18)  Beginning with taxable years  ending  on  or  after
20    December  31, 1995 and ending with taxable years ending on or
21    before December 31, 2004, personal property that is  used  in
22    the  performance  of  infrastructure  repairs  in this State,
23    including but not limited to  municipal  roads  and  streets,
24    access  roads,  bridges,  sidewalks,  waste disposal systems,
25    water and  sewer  line  extensions,  water  distribution  and
26    purification  facilities,  storm water drainage and retention
27    facilities, and sewage treatment facilities, resulting from a
28    State or federally declared disaster in Illinois or bordering
29    Illinois  when  such  repairs  are  initiated  on  facilities
30    located in the declared disaster area within 6  months  after
31    the disaster.
32        (19)  Beginning   July   1,  1999,  game  or  game  birds
33    purchased at a "game breeding and hunting preserve  area"  or
34    an  "exotic game hunting area" as those terms are used in the
 
                            -18-     SRS093 00123 NAD 00123 b
 1    Wildlife Code or at  a  hunting  enclosure  approved  through
 2    rules  adopted  by the Department of Natural Resources.  This
 3    paragraph is exempt from the provisions of Section 3-75.
 4        (20)  A motor vehicle, as that term is defined in Section
 5    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
 6    corporation, limited liability company, society, association,
 7    foundation,   or   institution  that  is  determined  by  the
 8    Department to  be  organized  and  operated  exclusively  for
 9    educational  purposes.   For  purposes  of this exemption, "a
10    corporation, limited liability company, society, association,
11    foundation, or institution organized and operated exclusively
12    for educational  purposes"  means  all  tax-supported  public
13    schools, private schools that offer systematic instruction in
14    useful  branches  of  learning  by  methods  common to public
15    schools  and  that  compare  favorably  in  their  scope  and
16    intensity with the course of study presented in tax-supported
17    schools, and vocational or technical  schools  or  institutes
18    organized  and  operated  exclusively  to provide a course of
19    study of not less than  6  weeks  duration  and  designed  to
20    prepare  individuals to follow a trade or to pursue a manual,
21    technical, mechanical, industrial,  business,  or  commercial
22    occupation.
23        (21)  Beginning  January  1,  2000,   personal  property,
24    including  food, purchased through fundraising events for the
25    benefit of  a  public  or  private  elementary  or  secondary
26    school,  a  group  of  those  schools,  or one or more school
27    districts if the events are sponsored by an entity recognized
28    by the school district that consists primarily of  volunteers
29    and  includes  parents  and  teachers of the school children.
30    This paragraph does not apply to fundraising events  (i)  for
31    the benefit of private home instruction or (ii) for which the
32    fundraising  entity  purchases  the personal property sold at
33    the events from another individual or entity  that  sold  the
34    property  for the purpose of resale by the fundraising entity
 
                            -19-     SRS093 00123 NAD 00123 b
 1    and that profits from the sale  to  the  fundraising  entity.
 2    This paragraph is exempt from the provisions of Section 3-75.
 3        (22)  Beginning  January 1, 2000 and through December 31,
 4    2001, new or used automatic vending machines that prepare and
 5    serve hot food and beverages,  including  coffee,  soup,  and
 6    other  items,  and  replacement  parts  for  these  machines.
 7    Beginning January 1, 2002 and through June 30, 2003, machines
 8    and  parts  for  machines  used  in commercial, coin-operated
 9    amusement and vending business if a use or occupation tax  is
10    paid  on  the  gross  receipts  derived  from  the use of the
11    commercial, coin-operated  amusement  and  vending  machines.
12    This paragraph is exempt from the provisions of Section 3-75.
13        (23)  Food  for  human consumption that is to be consumed
14    off the premises where  it  is  sold  (other  than  alcoholic
15    beverages,  soft  drinks, and food that has been prepared for
16    immediate consumption) and prescription  and  nonprescription
17    medicines,  drugs,  medical  appliances,  and  insulin, urine
18    testing materials, syringes, and needles used  by  diabetics,
19    for  human  use, when purchased for use by a person receiving
20    medical assistance under Article 5 of the Illinois Public Aid
21    Code who resides in a licensed long-term  care  facility,  as
22    defined in the Nursing Home Care Act.
23        (24)  Beginning  on the effective date of this amendatory
24    Act   of   the   92nd   General   Assembly,   computers   and
25    communications equipment utilized for  any  hospital  purpose
26    and  equipment  used in the diagnosis, analysis, or treatment
27    of hospital patients purchased by a  lessor  who  leases  the
28    equipment, under a lease of one year or longer executed or in
29    effect  at  the time the lessor would otherwise be subject to
30    the tax imposed by this Act, to  a  hospital  that  has  been
31    issued  an  active tax exemption identification number by the
32    Department under Section 1g of the Retailers' Occupation  Tax
33    Act.   If  the  equipment is leased in a manner that does not
34    qualify for this exemption or is used in any other  nonexempt
 
                            -20-     SRS093 00123 NAD 00123 b
 1    manner,  the lessor shall be liable for the tax imposed under
 2    this Act or the Use Tax Act, as the case may be, based on the
 3    fair  market  value  of  the  property  at   the   time   the
 4    nonqualifying  use occurs. No lessor shall collect or attempt
 5    to collect an amount (however designated)  that  purports  to
 6    reimburse  that lessor for the tax imposed by this Act or the
 7    Use Tax Act, as the case may be, if the tax has not been paid
 8    by the lessor.  If a  lessor  improperly  collects  any  such
 9    amount  from  the lessee, the lessee shall have a legal right
10    to claim a refund  of  that  amount  from  the  lessor.   If,
11    however,  that  amount  is not refunded to the lessee for any
12    reason, the lessor is  liable  to  pay  that  amount  to  the
13    Department.  This  paragraph is exempt from the provisions of
14    Section 3-75.
15        (25)  Beginning on the effective date of this  amendatory
16    Act of the 92nd General Assembly, personal property purchased
17    by  a  lessor  who  leases the property, under a lease of one
18    year or longer executed or in effect at the time  the  lessor
19    would otherwise be subject to the tax imposed by this Act, to
20    a  governmental  body  that  has  been  issued  an active tax
21    exemption  identification  number  by  the  Department  under
22    Section 1g of the Retailers'  Occupation  Tax  Act.   If  the
23    property is leased in a manner that does not qualify for this
24    exemption  or  is  used  in  any  other nonexempt manner, the
25    lessor shall be liable for the tax imposed under this Act  or
26    the Use Tax Act, as the case may be, based on the fair market
27    value  of  the  property  at  the  time the nonqualifying use
28    occurs.  No lessor shall collect or  attempt  to  collect  an
29    amount  (however  designated) that purports to reimburse that
30    lessor for the tax imposed by this Act or the Use Tax Act, as
31    the case may be, if the tax has not been paid by the  lessor.
32    If  a  lessor  improperly  collects  any such amount from the
33    lessee, the lessee shall have a legal right to claim a refund
34    of that amount from the lessor.  If, however, that amount  is
 
                            -21-     SRS093 00123 NAD 00123 b
 1    not  refunded  to  the  lessee  for any reason, the lessor is
 2    liable to pay that amount to the Department.  This  paragraph
 3    is exempt from the provisions of Section 3-75.
 4    (Source:  P.A.  92-16,  eff.  6-28-01;  92-35,  eff.  7-1-01;
 5    92-227,  eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484, eff.
 6    8-23-01; 92-651, eff. 7-11-02; 93-24, eff. 6-20-03.)

 7        Section 15.  The Service Occupation Tax Act is amended by
 8    changing Section 3-5 as follows:

 9        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
10        Sec. 3-5.  Exemptions.  The following  tangible  personal
11    property is exempt from the tax imposed by this Act:
12        (1)  Personal  property  sold  by a corporation, society,
13    association, foundation, institution, or organization,  other
14    than  a  limited  liability  company,  that  is organized and
15    operated as  a  not-for-profit  service  enterprise  for  the
16    benefit  of  persons 65 years of age or older if the personal
17    property was not purchased by the enterprise for the  purpose
18    of resale by the enterprise.
19        (2)  Personal  property  purchased  by  a  not-for-profit
20    Illinois  county  fair  association  for  use  in conducting,
21    operating, or promoting the county fair.
22        (3)  Personal property purchased  by  any  not-for-profit
23    arts  or  cultural  organization  that  establishes, by proof
24    required by the Department by rule, that it has  received  an
25    exemption   under  Section  501(c)(3) of the Internal Revenue
26    Code and that is organized and  operated  primarily  for  the
27    presentation  or  support  of  arts  or cultural programming,
28    activities, or services.  These  organizations  include,  but
29    are  not  limited  to,  music and dramatic arts organizations
30    such as symphony orchestras and theatrical groups,  arts  and
31    cultural  service  organizations, local arts councils, visual
32    arts organizations, and  media  arts  organizations.  On  and
 
                            -22-     SRS093 00123 NAD 00123 b
 1    after  the  effective date of this amendatory Act of the 92nd
 2    General Assembly, however, an entity otherwise  eligible  for
 3    this  exemption  shall  not make tax-free purchases unless it
 4    has an active identification number issued by the Department.
 5        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 6    silver  coinage  issued  by  the  State  of   Illinois,   the
 7    government of the United States of America, or the government
 8    of any foreign country, and bullion.
 9        (5)  Until  July  1,  2003,  graphic  arts  machinery and
10    equipment, including repair and replacement parts,  both  new
11    and used, and including that manufactured on special order or
12    purchased  for  lease,  certified by the purchaser to be used
13    primarily for graphic  arts  production.  Equipment  includes
14    chemicals  or  chemicals  acting as catalysts but only if the
15    chemicals or chemicals acting as catalysts  effect  a  direct
16    and immediate change upon a graphic arts product.
17        (6)  Personal   property   sold  by  a  teacher-sponsored
18    student  organization  affiliated  with  an   elementary   or
19    secondary school located in Illinois.
20        (7)  Farm  machinery  and  equipment,  both new and used,
21    including that manufactured on special  order,  certified  by
22    the purchaser to be used primarily for production agriculture
23    or   State   or   federal  agricultural  programs,  including
24    individual replacement parts for the machinery and equipment,
25    including machinery and equipment purchased  for  lease,  and
26    including implements of husbandry defined in Section 1-130 of
27    the  Illinois  Vehicle  Code, farm machinery and agricultural
28    chemical and fertilizer spreaders, and nurse wagons  required
29    to  be registered under Section 3-809 of the Illinois Vehicle
30    Code, but excluding  other  motor  vehicles  required  to  be
31    registered  under  the  Illinois  Vehicle Code. Horticultural
32    polyhouses or hoop houses used for propagating,  growing,  or
33    overwintering  plants  shall be considered farm machinery and
34    equipment under this item (7). Agricultural  chemical  tender
 
                            -23-     SRS093 00123 NAD 00123 b
 1    tanks  and dry boxes shall include units sold separately from
 2    a motor vehicle  required  to  be  licensed  and  units  sold
 3    mounted  on  a  motor  vehicle required to be licensed if the
 4    selling price of the tender is separately stated.
 5        Farm machinery  and  equipment  shall  include  precision
 6    farming  equipment  that  is  installed  or  purchased  to be
 7    installed on farm machinery and equipment including, but  not
 8    limited   to,   tractors,   harvesters,  sprayers,  planters,
 9    seeders, or spreaders. Precision farming equipment  includes,
10    but  is  not  limited  to,  soil  testing sensors, computers,
11    monitors, software, global positioning and  mapping  systems,
12    and other such equipment.
13        Farm  machinery  and  equipment  also includes computers,
14    sensors, software, and related equipment  used  primarily  in
15    the  computer-assisted  operation  of  production agriculture
16    facilities,  equipment,  and  activities  such  as,  but  not
17    limited to, the collection, monitoring,  and  correlation  of
18    animal  and  crop  data for the purpose of formulating animal
19    diets and agricultural chemicals.  This item  (7)  is  exempt
20    from the provisions of Section 3-55.
21        (8)  Fuel  and  petroleum  products sold to or used by an
22    air common carrier, certified by the carrier to be  used  for
23    consumption,  shipment,  or  storage  in  the  conduct of its
24    business as an air common carrier, for a flight destined  for
25    or  returning from a location or locations outside the United
26    States without regard  to  previous  or  subsequent  domestic
27    stopovers.
28        (9)  Proceeds  of  mandatory  service  charges separately
29    stated on customers' bills for the purchase  and  consumption
30    of food and beverages, to the extent that the proceeds of the
31    service  charge  are  in  fact  turned  over  as tips or as a
32    substitute for tips to the employees who participate directly
33    in preparing, serving, hosting or cleaning  up  the  food  or
34    beverage function with respect to which the service charge is
 
                            -24-     SRS093 00123 NAD 00123 b
 1    imposed.
 2        (10)  Until  July  1,  2003  and  beginning  again on the
 3    effective date of this amendatory Act  of  the  93rd  General
 4    Assembly,  oil  field  exploration,  drilling, and production
 5    equipment, including (i) rigs and parts of rigs, rotary rigs,
 6    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
 7    goods,  including  casing  and drill strings, (iii) pumps and
 8    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
 9    individual   replacement  part  for  oil  field  exploration,
10    drilling, and production equipment, and  (vi)  machinery  and
11    equipment  purchased  for lease; but excluding motor vehicles
12    required to be registered under the  Illinois  Vehicle  Code.
13    This paragraph is exempt from the provisions of Section 3-55.
14        (11)  Photoprocessing  machinery and equipment, including
15    repair and replacement parts, both new  and  used,  including
16    that   manufactured   on  special  order,  certified  by  the
17    purchaser to  be  used  primarily  for  photoprocessing,  and
18    including  photoprocessing  machinery and equipment purchased
19    for lease.
20        (12)  Until July 1,  2003  and  beginning  again  on  the
21    effective  date  of  this  amendatory Act of the 93rd General
22    Assembly,  coal  exploration,  mining,  offhighway   hauling,
23    processing, maintenance, and reclamation equipment, including
24    replacement  parts  and  equipment,  and  including equipment
25    purchased for lease, but excluding motor vehicles required to
26    be registered under the Illinois Vehicle Code. This paragraph
27    is exempt from the provisions of Section 3-55.
28        (13)  Food for human consumption that is to  be  consumed
29    off  the  premises  where  it  is  sold (other than alcoholic
30    beverages, soft drinks and food that has  been  prepared  for
31    immediate  consumption) and prescription and non-prescription
32    medicines, drugs,  medical  appliances,  and  insulin,  urine
33    testing  materials,  syringes, and needles used by diabetics,
34    for human use, when purchased for use by a  person  receiving
 
                            -25-     SRS093 00123 NAD 00123 b
 1    medical assistance under Article 5 of the Illinois Public Aid
 2    Code  who  resides  in a licensed long-term care facility, as
 3    defined in the Nursing Home Care Act.
 4        (14)  Semen used for artificial insemination of livestock
 5    for direct agricultural production.
 6        (15)  Horses, or interests in horses, registered with and
 7    meeting the requirements of any of  the  Arabian  Horse  Club
 8    Registry  of  America, Appaloosa Horse Club, American Quarter
 9    Horse Association, United  States  Trotting  Association,  or
10    Jockey Club, as appropriate, used for purposes of breeding or
11    racing for prizes.
12        (16)  Computers and communications equipment utilized for
13    any  hospital  purpose  and  equipment used in the diagnosis,
14    analysis, or treatment of hospital patients sold to a  lessor
15    who leases the equipment, under a lease of one year or longer
16    executed  or  in  effect  at  the  time of the purchase, to a
17    hospital  that  has  been  issued  an  active  tax  exemption
18    identification number by the Department under Section  1g  of
19    the Retailers' Occupation Tax Act.
20        (17)  Personal  property  sold to a lessor who leases the
21    property, under a lease of one year or longer executed or  in
22    effect  at  the  time of the purchase, to a governmental body
23    that has been issued an active tax  exemption  identification
24    number  by  the Department under Section 1g of the Retailers'
25    Occupation Tax Act.
26        (18)  Beginning with taxable years  ending  on  or  after
27    December  31, 1995 and ending with taxable years ending on or
28    before December 31, 2004, personal property that  is  donated
29    for  disaster  relief  to  be  used  in  a State or federally
30    declared disaster area in Illinois or bordering Illinois by a
31    manufacturer or retailer that is registered in this State  to
32    a   corporation,   society,   association,   foundation,   or
33    institution  that  has  been  issued  a  sales  tax exemption
34    identification number by the Department that assists  victims
 
                            -26-     SRS093 00123 NAD 00123 b
 1    of the disaster who reside within the declared disaster area.
 2        (19)  Beginning  with  taxable  years  ending on or after
 3    December 31, 1995 and ending with taxable years ending on  or
 4    before  December  31, 2004, personal property that is used in
 5    the performance of  infrastructure  repairs  in  this  State,
 6    including  but  not  limited  to municipal roads and streets,
 7    access roads, bridges,  sidewalks,  waste  disposal  systems,
 8    water  and  sewer  line  extensions,  water  distribution and
 9    purification facilities, storm water drainage  and  retention
10    facilities, and sewage treatment facilities, resulting from a
11    State or federally declared disaster in Illinois or bordering
12    Illinois  when  such  repairs  are  initiated  on  facilities
13    located  in  the declared disaster area within 6 months after
14    the disaster.
15        (20)  Beginning July 1, 1999, game or game birds sold  at
16    a  "game  breeding  and  hunting preserve area" or an "exotic
17    game hunting area" as those terms are used  in  the  Wildlife
18    Code or at a hunting enclosure approved through rules adopted
19    by  the  Department  of Natural Resources.  This paragraph is
20    exempt from the provisions of Section 3-55.
21        (21)  A motor vehicle, as that term is defined in Section
22    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
23    corporation, limited liability company, society, association,
24    foundation,   or   institution  that  is  determined  by  the
25    Department to  be  organized  and  operated  exclusively  for
26    educational  purposes.   For  purposes  of this exemption, "a
27    corporation, limited liability company, society, association,
28    foundation, or institution organized and operated exclusively
29    for educational  purposes"  means  all  tax-supported  public
30    schools, private schools that offer systematic instruction in
31    useful  branches  of  learning  by  methods  common to public
32    schools  and  that  compare  favorably  in  their  scope  and
33    intensity with the course of study presented in tax-supported
34    schools, and vocational or technical  schools  or  institutes
 
                            -27-     SRS093 00123 NAD 00123 b
 1    organized  and  operated  exclusively  to provide a course of
 2    study of not less than  6  weeks  duration  and  designed  to
 3    prepare  individuals to follow a trade or to pursue a manual,
 4    technical, mechanical, industrial,  business,  or  commercial
 5    occupation.
 6        (22)  Beginning  January  1,  2000,   personal  property,
 7    including  food, purchased through fundraising events for the
 8    benefit of  a  public  or  private  elementary  or  secondary
 9    school,  a  group  of  those  schools,  or one or more school
10    districts if the events are sponsored by an entity recognized
11    by the school district that consists primarily of  volunteers
12    and  includes  parents  and  teachers of the school children.
13    This paragraph does not apply to fundraising events  (i)  for
14    the benefit of private home instruction or (ii) for which the
15    fundraising  entity  purchases  the personal property sold at
16    the events from another individual or entity  that  sold  the
17    property  for the purpose of resale by the fundraising entity
18    and that profits from the sale  to  the  fundraising  entity.
19    This paragraph is exempt from the provisions of Section 3-55.
20        (23)  Beginning  January 1, 2000 and through December 31,
21    2001, new or used automatic vending machines that prepare and
22    serve hot food and beverages,  including  coffee,  soup,  and
23    other  items,  and  replacement  parts  for  these  machines.
24    Beginning January 1, 2002 and through June 30, 2003, machines
25    and  parts  for  machines  used  in commercial, coin-operated
26    amusement and vending business if a use or occupation tax  is
27    paid  on  the  gross  receipts  derived  from  the use of the
28    commercial, coin-operated  amusement  and  vending  machines.
29    This paragraph is exempt from the provisions of Section 3-55.
30        (24)  Beginning  on the effective date of this amendatory
31    Act   of   the   92nd   General   Assembly,   computers   and
32    communications equipment utilized for  any  hospital  purpose
33    and  equipment  used in the diagnosis, analysis, or treatment
34    of  hospital  patients  sold  to  a  lessor  who  leases  the
 
                            -28-     SRS093 00123 NAD 00123 b
 1    equipment, under a lease of one year or longer executed or in
 2    effect at the time of the purchase, to a  hospital  that  has
 3    been  issued an active tax exemption identification number by
 4    the Department under Section 1g of the Retailers'  Occupation
 5    Tax  Act.   This  paragraph  is exempt from the provisions of
 6    Section 3-55.
 7        (25)  Beginning on the effective date of this  amendatory
 8    Act of the 92nd General Assembly, personal property sold to a
 9    lessor  who leases the property, under a lease of one year or
10    longer executed or in effect at the time of the purchase,  to
11    a  governmental  body  that  has  been  issued  an active tax
12    exemption  identification  number  by  the  Department  under
13    Section 1g  of  the  Retailers'  Occupation  Tax  Act.   This
14    paragraph is exempt from the provisions of Section 3-55.
15        (26)  Beginning  on  January  1,  2002, tangible personal
16    property purchased from an Illinois retailer  by  a  taxpayer
17    engaged  in centralized purchasing activities in Illinois who
18    will, upon receipt of the property in  Illinois,  temporarily
19    store  the  property  in  Illinois  (i)  for  the  purpose of
20    subsequently transporting it outside this State  for  use  or
21    consumption  thereafter solely outside this State or (ii) for
22    the purpose of being processed, fabricated,  or  manufactured
23    into,  attached  to,  or  incorporated  into  other  tangible
24    personal  property  to  be transported outside this State and
25    thereafter used or consumed solely outside this  State.   The
26    Director  of  Revenue  shall,  pursuant  to  rules adopted in
27    accordance with the Illinois  Administrative  Procedure  Act,
28    issue  a  permit  to  any  taxpayer in good standing with the
29    Department who is  eligible  for  the  exemption  under  this
30    paragraph  (26).  The permit issued under this paragraph (26)
31    shall authorize the holder, to the extent and in  the  manner
32    specified  in  the  rules adopted under this Act, to purchase
33    tangible personal property from a retailer  exempt  from  the
34    taxes  imposed  by  this  Act.   Taxpayers shall maintain all
 
                            -29-     SRS093 00123 NAD 00123 b
 1    necessary books and  records  to  substantiate  the  use  and
 2    consumption of all such tangible personal property outside of
 3    the State of Illinois.
 4    (Source: P.A.   92-16,  eff.  6-28-01;  92-35,  eff.  7-1-01;
 5    92-227, eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484,  eff.
 6    8-23-01;  92-488,  eff. 8-23-01; 92-651, eff. 7-11-02; 93-24,
 7    eff. 6-20-03.)

 8        Section 20.  The Retailers' Occupation Tax Act is amended
 9    by changing Section 2-5 as follows:

10        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
11        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
12    the sale of the  following  tangible  personal  property  are
13    exempt from the tax imposed by this Act:
14        (1)  Farm chemicals.
15        (2)  Farm  machinery  and  equipment,  both new and used,
16    including that manufactured on special  order,  certified  by
17    the purchaser to be used primarily for production agriculture
18    or   State   or   federal  agricultural  programs,  including
19    individual replacement parts for the machinery and equipment,
20    including machinery and equipment purchased  for  lease,  and
21    including implements of husbandry defined in Section 1-130 of
22    the  Illinois  Vehicle  Code, farm machinery and agricultural
23    chemical and fertilizer spreaders, and nurse wagons  required
24    to  be registered under Section 3-809 of the Illinois Vehicle
25    Code, but excluding  other  motor  vehicles  required  to  be
26    registered  under  the  Illinois  Vehicle Code. Horticultural
27    polyhouses or hoop houses used for propagating,  growing,  or
28    overwintering  plants  shall be considered farm machinery and
29    equipment under this item (2). Agricultural  chemical  tender
30    tanks  and dry boxes shall include units sold separately from
31    a motor vehicle  required  to  be  licensed  and  units  sold
32    mounted  on  a  motor vehicle required to be licensed, if the
 
                            -30-     SRS093 00123 NAD 00123 b
 1    selling price of the tender is separately stated.
 2        Farm machinery  and  equipment  shall  include  precision
 3    farming  equipment  that  is  installed  or  purchased  to be
 4    installed on farm machinery and equipment including, but  not
 5    limited   to,   tractors,   harvesters,  sprayers,  planters,
 6    seeders, or spreaders. Precision farming equipment  includes,
 7    but  is  not  limited  to,  soil  testing sensors, computers,
 8    monitors, software, global positioning and  mapping  systems,
 9    and other such equipment.
10        Farm  machinery  and  equipment  also includes computers,
11    sensors, software, and related equipment  used  primarily  in
12    the  computer-assisted  operation  of  production agriculture
13    facilities,  equipment,  and  activities  such  as,  but  not
14    limited to, the collection, monitoring,  and  correlation  of
15    animal  and  crop  data for the purpose of formulating animal
16    diets and agricultural chemicals.  This item  (7)  is  exempt
17    from the provisions of Section 2-70.
18        (3)  Until  July  1,  2003,  distillation  machinery  and
19    equipment,  sold  as a unit or kit, assembled or installed by
20    the retailer, certified by the user to be used only  for  the
21    production of ethyl alcohol that will be used for consumption
22    as  motor  fuel  or  as  a  component  of  motor fuel for the
23    personal use of the user, and not subject to sale or resale.
24        (4)  Until July  1,  2003,  graphic  arts  machinery  and
25    equipment,  including  repair and replacement parts, both new
26    and used, and including that manufactured on special order or
27    purchased for lease, certified by the purchaser  to  be  used
28    primarily  for  graphic  arts  production. Equipment includes
29    chemicals or chemicals acting as catalysts but  only  if  the
30    chemicals  or  chemicals  acting as catalysts effect a direct
31    and immediate change upon a graphic arts product.
32        (5)  A motor vehicle  of  the  first  division,  a  motor
33    vehicle of the second division that is a self-contained motor
34    vehicle  designed  or permanently converted to provide living
 
                            -31-     SRS093 00123 NAD 00123 b
 1    quarters for  recreational,  camping,  or  travel  use,  with
 2    direct  walk  through  access to the living quarters from the
 3    driver's seat, or a motor vehicle of the second division that
 4    is of the van configuration designed for  the  transportation
 5    of not less than 7 nor more than 16 passengers, as defined in
 6    Section  1-146 of the Illinois Vehicle Code, that is used for
 7    automobile renting, as  defined  in  the  Automobile  Renting
 8    Occupation and Use Tax Act.
 9        (6)  Personal   property   sold  by  a  teacher-sponsored
10    student  organization  affiliated  with  an   elementary   or
11    secondary school located in Illinois.
12        (7)  Until  July 1, 2003, proceeds of that portion of the
13    selling price of a passenger car the sale of which is subject
14    to the Replacement Vehicle Tax.
15        (8)  Personal property sold to an  Illinois  county  fair
16    association  for  use  in conducting, operating, or promoting
17    the county fair.
18        (9)  Personal property sold to a not-for-profit  arts  or
19    cultural  organization that establishes, by proof required by
20    the Department by rule, that it  has  received  an  exemption
21    under Section 501(c)(3) of the Internal Revenue Code and that
22    is  organized  and operated primarily for the presentation or
23    support of  arts  or  cultural  programming,  activities,  or
24    services.   These  organizations include, but are not limited
25    to, music and dramatic arts organizations  such  as  symphony
26    orchestras  and  theatrical groups, arts and cultural service
27    organizations,   local    arts    councils,    visual    arts
28    organizations, and media arts organizations. On and after the
29    effective  date  of  this  amendatory Act of the 92nd General
30    Assembly, however, an  entity  otherwise  eligible  for  this
31    exemption  shall not make tax-free purchases unless it has an
32    active identification number issued by the Department.
33        (10)  Personal property sold by a  corporation,  society,
34    association,  foundation, institution, or organization, other
 
                            -32-     SRS093 00123 NAD 00123 b
 1    than a limited  liability  company,  that  is  organized  and
 2    operated  as  a  not-for-profit  service  enterprise  for the
 3    benefit of persons 65 years of age or older if  the  personal
 4    property  was not purchased by the enterprise for the purpose
 5    of resale by the enterprise.
 6        (11)  Personal property sold to a governmental body, to a
 7    corporation, society, association, foundation, or institution
 8    organized and operated exclusively for charitable, religious,
 9    or educational purposes, or to a not-for-profit  corporation,
10    society,    association,    foundation,    institution,    or
11    organization  that  has  no compensated officers or employees
12    and  that  is  organized  and  operated  primarily  for   the
13    recreation  of  persons  55  years of age or older. A limited
14    liability company may qualify for the  exemption  under  this
15    paragraph  only if the limited liability company is organized
16    and operated exclusively for  educational  purposes.  On  and
17    after July 1, 1987, however, no entity otherwise eligible for
18    this exemption shall make tax-free purchases unless it has an
19    active identification number issued by the Department.
20        (12)  Tangible   personal  property  sold  to  interstate
21    carriers  for  hire  for  use  as  rolling  stock  moving  in
22    interstate commerce or to lessors under leases of one year or
23    longer executed or in effect  at  the  time  of  purchase  by
24    interstate  carriers for hire for use as rolling stock moving
25    in  interstate  commerce  and   equipment   operated   by   a
26    telecommunications  provider, licensed as a common carrier by
27    the Federal Communications Commission, which  is  permanently
28    installed  in  or  affixed  to  aircraft moving in interstate
29    commerce.
30        (12-5)  On and after July 1, 2003, motor vehicles of  the
31    second  division  with  a  gross  vehicle weight in excess of
32    8,000 pounds that are subject to the commercial  distribution
33    fee  imposed  under  Section  3-815.1 of the Illinois Vehicle
34    Code. This exemption applies to repair and replacement  parts
 
                            -33-     SRS093 00123 NAD 00123 b
 1    added  after  the initial purchase of such a motor vehicle if
 2    that motor vehicle is used in a manner that would qualify for
 3    the rolling stock exemption otherwise provided  for  in  this
 4    Act.
 5        (13)  Proceeds from sales to owners, lessors, or shippers
 6    of  tangible personal property that is utilized by interstate
 7    carriers  for  hire  for  use  as  rolling  stock  moving  in
 8    interstate   commerce   and   equipment   operated    by    a
 9    telecommunications  provider, licensed as a common carrier by
10    the Federal Communications Commission, which  is  permanently
11    installed  in  or  affixed  to  aircraft moving in interstate
12    commerce.
13        (14)  Machinery and equipment that will be  used  by  the
14    purchaser,  or  a  lessee  of the purchaser, primarily in the
15    process of  manufacturing  or  assembling  tangible  personal
16    property  for  wholesale or retail sale or lease, whether the
17    sale or lease is made directly by the manufacturer or by some
18    other person, whether the materials used in the  process  are
19    owned  by  the  manufacturer or some other person, or whether
20    the sale or lease is made apart from or as an incident to the
21    seller's engaging in  the  service  occupation  of  producing
22    machines,  tools,  dies,  jigs,  patterns,  gauges,  or other
23    similar items of no commercial value on special order  for  a
24    particular purchaser.
25        (15)  Proceeds  of  mandatory  service charges separately
26    stated on customers' bills for purchase  and  consumption  of
27    food  and  beverages,  to the extent that the proceeds of the
28    service charge are in fact  turned  over  as  tips  or  as  a
29    substitute for tips to the employees who participate directly
30    in  preparing,  serving,  hosting  or cleaning up the food or
31    beverage function with respect to which the service charge is
32    imposed.
33        (16)  Petroleum products  sold  to  a  purchaser  if  the
34    seller  is prohibited by federal law from charging tax to the
 
                            -34-     SRS093 00123 NAD 00123 b
 1    purchaser.
 2        (17)  Tangible personal property sold to a common carrier
 3    by rail or motor that receives the physical possession of the
 4    property in Illinois and that  transports  the  property,  or
 5    shares  with  another common carrier in the transportation of
 6    the property, out of Illinois on a standard uniform  bill  of
 7    lading  showing  the seller of the property as the shipper or
 8    consignor of the property to a destination outside  Illinois,
 9    for use outside Illinois.
10        (18)  Legal  tender,  currency,  medallions,  or  gold or
11    silver  coinage  issued  by  the  State  of   Illinois,   the
12    government of the United States of America, or the government
13    of any foreign country, and bullion.
14        (19)  Until  July  1  2003  and  beginning  again  on the
15    effective date of this amendatory Act  of  the  93rd  General
16    Assembly,  oil  field  exploration,  drilling, and production
17    equipment, including (i) rigs and parts of rigs, rotary rigs,
18    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
19    goods,  including  casing  and drill strings, (iii) pumps and
20    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
21    individual   replacement  part  for  oil  field  exploration,
22    drilling, and production equipment, and  (vi)  machinery  and
23    equipment  purchased  for lease; but excluding motor vehicles
24    required to be registered under the  Illinois  Vehicle  Code.
25    This paragraph is exempt from the provisions of Section 2-70.
26        (20)  Photoprocessing  machinery and equipment, including
27    repair and replacement parts, both new  and  used,  including
28    that   manufactured   on  special  order,  certified  by  the
29    purchaser to  be  used  primarily  for  photoprocessing,  and
30    including  photoprocessing  machinery and equipment purchased
31    for lease.
32        (21)  Until July 1,  2003  and  beginning  again  on  the
33    effective  date  of  this  amendatory Act of the 93rd General
34    Assembly,  coal  exploration,  mining,  offhighway   hauling,
 
                            -35-     SRS093 00123 NAD 00123 b
 1    processing, maintenance, and reclamation equipment, including
 2    replacement  parts  and  equipment,  and  including equipment
 3    purchased for lease, but excluding motor vehicles required to
 4    be registered under the Illinois Vehicle Code. This paragraph
 5    is exempt from the provisions of Section 2-70.
 6        (22)  Fuel and petroleum products sold to or used  by  an
 7    air  carrier,  certified  by  the  carrier  to  be  used  for
 8    consumption,  shipment,  or  storage  in  the  conduct of its
 9    business as an air common carrier, for a flight destined  for
10    or  returning from a location or locations outside the United
11    States without regard  to  previous  or  subsequent  domestic
12    stopovers.
13        (23)  A  transaction  in  which  the  purchase  order  is
14    received  by  a  florist who is located outside Illinois, but
15    who has a florist located in Illinois deliver the property to
16    the purchaser or the purchaser's donee in Illinois.
17        (24)  Fuel consumed or used in the  operation  of  ships,
18    barges,  or  vessels  that  are  used primarily in or for the
19    transportation of property or the conveyance of  persons  for
20    hire  on  rivers  bordering  on  this  State  if  the fuel is
21    delivered by the seller to the purchaser's  barge,  ship,  or
22    vessel while it is afloat upon that bordering river.
23        (25)  A motor vehicle sold in this State to a nonresident
24    even though the motor vehicle is delivered to the nonresident
25    in  this  State,  if the motor vehicle is not to be titled in
26    this State, and if a drive-away permit is issued to the motor
27    vehicle as provided in Section 3-603 of the Illinois  Vehicle
28    Code or if the nonresident purchaser has vehicle registration
29    plates to transfer to the motor vehicle upon returning to his
30    or  her home state.  The issuance of the drive-away permit or
31    having the out-of-state registration plates to be transferred
32    is prima facie evidence that the motor vehicle  will  not  be
33    titled in this State.
34        (26)  Semen used for artificial insemination of livestock
 
                            -36-     SRS093 00123 NAD 00123 b
 1    for direct agricultural production.
 2        (27)  Horses, or interests in horses, registered with and
 3    meeting  the  requirements  of  any of the Arabian Horse Club
 4    Registry of America, Appaloosa Horse Club,  American  Quarter
 5    Horse  Association,  United  States  Trotting Association, or
 6    Jockey Club, as appropriate, used for purposes of breeding or
 7    racing for prizes.
 8        (28)  Computers and communications equipment utilized for
 9    any hospital purpose and equipment  used  in  the  diagnosis,
10    analysis,  or treatment of hospital patients sold to a lessor
11    who leases the equipment, under a lease of one year or longer
12    executed or in effect at the  time  of  the  purchase,  to  a
13    hospital  that  has  been  issued  an  active  tax  exemption
14    identification  number  by the Department under Section 1g of
15    this Act.
16        (29)  Personal property sold to a lessor who  leases  the
17    property,  under a lease of one year or longer executed or in
18    effect at the time of the purchase, to  a  governmental  body
19    that  has  been issued an active tax exemption identification
20    number by the Department under Section 1g of this Act.
21        (30)  Beginning with taxable years  ending  on  or  after
22    December  31, 1995 and ending with taxable years ending on or
23    before December 31, 2004, personal property that  is  donated
24    for  disaster  relief  to  be  used  in  a State or federally
25    declared disaster area in Illinois or bordering Illinois by a
26    manufacturer or retailer that is registered in this State  to
27    a   corporation,   society,   association,   foundation,   or
28    institution  that  has  been  issued  a  sales  tax exemption
29    identification number by the Department that assists  victims
30    of the disaster who reside within the declared disaster area.
31        (31)  Beginning  with  taxable  years  ending on or after
32    December 31, 1995 and ending with taxable years ending on  or
33    before  December  31, 2004, personal property that is used in
34    the performance of  infrastructure  repairs  in  this  State,
 
                            -37-     SRS093 00123 NAD 00123 b
 1    including  but  not  limited  to municipal roads and streets,
 2    access roads, bridges,  sidewalks,  waste  disposal  systems,
 3    water  and  sewer  line  extensions,  water  distribution and
 4    purification facilities, storm water drainage  and  retention
 5    facilities, and sewage treatment facilities, resulting from a
 6    State or federally declared disaster in Illinois or bordering
 7    Illinois  when  such  repairs  are  initiated  on  facilities
 8    located  in  the declared disaster area within 6 months after
 9    the disaster.
10        (32)  Beginning July 1, 1999, game or game birds sold  at
11    a  "game  breeding  and  hunting preserve area" or an "exotic
12    game hunting area" as those terms are used  in  the  Wildlife
13    Code or at a hunting enclosure approved through rules adopted
14    by  the  Department  of Natural Resources.  This paragraph is
15    exempt from the provisions of Section 2-70.
16        (33)  A motor vehicle, as that term is defined in Section
17    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
18    corporation, limited liability company, society, association,
19    foundation,   or   institution  that  is  determined  by  the
20    Department to  be  organized  and  operated  exclusively  for
21    educational  purposes.   For  purposes  of this exemption, "a
22    corporation, limited liability company, society, association,
23    foundation, or institution organized and operated exclusively
24    for educational  purposes"  means  all  tax-supported  public
25    schools, private schools that offer systematic instruction in
26    useful  branches  of  learning  by  methods  common to public
27    schools  and  that  compare  favorably  in  their  scope  and
28    intensity with the course of study presented in tax-supported
29    schools, and vocational or technical  schools  or  institutes
30    organized  and  operated  exclusively  to provide a course of
31    study of not less than  6  weeks  duration  and  designed  to
32    prepare  individuals to follow a trade or to pursue a manual,
33    technical, mechanical, industrial,  business,  or  commercial
34    occupation.
 
                            -38-     SRS093 00123 NAD 00123 b
 1        (34)  Beginning   January  1,  2000,  personal  property,
 2    including food, purchased through fundraising events for  the
 3    benefit  of  a  public  or  private  elementary  or secondary
 4    school, a group of those  schools,  or  one  or  more  school
 5    districts if the events are sponsored by an entity recognized
 6    by  the school district that consists primarily of volunteers
 7    and includes parents and teachers  of  the  school  children.
 8    This  paragraph  does not apply to fundraising events (i) for
 9    the benefit of private home instruction or (ii) for which the
10    fundraising entity purchases the personal  property  sold  at
11    the  events  from  another individual or entity that sold the
12    property for the purpose of resale by the fundraising  entity
13    and  that  profits  from  the sale to the fundraising entity.
14    This paragraph is exempt from the provisions of Section 2-70.
15        (35)  Beginning January 1, 2000 and through December  31,
16    2001, new or used automatic vending machines that prepare and
17    serve  hot  food  and  beverages, including coffee, soup, and
18    other  items,  and  replacement  parts  for  these  machines.
19    Beginning January 1, 2002 and through June 30, 2003, machines
20    and parts for  machines  used  in  commercial,  coin-operated
21    amusement  and vending business if a use or occupation tax is
22    paid on the gross  receipts  derived  from  the  use  of  the
23    commercial,  coin-operated  amusement  and  vending machines.
24    This paragraph is exempt from the provisions of Section 2-70.
25        (35-5)  Food for human consumption that is to be consumed
26    off the premises where  it  is  sold  (other  than  alcoholic
27    beverages,  soft  drinks, and food that has been prepared for
28    immediate consumption) and prescription  and  nonprescription
29    medicines,  drugs,  medical  appliances,  and  insulin, urine
30    testing materials, syringes, and needles used  by  diabetics,
31    for  human  use, when purchased for use by a person receiving
32    medical assistance under Article 5 of the Illinois Public Aid
33    Code who resides in a licensed long-term  care  facility,  as
34    defined in the Nursing Home Care Act.
 
                            -39-     SRS093 00123 NAD 00123 b
 1        (36)  Beginning    August    2,   2001,   computers   and
 2    communications equipment utilized for  any  hospital  purpose
 3    and  equipment  used in the diagnosis, analysis, or treatment
 4    of  hospital  patients  sold  to  a  lessor  who  leases  the
 5    equipment, under a lease of one year or longer executed or in
 6    effect at the time of the purchase, to a  hospital  that  has
 7    been  issued an active tax exemption identification number by
 8    the Department under Section 1g of this Act.  This  paragraph
 9    is exempt from the provisions of Section 2-70.
10        (37)  Beginning August 2, 2001, personal property sold to
11    a  lessor  who leases the property, under a lease of one year
12    or longer executed or in effect at the time of the  purchase,
13    to  a  governmental  body  that has been issued an active tax
14    exemption  identification  number  by  the  Department  under
15    Section 1g of this Act.  This paragraph is  exempt  from  the
16    provisions of Section 2-70.
17        (38)  Beginning  on  January  1,  2002, tangible personal
18    property purchased from an Illinois retailer  by  a  taxpayer
19    engaged  in centralized purchasing activities in Illinois who
20    will, upon receipt of the property in  Illinois,  temporarily
21    store  the  property  in  Illinois  (i)  for  the  purpose of
22    subsequently transporting it outside this State  for  use  or
23    consumption  thereafter solely outside this State or (ii) for
24    the purpose of being processed, fabricated,  or  manufactured
25    into,  attached  to,  or  incorporated  into  other  tangible
26    personal  property  to  be transported outside this State and
27    thereafter used or consumed solely outside this  State.   The
28    Director  of  Revenue  shall,  pursuant  to  rules adopted in
29    accordance with the Illinois  Administrative  Procedure  Act,
30    issue  a  permit  to  any  taxpayer in good standing with the
31    Department who is  eligible  for  the  exemption  under  this
32    paragraph  (38).  The permit issued under this paragraph (38)
33    shall authorize the holder, to the extent and in  the  manner
34    specified  in  the  rules adopted under this Act, to purchase
 
                            -40-     SRS093 00123 NAD 00123 b
 1    tangible personal property from a retailer  exempt  from  the
 2    taxes  imposed  by  this  Act.   Taxpayers shall maintain all
 3    necessary books and  records  to  substantiate  the  use  and
 4    consumption of all such tangible personal property outside of
 5    the State of Illinois.
 6    (Source: P.A.   92-16,  eff.  6-28-01;  92-35,  eff.  7-1-01;
 7    92-227, eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484,  eff.
 8    8-23-01;  92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 92-680,
 9    eff. 7-16-02;  93-23,  eff.  6-20-03;  93-24,  eff.  6-20-03;
10    revised 9-11-03.)

11        Section  99.  Effective date.  This Act takes effect upon
12    becoming law.