Full Text of HB5207 101st General Assembly
HB5207 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB5207 Introduced , by Rep. Keith R. Wheeler SYNOPSIS AS INTRODUCED: |
| 35 ILCS 105/3-55 | from Ch. 120, par. 439.3-55 | 35 ILCS 110/3-45 | from Ch. 120, par. 439.33-45 | 35 ILCS 115/3-5 | | 35 ILCS 120/2-5 | |
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Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the exemption for the use or sale of tangible personal property
purchased from an Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will temporarily store the property in Illinois (i) for the purpose of
subsequently transporting it outside this State for use or consumption solely outside this State or (ii) for the purpose of being
processed, fabricated, or manufactured into, attached to, or incorporated into
other tangible personal property to be transported outside this State and used or consumed solely outside this State sunsets on June 30, 2022 (currently, June 30, 2016). Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Use Tax Act is amended by changing Section | 5 | | 3-55 as follows:
| 6 | | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
| 7 | | Sec. 3-55. Multistate exemption. To prevent actual or | 8 | | likely multistate taxation, the tax imposed by this
Act
does | 9 | | not apply to the use of
tangible personal property in this | 10 | | State under the following circumstances:
| 11 | | (a) The use, in this State, of tangible personal property | 12 | | acquired
outside this State by a nonresident individual and | 13 | | brought into this
State by the individual for his or her own | 14 | | use while temporarily within
this State or while passing | 15 | | through this State.
| 16 | | (b) (Blank).
| 17 | | (c) The use, in this State, by owners, lessors,
or
shippers
| 18 | | of tangible personal property that is utilized by interstate | 19 | | carriers
for hire for use as rolling stock moving in interstate | 20 | | commerce as
long as so used by the interstate carriers for | 21 | | hire, and equipment
operated by a telecommunications provider, | 22 | | licensed as a common carrier by the
Federal Communications | 23 | | Commission, which is permanently installed in or affixed
to |
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| 1 | | aircraft moving in interstate commerce.
| 2 | | (d) The use, in this State, of tangible personal property | 3 | | that is
acquired outside this State and caused to be brought | 4 | | into this State by
a person who has already paid a tax in | 5 | | another State in respect to the
sale, purchase, or use of that | 6 | | property, to the extent of the amount of
the tax properly due | 7 | | and paid in the other State.
| 8 | | (e) The temporary storage, in this State, of tangible | 9 | | personal
property that is acquired outside this State and that, | 10 | | after
being brought into this State and stored here | 11 | | temporarily, is used
solely outside this State or is physically | 12 | | attached to or incorporated
into other tangible personal | 13 | | property that is used solely outside this
State, or is altered | 14 | | by converting, fabricating, manufacturing, printing,
| 15 | | processing, or shaping, and, as altered, is used solely outside | 16 | | this State.
| 17 | | (f) The temporary storage in this State of building | 18 | | materials and
fixtures that are acquired either in this State | 19 | | or outside this State
by an Illinois registered combination | 20 | | retailer and construction contractor, and
that the purchaser | 21 | | thereafter uses outside this State by incorporating that
| 22 | | property into real estate located outside this State.
| 23 | | (g) The use or purchase of tangible personal property by a | 24 | | common carrier
by rail or motor that receives the physical | 25 | | possession of the property in
Illinois, and
that transports the | 26 | | property, or shares with another common carrier in the
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| 1 | | transportation of the property, out of Illinois on a standard | 2 | | uniform bill of
lading showing the seller of the property as | 3 | | the shipper or consignor of the
property to a destination | 4 | | outside Illinois, for use outside Illinois.
| 5 | | (h) Except as provided in subsection (h-1), the use, in | 6 | | this State, of a motor vehicle that was sold in
this State to a | 7 | | nonresident, even though the motor vehicle is
delivered to the | 8 | | nonresident in this State, if the motor vehicle
is not to be | 9 | | titled in this State, and if a
drive-away permit is issued to | 10 | | the motor vehicle as
provided in Section 3-603 of the Illinois | 11 | | Vehicle Code or if the
nonresident purchaser has vehicle | 12 | | registration plates to transfer
to the motor vehicle upon | 13 | | returning to his or her home state.
The issuance of the | 14 | | drive-away permit or having the
out-of-state
registration | 15 | | plates to be transferred shall be prima facie evidence
that the | 16 | | motor vehicle will not be titled in this State.
| 17 | | (h-1) The exemption under subsection (h) does not apply if | 18 | | the state in which the motor vehicle will be titled does not | 19 | | allow a reciprocal exemption for the use in that state of a | 20 | | motor vehicle sold and delivered in that state to an Illinois | 21 | | resident but titled in Illinois. The tax collected under this | 22 | | Act on the sale of a motor vehicle in this State to a resident | 23 | | of another state that does not allow a reciprocal exemption | 24 | | shall be imposed at a rate equal to the state's rate of tax on | 25 | | taxable property in the state in which the purchaser is a | 26 | | resident, except that the tax shall not exceed the tax that |
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| 1 | | would otherwise be imposed under this Act. At the time of the | 2 | | sale, the purchaser shall execute a statement, signed under | 3 | | penalty of perjury, of his or her intent to title the vehicle | 4 | | in the state in which the purchaser is a resident within 30 | 5 | | days after the sale and of the fact of the payment to the State | 6 | | of Illinois of tax in an amount equivalent to the state's rate | 7 | | of tax on taxable property in his or her state of residence and | 8 | | shall submit the statement to the appropriate tax collection | 9 | | agency in his or her state of residence. In addition, the | 10 | | retailer must retain a signed copy of the statement in his or | 11 | | her records. Nothing in this subsection shall be construed to | 12 | | require the removal of the vehicle from this state following | 13 | | the filing of an intent to title the vehicle in the purchaser's | 14 | | state of residence if the purchaser titles the vehicle in his | 15 | | or her state of residence within 30 days after the date of | 16 | | sale. The tax collected under this Act in accordance with this | 17 | | subsection (h-1) shall be proportionately distributed as if the | 18 | | tax were collected at the 6.25% general rate imposed under this | 19 | | Act.
| 20 | | (h-2) The following exemptions apply with respect to | 21 | | certain aircraft: | 22 | | (1) Beginning on July 1, 2007, no tax is imposed under | 23 | | this Act on the purchase of an aircraft, as defined in | 24 | | Section 3 of the Illinois Aeronautics Act, if all of the | 25 | | following conditions are met: | 26 | | (A) the aircraft leaves this State within 15 days |
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| 1 | | after the later of either the issuance of the final | 2 | | billing for the purchase of the aircraft or the | 3 | | authorized approval for return to service, completion | 4 | | of the maintenance record entry, and completion of the | 5 | | test flight and ground test for inspection, as required | 6 | | by 14 C.F.R. 91.407; | 7 | | (B) the aircraft is not based or registered in this | 8 | | State after the purchase of the aircraft; and | 9 | | (C) the purchaser provides the Department with a | 10 | | signed and dated certification, on a form prescribed by | 11 | | the Department, certifying that the requirements of | 12 | | this item (1) are met. The certificate must also | 13 | | include the name and address of the purchaser, the | 14 | | address of the location where the aircraft is to be | 15 | | titled or registered, the address of the primary | 16 | | physical location of the aircraft, and other | 17 | | information that the Department may reasonably | 18 | | require. | 19 | | (2) Beginning on July 1, 2007, no tax is imposed under | 20 | | this Act on the use of an aircraft, as defined in Section 3 | 21 | | of the Illinois Aeronautics Act, that is temporarily | 22 | | located in this State for the purpose of a prepurchase | 23 | | evaluation if all of the following conditions are met: | 24 | | (A) the aircraft is not based or registered in this | 25 | | State after the prepurchase evaluation; and | 26 | | (B) the purchaser provides the Department with a |
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| 1 | | signed and dated certification, on a form prescribed by | 2 | | the Department, certifying that the requirements of | 3 | | this item (2) are met. The certificate must also | 4 | | include the name and address of the purchaser, the | 5 | | address of the location where the aircraft is to be | 6 | | titled or registered, the address of the primary | 7 | | physical location of the aircraft, and other | 8 | | information that the Department may reasonably | 9 | | require. | 10 | | (3) Beginning on July 1, 2007, no tax is imposed under | 11 | | this Act on the use of an aircraft, as defined in Section 3 | 12 | | of the Illinois Aeronautics Act, that is temporarily | 13 | | located in this State for the purpose of a post-sale | 14 | | customization if all of the following conditions are met: | 15 | | (A) the aircraft leaves this State within 15 days | 16 | | after the authorized approval for return to service, | 17 | | completion of the maintenance record entry, and | 18 | | completion of the test flight and ground test for | 19 | | inspection, as required by 14 C.F.R. 91.407; | 20 | | (B) the aircraft is not based or registered in this | 21 | | State either before or after the post-sale | 22 | | customization; and | 23 | | (C) the purchaser provides the Department with a | 24 | | signed and dated certification, on a form prescribed by | 25 | | the Department, certifying that the requirements of | 26 | | this item (3) are met. The certificate must also |
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| 1 | | include the name and address of the purchaser, the | 2 | | address of the location where the aircraft is to be | 3 | | titled or registered, the address of the primary | 4 | | physical location of the aircraft, and other | 5 | | information that the Department may reasonably | 6 | | require. | 7 | | If tax becomes due under this subsection (h-2) because of | 8 | | the purchaser's use of the aircraft in this State, the | 9 | | purchaser shall file a return with the Department and pay the | 10 | | tax on the fair market value of the aircraft. This return and | 11 | | payment of the tax must be made no later than 30 days after the | 12 | | aircraft is used in a taxable manner in this State. The tax is | 13 | | based on the fair market value of the aircraft on the date that | 14 | | it is first used in a taxable manner in this State. | 15 | | For purposes of this subsection (h-2): | 16 | | "Based in this State" means hangared, stored, or otherwise | 17 | | used, excluding post-sale customizations as defined in this | 18 | | Section, for 10 or more days in each 12-month period | 19 | | immediately following the date of the sale of the aircraft. | 20 | | "Post-sale customization" means any improvement, | 21 | | maintenance, or repair that is performed on an aircraft | 22 | | following a transfer of ownership of the aircraft. | 23 | | "Prepurchase evaluation" means an examination of an | 24 | | aircraft to provide a potential purchaser with information | 25 | | relevant to the potential purchase. | 26 | | "Registered in this State" means an aircraft registered |
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| 1 | | with the Department of Transportation, Aeronautics Division, | 2 | | or titled or registered with the Federal Aviation | 3 | | Administration to an address located in this State.
| 4 | | This subsection (h-2) is exempt from the provisions of | 5 | | Section 3-90.
| 6 | | (i) Beginning July 1, 1999, the use, in this State, of fuel | 7 | | acquired
outside this State and brought into this State in the | 8 | | fuel supply
tanks of locomotives engaged in freight hauling and | 9 | | passenger service for
interstate commerce. This subsection is | 10 | | exempt from the provisions of Section
3-90.
| 11 | | (j) Beginning on January 1, 2002 and through June 30, 2022 | 12 | | June 30, 2016 , the use of tangible personal property
purchased | 13 | | from an Illinois retailer by a taxpayer engaged in centralized
| 14 | | purchasing activities in Illinois who will, upon receipt of the | 15 | | property in
Illinois, temporarily store the property in | 16 | | Illinois (i) for the purpose of
subsequently transporting it | 17 | | outside this State for use or consumption
thereafter solely | 18 | | outside this State or (ii) for the purpose of being
processed, | 19 | | fabricated, or manufactured into, attached to, or incorporated | 20 | | into
other tangible personal property to be transported outside | 21 | | this State and
thereafter used or consumed solely outside this | 22 | | State. The Director of Revenue
shall, pursuant to rules adopted | 23 | | in accordance with the Illinois Administrative
Procedure Act, | 24 | | issue a permit to any taxpayer in good standing with the
| 25 | | Department who is eligible for the exemption under this | 26 | | subsection (j). The
permit issued under this subsection (j) |
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| 1 | | shall authorize the holder, to the
extent and in the manner | 2 | | specified in the rules adopted under this Act, to
purchase | 3 | | tangible personal property from a retailer exempt from the | 4 | | taxes
imposed by this Act. Taxpayers shall maintain all | 5 | | necessary books and records
to substantiate the use and | 6 | | consumption of all such tangible personal property
outside of | 7 | | the State of Illinois.
| 8 | | (Source: P.A. 100-321, eff. 8-24-17.)
| 9 | | Section 10. The Service Use Tax Act is amended by changing | 10 | | Section 3-45 as follows:
| 11 | | (35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
| 12 | | Sec. 3-45. Multistate exemption. To prevent actual or | 13 | | likely multistate
taxation, the tax imposed by this Act does | 14 | | not apply
to the use of tangible personal property in this | 15 | | State under the following
circumstances:
| 16 | | (a) The use, in this State, of property acquired outside | 17 | | this State
by a nonresident individual and brought into this | 18 | | State by the
individual for his or her own use while | 19 | | temporarily within this State or
while passing through this | 20 | | State.
| 21 | | (b) The use, in this State, of property that is
acquired | 22 | | outside
this State and that is moved into this State for use as | 23 | | rolling stock
moving in interstate commerce.
| 24 | | (c) The use, in this State, of property that is acquired |
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| 1 | | outside
this State and caused to be brought into this State by | 2 | | a person who has
already paid a tax in another state in respect | 3 | | to the sale, purchase, or
use of that property, to the extent | 4 | | of the amount of the tax properly
due and paid in the other | 5 | | state.
| 6 | | (d) The temporary storage, in this State, of property that | 7 | | is
acquired outside this State and that after being brought | 8 | | into
this State and stored here temporarily, is used solely | 9 | | outside this
State or is physically attached to or incorporated | 10 | | into other property
that is used solely outside this State, or | 11 | | is altered by converting,
fabricating, manufacturing, | 12 | | printing, processing, or shaping, and, as
altered, is used | 13 | | solely outside this State.
| 14 | | (e) Beginning July 1, 1999, the use, in this State, of fuel | 15 | | acquired
outside this State and brought into this State in the | 16 | | fuel supply
tanks of locomotives engaged in freight hauling and | 17 | | passenger service for
interstate commerce. This subsection is | 18 | | exempt from the provisions of Section
3-75.
| 19 | | (f) Beginning on January 1, 2002 and through June 30, 2022 | 20 | | June 30, 2016 , the use of tangible personal property
purchased | 21 | | from an Illinois retailer by a taxpayer engaged in centralized
| 22 | | purchasing activities in Illinois who will, upon receipt of the | 23 | | property in
Illinois, temporarily store the property in | 24 | | Illinois (i) for the purpose of
subsequently transporting it | 25 | | outside this State for use or consumption
thereafter solely | 26 | | outside this State or (ii) for the purpose of being
processed, |
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| 1 | | fabricated, or manufactured into, attached to, or incorporated | 2 | | into
other tangible personal property to be transported outside | 3 | | this State and
thereafter used or consumed solely outside this | 4 | | State. The Director of Revenue
shall, pursuant to rules adopted | 5 | | in accordance with the Illinois Administrative
Procedure Act, | 6 | | issue a permit to any taxpayer in good standing with the
| 7 | | Department who is eligible for the exemption under this | 8 | | subsection (f). The
permit issued under this subsection (f) | 9 | | shall authorize the holder, to the
extent and in the manner | 10 | | specified in the rules adopted under this Act, to
purchase | 11 | | tangible personal property from a retailer exempt from the | 12 | | taxes
imposed by this Act. Taxpayers shall maintain all | 13 | | necessary books and records
to substantiate the use and | 14 | | consumption of all such tangible personal property
outside of | 15 | | the State of Illinois.
| 16 | | (Source: P.A. 97-73, eff. 6-30-11.)
| 17 | | Section 15. The Service Occupation Tax Act is amended by | 18 | | changing Section 3-5 as follows:
| 19 | | (35 ILCS 115/3-5)
| 20 | | Sec. 3-5. Exemptions. The following tangible personal | 21 | | property is
exempt from the tax imposed by this Act:
| 22 | | (1) Personal property sold by a corporation, society, | 23 | | association,
foundation, institution, or organization, other | 24 | | than a limited liability
company, that is organized and |
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| 1 | | operated as a not-for-profit service enterprise
for the benefit | 2 | | of persons 65 years of age or older if the personal property
| 3 | | was not purchased by the enterprise for the purpose of resale | 4 | | by the
enterprise.
| 5 | | (2) Personal property purchased by a not-for-profit | 6 | | Illinois county fair
association for use in conducting, | 7 | | operating, or promoting the county fair.
| 8 | | (3) Personal property purchased by any not-for-profit
arts | 9 | | or cultural organization that establishes, by proof required by | 10 | | the
Department by
rule, that it has received an exemption under | 11 | | Section 501(c)(3) of the
Internal Revenue Code and that is | 12 | | organized and operated primarily for the
presentation
or | 13 | | support of arts or cultural programming, activities, or | 14 | | services. These
organizations include, but are not limited to, | 15 | | music and dramatic arts
organizations such as symphony | 16 | | orchestras and theatrical groups, arts and
cultural service | 17 | | organizations, local arts councils, visual arts organizations,
| 18 | | and media arts organizations.
On and after July 1, 2001 (the | 19 | | effective date of Public Act 92-35), however, an entity | 20 | | otherwise eligible for this exemption shall not
make tax-free | 21 | | purchases unless it has an active identification number issued | 22 | | by
the Department.
| 23 | | (4) Legal tender, currency, medallions, or gold or silver | 24 | | coinage
issued by the State of Illinois, the government of the | 25 | | United States of
America, or the government of any foreign | 26 | | country, and bullion.
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| 1 | | (5) Until July 1, 2003 and beginning again on September 1, | 2 | | 2004 through August 30, 2014, graphic arts machinery and | 3 | | equipment, including
repair and
replacement parts, both new and | 4 | | used, and including that manufactured on
special order or | 5 | | purchased for lease, certified by the purchaser to be used
| 6 | | primarily for graphic arts production.
Equipment includes | 7 | | chemicals or chemicals acting as catalysts but only if
the
| 8 | | chemicals or chemicals acting as catalysts effect a direct and | 9 | | immediate change
upon a graphic arts product. Beginning on July | 10 | | 1, 2017, graphic arts machinery and equipment is included in | 11 | | the manufacturing and assembling machinery and equipment | 12 | | exemption under Section 2 of this Act.
| 13 | | (6) Personal property sold by a teacher-sponsored student | 14 | | organization
affiliated with an elementary or secondary school | 15 | | located in Illinois.
| 16 | | (7) Farm machinery and equipment, both new and used, | 17 | | including that
manufactured on special order, certified by the | 18 | | purchaser to be used
primarily for production agriculture or | 19 | | State or federal agricultural
programs, including individual | 20 | | replacement parts for the machinery and
equipment, including | 21 | | machinery and equipment purchased for lease,
and including | 22 | | implements of husbandry defined in Section 1-130 of
the | 23 | | Illinois Vehicle Code, farm machinery and agricultural | 24 | | chemical and
fertilizer spreaders, and nurse wagons required to | 25 | | be registered
under Section 3-809 of the Illinois Vehicle Code,
| 26 | | but
excluding other motor vehicles required to be registered |
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| 1 | | under the Illinois
Vehicle
Code.
Horticultural polyhouses or | 2 | | hoop houses used for propagating, growing, or
overwintering | 3 | | plants shall be considered farm machinery and equipment under
| 4 | | this item (7).
Agricultural chemical tender tanks and dry boxes | 5 | | shall include units sold
separately from a motor vehicle | 6 | | required to be licensed and units sold mounted
on a motor | 7 | | vehicle required to be licensed if the selling price of the | 8 | | tender
is separately stated.
| 9 | | Farm machinery and equipment shall include precision | 10 | | farming equipment
that is
installed or purchased to be | 11 | | installed on farm machinery and equipment
including, but not | 12 | | limited to, tractors, harvesters, sprayers, planters,
seeders, | 13 | | or spreaders.
Precision farming equipment includes, but is not | 14 | | limited to,
soil testing sensors, computers, monitors, | 15 | | software, global positioning
and mapping systems, and other | 16 | | such equipment.
| 17 | | Farm machinery and equipment also includes computers, | 18 | | sensors, software, and
related equipment used primarily in the
| 19 | | computer-assisted operation of production agriculture | 20 | | facilities, equipment,
and activities such as, but
not limited | 21 | | to,
the collection, monitoring, and correlation of
animal and | 22 | | crop data for the purpose of
formulating animal diets and | 23 | | agricultural chemicals. This item (7) is exempt
from the | 24 | | provisions of
Section 3-55.
| 25 | | (8) Until June 30, 2013, fuel and petroleum products sold | 26 | | to or used by an air common
carrier, certified by the carrier |
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| 1 | | to be used for consumption, shipment,
or storage in the conduct | 2 | | of its business as an air common carrier, for
a flight destined | 3 | | for or returning from a location or locations
outside the | 4 | | United States without regard to previous or subsequent domestic
| 5 | | stopovers.
| 6 | | Beginning July 1, 2013, fuel and petroleum products sold to | 7 | | or used by an air carrier, certified by the carrier to be used | 8 | | for consumption, shipment, or storage in the conduct of its | 9 | | business as an air common carrier, for a flight that (i) is | 10 | | engaged in foreign trade or is engaged in trade between the | 11 | | United States and any of its possessions and (ii) transports at | 12 | | least one individual or package for hire from the city of | 13 | | origination to the city of final destination on the same | 14 | | aircraft, without regard to a change in the flight number of | 15 | | that aircraft. | 16 | | (9) Proceeds of mandatory service charges separately
| 17 | | stated on customers' bills for the purchase and consumption of | 18 | | food and
beverages, to the extent that the proceeds of the | 19 | | service charge are in fact
turned over as tips or as a | 20 | | substitute for tips to the employees who
participate directly | 21 | | in preparing, serving, hosting or cleaning up the
food or | 22 | | beverage function with respect to which the service charge is | 23 | | imposed.
| 24 | | (10) Until July 1, 2003, oil field exploration, drilling, | 25 | | and production
equipment,
including (i) rigs and parts of rigs, | 26 | | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and |
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| 1 | | tubular goods, including casing and
drill strings, (iii) pumps | 2 | | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | 3 | | individual replacement part for oil field exploration,
| 4 | | drilling, and production equipment, and (vi) machinery and | 5 | | equipment purchased
for lease; but
excluding motor vehicles | 6 | | required to be registered under the Illinois
Vehicle Code.
| 7 | | (11) Photoprocessing machinery and equipment, including | 8 | | repair and
replacement parts, both new and used, including that | 9 | | manufactured on
special order, certified by the purchaser to be | 10 | | used primarily for
photoprocessing, and including | 11 | | photoprocessing machinery and equipment
purchased for lease.
| 12 | | (12) Until July 1, 2023, coal and aggregate exploration, | 13 | | mining, off-highway hauling,
processing,
maintenance, and | 14 | | reclamation equipment, including
replacement parts and | 15 | | equipment, and including
equipment
purchased for lease, but | 16 | | excluding motor vehicles required to be registered
under the | 17 | | Illinois Vehicle Code. The changes made to this Section by | 18 | | Public Act 97-767 apply on and after July 1, 2003, but no claim | 19 | | for credit or refund is allowed on or after August 16, 2013 | 20 | | (the effective date of Public Act 98-456)
for such taxes paid | 21 | | during the period beginning July 1, 2003 and ending on August | 22 | | 16, 2013 (the effective date of Public Act 98-456).
| 23 | | (13) Beginning January 1, 1992 and through June 30, 2016, | 24 | | food for human consumption that is to be consumed off the | 25 | | premises
where it is sold (other than alcoholic beverages, soft | 26 | | drinks and food that
has been prepared for immediate |
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| 1 | | consumption) and prescription and
non-prescription medicines, | 2 | | drugs, medical appliances, and insulin, urine
testing | 3 | | materials, syringes, and needles used by diabetics, for human | 4 | | use,
when purchased for use by a person receiving medical | 5 | | assistance under
Article V of the Illinois Public Aid Code who | 6 | | resides in a licensed
long-term care facility, as defined in | 7 | | the Nursing Home Care Act, or in a licensed facility as defined | 8 | | in the ID/DD Community Care Act, the MC/DD Act, or the | 9 | | Specialized Mental Health Rehabilitation Act of 2013.
| 10 | | (14) Semen used for artificial insemination of livestock | 11 | | for direct
agricultural production.
| 12 | | (15) Horses, or interests in horses, registered with and | 13 | | meeting the
requirements of any of the
Arabian Horse Club | 14 | | Registry of America, Appaloosa Horse Club, American Quarter
| 15 | | Horse Association, United States
Trotting Association, or | 16 | | Jockey Club, as appropriate, used for
purposes of breeding or | 17 | | racing for prizes. This item (15) is exempt from the provisions | 18 | | of Section 3-55, and the exemption provided for under this item | 19 | | (15) applies for all periods beginning May 30, 1995, but no | 20 | | claim for credit or refund is allowed on or after January 1, | 21 | | 2008 (the effective date of Public Act 95-88)
for such taxes | 22 | | paid during the period beginning May 30, 2000 and ending on | 23 | | January 1, 2008 (the effective date of Public Act 95-88).
| 24 | | (16) Computers and communications equipment utilized for | 25 | | any
hospital
purpose
and equipment used in the diagnosis,
| 26 | | analysis, or treatment of hospital patients sold to a lessor |
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| 1 | | who leases the
equipment, under a lease of one year or longer | 2 | | executed or in effect at the
time of the purchase, to a
| 3 | | hospital
that has been issued an active tax exemption | 4 | | identification number by the
Department under Section 1g of the | 5 | | Retailers' Occupation Tax Act.
| 6 | | (17) Personal property sold to a lessor who leases the
| 7 | | property, under a
lease of one year or longer executed or in | 8 | | effect at the time of the purchase,
to a governmental body
that | 9 | | has been issued an active tax exemption identification number | 10 | | by the
Department under Section 1g of the Retailers' Occupation | 11 | | Tax Act.
| 12 | | (18) Beginning with taxable years ending on or after | 13 | | December
31, 1995
and
ending with taxable years ending on or | 14 | | before December 31, 2004,
personal property that is
donated for | 15 | | disaster relief to be used in a State or federally declared
| 16 | | disaster area in Illinois or bordering Illinois by a | 17 | | manufacturer or retailer
that is registered in this State to a | 18 | | corporation, society, association,
foundation, or institution | 19 | | that has been issued a sales tax exemption
identification | 20 | | number by the Department that assists victims of the disaster
| 21 | | who reside within the declared disaster area.
| 22 | | (19) Beginning with taxable years ending on or after | 23 | | December
31, 1995 and
ending with taxable years ending on or | 24 | | before December 31, 2004, personal
property that is used in the | 25 | | performance of infrastructure repairs in this
State, including | 26 | | but not limited to municipal roads and streets, access roads,
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| 1 | | bridges, sidewalks, waste disposal systems, water and sewer | 2 | | line extensions,
water distribution and purification | 3 | | facilities, storm water drainage and
retention facilities, and | 4 | | sewage treatment facilities, resulting from a State
or | 5 | | federally declared disaster in Illinois or bordering Illinois | 6 | | when such
repairs are initiated on facilities located in the | 7 | | declared 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
| 10 | | in the
Wildlife Code. This paragraph is exempt from the | 11 | | provisions
of
Section 3-55.
| 12 | | (21) A motor vehicle, as that term is defined in Section | 13 | | 1-146
of the
Illinois Vehicle Code, that is donated to a | 14 | | corporation, limited liability
company, society, association, | 15 | | foundation, or institution that is determined by
the Department | 16 | | to be organized and operated exclusively for educational
| 17 | | purposes. For purposes of this exemption, "a corporation, | 18 | | limited liability
company, society, association, foundation, | 19 | | or institution organized and
operated
exclusively for | 20 | | educational purposes" means all tax-supported public schools,
| 21 | | private schools that offer systematic instruction in useful | 22 | | branches of
learning by methods common to public schools and | 23 | | that compare favorably in
their scope and intensity with the | 24 | | course of study presented in tax-supported
schools, and | 25 | | vocational or technical schools or institutes organized and
| 26 | | operated exclusively to provide a course of study of not less |
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| 1 | | than 6 weeks
duration and designed to prepare individuals to | 2 | | follow a trade or to pursue a
manual, technical, mechanical, | 3 | | industrial, business, or commercial
occupation.
| 4 | | (22) Beginning January 1, 2000, personal property, | 5 | | including
food,
purchased through fundraising
events for the | 6 | | benefit of
a public or private elementary or
secondary school, | 7 | | a group of those schools, or one or more school
districts if | 8 | | the events are
sponsored by an entity recognized by the school | 9 | | district that consists
primarily of volunteers and includes
| 10 | | parents and teachers of the school children. This paragraph | 11 | | does not apply
to fundraising
events (i) for the benefit of | 12 | | private home instruction or (ii)
for which the fundraising | 13 | | entity purchases the personal property sold at
the events from | 14 | | another individual or entity that sold the property for the
| 15 | | purpose of resale by the fundraising entity and that
profits | 16 | | from the sale to the
fundraising entity. This paragraph is | 17 | | exempt
from the provisions
of Section 3-55.
| 18 | | (23) Beginning January 1, 2000
and through December 31, | 19 | | 2001, new or used automatic vending
machines that prepare and | 20 | | serve hot food and beverages, including coffee, soup,
and
other | 21 | | items, and replacement parts for these machines.
Beginning | 22 | | January 1,
2002 and through June 30, 2003, machines and parts | 23 | | for
machines used in commercial, coin-operated amusement
and | 24 | | vending business if a use or occupation tax is paid on the | 25 | | gross receipts
derived from
the use of the commercial, | 26 | | coin-operated amusement and vending machines.
This paragraph |
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| 1 | | is exempt from the provisions of Section 3-55.
| 2 | | (24) Beginning
on August 2, 2001 (the effective date of | 3 | | Public Act 92-227),
computers and communications equipment
| 4 | | utilized for any hospital purpose and equipment used in the | 5 | | diagnosis,
analysis, or treatment of hospital patients sold to | 6 | | a lessor who leases the
equipment, under a lease of one year or | 7 | | longer executed or in effect at the
time of the purchase, to a | 8 | | hospital that has been issued an active tax
exemption | 9 | | identification number by the Department under Section 1g of the
| 10 | | Retailers' Occupation Tax Act. This paragraph is exempt from | 11 | | the provisions of
Section 3-55.
| 12 | | (25) Beginning
on August 2, 2001 (the effective date of | 13 | | Public Act 92-227),
personal property sold to a lessor who
| 14 | | leases the property, under a lease of one year or longer | 15 | | executed or in effect
at the time of the purchase, to a | 16 | | governmental body that has been issued an
active tax exemption | 17 | | identification number by the Department under Section 1g
of the | 18 | | Retailers' Occupation Tax Act. This paragraph is exempt from | 19 | | the
provisions of Section 3-55.
| 20 | | (26) Beginning on January 1, 2002 and through June 30, 2022 | 21 | | June 30, 2016 , tangible personal property
purchased
from an | 22 | | Illinois retailer by a taxpayer engaged in centralized | 23 | | purchasing
activities in Illinois who will, upon receipt of the | 24 | | property in Illinois,
temporarily store the property in | 25 | | Illinois (i) for the purpose of subsequently
transporting it | 26 | | outside this State for use or consumption thereafter solely
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| 1 | | outside this State or (ii) for the purpose of being processed, | 2 | | fabricated, or
manufactured into, attached to, or incorporated | 3 | | into other tangible personal
property to be transported outside | 4 | | this State and thereafter used or consumed
solely outside this | 5 | | State. The Director of Revenue shall, pursuant to rules
adopted | 6 | | in accordance with the Illinois Administrative Procedure Act, | 7 | | issue a
permit to any taxpayer in good standing with the | 8 | | Department who is eligible for
the exemption under this | 9 | | paragraph (26). The permit issued under
this paragraph (26) | 10 | | shall authorize the holder, to the extent and
in the manner | 11 | | specified in the rules adopted under this Act, to purchase
| 12 | | tangible personal property from a retailer exempt from the | 13 | | taxes imposed by
this Act. Taxpayers shall maintain all | 14 | | necessary books and records to
substantiate the use and | 15 | | consumption of all such tangible personal property
outside of | 16 | | the State of Illinois.
| 17 | | (27) Beginning January 1, 2008, tangible personal property | 18 | | used in the construction or maintenance of a community water | 19 | | supply, as defined under Section 3.145 of the Environmental | 20 | | Protection Act, that is operated by a not-for-profit | 21 | | corporation that holds a valid water supply permit issued under | 22 | | Title IV of the Environmental Protection Act. This paragraph is | 23 | | exempt from the provisions of Section 3-55.
| 24 | | (28) Tangible personal property sold to a | 25 | | public-facilities corporation, as described in Section | 26 | | 11-65-10 of the Illinois Municipal Code, for purposes of |
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| 1 | | constructing or furnishing a municipal convention hall, but | 2 | | only if the legal title to the municipal convention hall is | 3 | | transferred to the municipality without any further | 4 | | consideration by or on behalf of the municipality at the time | 5 | | of the completion of the municipal convention hall or upon the | 6 | | retirement or redemption of any bonds or other debt instruments | 7 | | issued by the public-facilities corporation in connection with | 8 | | the development of the municipal convention hall. This | 9 | | exemption includes existing public-facilities corporations as | 10 | | provided in Section 11-65-25 of the Illinois Municipal Code. | 11 | | This paragraph is exempt from the provisions of Section 3-55. | 12 | | (29) Beginning January 1, 2010 and continuing through | 13 | | December 31, 2024, materials, parts, equipment, components, | 14 | | and furnishings incorporated into or upon an aircraft as part | 15 | | of the modification, refurbishment, completion, replacement, | 16 | | repair, or maintenance of the aircraft. This exemption includes | 17 | | consumable supplies used in the modification, refurbishment, | 18 | | completion, replacement, repair, and maintenance of aircraft, | 19 | | but excludes any materials, parts, equipment, components, and | 20 | | consumable supplies used in the modification, replacement, | 21 | | repair, and maintenance of aircraft engines or power plants, | 22 | | whether such engines or power plants are installed or | 23 | | uninstalled upon any such aircraft. "Consumable supplies" | 24 | | include, but are not limited to, adhesive, tape, sandpaper, | 25 | | general purpose lubricants, cleaning solution, latex gloves, | 26 | | and protective films. This exemption applies only to the |
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| 1 | | transfer of qualifying tangible personal property incident to | 2 | | the modification, refurbishment, completion, replacement, | 3 | | repair, or maintenance of an aircraft by persons who (i) hold | 4 | | an Air Agency Certificate and are empowered to operate an | 5 | | approved repair station by the Federal Aviation | 6 | | Administration, (ii) have a Class IV Rating, and (iii) conduct | 7 | | operations in accordance with Part 145 of the Federal Aviation | 8 | | Regulations. The exemption does not include aircraft operated | 9 | | by a commercial air carrier providing scheduled passenger air | 10 | | service pursuant to authority issued under Part 121 or Part 129 | 11 | | of the Federal Aviation Regulations. The changes made to this | 12 | | paragraph (29) by Public Act 98-534 are declarative of existing | 13 | | law. It is the intent of the General Assembly that the | 14 | | exemption under this paragraph (29) applies continuously from | 15 | | January 1, 2010 through December 31, 2024; however, no claim | 16 | | for credit or refund is allowed for taxes paid as a result of | 17 | | the disallowance of this exemption on or after January 1, 2015 | 18 | | and prior to the effective date of this amendatory Act of the | 19 | | 101st General Assembly. | 20 | | (30) Beginning January 1, 2017, menstrual pads, tampons, | 21 | | and menstrual cups. | 22 | | (31) Tangible personal property transferred to a purchaser | 23 | | who is exempt from tax by operation of federal law. This | 24 | | paragraph is exempt from the provisions of Section 3-55. | 25 | | (32) Qualified tangible personal property used in the | 26 | | construction or operation of a data center that has been |
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| 1 | | granted a certificate of exemption by the Department of | 2 | | Commerce and Economic Opportunity, whether that tangible | 3 | | personal property is purchased by the owner, operator, or | 4 | | tenant of the data center or by a contractor or subcontractor | 5 | | of the owner, operator, or tenant. Data centers that would have | 6 | | qualified for a certificate of exemption prior to January 1, | 7 | | 2020 had this amendatory Act of the 101st General Assembly been | 8 | | in effect, may apply for and obtain an exemption for subsequent | 9 | | purchases of computer equipment or enabling software purchased | 10 | | or leased to upgrade, supplement, or replace computer equipment | 11 | | or enabling software purchased or leased in the original | 12 | | investment that would have qualified. | 13 | | The Department of Commerce and Economic Opportunity shall | 14 | | grant a certificate of exemption under this item (32) to | 15 | | qualified data centers as defined by Section 605-1025 of the | 16 | | Department of Commerce and Economic Opportunity Law of the
| 17 | | Civil Administrative Code of Illinois. | 18 | | For the purposes of this item (32): | 19 | | "Data center" means a building or a series of buildings | 20 | | rehabilitated or constructed to house working servers in | 21 | | one physical location or multiple sites within the State of | 22 | | Illinois. | 23 | | "Qualified tangible personal property" means: | 24 | | electrical systems and equipment; climate control and | 25 | | chilling equipment and systems; mechanical systems and | 26 | | equipment; monitoring and secure systems; emergency |
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| 1 | | generators; hardware; computers; servers; data storage | 2 | | devices; network connectivity equipment; racks; cabinets; | 3 | | telecommunications cabling infrastructure; raised floor | 4 | | systems; peripheral components or systems; software; | 5 | | mechanical, electrical, or plumbing systems; battery | 6 | | systems; cooling systems and towers; temperature control | 7 | | systems; other cabling; and other data center | 8 | | infrastructure equipment and systems necessary to operate | 9 | | qualified tangible personal property, including fixtures; | 10 | | and component parts of any of the foregoing, including | 11 | | installation, maintenance, repair, refurbishment, and | 12 | | replacement of qualified tangible personal property to | 13 | | generate, transform, transmit, distribute, or manage | 14 | | electricity necessary to operate qualified tangible | 15 | | personal property; and all other tangible personal | 16 | | property that is essential to the operations of a computer | 17 | | data center. The term "qualified tangible personal | 18 | | property" also includes building materials physically | 19 | | incorporated in to the qualifying data center. To document | 20 | | the exemption allowed under this Section, the retailer must | 21 | | obtain from the purchaser a copy of the certificate of | 22 | | eligibility issued by the Department of Commerce and | 23 | | Economic Opportunity. | 24 | | This item (32) is exempt from the provisions of Section | 25 | | 3-55. | 26 | | (Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18; |
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| 1 | | 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff. | 2 | | 7-12-19; 101-629, eff. 2-5-20.)
| 3 | | Section 20. The Retailers' Occupation Tax Act is amended by | 4 | | changing Section 2-5 as follows:
| 5 | | (35 ILCS 120/2-5)
| 6 | | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | 7 | | sale of
the following tangible personal property are exempt | 8 | | from the tax imposed
by this Act:
| 9 | | (1) Farm chemicals.
| 10 | | (2) Farm machinery and equipment, both new and used, | 11 | | including that
manufactured on special order, certified by | 12 | | the purchaser to be used
primarily for production | 13 | | agriculture or State or federal agricultural
programs, | 14 | | including individual replacement parts for the machinery | 15 | | and
equipment, including machinery and equipment purchased | 16 | | for lease,
and including implements of husbandry defined in | 17 | | Section 1-130 of
the Illinois Vehicle Code, farm machinery | 18 | | and agricultural chemical and
fertilizer spreaders, and | 19 | | nurse wagons required to be registered
under Section 3-809 | 20 | | of the Illinois Vehicle Code,
but
excluding other motor | 21 | | vehicles required to be registered under the Illinois
| 22 | | Vehicle Code.
Horticultural polyhouses or hoop houses used | 23 | | for propagating, growing, or
overwintering plants shall be | 24 | | considered farm machinery and equipment under
this item |
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| 1 | | (2).
Agricultural chemical tender tanks and dry boxes shall | 2 | | include units sold
separately from a motor vehicle required | 3 | | to be licensed and units sold mounted
on a motor vehicle | 4 | | required to be licensed, if the selling price of the tender
| 5 | | is separately stated.
| 6 | | Farm machinery and equipment shall include precision | 7 | | farming equipment
that is
installed or purchased to be | 8 | | installed on farm machinery and equipment
including, but | 9 | | not limited to, tractors, harvesters, sprayers, planters,
| 10 | | seeders, or spreaders.
Precision farming equipment | 11 | | includes, but is not limited to,
soil testing sensors, | 12 | | computers, monitors, software, global positioning
and | 13 | | mapping systems, and other such equipment.
| 14 | | Farm machinery and equipment also includes computers, | 15 | | sensors, software, and
related equipment used primarily in | 16 | | the
computer-assisted operation of production agriculture | 17 | | facilities, equipment,
and activities such as, but
not | 18 | | limited to,
the collection, monitoring, and correlation of
| 19 | | animal and crop data for the purpose of
formulating animal | 20 | | diets and agricultural chemicals. This item (2) is exempt
| 21 | | from the provisions of
Section 2-70.
| 22 | | (3) Until July 1, 2003, distillation machinery and | 23 | | equipment, sold as a
unit or kit,
assembled or installed by | 24 | | the retailer, certified by the user to be used
only for the | 25 | | production of ethyl alcohol that will be used for | 26 | | consumption
as motor fuel or as a component of motor fuel |
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| 1 | | for the personal use of the
user, and not subject to sale | 2 | | or resale.
| 3 | | (4) Until July 1, 2003 and beginning again September 1, | 4 | | 2004 through August 30, 2014, graphic arts machinery and | 5 | | equipment, including
repair and
replacement parts, both | 6 | | new and used, and including that manufactured on
special | 7 | | order or purchased for lease, certified by the purchaser to | 8 | | be used
primarily for graphic arts production.
Equipment | 9 | | includes chemicals or
chemicals acting as catalysts but | 10 | | only if
the chemicals or chemicals acting as catalysts | 11 | | effect a direct and immediate
change upon a
graphic arts | 12 | | product. Beginning on July 1, 2017, graphic arts machinery | 13 | | and equipment is included in the manufacturing and | 14 | | assembling machinery and equipment exemption under | 15 | | paragraph (14).
| 16 | | (5) A motor vehicle that is used for automobile | 17 | | renting, as defined in the Automobile Renting Occupation | 18 | | and Use Tax Act. This paragraph is exempt from
the | 19 | | provisions of Section 2-70.
| 20 | | (6) Personal property sold by a teacher-sponsored | 21 | | student organization
affiliated with an elementary or | 22 | | secondary school located in Illinois.
| 23 | | (7) Until July 1, 2003, proceeds of that portion of the | 24 | | selling price of
a passenger car the
sale of which is | 25 | | subject to the Replacement Vehicle Tax.
| 26 | | (8) Personal property sold to an Illinois county fair |
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| 1 | | association for
use in conducting, operating, or promoting | 2 | | the county fair.
| 3 | | (9) Personal property sold to a not-for-profit arts
or | 4 | | cultural organization that establishes, by proof required | 5 | | by the Department
by
rule, that it has received an | 6 | | exemption under Section 501(c)(3) of the
Internal Revenue | 7 | | Code and that is organized and operated primarily for the
| 8 | | presentation
or support of arts or cultural programming, | 9 | | activities, or services. These
organizations include, but | 10 | | are not limited to, music and dramatic arts
organizations | 11 | | such as symphony orchestras and theatrical groups, arts and
| 12 | | cultural service organizations, local arts councils, | 13 | | visual arts organizations,
and media arts organizations.
| 14 | | On and after July 1, 2001 (the effective date of Public Act | 15 | | 92-35), however, an entity otherwise eligible for this | 16 | | exemption shall not
make tax-free purchases unless it has | 17 | | an active identification number issued by
the Department.
| 18 | | (10) Personal property sold by a corporation, society, | 19 | | association,
foundation, institution, or organization, | 20 | | other than a limited liability
company, that is organized | 21 | | and operated as a not-for-profit service enterprise
for the | 22 | | benefit of persons 65 years of age or older if the personal | 23 | | property
was not purchased by the enterprise for the | 24 | | purpose of resale by the
enterprise.
| 25 | | (11) Personal property sold to a governmental body, to | 26 | | a corporation,
society, association, foundation, or |
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| 1 | | institution organized and operated
exclusively for | 2 | | charitable, religious, or educational purposes, or to a
| 3 | | not-for-profit corporation, society, association, | 4 | | foundation, institution,
or organization that has no | 5 | | compensated officers or employees and that is
organized and | 6 | | operated primarily for the recreation of persons 55 years | 7 | | of
age or older. A limited liability company may qualify | 8 | | for the exemption under
this paragraph only if the limited | 9 | | liability company is organized and operated
exclusively | 10 | | for educational purposes. On and after July 1, 1987, | 11 | | however, no
entity otherwise eligible for this exemption | 12 | | shall make tax-free purchases
unless it has an active | 13 | | identification number issued by the Department.
| 14 | | (12) (Blank).
| 15 | | (12-5) On and after July 1, 2003 and through June 30, | 16 | | 2004, motor vehicles of the second division
with a gross | 17 | | vehicle weight in excess of 8,000 pounds
that
are
subject | 18 | | to the commercial distribution fee imposed under Section | 19 | | 3-815.1 of
the Illinois
Vehicle Code. Beginning on July 1, | 20 | | 2004 and through June 30, 2005, the use in this State of | 21 | | motor vehicles of the second division: (i) with a gross | 22 | | vehicle weight rating in excess of 8,000 pounds; (ii) that | 23 | | are subject to the commercial distribution fee imposed | 24 | | under Section 3-815.1 of the Illinois Vehicle Code; and | 25 | | (iii) that are primarily used for commercial purposes. | 26 | | Through June 30, 2005, this
exemption applies to repair and |
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| 1 | | replacement parts added
after the
initial purchase of such | 2 | | a motor vehicle if that motor vehicle is used in a
manner | 3 | | that
would qualify for the rolling stock exemption | 4 | | otherwise provided for in this
Act. For purposes of this | 5 | | paragraph, "used for commercial purposes" means the | 6 | | transportation of persons or property in furtherance of any | 7 | | commercial or industrial enterprise whether for-hire or | 8 | | not.
| 9 | | (13) Proceeds from sales to owners, lessors, or
| 10 | | shippers of
tangible personal property that is utilized by | 11 | | interstate carriers for
hire for use as rolling stock | 12 | | moving in interstate commerce
and equipment operated by a | 13 | | telecommunications provider, licensed as a
common carrier | 14 | | by the Federal Communications Commission, which is
| 15 | | permanently installed in or affixed to aircraft moving in | 16 | | interstate commerce.
| 17 | | (14) Machinery and equipment that will be used by the | 18 | | purchaser, or a
lessee of the purchaser, primarily in the | 19 | | process of manufacturing or
assembling tangible personal | 20 | | property for wholesale or retail sale or
lease, whether the | 21 | | sale or lease is made directly by the manufacturer or by
| 22 | | some other person, whether the materials used in the | 23 | | process are owned by
the manufacturer or some other person, | 24 | | or whether the sale or lease is made
apart from or as an | 25 | | incident to the seller's engaging in the service
occupation | 26 | | of producing machines, tools, dies, jigs, patterns, |
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| 1 | | gauges, or
other similar items of no commercial value on | 2 | | special order for a particular
purchaser. The exemption | 3 | | provided by this paragraph (14) does not include machinery | 4 | | and equipment used in (i) the generation of electricity for | 5 | | wholesale or retail sale; (ii) the generation or treatment | 6 | | of natural or artificial gas for wholesale or retail sale | 7 | | that is delivered to customers through pipes, pipelines, or | 8 | | mains; or (iii) the treatment of water for wholesale or | 9 | | retail sale that is delivered to customers through pipes, | 10 | | pipelines, or mains. The provisions of Public Act 98-583 | 11 | | are declaratory of existing law as to the meaning and scope | 12 | | of this exemption. Beginning on July 1, 2017, the exemption | 13 | | provided by this paragraph (14) includes, but is not | 14 | | limited to, graphic arts machinery and equipment, as | 15 | | defined in paragraph (4) of this Section.
| 16 | | (15) Proceeds of mandatory service charges separately | 17 | | stated on
customers' bills for purchase and consumption of | 18 | | food and beverages, to the
extent that the proceeds of the | 19 | | service charge are in fact turned over as
tips or as a | 20 | | substitute for tips to the employees who participate | 21 | | directly
in preparing, serving, hosting or cleaning up the | 22 | | food or beverage function
with respect to which the service | 23 | | charge is imposed.
| 24 | | (16) Tangible personal property sold to a purchaser if | 25 | | the purchaser is exempt from use tax by operation of | 26 | | federal law. This paragraph is exempt from the provisions |
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| 1 | | of Section 2-70.
| 2 | | (17) Tangible personal property sold to a common | 3 | | carrier by rail or
motor that
receives the physical | 4 | | possession of the property in Illinois and that
transports | 5 | | the property, or shares with another common carrier in the
| 6 | | transportation of the property, out of Illinois on a | 7 | | standard uniform bill
of lading showing the seller of the | 8 | | property as the shipper or consignor of
the property to a | 9 | | destination outside Illinois, for use outside Illinois.
| 10 | | (18) Legal tender, currency, medallions, or gold or | 11 | | silver coinage
issued by the State of Illinois, the | 12 | | government of the United States of
America, or the | 13 | | government of any foreign country, and bullion.
| 14 | | (19) Until July 1, 2003, oil field exploration, | 15 | | drilling, and production
equipment, including
(i) rigs and | 16 | | parts of rigs, rotary rigs, cable tool
rigs, and workover | 17 | | rigs, (ii) pipe and tubular goods, including casing and
| 18 | | drill strings, (iii) pumps and pump-jack units, (iv) | 19 | | storage tanks and flow
lines, (v) any individual | 20 | | replacement part for oil field exploration,
drilling, and | 21 | | production equipment, and (vi) machinery and equipment | 22 | | purchased
for lease; but
excluding motor vehicles required | 23 | | to be registered under the Illinois
Vehicle Code.
| 24 | | (20) Photoprocessing machinery and equipment, | 25 | | including repair and
replacement parts, both new and used, | 26 | | including that manufactured on
special order, certified by |
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| 1 | | the purchaser to be used primarily for
photoprocessing, and | 2 | | including photoprocessing machinery and equipment
| 3 | | purchased for lease.
| 4 | | (21) Until July 1, 2023, coal and aggregate | 5 | | exploration, mining, off-highway hauling,
processing,
| 6 | | maintenance, and reclamation equipment, including
| 7 | | replacement parts and equipment, and including
equipment | 8 | | purchased for lease, but excluding motor vehicles required | 9 | | to be
registered under the Illinois Vehicle Code. The | 10 | | changes made to this Section by Public Act 97-767 apply on | 11 | | and after July 1, 2003, but no claim for credit or refund | 12 | | is allowed on or after August 16, 2013 (the effective date | 13 | | of Public Act 98-456)
for such taxes paid during the period | 14 | | beginning July 1, 2003 and ending on August 16, 2013 (the | 15 | | effective date of Public Act 98-456).
| 16 | | (22) Until June 30, 2013, fuel and petroleum products | 17 | | sold to or used by an air carrier,
certified by the carrier | 18 | | to be used for consumption, shipment, or storage
in the | 19 | | conduct of its business as an air common carrier, for a | 20 | | flight
destined for or returning from a location or | 21 | | locations
outside the United States without regard to | 22 | | previous or subsequent domestic
stopovers.
| 23 | | Beginning July 1, 2013, fuel and petroleum products | 24 | | sold to or used by an air carrier, certified by the carrier | 25 | | to be used for consumption, shipment, or storage in the | 26 | | conduct of its business as an air common carrier, for a |
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| 1 | | flight that (i) is engaged in foreign trade or is engaged | 2 | | in trade between the United States and any of its | 3 | | possessions and (ii) transports at least one individual or | 4 | | package for hire from the city of origination to the city | 5 | | of final destination on the same aircraft, without regard | 6 | | to a change in the flight number of that aircraft. | 7 | | (23) A transaction in which the purchase order is | 8 | | received by a florist
who is located outside Illinois, but | 9 | | who has a florist located in Illinois
deliver the property | 10 | | to the purchaser or the purchaser's donee in Illinois.
| 11 | | (24) Fuel consumed or used in the operation of ships, | 12 | | barges, or vessels
that are used primarily in or for the | 13 | | transportation of property or the
conveyance of persons for | 14 | | hire on rivers bordering on this State if the
fuel is | 15 | | delivered by the seller to the purchaser's barge, ship, or | 16 | | vessel
while it is afloat upon that bordering river.
| 17 | | (25) Except as provided in item (25-5) of this Section, | 18 | | a
motor vehicle sold in this State to a nonresident even | 19 | | though the
motor vehicle is delivered to the nonresident in | 20 | | this State, if the motor
vehicle is not to be titled in | 21 | | this State, and if a drive-away permit
is issued to the | 22 | | motor vehicle as provided in Section 3-603 of the Illinois
| 23 | | Vehicle Code or if the nonresident purchaser has vehicle | 24 | | registration
plates to transfer to the motor vehicle upon | 25 | | returning to his or her home
state. The issuance of the | 26 | | drive-away permit or having
the
out-of-state registration |
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| 1 | | plates to be transferred is prima facie evidence
that the | 2 | | motor vehicle will not be titled in this State.
| 3 | | (25-5) The exemption under item (25) does not apply if | 4 | | the state in which the motor vehicle will be titled does | 5 | | not allow a reciprocal exemption for a motor vehicle sold | 6 | | and delivered in that state to an Illinois resident but | 7 | | titled in Illinois. The tax collected under this Act on the | 8 | | sale of a motor vehicle in this State to a resident of | 9 | | another state that does not allow a reciprocal exemption | 10 | | shall be imposed at a rate equal to the state's rate of tax | 11 | | on taxable property in the state in which the purchaser is | 12 | | a resident, except that the tax shall not exceed the tax | 13 | | that would otherwise be imposed under this Act. At the time | 14 | | of the sale, the purchaser shall execute a statement, | 15 | | signed under penalty of perjury, of his or her intent to | 16 | | title the vehicle in the state in which the purchaser is a | 17 | | resident within 30 days after the sale and of the fact of | 18 | | the payment to the State of Illinois of tax in an amount | 19 | | equivalent to the state's rate of tax on taxable property | 20 | | in his or her state of residence and shall submit the | 21 | | statement to the appropriate tax collection agency in his | 22 | | or her state of residence. In addition, the retailer must | 23 | | retain a signed copy of the statement in his or her | 24 | | records. Nothing in this item shall be construed to require | 25 | | the removal of the vehicle from this state following the | 26 | | filing of an intent to title the vehicle in the purchaser's |
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| 1 | | state of residence if the purchaser titles the vehicle in | 2 | | his or her state of residence within 30 days after the date | 3 | | of sale. The tax collected under this Act in accordance | 4 | | with this item (25-5) shall be proportionately distributed | 5 | | as if the tax were collected at the 6.25% general rate | 6 | | imposed under this Act.
| 7 | | (25-7) Beginning on July 1, 2007, no tax is imposed | 8 | | under this Act on the sale of an aircraft, as defined in | 9 | | Section 3 of the Illinois Aeronautics Act, if all of the | 10 | | following conditions are met: | 11 | | (1) the aircraft leaves this State within 15 days | 12 | | after the later of either the issuance of the final | 13 | | billing for the sale of the aircraft, or the authorized | 14 | | approval for return to service, completion of the | 15 | | maintenance record entry, and completion of the test | 16 | | flight and ground test for inspection, as required by | 17 | | 14 C.F.R. 91.407; | 18 | | (2) the aircraft is not based or registered in this | 19 | | State after the sale of the aircraft; and | 20 | | (3) the seller retains in his or her books and | 21 | | records and provides to the Department a signed and | 22 | | dated certification from the purchaser, on a form | 23 | | prescribed by the Department, certifying that the | 24 | | requirements of this item (25-7) are met. The | 25 | | certificate must also include the name and address of | 26 | | the purchaser, the address of the location where the |
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| 1 | | aircraft is to be titled or registered, the address of | 2 | | the primary physical location of the aircraft, and | 3 | | other information that the Department may reasonably | 4 | | require. | 5 | | For purposes of this item (25-7): | 6 | | "Based in this State" means hangared, stored, or | 7 | | otherwise used, excluding post-sale customizations as | 8 | | defined in this Section, for 10 or more days in each | 9 | | 12-month period immediately following the date of the sale | 10 | | of the aircraft. | 11 | | "Registered in this State" means an aircraft | 12 | | registered with the Department of Transportation, | 13 | | Aeronautics Division, or titled or registered with the | 14 | | Federal Aviation Administration to an address located in | 15 | | this State. | 16 | | This paragraph (25-7) is exempt from the provisions
of
| 17 | | Section 2-70.
| 18 | | (26) Semen used for artificial insemination of | 19 | | livestock for direct
agricultural production.
| 20 | | (27) Horses, or interests in horses, registered with | 21 | | and meeting the
requirements of any of the
Arabian Horse | 22 | | Club Registry of America, Appaloosa Horse Club, American | 23 | | Quarter
Horse Association, United States
Trotting | 24 | | Association, or Jockey Club, as appropriate, used for
| 25 | | purposes of breeding or racing for prizes. This item (27) | 26 | | is exempt from the provisions of Section 2-70, and the |
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| 1 | | exemption provided for under this item (27) applies for all | 2 | | periods beginning May 30, 1995, but no claim for credit or | 3 | | refund is allowed on or after January 1, 2008 (the | 4 | | effective date of Public Act 95-88)
for such taxes paid | 5 | | during the period beginning May 30, 2000 and ending on | 6 | | January 1, 2008 (the effective date of Public Act 95-88).
| 7 | | (28) Computers and communications equipment utilized | 8 | | for any
hospital
purpose
and equipment used in the | 9 | | diagnosis,
analysis, or treatment of hospital patients | 10 | | sold to a lessor who leases the
equipment, under a lease of | 11 | | one year or longer executed or in effect at the
time of the | 12 | | purchase, to a
hospital
that has been issued an active tax | 13 | | exemption identification number by the
Department under | 14 | | Section 1g of this Act.
| 15 | | (29) Personal property sold to a lessor who leases the
| 16 | | property, under a
lease of one year or longer executed or | 17 | | in effect at the time of the purchase,
to a governmental | 18 | | body
that has been issued an active tax exemption | 19 | | identification number by the
Department under Section 1g of | 20 | | this Act.
| 21 | | (30) Beginning with taxable years ending on or after | 22 | | December
31, 1995
and
ending with taxable years ending on | 23 | | or before December 31, 2004,
personal property that is
| 24 | | donated for disaster relief to be used in a State or | 25 | | federally declared
disaster area in Illinois or bordering | 26 | | Illinois by a manufacturer or retailer
that is registered |
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| 1 | | in this State to a corporation, society, association,
| 2 | | foundation, or institution that has been issued a sales tax | 3 | | exemption
identification number by the Department that | 4 | | assists victims of the disaster
who reside within the | 5 | | declared disaster area.
| 6 | | (31) Beginning with taxable years ending on or after | 7 | | December
31, 1995 and
ending with taxable years ending on | 8 | | or before December 31, 2004, personal
property that is used | 9 | | in the performance of infrastructure repairs in this
State, | 10 | | including but not limited to municipal roads and streets, | 11 | | access roads,
bridges, sidewalks, waste disposal systems, | 12 | | water and sewer line extensions,
water distribution and | 13 | | purification facilities, storm water drainage and
| 14 | | retention facilities, and sewage treatment facilities, | 15 | | resulting from a State
or federally declared disaster in | 16 | | Illinois or bordering Illinois when such
repairs are | 17 | | initiated on facilities located in the declared disaster | 18 | | area
within 6 months after the disaster.
| 19 | | (32) Beginning July 1, 1999, game or game birds sold at | 20 | | a "game breeding
and
hunting preserve area" as that term is | 21 | | used
in the
Wildlife Code. This paragraph is exempt from | 22 | | the provisions
of
Section 2-70.
| 23 | | (33) A motor vehicle, as that term is defined in | 24 | | Section 1-146
of the
Illinois Vehicle Code, that is donated | 25 | | to a corporation, limited liability
company, society, | 26 | | association, foundation, or institution that is determined |
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| 1 | | by
the Department to be organized and operated exclusively | 2 | | for educational
purposes. For purposes of this exemption, | 3 | | "a corporation, limited liability
company, society, | 4 | | association, foundation, or institution organized and
| 5 | | operated
exclusively for educational purposes" means all | 6 | | tax-supported public schools,
private schools that offer | 7 | | systematic instruction in useful branches of
learning by | 8 | | methods common to public schools and that compare favorably | 9 | | in
their scope and intensity with the course of study | 10 | | presented in tax-supported
schools, and vocational or | 11 | | technical schools or institutes organized and
operated | 12 | | exclusively to provide a course of study of not less than 6 | 13 | | weeks
duration and designed to prepare individuals to | 14 | | follow a trade or to pursue a
manual, technical, | 15 | | mechanical, industrial, business, or commercial
| 16 | | occupation.
| 17 | | (34) Beginning January 1, 2000, personal property, | 18 | | including food, purchased
through fundraising events for | 19 | | the benefit of a public or private elementary or
secondary | 20 | | school, a group of those schools, or one or more school | 21 | | districts if
the events are sponsored by an entity | 22 | | recognized by the school district that
consists primarily | 23 | | of volunteers and includes parents and teachers of the
| 24 | | school children. This paragraph does not apply to | 25 | | fundraising events (i) for
the benefit of private home | 26 | | instruction or (ii) for which the fundraising
entity |
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| 1 | | purchases the personal property sold at the events from | 2 | | another
individual or entity that sold the property for the | 3 | | purpose of resale by the
fundraising entity and that | 4 | | profits from the sale to the fundraising entity.
This | 5 | | paragraph is exempt from the provisions of Section 2-70.
| 6 | | (35) Beginning January 1, 2000 and through December 31, | 7 | | 2001, new or used
automatic vending machines that prepare | 8 | | and serve hot food and beverages,
including coffee, soup, | 9 | | and other items, and replacement parts for these
machines. | 10 | | Beginning January 1, 2002 and through June 30, 2003, | 11 | | machines
and parts for machines used in
commercial, | 12 | | coin-operated amusement and vending business if a use or | 13 | | occupation
tax is paid on the gross receipts derived from | 14 | | the use of the commercial,
coin-operated amusement and | 15 | | vending machines. This paragraph is exempt from
the | 16 | | provisions of Section 2-70.
| 17 | | (35-5) Beginning August 23, 2001 and through June 30, | 18 | | 2016, food for human consumption that is to be consumed off
| 19 | | the premises where it is sold (other than alcoholic | 20 | | beverages, soft drinks,
and food that has been prepared for | 21 | | immediate consumption) and prescription
and | 22 | | nonprescription medicines, drugs, medical appliances, and | 23 | | insulin, urine
testing materials, syringes, and needles | 24 | | used by diabetics, for human use, when
purchased for use by | 25 | | a person receiving medical assistance under Article V of
| 26 | | the Illinois Public Aid Code who resides in a licensed |
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| 1 | | long-term care facility,
as defined in the Nursing Home | 2 | | Care Act, or a licensed facility as defined in the ID/DD | 3 | | Community Care Act, the MC/DD Act, or the Specialized | 4 | | Mental Health Rehabilitation Act of 2013.
| 5 | | (36) Beginning August 2, 2001, computers and | 6 | | communications equipment
utilized for any hospital purpose | 7 | | and equipment used in the diagnosis,
analysis, or treatment | 8 | | of hospital patients sold to a lessor who leases the
| 9 | | equipment, under a lease of one year or longer executed or | 10 | | in effect at the
time of the purchase, to a hospital that | 11 | | has been issued an active tax
exemption identification | 12 | | number by the Department under Section 1g of this Act.
This | 13 | | paragraph is exempt from the provisions of Section 2-70.
| 14 | | (37) Beginning August 2, 2001, personal property sold | 15 | | to a lessor who
leases the property, under a lease of one | 16 | | year or longer executed or in effect
at the time of the | 17 | | purchase, to a governmental body that has been issued an
| 18 | | active tax exemption identification number by the | 19 | | Department under Section 1g
of this Act. This paragraph is | 20 | | exempt from the provisions of Section 2-70.
| 21 | | (38) Beginning on January 1, 2002 and through June 30, | 22 | | 2022 June 30, 2016 , tangible personal property purchased
| 23 | | from an Illinois retailer by a taxpayer engaged in | 24 | | centralized purchasing
activities in Illinois who will, | 25 | | upon receipt of the property in Illinois,
temporarily store | 26 | | the property in Illinois (i) for the purpose of |
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| 1 | | subsequently
transporting it outside this State for use or | 2 | | consumption thereafter solely
outside this State or (ii) | 3 | | for the purpose of being processed, fabricated, or
| 4 | | manufactured into, attached to, or incorporated into other | 5 | | tangible personal
property to be transported outside this | 6 | | State and thereafter used or consumed
solely outside this | 7 | | State. The Director of Revenue shall, pursuant to rules
| 8 | | adopted in accordance with the Illinois Administrative | 9 | | Procedure Act, issue a
permit to any taxpayer in good | 10 | | standing with the Department who is eligible for
the | 11 | | exemption under this paragraph (38). The permit issued | 12 | | under
this paragraph (38) shall authorize the holder, to | 13 | | the extent and
in the manner specified in the rules adopted | 14 | | under this Act, to purchase
tangible personal property from | 15 | | a retailer exempt from the taxes imposed by
this Act. | 16 | | Taxpayers shall maintain all necessary books and records to
| 17 | | substantiate the use and consumption of all such tangible | 18 | | personal property
outside of the State of Illinois.
| 19 | | (39) Beginning January 1, 2008, tangible personal | 20 | | property used in the construction or maintenance of a | 21 | | community water supply, as defined under Section 3.145 of | 22 | | the Environmental Protection Act, that is operated by a | 23 | | not-for-profit corporation that holds a valid water supply | 24 | | permit issued under Title IV of the Environmental | 25 | | Protection Act. This paragraph is exempt from the | 26 | | provisions of Section 2-70.
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| 1 | | (40) Beginning January 1, 2010 and continuing through | 2 | | December 31, 2024, materials, parts, equipment, | 3 | | components, and furnishings incorporated into or upon an | 4 | | aircraft as part of the modification, refurbishment, | 5 | | completion, replacement, repair, or maintenance of the | 6 | | aircraft. This exemption includes consumable supplies used | 7 | | in the modification, refurbishment, completion, | 8 | | replacement, repair, and maintenance of aircraft, but | 9 | | excludes any materials, parts, equipment, components, and | 10 | | consumable supplies used in the modification, replacement, | 11 | | repair, and maintenance of aircraft engines or power | 12 | | plants, whether such engines or power plants are installed | 13 | | or uninstalled upon any such aircraft. "Consumable | 14 | | supplies" include, but are not limited to, adhesive, tape, | 15 | | sandpaper, general purpose lubricants, cleaning solution, | 16 | | latex gloves, and protective films. This exemption applies | 17 | | only to the sale of qualifying tangible personal property | 18 | | to persons who modify, refurbish, complete, replace, or | 19 | | maintain an aircraft and who (i) hold an Air Agency | 20 | | Certificate and are empowered to operate an approved repair | 21 | | station by the Federal Aviation Administration, (ii) have a | 22 | | Class IV Rating, and (iii) conduct operations in accordance | 23 | | with Part 145 of the Federal Aviation Regulations. The | 24 | | exemption does not include aircraft operated by a | 25 | | commercial air carrier providing scheduled passenger air | 26 | | service pursuant to authority issued under Part 121 or Part |
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| 1 | | 129 of the Federal Aviation Regulations. The changes made | 2 | | to this paragraph (40) by Public Act 98-534 are declarative | 3 | | of existing law. It is the intent of the General Assembly | 4 | | that the exemption under this paragraph (40) applies | 5 | | continuously from January 1, 2010 through December 31, | 6 | | 2024; however, no claim for credit or refund is allowed for | 7 | | taxes paid as a result of the disallowance of this | 8 | | exemption on or after January 1, 2015 and prior to the | 9 | | effective date of this amendatory Act of the 101st General | 10 | | Assembly. | 11 | | (41) Tangible personal property sold to a | 12 | | public-facilities corporation, as described in Section | 13 | | 11-65-10 of the Illinois Municipal Code, for purposes of | 14 | | constructing or furnishing a municipal convention hall, | 15 | | but only if the legal title to the municipal convention | 16 | | hall is transferred to the municipality without any further | 17 | | consideration by or on behalf of the municipality at the | 18 | | time of the completion of the municipal convention hall or | 19 | | upon the retirement or redemption of any bonds or other | 20 | | debt instruments issued by the public-facilities | 21 | | corporation in connection with the development of the | 22 | | municipal convention hall. This exemption includes | 23 | | existing public-facilities corporations as provided in | 24 | | Section 11-65-25 of the Illinois Municipal Code. This | 25 | | paragraph is exempt from the provisions of Section 2-70. | 26 | | (42) Beginning January 1, 2017, menstrual pads, |
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| 1 | | tampons, and menstrual cups. | 2 | | (43) Merchandise that is subject to the Rental Purchase | 3 | | Agreement Occupation and Use Tax. The purchaser must | 4 | | certify that the item is purchased to be rented subject to | 5 | | a rental purchase agreement, as defined in the Rental | 6 | | Purchase Agreement Act, and provide proof of registration | 7 | | under the Rental Purchase Agreement Occupation and Use Tax | 8 | | Act. This paragraph is exempt from the provisions of | 9 | | Section 2-70. | 10 | | (44) Qualified tangible personal property used in the | 11 | | construction or operation of a data center that has been | 12 | | granted a certificate of exemption by the Department of | 13 | | Commerce and Economic Opportunity, whether that tangible | 14 | | personal property is purchased by the owner, operator, or | 15 | | tenant of the data center or by a contractor or | 16 | | subcontractor of the owner, operator, or tenant. Data | 17 | | centers that would have qualified for a certificate of | 18 | | exemption prior to January 1, 2020 had this amendatory Act | 19 | | of the 101st General Assembly been in effect, may apply for | 20 | | and obtain an exemption for subsequent purchases of | 21 | | computer equipment or enabling software purchased or | 22 | | leased to upgrade, supplement, or replace computer | 23 | | equipment or enabling software purchased or leased in the | 24 | | original investment that would have qualified. | 25 | | The Department of Commerce and Economic Opportunity | 26 | | shall grant a certificate of exemption under this item (44) |
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| 1 | | to qualified data centers as defined by Section 605-1025 of | 2 | | the Department of Commerce and Economic Opportunity Law of | 3 | | the
Civil Administrative Code of Illinois. | 4 | | For the purposes of this item (44): | 5 | | "Data center" means a building or a series of | 6 | | buildings rehabilitated or constructed to house | 7 | | working servers in one physical location or multiple | 8 | | sites within the State of Illinois. | 9 | | "Qualified tangible personal property" means: | 10 | | electrical systems and equipment; climate control and | 11 | | chilling equipment and systems; mechanical systems and | 12 | | equipment; monitoring and secure systems; emergency | 13 | | generators; hardware; computers; servers; data storage | 14 | | devices; network connectivity equipment; racks; | 15 | | cabinets; telecommunications cabling infrastructure; | 16 | | raised floor systems; peripheral components or | 17 | | systems; software; mechanical, electrical, or plumbing | 18 | | systems; battery systems; cooling systems and towers; | 19 | | temperature control systems; other cabling; and other | 20 | | data center infrastructure equipment and systems | 21 | | necessary to operate qualified tangible personal | 22 | | property, including fixtures; and component parts of | 23 | | any of the foregoing, including installation, | 24 | | maintenance, repair, refurbishment, and replacement of | 25 | | qualified tangible personal property to generate, | 26 | | transform, transmit, distribute, or manage electricity |
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| 1 | | necessary to operate qualified tangible personal | 2 | | property; and all other tangible personal property | 3 | | that is essential to the operations of a computer data | 4 | | center. The term "qualified tangible personal | 5 | | property" also includes building materials physically | 6 | | incorporated in to the qualifying data center. To | 7 | | document the exemption allowed under this Section, the | 8 | | retailer must obtain from the purchaser a copy of the | 9 | | certificate of eligibility issued by the Department of | 10 | | Commerce and Economic Opportunity. | 11 | | This item (44) is exempt from the provisions of Section | 12 | | 2-70. | 13 | | (Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17; | 14 | | 100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff. | 15 | | 8-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, | 16 | | eff. 7-12-19; 101-629, eff. 2-5-20.)
| 17 | | Section 99. Effective date. This Act takes effect upon | 18 | | becoming law.
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