Illinois General Assembly - Full Text of HB3673
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Full Text of HB3673  100th General Assembly

HB3673 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3673

 

Introduced , by Rep. John M. Cabello - Brian W. Stewart

 

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

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reinstates the graphic arts machinery and equipment exemption and the corresponding Manufacturer's Purchase Credit on and after January 1, 2017. Provides that those credits are exempt from the Acts' automatic sunset provisions. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3673LRB100 10839 HLH 21073 b

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

 

 

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

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003, and beginning again on September 1,
32004 through August 30, 2014, and beginning again on January 1,
42017, graphic arts machinery and equipment, including repair
5and replacement parts, both new and used, and including that
6manufactured on special order, certified by the purchaser to be
7used primarily for graphic arts production, and including
8machinery and equipment purchased for lease. Equipment
9includes chemicals or chemicals acting as catalysts but only if
10the chemicals or chemicals acting as catalysts effect a direct
11and immediate change upon a graphic arts product. This item (6)
12is exempt from the provisions of Section 3-90.
13    (7) Farm chemicals.
14    (8) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (9) Personal property purchased from a teacher-sponsored
19student organization affiliated with an elementary or
20secondary school located in Illinois.
21    (10) A motor vehicle that is used for automobile renting,
22as defined in the Automobile Renting Occupation and Use Tax
23Act.
24    (11) Farm machinery and equipment, both new and used,
25including that manufactured on special order, certified by the
26purchaser to be used primarily for production agriculture or

 

 

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

 

 

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

 

 

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

 

 

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1allowed on or after August 16, 2013 (the effective date of
2Public Act 98-456) for such taxes paid during the period
3beginning July 1, 2003 and ending on August 16, 2013 (the
4effective date of Public Act 98-456).
5    (17) Until July 1, 2003, distillation machinery and
6equipment, sold as a unit or kit, assembled or installed by the
7retailer, certified by the user to be used only for the
8production of ethyl alcohol that will be used for consumption
9as motor fuel or as a component of motor fuel for the personal
10use of the user, and not subject to sale or resale.
11    (18) Manufacturing and assembling machinery and equipment
12used primarily in the process of manufacturing or assembling
13tangible personal property for wholesale or retail sale or
14lease, whether that sale or lease is made directly by the
15manufacturer or by some other person, whether the materials
16used in the process are owned by the manufacturer or some other
17person, or whether that sale or lease is made apart from or as
18an incident to the seller's engaging in the service occupation
19of producing machines, tools, dies, jigs, patterns, gauges, or
20other similar items of no commercial value on special order for
21a particular purchaser. The exemption provided by this
22paragraph (18) does not include machinery and equipment used in
23(i) the generation of electricity for wholesale or retail sale;
24(ii) the generation or treatment of natural or artificial gas
25for wholesale or retail sale that is delivered to customers
26through pipes, pipelines, or mains; or (iii) the treatment of

 

 

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1water for wholesale or retail sale that is delivered to
2customers through pipes, pipelines, or mains. The provisions of
3Public Act 98-583 are declaratory of existing law as to the
4meaning and scope of this exemption.
5    (19) Personal property delivered to a purchaser or
6purchaser's donee inside Illinois when the purchase order for
7that personal property was received by a florist located
8outside Illinois who has a florist located inside Illinois
9deliver the personal property.
10    (20) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (21) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (21) is exempt from the provisions
18of Section 3-90, and the exemption provided for under this item
19(21) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 for such taxes paid during the period beginning May 30,
222000 and ending on January 1, 2008.
23    (22) Computers and communications equipment utilized for
24any hospital purpose and equipment used in the diagnosis,
25analysis, or treatment of hospital patients purchased by a
26lessor who leases the equipment, under a lease of one year or

 

 

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

 

 

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

 

 

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1performance of infrastructure repairs in this State, including
2but not limited to municipal roads and streets, access roads,
3bridges, sidewalks, waste disposal systems, water and sewer
4line extensions, water distribution and purification
5facilities, storm water drainage and retention facilities, and
6sewage treatment facilities, resulting from a State or
7federally declared disaster in Illinois or bordering Illinois
8when such repairs are initiated on facilities located in the
9declared disaster area within 6 months after the disaster.
10    (26) Beginning July 1, 1999, game or game birds purchased
11at a "game breeding and hunting preserve area" as that term is
12used in the Wildlife Code. This paragraph is exempt from the
13provisions of Section 3-90.
14    (27) A motor vehicle, as that term is defined in Section
151-146 of the Illinois Vehicle Code, that is donated to a
16corporation, limited liability company, society, association,
17foundation, or institution that is determined by the Department
18to be organized and operated exclusively for educational
19purposes. For purposes of this exemption, "a corporation,
20limited liability company, society, association, foundation,
21or institution organized and operated exclusively for
22educational purposes" means all tax-supported public schools,
23private schools that offer systematic instruction in useful
24branches of learning by methods common to public schools and
25that compare favorably in their scope and intensity with the
26course of study presented in tax-supported schools, and

 

 

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1vocational or technical schools or institutes organized and
2operated exclusively to provide a course of study of not less
3than 6 weeks duration and designed to prepare individuals to
4follow a trade or to pursue a manual, technical, mechanical,
5industrial, business, or commercial occupation.
6    (28) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 3-90.
20    (29) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and other
23items, and replacement parts for these machines. Beginning
24January 1, 2002 and through June 30, 2003, machines and parts
25for machines used in commercial, coin-operated amusement and
26vending business if a use or occupation tax is paid on the

 

 

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1gross receipts derived from the use of the commercial,
2coin-operated amusement and vending machines. This paragraph
3is exempt from the provisions of Section 3-90.
4    (30) Beginning January 1, 2001 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages, soft
7drinks, and food that has been prepared for immediate
8consumption) and prescription and nonprescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or in a licensed facility as defined
15in the ID/DD Community Care Act, the MC/DD Act, or the
16Specialized Mental Health Rehabilitation Act of 2013.
17    (31) Beginning on the effective date of this amendatory Act
18of the 92nd General Assembly, computers and communications
19equipment utilized for any hospital purpose and equipment used
20in the diagnosis, analysis, or treatment of hospital patients
21purchased by a lessor who leases the equipment, under a lease
22of one year or longer executed or in effect at the time the
23lessor would otherwise be subject to the tax imposed by this
24Act, to a hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of the
26Retailers' Occupation Tax Act. If the equipment is leased in a

 

 

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

 

 

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1Service Use Tax Act, as the case may be, based on the fair
2market value of the property at the time the nonqualifying use
3occurs. No lessor shall collect or attempt to collect an amount
4(however designated) that purports to reimburse that lessor for
5the tax imposed by this Act or the Service Use Tax Act, as the
6case may be, if the tax has not been paid by the lessor. If a
7lessor improperly collects any such amount from the lessee, the
8lessee shall have a legal right to claim a refund of that
9amount from the lessor. If, however, that amount is not
10refunded to the lessee for any reason, the lessor is liable to
11pay that amount to the Department. This paragraph is exempt
12from the provisions of Section 3-90.
13    (33) On and after July 1, 2003 and through June 30, 2004,
14the use in this State of motor vehicles of the second division
15with a gross vehicle weight in excess of 8,000 pounds and that
16are subject to the commercial distribution fee imposed under
17Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
181, 2004 and through June 30, 2005, the use in this State of
19motor vehicles of the second division: (i) with a gross vehicle
20weight rating in excess of 8,000 pounds; (ii) that are subject
21to the commercial distribution fee imposed under Section
223-815.1 of the Illinois Vehicle Code; and (iii) that are
23primarily used for commercial purposes. Through June 30, 2005,
24this exemption applies to repair and replacement parts added
25after the initial purchase of such a motor vehicle if that
26motor vehicle is used in a manner that would qualify for the

 

 

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1rolling stock exemption otherwise provided for in this Act. For
2purposes of this paragraph, the term "used for commercial
3purposes" means the transportation of persons or property in
4furtherance of any commercial or industrial enterprise,
5whether for-hire or not.
6    (34) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 3-90.
13    (35) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

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1films. This exemption applies only to the use of qualifying
2tangible personal property by persons who modify, refurbish,
3complete, repair, replace, or maintain aircraft and who (i)
4hold an Air Agency Certificate and are empowered to operate an
5approved repair station by the Federal Aviation
6Administration, (ii) have a Class IV Rating, and (iii) conduct
7operations in accordance with Part 145 of the Federal Aviation
8Regulations. The exemption does not include aircraft operated
9by a commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (35) by Public Act 98-534 are declarative of existing
13law.
14    (36) Tangible personal property purchased by a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

 

 

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1This paragraph is exempt from the provisions of Section 3-90.
2    (37) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
61-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
77-29-15; 99-855, eff. 8-19-16.)
 
8    (35 ILCS 105/3-85)
9    Sec. 3-85. Manufacturer's Purchase Credit. For purchases
10of machinery and equipment made on and after January 1, 1995
11through June 30, 2003, and on and after September 1, 2004
12through August 30, 2014, and on and after January 1, 2017, a
13purchaser of manufacturing machinery and equipment that
14qualifies for the exemption provided by paragraph (18) of
15Section 3-5 of this Act earns a credit in an amount equal to a
16fixed percentage of the tax which would have been incurred
17under this Act on those purchases. For purchases of graphic
18arts machinery and equipment made on or after July 1, 1996 and
19through June 30, 2003, and on and after September 1, 2004
20through August 30, 2014, and on and after January 1, 2017, a
21purchaser of graphic arts machinery and equipment that
22qualifies for the exemption provided by paragraph (6) of
23Section 3-5 of this Act earns a credit in an amount equal to a
24fixed percentage of the tax that would have been incurred under
25this Act on those purchases. The credit earned for purchases of

 

 

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1manufacturing machinery and equipment or graphic arts
2machinery and equipment shall be referred to as the
3Manufacturer's Purchase Credit. A graphic arts producer is a
4person engaged in graphic arts production as defined in Section
52-30 of the Retailers' Occupation Tax Act. Beginning July 1,
61996, all references in this Section to manufacturers or
7manufacturing shall also be deemed to refer to graphic arts
8producers or graphic arts production.
9    The amount of credit shall be a percentage of the tax that
10would have been incurred on the purchase of manufacturing
11machinery and equipment or graphic arts machinery and equipment
12if the exemptions provided by paragraph (6) or paragraph (18)
13of Section 3-5 of this Act had not been applicable. The
14percentage shall be as follows:
15        (1) 15% for purchases made on or before June 30, 1995.
16        (2) 25% for purchases made after June 30, 1995, and on
17    or before June 30, 1996.
18        (3) 40% for purchases made after June 30, 1996, and on
19    or before June 30, 1997.
20        (4) 50% for purchases made on or after July 1, 1997.
21    (a) Manufacturer's Purchase Credit earned prior to July 1,
222003. This subsection (a) applies to Manufacturer's Purchase
23Credit earned prior to July 1, 2003. A purchaser of production
24related tangible personal property desiring to use the
25Manufacturer's Purchase Credit shall certify to the seller
26prior to October 1, 2003 that the purchaser is satisfying all

 

 

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1or part of the liability under the Use Tax Act or the Service
2Use Tax Act that is due on the purchase of the production
3related tangible personal property by use of Manufacturer's
4Purchase Credit. The Manufacturer's Purchase Credit
5certification must be dated and shall include the name and
6address of the purchaser, the purchaser's registration number,
7if registered, the credit being applied, and a statement that
8the State Use Tax or Service Use Tax liability is being
9satisfied with the manufacturer's or graphic arts producer's
10accumulated purchase credit. Certification may be incorporated
11into the manufacturer's or graphic arts producer's purchase
12order. Manufacturer's Purchase Credit certification provided
13by the manufacturer or graphic arts producer prior to October
141, 2003 may be used to satisfy the retailer's or serviceman's
15liability under the Retailers' Occupation Tax Act or Service
16Occupation Tax Act for the credit claimed, not to exceed 6.25%
17of the receipts subject to tax from a qualifying purchase, but
18only if the retailer or serviceman reports the Manufacturer's
19Purchase Credit claimed as required by the Department. A
20Manufacturer's Purchase Credit reported on any original or
21amended return filed under this Act after October 20, 2003
22shall be disallowed. The Manufacturer's Purchase Credit earned
23by purchase of exempt manufacturing machinery and equipment or
24graphic arts machinery and equipment is a non-transferable
25credit. A manufacturer or graphic arts producer that enters
26into a contract involving the installation of tangible personal

 

 

HB3673- 21 -LRB100 10839 HLH 21073 b

1property into real estate within a manufacturing or graphic
2arts production facility may, prior to October 1, 2003,
3authorize a construction contractor to utilize credit
4accumulated by the manufacturer or graphic arts producer to
5purchase the tangible personal property. A manufacturer or
6graphic arts producer intending to use accumulated credit to
7purchase such tangible personal property shall execute a
8written contract authorizing the contractor to utilize a
9specified dollar amount of credit. The contractor shall
10furnish, prior to October 1, 2003, the supplier with the
11manufacturer's or graphic arts producer's name, registration
12or resale number, and a statement that a specific amount of the
13Use Tax or Service Use Tax liability, not to exceed 6.25% of
14the selling price, is being satisfied with the credit. The
15manufacturer or graphic arts producer shall remain liable to
16timely report all information required by the annual Report of
17Manufacturer's Purchase Credit Used for all credit utilized by
18a construction contractor.
19    No Manufacturer's Purchase Credit earned prior to July 1,
202003 may be used after October 1, 2003. The Manufacturer's
21Purchase Credit may be used to satisfy liability under the Use
22Tax Act or the Service Use Tax Act due on the purchase of
23production related tangible personal property (including
24purchases by a manufacturer, by a graphic arts producer, or by
25a lessor who rents or leases the use of the property to a
26manufacturer or graphic arts producer) that does not otherwise

 

 

HB3673- 22 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 23 -LRB100 10839 HLH 21073 b

1personal property" does not include (i) tangible personal
2property used, within or without a manufacturing facility, in
3sales, purchasing, accounting, fiscal management, marketing,
4personnel recruitment or selection, or landscaping or (ii)
5tangible personal property required to be titled or registered
6with a department, agency, or unit of federal, state, or local
7government. The Manufacturer's Purchase Credit may be used,
8prior to October 1, 2003, to satisfy the tax arising either
9from the purchase of machinery and equipment on or after
10January 1, 1995 for which the exemption provided by paragraph
11(18) of Section 3-5 of this Act was erroneously claimed, or the
12purchase of machinery and equipment on or after July 1, 1996
13for which the exemption provided by paragraph (6) of Section
143-5 of this Act was erroneously claimed, but not in
15satisfaction of penalty, if any, and interest for failure to
16pay the tax when due. A purchaser of production related
17tangible personal property who is required to pay Illinois Use
18Tax or Service Use Tax on the purchase directly to the
19Department may, prior to October 1, 2003, utilize the
20Manufacturer's Purchase Credit in satisfaction of the tax
21arising from that purchase, but not in satisfaction of penalty
22and interest. A purchaser who uses the Manufacturer's Purchase
23Credit to purchase property which is later determined not to be
24production related tangible personal property may be liable for
25tax, penalty, and interest on the purchase of that property as
26of the date of purchase but shall be entitled to use the

 

 

HB3673- 24 -LRB100 10839 HLH 21073 b

1disallowed Manufacturer's Purchase Credit, so long as it has
2not expired and is used prior to October 1, 2003, on qualifying
3purchases of production related tangible personal property not
4previously subject to credit usage. The Manufacturer's
5Purchase Credit earned by a manufacturer or graphic arts
6producer expires the last day of the second calendar year
7following the calendar year in which the credit arose. No
8Manufacturer's Purchase Credit may be used after September 30,
92003 regardless of when that credit was earned.
10    A purchaser earning Manufacturer's Purchase Credit shall
11sign and file an annual Report of Manufacturer's Purchase
12Credit Earned for each calendar year no later than the last day
13of the sixth month following the calendar year in which a
14Manufacturer's Purchase Credit is earned. A Report of
15Manufacturer's Purchase Credit Earned shall be filed on forms
16as prescribed or approved by the Department and shall state,
17for each month of the calendar year: (i) the total purchase
18price of all purchases of exempt manufacturing or graphic arts
19machinery on which the credit was earned; (ii) the total State
20Use Tax or Service Use Tax which would have been due on those
21items; (iii) the percentage used to calculate the amount of
22credit earned; (iv) the amount of credit earned; and (v) such
23other information as the Department may reasonably require. A
24purchaser earning Manufacturer's Purchase Credit shall
25maintain records which identify, as to each purchase of
26manufacturing or graphic arts machinery and equipment on which

 

 

HB3673- 25 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 26 -LRB100 10839 HLH 21073 b

1    No annual report shall be filed before May 1, 1996 or after
2June 30, 2004. A purchaser that fails to file an annual Report
3of Manufacturer's Purchase Credit Earned or an annual Report of
4Manufacturer's Purchase Credit Used by the last day of the
5sixth month following the end of the calendar year shall
6forfeit all Manufacturer's Purchase Credit for that calendar
7year unless it establishes that its failure to file was due to
8reasonable cause. Manufacturer's Purchase Credit reports may
9be amended to report and claim credit on qualifying purchases
10not previously reported at any time before the credit would
11have expired, unless both the Department and the purchaser have
12agreed to an extension of the statute of limitations for the
13issuance of a notice of tax liability as provided in Section 4
14of the Retailers' Occupation Tax Act. If the time for
15assessment or refund has been extended, then amended reports
16for a calendar year may be filed at any time prior to the date
17to which the statute of limitations for the calendar year or
18portion thereof has been extended. No Manufacturer's Purchase
19Credit report filed with the Department for periods prior to
20January 1, 1995 shall be approved. Manufacturer's Purchase
21Credit claimed on an amended report may be used, until October
221, 2003, to satisfy tax liability under the Use Tax Act or the
23Service Use Tax Act (i) on qualifying purchases of production
24related tangible personal property made after the date the
25amended report is filed or (ii) assessed by the Department on
26qualifying purchases of production related tangible personal

 

 

HB3673- 27 -LRB100 10839 HLH 21073 b

1property made in the case of manufacturers on or after January
21, 1995, or in the case of graphic arts producers on or after
3July 1, 1996.
4    If the purchaser is not the manufacturer or a graphic arts
5producer, but rents or leases the use of the property to a
6manufacturer or graphic arts producer, the purchaser may earn,
7report, and use Manufacturer's Purchase Credit in the same
8manner as a manufacturer or graphic arts producer.
9    A purchaser shall not be entitled to any Manufacturer's
10Purchase Credit for a purchase that is required to be reported
11and is not timely reported as provided in this Section. A
12purchaser remains liable for (i) any tax that was satisfied by
13use of a Manufacturer's Purchase Credit, as of the date of
14purchase, if that use is not timely reported as required in
15this Section and (ii) for any applicable penalties and interest
16for failing to pay the tax when due. No Manufacturer's Purchase
17Credit may be used after September 30, 2003 to satisfy any tax
18liability imposed under this Act, including any audit
19liability.
20    (b) Manufacturer's Purchase Credit earned on and after
21September 1, 2004. This subsection (b) applies to
22Manufacturer's Purchase Credit earned on and after September 1,
232004. Manufacturer's Purchase Credit earned on or after
24September 1, 2004 may only be used to satisfy the Use Tax or
25Service Use Tax liability incurred on production related
26tangible personal property purchased on or after September 1,

 

 

HB3673- 28 -LRB100 10839 HLH 21073 b

12004. A purchaser of production related tangible personal
2property desiring to use the Manufacturer's Purchase Credit
3shall certify to the seller that the purchaser is satisfying
4all or part of the liability under the Use Tax Act or the
5Service Use Tax Act that is due on the purchase of the
6production related tangible personal property by use of
7Manufacturer's Purchase Credit. The Manufacturer's Purchase
8Credit certification must be dated and shall include the name
9and address of the purchaser, the purchaser's registration
10number, if registered, the credit being applied, and a
11statement that the State Use Tax or Service Use Tax liability
12is being satisfied with the manufacturer's or graphic arts
13producer's accumulated purchase credit. Certification may be
14incorporated into the manufacturer's or graphic arts
15producer's purchase order. Manufacturer's Purchase Credit
16certification provided by the manufacturer or graphic arts
17producer may be used to satisfy the retailer's or serviceman's
18liability under the Retailers' Occupation Tax Act or Service
19Occupation Tax Act for the credit claimed, not to exceed 6.25%
20of the receipts subject to tax from a qualifying purchase, but
21only if the retailer or serviceman reports the Manufacturer's
22Purchase Credit claimed as required by the Department. The
23Manufacturer's Purchase Credit earned by purchase of exempt
24manufacturing machinery and equipment or graphic arts
25machinery and equipment is a non-transferable credit. A
26manufacturer or graphic arts producer that enters into a

 

 

HB3673- 29 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 30 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 31 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 32 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 33 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 34 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 35 -LRB100 10839 HLH 21073 b

1that is required to be reported and is not timely reported as
2provided in this Section. A purchaser remains liable for (i)
3any tax that was satisfied by use of a Manufacturer's Purchase
4Credit, as of the date of purchase, if that use is not timely
5reported as required in this Section and (ii) for any
6applicable penalties and interest for failing to pay the tax
7when due.
8    This Section is exempt from the provisions of Section 3-90.
9(Source: P.A. 96-116, eff. 7-31-09.)
 
10    Section 10. The Service Use Tax Act is amended by changing
11Sections 3-5 and 3-70 as follows:
 
12    (35 ILCS 110/3-5)
13    Sec. 3-5. Exemptions. Use of the following tangible
14personal property is exempt from the tax imposed by this Act:
15    (1) Personal property purchased from a corporation,
16society, association, foundation, institution, or
17organization, other than a limited liability company, that is
18organized and operated as a not-for-profit service enterprise
19for the benefit of persons 65 years of age or older if the
20personal property was not purchased by the enterprise for the
21purpose of resale by the enterprise.
22    (2) Personal property purchased by a non-profit Illinois
23county fair association for use in conducting, operating, or
24promoting the county fair.

 

 

HB3673- 36 -LRB100 10839 HLH 21073 b

1    (3) Personal property purchased by a not-for-profit arts or
2cultural organization that establishes, by proof required by
3the Department by rule, that it has received an exemption under
4Section 501(c)(3) of the Internal Revenue Code and that is
5organized and operated primarily for the presentation or
6support of arts or cultural programming, activities, or
7services. These organizations include, but are not limited to,
8music and dramatic arts organizations such as symphony
9orchestras and theatrical groups, arts and cultural service
10organizations, local arts councils, visual arts organizations,
11and media arts organizations. On and after the effective date
12of this amendatory Act of the 92nd General Assembly, however,
13an entity otherwise eligible for this exemption shall not make
14tax-free purchases unless it has an active identification
15number issued by the Department.
16    (4) 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    (5) Until July 1, 2003, and beginning again on September 1,
212004 through August 30, 2014, graphic arts machinery and
22equipment, including repair and replacement parts, both new and
23used, and including that manufactured on special order or
24purchased for lease, certified by the purchaser to be used
25primarily for graphic arts production. Equipment includes
26chemicals or chemicals acting as catalysts but only if the

 

 

HB3673- 37 -LRB100 10839 HLH 21073 b

1chemicals or chemicals acting as catalysts effect a direct and
2immediate change upon a graphic arts product. This item (5) is
3exempt from the provisions of Section 3-75.
4    (6) Personal property purchased from a teacher-sponsored
5student organization affiliated with an elementary or
6secondary school located in Illinois.
7    (7) Farm machinery and equipment, both new and used,
8including that manufactured on special order, certified by the
9purchaser to be used primarily for production agriculture or
10State or federal agricultural programs, including individual
11replacement parts for the machinery and equipment, including
12machinery and equipment purchased for lease, and including
13implements of husbandry defined in Section 1-130 of the
14Illinois Vehicle Code, farm machinery and agricultural
15chemical and fertilizer spreaders, and nurse wagons required to
16be registered under Section 3-809 of the Illinois Vehicle Code,
17but excluding other motor vehicles required to be registered
18under the Illinois Vehicle Code. Horticultural polyhouses or
19hoop houses used for propagating, growing, or overwintering
20plants shall be considered farm machinery and equipment under
21this item (7). Agricultural chemical tender tanks and dry boxes
22shall include units sold separately from a motor vehicle
23required to be licensed and units sold mounted on a motor
24vehicle required to be licensed if the selling price of the
25tender is separately stated.
26    Farm machinery and equipment shall include precision

 

 

HB3673- 38 -LRB100 10839 HLH 21073 b

1farming equipment that is installed or purchased to be
2installed on farm machinery and equipment including, but not
3limited to, tractors, harvesters, sprayers, planters, seeders,
4or spreaders. Precision farming equipment includes, but is not
5limited to, soil testing sensors, computers, monitors,
6software, global positioning and mapping systems, and other
7such equipment.
8    Farm machinery and equipment also includes computers,
9sensors, software, and related equipment used primarily in the
10computer-assisted operation of production agriculture
11facilities, equipment, and activities such as, but not limited
12to, the collection, monitoring, and correlation of animal and
13crop data for the purpose of formulating animal diets and
14agricultural chemicals. This item (7) is exempt from the
15provisions of Section 3-75.
16    (8) Until June 30, 2013, fuel and petroleum products sold
17to or used by an air common carrier, certified by the carrier
18to be used for consumption, shipment, or storage in the conduct
19of its business as an air common carrier, for a flight destined
20for or returning from a location or locations outside the
21United States without regard to previous or subsequent domestic
22stopovers.
23    Beginning July 1, 2013, fuel and petroleum products sold to
24or used by an air carrier, certified by the carrier to be used
25for consumption, shipment, or storage in the conduct of its
26business as an air common carrier, for a flight that (i) is

 

 

HB3673- 39 -LRB100 10839 HLH 21073 b

1engaged in foreign trade or is engaged in trade between the
2United States and any of its possessions and (ii) transports at
3least one individual or package for hire from the city of
4origination to the city of final destination on the same
5aircraft, without regard to a change in the flight number of
6that aircraft.
7    (9) Proceeds of mandatory service charges separately
8stated on customers' bills for the purchase and consumption of
9food and beverages acquired as an incident to the purchase of a
10service from a serviceman, to the extent that the proceeds of
11the service charge are in fact turned over as tips or as a
12substitute for tips to the employees who participate directly
13in preparing, serving, hosting or cleaning up the food or
14beverage function with respect to which the service charge is
15imposed.
16    (10) Until July 1, 2003, oil field exploration, drilling,
17and production equipment, including (i) rigs and parts of rigs,
18rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
19tubular goods, including casing and drill strings, (iii) pumps
20and pump-jack units, (iv) storage tanks and flow lines, (v) any
21individual replacement part for oil field exploration,
22drilling, and production equipment, and (vi) machinery and
23equipment purchased for lease; but excluding motor vehicles
24required to be registered under the Illinois Vehicle Code.
25    (11) Proceeds from the sale of photoprocessing machinery
26and equipment, including repair and replacement parts, both new

 

 

HB3673- 40 -LRB100 10839 HLH 21073 b

1and used, including that manufactured on special order,
2certified by the purchaser to be used primarily for
3photoprocessing, and including photoprocessing machinery and
4equipment purchased for lease.
5    (12) Coal and aggregate exploration, mining, off-highway
6hauling, processing, maintenance, and reclamation equipment,
7including replacement parts and equipment, and including
8equipment purchased for lease, but excluding motor vehicles
9required to be registered under the Illinois Vehicle Code. The
10changes made to this Section by Public Act 97-767 apply on and
11after July 1, 2003, but no claim for credit or refund is
12allowed on or after August 16, 2013 (the effective date of
13Public Act 98-456) for such taxes paid during the period
14beginning July 1, 2003 and ending on August 16, 2013 (the
15effective date of Public Act 98-456).
16    (13) Semen used for artificial insemination of livestock
17for direct agricultural production.
18    (14) Horses, or interests in horses, registered with and
19meeting the requirements of any of the Arabian Horse Club
20Registry of America, Appaloosa Horse Club, American Quarter
21Horse Association, United States Trotting Association, or
22Jockey Club, as appropriate, used for purposes of breeding or
23racing for prizes. This item (14) is exempt from the provisions
24of Section 3-75, and the exemption provided for under this item
25(14) applies for all periods beginning May 30, 1995, but no
26claim for credit or refund is allowed on or after the effective

 

 

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1date of this amendatory Act of the 95th General Assembly for
2such taxes paid during the period beginning May 30, 2000 and
3ending on the effective date of this amendatory Act of the 95th
4General Assembly.
5    (15) Computers and communications equipment utilized for
6any hospital purpose and equipment used in the diagnosis,
7analysis, or treatment of hospital patients purchased by a
8lessor who leases the equipment, under a lease of one year or
9longer executed or in effect at the time the lessor would
10otherwise be subject to the tax imposed by this Act, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of the
13Retailers' Occupation Tax Act. If the equipment is leased in a
14manner that does not qualify for this exemption or is used in
15any other non-exempt manner, the lessor shall be liable for the
16tax imposed under this Act or the Use Tax Act, as the case may
17be, based on the fair market value of the property at the time
18the non-qualifying use occurs. No lessor shall collect or
19attempt to collect an amount (however designated) that purports
20to reimburse that lessor for the tax imposed by this Act or the
21Use Tax Act, as the case may be, if the tax has not been paid by
22the lessor. If a lessor improperly collects any such amount
23from the lessee, the lessee shall have a legal right to claim a
24refund of that amount from the lessor. If, however, that amount
25is not refunded to the lessee for any reason, the lessor is
26liable to pay that amount to the Department.

 

 

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1    (16) Personal property purchased by a lessor who leases the
2property, under a lease of one year or longer executed or in
3effect at the time the lessor would otherwise be subject to the
4tax imposed by this Act, to a governmental body that has been
5issued an active tax exemption identification number by the
6Department under Section 1g of the Retailers' Occupation Tax
7Act. If the property is leased in a manner that does not
8qualify for this exemption or is used in any other non-exempt
9manner, the lessor shall be liable for the tax imposed under
10this Act or the Use Tax Act, as the case may be, based on the
11fair market value of the property at the time the
12non-qualifying use occurs. No lessor shall collect or attempt
13to collect an amount (however designated) that purports to
14reimburse that lessor for the tax imposed by this Act or the
15Use Tax Act, as the case may be, if the tax has not been paid by
16the lessor. If a lessor improperly collects any such amount
17from the lessee, the lessee shall have a legal right to claim a
18refund of that amount from the lessor. If, however, that amount
19is not refunded to the lessee for any reason, the lessor is
20liable to pay that amount to the Department.
21    (17) 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 for
24disaster 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    (18) 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 the
8performance of infrastructure repairs in this State, including
9but not limited to municipal roads and streets, access roads,
10bridges, sidewalks, waste disposal systems, water and sewer
11line extensions, water distribution and purification
12facilities, storm water drainage and retention facilities, and
13sewage treatment facilities, resulting from a State or
14federally declared disaster in Illinois or bordering Illinois
15when such repairs are initiated on facilities located in the
16declared disaster area within 6 months after the disaster.
17    (19) Beginning July 1, 1999, game or game birds purchased
18at a "game breeding and hunting preserve area" as that term is
19used in the Wildlife Code. This paragraph is exempt from the
20provisions of Section 3-75.
21    (20) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the Department
25to be organized and operated exclusively for educational
26purposes. For purposes of this exemption, "a corporation,

 

 

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1limited liability company, society, association, foundation,
2or institution organized and operated exclusively for
3educational purposes" means all tax-supported public schools,
4private schools that offer systematic instruction in useful
5branches of learning by methods common to public schools and
6that compare favorably in their scope and intensity with the
7course of study presented in tax-supported schools, and
8vocational or technical schools or institutes organized and
9operated exclusively to provide a course of study of not less
10than 6 weeks duration and designed to prepare individuals to
11follow a trade or to pursue a manual, technical, mechanical,
12industrial, business, or commercial occupation.
13    (21) Beginning January 1, 2000, personal property,
14including food, purchased through fundraising events for the
15benefit of a public or private elementary or secondary school,
16a group of those schools, or one or more school districts if
17the events are sponsored by an entity recognized by the school
18district that consists primarily of volunteers and includes
19parents and teachers of the school children. This paragraph
20does not apply to fundraising events (i) for the benefit of
21private home instruction or (ii) for which the fundraising
22entity purchases the personal property sold at the events from
23another individual or entity that sold the property for the
24purpose of resale by the fundraising entity and that profits
25from the sale to the fundraising entity. This paragraph is
26exempt from the provisions of Section 3-75.

 

 

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1    (22) Beginning January 1, 2000 and through December 31,
22001, new or used automatic vending machines that prepare and
3serve hot food and beverages, including coffee, soup, and other
4items, and replacement parts for these machines. Beginning
5January 1, 2002 and through June 30, 2003, machines and parts
6for machines used in commercial, coin-operated amusement and
7vending business if a use or occupation tax is paid on the
8gross receipts derived from the use of the commercial,
9coin-operated amusement and vending machines. This paragraph
10is exempt from the provisions of Section 3-75.
11    (23) Beginning August 23, 2001 and through June 30, 2016,
12food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages, soft
14drinks, and food that has been prepared for immediate
15consumption) and prescription and nonprescription medicines,
16drugs, medical appliances, and insulin, urine testing
17materials, syringes, and needles used by diabetics, for human
18use, when purchased for use by a person receiving medical
19assistance under Article V of the Illinois Public Aid Code who
20resides in a licensed long-term care facility, as defined in
21the Nursing Home Care Act, or in a licensed facility as defined
22in the ID/DD Community Care Act, the MC/DD Act, or the
23Specialized Mental Health Rehabilitation Act of 2013.
24    (24) Beginning on the effective date of this amendatory Act
25of the 92nd General Assembly, computers and communications
26equipment utilized for any hospital purpose and equipment used

 

 

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1in the diagnosis, analysis, or treatment of hospital patients
2purchased by a lessor who leases the equipment, under a lease
3of one year or longer executed or in effect at the time the
4lessor would otherwise be subject to the tax imposed by this
5Act, to a hospital that has been issued an active tax exemption
6identification number by the Department under Section 1g of the
7Retailers' Occupation Tax Act. If the equipment is leased in a
8manner that does not qualify for this exemption or is used in
9any other nonexempt manner, the lessor shall be liable for the
10tax imposed under this Act or the Use Tax Act, as the case may
11be, based on the fair market value of the property at the time
12the nonqualifying use occurs. No lessor shall collect or
13attempt to collect an amount (however designated) that purports
14to reimburse that lessor for the tax imposed by this Act or the
15Use Tax Act, as the case may be, if the tax has not been paid by
16the lessor. If a lessor improperly collects any such amount
17from the lessee, the lessee shall have a legal right to claim a
18refund of that amount from the lessor. If, however, that amount
19is not refunded to the lessee for any reason, the lessor is
20liable to pay that amount to the Department. This paragraph is
21exempt from the provisions of Section 3-75.
22    (25) Beginning on the effective date of this amendatory Act
23of the 92nd General Assembly, personal property purchased by a
24lessor who leases the property, under a lease of one year or
25longer executed or in effect at the time the lessor would
26otherwise be subject to the tax imposed by this Act, 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 the
3Retailers' Occupation Tax Act. If the property is leased in a
4manner that does not qualify for this exemption or is used in
5any other nonexempt manner, the lessor shall be liable for the
6tax imposed under this Act or the Use Tax Act, as the case may
7be, based on the fair market value of the property at the time
8the nonqualifying use occurs. No lessor shall collect or
9attempt to collect an amount (however designated) that purports
10to reimburse that lessor for the tax imposed by this Act or the
11Use Tax Act, as the case may be, if the tax has not been paid by
12the lessor. If a lessor improperly collects any such amount
13from the lessee, the lessee shall have a legal right to claim a
14refund of that amount from the lessor. If, however, that amount
15is not refunded to the lessee for any reason, the lessor is
16liable to pay that amount to the Department. This paragraph is
17exempt from the provisions of Section 3-75.
18    (26) 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 under
23Title IV of the Environmental Protection Act. This paragraph is
24exempt from the provisions of Section 3-75.
25    (27) Beginning January 1, 2010, materials, parts,
26equipment, components, and furnishings incorporated into or

 

 

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1upon an aircraft as part of the modification, refurbishment,
2completion, replacement, repair, or maintenance of the
3aircraft. This exemption includes consumable supplies used in
4the modification, refurbishment, completion, replacement,
5repair, and maintenance of aircraft, but excludes any
6materials, parts, equipment, components, and consumable
7supplies used in the modification, replacement, repair, and
8maintenance of aircraft engines or power plants, whether such
9engines or power plants are installed or uninstalled upon any
10such aircraft. "Consumable supplies" include, but are not
11limited to, adhesive, tape, sandpaper, general purpose
12lubricants, cleaning solution, latex gloves, and protective
13films. This exemption applies only to the use of qualifying
14tangible personal property transferred incident to the
15modification, refurbishment, completion, replacement, repair,
16or maintenance of aircraft by persons 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 129
24of the Federal Aviation Regulations. The changes made to this
25paragraph (27) by Public Act 98-534 are declarative of existing
26law.

 

 

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1    (28) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt instruments
10issued by the public-facilities corporation in connection with
11the development of the municipal convention hall. This
12exemption includes existing public-facilities corporations as
13provided in Section 11-65-25 of the Illinois Municipal Code.
14This paragraph is exempt from the provisions of Section 3-75.
15    (29) Beginning January 1, 2017, menstrual pads, tampons,
16and menstrual cups.
17(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1898-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
197-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
20    (35 ILCS 110/3-70)
21    Sec. 3-70. Manufacturer's Purchase Credit. For purchases
22of machinery and equipment made on and after January 1, 1995
23and through June 30, 2003, and on and after September 1, 2004
24through August 30, 2014, and on and after January 1, 2017, a
25purchaser of manufacturing machinery and equipment that

 

 

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1qualifies for the exemption provided by Section 2 of this Act
2earns a credit in an amount equal to a fixed percentage of the
3tax which would have been incurred under this Act on those
4purchases. For purchases of graphic arts machinery and
5equipment made on or after July 1, 1996 through June 30, 2003,
6and on and after September 1, 2004 through August 30, 2014, and
7on and after January 1, 2017, a purchase of graphic arts
8machinery and equipment that qualifies for the exemption
9provided by paragraph (5) of Section 3-5 of this Act earns a
10credit in an amount equal to a fixed percentage of the tax that
11would have been incurred under this Act on those purchases. The
12credit earned for the purchase of manufacturing machinery and
13equipment and graphic arts machinery and equipment shall be
14referred to as the Manufacturer's Purchase Credit. A graphic
15arts producer is a person engaged in graphic arts production as
16defined in Section 3-30 of the Service Occupation Tax Act.
17Beginning July 1, 1996, all references in this Section to
18manufacturers or manufacturing shall also refer to graphic arts
19producers or graphic arts production.
20    The amount of credit shall be a percentage of the tax that
21would have been incurred on the purchase of the manufacturing
22machinery and equipment or graphic arts machinery and equipment
23if the exemptions provided by Section 2 or paragraph (5) of
24Section 3-5 of this Act had not been applicable.
25    All purchases prior to October 1, 2003 of manufacturing
26machinery and equipment and graphic arts machinery and

 

 

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1equipment that qualify for the exemptions provided by paragraph
2(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
3qualify for the credit without regard to whether the serviceman
4elected, or could have elected, under paragraph (7) of Section
52 of this Act to exclude the transaction from this Act. If the
6serviceman's billing to the service customer separately states
7a selling price for the exempt manufacturing machinery or
8equipment or the exempt graphic arts machinery and equipment,
9the credit shall be calculated, as otherwise provided herein,
10based on that selling price. If the serviceman's billing does
11not separately state a selling price for the exempt
12manufacturing machinery and equipment or the exempt graphic
13arts machinery and equipment, the credit shall be calculated,
14as otherwise provided herein, based on 50% of the entire
15billing. If the serviceman contracts to design, develop, and
16produce special order manufacturing machinery and equipment or
17special order graphic arts machinery and equipment, and the
18billing does not separately state a selling price for such
19special order machinery and equipment, the credit shall be
20calculated, as otherwise provided herein, based on 50% of the
21entire billing. The provisions of this paragraph are effective
22for purchases made on or after January 1, 1995.
23    The percentage shall be as follows:
24        (1) 15% for purchases made on or before June 30, 1995.
25        (2) 25% for purchases made after June 30, 1995, and on
26    or before June 30, 1996.

 

 

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

 

 

HB3673- 53 -LRB100 10839 HLH 21073 b

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

 

 

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

 

 

HB3673- 55 -LRB100 10839 HLH 21073 b

1for incorporation into real estate within a graphic arts
2facility and including, but not limited to, all tangible
3personal property used or consumed in activities such as
4graphic arts preliminary or pre-press production,
5pre-production material handling, receiving, quality control,
6inventory control, storage, staging, sorting, labeling,
7mailing, tying, wrapping, and packaging; and (iii) all tangible
8personal property used or consumed by the purchaser for
9research and development. "Production related tangible
10personal property" does not include (i) tangible personal
11property used, within or without a manufacturing or graphic
12arts facility, in sales, purchasing, accounting, fiscal
13management, marketing, personnel recruitment or selection, or
14landscaping or (ii) tangible personal property required to be
15titled or registered with a department, agency, or unit of
16federal, state, or local government. The Manufacturer's
17Purchase Credit may be used, prior to October 1, 2003, to
18satisfy the tax arising either from the purchase of machinery
19and equipment on or after January 1, 1995 for which the
20manufacturing machinery and equipment exemption provided by
21Section 2 of this Act was erroneously claimed, or the purchase
22of machinery and equipment on or after July 1, 1996 for which
23the exemption provided by paragraph (5) of Section 3-5 of this
24Act was erroneously claimed, but not in satisfaction of
25penalty, if any, and interest for failure to pay the tax when
26due. A purchaser of production related tangible personal

 

 

HB3673- 56 -LRB100 10839 HLH 21073 b

1property who is required to pay Illinois Use Tax or Service Use
2Tax on the purchase directly to the Department may, prior to
3October 1, 2003, utilize the Manufacturer's Purchase Credit in
4satisfaction of the tax arising from that purchase, but not in
5satisfaction of penalty and interest. A purchaser who uses the
6Manufacturer's Purchase Credit to purchase property which is
7later determined not to be production related tangible personal
8property may be liable for tax, penalty, and interest on the
9purchase of that property as of the date of purchase but shall
10be entitled to use the disallowed Manufacturer's Purchase
11Credit, so long as it has not expired and is used prior to
12October 1, 2003, on qualifying purchases of production related
13tangible personal property not previously subject to credit
14usage. The Manufacturer's Purchase Credit earned by a
15manufacturer or graphic arts producer expires the last day of
16the second calendar year following the calendar year in which
17the credit arose. No Manufacturer's Purchase Credit may be used
18after September 30, 2003 regardless of when that credit was
19earned.
20    A purchaser earning Manufacturer's Purchase Credit shall
21sign and file an annual Report of Manufacturer's Purchase
22Credit Earned for each calendar year no later than the last day
23of the sixth month following the calendar year in which a
24Manufacturer's Purchase Credit is earned. A Report of
25Manufacturer's Purchase Credit Earned shall be filed on forms
26as prescribed or approved by the Department and shall state,

 

 

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

 

 

HB3673- 58 -LRB100 10839 HLH 21073 b

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

 

 

HB3673- 59 -LRB100 10839 HLH 21073 b

1to which the statute of limitations for the calendar year or
2portion thereof has been extended. No Manufacturer's Purchase
3Credit report filed with the Department for periods prior to
4January 1, 1995 shall be approved. Manufacturer's Purchase
5Credit claimed on an amended report may be used, prior to
6October 1, 2003, to satisfy tax liability under the Use Tax Act
7or the Service Use Tax Act (i) on qualifying purchases of
8production related tangible personal property made after the
9date the amended report is filed or (ii) assessed by the
10Department on qualifying purchases of production related
11tangible personal property made in the case of manufacturers on
12or after January 1, 1995, or in the case of graphic arts
13producers on or after July 1, 1996.
14    If the purchaser is not the manufacturer or a graphic arts
15producer, but rents or leases the use of the property to a
16manufacturer or a graphic arts producer, the purchaser may
17earn, report, and use Manufacturer's Purchase Credit in the
18same manner as a manufacturer or graphic arts producer.
19    A purchaser shall not be entitled to any Manufacturer's
20Purchase Credit for a purchase that is required to be reported
21and is not timely reported as provided in this Section. A
22purchaser remains liable for (i) any tax that was satisfied by
23use of a Manufacturer's Purchase Credit, as of the date of
24purchase, if that use is not timely reported as required in
25this Section and (ii) for any applicable penalties and interest
26for failing to pay the tax when due. No Manufacturer's Purchase

 

 

HB3673- 60 -LRB100 10839 HLH 21073 b

1Credit may be used after September 30, 2003 to satisfy any tax
2liability imposed under this Act, including any audit
3liability.
4    (b) Manufacturer's Purchase Credit earned on and after
5September 1, 2004. This subsection (b) applies to
6Manufacturer's Purchase Credit earned on or after September 1,
72004. Manufacturer's Purchase Credit earned on or after
8September 1, 2004 may only be used to satisfy the Use Tax or
9Service Use Tax liability incurred on production related
10tangible personal property purchased on or after September 1,
112004. A purchaser of production related tangible personal
12property desiring to use the Manufacturer's Purchase Credit
13shall certify to the seller that the purchaser is satisfying
14all or part of the liability under the Use Tax Act or the
15Service Use Tax Act that is due on the purchase of the
16production related tangible personal property by use of a
17Manufacturer's Purchase Credit. The Manufacturer's Purchase
18Credit certification must be dated and shall include the name
19and address of the purchaser, the purchaser's registration
20number, if registered, the credit being applied, and a
21statement that the State Use Tax or Service Use Tax liability
22is being satisfied with the manufacturer's or graphic arts
23producer's accumulated purchase credit. Certification may be
24incorporated into the manufacturer's or graphic arts
25producer's purchase order. Manufacturer's Purchase Credit
26certification provided by the manufacturer or graphic arts

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1liability under the Use Tax Act or the Service Use Tax Act (i)
2on qualifying purchases of production related tangible
3personal property made after the date the amended report is
4filed or (ii) assessed by the Department on qualifying
5production related tangible personal property purchased on or
6after September 1, 2004.
7    If the purchaser is not the manufacturer or a graphic arts
8producer, but rents or leases the use of the property to a
9manufacturer or a graphic arts producer, the purchaser may
10earn, report, and use Manufacturer's Purchase Credit in the
11same manner as a manufacturer or graphic arts producer. A
12purchaser shall not be entitled to any Manufacturer's Purchase
13Credit for a purchase that is required to be reported and is
14not timely reported as provided in this Section. A purchaser
15remains liable for (i) any tax that was satisfied by use of a
16Manufacturer's Purchase Credit, as of the date of purchase, if
17that use is not timely reported as required in this Section and
18(ii) for any applicable penalties and interest for failing to
19pay the tax when due.
20    This Section is exempt from the provisions of Section 3-75.
21(Source: P.A. 96-116, eff. 7-31-09.)
 
22    Section 15. The Service Occupation Tax Act is amended by
23changing Section 3-5 as follows:
 
24    (35 ILCS 115/3-5)

 

 

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

 

 

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1number issued by the Department.
2    (4) Legal tender, currency, medallions, or gold or silver
3coinage issued by the State of Illinois, the government of the
4United States of America, or the government of any foreign
5country, and bullion.
6    (5) Until July 1, 2003, and beginning again on September 1,
72004 through August 30, 2014, and beginning again on January 1,
82017, graphic arts machinery and equipment, including repair
9and replacement parts, both new and used, and including that
10manufactured on special order or purchased for lease, certified
11by the purchaser to be used primarily for graphic arts
12production. Equipment includes chemicals or chemicals acting
13as catalysts but only if the chemicals or chemicals acting as
14catalysts effect a direct and immediate change upon a graphic
15arts product. and beginning again on January 1, 2017,
16    (6) Personal property sold by a teacher-sponsored student
17organization affiliated with an elementary or secondary school
18located in Illinois.
19    (7) Farm machinery and equipment, both new and used,
20including that manufactured on special order, certified by the
21purchaser to be used primarily for production agriculture or
22State or federal agricultural programs, including individual
23replacement parts for the machinery and equipment, including
24machinery and equipment purchased for lease, and including
25implements of husbandry defined in Section 1-130 of the
26Illinois Vehicle Code, farm machinery and agricultural

 

 

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

 

 

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1provisions of Section 3-55.
2    (8) Until June 30, 2013, fuel and petroleum products sold
3to or used by an air common carrier, certified by the carrier
4to be used for consumption, shipment, or storage in the conduct
5of its business as an air common carrier, for a flight destined
6for or returning from a location or locations outside the
7United States without regard to previous or subsequent domestic
8stopovers.
9    Beginning July 1, 2013, fuel and petroleum products sold to
10or used by an air carrier, certified by the carrier to be used
11for consumption, shipment, or storage in the conduct of its
12business as an air common carrier, for a flight that (i) is
13engaged in foreign trade or is engaged in trade between the
14United States and any of its possessions and (ii) transports at
15least one individual or package for hire from the city of
16origination to the city of final destination on the same
17aircraft, without regard to a change in the flight number of
18that aircraft.
19    (9) Proceeds of mandatory service charges separately
20stated on customers' bills for the purchase and consumption of
21food and beverages, to the extent that the proceeds of the
22service charge are in fact turned over as tips or as a
23substitute for tips to the employees who participate directly
24in preparing, serving, hosting or cleaning up the food or
25beverage function with respect to which the service charge is
26imposed.

 

 

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

 

 

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1food for human consumption that is to be consumed off the
2premises where it is sold (other than alcoholic beverages, soft
3drinks and food that has been prepared for immediate
4consumption) and prescription and non-prescription medicines,
5drugs, medical appliances, and insulin, urine testing
6materials, syringes, and needles used by diabetics, for human
7use, when purchased for use by a person receiving medical
8assistance under Article V of the Illinois Public Aid Code who
9resides in a licensed long-term care facility, as defined in
10the Nursing Home Care Act, or in a licensed facility as defined
11in the ID/DD Community Care Act, the MC/DD Act, or the
12Specialized Mental Health Rehabilitation Act of 2013.
13    (14) Semen used for artificial insemination of livestock
14for direct agricultural production.
15    (15) Horses, or interests in horses, registered with and
16meeting the requirements of any of the Arabian Horse Club
17Registry of America, Appaloosa Horse Club, American Quarter
18Horse Association, United States Trotting Association, or
19Jockey Club, as appropriate, used for purposes of breeding or
20racing for prizes. This item (15) is exempt from the provisions
21of Section 3-55, and the exemption provided for under this item
22(15) applies for all periods beginning May 30, 1995, but no
23claim for credit or refund is allowed on or after January 1,
242008 (the effective date of Public Act 95-88) for such taxes
25paid during the period beginning May 30, 2000 and ending on
26January 1, 2008 (the effective date of Public Act 95-88).

 

 

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

 

 

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1before December 31, 2004, personal property that is used in the
2performance of infrastructure repairs in this State, including
3but not limited to municipal roads and streets, access roads,
4bridges, sidewalks, waste disposal systems, water and sewer
5line extensions, water distribution and purification
6facilities, storm water drainage and retention facilities, and
7sewage treatment facilities, resulting from a State or
8federally declared disaster in Illinois or bordering Illinois
9when such repairs are initiated on facilities located in the
10declared disaster area within 6 months after the disaster.
11    (20) Beginning July 1, 1999, game or game birds sold at a
12"game breeding and hunting preserve area" as that term is used
13in the Wildlife Code. This paragraph is exempt from the
14provisions of Section 3-55.
15    (21) A motor vehicle, as that term is defined in Section
161-146 of the Illinois Vehicle Code, that is donated to a
17corporation, limited liability company, society, association,
18foundation, or institution that is determined by the Department
19to be organized and operated exclusively for educational
20purposes. For purposes of this exemption, "a corporation,
21limited liability company, society, association, foundation,
22or institution organized and operated exclusively for
23educational purposes" means all tax-supported public schools,
24private schools that offer systematic instruction in useful
25branches of learning by methods common to public schools and
26that compare favorably in their scope and intensity with the

 

 

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1course of study presented in tax-supported schools, and
2vocational or technical schools or institutes organized and
3operated exclusively to provide a course of study of not less
4than 6 weeks duration and designed to prepare individuals to
5follow a trade or to pursue a manual, technical, mechanical,
6industrial, business, or commercial occupation.
7    (22) Beginning January 1, 2000, personal property,
8including food, purchased through fundraising events for the
9benefit of a public or private elementary or secondary school,
10a group of those schools, or one or more school districts if
11the events are sponsored by an entity recognized by the school
12district that consists primarily of volunteers and includes
13parents and teachers of the school children. This paragraph
14does not apply to fundraising events (i) for the benefit of
15private home instruction or (ii) for which the fundraising
16entity purchases the personal property sold at the events from
17another individual or entity that sold the property for the
18purpose of resale by the fundraising entity and that profits
19from the sale to the fundraising entity. This paragraph is
20exempt from the provisions of Section 3-55.
21    (23) Beginning January 1, 2000 and through December 31,
222001, new or used automatic vending machines that prepare and
23serve hot food and beverages, including coffee, soup, and other
24items, and replacement parts for these machines. Beginning
25January 1, 2002 and through June 30, 2003, machines and parts
26for machines used in commercial, coin-operated amusement and

 

 

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1vending business if a use or occupation tax is paid on the
2gross receipts derived from the use of the commercial,
3coin-operated amusement and vending machines. This paragraph
4is exempt from the provisions of Section 3-55.
5    (24) Beginning on the effective date of this amendatory Act
6of the 92nd General Assembly, computers and communications
7equipment utilized for any hospital purpose and equipment used
8in the diagnosis, analysis, or treatment of hospital patients
9sold to a lessor who leases the equipment, under a lease of one
10year or longer executed or in effect at the time of the
11purchase, to a hospital that has been issued an active tax
12exemption identification number by the Department under
13Section 1g of the Retailers' Occupation Tax Act. This paragraph
14is exempt from the provisions of Section 3-55.
15    (25) Beginning on the effective date of this amendatory Act
16of the 92nd General Assembly, personal property sold to a
17lessor who leases the property, under a lease of one year or
18longer executed or in effect at the time of the purchase, to a
19governmental body that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act. This paragraph is exempt from
22the provisions of Section 3-55.
23    (26) Beginning on January 1, 2002 and through June 30,
242016, tangible personal property purchased from an Illinois
25retailer by a taxpayer engaged in centralized purchasing
26activities in Illinois who will, upon receipt of the property

 

 

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

 

 

HB3673- 79 -LRB100 10839 HLH 21073 b

1    (28) Tangible personal property sold to a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt instruments
10issued by the public-facilities corporation in connection with
11the development of the municipal convention hall. This
12exemption includes existing public-facilities corporations as
13provided in Section 11-65-25 of the Illinois Municipal Code.
14This paragraph is exempt from the provisions of Section 3-55.
15    (29) Beginning January 1, 2010, materials, parts,
16equipment, components, and furnishings incorporated into or
17upon an aircraft as part of the modification, refurbishment,
18completion, replacement, repair, or maintenance of the
19aircraft. This exemption includes consumable supplies used in
20the modification, refurbishment, completion, replacement,
21repair, and maintenance of aircraft, but excludes any
22materials, parts, equipment, components, and consumable
23supplies used in the modification, replacement, repair, and
24maintenance of aircraft engines or power plants, whether such
25engines or power plants are installed or uninstalled upon any
26such aircraft. "Consumable supplies" include, but are not

 

 

HB3673- 80 -LRB100 10839 HLH 21073 b

1limited to, adhesive, tape, sandpaper, general purpose
2lubricants, cleaning solution, latex gloves, and protective
3films. This exemption applies only to the transfer of
4qualifying tangible personal property incident to the
5modification, refurbishment, completion, replacement, repair,
6or maintenance of an aircraft by persons who (i) hold an Air
7Agency Certificate and are empowered to operate an approved
8repair station by the Federal Aviation Administration, (ii)
9have a Class IV Rating, and (iii) conduct operations in
10accordance with Part 145 of the Federal Aviation Regulations.
11The exemption does not include aircraft operated by a
12commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (29) by Public Act 98-534 are declarative of existing
16law.
17    (30) Beginning January 1, 2017, menstrual pads, tampons,
18and menstrual cups.
19(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2098-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
217-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
22    Section 20. The Retailers' Occupation Tax Act is amended by
23changing Section 2-5 as follows:
 
24    (35 ILCS 120/2-5)

 

 

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

 

 

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1limited to, tractors, harvesters, sprayers, planters, seeders,
2or spreaders. Precision farming equipment includes, but is not
3limited to, soil testing sensors, computers, monitors,
4software, global positioning and mapping systems, and other
5such equipment.
6    Farm machinery and equipment also includes computers,
7sensors, software, and related equipment used primarily in the
8computer-assisted operation of production agriculture
9facilities, equipment, and activities such as, but not limited
10to, the collection, monitoring, and correlation of animal and
11crop data for the purpose of formulating animal diets and
12agricultural chemicals. This item (2) is exempt from the
13provisions of Section 2-70.
14    (3) Until July 1, 2003, distillation machinery and
15equipment, sold as a unit or kit, assembled or installed by the
16retailer, certified by the user to be used only for the
17production of ethyl alcohol that will be used for consumption
18as motor fuel or as a component of motor fuel for the personal
19use of the user, and not subject to sale or resale.
20    (4) Until July 1, 2003, and beginning again September 1,
212004 through August 30, 2014, and beginning again on January 1,
222017, graphic arts machinery and equipment, including repair
23and replacement parts, both new and used, and including that
24manufactured on special order or purchased for lease, certified
25by the purchaser to be used primarily for graphic arts
26production. Equipment includes chemicals or chemicals acting

 

 

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

 

 

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1and media arts organizations. On and after the effective date
2of this amendatory Act of the 92nd General Assembly, however,
3an entity otherwise eligible for this exemption shall not make
4tax-free purchases unless it has an active identification
5number issued by the Department.
6    (10) Personal property sold by a corporation, society,
7association, foundation, institution, or organization, other
8than a limited liability company, that is organized and
9operated as a not-for-profit service enterprise for the benefit
10of persons 65 years of age or older if the personal property
11was not purchased by the enterprise for the purpose of resale
12by the enterprise.
13    (11) Personal property sold to a governmental body, to a
14corporation, society, association, foundation, or institution
15organized and operated exclusively for charitable, religious,
16or educational purposes, or to a not-for-profit corporation,
17society, association, foundation, institution, or organization
18that has no compensated officers or employees and that is
19organized and operated primarily for the recreation of persons
2055 years of age or older. A limited liability company may
21qualify for the exemption under this paragraph only if the
22limited liability company is organized and operated
23exclusively for educational purposes. On and after July 1,
241987, however, no entity otherwise eligible for this exemption
25shall make tax-free purchases unless it has an active
26identification number issued by the Department.

 

 

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

 

 

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

 

 

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1pipes, pipelines, or mains. The provisions of Public Act 98-583
2are declaratory of existing law as to the meaning and scope of
3this exemption.
4    (15) Proceeds of mandatory service charges separately
5stated on customers' bills for purchase and consumption of food
6and beverages, to the extent that the proceeds of the service
7charge are in fact turned over as tips or as a substitute for
8tips to the employees who participate directly in preparing,
9serving, hosting or cleaning up the food or beverage function
10with respect to which the service charge is imposed.
11    (16) Petroleum products sold to a purchaser if the seller
12is prohibited by federal law from charging tax to the
13purchaser.
14    (17) Tangible personal property sold to a common carrier by
15rail or motor that receives the physical possession of the
16property in Illinois and that transports the property, or
17shares with another common carrier in the transportation of the
18property, out of Illinois on a standard uniform bill of lading
19showing the seller of the property as the shipper or consignor
20of the property to a destination outside Illinois, for use
21outside Illinois.
22    (18) Legal tender, currency, medallions, or gold or silver
23coinage issued by the State of Illinois, the government of the
24United States of America, or the government of any foreign
25country, and bullion.
26    (19) Until July 1 2003, oil field exploration, drilling,

 

 

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1and production equipment, including (i) rigs and parts of rigs,
2rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
3tubular goods, including casing and drill strings, (iii) pumps
4and pump-jack units, (iv) storage tanks and flow lines, (v) any
5individual replacement part for oil field exploration,
6drilling, and production equipment, and (vi) machinery and
7equipment purchased for lease; but excluding motor vehicles
8required to be registered under the Illinois Vehicle Code.
9    (20) Photoprocessing machinery and equipment, including
10repair and replacement parts, both new and used, including that
11manufactured on special order, certified by the purchaser to be
12used primarily for photoprocessing, and including
13photoprocessing machinery and equipment purchased for lease.
14    (21) Coal and aggregate exploration, mining, off-highway
15hauling, processing, maintenance, and reclamation equipment,
16including replacement parts and equipment, and including
17equipment purchased for lease, but excluding motor vehicles
18required to be registered under the Illinois Vehicle Code. The
19changes made to this Section by Public Act 97-767 apply on and
20after July 1, 2003, but no claim for credit or refund is
21allowed on or after August 16, 2013 (the effective date of
22Public Act 98-456) for such taxes paid during the period
23beginning July 1, 2003 and ending on August 16, 2013 (the
24effective date of Public Act 98-456).
25    (22) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air carrier, certified by the carrier to be

 

 

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

 

 

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1motor vehicle sold in this State to a nonresident even though
2the motor vehicle is delivered to the nonresident in this
3State, if the motor vehicle is not to be titled in this State,
4and if a drive-away permit is issued to the motor vehicle as
5provided in Section 3-603 of the Illinois Vehicle Code or if
6the nonresident purchaser has vehicle registration plates to
7transfer to the motor vehicle upon returning to his or her home
8state. The issuance of the drive-away permit or having the
9out-of-state registration plates to be transferred is prima
10facie evidence that the motor vehicle will not be titled in
11this State.
12    (25-5) The exemption under item (25) does not apply if the
13state in which the motor vehicle will be titled does not allow
14a reciprocal exemption for a motor vehicle sold and delivered
15in that state to an Illinois resident but titled in Illinois.
16The tax collected under this Act on the sale of a motor vehicle
17in this State to a resident of another state that does not
18allow a reciprocal exemption shall be imposed at a rate equal
19to the state's rate of tax on taxable property in the state in
20which the purchaser is a resident, except that the tax shall
21not exceed the tax that would otherwise be imposed under this
22Act. At the time of the sale, the purchaser shall execute a
23statement, signed under penalty of perjury, of his or her
24intent to title the vehicle in the state in which the purchaser
25is a resident within 30 days after the sale and of the fact of
26the payment to the State of Illinois of tax in an amount

 

 

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

 

 

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

 

 

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1Jockey Club, as appropriate, used for purposes of breeding or
2racing for prizes. This item (27) is exempt from the provisions
3of Section 2-70, and the exemption provided for under this item
4(27) applies for all periods beginning May 30, 1995, but no
5claim for credit or refund is allowed on or after January 1,
62008 (the effective date of Public Act 95-88) for such taxes
7paid during the period beginning May 30, 2000 and ending on
8January 1, 2008 (the effective date of Public Act 95-88).
9    (28) Computers and communications equipment utilized for
10any hospital purpose and equipment used in the diagnosis,
11analysis, or treatment of hospital patients sold to a lessor
12who leases the equipment, under a lease of one year or longer
13executed or in effect at the time of the purchase, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16this Act.
17    (29) Personal property sold to a lessor who leases the
18property, under a lease of one year or longer executed or in
19effect at the time of the purchase, to a governmental body that
20has been issued an active tax exemption identification number
21by the Department under Section 1g of this Act.
22    (30) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is donated for
25disaster relief to be used in a State or federally declared
26disaster area in Illinois or bordering Illinois by a

 

 

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1manufacturer or retailer that is registered in this State to a
2corporation, society, association, foundation, or institution
3that has been issued a sales tax exemption identification
4number by the Department that assists victims of the disaster
5who reside within the declared disaster area.
6    (31) 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 used in the
9performance of infrastructure repairs in this State, including
10but not limited to municipal roads and streets, access roads,
11bridges, sidewalks, waste disposal systems, water and sewer
12line extensions, water distribution and purification
13facilities, storm water drainage and retention facilities, and
14sewage treatment facilities, resulting from a State or
15federally declared disaster in Illinois or bordering Illinois
16when such repairs are initiated on facilities located in the
17declared disaster area within 6 months after the disaster.
18    (32) 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 2-70.
22    (33) 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 Department
26to be organized and operated exclusively for educational

 

 

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

 

 

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1exempt from the provisions of Section 2-70.
2    (35) Beginning January 1, 2000 and through December 31,
32001, new or used automatic vending machines that prepare and
4serve hot food and beverages, including coffee, soup, and other
5items, and replacement parts for these machines. Beginning
6January 1, 2002 and through June 30, 2003, machines and parts
7for machines used in commercial, coin-operated amusement and
8vending business if a use or occupation tax is paid on the
9gross receipts derived from the use of the commercial,
10coin-operated amusement and vending machines. This paragraph
11is exempt from the provisions of Section 2-70.
12    (35-5) Beginning August 23, 2001 and through June 30, 2016,
13food for human consumption that is to be consumed off the
14premises where it is sold (other than alcoholic beverages, soft
15drinks, and food that has been prepared for immediate
16consumption) and prescription and nonprescription medicines,
17drugs, medical appliances, and insulin, urine testing
18materials, syringes, and needles used by diabetics, for human
19use, when purchased for use by a person receiving medical
20assistance under Article V of the Illinois Public Aid Code who
21resides in a licensed long-term care facility, as defined in
22the Nursing Home Care Act, or a licensed facility as defined in
23the ID/DD Community Care Act, the MC/DD Act, or the Specialized
24Mental Health Rehabilitation Act of 2013.
25    (36) Beginning August 2, 2001, computers and
26communications equipment utilized for any hospital purpose and

 

 

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1equipment used in the diagnosis, analysis, or treatment of
2hospital patients sold to a lessor who leases the equipment,
3under a lease of one year or longer executed or in effect at
4the time of the purchase, to a hospital that has been issued an
5active tax exemption identification number by the Department
6under Section 1g of this Act. This paragraph is exempt from the
7provisions of Section 2-70.
8    (37) Beginning August 2, 2001, personal property sold to a
9lessor who leases the property, under a lease of one year or
10longer executed or in effect at the time of the purchase, to a
11governmental body that has been issued an active tax exemption
12identification number by the Department under Section 1g of
13this Act. This paragraph is exempt from the provisions of
14Section 2-70.
15    (38) Beginning on January 1, 2002 and through June 30,
162016, tangible personal property purchased from an Illinois
17retailer by a taxpayer engaged in centralized purchasing
18activities in Illinois who will, upon receipt of the property
19in Illinois, temporarily store the property in Illinois (i) for
20the purpose of subsequently transporting it outside this State
21for use or consumption thereafter solely outside this State or
22(ii) for the purpose of being processed, fabricated, or
23manufactured into, attached to, or incorporated into other
24tangible personal property to be transported outside this State
25and thereafter used or consumed solely outside this State. The
26Director of Revenue shall, pursuant to rules adopted in

 

 

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

 

 

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1supplies used in the modification, replacement, repair, and
2maintenance of aircraft engines or power plants, whether such
3engines or power plants are installed or uninstalled upon any
4such aircraft. "Consumable supplies" include, but are not
5limited to, adhesive, tape, sandpaper, general purpose
6lubricants, cleaning solution, latex gloves, and protective
7films. This exemption applies only to the sale of qualifying
8tangible personal property to persons who modify, refurbish,
9complete, replace, or maintain an aircraft and who (i) hold an
10Air Agency Certificate and are empowered to operate an approved
11repair station by the Federal Aviation Administration, (ii)
12have a Class IV Rating, and (iii) conduct operations in
13accordance with Part 145 of the Federal Aviation Regulations.
14The exemption does not include aircraft operated by a
15commercial air carrier providing scheduled passenger air
16service pursuant to authority issued under Part 121 or Part 129
17of the Federal Aviation Regulations. The changes made to this
18paragraph (40) by Public Act 98-534 are declarative of existing
19law.
20    (41) Tangible personal property sold to a
21public-facilities corporation, as described in Section
2211-65-10 of the Illinois Municipal Code, for purposes of
23constructing or furnishing a municipal convention hall, but
24only if the legal title to the municipal convention hall is
25transferred to the municipality without any further
26consideration by or on behalf of the municipality at the time

 

 

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1of the completion of the municipal convention hall or upon the
2retirement or redemption of any bonds or other debt instruments
3issued by the public-facilities corporation in connection with
4the development of the municipal convention hall. This
5exemption includes existing public-facilities corporations as
6provided in Section 11-65-25 of the Illinois Municipal Code.
7This paragraph is exempt from the provisions of Section 2-70.
8    (42) Beginning January 1, 2017, menstrual pads, tampons,
9and menstrual cups.
10(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1198-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
121-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
137-29-15; 99-855, eff. 8-19-16.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.