99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1293

 

Introduced 2/18/2015, by Sen. William E. Brady

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 105/3-85
35 ILCS 110/3-5
35 ILCS 110/3-70
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the graphic arts machinery and equipment exemption, and the corresponding Manufacturer's Purchase Credit for graphic arts machinery and equipment, sunsets on August 30, 2024 (instead of August 30, 2014). Provides that the exemption applies during the entire period from September 1, 2004 through August 30, 2024, including, but not limited to, the period beginning on August 31, 2014 and ending on the effective date of the amendatory Act. Effective immediately.


LRB099 09014 HLH 29194 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1293LRB099 09014 HLH 29194 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Sections
53-5 and 3-85 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after the effective date
7of this amendatory Act of the 92nd General Assembly, however,
8an entity otherwise eligible for this exemption shall not make
9tax-free purchases unless it has an active identification
10number issued by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active exemption
24identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2024 August 30, 2014, graphic arts
4machinery and equipment, including repair and replacement
5parts, both new and used, and including that manufactured on
6special order, certified by the purchaser to be used primarily
7for graphic arts production, and including machinery and
8equipment purchased for lease. Equipment includes chemicals or
9chemicals acting as catalysts but only if the chemicals or
10chemicals acting as catalysts effect a direct and immediate
11change upon a graphic arts product. This paragraph is exempt
12from the provisions of Section 3-90. It is the intent of the
13General Assembly that the exemption under this paragraph (6)
14shall apply during the entire period from September 1, 2004
15through August 30, 2024, including, but not limited to, the
16period beginning on August 31, 2014 and ending on the effective
17date of this amendatory Act of the 99th General Assembly.
18    (7) Farm chemicals.
19    (8) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (9) Personal property purchased from a teacher-sponsored
24student organization affiliated with an elementary or
25secondary school located in Illinois.
26    (10) A motor vehicle that is used for automobile renting,

 

 

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

 

 

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1limited to, soil testing sensors, computers, monitors,
2software, global positioning and mapping systems, and other
3such equipment.
4    Farm machinery and equipment also includes computers,
5sensors, software, and related equipment used primarily in the
6computer-assisted operation of production agriculture
7facilities, equipment, and activities such as, but not limited
8to, the collection, monitoring, and correlation of animal and
9crop data for the purpose of formulating animal diets and
10agricultural chemicals. This item (11) is exempt from the
11provisions of Section 3-90.
12    (12) Until June 30, 2013, fuel and petroleum products sold
13to or used by an air common carrier, certified by the carrier
14to be used for consumption, shipment, or storage in the conduct
15of its business as an air common carrier, for a flight destined
16for or returning from a location or locations outside the
17United States without regard to previous or subsequent domestic
18stopovers.
19    Beginning July 1, 2013, fuel and petroleum products sold to
20or used by an air carrier, certified by the carrier to be used
21for consumption, shipment, or storage in the conduct of its
22business as an air common carrier, for a flight that (i) is
23engaged in foreign trade or is engaged in trade between the
24United States and any of its possessions and (ii) transports at
25least one individual or package for hire from the city of
26origination to the city of final destination on the same

 

 

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1aircraft, without regard to a change in the flight number of
2that aircraft.
3    (13) Proceeds of mandatory service charges separately
4stated on customers' bills for the purchase and consumption of
5food and beverages purchased at retail from a retailer, to the
6extent that the proceeds of the service charge are in fact
7turned over as tips or as a substitute for tips to the
8employees who participate directly in preparing, serving,
9hosting or cleaning up the food or beverage function with
10respect to which the service charge is imposed.
11    (14) Until July 1, 2003, oil field exploration, drilling,
12and production equipment, including (i) rigs and parts of rigs,
13rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
14tubular goods, including casing and drill strings, (iii) pumps
15and pump-jack units, (iv) storage tanks and flow lines, (v) any
16individual replacement part for oil field exploration,
17drilling, and production equipment, and (vi) machinery and
18equipment purchased for lease; but excluding motor vehicles
19required to be registered under the Illinois Vehicle Code.
20    (15) Photoprocessing machinery and equipment, including
21repair and replacement parts, both new and used, including that
22manufactured on special order, certified by the purchaser to be
23used primarily for photoprocessing, and including
24photoprocessing machinery and equipment purchased for lease.
25    (16) Coal and aggregate exploration, mining, off-highway
26hauling, processing, maintenance, and reclamation equipment,

 

 

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1including replacement parts and equipment, and including
2equipment purchased for lease, but excluding motor vehicles
3required to be registered under the Illinois Vehicle Code. The
4changes made to this Section by Public Act 97-767 apply on and
5after July 1, 2003, but no claim for credit or refund is
6allowed on or after August 16, 2013 (the effective date of
7Public Act 98-456) for such taxes paid during the period
8beginning July 1, 2003 and ending on August 16, 2013 (the
9effective date of Public Act 98-456).
10    (17) Until July 1, 2003, distillation machinery and
11equipment, sold as a unit or kit, assembled or installed by the
12retailer, certified by the user to be used only for the
13production of ethyl alcohol that will be used for consumption
14as motor fuel or as a component of motor fuel for the personal
15use of the user, and not subject to sale or resale.
16    (18) Manufacturing and assembling machinery and equipment
17used primarily in the process of manufacturing or assembling
18tangible personal property for wholesale or retail sale or
19lease, whether that sale or lease is made directly by the
20manufacturer or by some other person, whether the materials
21used in the process are owned by the manufacturer or some other
22person, or whether that sale or lease is made apart from or as
23an incident to the seller's engaging in the service occupation
24of producing machines, tools, dies, jigs, patterns, gauges, or
25other similar items of no commercial value on special order for
26a particular purchaser. The exemption provided by this

 

 

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1paragraph (18) does not include machinery and equipment used in
2(i) the generation of electricity for wholesale or retail sale;
3(ii) the generation or treatment of natural or artificial gas
4for wholesale or retail sale that is delivered to customers
5through pipes, pipelines, or mains; or (iii) the treatment of
6water for wholesale or retail sale that is delivered to
7customers through pipes, pipelines, or mains. The provisions of
8Public Act 98-583 are declaratory of existing law as to the
9meaning and scope of this exemption.
10    (19) Personal property delivered to a purchaser or
11purchaser's donee inside Illinois when the purchase order for
12that personal property was received by a florist located
13outside Illinois who has a florist located inside Illinois
14deliver the personal property.
15    (20) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (21) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (21) is exempt from the provisions
23of Section 3-90, and the exemption provided for under this item
24(21) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after January 1,
262008 for such taxes paid during the period beginning May 30,

 

 

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12000 and ending on January 1, 2008.
2    (22) Computers and communications equipment utilized for
3any hospital purpose and equipment used in the diagnosis,
4analysis, or treatment of hospital patients purchased by a
5lessor who leases the equipment, under a lease of one year or
6longer executed or in effect at the time the lessor would
7otherwise be subject to the tax imposed by this Act, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of the
10Retailers' Occupation Tax Act. If the equipment is leased in a
11manner that does not qualify for this exemption or is used in
12any other non-exempt manner, the lessor shall be liable for the
13tax imposed under this Act or the Service Use Tax Act, as the
14case may be, based on the fair market value of the property at
15the time the non-qualifying use occurs. No lessor shall collect
16or attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall have
21a legal right to claim a refund of that amount from the lessor.
22If, however, that amount is not refunded to the lessee for any
23reason, the lessor is liable to pay that amount to the
24Department.
25    (23) Personal property purchased by a lessor who leases the
26property, under a lease of one year or longer executed or in

 

 

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

 

 

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1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (25) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (26) Beginning July 1, 1999, game or game birds purchased
16at a "game breeding and hunting preserve area" as that term is
17used in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 3-90.
19    (27) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the Department
23to be organized and operated exclusively for educational
24purposes. For purposes of this exemption, "a corporation,
25limited liability company, society, association, foundation,
26or institution organized and operated exclusively for

 

 

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1educational purposes" means all tax-supported public schools,
2private schools that offer systematic instruction in useful
3branches of learning by methods common to public schools and
4that compare favorably in their scope and intensity with the
5course of study presented in tax-supported schools, and
6vocational or technical schools or institutes organized and
7operated exclusively to provide a course of study of not less
8than 6 weeks duration and designed to prepare individuals to
9follow a trade or to pursue a manual, technical, mechanical,
10industrial, business, or commercial occupation.
11    (28) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 3-90.
25    (29) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

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1serve hot food and beverages, including coffee, soup, and other
2items, and replacement parts for these machines. Beginning
3January 1, 2002 and through June 30, 2003, machines and parts
4for machines used in commercial, coin-operated amusement and
5vending business if a use or occupation tax is paid on the
6gross receipts derived from the use of the commercial,
7coin-operated amusement and vending machines. This paragraph
8is exempt from the provisions of Section 3-90.
9    (30) Beginning January 1, 2001 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks, and food that has been prepared for immediate
13consumption) and prescription and nonprescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or in a licensed facility as defined
20in the ID/DD Community Care Act or the Specialized Mental
21Health Rehabilitation Act of 2013.
22    (31) Beginning on the effective date of this amendatory Act
23of the 92nd General Assembly, computers and communications
24equipment utilized for any hospital purpose and equipment used
25in the diagnosis, analysis, or treatment of hospital patients
26purchased by a lessor who leases the equipment, under a lease

 

 

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1of one year or longer executed or in effect at the time the
2lessor would otherwise be subject to the tax imposed by this
3Act, to a hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the equipment is leased in a
6manner that does not qualify for this exemption or is used in
7any other nonexempt manner, the lessor shall be liable for the
8tax imposed under this Act or the Service Use Tax Act, as the
9case may be, based on the fair market value of the property at
10the time the nonqualifying use occurs. No lessor shall collect
11or attempt to collect an amount (however designated) that
12purports to reimburse that lessor for the tax imposed by this
13Act or the Service Use Tax Act, as the case may be, if the tax
14has not been paid by the lessor. If a lessor improperly
15collects any such amount from the lessee, the lessee shall have
16a legal right to claim a refund of that amount from the lessor.
17If, however, that amount is not refunded to the lessee for any
18reason, the lessor is liable to pay that amount to the
19Department. This paragraph is exempt from the provisions of
20Section 3-90.
21    (32) Beginning on the effective date of this amendatory Act
22of the 92nd General Assembly, personal property purchased by a
23lessor who leases the property, under a lease of one year or
24longer executed or in effect at the time the lessor would
25otherwise be subject to the tax imposed by this Act, to a
26governmental body that has been issued an active sales tax

 

 

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1exemption identification number by the Department under
2Section 1g of the Retailers' Occupation Tax Act. If the
3property is leased in a manner that does not qualify for this
4exemption or used in any other nonexempt manner, the lessor
5shall be liable for the tax imposed under this Act or the
6Service Use Tax Act, as the case may be, based on the fair
7market value of the property at the time the nonqualifying use
8occurs. No lessor shall collect or attempt to collect an amount
9(however designated) that purports to reimburse that lessor for
10the tax imposed by this Act or the Service Use Tax Act, as the
11case may be, if the tax has not been paid by the lessor. If a
12lessor improperly collects any such amount from the lessee, the
13lessee shall have a legal right to claim a refund of that
14amount from the lessor. If, however, that amount is not
15refunded to the lessee for any reason, the lessor is liable to
16pay that amount to the Department. This paragraph is exempt
17from the provisions of Section 3-90.
18    (33) On and after July 1, 2003 and through June 30, 2004,
19the use in this State of motor vehicles of the second division
20with a gross vehicle weight in excess of 8,000 pounds and that
21are subject to the commercial distribution fee imposed under
22Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
231, 2004 and through June 30, 2005, the use in this State of
24motor vehicles of the second division: (i) with a gross vehicle
25weight rating in excess of 8,000 pounds; (ii) that are subject
26to the commercial distribution fee imposed under Section

 

 

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13-815.1 of the Illinois Vehicle Code; and (iii) that are
2primarily used for commercial purposes. Through June 30, 2005,
3this exemption applies to repair and replacement parts added
4after the initial purchase of such a motor vehicle if that
5motor vehicle is used in a manner that would qualify for the
6rolling stock exemption otherwise provided for in this Act. For
7purposes of this paragraph, the term "used for commercial
8purposes" means the transportation of persons or property in
9furtherance of any commercial or industrial enterprise,
10whether for-hire or not.
11    (34) Beginning January 1, 2008, tangible personal property
12used in the construction or maintenance of a community water
13supply, as defined under Section 3.145 of the Environmental
14Protection Act, that is operated by a not-for-profit
15corporation that holds a valid water supply permit issued under
16Title IV of the Environmental Protection Act. This paragraph is
17exempt from the provisions of Section 3-90.
18    (35) Beginning January 1, 2010, materials, parts,
19equipment, components, and furnishings incorporated into or
20upon an aircraft as part of the modification, refurbishment,
21completion, replacement, repair, or maintenance of the
22aircraft. This exemption includes consumable supplies used in
23the modification, refurbishment, completion, replacement,
24repair, and maintenance of aircraft, but excludes any
25materials, parts, equipment, components, and consumable
26supplies used in the modification, replacement, repair, and

 

 

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1maintenance of aircraft engines or power plants, whether such
2engines or power plants are installed or uninstalled upon any
3such aircraft. "Consumable supplies" include, but are not
4limited to, adhesive, tape, sandpaper, general purpose
5lubricants, cleaning solution, latex gloves, and protective
6films. This exemption applies only to the use of qualifying
7tangible personal property by persons who modify, refurbish,
8complete, repair, replace, or maintain aircraft and who (i)
9hold an Air Agency Certificate and are empowered to operate an
10approved repair station by the Federal Aviation
11Administration, (ii) have a Class IV Rating, and (iii) conduct
12operations in accordance with Part 145 of the Federal Aviation
13Regulations. The exemption does not include aircraft operated
14by a commercial air carrier providing scheduled passenger air
15service pursuant to authority issued under Part 121 or Part 129
16of the Federal Aviation Regulations. The changes made to this
17paragraph (35) by Public Act 98-534 are declarative of existing
18law.
19    (36) Tangible personal property purchased by a
20public-facilities corporation, as described in Section
2111-65-10 of the Illinois Municipal Code, for purposes of
22constructing or furnishing a municipal convention hall, but
23only if the legal title to the municipal convention hall is
24transferred to the municipality without any further
25consideration by or on behalf of the municipality at the time
26of the completion of the municipal convention hall or upon the

 

 

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1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 3-90.
7(Source: P.A. 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431,
8eff. 8-16-11; 97-636, eff. 6-1-12; 97-767, eff. 7-9-12; 98-104,
9eff. 7-22-13; 98-422, eff. 8-16-13; 98-456, eff. 8-16-13;
1098-534, eff. 8-23-13; 98-574, eff. 1-1-14; 98-583, eff. 1-1-14;
1198-756, eff. 7-16-14.)
 
12    (35 ILCS 105/3-85)
13    Sec. 3-85. Manufacturer's Purchase Credit. For purchases
14of machinery and equipment made on and after January 1, 1995
15through June 30, 2003, and on and after September 1, 2004
16through August 30, 2014, a purchaser of manufacturing machinery
17and equipment that qualifies for the exemption provided by
18paragraph (18) of Section 3-5 of this Act earns a credit in an
19amount equal to a fixed percentage of the tax which would have
20been incurred under this Act on those purchases. For purchases
21of graphic arts machinery and equipment made on or after July
221, 1996 and through June 30, 2003, and on and after September
231, 2004 through August 30, 2024 August 30, 2014, a purchaser of
24graphic arts machinery and equipment that qualifies for the
25exemption provided by paragraph (6) of Section 3-5 of this Act

 

 

SB1293- 19 -LRB099 09014 HLH 29194 b

1earns a credit in an amount equal to a fixed percentage of the
2tax that would have been incurred under this Act on those
3purchases. The credit earned for purchases of manufacturing
4machinery and equipment or graphic arts machinery and equipment
5shall be referred to as the Manufacturer's Purchase Credit. A
6graphic arts producer is a person engaged in graphic arts
7production as defined in Section 2-30 of the Retailers'
8Occupation Tax Act. Beginning July 1, 1996, all references in
9this Section to manufacturers or manufacturing shall also be
10deemed to refer to graphic arts producers or graphic arts
11production. It is the intent of the General Assembly that the
12Manufacturer's Purchase Credit for purchases of graphic arts
13machinery and equipment shall apply during the entire period
14from September 1, 2004 through August 30, 2024, including, but
15not limited to, the period beginning on August 31, 2014 and
16ending on the effective date of this amendatory Act of the 99th
17General Assembly.
18    The amount of credit shall be a percentage of the tax that
19would have been incurred on the purchase of manufacturing
20machinery and equipment or graphic arts machinery and equipment
21if the exemptions provided by paragraph (6) or paragraph (18)
22of Section 3-5 of this Act had not been applicable. The
23percentage shall be as follows:
24        (1) 15% for purchases made on or before June 30, 1995.
25        (2) 25% for purchases made after June 30, 1995, and on
26    or before June 30, 1996.

 

 

SB1293- 20 -LRB099 09014 HLH 29194 b

1        (3) 40% for purchases made after June 30, 1996, and on
2    or before June 30, 1997.
3        (4) 50% for purchases made on or after July 1, 1997.
4    (a) Manufacturer's Purchase Credit earned prior to July 1,
52003. This subsection (a) applies to Manufacturer's Purchase
6Credit earned prior to July 1, 2003. A purchaser of production
7related tangible personal property desiring to use the
8Manufacturer's Purchase Credit shall certify to the seller
9prior to October 1, 2003 that the purchaser is satisfying all
10or part of the liability under the Use Tax Act or the Service
11Use Tax Act that is due on the purchase of the production
12related tangible personal property by use of Manufacturer's
13Purchase Credit. The Manufacturer's Purchase Credit
14certification must be dated and shall include the name and
15address of the purchaser, the purchaser's registration number,
16if registered, the credit being applied, and a statement that
17the State Use Tax or Service Use Tax liability is being
18satisfied with the manufacturer's or graphic arts producer's
19accumulated purchase credit. Certification may be incorporated
20into the manufacturer's or graphic arts producer's purchase
21order. Manufacturer's Purchase Credit certification provided
22by the manufacturer or graphic arts producer prior to October
231, 2003 may be used to satisfy the retailer's or serviceman's
24liability under the Retailers' Occupation Tax Act or Service
25Occupation Tax Act for the credit claimed, not to exceed 6.25%
26of the receipts subject to tax from a qualifying purchase, but

 

 

SB1293- 21 -LRB099 09014 HLH 29194 b

1only if the retailer or serviceman reports the Manufacturer's
2Purchase Credit claimed as required by the Department. A
3Manufacturer's Purchase Credit reported on any original or
4amended return filed under this Act after October 20, 2003
5shall be disallowed. The Manufacturer's Purchase Credit earned
6by purchase of exempt manufacturing machinery and equipment or
7graphic arts machinery and equipment is a non-transferable
8credit. A manufacturer or graphic arts producer that enters
9into a contract involving the installation of tangible personal
10property into real estate within a manufacturing or graphic
11arts production facility may, prior to October 1, 2003,
12authorize a construction contractor to utilize credit
13accumulated by the manufacturer or graphic arts producer to
14purchase the tangible personal property. A manufacturer or
15graphic arts producer intending to use accumulated credit to
16purchase such tangible personal property shall execute a
17written contract authorizing the contractor to utilize a
18specified dollar amount of credit. The contractor shall
19furnish, prior to October 1, 2003, the supplier with the
20manufacturer's or graphic arts producer's name, registration
21or resale number, and a statement that a specific amount of the
22Use Tax or Service Use Tax liability, not to exceed 6.25% of
23the selling price, is being satisfied with the credit. The
24manufacturer or graphic arts producer shall remain liable to
25timely report all information required by the annual Report of
26Manufacturer's Purchase Credit Used for all credit utilized by

 

 

SB1293- 22 -LRB099 09014 HLH 29194 b

1a construction contractor.
2    No Manufacturer's Purchase Credit earned prior to July 1,
32003 may be used after October 1, 2003. The Manufacturer's
4Purchase Credit may be used to satisfy liability under the Use
5Tax Act or the Service Use Tax Act due on the purchase of
6production related tangible personal property (including
7purchases by a manufacturer, by a graphic arts producer, or by
8a lessor who rents or leases the use of the property to a
9manufacturer or graphic arts producer) that does not otherwise
10qualify for the manufacturing machinery and equipment
11exemption or the graphic arts machinery and equipment
12exemption. "Production related tangible personal property"
13means (i) all tangible personal property used or consumed by
14the purchaser in a manufacturing facility in which a
15manufacturing process described in Section 2-45 of the
16Retailers' Occupation Tax Act takes place, including tangible
17personal property purchased for incorporation into real estate
18within a manufacturing facility and including, but not limited
19to, tangible personal property used or consumed in activities
20such as preproduction material handling, receiving, quality
21control, inventory control, storage, staging, and packaging
22for shipping and transportation purposes; (ii) all tangible
23personal property used or consumed by the purchaser in a
24graphic arts facility in which graphic arts production as
25described in Section 2-30 of the Retailers' Occupation Tax Act
26takes place, including tangible personal property purchased

 

 

SB1293- 23 -LRB099 09014 HLH 29194 b

1for incorporation into real estate within a graphic arts
2facility and including, but not limited to, all tangible
3personal property used or consumed in activities such as
4graphic arts preliminary or pre-press production,
5pre-production material handling, receiving, quality control,
6inventory control, storage, staging, sorting, labeling,
7mailing, tying, wrapping, and packaging; and (iii) all tangible
8personal property used or consumed by the purchaser for
9research and development. "Production related tangible
10personal property" does not include (i) tangible personal
11property used, within or without a manufacturing facility, in
12sales, purchasing, accounting, fiscal management, marketing,
13personnel recruitment or selection, or landscaping or (ii)
14tangible personal property required to be titled or registered
15with a department, agency, or unit of federal, state, or local
16government. The Manufacturer's Purchase Credit may be used,
17prior to October 1, 2003, to satisfy the tax arising either
18from the purchase of machinery and equipment on or after
19January 1, 1995 for which the exemption provided by paragraph
20(18) of Section 3-5 of this Act was erroneously claimed, or the
21purchase of machinery and equipment on or after July 1, 1996
22for which the exemption provided by paragraph (6) of Section
233-5 of this Act was erroneously claimed, but not in
24satisfaction of penalty, if any, and interest for failure to
25pay the tax when due. A purchaser of production related
26tangible personal property who is required to pay Illinois Use

 

 

SB1293- 24 -LRB099 09014 HLH 29194 b

1Tax or Service Use Tax on the purchase directly to the
2Department may, prior to October 1, 2003, utilize the
3Manufacturer's Purchase Credit in satisfaction of the tax
4arising from that purchase, but not in satisfaction of penalty
5and interest. A purchaser who uses the Manufacturer's Purchase
6Credit to purchase property which is later determined not to be
7production related tangible personal property may be liable for
8tax, penalty, and interest on the purchase of that property as
9of the date of purchase but shall be entitled to use the
10disallowed Manufacturer's Purchase Credit, so long as it has
11not expired and is used prior to October 1, 2003, on qualifying
12purchases of production related tangible personal property not
13previously subject to credit usage. The Manufacturer's
14Purchase Credit earned by a manufacturer or graphic arts
15producer expires the last day of the second calendar year
16following the calendar year in which the credit arose. No
17Manufacturer's Purchase Credit may be used after September 30,
182003 regardless of when that credit was earned.
19    A purchaser earning Manufacturer's Purchase Credit shall
20sign and file an annual Report of Manufacturer's Purchase
21Credit Earned for each calendar year no later than the last day
22of the sixth month following the calendar year in which a
23Manufacturer's Purchase Credit is earned. A Report of
24Manufacturer's Purchase Credit Earned shall be filed on forms
25as prescribed or approved by the Department and shall state,
26for each month of the calendar year: (i) the total purchase

 

 

SB1293- 25 -LRB099 09014 HLH 29194 b

1price of all purchases of exempt manufacturing or graphic arts
2machinery on which the credit was earned; (ii) the total State
3Use Tax or Service Use Tax which would have been due on those
4items; (iii) the percentage used to calculate the amount of
5credit earned; (iv) the amount of credit earned; and (v) such
6other information as the Department may reasonably require. A
7purchaser earning Manufacturer's Purchase Credit shall
8maintain records which identify, as to each purchase of
9manufacturing or graphic arts machinery and equipment on which
10the purchaser earned Manufacturer's Purchase Credit, the
11vendor (including, if applicable, either the vendor's
12registration number or Federal Employer Identification
13Number), the purchase price, and the amount of Manufacturer's
14Purchase Credit earned on each purchase.
15    A purchaser using Manufacturer's Purchase Credit shall
16sign and file an annual Report of Manufacturer's Purchase
17Credit Used for each calendar year no later than the last day
18of the sixth month following the calendar year in which a
19Manufacturer's Purchase Credit is used. A Report of
20Manufacturer's Purchase Credit Used shall be filed on forms as
21prescribed or approved by the Department and shall state, for
22each month of the calendar year: (i) the total purchase price
23of production related tangible personal property purchased
24from Illinois suppliers; (ii) the total purchase price of
25production related tangible personal property purchased from
26out-of-state suppliers; (iii) the total amount of credit used

 

 

SB1293- 26 -LRB099 09014 HLH 29194 b

1during such month; and (iv) such other information as the
2Department may reasonably require. A purchaser using
3Manufacturer's Purchase Credit shall maintain records that
4identify, as to each purchase of production related tangible
5personal property on which the purchaser used Manufacturer's
6Purchase Credit, the vendor (including, if applicable, either
7the vendor's registration number or Federal Employer
8Identification Number), the purchase price, and the amount of
9Manufacturer's Purchase Credit used on each purchase.
10    No annual report shall be filed before May 1, 1996 or after
11June 30, 2004. A purchaser that fails to file an annual Report
12of Manufacturer's Purchase Credit Earned or an annual Report of
13Manufacturer's Purchase Credit Used by the last day of the
14sixth month following the end of the calendar year shall
15forfeit all Manufacturer's Purchase Credit for that calendar
16year unless it establishes that its failure to file was due to
17reasonable cause. Manufacturer's Purchase Credit reports may
18be amended to report and claim credit on qualifying purchases
19not previously reported at any time before the credit would
20have expired, unless both the Department and the purchaser have
21agreed to an extension of the statute of limitations for the
22issuance of a notice of tax liability as provided in Section 4
23of the Retailers' Occupation Tax Act. If the time for
24assessment or refund has been extended, then amended reports
25for a calendar year may be filed at any time prior to the date
26to which the statute of limitations for the calendar year or

 

 

SB1293- 27 -LRB099 09014 HLH 29194 b

1portion thereof has been extended. No Manufacturer's Purchase
2Credit report filed with the Department for periods prior to
3January 1, 1995 shall be approved. Manufacturer's Purchase
4Credit claimed on an amended report may be used, until October
51, 2003, to satisfy tax liability under the Use Tax Act or the
6Service Use Tax Act (i) on qualifying purchases of production
7related tangible personal property made after the date the
8amended report is filed or (ii) assessed by the Department on
9qualifying purchases of production related tangible personal
10property made in the case of manufacturers on or after January
111, 1995, or in the case of graphic arts producers on or after
12July 1, 1996.
13    If the purchaser is not the manufacturer or a graphic arts
14producer, but rents or leases the use of the property to a
15manufacturer or graphic arts producer, the purchaser may earn,
16report, and use Manufacturer's Purchase Credit in the same
17manner as a manufacturer or graphic arts producer.
18    A purchaser shall not be entitled to any Manufacturer's
19Purchase Credit for a purchase that is required to be reported
20and is not timely reported as provided in this Section. A
21purchaser remains liable for (i) any tax that was satisfied by
22use of a Manufacturer's Purchase Credit, as of the date of
23purchase, if that use is not timely reported as required in
24this Section and (ii) for any applicable penalties and interest
25for failing to pay the tax when due. No Manufacturer's Purchase
26Credit may be used after September 30, 2003 to satisfy any tax

 

 

SB1293- 28 -LRB099 09014 HLH 29194 b

1liability imposed under this Act, including any audit
2liability.
3    (b) Manufacturer's Purchase Credit earned on and after
4September 1, 2004. This subsection (b) applies to
5Manufacturer's Purchase Credit earned on and after September 1,
62004. Manufacturer's Purchase Credit earned on or after
7September 1, 2004 may only be used to satisfy the Use Tax or
8Service Use Tax liability incurred on production related
9tangible personal property purchased on or after September 1,
102004. A purchaser of production related tangible personal
11property desiring to use the Manufacturer's Purchase Credit
12shall certify to the seller that the purchaser is satisfying
13all or part of the liability under the Use Tax Act or the
14Service Use Tax Act that is due on the purchase of the
15production related tangible personal property by use of
16Manufacturer's Purchase Credit. The Manufacturer's Purchase
17Credit certification must be dated and shall include the name
18and address of the purchaser, the purchaser's registration
19number, if registered, the credit being applied, and a
20statement that the State Use Tax or Service Use Tax liability
21is being satisfied with the manufacturer's or graphic arts
22producer's accumulated purchase credit. Certification may be
23incorporated into the manufacturer's or graphic arts
24producer's purchase order. Manufacturer's Purchase Credit
25certification provided by the manufacturer or graphic arts
26producer may be used to satisfy the retailer's or serviceman's

 

 

SB1293- 29 -LRB099 09014 HLH 29194 b

1liability under the Retailers' Occupation Tax Act or Service
2Occupation Tax Act for the credit claimed, not to exceed 6.25%
3of the receipts subject to tax from a qualifying purchase, but
4only if the retailer or serviceman reports the Manufacturer's
5Purchase Credit claimed as required by the Department. The
6Manufacturer's Purchase Credit earned by purchase of exempt
7manufacturing machinery and equipment or graphic arts
8machinery and equipment is a non-transferable credit. A
9manufacturer or graphic arts producer that enters into a
10contract involving the installation of tangible personal
11property into real estate within a manufacturing or graphic
12arts production facility may, on or after September 1, 2004,
13authorize a construction contractor to utilize credit
14accumulated by the manufacturer or graphic arts producer to
15purchase the tangible personal property. A manufacturer or
16graphic arts producer intending to use accumulated credit to
17purchase such tangible personal property shall execute a
18written contract authorizing the contractor to utilize a
19specified dollar amount of credit. The contractor shall furnish
20the supplier with the manufacturer's or graphic arts producer's
21name, registration or resale number, and a statement that a
22specific amount of the Use Tax or Service Use Tax liability,
23not to exceed 6.25% of the selling price, is being satisfied
24with the credit. The manufacturer or graphic arts producer
25shall remain liable to timely report all information required
26by the annual Report of Manufacturer's Purchase Credit Used for

 

 

SB1293- 30 -LRB099 09014 HLH 29194 b

1all credit utilized by a construction contractor.
2    The Manufacturer's Purchase Credit may be used to satisfy
3liability under the Use Tax Act or the Service Use Tax Act due
4on the purchase, made on or after September 1, 2004, of
5production related tangible personal property (including
6purchases by a manufacturer, by a graphic arts producer, or by
7a lessor who rents or leases the use of the property to a
8manufacturer or graphic arts producer) that does not otherwise
9qualify for the manufacturing machinery and equipment
10exemption or the graphic arts machinery and equipment
11exemption. "Production related tangible personal property"
12means (i) all tangible personal property used or consumed by
13the purchaser in a manufacturing facility in which a
14manufacturing process described in Section 2-45 of the
15Retailers' Occupation Tax Act takes place, including tangible
16personal property purchased for incorporation into real estate
17within a manufacturing facility and including, but not limited
18to, tangible personal property used or consumed in activities
19such as preproduction material handling, receiving, quality
20control, inventory control, storage, staging, and packaging
21for shipping and transportation purposes; (ii) all tangible
22personal property used or consumed by the purchaser in a
23graphic arts facility in which graphic arts production as
24described in Section 2-30 of the Retailers' Occupation Tax Act
25takes place, including tangible personal property purchased
26for incorporation into real estate within a graphic arts

 

 

SB1293- 31 -LRB099 09014 HLH 29194 b

1facility and including, but not limited to, all tangible
2personal property used or consumed in activities such as
3graphic arts preliminary or pre-press production,
4pre-production material handling, receiving, quality control,
5inventory control, storage, staging, sorting, labeling,
6mailing, tying, wrapping, and packaging; and (iii) all tangible
7personal property used or consumed by the purchaser for
8research and development. "Production related tangible
9personal property" does not include (i) tangible personal
10property used, within or without a manufacturing facility, in
11sales, purchasing, accounting, fiscal management, marketing,
12personnel recruitment or selection, or landscaping or (ii)
13tangible personal property required to be titled or registered
14with a department, agency, or unit of federal, state, or local
15government. The Manufacturer's Purchase Credit may be used to
16satisfy the tax arising either from the purchase of machinery
17and equipment on or after September 1, 2004 for which the
18exemption provided by paragraph (18) of Section 3-5 of this Act
19was erroneously claimed, or the purchase of machinery and
20equipment on or after September 1, 2004 for which the exemption
21provided by paragraph (6) of Section 3-5 of this Act was
22erroneously claimed, but not in satisfaction of penalty, if
23any, and interest for failure to pay the tax when due. A
24purchaser of production related tangible personal property
25that is purchased on or after September 1, 2004 who is required
26to pay Illinois Use Tax or Service Use Tax on the purchase

 

 

SB1293- 32 -LRB099 09014 HLH 29194 b

1directly to the Department may utilize the Manufacturer's
2Purchase Credit in satisfaction of the tax arising from that
3purchase, but not in satisfaction of penalty and interest. A
4purchaser who uses the Manufacturer's Purchase Credit to
5purchase property on and after September 1, 2004 which is later
6determined not to be production related tangible personal
7property may be liable for tax, penalty, and interest on the
8purchase of that property as of the date of purchase but shall
9be entitled to use the disallowed Manufacturer's Purchase
10Credit, so long as it has not expired and is used on qualifying
11purchases of production related tangible personal property not
12previously subject to credit usage. The Manufacturer's
13Purchase Credit earned by a manufacturer or graphic arts
14producer expires the last day of the second calendar year
15following the calendar year in which the credit arose. A
16purchaser earning Manufacturer's Purchase Credit shall sign
17and file an annual Report of Manufacturer's Purchase Credit
18Earned for each calendar year no later than the last day of the
19sixth month following the calendar year in which a
20Manufacturer's Purchase Credit is earned. A Report of
21Manufacturer's Purchase Credit Earned shall be filed on forms
22as prescribed or approved by the Department and shall state,
23for each month of the calendar year: (i) the total purchase
24price of all purchases of exempt manufacturing or graphic arts
25machinery on which the credit was earned; (ii) the total State
26Use Tax or Service Use Tax which would have been due on those

 

 

SB1293- 33 -LRB099 09014 HLH 29194 b

1items; (iii) the percentage used to calculate the amount of
2credit earned; (iv) the amount of credit earned; and (v) such
3other information as the Department may reasonably require. A
4purchaser earning Manufacturer's Purchase Credit shall
5maintain records which identify, as to each purchase of
6manufacturing or graphic arts machinery and equipment on which
7the purchaser earned Manufacturer's Purchase Credit, the
8vendor (including, if applicable, either the vendor's
9registration number or Federal Employer Identification
10Number), the purchase price, and the amount of Manufacturer's
11Purchase Credit earned on each purchase. A purchaser using
12Manufacturer's Purchase Credit shall sign and file an annual
13Report of Manufacturer's Purchase Credit Used for each calendar
14year no later than the last day of the sixth month following
15the calendar year in which a Manufacturer's Purchase Credit is
16used. A Report of Manufacturer's Purchase Credit Used shall be
17filed on forms as prescribed or approved by the Department and
18shall state, for each month of the calendar year: (i) the total
19purchase price of production related tangible personal
20property purchased from Illinois suppliers; (ii) the total
21purchase price of production related tangible personal
22property purchased from out-of-state suppliers; (iii) the
23total amount of credit used during such month; and (iv) such
24other information as the Department may reasonably require. A
25purchaser using Manufacturer's Purchase Credit shall maintain
26records that identify, as to each purchase of production

 

 

SB1293- 34 -LRB099 09014 HLH 29194 b

1related tangible personal property on which the purchaser used
2Manufacturer's Purchase Credit, the vendor (including, if
3applicable, either the vendor's registration number or Federal
4Employer Identification Number), the purchase price, and the
5amount of Manufacturer's Purchase Credit used on each purchase.
6    A purchaser that fails to file an annual Report of
7Manufacturer's Purchase Credit Earned or an annual Report of
8Manufacturer's Purchase Credit Used by the last day of the
9sixth month following the end of the calendar year shall
10forfeit all Manufacturer's Purchase Credit for that calendar
11year unless it establishes that its failure to file was due to
12reasonable cause. Manufacturer's Purchase Credit reports may
13be amended to report and claim credit on qualifying purchases
14not previously reported at any time before the credit would
15have expired, unless both the Department and the purchaser have
16agreed to an extension of the statute of limitations for the
17issuance of a notice of tax liability as provided in Section 4
18of the Retailers' Occupation Tax Act. If the time for
19assessment or refund has been extended, then amended reports
20for a calendar year may be filed at any time prior to the date
21to which the statute of limitations for the calendar year or
22portion thereof has been extended. Manufacturer's Purchase
23Credit claimed on an amended report may be used to satisfy tax
24liability under the Use Tax Act or the Service Use Tax Act (i)
25on qualifying purchases of production related tangible
26personal property made after the date the amended report is

 

 

SB1293- 35 -LRB099 09014 HLH 29194 b

1filed or (ii) assessed by the Department on qualifying
2production related tangible personal property purchased on or
3after September 1, 2004. If the purchaser is not the
4manufacturer or a graphic arts producer, but rents or leases
5the use of the property to a manufacturer or graphic arts
6producer, the purchaser may earn, report, and use
7Manufacturer's Purchase Credit in the same manner as a
8manufacturer or graphic arts producer. A purchaser shall not be
9entitled to any Manufacturer's Purchase Credit for a purchase
10that is required to be reported and is not timely reported as
11provided in this Section. A purchaser remains liable for (i)
12any tax that was satisfied by use of a Manufacturer's Purchase
13Credit, as of the date of purchase, if that use is not timely
14reported as required in this Section and (ii) for any
15applicable penalties and interest for failing to pay the tax
16when due.
17(Source: P.A. 96-116, eff. 7-31-09.)
 
18    Section 10. The Service Use Tax Act is amended by changing
19Sections 3-5 and 3-70 as follows:
 
20    (35 ILCS 110/3-5)
21    Sec. 3-5. Exemptions. Use of the following tangible
22personal property is exempt from the tax imposed by this Act:
23    (1) Personal property purchased from a corporation,
24society, association, foundation, institution, or

 

 

SB1293- 36 -LRB099 09014 HLH 29194 b

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

 

 

SB1293- 37 -LRB099 09014 HLH 29194 b

1country, and bullion.
2    (5) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2024 August 30, 2014, graphic arts
4machinery and equipment, including repair and replacement
5parts, both new and used, and including that manufactured on
6special order or purchased for lease, certified by the
7purchaser to be used primarily for graphic arts production.
8Equipment includes chemicals or chemicals acting as catalysts
9but only if the chemicals or chemicals acting as catalysts
10effect a direct and immediate change upon a graphic arts
11product. This paragraph is exempt from the provisions of
12Section 3-75. It is the intent of the General Assembly that the
13exemption under this paragraph (5) shall apply during the
14entire period from September 1, 2004 through August 30, 2024,
15including, but not limited to, the period beginning on August
1631, 2014 and ending on the effective date of this amendatory
17Act of the 99th General Assembly.
18    (6) Personal property purchased from a teacher-sponsored
19student organization affiliated with an elementary or
20secondary school located in Illinois.
21    (7) Farm machinery and equipment, both new and used,
22including that manufactured on special order, certified by the
23purchaser to be used primarily for production agriculture or
24State or federal agricultural programs, including individual
25replacement parts for the machinery and equipment, including
26machinery and equipment purchased for lease, and including

 

 

SB1293- 38 -LRB099 09014 HLH 29194 b

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

 

 

SB1293- 39 -LRB099 09014 HLH 29194 b

1crop data for the purpose of formulating animal diets and
2agricultural chemicals. This item (7) is exempt from the
3provisions of Section 3-75.
4    (8) Until June 30, 2013, fuel and petroleum products sold
5to or used by an air common carrier, certified by the carrier
6to be used for consumption, shipment, or storage in the conduct
7of its business as an air common carrier, for a flight destined
8for or returning from a location or locations outside the
9United States without regard to previous or subsequent domestic
10stopovers.
11    Beginning July 1, 2013, fuel and petroleum products sold to
12or used by an air carrier, certified by the carrier to be used
13for consumption, shipment, or storage in the conduct of its
14business as an air common carrier, for a flight that (i) is
15engaged in foreign trade or is engaged in trade between the
16United States and any of its possessions and (ii) transports at
17least one individual or package for hire from the city of
18origination to the city of final destination on the same
19aircraft, without regard to a change in the flight number of
20that aircraft.
21    (9) Proceeds of mandatory service charges separately
22stated on customers' bills for the purchase and consumption of
23food and beverages acquired as an incident to the purchase of a
24service from a serviceman, to the extent that the proceeds of
25the service charge are in fact turned over as tips or as a
26substitute for tips to the employees who participate directly

 

 

SB1293- 40 -LRB099 09014 HLH 29194 b

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

 

 

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1Public Act 98-456) for such taxes paid during the period
2beginning July 1, 2003 and ending on August 16, 2013 (the
3effective date of Public Act 98-456).
4    (13) Semen used for artificial insemination of livestock
5for direct agricultural production.
6    (14) Horses, or interests in horses, registered with and
7meeting the requirements of any of the Arabian Horse Club
8Registry of America, Appaloosa Horse Club, American Quarter
9Horse Association, United States Trotting Association, or
10Jockey Club, as appropriate, used for purposes of breeding or
11racing for prizes. This item (14) is exempt from the provisions
12of Section 3-75, and the exemption provided for under this item
13(14) applies for all periods beginning May 30, 1995, but no
14claim for credit or refund is allowed on or after the effective
15date of this amendatory Act of the 95th General Assembly for
16such taxes paid during the period beginning May 30, 2000 and
17ending on the effective date of this amendatory Act of the 95th
18General Assembly.
19    (15) Computers and communications equipment utilized for
20any hospital purpose and equipment used in the diagnosis,
21analysis, or treatment of hospital patients purchased by a
22lessor who leases the equipment, under a lease of one year or
23longer executed or in effect at the time the lessor would
24otherwise be subject to the tax imposed by this Act, to a
25hospital that has been issued an active tax exemption
26identification number by the Department under Section 1g of the

 

 

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

 

 

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1to collect an amount (however designated) that purports to
2reimburse that lessor for the tax imposed by this Act or the
3Use Tax Act, as the case may be, if the tax has not been paid by
4the lessor. If a lessor improperly collects any such amount
5from the lessee, the lessee shall have a legal right to claim a
6refund of that amount from the lessor. If, however, that amount
7is not refunded to the lessee for any reason, the lessor is
8liable to pay that amount to the Department.
9    (17) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is donated for
12disaster relief to be used in a State or federally declared
13disaster area in Illinois or bordering Illinois by a
14manufacturer or retailer that is registered in this State to a
15corporation, society, association, foundation, or institution
16that has been issued a sales tax exemption identification
17number by the Department that assists victims of the disaster
18who reside within the declared disaster area.
19    (18) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is used in the
22performance of infrastructure repairs in this State, including
23but not limited to municipal roads and streets, access roads,
24bridges, sidewalks, waste disposal systems, water and sewer
25line extensions, water distribution and purification
26facilities, storm water drainage and retention facilities, and

 

 

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1sewage treatment facilities, resulting from a State or
2federally declared disaster in Illinois or bordering Illinois
3when such repairs are initiated on facilities located in the
4declared disaster area within 6 months after the disaster.
5    (19) Beginning July 1, 1999, game or game birds purchased
6at a "game breeding and hunting preserve area" as that term is
7used in the Wildlife Code. This paragraph is exempt from the
8provisions of Section 3-75.
9    (20) A motor vehicle, as that term is defined in Section
101-146 of the Illinois Vehicle Code, that is donated to a
11corporation, limited liability company, society, association,
12foundation, or institution that is determined by the Department
13to be organized and operated exclusively for educational
14purposes. For purposes of this exemption, "a corporation,
15limited liability company, society, association, foundation,
16or institution organized and operated exclusively for
17educational purposes" means all tax-supported public schools,
18private schools that offer systematic instruction in useful
19branches of learning by methods common to public schools and
20that compare favorably in their scope and intensity with the
21course of study presented in tax-supported schools, and
22vocational or technical schools or institutes organized and
23operated exclusively to provide a course of study of not less
24than 6 weeks duration and designed to prepare individuals to
25follow a trade or to pursue a manual, technical, mechanical,
26industrial, business, or commercial occupation.

 

 

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1    (21) Beginning January 1, 2000, personal property,
2including food, purchased through fundraising events for the
3benefit of a public or private elementary or secondary school,
4a group of those schools, or one or more school districts if
5the events are sponsored by an entity recognized by the school
6district that consists primarily of volunteers and includes
7parents and teachers of the school children. This paragraph
8does not apply to fundraising events (i) for the benefit of
9private home instruction or (ii) for which the fundraising
10entity purchases the personal property sold at the events from
11another individual or entity that sold the property for the
12purpose of resale by the fundraising entity and that profits
13from the sale to the fundraising entity. This paragraph is
14exempt from the provisions of Section 3-75.
15    (22) Beginning January 1, 2000 and through December 31,
162001, new or used automatic vending machines that prepare and
17serve hot food and beverages, including coffee, soup, and other
18items, and replacement parts for these machines. Beginning
19January 1, 2002 and through June 30, 2003, machines and parts
20for machines used in commercial, coin-operated amusement and
21vending business if a use or occupation tax is paid on the
22gross receipts derived from the use of the commercial,
23coin-operated amusement and vending machines. This paragraph
24is exempt from the provisions of Section 3-75.
25    (23) Beginning August 23, 2001 and through June 30, 2016,
26food for human consumption that is to be consumed off the

 

 

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1premises where it is sold (other than alcoholic beverages, soft
2drinks, and food that has been prepared for immediate
3consumption) and prescription and nonprescription medicines,
4drugs, medical appliances, and insulin, urine testing
5materials, syringes, and needles used by diabetics, for human
6use, when purchased for use by a person receiving medical
7assistance under Article V of the Illinois Public Aid Code who
8resides in a licensed long-term care facility, as defined in
9the Nursing Home Care Act, or in a licensed facility as defined
10in the ID/DD Community Care Act or the Specialized Mental
11Health Rehabilitation Act of 2013.
12    (24) Beginning on the effective date of this amendatory Act
13of the 92nd General Assembly, computers and communications
14equipment utilized for any hospital purpose and equipment used
15in the diagnosis, analysis, or treatment of hospital patients
16purchased by a lessor who leases the equipment, under a lease
17of one year or longer executed or in effect at the time the
18lessor would otherwise be subject to the tax imposed by this
19Act, to a hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act. If the equipment is leased in a
22manner that does not qualify for this exemption or is used in
23any other nonexempt manner, the lessor shall be liable for the
24tax imposed under this Act or the Use Tax Act, as the case may
25be, based on the fair market value of the property at the time
26the nonqualifying use occurs. No lessor shall collect or

 

 

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

 

 

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1from the lessee, the lessee shall have a legal right to claim a
2refund of that amount from the lessor. If, however, that amount
3is not refunded to the lessee for any reason, the lessor is
4liable to pay that amount to the Department. This paragraph is
5exempt from the provisions of Section 3-75.
6    (26) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 3-75.
13    (27) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

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1films. This exemption applies only to the use of qualifying
2tangible personal property transferred incident to the
3modification, refurbishment, completion, replacement, repair,
4or maintenance of aircraft by persons who (i) hold an Air
5Agency Certificate and are empowered to operate an approved
6repair station by the Federal Aviation Administration, (ii)
7have a Class IV Rating, and (iii) conduct operations in
8accordance with Part 145 of the Federal Aviation Regulations.
9The exemption does not include aircraft operated by a
10commercial air carrier providing scheduled passenger air
11service pursuant to authority issued under Part 121 or Part 129
12of the Federal Aviation Regulations. The changes made to this
13paragraph (27) by Public Act 98-534 are declarative of existing
14law.
15    (28) Tangible personal property purchased by a
16public-facilities corporation, as described in Section
1711-65-10 of the Illinois Municipal Code, for purposes of
18constructing or furnishing a municipal convention hall, but
19only if the legal title to the municipal convention hall is
20transferred to the municipality without any further
21consideration by or on behalf of the municipality at the time
22of the completion of the municipal convention hall or upon the
23retirement or redemption of any bonds or other debt instruments
24issued by the public-facilities corporation in connection with
25the development of the municipal convention hall. This
26exemption includes existing public-facilities corporations as

 

 

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1provided in Section 11-65-25 of the Illinois Municipal Code.
2This paragraph is exempt from the provisions of Section 3-75.
3(Source: P.A. 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431,
4eff. 8-16-11; 97-636, eff. 6-1-12; 97-767, eff. 7-9-12; 98-104,
5eff. 7-22-13; 98-422, eff. 8-16-13; 98-456, eff. 8-16-13;
698-534, eff. 8-23-13; 98-756, eff. 7-16-14.)
 
7    (35 ILCS 110/3-70)
8    Sec. 3-70. Manufacturer's Purchase Credit. For purchases
9of machinery and equipment made on and after January 1, 1995
10and through June 30, 2003, and on and after September 1, 2004
11through August 30, 2014, a purchaser of manufacturing machinery
12and equipment that qualifies for the exemption provided by
13Section 2 of this Act earns a credit in an amount equal to a
14fixed percentage of the tax which would have been incurred
15under this Act on those purchases. For purchases of graphic
16arts machinery and equipment made on or after July 1, 1996
17through June 30, 2003, and on and after September 1, 2004
18through August 30, 2024 August 30, 2014, a purchase of graphic
19arts machinery and equipment that qualifies for the exemption
20provided by paragraph (5) of Section 3-5 of this Act earns a
21credit in an amount equal to a fixed percentage of the tax that
22would have been incurred under this Act on those purchases. The
23credit earned for the purchase of manufacturing machinery and
24equipment and graphic arts machinery and equipment shall be
25referred to as the Manufacturer's Purchase Credit. A graphic

 

 

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1arts producer is a person engaged in graphic arts production as
2defined in Section 3-30 of the Service Occupation Tax Act.
3Beginning July 1, 1996, all references in this Section to
4manufacturers or manufacturing shall also refer to graphic arts
5producers or graphic arts production. It is the intent of the
6General Assembly that the Manufacturer's Purchase Credit for
7purchases of graphic arts machinery and equipment shall apply
8during the entire period from September 1, 2004 through August
930, 2024, including, but not limited to, the period beginning
10on August 31, 2014 and ending on the effective date of this
11amendatory Act of the 99th General Assembly.
12    The amount of credit shall be a percentage of the tax that
13would have been incurred on the purchase of the manufacturing
14machinery and equipment or graphic arts machinery and equipment
15if the exemptions provided by Section 2 or paragraph (5) of
16Section 3-5 of this Act had not been applicable.
17    All purchases prior to October 1, 2003 of manufacturing
18machinery and equipment and graphic arts machinery and
19equipment that qualify for the exemptions provided by paragraph
20(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
21qualify for the credit without regard to whether the serviceman
22elected, or could have elected, under paragraph (7) of Section
232 of this Act to exclude the transaction from this Act. If the
24serviceman's billing to the service customer separately states
25a selling price for the exempt manufacturing machinery or
26equipment or the exempt graphic arts machinery and equipment,

 

 

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1the credit shall be calculated, as otherwise provided herein,
2based on that selling price. If the serviceman's billing does
3not separately state a selling price for the exempt
4manufacturing machinery and equipment or the exempt graphic
5arts machinery and equipment, the credit shall be calculated,
6as otherwise provided herein, based on 50% of the entire
7billing. If the serviceman contracts to design, develop, and
8produce special order manufacturing machinery and equipment or
9special order graphic arts machinery and equipment, and the
10billing does not separately state a selling price for such
11special order machinery and equipment, the credit shall be
12calculated, as otherwise provided herein, based on 50% of the
13entire billing. The provisions of this paragraph are effective
14for purchases made on or after January 1, 1995.
15    The percentage shall be as follows:
16        (1) 15% for purchases made on or before June 30, 1995.
17        (2) 25% for purchases made after June 30, 1995, and on
18    or before June 30, 1996.
19        (3) 40% for purchases made after June 30, 1996, and on
20    or before June 30, 1997.
21        (4) 50% for purchases made on or after July 1, 1997.
22    (a) Manufacturer's Purchase Credit earned prior to July 1,
232003. This subsection (a) applies to Manufacturer's Purchase
24Credit earned prior to July 1, 2003. A purchaser of production
25related tangible personal property desiring to use the
26Manufacturer's Purchase Credit shall certify to the seller

 

 

SB1293- 53 -LRB099 09014 HLH 29194 b

1prior to October 1, 2003 that the purchaser is satisfying all
2or part of the liability under the Use Tax Act or the Service
3Use Tax Act that is due on the purchase of the production
4related tangible personal property by use of a Manufacturer's
5Purchase Credit. The Manufacturer's Purchase Credit
6certification must be dated and shall include the name and
7address of the purchaser, the purchaser's registration number,
8if registered, the credit being applied, and a statement that
9the State Use Tax or Service Use Tax liability is being
10satisfied with the manufacturer's or graphic arts producer's
11accumulated purchase credit. Certification may be incorporated
12into the manufacturer's or graphic arts producer's purchase
13order. Manufacturer's Purchase Credit certification provided
14by the manufacturer or graphic arts producer prior to October
151, 2003 may be used to satisfy the retailer's or serviceman's
16liability under the Retailers' Occupation Tax Act or Service
17Occupation Tax Act for the credit claimed, not to exceed 6.25%
18of the receipts subject to tax from a qualifying purchase, but
19only if the retailer or serviceman reports the Manufacturer's
20Purchase Credit claimed as required by the Department. A
21Manufacturer's Purchase Credit reported on any original or
22amended return filed under this Act after October 20, 2003
23shall be disallowed. The Manufacturer's Purchase Credit earned
24by purchase of exempt manufacturing machinery and equipment or
25graphic arts machinery and equipment is a non-transferable
26credit. A manufacturer or graphic arts producer that enters

 

 

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1into a contract involving the installation of tangible personal
2property into real estate within a manufacturing or graphic
3arts production facility, prior to October 1, 2003, may
4authorize a construction contractor to utilize credit
5accumulated by the manufacturer or graphic arts producer to
6purchase the tangible personal property. A manufacturer or
7graphic arts producer intending to use accumulated credit to
8purchase such tangible personal property shall execute a
9written contract authorizing the contractor to utilize a
10specified dollar amount of credit. The contractor shall
11furnish, prior to October 1, 2003, the supplier with the
12manufacturer's or graphic arts producer's name, registration
13or resale number, and a statement that a specific amount of the
14Use Tax or Service Use Tax liability, not to exceed 6.25% of
15the selling price, is being satisfied with the credit. The
16manufacturer or graphic arts producer shall remain liable to
17timely report all information required by the annual Report of
18Manufacturer's Purchase Credit Used for credit utilized by a
19construction contractor.
20    No Manufacturer's Purchase Credit earned prior to July 1,
212003 may be used after October 1, 2003. The Manufacturer's
22Purchase Credit may be used to satisfy liability under the Use
23Tax Act or the Service Use Tax Act due on the purchase of
24production related tangible personal property (including
25purchases by a manufacturer, by a graphic arts producer, or a
26lessor who rents or leases the use of the property to a

 

 

SB1293- 55 -LRB099 09014 HLH 29194 b

1manufacturer or graphic arts producer) that does not otherwise
2qualify for the manufacturing machinery and equipment
3exemption or the graphic arts machinery and equipment
4exemption. "Production related tangible personal property"
5means (i) all tangible personal property used or consumed by
6the purchaser in a manufacturing facility in which a
7manufacturing process described in Section 2-45 of the
8Retailers' Occupation Tax Act takes place, including tangible
9personal property purchased for incorporation into real estate
10within a manufacturing facility and including, but not limited
11to, tangible personal property used or consumed in activities
12such as pre-production material handling, receiving, quality
13control, inventory control, storage, staging, and packaging
14for shipping and transportation purposes; (ii) all tangible
15personal property used or consumed by the purchaser in a
16graphic arts facility in which graphic arts production as
17described in Section 2-30 of the Retailers' Occupation Tax Act
18takes place, including tangible personal property purchased
19for incorporation into real estate within a graphic arts
20facility and including, but not limited to, all tangible
21personal property used or consumed in activities such as
22graphic arts preliminary or pre-press production,
23pre-production material handling, receiving, quality control,
24inventory control, storage, staging, sorting, labeling,
25mailing, tying, wrapping, and packaging; and (iii) all tangible
26personal property used or consumed by the purchaser for

 

 

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1research and development. "Production related tangible
2personal property" does not include (i) tangible personal
3property used, within or without a manufacturing or graphic
4arts facility, in sales, purchasing, accounting, fiscal
5management, marketing, personnel recruitment or selection, or
6landscaping or (ii) tangible personal property required to be
7titled or registered with a department, agency, or unit of
8federal, state, or local government. The Manufacturer's
9Purchase Credit may be used, prior to October 1, 2003, to
10satisfy the tax arising either from the purchase of machinery
11and equipment on or after January 1, 1995 for which the
12manufacturing machinery and equipment exemption provided by
13Section 2 of this Act was erroneously claimed, or the purchase
14of machinery and equipment on or after July 1, 1996 for which
15the exemption provided by paragraph (5) of Section 3-5 of this
16Act was erroneously claimed, but not in satisfaction of
17penalty, if any, and interest for failure to pay the tax when
18due. A purchaser of production related tangible personal
19property who is required to pay Illinois Use Tax or Service Use
20Tax on the purchase directly to the Department may, prior to
21October 1, 2003, utilize the Manufacturer's Purchase Credit in
22satisfaction of the tax arising from that purchase, but not in
23satisfaction of penalty and interest. A purchaser who uses the
24Manufacturer's Purchase Credit to purchase property which is
25later determined not to be production related tangible personal
26property may be liable for tax, penalty, and interest on the

 

 

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1purchase of that property as of the date of purchase but shall
2be entitled to use the disallowed Manufacturer's Purchase
3Credit, so long as it has not expired and is used prior to
4October 1, 2003, on qualifying purchases of production related
5tangible personal property not previously subject to credit
6usage. The Manufacturer's Purchase Credit earned by a
7manufacturer or graphic arts producer expires the last day of
8the second calendar year following the calendar year in which
9the credit arose. No Manufacturer's Purchase Credit may be used
10after September 30, 2003 regardless of when that credit was
11earned.
12    A purchaser earning Manufacturer's Purchase Credit shall
13sign and file an annual Report of Manufacturer's Purchase
14Credit Earned for each calendar year no later than the last day
15of the sixth month following the calendar year in which a
16Manufacturer's Purchase Credit is earned. A Report of
17Manufacturer's Purchase Credit Earned shall be filed on forms
18as prescribed or approved by the Department and shall state,
19for each month of the calendar year: (i) the total purchase
20price of all purchases of exempt manufacturing or graphic arts
21machinery on which the credit was earned; (ii) the total State
22Use Tax or Service Use Tax which would have been due on those
23items; (iii) the percentage used to calculate the amount of
24credit earned; (iv) the amount of credit earned; and (v) such
25other information as the Department may reasonably require. A
26purchaser earning Manufacturer's Purchase Credit shall

 

 

SB1293- 58 -LRB099 09014 HLH 29194 b

1maintain records which identify, as to each purchase of
2manufacturing or graphic arts machinery and equipment on which
3the purchaser earned Manufacturer's Purchase Credit, the
4vendor (including, if applicable, either the vendor's
5registration number or Federal Employer Identification
6Number), the purchase price, and the amount of Manufacturer's
7Purchase Credit earned on each purchase.
8    A purchaser using Manufacturer's Purchase Credit shall
9sign and file an annual Report of Manufacturer's Purchase
10Credit Used for each calendar year no later than the last day
11of the sixth month following the calendar year in which a
12Manufacturer's Purchase Credit is used. A Report of
13Manufacturer's Purchase Credit Used shall be filed on forms as
14prescribed or approved by the Department and shall state, for
15each month of the calendar year: (i) the total purchase price
16of production related tangible personal property purchased
17from Illinois suppliers; (ii) the total purchase price of
18production related tangible personal property purchased from
19out-of-state suppliers; (iii) the total amount of credit used
20during such month; and (iv) such other information as the
21Department may reasonably require. A purchaser using
22Manufacturer's Purchase Credit shall maintain records that
23identify, as to each purchase of production related tangible
24personal property on which the purchaser used Manufacturer's
25Purchase Credit, the vendor (including, if applicable, either
26the vendor's registration number or Federal Employer

 

 

SB1293- 59 -LRB099 09014 HLH 29194 b

1Identification Number), the purchase price, and the amount of
2Manufacturer's Purchase Credit used on each purchase.
3    No annual report shall be filed before May 1, 1996 or after
4June 30, 2004. A purchaser that fails to file an annual Report
5of Manufacturer's Purchase Credit Earned or an annual Report of
6Manufacturer's Purchase Credit Used by the last day of the
7sixth month following the end of the calendar year shall
8forfeit all Manufacturer's Purchase Credit for that calendar
9year unless it establishes that its failure to file was due to
10reasonable cause. Manufacturer's Purchase Credit reports may
11be amended to report and claim credit on qualifying purchases
12not previously reported at any time before the credit would
13have expired, unless both the Department and the purchaser have
14agreed to an extension of the statute of limitations for the
15issuance of a notice of tax liability as provided in Section 4
16of the Retailers' Occupation Tax Act. If the time for
17assessment or refund has been extended, then amended reports
18for a calendar year may be filed at any time prior to the date
19to which the statute of limitations for the calendar year or
20portion thereof has been extended. No Manufacturer's Purchase
21Credit report filed with the Department for periods prior to
22January 1, 1995 shall be approved. Manufacturer's Purchase
23Credit claimed on an amended report may be used, prior to
24October 1, 2003, to satisfy tax liability under the Use Tax Act
25or the Service Use Tax Act (i) on qualifying purchases of
26production related tangible personal property made after the

 

 

SB1293- 60 -LRB099 09014 HLH 29194 b

1date the amended report is filed or (ii) assessed by the
2Department on qualifying purchases of production related
3tangible personal property made in the case of manufacturers on
4or after January 1, 1995, or in the case of graphic arts
5producers on or after July 1, 1996.
6    If the purchaser is not the manufacturer or a graphic arts
7producer, but rents or leases the use of the property to a
8manufacturer or a graphic arts producer, the purchaser may
9earn, report, and use Manufacturer's Purchase Credit in the
10same manner as a manufacturer or graphic arts producer.
11    A purchaser shall not be entitled to any Manufacturer's
12Purchase Credit for a purchase that is required to be reported
13and is not timely reported as provided in this Section. A
14purchaser remains liable for (i) any tax that was satisfied by
15use of a Manufacturer's Purchase Credit, as of the date of
16purchase, if that use is not timely reported as required in
17this Section and (ii) for any applicable penalties and interest
18for failing to pay the tax when due. No Manufacturer's Purchase
19Credit may be used after September 30, 2003 to satisfy any tax
20liability imposed under this Act, including any audit
21liability.
22    (b) Manufacturer's Purchase Credit earned on and after
23September 1, 2004. This subsection (b) applies to
24Manufacturer's Purchase Credit earned on or after September 1,
252004. Manufacturer's Purchase Credit earned on or after
26September 1, 2004 may only be used to satisfy the Use Tax or

 

 

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1Service Use Tax liability incurred on production related
2tangible personal property purchased on or after September 1,
32004. A purchaser of production related tangible personal
4property desiring to use the Manufacturer's Purchase Credit
5shall certify to the seller that the purchaser is satisfying
6all or part of the liability under the Use Tax Act or the
7Service Use Tax Act that is due on the purchase of the
8production related tangible personal property by use of a
9Manufacturer's Purchase Credit. The Manufacturer's Purchase
10Credit certification must be dated and shall include the name
11and address of the purchaser, the purchaser's registration
12number, if registered, the credit being applied, and a
13statement that the State Use Tax or Service Use Tax liability
14is being satisfied with the manufacturer's or graphic arts
15producer's accumulated purchase credit. Certification may be
16incorporated into the manufacturer's or graphic arts
17producer's purchase order. Manufacturer's Purchase Credit
18certification provided by the manufacturer or graphic arts
19producer may be used to satisfy the retailer's or serviceman's
20liability under the Retailers' Occupation Tax Act or Service
21Occupation Tax Act for the credit claimed, not to exceed 6.25%
22of the receipts subject to tax from a qualifying purchase, but
23only if the retailer or serviceman reports the Manufacturer's
24Purchase Credit claimed as required by the Department. The
25Manufacturer's Purchase Credit earned by purchase of exempt
26manufacturing machinery and equipment or graphic arts

 

 

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1machinery and equipment is a non-transferable credit. A
2manufacturer or graphic arts producer that enters into a
3contract involving the installation of tangible personal
4property into real estate within a manufacturing or graphic
5arts production facility may, on or after September 1, 2004,
6authorize a construction contractor to utilize credit
7accumulated by the manufacturer or graphic arts producer to
8purchase the tangible personal property. A manufacturer or
9graphic arts producer intending to use accumulated credit to
10purchase such tangible personal property shall execute a
11written contract authorizing the contractor to utilize a
12specified dollar amount of credit. The contractor shall furnish
13the supplier with the manufacturer's or graphic arts producer's
14name, registration or resale number, and a statement that a
15specific amount of the Use Tax or Service Use Tax liability,
16not to exceed 6.25% of the selling price, is being satisfied
17with the credit. The manufacturer or graphic arts producer
18shall remain liable to timely report all information required
19by the annual Report of Manufacturer's Purchase Credit Used for
20credit utilized by a construction contractor.
21    The Manufacturer's Purchase Credit may be used to satisfy
22liability under the Use Tax Act or the Service Use Tax Act due
23on the purchase, made on or after September 1, 2004, of
24production related tangible personal property (including
25purchases by a manufacturer, by a graphic arts producer, or a
26lessor who rents or leases the use of the property to a

 

 

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1manufacturer or graphic arts producer) that does not otherwise
2qualify for the manufacturing machinery and equipment
3exemption or the graphic arts machinery and equipment
4exemption. "Production related tangible personal property"
5means (i) all tangible personal property used or consumed by
6the purchaser in a manufacturing facility in which a
7manufacturing process described in Section 2-45 of the
8Retailers' Occupation Tax Act takes place, including tangible
9personal property purchased for incorporation into real estate
10within a manufacturing facility and including, but not limited
11to, tangible personal property used or consumed in activities
12such as pre-production material handling, receiving, quality
13control, inventory control, storage, staging, and packaging
14for shipping and transportation purposes; (ii) all tangible
15personal property used or consumed by the purchaser in a
16graphic arts facility in which graphic arts production as
17described in Section 2-30 of the Retailers' Occupation Tax Act
18takes place, including tangible personal property purchased
19for incorporation into real estate within a graphic arts
20facility and including, but not limited to, all tangible
21personal property used or consumed in activities such as
22graphic arts preliminary or pre-press production,
23pre-production material handling, receiving, quality control,
24inventory control, storage, staging, sorting, labeling,
25mailing, tying, wrapping, and packaging; and (iii) all tangible
26personal property used or consumed by the purchaser for

 

 

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1research and development. "Production related tangible
2personal property" does not include (i) tangible personal
3property used, within or without a manufacturing or graphic
4arts facility, in sales, purchasing, accounting, fiscal
5management, marketing, personnel recruitment or selection, or
6landscaping or (ii) tangible personal property required to be
7titled or registered with a department, agency, or unit of
8federal, state, or local government. The Manufacturer's
9Purchase Credit may be used to satisfy the tax arising either
10from the purchase of machinery and equipment on or after
11September 1, 2004 for which the manufacturing machinery and
12equipment exemption provided by Section 2 of this Act was
13erroneously claimed, or the purchase of machinery and equipment
14on or after September 1, 2004 for which the exemption provided
15by paragraph (5) of Section 3-5 of this Act was erroneously
16claimed, but not in satisfaction of penalty, if any, and
17interest for failure to pay the tax when due. A purchaser of
18production related tangible personal property that is
19purchased on or after September 1, 2004 who is required to pay
20Illinois Use Tax or Service Use Tax on the purchase directly to
21the Department may utilize the Manufacturer's Purchase Credit
22in satisfaction of the tax arising from that purchase, but not
23in satisfaction of penalty and interest. A purchaser who uses
24the Manufacturer's Purchase Credit to purchase property on and
25after September 1, 2004 which is later determined not to be
26production related tangible personal property may be liable for

 

 

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1tax, penalty, and interest on the purchase of that property as
2of the date of purchase but shall be entitled to use the
3disallowed Manufacturer's Purchase Credit, so long as it has
4not expired, on qualifying purchases of production related
5tangible personal property not previously subject to credit
6usage. The Manufacturer's Purchase Credit earned by a
7manufacturer or graphic arts producer expires the last day of
8the second calendar year following the calendar year in which
9the credit arose.
10    A purchaser earning Manufacturer's Purchase Credit shall
11sign and file an annual Report of Manufacturer's Purchase
12Credit Earned for each calendar year no later than the last day
13of the sixth month following the calendar year in which a
14Manufacturer's Purchase Credit is earned. A Report of
15Manufacturer's Purchase Credit Earned shall be filed on forms
16as prescribed or approved by the Department and shall state,
17for each month of the calendar year: (i) the total purchase
18price of all purchases of exempt manufacturing or graphic arts
19machinery on which the credit was earned; (ii) the total State
20Use Tax or Service Use Tax which would have been due on those
21items; (iii) the percentage used to calculate the amount of
22credit earned; (iv) the amount of credit earned; and (v) such
23other information as the Department may reasonably require. A
24purchaser earning Manufacturer's Purchase Credit shall
25maintain records which identify, as to each purchase of
26manufacturing or graphic arts machinery and equipment on which

 

 

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1the purchaser earned Manufacturer's Purchase Credit, the
2vendor (including, if applicable, either the vendor's
3registration number or Federal Employer Identification
4Number), the purchase price, and the amount of Manufacturer's
5Purchase Credit earned on each purchase.
6    A purchaser using Manufacturer's Purchase Credit shall
7sign and file an annual Report of Manufacturer's Purchase
8Credit Used for each calendar year no later than the last day
9of the sixth month following the calendar year in which a
10Manufacturer's Purchase Credit is used. A Report of
11Manufacturer's Purchase Credit Used shall be filed on forms as
12prescribed or approved by the Department and shall state, for
13each month of the calendar year: (i) the total purchase price
14of production related tangible personal property purchased
15from Illinois suppliers; (ii) the total purchase price of
16production related tangible personal property purchased from
17out-of-state suppliers; (iii) the total amount of credit used
18during such month; and (iv) such other information as the
19Department may reasonably require. A purchaser using
20Manufacturer's Purchase Credit shall maintain records that
21identify, as to each purchase of production related tangible
22personal property on which the purchaser used Manufacturer's
23Purchase Credit, the vendor (including, if applicable, either
24the vendor's registration number or Federal Employer
25Identification Number), the purchase price, and the amount of
26Manufacturer's Purchase Credit used on each purchase.

 

 

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1    A purchaser that fails to file an annual Report of
2Manufacturer's Purchase Credit Earned or an annual Report of
3Manufacturer's Purchase Credit Used by the last day of the
4sixth month following the end of the calendar year shall
5forfeit all Manufacturer's Purchase Credit for that calendar
6year unless it establishes that its failure to file was due to
7reasonable cause. Manufacturer's Purchase Credit reports may
8be amended to report and claim credit on qualifying purchases
9not previously reported at any time before the credit would
10have expired, unless both the Department and the purchaser have
11agreed to an extension of the statute of limitations for the
12issuance of a notice of tax liability as provided in Section 4
13of the Retailers' Occupation Tax Act. If the time for
14assessment or refund has been extended, then amended reports
15for a calendar year may be filed at any time prior to the date
16to which the statute of limitations for the calendar year or
17portion thereof has been extended. Manufacturer's Purchase
18Credit claimed on an amended report may be used to satisfy tax
19liability under the Use Tax Act or the Service Use Tax Act (i)
20on qualifying purchases of production related tangible
21personal property made after the date the amended report is
22filed or (ii) assessed by the Department on qualifying
23production related tangible personal property purchased on or
24after September 1, 2004.
25    If the purchaser is not the manufacturer or a graphic arts
26producer, but rents or leases the use of the property to a

 

 

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1manufacturer or a graphic arts producer, the purchaser may
2earn, report, and use Manufacturer's Purchase Credit in the
3same manner as a manufacturer or graphic arts producer. A
4purchaser shall not be entitled to any Manufacturer's Purchase
5Credit for a purchase that is required to be reported and is
6not timely reported as provided in this Section. A purchaser
7remains liable for (i) any tax that was satisfied by use of a
8Manufacturer's Purchase Credit, as of the date of purchase, if
9that use is not timely reported as required in this Section and
10(ii) for any applicable penalties and interest for failing to
11pay the tax when due.
12(Source: P.A. 96-116, eff. 7-31-09.)
 
13    Section 15. The Service Occupation Tax Act is amended by
14changing Section 3-5 as follows:
 
15    (35 ILCS 115/3-5)
16    Sec. 3-5. Exemptions. The following tangible personal
17property is exempt from the tax imposed by this Act:
18    (1) Personal property sold by a corporation, society,
19association, foundation, institution, or organization, other
20than a limited liability company, that is organized and
21operated as a not-for-profit service enterprise for the benefit
22of persons 65 years of age or older if the personal property
23was not purchased by the enterprise for the purpose of resale
24by the enterprise.

 

 

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1    (2) Personal property purchased by a not-for-profit
2Illinois county fair association for use in conducting,
3operating, or promoting the county fair.
4    (3) Personal property purchased by any not-for-profit arts
5or cultural organization that establishes, by proof required by
6the Department by rule, that it has received an exemption under
7Section 501(c)(3) of the Internal Revenue Code and that is
8organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after the effective date
15of this amendatory Act of the 92nd General Assembly, however,
16an entity otherwise eligible for this exemption shall not make
17tax-free purchases unless it has an active identification
18number issued by the Department.
19    (4) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (5) Until July 1, 2003 and beginning again on September 1,
242004 through August 30, 2024 August 30, 2014, graphic arts
25machinery and equipment, including repair and replacement
26parts, both new and used, and including that manufactured on

 

 

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1special order or purchased for lease, certified by the
2purchaser to be used primarily for graphic arts production.
3Equipment includes chemicals or chemicals acting as catalysts
4but only if the chemicals or chemicals acting as catalysts
5effect a direct and immediate change upon a graphic arts
6product. This paragraph is exempt from the provisions of
7Section 3-55. It is the intent of the General Assembly that the
8exemption under this paragraph (5) shall apply during the
9entire period from September 1, 2004 through August 30, 2024,
10including, but not limited to, the period beginning on August
1131, 2014 and ending on the effective date of this amendatory
12Act of the 99th General Assembly.
13    (6) Personal property sold by a teacher-sponsored student
14organization affiliated with an elementary or secondary school
15located in Illinois.
16    (7) Farm machinery and equipment, both new and used,
17including that manufactured on special order, certified by the
18purchaser to be used primarily for production agriculture or
19State or federal agricultural programs, including individual
20replacement parts for the machinery and equipment, including
21machinery and equipment purchased for lease, and including
22implements of husbandry defined in Section 1-130 of the
23Illinois Vehicle Code, farm machinery and agricultural
24chemical and fertilizer spreaders, and nurse wagons required to
25be registered under Section 3-809 of the Illinois Vehicle Code,
26but excluding other motor vehicles required to be registered

 

 

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1under the Illinois Vehicle Code. Horticultural polyhouses or
2hoop houses used for propagating, growing, or overwintering
3plants shall be considered farm machinery and equipment under
4this item (7). Agricultural chemical tender tanks and dry boxes
5shall include units sold separately from a motor vehicle
6required to be licensed and units sold mounted on a motor
7vehicle required to be licensed if the selling price of the
8tender is separately stated.
9    Farm machinery and equipment shall include precision
10farming equipment that is installed or purchased to be
11installed on farm machinery and equipment including, but not
12limited to, tractors, harvesters, sprayers, planters, seeders,
13or spreaders. Precision farming equipment includes, but is not
14limited to, soil testing sensors, computers, monitors,
15software, global positioning and mapping systems, and other
16such equipment.
17    Farm machinery and equipment also includes computers,
18sensors, software, and related equipment used primarily in the
19computer-assisted operation of production agriculture
20facilities, equipment, and activities such as, but not limited
21to, the collection, monitoring, and correlation of animal and
22crop data for the purpose of formulating animal diets and
23agricultural chemicals. This item (7) is exempt from the
24provisions of Section 3-55.
25    (8) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air common carrier, certified by the carrier

 

 

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1to be used for consumption, shipment, or storage in the conduct
2of its business as an air common carrier, for a flight destined
3for or returning from a location or locations outside the
4United States without regard to previous or subsequent domestic
5stopovers.
6    Beginning July 1, 2013, fuel and petroleum products sold to
7or used by an air carrier, certified by the carrier to be used
8for consumption, shipment, or storage in the conduct of its
9business as an air common carrier, for a flight that (i) is
10engaged in foreign trade or is engaged in trade between the
11United States and any of its possessions and (ii) transports at
12least one individual or package for hire from the city of
13origination to the city of final destination on the same
14aircraft, without regard to a change in the flight number of
15that aircraft.
16    (9) Proceeds of mandatory service charges separately
17stated on customers' bills for the purchase and consumption of
18food and beverages, to the extent that the proceeds of the
19service charge are in fact turned over as tips or as a
20substitute for tips to the employees who participate directly
21in preparing, serving, hosting or cleaning up the food or
22beverage function with respect to which the service charge is
23imposed.
24    (10) Until July 1, 2003, oil field exploration, drilling,
25and production equipment, including (i) rigs and parts of rigs,
26rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

 

 

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1tubular goods, including casing and drill strings, (iii) pumps
2and pump-jack units, (iv) storage tanks and flow lines, (v) any
3individual replacement part for oil field exploration,
4drilling, and production equipment, and (vi) machinery and
5equipment purchased for lease; but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code.
7    (11) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including that
9manufactured on special order, certified by the purchaser to be
10used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (12) Coal and aggregate exploration, mining, off-highway
13hauling, processing, maintenance, and reclamation equipment,
14including replacement parts and equipment, and including
15equipment purchased for lease, but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code. The
17changes made to this Section by Public Act 97-767 apply on and
18after July 1, 2003, but no claim for credit or refund is
19allowed on or after August 16, 2013 (the effective date of
20Public Act 98-456) for such taxes paid during the period
21beginning July 1, 2003 and ending on August 16, 2013 (the
22effective date of Public Act 98-456).
23    (13) Beginning January 1, 1992 and through June 30, 2016,
24food for human consumption that is to be consumed off the
25premises where it is sold (other than alcoholic beverages, soft
26drinks and food that has been prepared for immediate

 

 

SB1293- 74 -LRB099 09014 HLH 29194 b

1consumption) and prescription and non-prescription medicines,
2drugs, medical appliances, and insulin, urine testing
3materials, syringes, and needles used by diabetics, for human
4use, when purchased for use by a person receiving medical
5assistance under Article V of the Illinois Public Aid Code who
6resides in a licensed long-term care facility, as defined in
7the Nursing Home Care Act, or in a licensed facility as defined
8in the ID/DD Community Care Act or the Specialized Mental
9Health Rehabilitation Act of 2013.
10    (14) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (15) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (15) is exempt from the provisions
18of Section 3-55, and the exemption provided for under this item
19(15) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 (the effective date of Public Act 95-88) for such taxes
22paid during the period beginning May 30, 2000 and ending on
23January 1, 2008 (the effective date of Public Act 95-88).
24    (16) Computers and communications equipment utilized for
25any hospital purpose and equipment used in the diagnosis,
26analysis, or treatment of hospital patients sold to a lessor

 

 

SB1293- 75 -LRB099 09014 HLH 29194 b

1who leases the equipment, under a lease of one year or longer
2executed or in effect at the time of the purchase, to a
3hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act.
6    (17) Personal property sold to a lessor who leases the
7property, under a lease of one year or longer executed or in
8effect at the time of the purchase, to a governmental body that
9has been issued an active tax exemption identification number
10by the Department under Section 1g of the Retailers' Occupation
11Tax Act.
12    (18) Beginning with taxable years ending on or after
13December 31, 1995 and ending with taxable years ending on or
14before December 31, 2004, personal property that is donated for
15disaster relief to be used in a State or federally declared
16disaster area in Illinois or bordering Illinois by a
17manufacturer or retailer that is registered in this State to a
18corporation, society, association, foundation, or institution
19that has been issued a sales tax exemption identification
20number by the Department that assists victims of the disaster
21who reside within the declared disaster area.
22    (19) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is used in the
25performance of infrastructure repairs in this State, including
26but not limited to municipal roads and streets, access roads,

 

 

SB1293- 76 -LRB099 09014 HLH 29194 b

1bridges, sidewalks, waste disposal systems, water and sewer
2line extensions, water distribution and purification
3facilities, storm water drainage and retention facilities, and
4sewage treatment facilities, resulting from a State or
5federally declared disaster in Illinois or bordering Illinois
6when such repairs are initiated on facilities located in the
7declared disaster area within 6 months after the disaster.
8    (20) Beginning July 1, 1999, game or game birds sold at a
9"game breeding and hunting preserve area" as that term is used
10in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 3-55.
12    (21) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the Department
16to be organized and operated exclusively for educational
17purposes. For purposes of this exemption, "a corporation,
18limited liability company, society, association, foundation,
19or institution organized and operated exclusively for
20educational purposes" means all tax-supported public schools,
21private schools that offer systematic instruction in useful
22branches of learning by methods common to public schools and
23that compare favorably in their scope and intensity with the
24course of study presented in tax-supported schools, and
25vocational or technical schools or institutes organized and
26operated exclusively to provide a course of study of not less

 

 

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1than 6 weeks duration and designed to prepare individuals to
2follow a trade or to pursue a manual, technical, mechanical,
3industrial, business, or commercial occupation.
4    (22) Beginning January 1, 2000, personal property,
5including food, purchased through fundraising events for the
6benefit of a public or private elementary or secondary school,
7a group of those schools, or one or more school districts if
8the events are sponsored by an entity recognized by the school
9district that consists primarily of volunteers and includes
10parents and teachers of the school children. This paragraph
11does not apply to fundraising events (i) for the benefit of
12private home instruction or (ii) for which the fundraising
13entity purchases the personal property sold at the events from
14another individual or entity that sold the property for the
15purpose of resale by the fundraising entity and that profits
16from the sale to the fundraising entity. This paragraph is
17exempt from the provisions of Section 3-55.
18    (23) Beginning January 1, 2000 and through December 31,
192001, new or used automatic vending machines that prepare and
20serve hot food and beverages, including coffee, soup, and other
21items, and replacement parts for these machines. Beginning
22January 1, 2002 and through June 30, 2003, machines and parts
23for machines used in commercial, coin-operated amusement and
24vending business if a use or occupation tax is paid on the
25gross receipts derived from the use of the commercial,
26coin-operated amusement and vending machines. This paragraph

 

 

SB1293- 78 -LRB099 09014 HLH 29194 b

1is exempt from the provisions of Section 3-55.
2    (24) Beginning on the effective date of this amendatory Act
3of the 92nd General Assembly, computers and communications
4equipment utilized for any hospital purpose and equipment used
5in the diagnosis, analysis, or treatment of hospital patients
6sold to a lessor who leases the equipment, under a lease of one
7year or longer executed or in effect at the time of the
8purchase, to a hospital that has been issued an active tax
9exemption identification number by the Department under
10Section 1g of the Retailers' Occupation Tax Act. This paragraph
11is exempt from the provisions of Section 3-55.
12    (25) Beginning on the effective date of this amendatory Act
13of the 92nd General Assembly, personal property sold to a
14lessor who leases the property, under a lease of one year or
15longer executed or in effect at the time of the purchase, to a
16governmental body that has been issued an active tax exemption
17identification number by the Department under Section 1g of the
18Retailers' Occupation Tax Act. This paragraph is exempt from
19the provisions of Section 3-55.
20    (26) Beginning on January 1, 2002 and through June 30,
212016, tangible personal property purchased from an Illinois
22retailer by a taxpayer engaged in centralized purchasing
23activities in Illinois who will, upon receipt of the property
24in Illinois, temporarily store the property in Illinois (i) for
25the purpose of subsequently transporting it outside this State
26for use or consumption thereafter solely outside this State or

 

 

SB1293- 79 -LRB099 09014 HLH 29194 b

1(ii) for the purpose of being processed, fabricated, or
2manufactured into, attached to, or incorporated into other
3tangible personal property to be transported outside this State
4and thereafter used or consumed solely outside this State. The
5Director of Revenue shall, pursuant to rules adopted in
6accordance with the Illinois Administrative Procedure Act,
7issue a permit to any taxpayer in good standing with the
8Department who is eligible for the exemption under this
9paragraph (26). The permit issued under this paragraph (26)
10shall authorize the holder, to the extent and in the manner
11specified in the rules adopted under this Act, to purchase
12tangible personal property from a retailer exempt from the
13taxes imposed by this Act. Taxpayers shall maintain all
14necessary books and records to substantiate the use and
15consumption of all such tangible personal property outside of
16the State of Illinois.
17    (27) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued under
22Title IV of the Environmental Protection Act. This paragraph is
23exempt from the provisions of Section 3-55.
24    (28) Tangible personal property sold to a
25public-facilities corporation, as described in Section
2611-65-10 of the Illinois Municipal Code, for purposes of

 

 

SB1293- 80 -LRB099 09014 HLH 29194 b

1constructing or furnishing a municipal convention hall, but
2only if the legal title to the municipal convention hall is
3transferred to the municipality without any further
4consideration by or on behalf of the municipality at the time
5of the completion of the municipal convention hall or upon the
6retirement or redemption of any bonds or other debt instruments
7issued by the public-facilities corporation in connection with
8the development of the municipal convention hall. This
9exemption includes existing public-facilities corporations as
10provided in Section 11-65-25 of the Illinois Municipal Code.
11This paragraph is exempt from the provisions of Section 3-55.
12    (29) Beginning January 1, 2010, materials, parts,
13equipment, components, and furnishings incorporated into or
14upon an aircraft as part of the modification, refurbishment,
15completion, replacement, repair, or maintenance of the
16aircraft. This exemption includes consumable supplies used in
17the modification, refurbishment, completion, replacement,
18repair, and maintenance of aircraft, but excludes any
19materials, parts, equipment, components, and consumable
20supplies used in the modification, replacement, repair, and
21maintenance of aircraft engines or power plants, whether such
22engines or power plants are installed or uninstalled upon any
23such aircraft. "Consumable supplies" include, but are not
24limited to, adhesive, tape, sandpaper, general purpose
25lubricants, cleaning solution, latex gloves, and protective
26films. This exemption applies only to the transfer of

 

 

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1qualifying tangible personal property incident to the
2modification, refurbishment, completion, replacement, repair,
3or maintenance of an aircraft by persons who (i) hold an Air
4Agency Certificate and are empowered to operate an approved
5repair station by the Federal Aviation Administration, (ii)
6have a Class IV Rating, and (iii) conduct operations in
7accordance with Part 145 of the Federal Aviation Regulations.
8The exemption does not include aircraft operated by a
9commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (29) by Public Act 98-534 are declarative of existing
13law.
14(Source: P.A. 97-38, eff. 6-28-11; 97-73, eff. 6-30-11; 97-227,
15eff. 1-1-12; 97-431, eff. 8-16-11; 97-636, eff. 6-1-12; 97-767,
16eff. 7-9-12; 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1798-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
187-16-14.)
 
19    Section 20. The Retailers' Occupation Tax Act is amended by
20changing Section 2-5 as follows:
 
21    (35 ILCS 120/2-5)
22    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
23sale of the following tangible personal property are exempt
24from the tax imposed by this Act:

 

 

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

 

 

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1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals. This item (2) is exempt from the
10provisions of Section 2-70.
11    (3) Until July 1, 2003, distillation machinery and
12equipment, sold as a unit or kit, assembled or installed by the
13retailer, certified by the user to be used only for the
14production of ethyl alcohol that will be used for consumption
15as motor fuel or as a component of motor fuel for the personal
16use of the user, and not subject to sale or resale.
17    (4) Until July 1, 2003 and beginning again September 1,
182004 through August 30, 2024 August 30, 2014, graphic arts
19machinery and equipment, including repair and replacement
20parts, both new and used, and including that manufactured on
21special order or purchased for lease, certified by the
22purchaser to be used primarily for graphic arts production.
23Equipment includes chemicals or chemicals acting as catalysts
24but only if the chemicals or chemicals acting as catalysts
25effect a direct and immediate change upon a graphic arts
26product. This paragraph is exempt from the provisions of

 

 

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1Section 2-70. It is the intent of the General Assembly that the
2exemption under this paragraph (4) shall apply during the
3entire period from September 1, 2004 through August 30, 2024,
4including, but not limited to, the period beginning on August
531, 2014 and ending on the effective date of this amendatory
6Act of the 99th General Assembly.
7    (5) A motor vehicle that is used for automobile renting, as
8defined in the Automobile Renting Occupation and Use Tax Act.
9This paragraph is exempt from the provisions of Section 2-70.
10    (6) Personal property sold by a teacher-sponsored student
11organization affiliated with an elementary or secondary school
12located in Illinois.
13    (7) Until July 1, 2003, proceeds of that portion of the
14selling price of a passenger car the sale of which is subject
15to the Replacement Vehicle Tax.
16    (8) Personal property sold to an Illinois county fair
17association for use in conducting, operating, or promoting the
18county fair.
19    (9) Personal property sold to a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or
24support of arts or cultural programming, activities, or
25services. These organizations include, but are not limited to,
26music and dramatic arts organizations such as symphony

 

 

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1orchestras and theatrical groups, arts and cultural service
2organizations, local arts councils, visual arts organizations,
3and media arts organizations. On and after the effective date
4of this amendatory Act of the 92nd General Assembly, however,
5an entity otherwise eligible for this exemption shall not make
6tax-free purchases unless it has an active identification
7number issued by the Department.
8    (10) Personal property sold by a corporation, society,
9association, foundation, institution, or organization, other
10than a limited liability company, that is organized and
11operated as a not-for-profit service enterprise for the benefit
12of persons 65 years of age or older if the personal property
13was not purchased by the enterprise for the purpose of resale
14by the enterprise.
15    (11) Personal property sold to a governmental body, to a
16corporation, society, association, foundation, or institution
17organized and operated exclusively for charitable, religious,
18or educational purposes, or to a not-for-profit corporation,
19society, association, foundation, institution, or organization
20that has no compensated officers or employees and that is
21organized and operated primarily for the recreation of persons
2255 years of age or older. A limited liability company may
23qualify for the exemption under this paragraph only if the
24limited liability company is organized and operated
25exclusively for educational purposes. On and after July 1,
261987, however, no entity otherwise eligible for this exemption

 

 

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1shall make tax-free purchases unless it has an active
2identification number issued by the Department.
3    (12) Tangible personal property sold to interstate
4carriers for hire for use as rolling stock moving in interstate
5commerce or to lessors under leases of one year or longer
6executed or in effect at the time of purchase by interstate
7carriers for hire for use as rolling stock moving in interstate
8commerce and equipment operated by a telecommunications
9provider, licensed as a common carrier by the Federal
10Communications Commission, which is permanently installed in
11or affixed to aircraft moving in interstate commerce.
12    (12-5) On and after July 1, 2003 and through June 30, 2004,
13motor vehicles of the second division with a gross vehicle
14weight in excess of 8,000 pounds that are subject to the
15commercial distribution fee imposed under Section 3-815.1 of
16the Illinois Vehicle Code. Beginning on July 1, 2004 and
17through June 30, 2005, the use in this State of motor vehicles
18of the second division: (i) with a gross vehicle weight rating
19in excess of 8,000 pounds; (ii) that are subject to the
20commercial distribution fee imposed under Section 3-815.1 of
21the Illinois Vehicle Code; and (iii) that are primarily used
22for commercial purposes. Through June 30, 2005, this exemption
23applies to repair and replacement parts added after the initial
24purchase of such a motor vehicle if that motor vehicle is used
25in a manner that would qualify for the rolling stock exemption
26otherwise provided for in this Act. For purposes of this

 

 

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1paragraph, "used for commercial purposes" means the
2transportation of persons or property in furtherance of any
3commercial or industrial enterprise whether for-hire or not.
4    (13) Proceeds from sales to owners, lessors, or shippers of
5tangible personal property that is utilized by interstate
6carriers for hire for use as rolling stock moving in interstate
7commerce and equipment operated by a telecommunications
8provider, licensed as a common carrier by the Federal
9Communications Commission, which is permanently installed in
10or affixed to aircraft moving in interstate commerce.
11    (14) Machinery and equipment that will be used by the
12purchaser, or a lessee of the purchaser, primarily in the
13process of manufacturing or assembling tangible personal
14property for wholesale or retail sale or lease, whether the
15sale or lease is made directly by the manufacturer or by some
16other person, whether the materials used in the process are
17owned by the manufacturer or some other person, or whether the
18sale or lease is made apart from or as an incident to the
19seller's engaging in the service occupation of producing
20machines, tools, dies, jigs, patterns, gauges, or other similar
21items of no commercial value on special order for a particular
22purchaser. The exemption provided by this paragraph (14) does
23not include machinery and equipment used in (i) the generation
24of electricity for wholesale or retail sale; (ii) the
25generation or treatment of natural or artificial gas for
26wholesale or retail sale that is delivered to customers through

 

 

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1pipes, pipelines, or mains; or (iii) the treatment of water for
2wholesale or retail sale that is delivered to customers through
3pipes, pipelines, or mains. The provisions of Public Act 98-583
4are declaratory of existing law as to the meaning and scope of
5this exemption.
6    (15) Proceeds of mandatory service charges separately
7stated on customers' bills for purchase and consumption of food
8and beverages, to the extent that the proceeds of the service
9charge are in fact turned over as tips or as a substitute for
10tips to the employees who participate directly in preparing,
11serving, hosting or cleaning up the food or beverage function
12with respect to which the service charge is imposed.
13    (16) Petroleum products sold to a purchaser if the seller
14is prohibited by federal law from charging tax to the
15purchaser.
16    (17) Tangible personal property sold to a common carrier by
17rail or motor that receives the physical possession of the
18property in Illinois and that transports the property, or
19shares with another common carrier in the transportation of the
20property, out of Illinois on a standard uniform bill of lading
21showing the seller of the property as the shipper or consignor
22of the property to a destination outside Illinois, for use
23outside Illinois.
24    (18) Legal tender, currency, medallions, or gold or silver
25coinage issued by the State of Illinois, the government of the
26United States of America, or the government of any foreign

 

 

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1country, and bullion.
2    (19) Until July 1 2003, oil field exploration, drilling,
3and production equipment, including (i) rigs and parts of rigs,
4rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
5tubular goods, including casing and drill strings, (iii) pumps
6and pump-jack units, (iv) storage tanks and flow lines, (v) any
7individual replacement part for oil field exploration,
8drilling, and production equipment, and (vi) machinery and
9equipment purchased for lease; but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code.
11    (20) Photoprocessing machinery and equipment, including
12repair and replacement parts, both new and used, including that
13manufactured on special order, certified by the purchaser to be
14used primarily for photoprocessing, and including
15photoprocessing machinery and equipment purchased for lease.
16    (21) Coal and aggregate exploration, mining, off-highway
17hauling, processing, maintenance, and reclamation equipment,
18including replacement parts and equipment, and including
19equipment purchased for lease, but excluding motor vehicles
20required to be registered under the Illinois Vehicle Code. The
21changes made to this Section by Public Act 97-767 apply on and
22after July 1, 2003, but no claim for credit or refund is
23allowed on or after August 16, 2013 (the effective date of
24Public Act 98-456) for such taxes paid during the period
25beginning July 1, 2003 and ending on August 16, 2013 (the
26effective date of Public Act 98-456).

 

 

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1    (22) Until June 30, 2013, fuel and petroleum products sold
2to or used by an air carrier, certified by the carrier to be
3used for consumption, shipment, or storage in the conduct of
4its business as an air common carrier, for a flight destined
5for or returning from a location or locations outside the
6United States without regard to previous or subsequent domestic
7stopovers.
8    Beginning July 1, 2013, fuel and petroleum products sold to
9or used by an air carrier, certified by the carrier to be used
10for consumption, shipment, or storage in the conduct of its
11business as an air common carrier, for a flight that (i) is
12engaged in foreign trade or is engaged in trade between the
13United States and any of its possessions and (ii) transports at
14least one individual or package for hire from the city of
15origination to the city of final destination on the same
16aircraft, without regard to a change in the flight number of
17that aircraft.
18    (23) A transaction in which the purchase order is received
19by a florist who is located outside Illinois, but who has a
20florist located in Illinois deliver the property to the
21purchaser or the purchaser's donee in Illinois.
22    (24) Fuel consumed or used in the operation of ships,
23barges, or vessels that are used primarily in or for the
24transportation of property or the conveyance of persons for
25hire on rivers bordering on this State if the fuel is delivered
26by the seller to the purchaser's barge, ship, or vessel while

 

 

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

 

 

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

 

 

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

 

 

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1Registry of America, Appaloosa Horse Club, American Quarter
2Horse Association, United States Trotting Association, or
3Jockey Club, as appropriate, used for purposes of breeding or
4racing for prizes. This item (27) is exempt from the provisions
5of Section 2-70, and the exemption provided for under this item
6(27) applies for all periods beginning May 30, 1995, but no
7claim for credit or refund is allowed on or after January 1,
82008 (the effective date of Public Act 95-88) for such taxes
9paid during the period beginning May 30, 2000 and ending on
10January 1, 2008 (the effective date of Public Act 95-88).
11    (28) Computers and communications equipment utilized for
12any hospital purpose and equipment used in the diagnosis,
13analysis, or treatment of hospital patients sold to a lessor
14who leases the equipment, under a lease of one year or longer
15executed or in effect at the time of the purchase, to a
16hospital that has been issued an active tax exemption
17identification number by the Department under Section 1g of
18this Act.
19    (29) Personal property sold to a lessor who leases the
20property, under a lease of one year or longer executed or in
21effect at the time of the purchase, to a governmental body that
22has been issued an active tax exemption identification number
23by the Department under Section 1g of this Act.
24    (30) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated for

 

 

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1disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (31) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in the
11performance of infrastructure repairs in this State, including
12but not limited to municipal roads and streets, access roads,
13bridges, sidewalks, waste disposal systems, water and sewer
14line extensions, water distribution and purification
15facilities, storm water drainage and retention facilities, and
16sewage treatment facilities, resulting from a State or
17federally declared disaster in Illinois or bordering Illinois
18when such repairs are initiated on facilities located in the
19declared disaster area within 6 months after the disaster.
20    (32) Beginning July 1, 1999, game or game birds sold at a
21"game breeding and hunting preserve area" as that term is used
22in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 2-70.
24    (33) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

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

 

 

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1purpose of resale by the fundraising entity and that profits
2from the sale to the fundraising entity. This paragraph is
3exempt from the provisions of Section 2-70.
4    (35) Beginning January 1, 2000 and through December 31,
52001, new or used automatic vending machines that prepare and
6serve hot food and beverages, including coffee, soup, and other
7items, and replacement parts for these machines. Beginning
8January 1, 2002 and through June 30, 2003, machines and parts
9for machines used in commercial, coin-operated amusement and
10vending business if a use or occupation tax is paid on the
11gross receipts derived from the use of the commercial,
12coin-operated amusement and vending machines. This paragraph
13is exempt from the provisions of Section 2-70.
14    (35-5) Beginning August 23, 2001 and through June 30, 2016,
15food for human consumption that is to be consumed off the
16premises where it is sold (other than alcoholic beverages, soft
17drinks, and food that has been prepared for immediate
18consumption) and prescription and nonprescription medicines,
19drugs, medical appliances, and insulin, urine testing
20materials, syringes, and needles used by diabetics, for human
21use, when purchased for use by a person receiving medical
22assistance under Article V of the Illinois Public Aid Code who
23resides in a licensed long-term care facility, as defined in
24the Nursing Home Care Act, or a licensed facility as defined in
25the ID/DD Community Care Act or the Specialized Mental Health
26Rehabilitation Act of 2013.

 

 

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1    (36) Beginning August 2, 2001, computers and
2communications equipment utilized for any hospital purpose and
3equipment used in the diagnosis, analysis, or treatment of
4hospital patients sold to a lessor who leases the equipment,
5under a lease of one year or longer executed or in effect at
6the time of the purchase, to a hospital that has been issued an
7active tax exemption identification number by the Department
8under Section 1g of this Act. This paragraph is exempt from the
9provisions of Section 2-70.
10    (37) Beginning August 2, 2001, personal property sold to a
11lessor who leases the property, under a lease of one year or
12longer executed or in effect at the time of the purchase, to a
13governmental body that has been issued an active tax exemption
14identification number by the Department under Section 1g of
15this Act. This paragraph is exempt from the provisions of
16Section 2-70.
17    (38) Beginning on January 1, 2002 and through June 30,
182016, tangible personal property purchased from an Illinois
19retailer by a taxpayer engaged in centralized purchasing
20activities in Illinois who will, upon receipt of the property
21in Illinois, temporarily store the property in Illinois (i) for
22the purpose of subsequently transporting it outside this State
23for use or consumption thereafter solely outside this State or
24(ii) for the purpose of being processed, fabricated, or
25manufactured into, attached to, or incorporated into other
26tangible personal property to be transported outside this State

 

 

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1and thereafter used or consumed solely outside this State. The
2Director of Revenue shall, pursuant to rules adopted in
3accordance with the Illinois Administrative Procedure Act,
4issue a permit to any taxpayer in good standing with the
5Department who is eligible for the exemption under this
6paragraph (38). The permit issued under this paragraph (38)
7shall authorize the holder, to the extent and in the manner
8specified in the rules adopted under this Act, to purchase
9tangible personal property from a retailer exempt from the
10taxes imposed by this Act. Taxpayers shall maintain all
11necessary books and records to substantiate the use and
12consumption of all such tangible personal property outside of
13the State of Illinois.
14    (39) Beginning January 1, 2008, tangible personal property
15used in the construction or maintenance of a community water
16supply, as defined under Section 3.145 of the Environmental
17Protection Act, that is operated by a not-for-profit
18corporation that holds a valid water supply permit issued under
19Title IV of the Environmental Protection Act. This paragraph is
20exempt from the provisions of Section 2-70.
21    (40) Beginning January 1, 2010, materials, parts,
22equipment, components, and furnishings incorporated into or
23upon an aircraft as part of the modification, refurbishment,
24completion, replacement, repair, or maintenance of the
25aircraft. This exemption includes consumable supplies used in
26the modification, refurbishment, completion, replacement,

 

 

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1repair, and maintenance of aircraft, but excludes any
2materials, parts, equipment, components, and consumable
3supplies used in the modification, replacement, repair, and
4maintenance of aircraft engines or power plants, whether such
5engines or power plants are installed or uninstalled upon any
6such aircraft. "Consumable supplies" include, but are not
7limited to, adhesive, tape, sandpaper, general purpose
8lubricants, cleaning solution, latex gloves, and protective
9films. This exemption applies only to the sale of qualifying
10tangible personal property to persons who modify, refurbish,
11complete, replace, or maintain an aircraft and who (i) hold an
12Air Agency Certificate and are empowered to operate an approved
13repair station by the Federal Aviation Administration, (ii)
14have a Class IV Rating, and (iii) conduct operations in
15accordance with Part 145 of the Federal Aviation Regulations.
16The exemption does not include aircraft operated by a
17commercial air carrier providing scheduled passenger air
18service pursuant to authority issued under Part 121 or Part 129
19of the Federal Aviation Regulations. The changes made to this
20paragraph (40) by Public Act 98-534 are declarative of existing
21law.
22    (41) Tangible personal property sold to a
23public-facilities corporation, as described in Section
2411-65-10 of the Illinois Municipal Code, for purposes of
25constructing or furnishing a municipal convention hall, but
26only if the legal title to the municipal convention hall is

 

 

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1transferred to the municipality without any further
2consideration by or on behalf of the municipality at the time
3of the completion of the municipal convention hall or upon the
4retirement or redemption of any bonds or other debt instruments
5issued by the public-facilities corporation in connection with
6the development of the municipal convention hall. This
7exemption includes existing public-facilities corporations as
8provided in Section 11-65-25 of the Illinois Municipal Code.
9This paragraph is exempt from the provisions of Section 2-70.
10(Source: P.A. 97-38, eff. 6-28-11; 97-73, eff. 6-30-11; 97-227,
11eff. 1-1-12; 97-431, eff. 8-16-11; 97-636, eff. 6-1-12; 97-767,
12eff. 7-9-12; 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1398-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
141-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.