Illinois General Assembly - Full Text of HB5043
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Full Text of HB5043  102nd General Assembly

HB5043 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5043

 

Introduced 1/27/2022, by Rep. Michael J. Zalewski

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 110/3-5
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 tangible personal property sold by or on behalf of the State Treasurer pursuant to the Revised Uniform Unclaimed Property Act is exempt.


LRB102 25103 HLH 34365 b

 

 

A BILL FOR

 

HB5043LRB102 25103 HLH 34365 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-5 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
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized 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 July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by 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
24exemption identification 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, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon
11a graphic arts product. Beginning on July 1, 2017, graphic
12arts machinery and equipment is included in the manufacturing
13and assembling machinery and equipment exemption under
14paragraph (18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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

 

 

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

 

 

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1stated on customers' bills for the purchase and consumption of
2food and beverages purchased at retail from a retailer, to the
3extent that the proceeds of the service charge are in fact
4turned over as tips or as a substitute for tips to the
5employees who participate directly in preparing, serving,
6hosting or cleaning up the food or beverage function with
7respect to which the service charge is imposed.
8    (14) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of
10rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
11pipe and tubular goods, including casing and drill strings,
12(iii) pumps and pump-jack units, (iv) storage tanks and flow
13lines, (v) any individual replacement part for oil field
14exploration, drilling, and production equipment, and (vi)
15machinery and equipment purchased for lease; but excluding
16motor vehicles required to be registered under the Illinois
17Vehicle Code.
18    (15) Photoprocessing machinery and equipment, including
19repair and replacement parts, both new and used, including
20that manufactured on special order, certified by the purchaser
21to be used primarily for photoprocessing, and including
22photoprocessing machinery and equipment purchased for lease.
23    (16) Until July 1, 2023, coal and aggregate exploration,
24mining, off-highway hauling, processing, maintenance, and
25reclamation equipment, including replacement parts and
26equipment, and including equipment purchased for lease, but

 

 

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1excluding motor vehicles required to be registered under the
2Illinois Vehicle Code. The changes made to this Section by
3Public Act 97-767 apply on and after July 1, 2003, but no claim
4for credit or refund is allowed on or after August 16, 2013
5(the effective date of Public Act 98-456) for such taxes paid
6during the period beginning July 1, 2003 and ending on August
716, 2013 (the effective date of Public Act 98-456).
8    (17) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (18) Manufacturing and assembling machinery and equipment
15used primarily in the process of manufacturing or assembling
16tangible personal property for wholesale or retail sale or
17lease, whether that sale or lease is made directly by the
18manufacturer or by some other person, whether the materials
19used in the process are owned by the manufacturer or some other
20person, or whether that sale or lease is made apart from or as
21an incident to the seller's engaging in the service occupation
22of producing machines, tools, dies, jigs, patterns, gauges, or
23other similar items of no commercial value on special order
24for a particular purchaser. The exemption provided by this
25paragraph (18) includes production related tangible personal
26property, as defined in Section 3-50, purchased on or after

 

 

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1July 1, 2019. The exemption provided by this paragraph (18)
2does not include machinery and equipment used in (i) the
3generation of electricity for wholesale or retail sale; (ii)
4the generation or treatment of natural or artificial gas for
5wholesale or retail sale that is delivered to customers
6through pipes, pipelines, or mains; or (iii) the treatment of
7water for wholesale or retail sale that is delivered to
8customers through pipes, pipelines, or mains. The provisions
9of Public Act 98-583 are declaratory of existing law as to the
10meaning and scope of this exemption. Beginning on July 1,
112017, the exemption provided by this paragraph (18) includes,
12but is not limited to, graphic arts machinery and equipment,
13as defined in paragraph (6) of this Section.
14    (19) Personal property delivered to a purchaser or
15purchaser's donee inside Illinois when the purchase order for
16that personal property was received by a florist located
17outside Illinois who has a florist located inside Illinois
18deliver the personal property.
19    (20) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (21) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (21) is exempt from the

 

 

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1provisions of Section 3-90, and the exemption provided for
2under this item (21) applies for all periods beginning May 30,
31995, but no claim for credit or refund is allowed on or after
4January 1, 2008 for such taxes paid during the period
5beginning May 30, 2000 and ending on January 1, 2008.
6    (22) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Service Use Tax Act, as
18the case may be, based on the fair market value of the property
19at the time the non-qualifying use occurs. No lessor shall
20collect or attempt to collect an amount (however designated)
21that purports to reimburse that lessor for the tax imposed by
22this Act or the Service Use Tax Act, as the case may be, if the
23tax has not been paid by the lessor. If a lessor improperly
24collects any such amount from the lessee, the lessee shall
25have a legal right to claim a refund of that amount from the
26lessor. If, however, that amount is not refunded to the lessee

 

 

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

 

 

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1for disaster 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    (25) 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
11the performance of infrastructure repairs in this State,
12including but not limited to municipal roads and streets,
13access roads, bridges, sidewalks, waste disposal systems,
14water and sewer line extensions, water distribution and
15purification facilities, storm water drainage and retention
16facilities, and sewage treatment facilities, resulting from a
17State or federally declared disaster in Illinois or bordering
18Illinois when such repairs are initiated on facilities located
19in the declared disaster area within 6 months after the
20disaster.
21    (26) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-90.
6    (29) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and
9other items, and replacement parts for these machines.
10Beginning January 1, 2002 and through June 30, 2003, machines
11and parts for machines used in commercial, coin-operated
12amusement and vending business if a use or occupation tax is
13paid on the gross receipts derived from the use of the
14commercial, coin-operated amusement and vending machines. This
15paragraph is exempt from the provisions of Section 3-90.
16    (30) Beginning January 1, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19soft drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (31) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), computers and communications equipment
5utilized for any hospital purpose and equipment used in the
6diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other nonexempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Service Use Tax Act, as
16the case may be, based on the fair market value of the property
17at the time the nonqualifying use occurs. No lessor shall
18collect or attempt to collect an amount (however designated)
19that purports to reimburse that lessor for the tax imposed by
20this Act or the Service Use Tax Act, as the case may be, if the
21tax has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall
23have a legal right to claim a refund of that amount from the
24lessor. If, however, that amount is not refunded to the lessee
25for any reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

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1Section 3-90.
2    (32) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), personal property purchased by a lessor
4who leases the property, under a lease of one year or longer
5executed or in effect at the time the lessor would otherwise be
6subject to the tax imposed by this Act, to a governmental body
7that has been issued an active sales tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act. If the property is leased
10in a manner that does not qualify for this exemption or used in
11any other nonexempt manner, the lessor shall be liable for the
12tax imposed under this Act or the Service Use Tax Act, as the
13case may be, based on the fair market value of the property at
14the time the nonqualifying use occurs. No lessor shall collect
15or attempt to collect an amount (however designated) that
16purports to reimburse that lessor for the tax imposed by this
17Act or the Service Use Tax Act, as the case may be, if the tax
18has not been paid by the lessor. If a lessor improperly
19collects any such amount from the lessee, the lessee shall
20have a legal right to claim a refund of that amount from the
21lessor. If, however, that amount is not refunded to the lessee
22for any reason, the lessor is liable to pay that amount to the
23Department. This paragraph is exempt from the provisions of
24Section 3-90.
25    (33) On and after July 1, 2003 and through June 30, 2004,
26the use in this State of motor vehicles of the second division

 

 

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1with a gross vehicle weight in excess of 8,000 pounds and that
2are subject to the commercial distribution fee imposed under
3Section 3-815.1 of the Illinois Vehicle Code. Beginning on
4July 1, 2004 and through June 30, 2005, the use in this State
5of motor vehicles of the second division: (i) with a gross
6vehicle weight rating in excess of 8,000 pounds; (ii) that are
7subject to the commercial distribution fee imposed under
8Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
9are primarily used for commercial purposes. Through June 30,
102005, this exemption applies to repair and replacement parts
11added after the initial purchase of such a motor vehicle if
12that motor vehicle is used in a manner that would qualify for
13the rolling stock exemption otherwise provided for in this
14Act. For purposes of this paragraph, the term "used for
15commercial purposes" means the transportation of persons or
16property in furtherance of any commercial or industrial
17enterprise, whether for-hire or not.
18    (34) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued
23under Title IV of the Environmental Protection Act. This
24paragraph is exempt from the provisions of Section 3-90.
25    (35) Beginning January 1, 2010 and continuing through
26December 31, 2024, materials, parts, equipment, components,

 

 

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1and furnishings incorporated into or upon an aircraft as part
2of the modification, refurbishment, completion, replacement,
3repair, or maintenance of the aircraft. This exemption
4includes consumable supplies used in the modification,
5refurbishment, completion, replacement, repair, and
6maintenance of aircraft, but excludes any materials, parts,
7equipment, components, and consumable supplies used in the
8modification, replacement, repair, and maintenance of aircraft
9engines or power plants, whether such engines or power plants
10are installed or uninstalled upon any such aircraft.
11"Consumable supplies" include, but are not limited to,
12adhesive, tape, sandpaper, general purpose lubricants,
13cleaning solution, latex gloves, and protective films. This
14exemption applies only to the use of qualifying tangible
15personal property by persons who modify, refurbish, complete,
16repair, replace, or maintain aircraft and who (i) hold an Air
17Agency Certificate and are empowered to operate an approved
18repair station by the Federal Aviation Administration, (ii)
19have a Class IV Rating, and (iii) conduct operations in
20accordance with Part 145 of the Federal Aviation Regulations.
21The exemption does not include aircraft operated by a
22commercial air carrier providing scheduled passenger air
23service pursuant to authority issued under Part 121 or Part
24129 of the Federal Aviation Regulations. The changes made to
25this paragraph (35) by Public Act 98-534 are declarative of
26existing law. It is the intent of the General Assembly that the

 

 

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1exemption under this paragraph (35) applies continuously from
2January 1, 2010 through December 31, 2024; however, no claim
3for credit or refund is allowed for taxes paid as a result of
4the disallowance of this exemption on or after January 1, 2015
5and prior to the effective date of this amendatory Act of the
6101st General Assembly.
7    (36) Tangible personal property purchased by a
8public-facilities corporation, as described in Section
911-65-10 of the Illinois Municipal Code, for purposes of
10constructing or furnishing a municipal convention hall, but
11only if the legal title to the municipal convention hall is
12transferred to the municipality without any further
13consideration by or on behalf of the municipality at the time
14of the completion of the municipal convention hall or upon the
15retirement or redemption of any bonds or other debt
16instruments issued by the public-facilities corporation in
17connection with the development of the municipal convention
18hall. This exemption includes existing public-facilities
19corporations as provided in Section 11-65-25 of the Illinois
20Municipal Code. This paragraph is exempt from the provisions
21of Section 3-90.
22    (37) Beginning January 1, 2017 and through December 31,
232026, menstrual pads, tampons, and menstrual cups.
24    (38) Merchandise that is subject to the Rental Purchase
25Agreement Occupation and Use Tax. The purchaser must certify
26that the item is purchased to be rented subject to a rental

 

 

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1purchase agreement, as defined in the Rental Purchase
2Agreement Act, and provide proof of registration under the
3Rental Purchase Agreement Occupation and Use Tax Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (39) Tangible personal property purchased by a purchaser
6who is exempt from the tax imposed by this Act by operation of
7federal law. This paragraph is exempt from the provisions of
8Section 3-90.
9    (40) Qualified tangible personal property used in the
10construction or operation of a data center that has been
11granted a certificate of exemption by the Department of
12Commerce and Economic Opportunity, whether that tangible
13personal property is purchased by the owner, operator, or
14tenant of the data center or by a contractor or subcontractor
15of the owner, operator, or tenant. Data centers that would
16have qualified for a certificate of exemption prior to January
171, 2020 had Public Act 101-31 been in effect may apply for and
18obtain an exemption for subsequent purchases of computer
19equipment or enabling software purchased or leased to upgrade,
20supplement, or replace computer equipment or enabling software
21purchased or leased in the original investment that would have
22qualified.
23    The Department of Commerce and Economic Opportunity shall
24grant a certificate of exemption under this item (40) to
25qualified data centers as defined by Section 605-1025 of the
26Department of Commerce and Economic Opportunity Law of the

 

 

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1Civil Administrative Code of Illinois.
2    For the purposes of this item (40):
3        "Data center" means a building or a series of
4    buildings rehabilitated or constructed to house working
5    servers in one physical location or multiple sites within
6    the State of Illinois.
7        "Qualified tangible personal property" means:
8    electrical systems and equipment; climate control and
9    chilling equipment and systems; mechanical systems and
10    equipment; monitoring and secure systems; emergency
11    generators; hardware; computers; servers; data storage
12    devices; network connectivity equipment; racks; cabinets;
13    telecommunications cabling infrastructure; raised floor
14    systems; peripheral components or systems; software;
15    mechanical, electrical, or plumbing systems; battery
16    systems; cooling systems and towers; temperature control
17    systems; other cabling; and other data center
18    infrastructure equipment and systems necessary to operate
19    qualified tangible personal property, including fixtures;
20    and component parts of any of the foregoing, including
21    installation, maintenance, repair, refurbishment, and
22    replacement of qualified tangible personal property to
23    generate, transform, transmit, distribute, or manage
24    electricity necessary to operate qualified tangible
25    personal property; and all other tangible personal
26    property that is essential to the operations of a computer

 

 

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1    data center. The term "qualified tangible personal
2    property" also includes building materials physically
3    incorporated in to the qualifying data center. To document
4    the exemption allowed under this Section, the retailer
5    must obtain from the purchaser a copy of the certificate
6    of eligibility issued by the Department of Commerce and
7    Economic Opportunity.
8    This item (40) is exempt from the provisions of Section
93-90.
10    (41) Tangible personal property sold by or on behalf of
11the State Treasurer pursuant to the Revised Uniform Unclaimed
12Property Act. This item (41) is exempt from the provisions of
13Section 3-90.
14(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
15101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
166-17-21.)
 
17    Section 10. The Service Use Tax Act is amended by changing
18Section 3-5 as follows:
 
19    (35 ILCS 110/3-5)
20    Sec. 3-5. Exemptions. Use of the following tangible
21personal property is exempt from the tax imposed by this Act:
22    (1) Personal property purchased from a corporation,
23society, association, foundation, institution, or
24organization, other than a limited liability company, that is

 

 

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1organized and operated as a not-for-profit service enterprise
2for the benefit of persons 65 years of age or older if the
3personal property was not purchased by the enterprise for the
4purpose of resale by the enterprise.
5    (2) Personal property purchased by a non-profit Illinois
6county fair association for use in conducting, operating, or
7promoting the county fair.
8    (3) Personal property purchased by a not-for-profit arts
9or cultural organization that establishes, by proof required
10by the Department by rule, that it has received an exemption
11under Section 501(c)(3) of the Internal Revenue Code and that
12is organized and operated primarily for the presentation or
13support of arts or cultural programming, activities, or
14services. These organizations include, but are not limited to,
15music and dramatic arts organizations such as symphony
16orchestras and theatrical groups, arts and cultural service
17organizations, local arts councils, visual arts organizations,
18and media arts organizations. On and after July 1, 2001 (the
19effective date of Public Act 92-35), however, an entity
20otherwise eligible for this exemption shall not make tax-free
21purchases unless it has an active identification number issued
22by the Department.
23    (4) Legal tender, currency, medallions, or gold or silver
24coinage issued by the State of Illinois, the government of the
25United States of America, or the government of any foreign
26country, and bullion.

 

 

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1    (5) Until July 1, 2003 and beginning again on September 1,
22004 through August 30, 2014, graphic arts machinery and
3equipment, including repair and replacement parts, both new
4and used, and including that manufactured on special order or
5purchased for lease, certified by the purchaser to be used
6primarily for graphic arts production. Equipment includes
7chemicals or chemicals acting as catalysts but only if the
8chemicals or chemicals acting as catalysts effect a direct and
9immediate change upon a graphic arts product. Beginning on
10July 1, 2017, graphic arts machinery and equipment is included
11in the manufacturing and assembling machinery and equipment
12exemption under Section 2 of this Act.
13    (6) Personal property purchased from a teacher-sponsored
14student organization affiliated with an elementary or
15secondary school located 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
25to be registered under Section 3-809 of the Illinois Vehicle
26Code, but excluding other motor vehicles required to be

 

 

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1registered under the Illinois Vehicle Code. Horticultural
2polyhouses or hoop houses used for propagating, growing, or
3overwintering plants shall be considered farm machinery and
4equipment under this item (7). Agricultural chemical tender
5tanks and dry boxes shall include units sold separately from a
6motor vehicle required to be licensed and units sold mounted
7on a motor vehicle required to be licensed if the selling price
8of the tender 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 3-75.
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
2conduct of its business as an air common carrier, for a flight
3destined for or returning from a location or locations outside
4the United States without regard to previous or subsequent
5domestic stopovers.
6    Beginning July 1, 2013, fuel and petroleum products sold
7to or used by an air carrier, certified by the carrier to be
8used for consumption, shipment, or storage in the conduct of
9its business 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
12at least 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 acquired as an incident to the purchase of a
19service from a serviceman, to the extent that the proceeds of
20the service charge are in fact turned over as tips or as a
21substitute for tips to the employees who participate directly
22in preparing, serving, hosting or cleaning up the food or
23beverage function with respect to which the service charge is
24imposed.
25    (10) Until July 1, 2003, oil field exploration, drilling,
26and production equipment, including (i) rigs and parts of

 

 

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1rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
2pipe and tubular goods, including casing and drill strings,
3(iii) pumps and pump-jack units, (iv) storage tanks and flow
4lines, (v) any individual replacement part for oil field
5exploration, drilling, and production equipment, and (vi)
6machinery and equipment purchased for lease; but excluding
7motor vehicles required to be registered under the Illinois
8Vehicle Code.
9    (11) Proceeds from the sale of photoprocessing machinery
10and equipment, including repair and replacement parts, both
11new and used, including that manufactured on special order,
12certified by the purchaser to be used primarily for
13photoprocessing, and including photoprocessing machinery and
14equipment purchased for lease.
15    (12) Until July 1, 2023, coal and aggregate exploration,
16mining, off-highway hauling, processing, maintenance, and
17reclamation equipment, including replacement parts and
18equipment, and including equipment purchased for lease, but
19excluding motor vehicles required to be registered under the
20Illinois Vehicle Code. The changes made to this Section by
21Public Act 97-767 apply on and after July 1, 2003, but no claim
22for credit or refund is allowed on or after August 16, 2013
23(the effective date of Public Act 98-456) for such taxes paid
24during the period beginning July 1, 2003 and ending on August
2516, 2013 (the effective date of Public Act 98-456).
26    (13) Semen used for artificial insemination of livestock

 

 

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1for direct agricultural production.
2    (14) Horses, or interests in horses, registered with and
3meeting the requirements of any of the Arabian Horse Club
4Registry of America, Appaloosa Horse Club, American Quarter
5Horse Association, United States Trotting Association, or
6Jockey Club, as appropriate, used for purposes of breeding or
7racing for prizes. This item (14) is exempt from the
8provisions of Section 3-75, and the exemption provided for
9under this item (14) applies for all periods beginning May 30,
101995, but no claim for credit or refund is allowed on or after
11January 1, 2008 (the effective date of Public Act 95-88) for
12such taxes paid during the period beginning May 30, 2000 and
13ending on January 1, 2008 (the effective date of Public Act
1495-88).
15    (15) Computers and communications equipment utilized for
16any hospital purpose and equipment used in the diagnosis,
17analysis, or treatment of hospital patients purchased by a
18lessor who leases the equipment, under a lease of one year or
19longer executed or in effect at the time the lessor would
20otherwise be subject to the tax imposed by this Act, to a
21hospital that has been issued an active tax exemption
22identification number by the Department under Section 1g of
23the Retailers' Occupation Tax Act. If the equipment is leased
24in a manner that does not qualify for this exemption or is used
25in any other non-exempt manner, the lessor shall be liable for
26the tax imposed under this Act or the Use Tax Act, as the case

 

 

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

 

 

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

 

 

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1in the declared disaster area within 6 months after the
2disaster.
3    (19) Beginning July 1, 1999, game or game birds purchased
4at a "game breeding and hunting preserve area" as that term is
5used in the Wildlife Code. This paragraph is exempt from the
6provisions of Section 3-75.
7    (20) A motor vehicle, as that term is defined in Section
81-146 of the Illinois Vehicle Code, that is donated to a
9corporation, limited liability company, society, association,
10foundation, or institution that is determined by the
11Department to be organized and operated exclusively for
12educational purposes. For purposes of this exemption, "a
13corporation, limited liability company, society, association,
14foundation, or institution organized and operated exclusively
15for educational purposes" means all tax-supported public
16schools, private schools that offer systematic instruction in
17useful branches of learning by methods common to public
18schools and that compare favorably in their scope and
19intensity with the course of study presented in tax-supported
20schools, and vocational or technical schools or institutes
21organized and operated exclusively to provide a course of
22study of not less than 6 weeks duration and designed to prepare
23individuals to follow a trade or to pursue a manual,
24technical, mechanical, industrial, business, or commercial
25occupation.
26    (21) Beginning January 1, 2000, personal property,

 

 

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1including food, purchased through fundraising events for the
2benefit of a public or private elementary or secondary school,
3a group of those schools, or one or more school districts if
4the events are sponsored by an entity recognized by the school
5district that consists primarily of volunteers and includes
6parents and teachers of the school children. This paragraph
7does not apply to fundraising events (i) for the benefit of
8private home instruction or (ii) for which the fundraising
9entity purchases the personal property sold at the events from
10another individual or entity that sold the property for the
11purpose of resale by the fundraising entity and that profits
12from the sale to the fundraising entity. This paragraph is
13exempt from the provisions of Section 3-75.
14    (22) Beginning January 1, 2000 and through December 31,
152001, new or used automatic vending machines that prepare and
16serve hot food and beverages, including coffee, soup, and
17other items, and replacement parts for these machines.
18Beginning January 1, 2002 and through June 30, 2003, machines
19and parts for machines used in commercial, coin-operated
20amusement and vending business if a use or occupation tax is
21paid on the gross receipts derived from the use of the
22commercial, coin-operated amusement and vending machines. This
23paragraph is exempt from the provisions of Section 3-75.
24    (23) Beginning August 23, 2001 and through June 30, 2016,
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages,

 

 

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1soft drinks, and food that has been prepared for immediate
2consumption) and prescription and nonprescription medicines,
3drugs, medical appliances, and insulin, urine testing
4materials, syringes, and needles used by diabetics, for human
5use, when purchased for use by a person receiving medical
6assistance under Article V of the Illinois Public Aid Code who
7resides in a licensed long-term care facility, as defined in
8the Nursing Home Care Act, or in a licensed facility as defined
9in the ID/DD Community Care Act, the MC/DD Act, or the
10Specialized Mental Health Rehabilitation Act of 2013.
11    (24) Beginning on August 2, 2001 (the effective date of
12Public Act 92-227), computers and communications equipment
13utilized for any hospital purpose and equipment used in the
14diagnosis, analysis, or treatment of hospital patients
15purchased by a lessor who leases the equipment, under a lease
16of one year or longer executed or in effect at the time the
17lessor would otherwise be subject to the tax imposed by this
18Act, to a hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20the Retailers' Occupation Tax Act. If the equipment is leased
21in a manner that does not qualify for this exemption or is used
22in any other nonexempt manner, the lessor shall be liable for
23the tax imposed under this Act or the Use Tax Act, as the case
24may be, based on the fair market value of the property at the
25time the nonqualifying use occurs. No lessor shall collect or
26attempt to collect an amount (however designated) that

 

 

HB5043- 33 -LRB102 25103 HLH 34365 b

1purports to reimburse that lessor for the tax imposed by this
2Act or the Use Tax Act, as the case may be, if the tax has not
3been paid by the lessor. If a lessor improperly collects any
4such amount from the lessee, the lessee shall have a legal
5right to claim a refund of that amount from the lessor. If,
6however, that amount is not refunded to the lessee for any
7reason, the lessor is liable to pay that amount to the
8Department. This paragraph is exempt from the provisions of
9Section 3-75.
10    (25) Beginning on August 2, 2001 (the effective date of
11Public Act 92-227), personal property purchased by a lessor
12who leases the property, under a lease of one year or longer
13executed or in effect at the time the lessor would otherwise be
14subject to the tax imposed by this Act, to a governmental body
15that has been issued an active tax exemption identification
16number by the Department under Section 1g of the Retailers'
17Occupation Tax Act. If the property is leased in a manner that
18does not qualify for this exemption or is used in any other
19nonexempt manner, the lessor shall be liable for the tax
20imposed under this Act or the Use Tax Act, as the case may be,
21based on the fair market value of the property at the time the
22nonqualifying use occurs. No lessor shall collect or attempt
23to collect an amount (however designated) that purports to
24reimburse 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
26by the 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
3amount is not refunded to the lessee for any reason, the lessor
4is liable to pay that amount to the Department. This paragraph
5is exempt 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
11under Title IV of the Environmental Protection Act. This
12paragraph is exempt from the provisions of Section 3-75.
13    (27) Beginning January 1, 2010 and continuing through
14December 31, 2024, materials, parts, equipment, components,
15and furnishings incorporated into or upon an aircraft as part
16of the modification, refurbishment, completion, replacement,
17repair, or maintenance of the aircraft. This exemption
18includes consumable supplies used in the modification,
19refurbishment, completion, replacement, repair, and
20maintenance of aircraft, but excludes any materials, parts,
21equipment, components, and consumable supplies used in the
22modification, replacement, repair, and maintenance of aircraft
23engines or power plants, whether such engines or power plants
24are installed or uninstalled upon any such aircraft.
25"Consumable supplies" include, but are not limited to,
26adhesive, tape, sandpaper, general purpose lubricants,

 

 

HB5043- 35 -LRB102 25103 HLH 34365 b

1cleaning solution, latex gloves, and protective films. This
2exemption applies only to the use of qualifying tangible
3personal property transferred incident to the modification,
4refurbishment, completion, replacement, repair, or maintenance
5of aircraft by persons who (i) hold an Air Agency Certificate
6and are empowered to operate an approved repair station by the
7Federal Aviation Administration, (ii) have a Class IV Rating,
8and (iii) conduct operations in accordance with Part 145 of
9the Federal Aviation Regulations. The exemption does not
10include aircraft operated by a commercial air carrier
11providing scheduled passenger air service pursuant to
12authority issued under Part 121 or Part 129 of the Federal
13Aviation Regulations. The changes made to this paragraph (27)
14by Public Act 98-534 are declarative of existing law. It is the
15intent of the General Assembly that the exemption under this
16paragraph (27) applies continuously from January 1, 2010
17through December 31, 2024; however, no claim for credit or
18refund is allowed for taxes paid as a result of the
19disallowance of this exemption on or after January 1, 2015 and
20prior to the effective date of this amendatory Act of the 101st
21General Assembly.
22    (28) Tangible personal property purchased by 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
5instruments issued by the public-facilities corporation in
6connection with the development of the municipal convention
7hall. This exemption includes existing public-facilities
8corporations as provided in Section 11-65-25 of the Illinois
9Municipal Code. This paragraph is exempt from the provisions
10of Section 3-75.
11    (29) Beginning January 1, 2017 and through December 31,
122026, menstrual pads, tampons, and menstrual cups.
13    (30) Tangible personal property transferred to a purchaser
14who is exempt from the tax imposed by this Act by operation of
15federal law. This paragraph is exempt from the provisions of
16Section 3-75.
17    (31) Qualified tangible personal property used in the
18construction or operation of a data center that has been
19granted a certificate of exemption by the Department of
20Commerce and Economic Opportunity, whether that tangible
21personal property is purchased by the owner, operator, or
22tenant of the data center or by a contractor or subcontractor
23of the owner, operator, or tenant. Data centers that would
24have qualified for a certificate of exemption prior to January
251, 2020 had this amendatory Act of the 101st General Assembly
26been in effect, may apply for and obtain an exemption for

 

 

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1subsequent purchases of computer equipment or enabling
2software purchased or leased to upgrade, supplement, or
3replace computer equipment or enabling software purchased or
4leased in the original investment that would have qualified.
5    The Department of Commerce and Economic Opportunity shall
6grant a certificate of exemption under this item (31) to
7qualified data centers as defined by Section 605-1025 of the
8Department of Commerce and Economic Opportunity Law of the
9Civil Administrative Code of Illinois.
10    For the purposes of this item (31):
11        "Data center" means a building or a series of
12    buildings rehabilitated or constructed to house working
13    servers in one physical location or multiple sites within
14    the State of Illinois.
15        "Qualified tangible personal property" means:
16    electrical systems and equipment; climate control and
17    chilling equipment and systems; mechanical systems and
18    equipment; monitoring and secure systems; emergency
19    generators; hardware; computers; servers; data storage
20    devices; network connectivity equipment; racks; cabinets;
21    telecommunications cabling infrastructure; raised floor
22    systems; peripheral components or systems; software;
23    mechanical, electrical, or plumbing systems; battery
24    systems; cooling systems and towers; temperature control
25    systems; other cabling; and other data center
26    infrastructure equipment and systems necessary to operate

 

 

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1    qualified tangible personal property, including fixtures;
2    and component parts of any of the foregoing, including
3    installation, maintenance, repair, refurbishment, and
4    replacement of qualified tangible personal property to
5    generate, transform, transmit, distribute, or manage
6    electricity necessary to operate qualified tangible
7    personal property; and all other tangible personal
8    property that is essential to the operations of a computer
9    data center. The term "qualified tangible personal
10    property" also includes building materials physically
11    incorporated in to the qualifying data center. To document
12    the exemption allowed under this Section, the retailer
13    must obtain from the purchaser a copy of the certificate
14    of eligibility issued by the Department of Commerce and
15    Economic Opportunity.
16    This item (31) is exempt from the provisions of Section
173-75.
18    (32) Tangible personal property sold by or on behalf of
19the State Treasurer pursuant to the Revised Uniform Unclaimed
20Property Act. This item (32) is exempt from the provisions of
21Section 3-75.
22(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
23101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
24    Section 15. The Service Occupation Tax Act is amended by
25changing Section 3-5 as follows:
 

 

 

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1    (35 ILCS 115/3-5)
2    Sec. 3-5. Exemptions. The following tangible personal
3property is exempt from the tax imposed by this Act:
4    (1) Personal property sold by a corporation, society,
5association, foundation, institution, or organization, other
6than a limited liability company, that is organized and
7operated as a not-for-profit service enterprise for the
8benefit of persons 65 years of age or older if the personal
9property was not purchased by the enterprise for the purpose
10of resale by the enterprise.
11    (2) Personal property purchased by a not-for-profit
12Illinois county fair association for use in conducting,
13operating, or promoting the county fair.
14    (3) Personal property purchased by any not-for-profit arts
15or cultural organization that establishes, by proof required
16by the Department by rule, that it has received an exemption
17under Section 501(c)(3) of the Internal Revenue Code and that
18is organized and operated primarily for the presentation or
19support of arts or cultural programming, activities, or
20services. These organizations include, but are not limited to,
21music and dramatic arts organizations such as symphony
22orchestras and theatrical groups, arts and cultural service
23organizations, local arts councils, visual arts organizations,
24and media arts organizations. On and after July 1, 2001 (the
25effective date of Public Act 92-35), however, an entity

 

 

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1otherwise eligible for this exemption shall not make tax-free
2purchases unless it has an active identification number issued
3by the Department.
4    (4) Legal tender, currency, medallions, or gold or silver
5coinage issued by the State of Illinois, the government of the
6United States of America, or the government of any foreign
7country, and bullion.
8    (5) Until July 1, 2003 and beginning again on September 1,
92004 through August 30, 2014, graphic arts machinery and
10equipment, including repair and replacement parts, both new
11and used, and including that manufactured on special order or
12purchased for lease, certified by the purchaser to be used
13primarily for graphic arts production. Equipment includes
14chemicals or chemicals acting as catalysts but only if the
15chemicals or chemicals acting as catalysts effect a direct and
16immediate change upon a graphic arts product. Beginning on
17July 1, 2017, graphic arts machinery and equipment is included
18in the manufacturing and assembling machinery and equipment
19exemption under Section 2 of this Act.
20    (6) Personal property sold by a teacher-sponsored student
21organization affiliated with an elementary or secondary school
22located in Illinois.
23    (7) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the
25purchaser to be used primarily for production agriculture or
26State or federal agricultural programs, including individual

 

 

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

 

 

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1facilities, equipment, and activities such as, but not limited
2to, the collection, monitoring, and correlation of animal and
3crop data for the purpose of formulating animal diets and
4agricultural chemicals. This item (7) is exempt from the
5provisions of Section 3-55.
6    (8) Until June 30, 2013, fuel and petroleum products sold
7to or used by an air common carrier, certified by the carrier
8to be used for consumption, shipment, or storage in the
9conduct of its business as an air common carrier, for a flight
10destined for or returning from a location or locations outside
11the United States without regard to previous or subsequent
12domestic stopovers.
13    Beginning July 1, 2013, fuel and petroleum products sold
14to or used by an air carrier, certified by the carrier to be
15used for consumption, shipment, or storage in the conduct of
16its business as an air common carrier, for a flight that (i) is
17engaged in foreign trade or is engaged in trade between the
18United States and any of its possessions and (ii) transports
19at least one individual or package for hire from the city of
20origination to the city of final destination on the same
21aircraft, without regard to a change in the flight number of
22that aircraft.
23    (9) Proceeds of mandatory service charges separately
24stated on customers' bills for the purchase and consumption of
25food and beverages, to the extent that the proceeds of the
26service charge are in fact turned over as tips or as a

 

 

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1substitute for tips to the employees who participate directly
2in preparing, serving, hosting or cleaning up the food or
3beverage function with respect to which the service charge is
4imposed.
5    (10) Until July 1, 2003, oil field exploration, drilling,
6and production equipment, including (i) rigs and parts of
7rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
8pipe and tubular goods, including casing and drill strings,
9(iii) pumps and pump-jack units, (iv) storage tanks and flow
10lines, (v) any individual replacement part for oil field
11exploration, drilling, and production equipment, and (vi)
12machinery and equipment purchased for lease; but excluding
13motor vehicles required to be registered under the Illinois
14Vehicle Code.
15    (11) Photoprocessing machinery and equipment, including
16repair and replacement parts, both new and used, including
17that manufactured on special order, certified by the purchaser
18to be used primarily for photoprocessing, and including
19photoprocessing machinery and equipment purchased for lease.
20    (12) Until July 1, 2023, coal and aggregate exploration,
21mining, off-highway hauling, processing, maintenance, and
22reclamation equipment, including replacement parts and
23equipment, and including equipment purchased for lease, but
24excluding motor vehicles required to be registered under the
25Illinois Vehicle Code. The changes made to this Section by
26Public Act 97-767 apply on and after July 1, 2003, but no claim

 

 

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1for credit or refund is allowed on or after August 16, 2013
2(the effective date of Public Act 98-456) for such taxes paid
3during the period beginning July 1, 2003 and ending on August
416, 2013 (the effective date of Public Act 98-456).
5    (13) Beginning January 1, 1992 and through June 30, 2016,
6food for human consumption that is to be consumed off the
7premises where it is sold (other than alcoholic beverages,
8soft drinks and food that has been prepared for immediate
9consumption) and prescription and non-prescription medicines,
10drugs, medical appliances, and insulin, urine testing
11materials, syringes, and needles used by diabetics, for human
12use, when purchased for use by a person receiving medical
13assistance under Article V of the Illinois Public Aid Code who
14resides in a licensed long-term care facility, as defined in
15the Nursing Home Care Act, or in a licensed facility as defined
16in the ID/DD Community Care Act, the MC/DD Act, or the
17Specialized Mental Health Rehabilitation Act of 2013.
18    (14) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (15) Horses, or interests in horses, registered with and
21meeting the requirements of any of the Arabian Horse Club
22Registry of America, Appaloosa Horse Club, American Quarter
23Horse Association, United States Trotting Association, or
24Jockey Club, as appropriate, used for purposes of breeding or
25racing for prizes. This item (15) is exempt from the
26provisions of Section 3-55, and the exemption provided for

 

 

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1under this item (15) applies for all periods beginning May 30,
21995, but no claim for credit or refund is allowed on or after
3January 1, 2008 (the effective date of Public Act 95-88) for
4such taxes paid during the period beginning May 30, 2000 and
5ending on January 1, 2008 (the effective date of Public Act
695-88).
7    (16) Computers and communications equipment utilized for
8any hospital purpose and equipment used in the diagnosis,
9analysis, or treatment of hospital patients sold to a lessor
10who leases the equipment, under a lease of one year or longer
11executed or in effect at the time of the purchase, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act.
15    (17) Personal property sold to a lessor who leases the
16property, under a lease of one year or longer executed or in
17effect at the time of the purchase, to a governmental body that
18has been issued an active tax exemption identification number
19by the Department under Section 1g of the Retailers'
20Occupation Tax Act.
21    (18) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is donated
24for disaster relief to be used in a State or federally declared
25disaster area in Illinois or bordering Illinois by a
26manufacturer or retailer that is registered in this State to a

 

 

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1corporation, society, association, foundation, or institution
2that has been issued a sales tax exemption identification
3number by the Department that assists victims of the disaster
4who reside within the declared disaster area.
5    (19) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is used in
8the performance of infrastructure repairs in this State,
9including but not limited to municipal roads and streets,
10access roads, bridges, sidewalks, waste disposal systems,
11water and sewer line extensions, water distribution and
12purification facilities, storm water drainage and retention
13facilities, and sewage treatment facilities, resulting from a
14State or federally declared disaster in Illinois or bordering
15Illinois when such repairs are initiated on facilities located
16in the declared disaster area within 6 months after the
17disaster.
18    (20) Beginning July 1, 1999, game or game birds sold at a
19"game breeding and hunting preserve area" as that term is used
20in the Wildlife Code. This paragraph is exempt from the
21provisions of Section 3-55.
22    (21) A motor vehicle, as that term is defined in Section
231-146 of the Illinois Vehicle Code, that is donated to a
24corporation, limited liability company, society, association,
25foundation, or institution that is determined by the
26Department to be organized and operated exclusively for

 

 

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

 

 

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1from the sale to the fundraising entity. This paragraph is
2exempt from the provisions of Section 3-55.
3    (23) Beginning January 1, 2000 and through December 31,
42001, new or used automatic vending machines that prepare and
5serve hot food and beverages, including coffee, soup, and
6other items, and replacement parts for these machines.
7Beginning January 1, 2002 and through June 30, 2003, machines
8and parts for machines used in commercial, coin-operated
9amusement and vending business if a use or occupation tax is
10paid on the gross receipts derived from the use of the
11commercial, coin-operated amusement and vending machines. This
12paragraph is exempt from the provisions of Section 3-55.
13    (24) Beginning on August 2, 2001 (the effective date of
14Public Act 92-227), computers and communications equipment
15utilized for any hospital purpose and equipment used in the
16diagnosis, analysis, or treatment of hospital patients sold to
17a lessor who leases the equipment, under a lease of one year or
18longer executed or in effect at the time of the purchase, to a
19hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of
21the Retailers' Occupation Tax Act. This paragraph is exempt
22from the provisions of Section 3-55.
23    (25) Beginning on August 2, 2001 (the effective date of
24Public Act 92-227), personal property sold to a lessor who
25leases the property, under a lease of one year or longer
26executed or in effect at the time of the purchase, to a

 

 

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1governmental body that has been issued an active tax exemption
2identification number by the Department under Section 1g of
3the Retailers' Occupation Tax Act. This paragraph is exempt
4from the provisions of Section 3-55.
5    (26) Beginning on January 1, 2002 and through June 30,
62016, tangible personal property purchased from an Illinois
7retailer by a taxpayer engaged in centralized purchasing
8activities in Illinois who will, upon receipt of the property
9in Illinois, temporarily store the property in Illinois (i)
10for the purpose of subsequently transporting it outside this
11State for use or consumption thereafter solely outside this
12State or (ii) for the purpose of being processed, fabricated,
13or manufactured into, attached to, or incorporated into other
14tangible personal property to be transported outside this
15State and thereafter used or consumed solely outside this
16State. The Director of Revenue shall, pursuant to rules
17adopted in accordance with the Illinois Administrative
18Procedure Act, issue a permit to any taxpayer in good standing
19with the Department who is eligible for the exemption under
20this paragraph (26). The permit issued under this paragraph
21(26) shall authorize the holder, to the extent and in the
22manner specified in the rules adopted under this Act, to
23purchase tangible personal property from a retailer exempt
24from the taxes imposed by this Act. Taxpayers shall maintain
25all necessary books and records to substantiate the use and
26consumption of all such tangible personal property outside of

 

 

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1the State of Illinois.
2    (27) Beginning January 1, 2008, tangible personal property
3used in the construction or maintenance of a community water
4supply, as defined under Section 3.145 of the Environmental
5Protection Act, that is operated by a not-for-profit
6corporation that holds a valid water supply permit issued
7under Title IV of the Environmental Protection Act. This
8paragraph is exempt from the provisions of Section 3-55.
9    (28) Tangible personal property sold to a
10public-facilities corporation, as described in Section
1111-65-10 of the Illinois Municipal Code, for purposes of
12constructing or furnishing a municipal convention hall, but
13only if the legal title to the municipal convention hall is
14transferred to the municipality without any further
15consideration by or on behalf of the municipality at the time
16of the completion of the municipal convention hall or upon the
17retirement or redemption of any bonds or other debt
18instruments issued by the public-facilities corporation in
19connection with the development of the municipal convention
20hall. This exemption includes existing public-facilities
21corporations as provided in Section 11-65-25 of the Illinois
22Municipal Code. This paragraph is exempt from the provisions
23of Section 3-55.
24    (29) Beginning January 1, 2010 and continuing through
25December 31, 2024, materials, parts, equipment, components,
26and furnishings incorporated into or upon an aircraft as part

 

 

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1of the modification, refurbishment, completion, replacement,
2repair, or maintenance of the aircraft. This exemption
3includes consumable supplies used in the modification,
4refurbishment, completion, replacement, repair, and
5maintenance of aircraft, but excludes any materials, parts,
6equipment, components, and consumable supplies used in the
7modification, replacement, repair, and maintenance of aircraft
8engines or power plants, whether such engines or power plants
9are installed or uninstalled upon any such aircraft.
10"Consumable supplies" include, but are not limited to,
11adhesive, tape, sandpaper, general purpose lubricants,
12cleaning solution, latex gloves, and protective films. This
13exemption applies only to the transfer of qualifying tangible
14personal property incident to the modification, refurbishment,
15completion, replacement, repair, or maintenance of an aircraft
16by persons who (i) hold an Air Agency Certificate and are
17empowered to operate an approved repair station by the Federal
18Aviation Administration, (ii) have a Class IV Rating, and
19(iii) conduct operations in accordance with Part 145 of the
20Federal Aviation Regulations. The exemption does not include
21aircraft operated by a commercial air carrier providing
22scheduled passenger air service pursuant to authority issued
23under Part 121 or Part 129 of the Federal Aviation
24Regulations. The changes made to this paragraph (29) by Public
25Act 98-534 are declarative of existing law. It is the intent of
26the General Assembly that the exemption under this paragraph

 

 

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1(29) applies continuously from January 1, 2010 through
2December 31, 2024; however, no claim for credit or refund is
3allowed for taxes paid as a result of the disallowance of this
4exemption on or after January 1, 2015 and prior to the
5effective date of this amendatory Act of the 101st General
6Assembly.
7    (30) Beginning January 1, 2017 and through December 31,
82026, menstrual pads, tampons, and menstrual cups.
9    (31) Tangible personal property transferred to a purchaser
10who is exempt from tax by operation of federal law. This
11paragraph is exempt from the provisions of Section 3-55.
12    (32) Qualified tangible personal property used in the
13construction or operation of a data center that has been
14granted a certificate of exemption by the Department of
15Commerce and Economic Opportunity, whether that tangible
16personal property is purchased by the owner, operator, or
17tenant of the data center or by a contractor or subcontractor
18of the owner, operator, or tenant. Data centers that would
19have qualified for a certificate of exemption prior to January
201, 2020 had this amendatory Act of the 101st General Assembly
21been in effect, may apply for and obtain an exemption for
22subsequent purchases of computer equipment or enabling
23software purchased or leased to upgrade, supplement, or
24replace computer equipment or enabling software purchased or
25leased in the original investment that would have qualified.
26    The Department of Commerce and Economic Opportunity shall

 

 

HB5043- 53 -LRB102 25103 HLH 34365 b

1grant a certificate of exemption under this item (32) to
2qualified data centers as defined by Section 605-1025 of the
3Department of Commerce and Economic Opportunity Law of the
4Civil Administrative Code of Illinois.
5    For the purposes of this item (32):
6        "Data center" means a building or a series of
7    buildings rehabilitated or constructed to house working
8    servers in one physical location or multiple sites within
9    the State of Illinois.
10        "Qualified tangible personal property" means:
11    electrical systems and equipment; climate control and
12    chilling equipment and systems; mechanical systems and
13    equipment; monitoring and secure systems; emergency
14    generators; hardware; computers; servers; data storage
15    devices; network connectivity equipment; racks; cabinets;
16    telecommunications cabling infrastructure; raised floor
17    systems; peripheral components or systems; software;
18    mechanical, electrical, or plumbing systems; battery
19    systems; cooling systems and towers; temperature control
20    systems; other cabling; and other data center
21    infrastructure equipment and systems necessary to operate
22    qualified tangible personal property, including fixtures;
23    and component parts of any of the foregoing, including
24    installation, maintenance, repair, refurbishment, and
25    replacement of qualified tangible personal property to
26    generate, transform, transmit, distribute, or manage

 

 

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1    electricity necessary to operate qualified tangible
2    personal property; and all other tangible personal
3    property that is essential to the operations of a computer
4    data center. The term "qualified tangible personal
5    property" also includes building materials physically
6    incorporated in to the qualifying data center. To document
7    the exemption allowed under this Section, the retailer
8    must obtain from the purchaser a copy of the certificate
9    of eligibility issued by the Department of Commerce and
10    Economic Opportunity.
11    This item (32) is exempt from the provisions of Section
123-55.
13    (33) Tangible personal property sold by or on behalf of
14the State Treasurer pursuant to the Revised Uniform Unclaimed
15Property Act. This item (33) is exempt from the provisions of
16Section 3-55.
17(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
18101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
19    Section 20. The Retailers' Occupation Tax Act is amended
20by changing Section 2-5 as follows:
 
21    (35 ILCS 120/2-5)
22    Sec. 2-5. Exemptions. Gross receipts from proceeds from
23the sale of the following tangible personal property are
24exempt from the tax imposed by this Act:

 

 

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

 

 

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1    seeders, or spreaders. Precision farming equipment
2    includes, but is not limited to, soil testing sensors,
3    computers, monitors, software, global positioning and
4    mapping systems, and other such equipment.
5        Farm machinery and equipment also includes computers,
6    sensors, software, and related equipment used primarily in
7    the computer-assisted operation of production agriculture
8    facilities, equipment, and activities such as, but not
9    limited to, the collection, monitoring, and correlation of
10    animal and crop data for the purpose of formulating animal
11    diets and agricultural chemicals. This item (2) is exempt
12    from the provisions of Section 2-70.
13        (3) Until July 1, 2003, distillation machinery and
14    equipment, sold as a unit or kit, assembled or installed
15    by the retailer, certified by the user to be used only for
16    the production of ethyl alcohol that will be used for
17    consumption as motor fuel or as a component of motor fuel
18    for the personal use of the user, and not subject to sale
19    or resale.
20        (4) Until July 1, 2003 and beginning again September
21    1, 2004 through August 30, 2014, graphic arts machinery
22    and equipment, including repair and replacement parts,
23    both new and used, and including that manufactured on
24    special order or purchased for lease, certified by the
25    purchaser to be used primarily for graphic arts
26    production. Equipment includes chemicals or chemicals

 

 

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1    acting as catalysts but only if the chemicals or chemicals
2    acting as catalysts effect a direct and immediate change
3    upon a graphic arts product. Beginning on July 1, 2017,
4    graphic arts machinery and equipment is included in the
5    manufacturing and assembling machinery and equipment
6    exemption under paragraph (14).
7        (5) A motor vehicle that is used for automobile
8    renting, as defined in the Automobile Renting Occupation
9    and Use Tax Act. This paragraph is exempt from the
10    provisions of Section 2-70.
11        (6) Personal property sold by a teacher-sponsored
12    student organization affiliated with an elementary or
13    secondary school located in Illinois.
14        (7) Until July 1, 2003, proceeds of that portion of
15    the selling price of a passenger car the sale of which is
16    subject to the Replacement Vehicle Tax.
17        (8) Personal property sold to an Illinois county fair
18    association for use in conducting, operating, or promoting
19    the county fair.
20        (9) Personal property sold to a not-for-profit arts or
21    cultural organization that establishes, by proof required
22    by the Department by rule, that it has received an
23    exemption under Section 501(c)(3) of the Internal Revenue
24    Code and that is organized and operated primarily for the
25    presentation or support of arts or cultural programming,
26    activities, or services. These organizations include, but

 

 

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1    are not limited to, music and dramatic arts organizations
2    such as symphony orchestras and theatrical groups, arts
3    and cultural service organizations, local arts councils,
4    visual arts organizations, and media arts organizations.
5    On and after July 1, 2001 (the effective date of Public Act
6    92-35), however, an entity otherwise eligible for this
7    exemption shall not make tax-free purchases unless it has
8    an active identification number issued by the Department.
9        (10) Personal property sold by a corporation, society,
10    association, foundation, institution, or organization,
11    other than a limited liability company, that is organized
12    and operated as a not-for-profit service enterprise for
13    the benefit of persons 65 years of age or older if the
14    personal property was not purchased by the enterprise for
15    the purpose of resale by the enterprise.
16        (11) Personal property sold to a governmental body, to
17    a corporation, society, association, foundation, or
18    institution organized and operated exclusively for
19    charitable, religious, or educational purposes, or to a
20    not-for-profit corporation, society, association,
21    foundation, institution, or organization that has no
22    compensated officers or employees and that is organized
23    and operated primarily for the recreation of persons 55
24    years of age or older. A limited liability company may
25    qualify for the exemption under this paragraph only if the
26    limited liability company is organized and operated

 

 

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1    exclusively for educational purposes. On and after July 1,
2    1987, however, no entity otherwise eligible for this
3    exemption shall make tax-free purchases unless it has an
4    active identification number issued by the Department.
5        (12) (Blank).
6        (12-5) On and after July 1, 2003 and through June 30,
7    2004, motor vehicles of the second division with a gross
8    vehicle weight in excess of 8,000 pounds that are subject
9    to the commercial distribution fee imposed under Section
10    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
11    2004 and through June 30, 2005, the use in this State of
12    motor vehicles of the second division: (i) with a gross
13    vehicle weight rating in excess of 8,000 pounds; (ii) that
14    are subject to the commercial distribution fee imposed
15    under Section 3-815.1 of the Illinois Vehicle Code; and
16    (iii) that are primarily used for commercial purposes.
17    Through June 30, 2005, this exemption applies to repair
18    and replacement parts added after the initial purchase of
19    such a motor vehicle if that motor vehicle is used in a
20    manner that would qualify for the rolling stock exemption
21    otherwise provided for in this Act. For purposes of this
22    paragraph, "used for commercial purposes" means the
23    transportation of persons or property in furtherance of
24    any commercial or industrial enterprise whether for-hire
25    or not.
26        (13) Proceeds from sales to owners, lessors, or

 

 

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

 

 

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1    customers through pipes, pipelines, or mains. The
2    provisions of Public Act 98-583 are declaratory of
3    existing law as to the meaning and scope of this
4    exemption. Beginning on July 1, 2017, the exemption
5    provided by this paragraph (14) includes, but is not
6    limited to, graphic arts machinery and equipment, as
7    defined in paragraph (4) of this Section.
8        (15) Proceeds of mandatory service charges separately
9    stated on customers' bills for purchase and consumption of
10    food and beverages, to the extent that the proceeds of the
11    service charge are in fact turned over as tips or as a
12    substitute for tips to the employees who participate
13    directly in preparing, serving, hosting or cleaning up the
14    food or beverage function with respect to which the
15    service charge is imposed.
16        (16) Tangible personal property sold to a purchaser if
17    the purchaser is exempt from use tax by operation of
18    federal law. This paragraph is exempt from the provisions
19    of Section 2-70.
20        (17) Tangible personal property sold to a common
21    carrier by rail or motor that receives the physical
22    possession of the property in Illinois and that transports
23    the property, or shares with another common carrier in the
24    transportation of the property, out of Illinois on a
25    standard uniform bill of lading showing the seller of the
26    property as the shipper or consignor of the property to a

 

 

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1    destination outside Illinois, for use outside Illinois.
2        (18) Legal tender, currency, medallions, or gold or
3    silver coinage issued by the State of Illinois, the
4    government of the United States of America, or the
5    government of any foreign country, and bullion.
6        (19) Until July 1, 2003, oil field exploration,
7    drilling, and production equipment, including (i) rigs and
8    parts of rigs, rotary rigs, cable tool rigs, and workover
9    rigs, (ii) pipe and tubular goods, including casing and
10    drill strings, (iii) pumps and pump-jack units, (iv)
11    storage tanks and flow lines, (v) any individual
12    replacement part for oil field exploration, drilling, and
13    production equipment, and (vi) machinery and equipment
14    purchased for lease; but excluding motor vehicles required
15    to be registered under the Illinois Vehicle Code.
16        (20) Photoprocessing machinery and equipment,
17    including repair and replacement parts, both new and used,
18    including that manufactured on special order, certified by
19    the purchaser to be used primarily for photoprocessing,
20    and including photoprocessing machinery and equipment
21    purchased for lease.
22        (21) Until July 1, 2023, coal and aggregate
23    exploration, mining, off-highway hauling, processing,
24    maintenance, and reclamation equipment, including
25    replacement parts and equipment, and including equipment
26    purchased for lease, but excluding motor vehicles required

 

 

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1    to be registered under the Illinois Vehicle Code. The
2    changes made to this Section by Public Act 97-767 apply on
3    and after July 1, 2003, but no claim for credit or refund
4    is allowed on or after August 16, 2013 (the effective date
5    of Public Act 98-456) for such taxes paid during the
6    period beginning July 1, 2003 and ending on August 16,
7    2013 (the effective date of Public Act 98-456).
8        (22) Until June 30, 2013, fuel and petroleum products
9    sold to or used by an air carrier, certified by the carrier
10    to be used for consumption, shipment, or storage in the
11    conduct of its business as an air common carrier, for a
12    flight destined for or returning from a location or
13    locations outside the United States without regard to
14    previous or subsequent domestic stopovers.
15        Beginning July 1, 2013, fuel and petroleum products
16    sold to or used by an air carrier, certified by the carrier
17    to be used for consumption, shipment, or storage in the
18    conduct of its business as an air common carrier, for a
19    flight that (i) is engaged in foreign trade or is engaged
20    in trade between the United States and any of its
21    possessions and (ii) transports at least one individual or
22    package for hire from the city of origination to the city
23    of final destination on the same aircraft, without regard
24    to a change in the flight number of that aircraft.
25        (23) A transaction in which the purchase order is
26    received by a florist who is located outside Illinois, but

 

 

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1    who has a florist located in Illinois deliver the property
2    to the purchaser or the purchaser's donee in Illinois.
3        (24) Fuel consumed or used in the operation of ships,
4    barges, or vessels that are used primarily in or for the
5    transportation of property or the conveyance of persons
6    for hire on rivers bordering on this State if the fuel is
7    delivered by the seller to the purchaser's barge, ship, or
8    vessel while it is afloat upon that bordering river.
9        (25) Except as provided in item (25-5) of this
10    Section, a motor vehicle sold in this State to a
11    nonresident even though the motor vehicle is delivered to
12    the nonresident in this State, if the motor vehicle is not
13    to be titled in this State, and if a drive-away permit is
14    issued to the motor vehicle as provided in Section 3-603
15    of the Illinois Vehicle Code or if the nonresident
16    purchaser has vehicle registration plates to transfer to
17    the motor vehicle upon returning to his or her home state.
18    The issuance of the drive-away permit or having the
19    out-of-state registration plates to be transferred is
20    prima facie evidence that the motor vehicle will not be
21    titled in this State.
22        (25-5) The exemption under item (25) does not apply if
23    the state in which the motor vehicle will be titled does
24    not allow a reciprocal exemption for a motor vehicle sold
25    and delivered in that state to an Illinois resident but
26    titled in Illinois. The tax collected under this Act on

 

 

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1    the sale of a motor vehicle in this State to a resident of
2    another state that does not allow a reciprocal exemption
3    shall be imposed at a rate equal to the state's rate of tax
4    on taxable property in the state in which the purchaser is
5    a resident, except that the tax shall not exceed the tax
6    that would otherwise be imposed under this Act. At the
7    time of the sale, the purchaser shall execute a statement,
8    signed under penalty of perjury, of his or her intent to
9    title the vehicle in the state in which the purchaser is a
10    resident within 30 days after the sale and of the fact of
11    the payment to the State of Illinois of tax in an amount
12    equivalent to the state's rate of tax on taxable property
13    in his or her state of residence and shall submit the
14    statement to the appropriate tax collection agency in his
15    or her state of residence. In addition, the retailer must
16    retain a signed copy of the statement in his or her
17    records. Nothing in this item shall be construed to
18    require the removal of the vehicle from this state
19    following the filing of an intent to title the vehicle in
20    the purchaser's state of residence if the purchaser titles
21    the vehicle in his or her state of residence within 30 days
22    after the date of sale. The tax collected under this Act in
23    accordance with this item (25-5) shall be proportionately
24    distributed as if the tax were collected at the 6.25%
25    general rate imposed under this Act.
26        (25-7) Beginning on July 1, 2007, no tax is imposed

 

 

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1    under this Act on the sale of an aircraft, as defined in
2    Section 3 of the Illinois Aeronautics Act, if all of the
3    following conditions are met:
4            (1) the aircraft leaves this State within 15 days
5        after the later of either the issuance of the final
6        billing for the sale of the aircraft, or the
7        authorized approval for return to service, completion
8        of the maintenance record entry, and completion of the
9        test flight and ground test for inspection, as
10        required by 14 C.F.R. 91.407;
11            (2) the aircraft is not based or registered in
12        this State after the sale of the aircraft; and
13            (3) the seller retains in his or her books and
14        records and provides to the Department a signed and
15        dated certification from the purchaser, on a form
16        prescribed by the Department, certifying that the
17        requirements of this item (25-7) are met. The
18        certificate must also include the name and address of
19        the purchaser, the address of the location where the
20        aircraft is to be titled or registered, the address of
21        the primary physical location of the aircraft, and
22        other information that the Department may reasonably
23        require.
24        For purposes of this item (25-7):
25        "Based in this State" means hangared, stored, or
26    otherwise used, excluding post-sale customizations as

 

 

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1    defined in this Section, for 10 or more days in each
2    12-month period immediately following the date of the sale
3    of the aircraft.
4        "Registered in this State" means an aircraft
5    registered with the Department of Transportation,
6    Aeronautics Division, or titled or registered with the
7    Federal Aviation Administration to an address located in
8    this State.
9        This paragraph (25-7) is exempt from the provisions of
10    Section 2-70.
11        (26) Semen used for artificial insemination of
12    livestock for direct agricultural production.
13        (27) Horses, or interests in horses, registered with
14    and meeting the requirements of any of the Arabian Horse
15    Club Registry of America, Appaloosa Horse Club, American
16    Quarter Horse Association, United States Trotting
17    Association, or Jockey Club, as appropriate, used for
18    purposes of breeding or racing for prizes. This item (27)
19    is exempt from the provisions of Section 2-70, and the
20    exemption provided for under this item (27) applies for
21    all periods beginning May 30, 1995, but no claim for
22    credit or refund is allowed on or after January 1, 2008
23    (the effective date of Public Act 95-88) for such taxes
24    paid during the period beginning May 30, 2000 and ending
25    on January 1, 2008 (the effective date of Public Act
26    95-88).

 

 

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1        (28) Computers and communications equipment utilized
2    for any hospital purpose and equipment used in the
3    diagnosis, analysis, or treatment of hospital patients
4    sold to a lessor who leases the equipment, under a lease of
5    one year or longer executed or in effect at the time of the
6    purchase, to a hospital that has been issued an active tax
7    exemption identification number by the Department under
8    Section 1g of this Act.
9        (29) Personal property sold to a lessor who leases the
10    property, under a lease of one year or longer executed or
11    in effect at the time of the purchase, to a governmental
12    body that has been issued an active tax exemption
13    identification number by the Department under Section 1g
14    of this Act.
15        (30) Beginning with taxable years ending on or after
16    December 31, 1995 and ending with taxable years ending on
17    or before December 31, 2004, personal property that is
18    donated for disaster relief to be used in a State or
19    federally declared disaster area in Illinois or bordering
20    Illinois by a manufacturer or retailer that is registered
21    in this State to a corporation, society, association,
22    foundation, or institution that has been issued a sales
23    tax exemption identification number by the Department that
24    assists victims of the disaster who reside within the
25    declared disaster area.
26        (31) Beginning with taxable years ending on or after

 

 

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

 

 

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1    offer systematic instruction in useful branches of
2    learning by methods common to public schools and that
3    compare favorably in their scope and intensity with the
4    course of study presented in tax-supported schools, and
5    vocational or technical schools or institutes organized
6    and operated exclusively to provide a course of study of
7    not less than 6 weeks duration and designed to prepare
8    individuals to follow a trade or to pursue a manual,
9    technical, mechanical, industrial, business, or commercial
10    occupation.
11        (34) Beginning January 1, 2000, personal property,
12    including food, purchased through fundraising events for
13    the benefit of a public or private elementary or secondary
14    school, a group of those schools, or one or more school
15    districts if the events are sponsored by an entity
16    recognized by the school district that consists primarily
17    of volunteers and includes parents and teachers of the
18    school children. This paragraph does not apply to
19    fundraising events (i) for the benefit of private home
20    instruction or (ii) for which the fundraising entity
21    purchases the personal property sold at the events from
22    another individual or entity that sold the property for
23    the purpose of resale by the fundraising entity and that
24    profits from the sale to the fundraising entity. This
25    paragraph is exempt from the provisions of Section 2-70.
26        (35) Beginning January 1, 2000 and through December

 

 

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

 

 

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1    and equipment used in the diagnosis, analysis, or
2    treatment of hospital patients sold to a lessor who leases
3    the equipment, under a lease of one year or longer
4    executed or in effect at the time of the purchase, to a
5    hospital that has been issued an active tax exemption
6    identification number by the Department under Section 1g
7    of this Act. This paragraph is exempt from the provisions
8    of Section 2-70.
9        (37) Beginning August 2, 2001, personal property sold
10    to a lessor who leases the property, under a lease of one
11    year or longer executed or in effect at the time of the
12    purchase, to a governmental body that has been issued an
13    active tax exemption identification number by the
14    Department under Section 1g of this Act. This paragraph is
15    exempt from the provisions of Section 2-70.
16        (38) Beginning on January 1, 2002 and through June 30,
17    2016, tangible personal property purchased from an
18    Illinois retailer by a taxpayer engaged in centralized
19    purchasing activities in Illinois who will, upon receipt
20    of the property in Illinois, temporarily store the
21    property in Illinois (i) for the purpose of subsequently
22    transporting it outside this State for use or consumption
23    thereafter solely outside this State or (ii) for the
24    purpose of being processed, fabricated, or manufactured
25    into, attached to, or incorporated into other tangible
26    personal property to be transported outside this State and

 

 

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1    thereafter used or consumed solely outside this State. The
2    Director of Revenue shall, pursuant to rules adopted in
3    accordance with the Illinois Administrative Procedure Act,
4    issue a permit to any taxpayer in good standing with the
5    Department who is eligible for the exemption under this
6    paragraph (38). The permit issued under this paragraph
7    (38) shall authorize the holder, to the extent and in the
8    manner specified in the rules adopted under this Act, to
9    purchase tangible personal property from a retailer exempt
10    from the taxes imposed by this Act. Taxpayers shall
11    maintain all necessary books and records to substantiate
12    the use and consumption of all such tangible personal
13    property outside of the State of Illinois.
14        (39) Beginning January 1, 2008, tangible personal
15    property used in the construction or maintenance of a
16    community water supply, as defined under Section 3.145 of
17    the Environmental Protection Act, that is operated by a
18    not-for-profit corporation that holds a valid water supply
19    permit issued under Title IV of the Environmental
20    Protection Act. This paragraph is exempt from the
21    provisions of Section 2-70.
22        (40) Beginning January 1, 2010 and continuing through
23    December 31, 2024, materials, parts, equipment,
24    components, and furnishings incorporated into or upon an
25    aircraft as part of the modification, refurbishment,
26    completion, replacement, repair, or maintenance of the

 

 

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1    aircraft. This exemption includes consumable supplies used
2    in the modification, refurbishment, completion,
3    replacement, repair, and maintenance of aircraft, but
4    excludes any materials, parts, equipment, components, and
5    consumable supplies used in the modification, replacement,
6    repair, and maintenance of aircraft engines or power
7    plants, whether such engines or power plants are installed
8    or uninstalled upon any such aircraft. "Consumable
9    supplies" include, but are not limited to, adhesive, tape,
10    sandpaper, general purpose lubricants, cleaning solution,
11    latex gloves, and protective films. This exemption applies
12    only to the sale of qualifying tangible personal property
13    to persons who modify, refurbish, complete, replace, or
14    maintain an aircraft and who (i) hold an Air Agency
15    Certificate and are empowered to operate an approved
16    repair station by the Federal Aviation Administration,
17    (ii) have a Class IV Rating, and (iii) conduct operations
18    in accordance with Part 145 of the Federal Aviation
19    Regulations. The exemption does not include aircraft
20    operated by a commercial air carrier providing scheduled
21    passenger air service pursuant to authority issued under
22    Part 121 or Part 129 of the Federal Aviation Regulations.
23    The changes made to this paragraph (40) by Public Act
24    98-534 are declarative of existing law. It is the intent
25    of the General Assembly that the exemption under this
26    paragraph (40) applies continuously from January 1, 2010

 

 

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1    through December 31, 2024; however, no claim for credit or
2    refund is allowed for taxes paid as a result of the
3    disallowance of this exemption on or after January 1, 2015
4    and prior to the effective date of this amendatory Act of
5    the 101st General Assembly.
6        (41) Tangible personal property sold to a
7    public-facilities corporation, as described in Section
8    11-65-10 of the Illinois Municipal Code, for purposes of
9    constructing or furnishing a municipal convention hall,
10    but only if the legal title to the municipal convention
11    hall is transferred to the municipality without any
12    further consideration by or on behalf of the municipality
13    at the time of the completion of the municipal convention
14    hall or upon the retirement or redemption of any bonds or
15    other debt instruments issued by the public-facilities
16    corporation in connection with the development of the
17    municipal convention hall. This exemption includes
18    existing public-facilities corporations as provided in
19    Section 11-65-25 of the Illinois Municipal Code. This
20    paragraph is exempt from the provisions of Section 2-70.
21        (42) Beginning January 1, 2017 and through December
22    31, 2026, menstrual pads, tampons, and menstrual cups.
23        (43) Merchandise that is subject to the Rental
24    Purchase Agreement Occupation and Use Tax. The purchaser
25    must certify that the item is purchased to be rented
26    subject to a rental purchase agreement, as defined in the

 

 

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1    Rental Purchase Agreement Act, and provide proof of
2    registration under the Rental Purchase Agreement
3    Occupation and Use Tax Act. This paragraph is exempt from
4    the provisions of Section 2-70.
5        (44) Qualified tangible personal property used in the
6    construction or operation of a data center that has been
7    granted a certificate of exemption by the Department of
8    Commerce and Economic Opportunity, whether that tangible
9    personal property is purchased by the owner, operator, or
10    tenant of the data center or by a contractor or
11    subcontractor of the owner, operator, or tenant. Data
12    centers that would have qualified for a certificate of
13    exemption prior to January 1, 2020 had this amendatory Act
14    of the 101st General Assembly been in effect, may apply
15    for and obtain an exemption for subsequent purchases of
16    computer equipment or enabling software purchased or
17    leased to upgrade, supplement, or replace computer
18    equipment or enabling software purchased or leased in the
19    original investment that would have qualified.
20        The Department of Commerce and Economic Opportunity
21    shall grant a certificate of exemption under this item
22    (44) to qualified data centers as defined by Section
23    605-1025 of the Department of Commerce and Economic
24    Opportunity Law of the Civil Administrative Code of
25    Illinois.
26        For the purposes of this item (44):

 

 

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1            "Data center" means a building or a series of
2        buildings rehabilitated or constructed to house
3        working servers in one physical location or multiple
4        sites within the State of Illinois.
5            "Qualified tangible personal property" means:
6        electrical systems and equipment; climate control and
7        chilling equipment and systems; mechanical systems and
8        equipment; monitoring and secure systems; emergency
9        generators; hardware; computers; servers; data storage
10        devices; network connectivity equipment; racks;
11        cabinets; telecommunications cabling infrastructure;
12        raised floor systems; peripheral components or
13        systems; software; mechanical, electrical, or plumbing
14        systems; battery systems; cooling systems and towers;
15        temperature control systems; other cabling; and other
16        data center infrastructure equipment and systems
17        necessary to operate qualified tangible personal
18        property, including fixtures; and component parts of
19        any of the foregoing, including installation,
20        maintenance, repair, refurbishment, and replacement of
21        qualified tangible personal property to generate,
22        transform, transmit, distribute, or manage electricity
23        necessary to operate qualified tangible personal
24        property; and all other tangible personal property
25        that is essential to the operations of a computer data
26        center. The term "qualified tangible personal

 

 

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1        property" also includes building materials physically
2        incorporated into in to the qualifying data center. To
3        document the exemption allowed under this Section, the
4        retailer must obtain from the purchaser a copy of the
5        certificate of eligibility issued by the Department of
6        Commerce and Economic Opportunity.
7        This item (44) is exempt from the provisions of
8    Section 2-70.
9        (45) Beginning January 1, 2020 and through December
10    31, 2020, sales of tangible personal property made by a
11    marketplace seller over a marketplace for which tax is due
12    under this Act but for which use tax has been collected and
13    remitted to the Department by a marketplace facilitator
14    under Section 2d of the Use Tax Act are exempt from tax
15    under this Act. A marketplace seller claiming this
16    exemption shall maintain books and records demonstrating
17    that the use tax on such sales has been collected and
18    remitted by a marketplace facilitator. Marketplace sellers
19    that have properly remitted tax under this Act on such
20    sales may file a claim for credit as provided in Section 6
21    of this Act. No claim is allowed, however, for such taxes
22    for which a credit or refund has been issued to the
23    marketplace facilitator under the Use Tax Act, or for
24    which the marketplace facilitator has filed a claim for
25    credit or refund under the Use Tax Act.
26        (46) Tangible personal property sold by or on behalf

 

 

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1    of the State Treasurer pursuant to the Revised Uniform
2    Unclaimed Property Act. This item (46) is exempt from the
3    provisions of Section 2-70.
4(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
5101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
68-27-21; revised 11-9-21.)