93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2836

 

Introduced 2/5/2004, by Dale E. Risinger

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/215
35 ILCS 105/3-5  from Ch. 120, par. 439.3-5
35 ILCS 105/3-61
35 ILCS 110/2  from Ch. 120, par. 439.32
35 ILCS 110/3-51
35 ILCS 115/2  from Ch. 120, par. 439.102
35 ILCS 115/2d
35 ILCS 120/2-5  from Ch. 120, par. 441-5
35 ILCS 120/2-51
625 ILCS 5/3-815.1

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the rolling stock exemption reverts on July 1, 2005 to its form prior to July 1, 2003. Amends the Illinois Income Tax Act. Provides that the transportation employee credit no longer applies for taxable years beginning on or after January 1, 2006. Amends the Illinois Vehicle Code. Provides that the commercial distribution fee shall be reduced each registration year and eliminated beginning with the registration year that begins on July 1, 2005. Makes other changes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2836 LRB093 20393 SJM 46165 b

1     AN ACT concerning taxes.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Income Tax Act is amended by
5 changing Section 215 as follows:
 
6     (35 ILCS 5/215)
7     Sec. 215. Transportation Employee Credit.
8     (a) For each taxable year beginning on or after January 1,
9 2004 and on or before December 31, 2005, a qualified employer
10 shall be allowed a credit against the tax imposed by
11 subsections (a) and (b) of Section 201 of this Act in the
12 amount of $50 for each eligible employee employed by the
13 taxpayer as of the last day of the taxable year.
14     (b) For purposes of this Section, "qualified employer"
15 means:
16         (1) any employer who pays a commercial distribution fee
17     under Section 3-815.1 of the Illinois Vehicle Code during
18     the taxable year; or
19         (2) any employer who, as of the end of the taxable
20     year, has one or more employees whose compensation is
21     subject to tax only by the employee's state of residence
22     pursuant to 49 U.S.C 14503(a)(1).
23     (c) For purposes of this Section, "employee" includes an
24 individual who is treated as an employee of the taxpayer under
25 Section 401(c) of the Internal Revenue Code and whose actual
26 assigned duties are such that, if the individual were a
27 common-law employee performing such duties in 2 or more states,
28 the individual's compensation would be subject to tax only by
29 the individual's state of residence pursuant to 49 U.S.C.
30 14503(a)(1).
31     (d) An employee is an "eligible employee" only if all of
32 the following criteria are met:

 

 

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1         (1) The employee is an operator of a motor vehicle;
2         (2) The employee's compensation, pursuant to 49 U.S.C.
3     14503(a)(1), is subject to tax only by the employee's state
4     of residence, or would be subject to tax only by the
5     employee's state of residence if the employee's actual
6     duties were performed in 2 or more states;
7         (3) As of the end of the taxable year for which the
8     credit is claimed, the employee is a resident of this State
9     for purposes of this Act and 49 U.S.C. 14503(a)(1); and
10         (4) The employee is a full-time employee working 30 or
11     more hours per week for 180 consecutive days; provided that
12     such 180-day period may be completed after the end of the
13     taxable year for which the credit under this Section is
14     claimed.
15     (e) For partners, shareholders of subchapter S
16 corporations, and owners of limited liability companies, if the
17 limited liability company is treated as a partnership for
18 purposes of federal and State income taxation, there shall be
19 allowed a credit under this Section to be determined in
20 accordance with the determination of income and distributive
21 share of income under Sections 702 and 704 and subchapter S of
22 the Internal Revenue Code.
23     (f) Any credit allowed under this Section which is unused
24 in the year the credit is earned may be carried forward to each
25 of the 5 taxable years following the year for which the credit
26 is first computed until it is used. This credit shall be
27 applied first to the earliest year for which there is a
28 liability. If there is a credit under this Section from more
29 than one tax year that is available to offset a liability, the
30 earliest credit arising under this Section shall be applied
31 first.
32     (g) (Blank) This Section is exempt from the provisions of
33 Section 250 of this Act.
34     (h) The Department of Revenue shall promulgate such rules
35 and regulations as may be deemed necessary to carry out the
36 purposes of this Section.

 

 

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1 (Source: P.A. 93-23, eff. 6-20-03.)
 
2     Section 10. The Use Tax Act is amended by changing
3 Sections 3-5 and 3-61 as follows:
 
4     (35 ILCS 105/3-5)   (from Ch. 120, par. 439.3-5)
5     Sec. 3-5. Exemptions. Use of the following tangible
6 personal property is exempt from the tax imposed by this Act:
7     (1) Personal property purchased from a corporation,
8 society, association, foundation, institution, or
9 organization, other than a limited liability company, that is
10 organized and operated as a not-for-profit service enterprise
11 for the benefit of persons 65 years of age or older if the
12 personal property was not purchased by the enterprise for the
13 purpose of resale by the enterprise.
14     (2) Personal property purchased by a not-for-profit
15 Illinois county fair association for use in conducting,
16 operating, or promoting the county fair.
17     (3) Personal property purchased by a not-for-profit arts or
18 cultural organization that establishes, by proof required by
19 the Department by rule, that it has received an exemption under
20 Section 501(c)(3) of the Internal Revenue Code and that is
21 organized and operated primarily for the presentation or
22 support of arts or cultural programming, activities, or
23 services. These organizations include, but are not limited to,
24 music and dramatic arts organizations such as symphony
25 orchestras and theatrical groups, arts and cultural service
26 organizations, local arts councils, visual arts organizations,
27 and media arts organizations. On and after the effective date
28 of this amendatory Act of the 92nd General Assembly, however,
29 an entity otherwise eligible for this exemption shall not make
30 tax-free purchases unless it has an active identification
31 number issued by the Department.
32     (4) Personal property purchased by a governmental body, by
33 a corporation, society, association, foundation, or
34 institution organized and operated exclusively for charitable,

 

 

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1 religious, or educational purposes, or by a not-for-profit
2 corporation, society, association, foundation, institution, or
3 organization that has no compensated officers or employees and
4 that is organized and operated primarily for the recreation of
5 persons 55 years of age or older. A limited liability company
6 may qualify for the exemption under this paragraph only if the
7 limited liability company is organized and operated
8 exclusively for educational purposes. On and after July 1,
9 1987, however, no entity otherwise eligible for this exemption
10 shall make tax-free purchases unless it has an active exemption
11 identification number issued by the Department.
12     (5) Until July 1, 2003, a passenger car that is a
13 replacement vehicle to the extent that the purchase price of
14 the car is subject to the Replacement Vehicle Tax.
15     (6) Until July 1, 2003, graphic arts machinery and
16 equipment, including repair and replacement parts, both new and
17 used, and including that manufactured on special order,
18 certified by the purchaser to be used primarily for graphic
19 arts production, and including machinery and equipment
20 purchased for lease. Equipment includes chemicals or chemicals
21 acting as catalysts but only if the chemicals or chemicals
22 acting as catalysts effect a direct and immediate change upon a
23 graphic arts product.
24     (7) Farm chemicals.
25     (8) Legal tender, currency, medallions, or gold or silver
26 coinage issued by the State of Illinois, the government of the
27 United States of America, or the government of any foreign
28 country, and bullion.
29     (9) Personal property purchased from a teacher-sponsored
30 student organization affiliated with an elementary or
31 secondary school located in Illinois.
32     (10) A motor vehicle of the first division, a motor vehicle
33 of the second division that is a self-contained motor vehicle
34 designed or permanently converted to provide living quarters
35 for recreational, camping, or travel use, with direct walk
36 through to the living quarters from the driver's seat, or a

 

 

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1 motor vehicle of the second division that is of the van
2 configuration designed for the transportation of not less than
3 7 nor more than 16 passengers, as defined in Section 1-146 of
4 the Illinois Vehicle Code, that is used for automobile renting,
5 as defined in the Automobile Renting Occupation and Use Tax
6 Act.
7     (11) Farm machinery and equipment, both new and used,
8 including that manufactured on special order, certified by the
9 purchaser to be used primarily for production agriculture or
10 State or federal agricultural programs, including individual
11 replacement parts for the machinery and equipment, including
12 machinery and equipment purchased for lease, and including
13 implements of husbandry defined in Section 1-130 of the
14 Illinois Vehicle Code, farm machinery and agricultural
15 chemical and fertilizer spreaders, and nurse wagons required to
16 be registered under Section 3-809 of the Illinois Vehicle Code,
17 but excluding other motor vehicles required to be registered
18 under the Illinois Vehicle Code. Horticultural polyhouses or
19 hoop houses used for propagating, growing, or overwintering
20 plants shall be considered farm machinery and equipment under
21 this item (11). Agricultural chemical tender tanks and dry
22 boxes shall include units sold separately from a motor vehicle
23 required to be licensed and units sold mounted on a motor
24 vehicle required to be licensed if the selling price of the
25 tender is separately stated.
26     Farm machinery and equipment shall include precision
27 farming equipment that is installed or purchased to be
28 installed on farm machinery and equipment including, but not
29 limited to, tractors, harvesters, sprayers, planters, seeders,
30 or spreaders. Precision farming equipment includes, but is not
31 limited to, soil testing sensors, computers, monitors,
32 software, global positioning and mapping systems, and other
33 such equipment.
34     Farm machinery and equipment also includes computers,
35 sensors, software, and related equipment used primarily in the
36 computer-assisted operation of production agriculture

 

 

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1 facilities, equipment, and activities such as, but not limited
2 to, the collection, monitoring, and correlation of animal and
3 crop data for the purpose of formulating animal diets and
4 agricultural chemicals. This item (11) is exempt from the
5 provisions of Section 3-90.
6     (12) Fuel and petroleum products sold to or used by an air
7 common 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 or
10 returning from a location or locations outside the United
11 States without regard to previous or subsequent domestic
12 stopovers.
13     (13) Proceeds of mandatory service charges separately
14 stated on customers' bills for the purchase and consumption of
15 food and beverages purchased at retail from a retailer, to the
16 extent that the proceeds of the service charge are in fact
17 turned over as tips or as a substitute for tips to the
18 employees who participate directly in preparing, serving,
19 hosting or cleaning up the food or beverage function with
20 respect to which the service charge is imposed.
21     (14) Until July 1, 2003, oil field exploration, drilling,
22 and production equipment, including (i) rigs and parts of rigs,
23 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
24 tubular goods, including casing and drill strings, (iii) pumps
25 and pump-jack units, (iv) storage tanks and flow lines, (v) any
26 individual replacement part for oil field exploration,
27 drilling, and production equipment, and (vi) machinery and
28 equipment purchased for lease; but excluding motor vehicles
29 required to be registered under the Illinois Vehicle Code.
30     (15) Photoprocessing machinery and equipment, including
31 repair and replacement parts, both new and used, including that
32 manufactured on special order, certified by the purchaser to be
33 used primarily for photoprocessing, and including
34 photoprocessing machinery and equipment purchased for lease.
35     (16) Until July 1, 2003, coal exploration, mining,
36 offhighway hauling, processing, maintenance, and reclamation

 

 

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1 equipment, including replacement parts and equipment, and
2 including equipment purchased for lease, but excluding motor
3 vehicles required to be registered under the Illinois Vehicle
4 Code.
5     (17) Until July 1, 2003, distillation machinery and
6 equipment, sold as a unit or kit, assembled or installed by the
7 retailer, certified by the user to be used only for the
8 production of ethyl alcohol that will be used for consumption
9 as motor fuel or as a component of motor fuel for the personal
10 use of the user, and not subject to sale or resale.
11     (18) Manufacturing and assembling machinery and equipment
12 used primarily in the process of manufacturing or assembling
13 tangible personal property for wholesale or retail sale or
14 lease, whether that sale or lease is made directly by the
15 manufacturer or by some other person, whether the materials
16 used in the process are owned by the manufacturer or some other
17 person, or whether that sale or lease is made apart from or as
18 an incident to the seller's engaging in the service occupation
19 of producing machines, tools, dies, jigs, patterns, gauges, or
20 other similar items of no commercial value on special order for
21 a particular purchaser.
22     (19) Personal property delivered to a purchaser or
23 purchaser's donee inside Illinois when the purchase order for
24 that personal property was received by a florist located
25 outside Illinois who has a florist located inside Illinois
26 deliver the personal property.
27     (20) Semen used for artificial insemination of livestock
28 for direct agricultural production.
29     (21) Horses, or interests in horses, registered with and
30 meeting the requirements of any of the Arabian Horse Club
31 Registry of America, Appaloosa Horse Club, American Quarter
32 Horse Association, United States Trotting Association, or
33 Jockey Club, as appropriate, used for purposes of breeding or
34 racing for prizes.
35     (22) Computers and communications equipment utilized for
36 any hospital purpose and equipment used in the diagnosis,

 

 

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

 

 

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1 paid by the lessor. If a lessor improperly collects any such
2 amount from the lessee, the lessee shall have a legal right to
3 claim a refund of that amount from the lessor. If, however,
4 that amount is not refunded to the lessee for any reason, the
5 lessor is liable to pay that amount to the Department.
6     (24) Beginning with taxable years ending on or after
7 December 31, 1995 and ending with taxable years ending on or
8 before December 31, 2004, personal property that is donated for
9 disaster relief to be used in a State or federally declared
10 disaster area in Illinois or bordering Illinois by a
11 manufacturer or retailer that is registered in this State to a
12 corporation, society, association, foundation, or institution
13 that has been issued a sales tax exemption identification
14 number by the Department that assists victims of the disaster
15 who reside within the declared disaster area.
16     (25) Beginning with taxable years ending on or after
17 December 31, 1995 and ending with taxable years ending on or
18 before December 31, 2004, personal property that is used in the
19 performance of infrastructure repairs in this State, including
20 but not limited to municipal roads and streets, access roads,
21 bridges, sidewalks, waste disposal systems, water and sewer
22 line extensions, water distribution and purification
23 facilities, storm water drainage and retention facilities, and
24 sewage treatment facilities, resulting from a State or
25 federally declared disaster in Illinois or bordering Illinois
26 when such repairs are initiated on facilities located in the
27 declared disaster area within 6 months after the disaster.
28     (26) Beginning July 1, 1999, game or game birds purchased
29 at a "game breeding and hunting preserve area" or an "exotic
30 game hunting area" as those terms are used in the Wildlife Code
31 or at a hunting enclosure approved through rules adopted by the
32 Department of Natural Resources. This paragraph is exempt from
33 the provisions of Section 3-90.
34     (27) A motor vehicle, as that term is defined in Section
35 1-146 of the Illinois Vehicle Code, that is donated to a
36 corporation, limited liability company, society, association,

 

 

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1 foundation, or institution that is determined by the Department
2 to be organized and operated exclusively for educational
3 purposes. For purposes of this exemption, "a corporation,
4 limited liability company, society, association, foundation,
5 or institution organized and operated exclusively for
6 educational purposes" means all tax-supported public schools,
7 private schools that offer systematic instruction in useful
8 branches of learning by methods common to public schools and
9 that compare favorably in their scope and intensity with the
10 course of study presented in tax-supported schools, and
11 vocational or technical schools or institutes organized and
12 operated exclusively to provide a course of study of not less
13 than 6 weeks duration and designed to prepare individuals to
14 follow a trade or to pursue a manual, technical, mechanical,
15 industrial, business, or commercial occupation.
16     (28) Beginning January 1, 2000, personal property,
17 including food, purchased through fundraising events for the
18 benefit of a public or private elementary or secondary school,
19 a group of those schools, or one or more school districts if
20 the events are sponsored by an entity recognized by the school
21 district that consists primarily of volunteers and includes
22 parents and teachers of the school children. This paragraph
23 does not apply to fundraising events (i) for the benefit of
24 private home instruction or (ii) for which the fundraising
25 entity purchases the personal property sold at the events from
26 another individual or entity that sold the property for the
27 purpose of resale by the fundraising entity and that profits
28 from the sale to the fundraising entity. This paragraph is
29 exempt from the provisions of Section 3-90.
30     (29) Beginning January 1, 2000 and through December 31,
31 2001, new or used automatic vending machines that prepare and
32 serve hot food and beverages, including coffee, soup, and other
33 items, and replacement parts for these machines. Beginning
34 January 1, 2002 and through June 30, 2003, machines and parts
35 for machines used in commercial, coin-operated amusement and
36 vending business if a use or occupation tax is paid on the

 

 

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1 gross receipts derived from the use of the commercial,
2 coin-operated amusement and vending machines. This paragraph
3 is exempt from the provisions of Section 3-90.
4     (30) Food for human consumption that is to be consumed off
5 the premises where it is sold (other than alcoholic beverages,
6 soft drinks, and food that has been prepared for immediate
7 consumption) and prescription and nonprescription medicines,
8 drugs, medical appliances, and insulin, urine testing
9 materials, syringes, and needles used by diabetics, for human
10 use, when purchased for use by a person receiving medical
11 assistance under Article 5 of the Illinois Public Aid Code who
12 resides in a licensed long-term care facility, as defined in
13 the Nursing Home Care Act.
14     (31) Beginning on the effective date of this amendatory Act
15 of the 92nd General Assembly, computers and communications
16 equipment utilized for any hospital purpose and equipment used
17 in the diagnosis, analysis, or treatment of hospital patients
18 purchased by a lessor who leases the equipment, under a lease
19 of one year or longer executed or in effect at the time the
20 lessor would otherwise be subject to the tax imposed by this
21 Act, to a hospital that has been issued an active tax exemption
22 identification number by the Department under Section 1g of the
23 Retailers' Occupation Tax Act. If the equipment is leased in a
24 manner that does not qualify for this exemption or is used in
25 any other nonexempt manner, the lessor shall be liable for the
26 tax imposed under this Act or the Service Use Tax Act, as the
27 case may be, based on the fair market value of the property at
28 the time the nonqualifying use occurs. No lessor shall collect
29 or attempt to collect an amount (however designated) that
30 purports to reimburse that lessor for the tax imposed by this
31 Act or the Service Use Tax Act, as the case may be, if the tax
32 has not been paid by the lessor. If a lessor improperly
33 collects any such amount from the lessee, the lessee shall have
34 a legal right to claim a refund of that amount from the lessor.
35 If, however, that amount is not refunded to the lessee for any
36 reason, the lessor is liable to pay that amount to the

 

 

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1 Department. This paragraph is exempt from the provisions of
2 Section 3-90.
3     (32) Beginning on the effective date of this amendatory Act
4 of the 92nd General Assembly, personal property purchased by a
5 lessor who leases the property, under a lease of one year or
6 longer executed or in effect at the time the lessor would
7 otherwise be subject to the tax imposed by this Act, to a
8 governmental body that has been issued an active sales tax
9 exemption identification number by the Department under
10 Section 1g of the Retailers' Occupation Tax Act. If the
11 property is leased in a manner that does not qualify for this
12 exemption or used in any other nonexempt manner, the lessor
13 shall be liable for the tax imposed under this Act or the
14 Service Use Tax Act, as the case may be, based on the fair
15 market value of the property at the time the nonqualifying use
16 occurs. No lessor shall collect or attempt to collect an amount
17 (however designated) that purports to reimburse that lessor for
18 the tax imposed by this Act or the Service Use Tax Act, as the
19 case may be, if the tax has not been paid by the lessor. If a
20 lessor improperly collects any such amount from the lessee, the
21 lessee shall have a legal right to claim a refund of that
22 amount from the lessor. If, however, that amount is not
23 refunded to the lessee for any reason, the lessor is liable to
24 pay that amount to the Department. This paragraph is exempt
25 from the provisions of Section 3-90.
26     (33) On and after July 1, 2003 and through June 30, 2005,
27 the use in this State of motor vehicles of the second division
28 with a gross vehicle weight in excess of 8,000 pounds and that
29 are subject to the commercial distribution fee imposed under
30 Section 3-815.1 of the Illinois Vehicle Code. This exemption
31 applies to repair and replacement parts added after the initial
32 purchase of such a motor vehicle if that motor vehicle is used
33 in a manner that would qualify for the rolling stock exemption
34 otherwise provided for in this Act.
35 (Source: P.A. 92-35, eff. 7-1-01; 92-227, eff. 8-2-01; 92-337,
36 eff. 8-10-01; 92-484, eff. 8-23-01; 92-651, eff. 7-11-02;

 

 

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1 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; revised 9-11-03.)
 
2     (35 ILCS 105/3-61)
3     Sec. 3-61. Motor vehicles; use as rolling stock definition.
4 Through June 30, 2003 and beginning again on July 1, 2005, "use
5 as rolling stock moving in interstate commerce" in subsections
6 (b) and (c) of Section 3-55 means for motor vehicles, as
7 defined in Section 1-146 of the Illinois Vehicle Code, and
8 trailers, as defined in Section 1-209 of the Illinois Vehicle
9 Code, when on 15 or more occasions in a 12-month period the
10 motor vehicle and trailer has carried persons or property for
11 hire in interstate commerce, even just between points in
12 Illinois, if the motor vehicle and trailer transports persons
13 whose journeys or property whose shipments originate or
14 terminate outside Illinois. This definition applies to all
15 property purchased for the purpose of being attached to those
16 motor vehicles or trailers as a part thereof.
17     On and after July 1, 2003 and through June 30, 2005, "use
18 as rolling stock moving in interstate commerce" in paragraphs
19 (b) and (c) of Section 3-55 occurs for motor vehicles, as
20 defined in Section 1-146 of the Illinois Vehicle Code, when
21 during a 12-month period the rolling stock has carried persons
22 or property for hire in interstate commerce for 51% of its
23 total trips and transports persons whose journeys or property
24 whose shipments originate or terminate outside Illinois. On and
25 after July 1, 2003 and through June 30, 2005, trips Trips that
26 are only between points in Illinois shall not be counted as
27 interstate trips when calculating whether the tangible
28 personal property qualifies for the exemption but such trips
29 shall be included in total trips taken.
30 (Source: P.A. 93-23, eff. 6-20-03.)
 
31     Section 15. The Service Use Tax Act is amended by changing
32 Sections 2 and 3-51 as follows:
 
33     (35 ILCS 110/2)   (from Ch. 120, par. 439.32)

 

 

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1     Sec. 2. "Use" means the exercise by any person of any right
2 or power over tangible personal property incident to the
3 ownership of that property, but does not include the sale or
4 use for demonstration by him of that property in any form as
5 tangible personal property in the regular course of business.
6 "Use" does not mean the interim use of tangible personal
7 property nor the physical incorporation of tangible personal
8 property, as an ingredient or constituent, into other tangible
9 personal property, (a) which is sold in the regular course of
10 business or (b) which the person incorporating such ingredient
11 or constituent therein has undertaken at the time of such
12 purchase to cause to be transported in interstate commerce to
13 destinations outside the State of Illinois.
14     "Purchased from a serviceman" means the acquisition of the
15 ownership of, or title to, tangible personal property through a
16 sale of service.
17     "Purchaser" means any person who, through a sale of
18 service, acquires the ownership of, or title to, any tangible
19 personal property.
20     "Cost price" means the consideration paid by the serviceman
21 for a purchase valued in money, whether paid in money or
22 otherwise, including cash, credits and services, and shall be
23 determined without any deduction on account of the supplier's
24 cost of the property sold or on account of any other expense
25 incurred by the supplier. When a serviceman contracts out part
26 or all of the services required in his sale of service, it
27 shall be presumed that the cost price to the serviceman of the
28 property transferred to him or her by his or her subcontractor
29 is equal to 50% of the subcontractor's charges to the
30 serviceman in the absence of proof of the consideration paid by
31 the subcontractor for the purchase of such property.
32     "Selling price" means the consideration for a sale valued
33 in money whether received in money or otherwise, including
34 cash, credits and service, and shall be determined without any
35 deduction on account of the serviceman's cost of the property
36 sold, the cost of materials used, labor or service cost or any

 

 

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1 other expense whatsoever, but does not include interest or
2 finance charges which appear as separate items on the bill of
3 sale or sales contract nor charges that are added to prices by
4 sellers on account of the seller's duty to collect, from the
5 purchaser, the tax that is imposed by this Act.
6     "Department" means the Department of Revenue.
7     "Person" means any natural individual, firm, partnership,
8 association, joint stock company, joint venture, public or
9 private corporation, limited liability company, and any
10 receiver, executor, trustee, guardian or other representative
11 appointed by order of any court.
12     "Sale of service" means any transaction except:
13         (1) a retail sale of tangible personal property taxable
14     under the Retailers' Occupation Tax Act or under the Use
15     Tax Act.
16         (2) a sale of tangible personal property for the
17     purpose of resale made in compliance with Section 2c of the
18     Retailers' Occupation Tax Act.
19         (3) except as hereinafter provided, a sale or transfer
20     of tangible personal property as an incident to the
21     rendering of service for or by any governmental body, or
22     for or by any corporation, society, association,
23     foundation or institution organized and operated
24     exclusively for charitable, religious or educational
25     purposes or any not-for-profit corporation, society,
26     association, foundation, institution or organization which
27     has no compensated officers or employees and which is
28     organized and operated primarily for the recreation of
29     persons 55 years of age or older. A limited liability
30     company may qualify for the exemption under this paragraph
31     only if the limited liability company is organized and
32     operated exclusively for educational purposes.
33         (4) a sale or transfer of tangible personal property as
34     an incident to the rendering of service for interstate
35     carriers for hire for use as rolling stock moving in
36     interstate commerce or by lessors under a lease of one year

 

 

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1     or longer, executed or in effect at the time of purchase of
2     personal property, to interstate carriers for hire for use
3     as rolling stock moving in interstate commerce so long as
4     so used by such interstate carriers for hire, and equipment
5     operated by a telecommunications provider, licensed as a
6     common carrier by the Federal Communications Commission,
7     which is permanently installed in or affixed to aircraft
8     moving in interstate commerce.
9         (4a) a sale or transfer of tangible personal property
10     as an incident to the rendering of service for owners,
11     lessors, or shippers of tangible personal property which is
12     utilized by interstate carriers for hire for use as rolling
13     stock moving in interstate commerce so long as so used by
14     interstate carriers for hire, and equipment operated by a
15     telecommunications provider, licensed as a common carrier
16     by the Federal Communications Commission, which is
17     permanently installed in or affixed to aircraft moving in
18     interstate commerce.
19         (4a-5) on and after July 1, 2003 and through June 30,
20     2005, a sale or transfer of a motor vehicle of the second
21     division with a gross vehicle weight in excess of 8,000
22     pounds as an incident to the rendering of service if that
23     motor vehicle is subject to the commercial distribution fee
24     imposed under Section 3-815.1 of the Illinois Vehicle Code.
25     This exemption applies to repair and replacement parts
26     added after the initial purchase of such a motor vehicle if
27     that motor vehicle is used in a manner that would qualify
28     for the rolling stock exemption otherwise provided for in
29     this Act.
30         (5) a sale or transfer of machinery and equipment used
31     primarily in the process of the manufacturing or
32     assembling, either in an existing, an expanded or a new
33     manufacturing facility, of tangible personal property for
34     wholesale or retail sale or lease, whether such sale or
35     lease is made directly by the manufacturer or by some other
36     person, whether the materials used in the process are owned

 

 

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1     by the manufacturer or some other person, or whether such
2     sale or lease is made apart from or as an incident to the
3     seller's engaging in a service occupation and the
4     applicable tax is a Service Use Tax or Service Occupation
5     Tax, rather than Use Tax or Retailers' Occupation Tax.
6         (5a) the repairing, reconditioning or remodeling, for
7     a common carrier by rail, of tangible personal property
8     which belongs to such carrier for hire, and as to which
9     such carrier receives the physical possession of the
10     repaired, reconditioned or remodeled item of tangible
11     personal property in Illinois, and which such carrier
12     transports, or shares with another common carrier in the
13     transportation of such property, out of Illinois on a
14     standard uniform bill of lading showing the person who
15     repaired, reconditioned or remodeled the property to a
16     destination outside Illinois, for use outside Illinois.
17         (5b) a sale or transfer of tangible personal property
18     which is produced by the seller thereof on special order in
19     such a way as to have made the applicable tax the Service
20     Occupation Tax or the Service Use Tax, rather than the
21     Retailers' Occupation Tax or the Use Tax, for an interstate
22     carrier by rail which receives the physical possession of
23     such property in Illinois, and which transports such
24     property, or shares with another common carrier in the
25     transportation of such property, out of Illinois on a
26     standard uniform bill of lading showing the seller of the
27     property as the shipper or consignor of such property to a
28     destination outside Illinois, for use outside Illinois.
29         (6) until July 1, 2003, a sale or transfer of
30     distillation machinery and equipment, sold as a unit or kit
31     and assembled or installed by the retailer, which machinery
32     and equipment is certified by the user to be used only for
33     the production of ethyl alcohol that will be used for
34     consumption as motor fuel or as a component of motor fuel
35     for the personal use of such user and not subject to sale
36     or resale.

 

 

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1         (7) at the election of any serviceman not required to
2     be otherwise registered as a retailer under Section 2a of
3     the Retailers' Occupation Tax Act, made for each fiscal
4     year sales of service in which the aggregate annual cost
5     price of tangible personal property transferred as an
6     incident to the sales of service is less than 35%, or 75%
7     in the case of servicemen transferring prescription drugs
8     or servicemen engaged in graphic arts production, of the
9     aggregate annual total gross receipts from all sales of
10     service. The purchase of such tangible personal property by
11     the serviceman shall be subject to tax under the Retailers'
12     Occupation Tax Act and the Use Tax Act. However, if a
13     primary serviceman who has made the election described in
14     this paragraph subcontracts service work to a secondary
15     serviceman who has also made the election described in this
16     paragraph, the primary serviceman does not incur a Use Tax
17     liability if the secondary serviceman (i) has paid or will
18     pay Use Tax on his or her cost price of any tangible
19     personal property transferred to the primary serviceman
20     and (ii) certifies that fact in writing to the primary
21     serviceman.
22     Tangible personal property transferred incident to the
23 completion of a maintenance agreement is exempt from the tax
24 imposed pursuant to this Act.
25     Exemption (5) also includes machinery and equipment used in
26 the general maintenance or repair of such exempt machinery and
27 equipment or for in-house manufacture of exempt machinery and
28 equipment. For the purposes of exemption (5), each of these
29 terms shall have the following meanings: (1) "manufacturing
30 process" shall mean the production of any article of tangible
31 personal property, whether such article is a finished product
32 or an article for use in the process of manufacturing or
33 assembling a different article of tangible personal property,
34 by procedures commonly regarded as manufacturing, processing,
35 fabricating, or refining which changes some existing material
36 or materials into a material with a different form, use or

 

 

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1 name. In relation to a recognized integrated business composed
2 of a series of operations which collectively constitute
3 manufacturing, or individually constitute manufacturing
4 operations, the manufacturing process shall be deemed to
5 commence with the first operation or stage of production in the
6 series, and shall not be deemed to end until the completion of
7 the final product in the last operation or stage of production
8 in the series; and further, for purposes of exemption (5),
9 photoprocessing is deemed to be a manufacturing process of
10 tangible personal property for wholesale or retail sale; (2)
11 "assembling process" shall mean the production of any article
12 of tangible personal property, whether such article is a
13 finished product or an article for use in the process of
14 manufacturing or assembling a different article of tangible
15 personal property, by the combination of existing materials in
16 a manner commonly regarded as assembling which results in a
17 material of a different form, use or name; (3) "machinery"
18 shall mean major mechanical machines or major components of
19 such machines contributing to a manufacturing or assembling
20 process; and (4) "equipment" shall include any independent
21 device or tool separate from any machinery but essential to an
22 integrated manufacturing or assembly process; including
23 computers used primarily in a manufacturer's computer assisted
24 design, computer assisted manufacturing (CAD/CAM) system; or
25 any subunit or assembly comprising a component of any machinery
26 or auxiliary, adjunct or attachment parts of machinery, such as
27 tools, dies, jigs, fixtures, patterns and molds; or any parts
28 which require periodic replacement in the course of normal
29 operation; but shall not include hand tools. Equipment includes
30 chemicals or chemicals acting as catalysts but only if the
31 chemicals or chemicals acting as catalysts effect a direct and
32 immediate change upon a product being manufactured or assembled
33 for wholesale or retail sale or lease. The purchaser of such
34 machinery and equipment who has an active resale registration
35 number shall furnish such number to the seller at the time of
36 purchase. The user of such machinery and equipment and tools

 

 

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1 without an active resale registration number shall prepare a
2 certificate of exemption for each transaction stating facts
3 establishing the exemption for that transaction, which
4 certificate shall be available to the Department for inspection
5 or audit. The Department shall prescribe the form of the
6 certificate.
7     Any informal rulings, opinions or letters issued by the
8 Department in response to an inquiry or request for any opinion
9 from any person regarding the coverage and applicability of
10 exemption (5) to specific devices shall be published,
11 maintained as a public record, and made available for public
12 inspection and copying. If the informal ruling, opinion or
13 letter contains trade secrets or other confidential
14 information, where possible the Department shall delete such
15 information prior to publication. Whenever such informal
16 rulings, opinions, or letters contain any policy of general
17 applicability, the Department shall formulate and adopt such
18 policy as a rule in accordance with the provisions of the
19 Illinois Administrative Procedure Act.
20     On and after July 1, 1987, no entity otherwise eligible
21 under exemption (3) of this Section shall make tax free
22 purchases unless it has an active exemption identification
23 number issued by the Department.
24     The purchase, employment and transfer of such tangible
25 personal property as newsprint and ink for the primary purpose
26 of conveying news (with or without other information) is not a
27 purchase, use or sale of service or of tangible personal
28 property within the meaning of this Act.
29     "Serviceman" means any person who is engaged in the
30 occupation of making sales of service.
31     "Sale at retail" means "sale at retail" as defined in the
32 Retailers' Occupation Tax Act.
33     "Supplier" means any person who makes sales of tangible
34 personal property to servicemen for the purpose of resale as an
35 incident to a sale of service.
36     "Serviceman maintaining a place of business in this State",

 

 

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1 or any like term, means and includes any serviceman:
2         1. having or maintaining within this State, directly or
3     by a subsidiary, an office, distribution house, sales
4     house, warehouse or other place of business, or any agent
5     or other representative operating within this State under
6     the authority of the serviceman or its subsidiary,
7     irrespective of whether such place of business or agent or
8     other representative is located here permanently or
9     temporarily, or whether such serviceman or subsidiary is
10     licensed to do business in this State;
11         2. soliciting orders for tangible personal property by
12     means of a telecommunication or television shopping system
13     (which utilizes toll free numbers) which is intended by the
14     retailer to be broadcast by cable television or other means
15     of broadcasting, to consumers located in this State;
16         3. pursuant to a contract with a broadcaster or
17     publisher located in this State, soliciting orders for
18     tangible personal property by means of advertising which is
19     disseminated primarily to consumers located in this State
20     and only secondarily to bordering jurisdictions;
21         4. soliciting orders for tangible personal property by
22     mail if the solicitations are substantial and recurring and
23     if the retailer benefits from any banking, financing, debt
24     collection, telecommunication, or marketing activities
25     occurring in this State or benefits from the location in
26     this State of authorized installation, servicing, or
27     repair facilities;
28         5. being owned or controlled by the same interests
29     which own or control any retailer engaging in business in
30     the same or similar line of business in this State;
31         6. having a franchisee or licensee operating under its
32     trade name if the franchisee or licensee is required to
33     collect the tax under this Section;
34         7. pursuant to a contract with a cable television
35     operator located in this State, soliciting orders for
36     tangible personal property by means of advertising which is

 

 

SB2836 - 22 - LRB093 20393 SJM 46165 b

1     transmitted or distributed over a cable television system
2     in this State; or
3         8. engaging in activities in Illinois, which
4     activities in the state in which the supply business
5     engaging in such activities is located would constitute
6     maintaining a place of business in that state.
7 (Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
8 eff. 6-20-03; revised 8-21-03.)
 
9     (35 ILCS 110/3-51)
10     Sec. 3-51. Motor vehicles; use as rolling stock definition.
11 Through June 30, 2003 and beginning again on July 1, 2005, "use
12 as rolling stock moving in interstate commerce" in subsection
13 (b) of Section 3-45 means for motor vehicles, as defined in
14 Section 1-46 of the Illinois Vehicle Code, and trailers, as
15 defined in Section 1-209 of the Illinois Vehicle Code, when on
16 15 or more occasions in a 12-month period the motor vehicle and
17 trailer has carried persons or property for hire in interstate
18 commerce, even just between points in Illinois, if the motor
19 vehicle and trailer transports persons whose journeys or
20 property whose shipments originate or terminate outside
21 Illinois. This definition applies to all property purchased for
22 the purpose of being attached to those motor vehicles or
23 trailers as a part thereof.
24     On and after July 1, 2003 and through June 30, 2005, "use
25 as rolling stock moving in interstate commerce" in paragraphs
26 (4) and (4a) of the definition of "sale of service" in Section
27 2 and subsection (b) of Section 3-45 occurs for motor vehicles,
28 as defined in Section 1-146 of the Illinois Vehicle Code, when
29 during a 12-month period the rolling stock has carried persons
30 or property for hire in interstate commerce for 51% of its
31 total trips and transports persons whose journeys or property
32 whose shipments originate or terminate outside Illinois. On and
33 after July 1, 2003 and through June 30, 2005, trips Trips that
34 are only between points in Illinois shall not be counted as
35 interstate trips when calculating whether the tangible

 

 

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1 personal property qualifies for the exemption but such trips
2 shall be included in total trips taken.
3 (Source: P.A. 93-23, eff. 6-20-03.)
 
4     Section 20. The Service Occupation Tax Act is amended by
5 changing Sections 2 and 2d as follows:
 
6     (35 ILCS 115/2)   (from Ch. 120, par. 439.102)
7     Sec. 2. "Transfer" means any transfer of the title to
8 property or of the ownership of property whether or not the
9 transferor retains title as security for the payment of amounts
10 due him from the transferee.
11     "Cost Price" means the consideration paid by the serviceman
12 for a purchase valued in money, whether paid in money or
13 otherwise, including cash, credits and services, and shall be
14 determined without any deduction on account of the supplier's
15 cost of the property sold or on account of any other expense
16 incurred by the supplier. When a serviceman contracts out part
17 or all of the services required in his sale of service, it
18 shall be presumed that the cost price to the serviceman of the
19 property transferred to him by his or her subcontractor is
20 equal to 50% of the subcontractor's charges to the serviceman
21 in the absence of proof of the consideration paid by the
22 subcontractor for the purchase of such property.
23     "Department" means the Department of Revenue.
24     "Person" means any natural individual, firm, partnership,
25 association, joint stock company, joint venture, public or
26 private corporation, limited liability company, and any
27 receiver, executor, trustee, guardian or other representative
28 appointed by order of any court.
29     "Sale of Service" means any transaction except:
30     (a) A retail sale of tangible personal property taxable
31 under the Retailers' Occupation Tax Act or under the Use Tax
32 Act.
33     (b) A sale of tangible personal property for the purpose of
34 resale made in compliance with Section 2c of the Retailers'

 

 

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1 Occupation Tax Act.
2     (c) Except as hereinafter provided, a sale or transfer of
3 tangible personal property as an incident to the rendering of
4 service for or by any governmental body or for or by any
5 corporation, society, association, foundation or institution
6 organized and operated exclusively for charitable, religious
7 or educational purposes or any not-for-profit corporation,
8 society, association, foundation, institution or organization
9 which has no compensated officers or employees and which is
10 organized and operated primarily for the recreation of persons
11 55 years of age or older. A limited liability company may
12 qualify for the exemption under this paragraph only if the
13 limited liability company is organized and operated
14 exclusively for educational purposes.
15     (d) A sale or transfer of tangible personal property as an
16 incident to the rendering of service for interstate carriers
17 for hire for use as rolling stock moving in interstate commerce
18 or lessors under leases of one year or longer, executed or in
19 effect at the time of purchase, to interstate carriers for hire
20 for use as rolling stock moving in interstate commerce, and
21 equipment operated by a telecommunications provider, licensed
22 as a common carrier by the Federal Communications Commission,
23 which is permanently installed in or affixed to aircraft moving
24 in interstate commerce.
25     (d-1) A sale or transfer of tangible personal property as
26 an incident to the rendering of service for owners, lessors or
27 shippers of tangible personal property which is utilized by
28 interstate carriers for hire for use as rolling stock moving in
29 interstate commerce, and equipment operated by a
30 telecommunications provider, licensed as a common carrier by
31 the Federal Communications Commission, which is permanently
32 installed in or affixed to aircraft moving in interstate
33 commerce.
34     (d-1.1) On and after July 1, 2003 and through June 30,
35 2005, a sale or transfer of a motor vehicle of the second
36 division with a gross vehicle weight in excess of 8,000 pounds

 

 

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1 as an incident to the rendering of service if that motor
2 vehicle is subject to the commercial distribution fee imposed
3 under Section 3-815.1 of the Illinois Vehicle Code. This
4 exemption applies to repair and replacement parts added after
5 the initial purchase of such a motor vehicle if that motor
6 vehicle is used in a manner that would qualify for the rolling
7 stock exemption otherwise provided for in this Act.
8     (d-2) The repairing, reconditioning or remodeling, for a
9 common carrier by rail, of tangible personal property which
10 belongs to such carrier for hire, and as to which such carrier
11 receives the physical possession of the repaired,
12 reconditioned or remodeled item of tangible personal property
13 in Illinois, and which such carrier transports, or shares with
14 another common carrier in the transportation of such property,
15 out of Illinois on a standard uniform bill of lading showing
16 the person who repaired, reconditioned or remodeled the
17 property as the shipper or consignor of such property to a
18 destination outside Illinois, for use outside Illinois.
19     (d-3) A sale or transfer of tangible personal property
20 which is produced by the seller thereof on special order in
21 such a way as to have made the applicable tax the Service
22 Occupation Tax or the Service Use Tax, rather than the
23 Retailers' Occupation Tax or the Use Tax, for an interstate
24 carrier by rail which receives the physical possession of such
25 property in Illinois, and which transports such property, or
26 shares with another common carrier in the transportation of
27 such property, out of Illinois on a standard uniform bill of
28 lading showing the seller of the property as the shipper or
29 consignor of such property to a destination outside Illinois,
30 for use outside Illinois.
31     (d-4) Until January 1, 1997, a sale, by a registered
32 serviceman paying tax under this Act to the Department, of
33 special order printed materials delivered outside Illinois and
34 which are not returned to this State, if delivery is made by
35 the seller or agent of the seller, including an agent who
36 causes the product to be delivered outside Illinois by a common

 

 

SB2836 - 26 - LRB093 20393 SJM 46165 b

1 carrier or the U.S. postal service.
2     (e) A sale or transfer of machinery and equipment used
3 primarily in the process of the manufacturing or assembling,
4 either in an existing, an expanded or a new manufacturing
5 facility, of tangible personal property for wholesale or retail
6 sale or lease, whether such sale or lease is made directly by
7 the manufacturer or by some other person, whether the materials
8 used in the process are owned by the manufacturer or some other
9 person, or whether such sale or lease is made apart from or as
10 an incident to the seller's engaging in a service occupation
11 and the applicable tax is a Service Occupation Tax or Service
12 Use Tax, rather than Retailers' Occupation Tax or Use Tax.
13     (f) Until July 1, 2003, the sale or transfer of
14 distillation machinery and equipment, sold as a unit or kit and
15 assembled or installed by the retailer, which machinery and
16 equipment is certified by the user to be used only for the
17 production of ethyl alcohol that will be used for consumption
18 as motor fuel or as a component of motor fuel for the personal
19 use of such user and not subject to sale or resale.
20     (g) At the election of any serviceman not required to be
21 otherwise registered as a retailer under Section 2a of the
22 Retailers' Occupation Tax Act, made for each fiscal year sales
23 of service in which the aggregate annual cost price of tangible
24 personal property transferred as an incident to the sales of
25 service is less than 35% (75% in the case of servicemen
26 transferring prescription drugs or servicemen engaged in
27 graphic arts production) of the aggregate annual total gross
28 receipts from all sales of service. The purchase of such
29 tangible personal property by the serviceman shall be subject
30 to tax under the Retailers' Occupation Tax Act and the Use Tax
31 Act. However, if a primary serviceman who has made the election
32 described in this paragraph subcontracts service work to a
33 secondary serviceman who has also made the election described
34 in this paragraph, the primary serviceman does not incur a Use
35 Tax liability if the secondary serviceman (i) has paid or will
36 pay Use Tax on his or her cost price of any tangible personal

 

 

SB2836 - 27 - LRB093 20393 SJM 46165 b

1 property transferred to the primary serviceman and (ii)
2 certifies that fact in writing to the primary serviceman.
3     Tangible personal property transferred incident to the
4 completion of a maintenance agreement is exempt from the tax
5 imposed pursuant to this Act.
6     Exemption (e) also includes machinery and equipment used in
7 the general maintenance or repair of such exempt machinery and
8 equipment or for in-house manufacture of exempt machinery and
9 equipment. For the purposes of exemption (e), each of these
10 terms shall have the following meanings: (1) "manufacturing
11 process" shall mean the production of any article of tangible
12 personal property, whether such article is a finished product
13 or an article for use in the process of manufacturing or
14 assembling a different article of tangible personal property,
15 by procedures commonly regarded as manufacturing, processing,
16 fabricating, or refining which changes some existing material
17 or materials into a material with a different form, use or
18 name. In relation to a recognized integrated business composed
19 of a series of operations which collectively constitute
20 manufacturing, or individually constitute manufacturing
21 operations, the manufacturing process shall be deemed to
22 commence with the first operation or stage of production in the
23 series, and shall not be deemed to end until the completion of
24 the final product in the last operation or stage of production
25 in the series; and further for purposes of exemption (e),
26 photoprocessing is deemed to be a manufacturing process of
27 tangible personal property for wholesale or retail sale; (2)
28 "assembling process" shall mean the production of any article
29 of tangible personal property, whether such article is a
30 finished product or an article for use in the process of
31 manufacturing or assembling a different article of tangible
32 personal property, by the combination of existing materials in
33 a manner commonly regarded as assembling which results in a
34 material of a different form, use or name; (3) "machinery"
35 shall mean major mechanical machines or major components of
36 such machines contributing to a manufacturing or assembling

 

 

SB2836 - 28 - LRB093 20393 SJM 46165 b

1 process; and (4) "equipment" shall include any independent
2 device or tool separate from any machinery but essential to an
3 integrated manufacturing or assembly process; including
4 computers used primarily in a manufacturer's computer assisted
5 design, computer assisted manufacturing (CAD/CAM) system; or
6 any subunit or assembly comprising a component of any machinery
7 or auxiliary, adjunct or attachment parts of machinery, such as
8 tools, dies, jigs, fixtures, patterns and molds; or any parts
9 which require periodic replacement in the course of normal
10 operation; but shall not include hand tools. Equipment includes
11 chemicals or chemicals acting as catalysts but only if the
12 chemicals or chemicals acting as catalysts effect a direct and
13 immediate change upon a product being manufactured or assembled
14 for wholesale or retail sale or lease. The purchaser of such
15 machinery and equipment who has an active resale registration
16 number shall furnish such number to the seller at the time of
17 purchase. The purchaser of such machinery and equipment and
18 tools without an active resale registration number shall
19 furnish to the seller a certificate of exemption for each
20 transaction stating facts establishing the exemption for that
21 transaction, which certificate shall be available to the
22 Department for inspection or audit.
23     Except as provided in Section 2d of this Act, the rolling
24 stock exemption applies to rolling stock used by an interstate
25 carrier for hire, even just between points in Illinois, if such
26 rolling stock transports, for hire, persons whose journeys or
27 property whose shipments originate or terminate outside
28 Illinois.
29     Any informal rulings, opinions or letters issued by the
30 Department in response to an inquiry or request for any opinion
31 from any person regarding the coverage and applicability of
32 exemption (e) to specific devices shall be published,
33 maintained as a public record, and made available for public
34 inspection and copying. If the informal ruling, opinion or
35 letter contains trade secrets or other confidential
36 information, where possible the Department shall delete such

 

 

SB2836 - 29 - LRB093 20393 SJM 46165 b

1 information prior to publication. Whenever such informal
2 rulings, opinions, or letters contain any policy of general
3 applicability, the Department shall formulate and adopt such
4 policy as a rule in accordance with the provisions of the
5 Illinois Administrative Procedure Act.
6     On and after July 1, 1987, no entity otherwise eligible
7 under exemption (c) of this Section shall make tax free
8 purchases unless it has an active exemption identification
9 number issued by the Department.
10     "Serviceman" means any person who is engaged in the
11 occupation of making sales of service.
12     "Sale at Retail" means "sale at retail" as defined in the
13 Retailers' Occupation Tax Act.
14     "Supplier" means any person who makes sales of tangible
15 personal property to servicemen for the purpose of resale as an
16 incident to a sale of service.
17 (Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
18 eff. 6-20-03; revised 8-21-03.)
 
19     (35 ILCS 115/2d)
20     Sec. 2d. Motor vehicles; use as rolling stock definition.
21 Through June 30, 2003 and beginning again on July 1, 2005, "use
22 as rolling stock moving in interstate commerce" in subsections
23 (d) and (d-1) of the definition of "sale of service" in Section
24 2 means for motor vehicles, as defined in Section 1-146 of the
25 Illinois Vehicle Code, and trailers, as defined in Section
26 1-209 of the Illinois Vehicle Code, when on 15 or more
27 occasions in a 12-month period the motor vehicle and trailer
28 has carried persons or property for hire in interstate
29 commerce, even just between points in Illinois, if the motor
30 vehicle and trailer transports persons whose journeys or
31 property whose shipments originate or terminate outside
32 Illinois. This definition applies to all property purchased for
33 the purpose of being attached to those motor vehicles or
34 trailers as a part thereof.
35     On and after July 1, 2003 and through June 30, 2005, "use

 

 

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1 as rolling stock moving in interstate commerce" in paragraphs
2 (d) and (d-1) of the definition of "sale of service" in Section
3 2 occurs for motor vehicles, as defined in Section 1-146 of the
4 Illinois Vehicle Code, when during a 12-month period the
5 rolling stock has carried persons or property for hire in
6 interstate commerce for 51% of its total trips and transports
7 persons whose journeys or property whose shipments originate or
8 terminate outside Illinois. On and after July 1, 2003 and
9 through June 30, 2005, trips Trips that are only between points
10 in Illinois will not be counted as interstate trips when
11 calculating whether the tangible personal property qualifies
12 for the exemption but such trips will be included in total
13 trips taken.
14 (Source: P.A. 93-23, eff. 6-20-03.)
 
15     Section 25. The Retailers' Occupation Tax Act is amended
16 by changing Sections 2-5 and 2-51 as follows:
 
17     (35 ILCS 120/2-5)   (from Ch. 120, par. 441-5)
18     Sec. 2-5. Exemptions. Gross receipts from proceeds from the
19 sale of the following tangible personal property are exempt
20 from the tax imposed by this Act:
21     (1) Farm chemicals.
22     (2) Farm machinery and equipment, both new and used,
23 including that manufactured on special order, certified by the
24 purchaser to be used primarily for production agriculture or
25 State or federal agricultural programs, including individual
26 replacement parts for the machinery and equipment, including
27 machinery and equipment purchased for lease, and including
28 implements of husbandry defined in Section 1-130 of the
29 Illinois Vehicle Code, farm machinery and agricultural
30 chemical and fertilizer spreaders, and nurse wagons required to
31 be registered under Section 3-809 of the Illinois Vehicle Code,
32 but excluding other motor vehicles required to be registered
33 under the Illinois Vehicle Code. Horticultural polyhouses or
34 hoop houses used for propagating, growing, or overwintering

 

 

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1 plants shall be considered farm machinery and equipment under
2 this item (2). Agricultural chemical tender tanks and dry boxes
3 shall include units sold separately from a motor vehicle
4 required to be licensed and units sold mounted on a motor
5 vehicle required to be licensed, if the selling price of the
6 tender is separately stated.
7     Farm machinery and equipment shall include precision
8 farming equipment that is installed or purchased to be
9 installed on farm machinery and equipment including, but not
10 limited to, tractors, harvesters, sprayers, planters, seeders,
11 or spreaders. Precision farming equipment includes, but is not
12 limited to, soil testing sensors, computers, monitors,
13 software, global positioning and mapping systems, and other
14 such equipment.
15     Farm machinery and equipment also includes computers,
16 sensors, software, and related equipment used primarily in the
17 computer-assisted operation of production agriculture
18 facilities, equipment, and activities such as, but not limited
19 to, the collection, monitoring, and correlation of animal and
20 crop data for the purpose of formulating animal diets and
21 agricultural chemicals. This item (7) is exempt from the
22 provisions of Section 2-70.
23     (3) Until July 1, 2003, distillation machinery and
24 equipment, sold as a unit or kit, assembled or installed by the
25 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 personal
28 use of the user, and not subject to sale or resale.
29     (4) Until July 1, 2003, graphic arts machinery and
30 equipment, including repair and replacement parts, both new and
31 used, and including that manufactured on special order or
32 purchased for lease, certified by the purchaser to be used
33 primarily for graphic arts production. Equipment includes
34 chemicals or chemicals acting as catalysts but only if the
35 chemicals or chemicals acting as catalysts effect a direct and
36 immediate change upon a graphic arts product.

 

 

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1     (5) A motor vehicle of the first division, a motor vehicle
2 of the second division that is a self-contained motor vehicle
3 designed or permanently converted to provide living quarters
4 for recreational, camping, or travel use, with direct walk
5 through access to the living quarters from the driver's seat,
6 or a motor vehicle of the second division that is of the van
7 configuration designed for the transportation of not less than
8 7 nor more than 16 passengers, as defined in Section 1-146 of
9 the Illinois Vehicle Code, that is used for automobile renting,
10 as defined in the Automobile Renting Occupation and Use Tax
11 Act.
12     (6) Personal property sold by a teacher-sponsored student
13 organization affiliated with an elementary or secondary school
14 located in Illinois.
15     (7) Until July 1, 2003, proceeds of that portion of the
16 selling price of a passenger car the sale of which is subject
17 to the Replacement Vehicle Tax.
18     (8) Personal property sold to an Illinois county fair
19 association for use in conducting, operating, or promoting the
20 county fair.
21     (9) Personal property sold to a not-for-profit arts or
22 cultural organization that establishes, by proof required by
23 the Department by rule, that it has received an exemption under
24 Section 501(c)(3) of the Internal Revenue Code and that is
25 organized and operated primarily for the presentation or
26 support of arts or cultural programming, activities, or
27 services. These organizations include, but are not limited to,
28 music and dramatic arts organizations such as symphony
29 orchestras and theatrical groups, arts and cultural service
30 organizations, local arts councils, visual arts organizations,
31 and media arts organizations. On and after the effective date
32 of this amendatory Act of the 92nd General Assembly, however,
33 an entity otherwise eligible for this exemption shall not make
34 tax-free purchases unless it has an active identification
35 number issued by the Department.
36     (10) Personal property sold by a corporation, society,

 

 

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1 association, foundation, institution, or organization, other
2 than a limited liability company, that is organized and
3 operated as a not-for-profit service enterprise for the benefit
4 of persons 65 years of age or older if the personal property
5 was not purchased by the enterprise for the purpose of resale
6 by the enterprise.
7     (11) Personal property sold to a governmental body, to a
8 corporation, society, association, foundation, or institution
9 organized and operated exclusively for charitable, religious,
10 or educational purposes, or to a not-for-profit corporation,
11 society, association, foundation, institution, or organization
12 that has no compensated officers or employees and that is
13 organized and operated primarily for the recreation of persons
14 55 years of age or older. A limited liability company may
15 qualify for the exemption under this paragraph only if the
16 limited liability company is organized and operated
17 exclusively for educational purposes. On and after July 1,
18 1987, however, no entity otherwise eligible for this exemption
19 shall make tax-free purchases unless it has an active
20 identification number issued by the Department.
21     (12) Tangible personal property sold to interstate
22 carriers for hire for use as rolling stock moving in interstate
23 commerce or to lessors under leases of one year or longer
24 executed or in effect at the time of purchase by interstate
25 carriers for hire for use as rolling stock moving in interstate
26 commerce and equipment operated by a telecommunications
27 provider, licensed as a common carrier by the Federal
28 Communications Commission, which is permanently installed in
29 or affixed to aircraft moving in interstate commerce.
30     (12-5) On and after July 1, 2003 and through June 30, 2005,
31 motor vehicles of the second division with a gross vehicle
32 weight in excess of 8,000 pounds that are subject to the
33 commercial distribution fee imposed under Section 3-815.1 of
34 the Illinois Vehicle Code. This exemption applies to repair and
35 replacement parts added after the initial purchase of such a
36 motor vehicle if that motor vehicle is used in a manner that

 

 

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1 would qualify for the rolling stock exemption otherwise
2 provided for in this Act.
3     (13) Proceeds from sales to owners, lessors, or shippers of
4 tangible personal property that is utilized by interstate
5 carriers for hire for use as rolling stock moving in interstate
6 commerce and equipment operated by a telecommunications
7 provider, licensed as a common carrier by the Federal
8 Communications Commission, which is permanently installed in
9 or affixed to aircraft moving in interstate commerce.
10     (14) Machinery and equipment that will be used by the
11 purchaser, or a lessee of the purchaser, primarily in the
12 process of manufacturing or assembling tangible personal
13 property for wholesale or retail sale or lease, whether the
14 sale or lease is made directly by the manufacturer or by some
15 other person, whether the materials used in the process are
16 owned by the manufacturer or some other person, or whether the
17 sale or lease is made apart from or as an incident to the
18 seller's engaging in the service occupation of producing
19 machines, tools, dies, jigs, patterns, gauges, or other similar
20 items of no commercial value on special order for a particular
21 purchaser.
22     (15) Proceeds of mandatory service charges separately
23 stated on customers' bills for purchase and consumption of food
24 and beverages, to the extent that the proceeds of the service
25 charge are in fact turned over as tips or as a substitute for
26 tips to the employees who participate directly in preparing,
27 serving, hosting or cleaning up the food or beverage function
28 with respect to which the service charge is imposed.
29     (16) Petroleum products sold to a purchaser if the seller
30 is prohibited by federal law from charging tax to the
31 purchaser.
32     (17) Tangible personal property sold to a common carrier by
33 rail or motor that receives the physical possession of the
34 property in Illinois and that transports the property, or
35 shares with another common carrier in the transportation of the
36 property, out of Illinois on a standard uniform bill of lading

 

 

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1 showing the seller of the property as the shipper or consignor
2 of the property to a destination outside Illinois, for use
3 outside Illinois.
4     (18) Legal tender, currency, medallions, or gold or silver
5 coinage issued by the State of Illinois, the government of the
6 United States of America, or the government of any foreign
7 country, and bullion.
8     (19) Until July 1 2003, oil field exploration, drilling,
9 and production equipment, including (i) rigs and parts of rigs,
10 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
11 tubular goods, including casing and drill strings, (iii) pumps
12 and pump-jack units, (iv) storage tanks and flow lines, (v) any
13 individual replacement part for oil field exploration,
14 drilling, and production equipment, and (vi) machinery and
15 equipment purchased for lease; but excluding motor vehicles
16 required to be registered under the Illinois Vehicle Code.
17     (20) Photoprocessing machinery and equipment, including
18 repair and replacement parts, both new and used, including that
19 manufactured on special order, certified by the purchaser to be
20 used primarily for photoprocessing, and including
21 photoprocessing machinery and equipment purchased for lease.
22     (21) Until July 1, 2003, coal exploration, mining,
23 offhighway hauling, processing, maintenance, and reclamation
24 equipment, including replacement parts and equipment, and
25 including equipment purchased for lease, but excluding motor
26 vehicles required to be registered under the Illinois Vehicle
27 Code.
28     (22) Fuel and petroleum products sold to or used by an air
29 carrier, certified by the carrier to be used for consumption,
30 shipment, or storage in the conduct of its business as an air
31 common carrier, for a flight destined for or returning from a
32 location or locations outside the United States without regard
33 to previous or subsequent domestic stopovers.
34     (23) A transaction in which the purchase order is received
35 by a florist who is located outside Illinois, but who has a
36 florist located in Illinois deliver the property to the

 

 

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1 purchaser or the purchaser's donee in Illinois.
2     (24) Fuel consumed or used in the operation of ships,
3 barges, or vessels that are used primarily in or for the
4 transportation of property or the conveyance of persons for
5 hire on rivers bordering on this State if the fuel is delivered
6 by the seller to the purchaser's barge, ship, or vessel while
7 it is afloat upon that bordering river.
8     (25) A motor vehicle sold in this State to a nonresident
9 even though the motor vehicle is delivered to the nonresident
10 in this State, if the motor vehicle is not to be titled in this
11 State, and if a drive-away permit is issued to the motor
12 vehicle as provided in Section 3-603 of the Illinois Vehicle
13 Code or if the nonresident purchaser has vehicle registration
14 plates to transfer to the motor vehicle upon returning to his
15 or her home state. The issuance of the drive-away permit or
16 having the out-of-state registration plates to be transferred
17 is prima facie evidence that the motor vehicle will not be
18 titled in this State.
19     (26) Semen used for artificial insemination of livestock
20 for direct agricultural production.
21     (27) Horses, or interests in horses, registered with and
22 meeting the requirements of any of the Arabian Horse Club
23 Registry of America, Appaloosa Horse Club, American Quarter
24 Horse Association, United States Trotting Association, or
25 Jockey Club, as appropriate, used for purposes of breeding or
26 racing for prizes.
27     (28) Computers and communications equipment utilized for
28 any hospital purpose and equipment used in the diagnosis,
29 analysis, or treatment of hospital patients sold to a lessor
30 who leases the equipment, under a lease of one year or longer
31 executed or in effect at the time of the purchase, to a
32 hospital that has been issued an active tax exemption
33 identification number by the Department under Section 1g of
34 this Act.
35     (29) Personal property sold to a lessor who leases the
36 property, under a lease of one year or longer executed or in

 

 

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1 effect at the time of the purchase, to a governmental body that
2 has been issued an active tax exemption identification number
3 by the Department under Section 1g of this Act.
4     (30) Beginning with taxable years ending on or after
5 December 31, 1995 and ending with taxable years ending on or
6 before December 31, 2004, personal property that is donated for
7 disaster relief to be used in a State or federally declared
8 disaster area in Illinois or bordering Illinois by a
9 manufacturer or retailer that is registered in this State to a
10 corporation, society, association, foundation, or institution
11 that has been issued a sales tax exemption identification
12 number by the Department that assists victims of the disaster
13 who reside within the declared disaster area.
14     (31) Beginning with taxable years ending on or after
15 December 31, 1995 and ending with taxable years ending on or
16 before December 31, 2004, personal property that is used in the
17 performance of infrastructure repairs in this State, including
18 but not limited to municipal roads and streets, access roads,
19 bridges, sidewalks, waste disposal systems, water and sewer
20 line extensions, water distribution and purification
21 facilities, storm water drainage and retention facilities, and
22 sewage treatment facilities, resulting from a State or
23 federally declared disaster in Illinois or bordering Illinois
24 when such repairs are initiated on facilities located in the
25 declared disaster area within 6 months after the disaster.
26     (32) Beginning July 1, 1999, game or game birds sold at a
27 "game breeding and hunting preserve area" or an "exotic game
28 hunting area" as those terms are used in the Wildlife Code or
29 at a hunting enclosure approved through rules adopted by the
30 Department of Natural Resources. This paragraph is exempt from
31 the provisions of Section 2-70.
32     (33) A motor vehicle, as that term is defined in Section
33 1-146 of the Illinois Vehicle Code, that is donated to a
34 corporation, limited liability company, society, association,
35 foundation, or institution that is determined by the Department
36 to be organized and operated exclusively for educational

 

 

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1 purposes. For purposes of this exemption, "a corporation,
2 limited liability company, society, association, foundation,
3 or institution organized and operated exclusively for
4 educational purposes" means all tax-supported public schools,
5 private schools that offer systematic instruction in useful
6 branches of learning by methods common to public schools and
7 that compare favorably in their scope and intensity with the
8 course of study presented in tax-supported schools, and
9 vocational or technical schools or institutes organized and
10 operated exclusively to provide a course of study of not less
11 than 6 weeks duration and designed to prepare individuals to
12 follow a trade or to pursue a manual, technical, mechanical,
13 industrial, business, or commercial occupation.
14     (34) Beginning January 1, 2000, personal property,
15 including food, purchased through fundraising events for the
16 benefit of a public or private elementary or secondary school,
17 a group of those schools, or one or more school districts if
18 the events are sponsored by an entity recognized by the school
19 district that consists primarily of volunteers and includes
20 parents and teachers of the school children. This paragraph
21 does not apply to fundraising events (i) for the benefit of
22 private home instruction or (ii) for which the fundraising
23 entity purchases the personal property sold at the events from
24 another individual or entity that sold the property for the
25 purpose of resale by the fundraising entity and that profits
26 from the sale to the fundraising entity. This paragraph is
27 exempt from the provisions of Section 2-70.
28     (35) Beginning January 1, 2000 and through December 31,
29 2001, new or used automatic vending machines that prepare and
30 serve hot food and beverages, including coffee, soup, and other
31 items, and replacement parts for these machines. Beginning
32 January 1, 2002 and through June 30, 2003, machines and parts
33 for machines used in commercial, coin-operated amusement and
34 vending business if a use or occupation tax is paid on the
35 gross receipts derived from the use of the commercial,
36 coin-operated amusement and vending machines. This paragraph

 

 

SB2836 - 39 - LRB093 20393 SJM 46165 b

1 is exempt from the provisions of Section 2-70.
2     (35-5) Food for human consumption that is to be consumed
3 off the premises where it is sold (other than alcoholic
4 beverages, soft drinks, and food that has been prepared for
5 immediate consumption) and prescription and nonprescription
6 medicines, drugs, medical appliances, and insulin, urine
7 testing materials, syringes, and needles used by diabetics, for
8 human use, when purchased for use by a person receiving medical
9 assistance under Article 5 of the Illinois Public Aid Code who
10 resides in a licensed long-term care facility, as defined in
11 the Nursing Home Care Act.
12     (36) Beginning August 2, 2001, computers and
13 communications equipment utilized for any hospital purpose and
14 equipment used in the diagnosis, analysis, or treatment of
15 hospital patients sold to a lessor who leases the equipment,
16 under a lease of one year or longer executed or in effect at
17 the time of the purchase, to a hospital that has been issued an
18 active tax exemption identification number by the Department
19 under Section 1g of this Act. This paragraph is exempt from the
20 provisions of Section 2-70.
21     (37) Beginning August 2, 2001, personal property sold to a
22 lessor who leases the property, under a lease of one year or
23 longer executed or in effect at the time of the purchase, to a
24 governmental body that has been issued an active tax exemption
25 identification number by the Department under Section 1g of
26 this Act. This paragraph is exempt from the provisions of
27 Section 2-70.
28     (38) Beginning on January 1, 2002, tangible personal
29 property purchased from an Illinois retailer by a taxpayer
30 engaged in centralized purchasing activities in Illinois who
31 will, upon receipt of the property in Illinois, temporarily
32 store the property in Illinois (i) for the purpose of
33 subsequently transporting it outside this State for use or
34 consumption thereafter solely outside this State or (ii) for
35 the purpose of being processed, fabricated, or manufactured
36 into, attached to, or incorporated into other tangible personal

 

 

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1 property to be transported outside this State and thereafter
2 used or consumed solely outside this State. The Director of
3 Revenue shall, pursuant to rules adopted in accordance with the
4 Illinois Administrative Procedure Act, issue a permit to any
5 taxpayer in good standing with the Department who is eligible
6 for the exemption under this paragraph (38). The permit issued
7 under this paragraph (38) shall authorize the holder, to the
8 extent and in the manner specified in the rules adopted under
9 this Act, to purchase tangible personal property from a
10 retailer exempt from the taxes imposed by this Act. Taxpayers
11 shall maintain all necessary books and records to substantiate
12 the use and consumption of all such tangible personal property
13 outside of the State of Illinois.
14 (Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
15 eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
16 92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 92-680, eff.
17 7-16-02; 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; revised
18 9-11-03.)
 
19     (35 ILCS 120/2-51)
20     Sec. 2-51. Motor vehicles; use as rolling stock definition.
21 Through June 30, 2003 and beginning again on July 1, 2005, "use
22 as rolling stock moving in interstate commerce" in paragraphs
23 (12) and (13) of Section 2-5 means for motor vehicles, as
24 defined in Section 1-146 of the Illinois Vehicle Code, and
25 trailers, as defined in Section 1-209 of the Illinois Vehicle
26 Code, when on 15 or more occasions in a 12-month period the
27 motor vehicle and trailer has carried persons or property for
28 hire in interstate commerce, even just between points in
29 Illinois, if the motor vehicle and trailer transports persons
30 whose journeys or property whose shipments originate or
31 terminate outside Illinois. This definition applies to all
32 property purchased for the purpose of being attached to those
33 motor vehicles or trailers as a part thereof.
34     On and after July 1, 2003 and through June 30, 2005, "use
35 as rolling stock moving in interstate commerce" in paragraphs

 

 

SB2836 - 41 - LRB093 20393 SJM 46165 b

1 (12) and (13) of Section 2-5 occurs for motor vehicles, as
2 defined in Section 1-146 of the Illinois Vehicle Code, when
3 during a 12-month period the rolling stock has carried persons
4 or property for hire in interstate commerce for 51% of its
5 total trips and transports persons whose journeys or property
6 whose shipments originate or terminate outside Illinois. On and
7 after July 1, 2003 and through June 30, 2005, trips Trips that
8 are only between points in Illinois shall not be counted as
9 interstate trips when calculating whether the tangible
10 personal property qualifies for the exemption but such trips
11 shall be included in total trips taken.
12 (Source: P.A. 93-23, eff. 6-20-03.)
 
13     Section 30. The Illinois Vehicle Code is amended by
14 changing Section 3-815.1 as follows:
 
15     (625 ILCS 5/3-815.1)
16     Sec. 3-815.1. Commercial distribution fee. Beginning July
17 1, 2003, in addition to any tax or fee imposed under this Code:
18         (a) Vehicles of the second division with a gross
19     vehicle weight that exceeds 8,000 pounds and that incur any
20     tax or fee under subsection (a) of Section 3-815 of this
21     Code or subsection (a) of Section 3-818 of this Code, as
22     applicable, and shall pay to the Secretary of State a
23     commercial distribution fee, for each registration year,
24     for the use of the public highways, State infrastructure,
25     and State services, in an amount equal to:
26             36% for the registration year beginning on July 1,
27         2003;
28             18% for the registration year beginning on July 1,
29         2004; and
30             0% for the registration year beginning on July 1,
31         2005 and for each registration year thereafter
32 of the taxes and fees incurred under subsection (a) of Section
33     3-815 of this Code, or subsection (a) of Section 3-818 of this
34     Code, as applicable, rounded up to the nearest whole dollar.

 

 

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1         (b) Vehicles of the second division with a gross
2     vehicle weight of 8,000 pounds or less and that incur any
3     tax or fee under subsection (a) of Section 3-815 of this
4     Code or subsection (a) of Section 3-818 of this Code, as
5     applicable, and have claimed the rolling stock exemption
6     under the Retailers' Occupation Tax Act, Use Tax Act,
7     Service Occupation Tax Act, or Service Use Tax Act shall
8     pay to the Illinois Department of Revenue (or the Secretary
9     of State under an intergovernmental agreement) a
10     commercial distribution fee, for each registration year,
11     for the use of the public highways, State infrastructure,
12     and State services, in an amount equal to:
13             36% for the registration year beginning on July 1,
14         2003;
15             18% for the registration year beginning on July 1,
16         2004; and
17             0% for the registration year beginning on July 1,
18         2005 and for each registration year thereafter
19     of the taxes and fees incurred under subsection (a) of
20     Section 3-815 of this Code or subsection (a) of Section
21     3-818 of this Code, as applicable, rounded up to the
22     nearest whole dollar.
23     The fees paid under this Section shall be deposited by the
24 Secretary of State into the General Revenue Fund.
25 (Source: P.A. 93-23, eff. 6-20-03; revised 10-9-03.)
 
26     Section 99. Effective date. This Act takes effect upon
27 becoming law.".