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90_SB0127
35 ILCS 105/2 from Ch. 120, par. 439.2
35 ILCS 105/3-5 from Ch. 120, par. 439.3-5
35 ILCS 110/3-5 from Ch. 120, par. 439.33-5
35 ILCS 115/3-5 from Ch. 120, par. 439.103-5
35 ILCS 120/1 from Ch. 120, par. 440
35 ILCS 120/2-5 from Ch. 120, par. 441-5
Amends the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act. Exempts from the Acts the sale of books sold for use as
textbooks for courses in private or public, elementary or
secondary schools. Deletes provision stating that the
selling of schools books by schools at retail is not
"primarily for the purposes of" the school which does the
selling.
LRB9000053KRsb
LRB9000053KRsb
1 AN ACT in relation to taxes, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Use Tax Act is amended by changing
5 Sections 2 and 3-5 as follows:
6 (35 ILCS 105/2) (from Ch. 120, par. 439.2)
7 Sec. 2. "Use" means the exercise by any person of any
8 right or power over tangible personal property incident to
9 the ownership of that property, except that it does not
10 include the sale of such property in any form as tangible
11 personal property in the regular course of business to the
12 extent that such property is not first subjected to a use for
13 which it was purchased, and does not include the use of such
14 property by its owner for demonstration purposes: Provided
15 that the property purchased is deemed to be purchased for the
16 purpose of resale, despite first being used, to the extent to
17 which it is resold as an ingredient of an intentionally
18 produced product or by-product of manufacturing. "Use" does
19 not mean the demonstration use or interim use of tangible
20 personal property by a retailer before he sells that tangible
21 personal property. For watercraft or aircraft, if the period
22 of demonstration use or interim use by the retailer exceeds
23 18 months, the retailer shall pay on the retailers' original
24 cost price the tax imposed by this Act, and no credit for
25 that tax is permitted if the watercraft or aircraft is
26 subsequently sold by the retailer. "Use" does not mean the
27 physical incorporation of tangible personal property, to the
28 extent not first subjected to a use for which it was
29 purchased, as an ingredient or constituent, into other
30 tangible personal property (a) which is sold in the regular
31 course of business or (b) which the person incorporating such
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1 ingredient or constituent therein has undertaken at the time
2 of such purchase to cause to be transported in interstate
3 commerce to destinations outside the State of Illinois:
4 Provided that the property purchased is deemed to be
5 purchased for the purpose of resale, despite first being
6 used, to the extent to which it is resold as an ingredient of
7 an intentionally produced product or by-product of
8 manufacturing.
9 "Watercraft" means a Class 2, Class 3, or Class 4
10 watercraft as defined in Section 3-2 of the Boat Registration
11 and Safety Act, a personal watercraft, or any boat equipped
12 with an inboard motor.
13 "Purchase at retail" means the acquisition of the
14 ownership of or title to tangible personal property through a
15 sale at retail.
16 "Purchaser" means anyone who, through a sale at retail,
17 acquires the ownership of tangible personal property for a
18 valuable consideration.
19 "Sale at retail" means any transfer of the ownership of
20 or title to tangible personal property to a purchaser, for
21 the purpose of use, and not for the purpose of resale in any
22 form as tangible personal property to the extent not first
23 subjected to a use for which it was purchased, for a valuable
24 consideration: Provided that the property purchased is deemed
25 to be purchased for the purpose of resale, despite first
26 being used, to the extent to which it is resold as an
27 ingredient of an intentionally produced product or by-product
28 of manufacturing. For this purpose, slag produced as an
29 incident to manufacturing pig iron or steel and sold is
30 considered to be an intentionally produced by-product of
31 manufacturing. "Sale at retail" includes any such transfer
32 made for resale unless made in compliance with Section 2c of
33 the Retailers' Occupation Tax Act, as incorporated by
34 reference into Section 12 of this Act. Transactions whereby
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1 the possession of the property is transferred but the seller
2 retains the title as security for payment of the selling
3 price are sales.
4 "Sale at retail" shall also be construed to include any
5 Illinois florist's sales transaction in which the purchase
6 order is received in Illinois by a florist and the sale is
7 for use or consumption, but the Illinois florist has a
8 florist in another state deliver the property to the
9 purchaser or the purchaser's donee in such other state.
10 The purchase, employment and transfer of such tangible
11 personal property as newsprint and ink for the primary
12 purpose of conveying news (with or without other information)
13 is not a purchase, use or sale of tangible personal property.
14 "Selling price" means the consideration for a sale valued
15 in money whether received in money or otherwise, including
16 cash, credits, property other than as hereinafter provided,
17 and services, but not including the value of or credit given
18 for traded-in tangible personal property where the item that
19 is traded-in is of like kind and character as that which is
20 being sold, and shall be determined without any deduction on
21 account of the cost of the property sold, the cost of
22 materials used, labor or service cost or any other expense
23 whatsoever, but does not include interest or finance charges
24 which appear as separate items on the bill of sale or sales
25 contract nor charges that are added to prices by sellers on
26 account of the seller's tax liability under the "Retailers'
27 Occupation Tax Act", or on account of the seller's duty to
28 collect, from the purchaser, the tax that is imposed by this
29 Act, or on account of the seller's tax liability under
30 Section 8-11-1 of the Illinois Municipal Code, as heretofore
31 and hereafter amended, or on account of the seller's tax
32 liability under the "County Retailers' Occupation Tax Act".
33 Effective December 1, 1985, "selling price" shall include
34 charges that are added to prices by sellers on account of the
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1 seller's tax liability under the Cigarette Tax Act, on
2 account of the seller's duty to collect, from the purchaser,
3 the tax imposed under the Cigarette Use Tax Act, and on
4 account of the seller's duty to collect, from the purchaser,
5 any cigarette tax imposed by a home rule unit.
6 The phrase "like kind and character" shall be liberally
7 construed (including but not limited to any form of motor
8 vehicle for any form of motor vehicle, or any kind of farm or
9 agricultural implement for any other kind of farm or
10 agricultural implement), while not including a kind of item
11 which, if sold at retail by that retailer, would be exempt
12 from retailers' occupation tax and use tax as an isolated or
13 occasional sale.
14 "Department" means the Department of Revenue.
15 "Person" means any natural individual, firm, partnership,
16 association, joint stock company, joint adventure, public or
17 private corporation, limited liability company, or a
18 receiver, executor, trustee, guardian or other representative
19 appointed by order of any court.
20 "Retailer" means and includes every person engaged in the
21 business of making sales at retail as defined in this
22 Section.
23 A person who holds himself or herself out as being
24 engaged (or who habitually engages) in selling tangible
25 personal property at retail is a retailer hereunder with
26 respect to such sales (and not primarily in a service
27 occupation) notwithstanding the fact that such person designs
28 and produces such tangible personal property on special order
29 for the purchaser and in such a way as to render the property
30 of value only to such purchaser, if such tangible personal
31 property so produced on special order serves substantially
32 the same function as stock or standard items of tangible
33 personal property that are sold at retail.
34 A person whose activities are organized and conducted
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1 primarily as a not-for-profit service enterprise, and who
2 engages in selling tangible personal property at retail
3 (whether to the public or merely to members and their guests)
4 is a retailer with respect to such transactions, excepting
5 only a person organized and operated exclusively for
6 charitable, religious or educational purposes either (1), to
7 the extent of sales by such person to its members, students,
8 patients or inmates of tangible personal property to be used
9 primarily for the purposes of such person, or (2), to the
10 extent of sales by such person of tangible personal property
11 which is not sold or offered for sale by persons organized
12 for profit. The selling of school books and school supplies
13 by schools at retail to students is not "primarily for the
14 purposes of" the school which does such selling. This
15 paragraph does not apply to nor subject to taxation
16 occasional dinners, social or similar activities of a person
17 organized and operated exclusively for charitable, religious
18 or educational purposes, whether or not such activities are
19 open to the public.
20 A person who is the recipient of a grant or contract
21 under Title VII of the Older Americans Act of 1965 (P.L.
22 92-258) and serves meals to participants in the federal
23 Nutrition Program for the Elderly in return for contributions
24 established in amount by the individual participant pursuant
25 to a schedule of suggested fees as provided for in the
26 federal Act is not a retailer under this Act with respect to
27 such transactions.
28 Persons who engage in the business of transferring
29 tangible personal property upon the redemption of trading
30 stamps are retailers hereunder when engaged in such business.
31 The isolated or occasional sale of tangible personal
32 property at retail by a person who does not hold himself out
33 as being engaged (or who does not habitually engage) in
34 selling such tangible personal property at retail or a sale
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1 through a bulk vending machine does not make such person a
2 retailer hereunder. However, any person who is engaged in a
3 business which is not subject to the tax imposed by the
4 "Retailers' Occupation Tax Act" because of involving the sale
5 of or a contract to sell real estate or a construction
6 contract to improve real estate, but who, in the course of
7 conducting such business, transfers tangible personal
8 property to users or consumers in the finished form in which
9 it was purchased, and which does not become real estate,
10 under any provision of a construction contract or real estate
11 sale or real estate sales agreement entered into with some
12 other person arising out of or because of such nontaxable
13 business, is a retailer to the extent of the value of the
14 tangible personal property so transferred. If, in such
15 transaction, a separate charge is made for the tangible
16 personal property so transferred, the value of such property,
17 for the purposes of this Act, is the amount so separately
18 charged, but not less than the cost of such property to the
19 transferor; if no separate charge is made, the value of such
20 property, for the purposes of this Act, is the cost to the
21 transferor of such tangible personal property.
22 "Retailer maintaining a place of business in this State",
23 or any like term, means and includes any of the following
24 retailers:
25 1. A retailer having or maintaining within this
26 State, directly or by a subsidiary, an office,
27 distribution house, sales house, warehouse or other place
28 of business, or any agent or other representative
29 operating within this State under the authority of the
30 retailer or its subsidiary, irrespective of whether such
31 place of business or agent or other representative is
32 located here permanently or temporarily, or whether such
33 retailer or subsidiary is licensed to do business in this
34 State. However, the ownership of property that is located
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1 at the premises of a printer with which the retailer has
2 contracted for printing and that consists of the final
3 printed product, property that becomes a part of the
4 final printed product, or copy from which the printed
5 product is produced shall not result in the retailer
6 being deemed to have or maintain an office, distribution
7 house, sales house, warehouse, or other place of business
8 within this State.
9 2. A retailer soliciting orders for tangible
10 personal property by means of a telecommunication or
11 television shopping system (which utilizes toll free
12 numbers) which is intended by the retailer to be
13 broadcast by cable television or other means of
14 broadcasting, to consumers located in this State.
15 3. A retailer, pursuant to a contract with a
16 broadcaster or publisher located in this State,
17 soliciting orders for tangible personal property by means
18 of advertising which is disseminated primarily to
19 consumers located in this State and only secondarily to
20 bordering jurisdictions.
21 4. A retailer soliciting orders for tangible
22 personal property by mail if the solicitations are
23 substantial and recurring and if the retailer benefits
24 from any banking, financing, debt collection,
25 telecommunication, or marketing activities occurring in
26 this State or benefits from the location in this State of
27 authorized installation, servicing, or repair facilities.
28 5. A retailer that is owned or controlled by the
29 same interests that own or control any retailer engaging
30 in business in the same or similar line of business in
31 this State.
32 6. A retailer having a franchisee or licensee
33 operating under its trade name if the franchisee or
34 licensee is required to collect the tax under this
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1 Section.
2 7. A retailer, pursuant to a contract with a cable
3 television operator located in this State, soliciting
4 orders for tangible personal property by means of
5 advertising which is transmitted or distributed over a
6 cable television system in this State.
7 8. A retailer engaging in activities in Illinois,
8 which activities in the state in which the retail
9 business engaging in such activities is located would
10 constitute maintaining a place of business in that state.
11 "Bulk vending machine" means a nonelectrically operated
12 vending machine, containing unsorted confections, nuts or
13 other merchandise which, when a coin of a denomination not
14 larger than one cent is inserted, are dispensed in equal
15 portions, at random and without selection by the customer.
16 (Source: P.A. 88-194; 88-361; 88-480; 88-660, eff. 9-16-94;
17 88-669, eff. 11-29-94; 88-670, eff. 12-2-94.)
18 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
19 Sec. 3-5. Exemptions. Use of the following tangible
20 personal property is exempt from the tax imposed by this Act:
21 (1) Personal property purchased from a corporation,
22 society, association, foundation, institution, or
23 organization, other than a limited liability company, that is
24 organized and operated as a not-for-profit service enterprise
25 for the benefit of persons 65 years of age or older if the
26 personal property was not purchased by the enterprise for the
27 purpose of resale by the enterprise.
28 (2) Personal property purchased by a not-for-profit
29 Illinois county fair association for use in conducting,
30 operating, or promoting the county fair.
31 (3) Personal property purchased by a not-for-profit
32 music or dramatic arts organization that establishes, by
33 proof required by the Department by rule, that it has
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1 received an exemption under Section 501(c)(3) of the Internal
2 Revenue Code and that is organized and operated for the
3 presentation of live public performances of musical or
4 theatrical works on a regular basis.
5 (4) Personal property purchased by a governmental body,
6 by a corporation, society, association, foundation, or
7 institution organized and operated exclusively for
8 charitable, religious, or educational purposes, or by a
9 not-for-profit corporation, society, association, foundation,
10 institution, or organization that has no compensated officers
11 or employees and that is organized and operated primarily for
12 the recreation of persons 55 years of age or older. A limited
13 liability company may qualify for the exemption under this
14 paragraph only if the limited liability company is organized
15 and operated exclusively for educational purposes. On and
16 after July 1, 1987, however, no entity otherwise eligible for
17 this exemption shall make tax-free purchases unless it has an
18 active exemption identification number issued by the
19 Department.
20 (5) A passenger car that is a replacement vehicle to the
21 extent that the purchase price of the car is subject to the
22 Replacement Vehicle Tax.
23 (6) Graphic arts machinery and equipment, including
24 repair and replacement parts, both new and used, and
25 including that manufactured on special order, certified by
26 the purchaser to be used primarily for graphic arts
27 production, and including machinery and equipment purchased
28 for lease.
29 (7) Farm chemicals.
30 (8) Legal tender, currency, medallions, or gold or
31 silver coinage issued by the State of Illinois, the
32 government of the United States of America, or the government
33 of any foreign country, and bullion.
34 (9) Personal property purchased from a teacher-sponsored
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1 student organization affiliated with an elementary or
2 secondary school located in Illinois.
3 (9-5) Books sold for use as textbooks for courses in any
4 private or public, elementary or secondary school.
5 (10) A motor vehicle of the first division, a motor
6 vehicle of the second division that is a self-contained motor
7 vehicle designed or permanently converted to provide living
8 quarters for recreational, camping, or travel use, with
9 direct walk through to the living quarters from the driver's
10 seat, or a motor vehicle of the second division that is of
11 the van configuration designed for the transportation of not
12 less than 7 nor more than 16 passengers, as defined in
13 Section 1-146 of the Illinois Vehicle Code, that is used for
14 automobile renting, as defined in the Automobile Renting
15 Occupation and Use Tax Act.
16 (11) Farm machinery and equipment, both new and used,
17 including that manufactured on special order, certified by
18 the purchaser to be used primarily for production agriculture
19 or State or federal agricultural programs, including
20 individual replacement parts for the machinery and equipment,
21 and including machinery and equipment purchased for lease,
22 but excluding motor vehicles required to be registered under
23 the Illinois Vehicle Code.
24 (12) Fuel and petroleum products sold to or used by an
25 air common carrier, certified by the carrier to be used for
26 consumption, shipment, or storage in the conduct of its
27 business as an air common carrier, for a flight destined for
28 or returning from a location or locations outside the United
29 States without regard to previous or subsequent domestic
30 stopovers.
31 (13) Proceeds of mandatory service charges separately
32 stated on customers' bills for the purchase and consumption
33 of food and beverages purchased at retail from a retailer, to
34 the extent that the proceeds of the service charge are in
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1 fact turned over as tips or as a substitute for tips to the
2 employees who participate directly in preparing, serving,
3 hosting or cleaning up the food or beverage function with
4 respect to which the service charge is imposed.
5 (14) Oil field exploration, drilling, and production
6 equipment, including (i) rigs and parts of rigs, rotary rigs,
7 cable tool rigs, and workover rigs, (ii) pipe and tubular
8 goods, including casing and drill strings, (iii) pumps and
9 pump-jack units, (iv) storage tanks and flow lines, (v) any
10 individual replacement part for oil field exploration,
11 drilling, and production equipment, and (vi) machinery and
12 equipment purchased for lease; but excluding motor vehicles
13 required to be registered under the Illinois Vehicle Code.
14 (15) Photoprocessing machinery and equipment, including
15 repair and replacement parts, both new and used, including
16 that manufactured on special order, certified by the
17 purchaser to be used primarily for photoprocessing, and
18 including photoprocessing machinery and equipment purchased
19 for lease.
20 (16) Coal exploration, mining, offhighway hauling,
21 processing, maintenance, and reclamation equipment, including
22 replacement parts and equipment, and including equipment
23 purchased for lease, but excluding motor vehicles required to
24 be registered under the Illinois Vehicle Code.
25 (17) Distillation machinery and equipment, sold as a
26 unit or kit, assembled or installed by the retailer,
27 certified by the user to be used only for the production of
28 ethyl alcohol that will be used for consumption as motor fuel
29 or as a component of motor fuel for the personal use of the
30 user, and not subject to sale or resale.
31 (18) Manufacturing and assembling machinery and
32 equipment used primarily in the process of manufacturing or
33 assembling tangible personal property for wholesale or retail
34 sale or lease, whether that sale or lease is made directly by
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1 the manufacturer or by some other person, whether the
2 materials used in the process are owned by the manufacturer
3 or some other person, or whether that sale or lease is made
4 apart from or as an incident to the seller's engaging in the
5 service occupation of producing machines, tools, dies, jigs,
6 patterns, gauges, or other similar items of no commercial
7 value on special order for a particular purchaser.
8 (19) Personal property delivered to a purchaser or
9 purchaser's donee inside Illinois when the purchase order for
10 that personal property was received by a florist located
11 outside Illinois who has a florist located inside Illinois
12 deliver the personal property.
13 (20) Semen used for artificial insemination of livestock
14 for direct agricultural production.
15 (21) Horses, or interests in horses, registered with and
16 meeting the requirements of any of the Arabian Horse Club
17 Registry of America, Appaloosa Horse Club, American Quarter
18 Horse Association, United States Trotting Association, or
19 Jockey Club, as appropriate, used for purposes of breeding or
20 racing for prizes.
21 (22) Computers and communications equipment utilized
22 for any hospital purpose and equipment used in the diagnosis,
23 analysis, or treatment of hospital patients purchased by a
24 lessor who leases the equipment, under a lease of one year or
25 longer executed or in effect at the time the lessor would
26 otherwise be subject to the tax imposed by this Act, to a
27 hospital that has been issued an active tax exemption
28 identification number by the Department under Section 1g of
29 the Retailers' Occupation Tax Act. If the equipment is
30 leased in a manner that does not qualify for this exemption
31 or is used in any other non-exempt manner, the lessor shall
32 be liable for the tax imposed under this Act or the Service
33 Use Tax Act, as the case may be, based on the fair market
34 value of the property at the time the non-qualifying use
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1 occurs. No lessor shall collect or attempt to collect an
2 amount (however designated) that purports to reimburse that
3 lessor for the tax imposed by this Act or the Service Use Tax
4 Act, as the case may be, if the tax has not been paid by the
5 lessor. If a lessor improperly collects any such amount from
6 the lessee, the lessee shall have a legal right to claim a
7 refund of that amount from the lessor. If, however, that
8 amount is not refunded to the lessee for any reason, the
9 lessor is liable to pay that amount to the Department.
10 (23) Personal property purchased by a lessor who leases
11 the property, under a lease of one year or longer executed
12 or in effect at the time the lessor would otherwise be
13 subject to the tax imposed by this Act, to a governmental
14 body that has been issued an active sales tax exemption
15 identification number by the Department under Section 1g of
16 the Retailers' Occupation Tax Act. If the property is leased
17 in a manner that does not qualify for this exemption or used
18 in any other non-exempt manner, the lessor shall be liable
19 for the tax imposed under this Act or the Service Use Tax
20 Act, as the case may be, based on the fair market value of
21 the property at the time the non-qualifying use occurs. No
22 lessor shall collect or attempt to collect an amount (however
23 designated) that purports to reimburse that lessor for the
24 tax imposed by this Act or the Service Use Tax Act, as the
25 case may be, if the tax has not been paid by the lessor. If
26 a lessor improperly collects any such amount from the lessee,
27 the lessee shall have a legal right to claim a refund of that
28 amount from the lessor. If, however, that amount is not
29 refunded to the lessee for any reason, the lessor is liable
30 to pay that amount to the Department.
31 (24) Beginning with taxable years ending on or after
32 December 31, 1995 and ending with taxable years ending on or
33 before December 31, 2004, personal property that is donated
34 for disaster relief to be used in a State or federally
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1 declared disaster area in Illinois or bordering Illinois by a
2 manufacturer or retailer that is registered in this State to
3 a corporation, society, association, foundation, or
4 institution that has been issued a sales tax exemption
5 identification number by the Department that assists victims
6 of the disaster who reside within the declared disaster area.
7 (25) Beginning with taxable years ending on or after
8 December 31, 1995 and ending with taxable years ending on or
9 before December 31, 2004, personal property that is used in
10 the performance of infrastructure repairs in this State,
11 including but not limited to municipal roads and streets,
12 access roads, bridges, sidewalks, waste disposal systems,
13 water and sewer line extensions, water distribution and
14 purification facilities, storm water drainage and retention
15 facilities, and sewage treatment facilities, resulting from a
16 State or federally declared disaster in Illinois or bordering
17 Illinois when such repairs are initiated on facilities
18 located in the declared disaster area within 6 months after
19 the disaster.
20 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
21 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
22 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
23 eff. 8-9-96; revised 8-21-96.)
24 Section 10. The Service Use Tax Act is amended by
25 changing Section 3-5 as follows:
26 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
27 Sec. 3-5. Exemptions. Use of the following tangible
28 personal property is exempt from the tax imposed by this Act:
29 (1) Personal property purchased from a corporation,
30 society, association, foundation, institution, or
31 organization, other than a limited liability company, that is
32 organized and operated as a not-for-profit service enterprise
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1 for the benefit of persons 65 years of age or older if the
2 personal property was not purchased by the enterprise for the
3 purpose of resale by the enterprise.
4 (2) Personal property purchased by a non-profit Illinois
5 county fair association for use in conducting, operating, or
6 promoting the county fair.
7 (3) Personal property purchased by a not-for-profit
8 music or dramatic arts organization that establishes, by
9 proof required by the Department by rule, that it has
10 received an exemption under Section 501(c)(3) of the Internal
11 Revenue Code and that is organized and operated for the
12 presentation of live public performances of musical or
13 theatrical works on a regular basis.
14 (4) Legal tender, currency, medallions, or gold or
15 silver coinage issued by the State of Illinois, the
16 government of the United States of America, or the government
17 of any foreign country, and bullion.
18 (5) Graphic arts machinery and equipment, including
19 repair and replacement parts, both new and used, and
20 including that manufactured on special order or purchased for
21 lease, certified by the purchaser to be used primarily for
22 graphic arts production.
23 (6) Personal property purchased from a teacher-sponsored
24 student organization affiliated with an elementary or
25 secondary school located in Illinois.
26 (6-5) Books sold for use as textbooks for courses in any
27 private or public, elementary or secondary school.
28 (7) Farm machinery and equipment, both new and used,
29 including that manufactured on special order, certified by
30 the purchaser to be used primarily for production agriculture
31 or State or federal agricultural programs, including
32 individual replacement parts for the machinery and equipment,
33 and including machinery and equipment purchased for lease,
34 but excluding motor vehicles required to be registered under
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1 the Illinois Vehicle Code.
2 (8) Fuel and petroleum products sold to or used by an
3 air common carrier, certified by the carrier to be used for
4 consumption, shipment, or storage in the conduct of its
5 business as an air common carrier, for a flight destined for
6 or returning from a location or locations outside the United
7 States without regard to previous or subsequent domestic
8 stopovers.
9 (9) Proceeds of mandatory service charges separately
10 stated on customers' bills for the purchase and consumption
11 of food and beverages acquired as an incident to the purchase
12 of a service from a serviceman, to the extent that the
13 proceeds of the service charge are in fact turned over as
14 tips or as a substitute for tips to the employees who
15 participate directly in preparing, serving, hosting or
16 cleaning up the food or beverage function with respect to
17 which the service charge is imposed.
18 (10) Oil field exploration, drilling, and production
19 equipment, including (i) rigs and parts of rigs, rotary rigs,
20 cable tool rigs, and workover rigs, (ii) pipe and tubular
21 goods, including casing and drill strings, (iii) pumps and
22 pump-jack units, (iv) storage tanks and flow lines, (v) any
23 individual replacement part for oil field exploration,
24 drilling, and production equipment, and (vi) machinery and
25 equipment purchased for lease; but excluding motor vehicles
26 required to be registered under the Illinois Vehicle Code.
27 (11) Proceeds from the sale of photoprocessing machinery
28 and equipment, including repair and replacement parts, both
29 new and used, including that manufactured on special order,
30 certified by the purchaser to be used primarily for
31 photoprocessing, and including photoprocessing machinery and
32 equipment purchased for lease.
33 (12) Coal exploration, mining, offhighway hauling,
34 processing, maintenance, and reclamation equipment, including
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1 replacement parts and equipment, and including equipment
2 purchased for lease, but excluding motor vehicles required to
3 be registered under the Illinois Vehicle Code.
4 (13) Semen used for artificial insemination of livestock
5 for direct agricultural production.
6 (14) Horses, or interests in horses, registered with and
7 meeting the requirements of any of the Arabian Horse Club
8 Registry of America, Appaloosa Horse Club, American Quarter
9 Horse Association, United States Trotting Association, or
10 Jockey Club, as appropriate, used for purposes of breeding or
11 racing for prizes.
12 (15) Computers and communications equipment utilized for
13 any hospital purpose and equipment used in the diagnosis,
14 analysis, or treatment of hospital patients purchased by a
15 lessor who leases the equipment, under a lease of one year or
16 longer executed or in effect at the time the lessor would
17 otherwise be subject to the tax imposed by this Act, to a
18 hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act. If the equipment is leased
21 in a manner that does not qualify for this exemption or is
22 used in any other non-exempt manner, the lessor shall be
23 liable for the tax imposed under this Act or the Use Tax Act,
24 as the case may be, based on the fair market value of the
25 property at the time the non-qualifying use occurs. No
26 lessor shall collect or attempt to collect an amount (however
27 designated) that purports to reimburse that lessor for the
28 tax imposed by this Act or the Use Tax Act, as the case may
29 be, if the tax has not been paid by the lessor. If a lessor
30 improperly collects any such amount from the lessee, the
31 lessee shall have a legal right to claim a refund of that
32 amount from the lessor. If, however, that amount is not
33 refunded to the lessee for any reason, the lessor is liable
34 to pay that amount to the Department.
-18- LRB9000053KRsb
1 (16) Personal property purchased by a lessor who leases
2 the property, under a lease of one year or longer executed or
3 in effect at the time the lessor would otherwise be subject
4 to the tax imposed by this Act, to a governmental body that
5 has been issued an active tax exemption identification number
6 by the Department under Section 1g of the Retailers'
7 Occupation Tax Act. If the property is leased in a manner
8 that does not qualify for this exemption or is used in any
9 other non-exempt manner, the lessor shall be liable for the
10 tax imposed under this Act or the Use Tax Act, as the case
11 may be, based on the fair market value of the property at the
12 time the non-qualifying use occurs. No lessor shall collect
13 or attempt to collect an amount (however designated) that
14 purports to reimburse that lessor for the tax imposed by this
15 Act or the Use Tax Act, as the case may be, if the tax has
16 not been paid by the lessor. If a lessor improperly collects
17 any such amount from the lessee, the lessee shall have a
18 legal right to claim a refund of that amount from the lessor.
19 If, however, that amount is not refunded to the lessee for
20 any reason, the lessor is liable to pay that amount to the
21 Department.
22 (17) Beginning with taxable years ending on or after
23 December 31, 1995 and ending with taxable years ending on or
24 before December 31, 2004, personal property that is donated
25 for disaster relief to be used in a State or federally
26 declared disaster area in Illinois or bordering Illinois by a
27 manufacturer or retailer that is registered in this State to
28 a corporation, society, association, foundation, or
29 institution that has been issued a sales tax exemption
30 identification number by the Department that assists victims
31 of the disaster who reside within the declared disaster area.
32 (18) Beginning with taxable years ending on or after
33 December 31, 1995 and ending with taxable years ending on or
34 before December 31, 2004, personal property that is used in
-19- LRB9000053KRsb
1 the performance of infrastructure repairs in this State,
2 including but not limited to municipal roads and streets,
3 access roads, bridges, sidewalks, waste disposal systems,
4 water and sewer line extensions, water distribution and
5 purification facilities, storm water drainage and retention
6 facilities, and sewage treatment facilities, resulting from a
7 State or federally declared disaster in Illinois or bordering
8 Illinois when such repairs are initiated on facilities
9 located in the declared disaster area within 6 months after
10 the disaster.
11 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
12 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
13 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
14 eff. 8-9-96; revised 8-21-96.)
15 Section 15. The Service Occupation Tax Act is amended by
16 changing Section 3-5 as follows:
17 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
18 Sec. 3-5. Exemptions. The following tangible personal
19 property is exempt from the tax imposed by this Act:
20 (1) Personal property sold by a corporation, society,
21 association, foundation, institution, or organization, other
22 than a limited liability company, that is organized and
23 operated as a not-for-profit service enterprise for the
24 benefit of persons 65 years of age or older if the personal
25 property was not purchased by the enterprise for the purpose
26 of resale by the enterprise.
27 (2) Personal property purchased by a not-for-profit
28 Illinois county fair association for use in conducting,
29 operating, or promoting the county fair.
30 (3) Personal property purchased by any not-for-profit
31 music or dramatic arts organization that establishes, by
32 proof required by the Department by rule, that it has
-20- LRB9000053KRsb
1 received an exemption under Section 501(c)(3) of the
2 Internal Revenue Code and that is organized and operated for
3 the presentation of live public performances of musical or
4 theatrical works on a regular basis.
5 (4) Legal tender, currency, medallions, or gold or
6 silver coinage issued by the State of Illinois, the
7 government of the United States of America, or the government
8 of any foreign country, and bullion.
9 (5) Graphic arts machinery and equipment, including
10 repair and replacement parts, both new and used, and
11 including that manufactured on special order or purchased for
12 lease, certified by the purchaser to be used primarily for
13 graphic arts production.
14 (6) Personal property sold by a teacher-sponsored
15 student organization affiliated with an elementary or
16 secondary school located in Illinois.
17 (6-5) Books sold for use as textbooks for courses in any
18 private or public, elementary or secondary school.
19 (7) Farm machinery and equipment, both new and used,
20 including that manufactured on special order, certified by
21 the purchaser to be used primarily for production agriculture
22 or State or federal agricultural programs, including
23 individual replacement parts for the machinery and equipment,
24 and including machinery and equipment purchased for lease,
25 but excluding motor vehicles required to be registered under
26 the Illinois Vehicle Code.
27 (8) Fuel and petroleum products sold to or used by an
28 air common carrier, certified by the carrier to be used for
29 consumption, shipment, or storage in the conduct of its
30 business as an air common carrier, for a flight destined for
31 or returning from a location or locations outside the United
32 States without regard to previous or subsequent domestic
33 stopovers.
34 (9) Proceeds of mandatory service charges separately
-21- LRB9000053KRsb
1 stated on customers' bills for the purchase and consumption
2 of food and beverages, to the extent that the proceeds of the
3 service charge are in fact turned over as tips or as a
4 substitute for tips to the employees who participate directly
5 in preparing, serving, hosting or cleaning up the food or
6 beverage function with respect to which the service charge is
7 imposed.
8 (10) Oil field exploration, drilling, and production
9 equipment, including (i) rigs and parts of rigs, rotary rigs,
10 cable tool rigs, and workover rigs, (ii) pipe and tubular
11 goods, including casing and drill strings, (iii) pumps and
12 pump-jack units, (iv) storage tanks and flow lines, (v) any
13 individual replacement part for oil field exploration,
14 drilling, and production equipment, and (vi) machinery and
15 equipment purchased for lease; but excluding motor vehicles
16 required to be registered under the Illinois Vehicle Code.
17 (11) Photoprocessing machinery and equipment, including
18 repair and replacement parts, both new and used, including
19 that manufactured on special order, certified by the
20 purchaser to be used primarily for photoprocessing, and
21 including photoprocessing machinery and equipment purchased
22 for lease.
23 (12) Coal exploration, mining, offhighway hauling,
24 processing, maintenance, and reclamation equipment, including
25 replacement parts and equipment, and including equipment
26 purchased for lease, but excluding motor vehicles required to
27 be registered under the Illinois Vehicle Code.
28 (13) Food for human consumption that is to be consumed
29 off the premises where it is sold (other than alcoholic
30 beverages, soft drinks and food that has been prepared for
31 immediate consumption) and prescription and nonprescription
32 medicines, drugs, medical appliances, and insulin, urine
33 testing materials, syringes, and needles used by diabetics,
34 for human use, when purchased for use by a person receiving
-22- LRB9000053KRsb
1 medical assistance under Article 5 of the Illinois Public Aid
2 Code who resides in a licensed long-term care facility, as
3 defined in the Nursing Home Care Act.
4 (14) Semen used for artificial insemination of livestock
5 for direct agricultural production.
6 (15) Horses, or interests in horses, registered with and
7 meeting the requirements of any of the Arabian Horse Club
8 Registry of America, Appaloosa Horse Club, American Quarter
9 Horse Association, United States Trotting Association, or
10 Jockey Club, as appropriate, used for purposes of breeding or
11 racing for prizes.
12 (16) Computers and communications equipment utilized
13 for any hospital purpose and equipment used in the diagnosis,
14 analysis, or treatment of hospital patients sold to a lessor
15 who leases the equipment, under a lease of one year or longer
16 executed or in effect at the time of the purchase, to a
17 hospital that has been issued an active tax exemption
18 identification number by the Department under Section 1g of
19 the Retailers' Occupation Tax Act.
20 (17) Personal property sold to a lessor who leases the
21 property, under a lease of one year or longer executed or in
22 effect at the time of the purchase, to a governmental body
23 that has been issued an active tax exemption identification
24 number by the Department under Section 1g of the Retailers'
25 Occupation Tax Act.
26 (18) Beginning with taxable years ending on or after
27 December 31, 1995 and ending with taxable years ending on or
28 before December 31, 2004, personal property that is donated
29 for disaster relief to be used in a State or federally
30 declared disaster area in Illinois or bordering Illinois by a
31 manufacturer or retailer that is registered in this State to
32 a corporation, society, association, foundation, or
33 institution that has been issued a sales tax exemption
34 identification number by the Department that assists victims
-23- LRB9000053KRsb
1 of the disaster who reside within the declared disaster area.
2 (19) Beginning with taxable years ending on or after
3 December 31, 1995 and ending with taxable years ending on or
4 before December 31, 2004, personal property that is used in
5 the performance of infrastructure repairs in this State,
6 including but not limited to municipal roads and streets,
7 access roads, bridges, sidewalks, waste disposal systems,
8 water and sewer line extensions, water distribution and
9 purification facilities, storm water drainage and retention
10 facilities, and sewage treatment facilities, resulting from a
11 State or federally declared disaster in Illinois or bordering
12 Illinois when such repairs are initiated on facilities
13 located in the declared disaster area within 6 months after
14 the disaster.
15 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
16 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
17 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
18 eff. 8-9-96; revised 8-21-96.)
19 Section 20. The Retailers' Occupation Tax Act is amended
20 by changing Sections 1 and 2-5 as follows:
21 (35 ILCS 120/1) (from Ch. 120, par. 440)
22 Sec. 1. Definitions. "Sale at retail" means any
23 transfer of the ownership of or title to tangible personal
24 property to a purchaser, for the purpose of use or
25 consumption, and not for the purpose of resale in any form as
26 tangible personal property to the extent not first subjected
27 to a use for which it was purchased, for a valuable
28 consideration: Provided that the property purchased is
29 deemed to be purchased for the purpose of resale, despite
30 first being used, to the extent to which it is resold as an
31 ingredient of an intentionally produced product or byproduct
32 of manufacturing. For this purpose, slag produced as an
-24- LRB9000053KRsb
1 incident to manufacturing pig iron or steel and sold is
2 considered to be an intentionally produced byproduct of
3 manufacturing. Transactions whereby the possession of the
4 property is transferred but the seller retains the title as
5 security for payment of the selling price shall be deemed to
6 be sales.
7 "Sale at retail" shall be construed to include any
8 transfer of the ownership of or title to tangible personal
9 property to a purchaser, for use or consumption by any other
10 person to whom such purchaser may transfer the tangible
11 personal property without a valuable consideration, and to
12 include any transfer, whether made for or without a valuable
13 consideration, for resale in any form as tangible personal
14 property unless made in compliance with Section 2c of this
15 Act.
16 Sales of tangible personal property, which property, to
17 the extent not first subjected to a use for which it was
18 purchased, as an ingredient or constituent, goes into and
19 forms a part of tangible personal property subsequently the
20 subject of a "Sale at retail", are not sales at retail as
21 defined in this Act: Provided that the property purchased is
22 deemed to be purchased for the purpose of resale, despite
23 first being used, to the extent to which it is resold as an
24 ingredient of an intentionally produced product or byproduct
25 of manufacturing.
26 "Sale at retail" shall be construed to include any
27 Illinois florist's sales transaction in which the purchase
28 order is received in Illinois by a florist and the sale is
29 for use or consumption, but the Illinois florist has a
30 florist in another state deliver the property to the
31 purchaser or the purchaser's donee in such other state.
32 The purchase, employment and transfer of such tangible
33 personal property as newsprint and ink for the primary
34 purpose of conveying news (with or without other information)
-25- LRB9000053KRsb
1 is not a purchase, use or sale of tangible personal property.
2 A person whose activities are organized and conducted
3 primarily as a not-for-profit service enterprise, and who
4 engages in selling tangible personal property at retail
5 (whether to the public or merely to members and their guests)
6 is engaged in the business of selling tangible personal
7 property at retail with respect to such transactions,
8 excepting only a person organized and operated exclusively
9 for charitable, religious or educational purposes either (1),
10 to the extent of sales by such person to its members,
11 students, patients or inmates of tangible personal property
12 to be used primarily for the purposes of such person, or (2),
13 to the extent of sales by such person of tangible personal
14 property which is not sold or offered for sale by persons
15 organized for profit. The selling of school books and school
16 supplies by schools at retail to students is not "primarily
17 for the purposes of" the school which does such selling. The
18 provisions of this paragraph shall not apply to nor subject
19 to taxation occasional dinners, socials or similar activities
20 of a person organized and operated exclusively for
21 charitable, religious or educational purposes, whether or not
22 such activities are open to the public.
23 A person who is the recipient of a grant or contract
24 under Title VII of the Older Americans Act of 1965 (P.L.
25 92-258) and serves meals to participants in the federal
26 Nutrition Program for the Elderly in return for contributions
27 established in amount by the individual participant pursuant
28 to a schedule of suggested fees as provided for in the
29 federal Act is not engaged in the business of selling
30 tangible personal property at retail with respect to such
31 transactions.
32 "Purchaser" means anyone who, through a sale at retail,
33 acquires the ownership of or title to tangible personal
34 property for a valuable consideration.
-26- LRB9000053KRsb
1 "Reseller of motor fuel" means any person engaged in the
2 business of selling or delivering or transferring title of
3 motor fuel to another person other than for use or
4 consumption. No person shall act as a reseller of motor fuel
5 within this State without first being registered as a
6 reseller pursuant to Section 2c or a retailer pursuant to
7 Section 2a.
8 "Selling price" or the "amount of sale" means the
9 consideration for a sale valued in money whether received in
10 money or otherwise, including cash, credits, property, other
11 than as hereinafter provided, and services, but not including
12 the value of or credit given for traded-in tangible personal
13 property where the item that is traded-in is of like kind and
14 character as that which is being sold, and shall be
15 determined without any deduction on account of the cost of
16 the property sold, the cost of materials used, labor or
17 service cost or any other expense whatsoever, but does not
18 include charges that are added to prices by sellers on
19 account of the seller's tax liability under this Act, or on
20 account of the seller's duty to collect, from the purchaser,
21 the tax that is imposed by the Use Tax Act, or on account of
22 the seller's tax liability under Section 8-11-1 of the
23 Illinois Municipal Code, as heretofore and hereafter amended,
24 or on account of the seller's tax liability under the County
25 Retailers' Occupation Tax Act, or on account of the seller's
26 tax liability under the Home Rule Municipal Soft Drink
27 Retailers' Occupation Tax, or on account of the seller's tax
28 liability under any tax imposed under the "Regional
29 Transportation Authority Act", approved December 12, 1973.
30 Effective December 1, 1985, "selling price" shall include
31 charges that are added to prices by sellers on account of the
32 seller's tax liability under the Cigarette Tax Act, on
33 account of the sellers' duty to collect, from the purchaser,
34 the tax imposed under the Cigarette Use Tax Act, and on
-27- LRB9000053KRsb
1 account of the seller's duty to collect, from the purchaser,
2 any cigarette tax imposed by a home rule unit.
3 The phrase "like kind and character" shall be liberally
4 construed (including but not limited to any form of motor
5 vehicle for any form of motor vehicle, or any kind of farm or
6 agricultural implement for any other kind of farm or
7 agricultural implement), while not including a kind of item
8 which, if sold at retail by that retailer, would be exempt
9 from retailers' occupation tax and use tax as an isolated or
10 occasional sale.
11 "Gross receipts" from the sales of tangible personal
12 property at retail means the total selling price or the
13 amount of such sales, as hereinbefore defined. In the case
14 of charge and time sales, the amount thereof shall be
15 included only as and when payments are received by the
16 seller. Receipts or other consideration derived by a seller
17 from the sale, transfer or assignment of accounts receivable
18 to a wholly owned subsidiary will not be deemed payments
19 prior to the time the purchaser makes payment on such
20 accounts.
21 "Department" means the Department of Revenue.
22 "Person" means any natural individual, firm, partnership,
23 association, joint stock company, joint adventure, public or
24 private corporation, limited liability company, or a
25 receiver, executor, trustee, guardian or other representative
26 appointed by order of any court.
27 The isolated or occasional sale of tangible personal
28 property at retail by a person who does not hold himself out
29 as being engaged (or who does not habitually engage) in
30 selling such tangible personal property at retail, or a sale
31 through a bulk vending machine, does not constitute engaging
32 in a business of selling such tangible personal property at
33 retail within the meaning of this Act; provided that any
34 person who is engaged in a business which is not subject to
-28- LRB9000053KRsb
1 the tax imposed by this Act because of involving the sale of
2 or a contract to sell real estate or a construction contract
3 to improve real estate or a construction contract to
4 engineer, install, and maintain an integrated system of
5 products, but who, in the course of conducting such business,
6 transfers tangible personal property to users or consumers in
7 the finished form in which it was purchased, and which does
8 not become real estate or was not engineered and installed,
9 under any provision of a construction contract or real estate
10 sale or real estate sales agreement entered into with some
11 other person arising out of or because of such nontaxable
12 business, is engaged in the business of selling tangible
13 personal property at retail to the extent of the value of the
14 tangible personal property so transferred. If, in such a
15 transaction, a separate charge is made for the tangible
16 personal property so transferred, the value of such property,
17 for the purpose of this Act, shall be the amount so
18 separately charged, but not less than the cost of such
19 property to the transferor; if no separate charge is made,
20 the value of such property, for the purposes of this Act, is
21 the cost to the transferor of such tangible personal
22 property. Construction contracts for the improvement of real
23 estate consisting of engineering, installation, and
24 maintenance of voice, data, video, security, and all
25 telecommunication systems do not constitute engaging in a
26 business of selling tangible personal property at retail
27 within the meaning of this Act if they are sold at one
28 specified contract price.
29 A person who holds himself or herself out as being
30 engaged (or who habitually engages) in selling tangible
31 personal property at retail is a person engaged in the
32 business of selling tangible personal property at retail
33 hereunder with respect to such sales (and not primarily in a
34 service occupation) notwithstanding the fact that such person
-29- LRB9000053KRsb
1 designs and produces such tangible personal property on
2 special order for the purchaser and in such a way as to
3 render the property of value only to such purchaser, if such
4 tangible personal property so produced on special order
5 serves substantially the same function as stock or standard
6 items of tangible personal property that are sold at retail.
7 Persons who engage in the business of transferring
8 tangible personal property upon the redemption of trading
9 stamps are engaged in the business of selling such property
10 at retail and shall be liable for and shall pay the tax
11 imposed by this Act on the basis of the retail value of the
12 property transferred upon redemption of such stamps.
13 "Bulk vending machine" means a nonelectrically operated
14 vending machine, containing unsorted confections, nuts or
15 other merchandise which, when a coin of a denomination not
16 larger than one cent is inserted, are dispensed in equal
17 portions, at random and without selection by the customer.
18 (Source: P.A. 88-420; 88-480; 88-507; 88-670, eff. 12-2-94.)
19 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
20 Sec. 2-5. Exemptions. Gross receipts from proceeds from
21 the sale of the following tangible personal property are
22 exempt from the tax imposed by this Act:
23 (1) Farm chemicals.
24 (2) Farm machinery and equipment, both new and used,
25 including that manufactured on special order, certified by
26 the purchaser to be used primarily for production agriculture
27 or State or federal agricultural programs, including
28 individual replacement parts for the machinery and equipment,
29 and including machinery and equipment purchased for lease,
30 but excluding motor vehicles required to be registered under
31 the Illinois Vehicle Code.
32 (3) Distillation machinery and equipment, sold as a unit
33 or kit, assembled or installed by the retailer, certified by
-30- LRB9000053KRsb
1 the user to be used only for the production of ethyl alcohol
2 that will be used for consumption as motor fuel or as a
3 component of motor fuel for the personal use of the user, and
4 not subject to sale or resale.
5 (4) Graphic arts machinery and equipment, including
6 repair and replacement parts, both new and used, and
7 including that manufactured on special order or purchased for
8 lease, certified by the purchaser to be used primarily for
9 graphic arts production.
10 (5) A motor vehicle of the first division, a motor
11 vehicle of the second division that is a self-contained motor
12 vehicle designed or permanently converted to provide living
13 quarters for recreational, camping, or travel use, with
14 direct walk through access to the living quarters from the
15 driver's seat, or a motor vehicle of the second division that
16 is of the van configuration designed for the transportation
17 of not less than 7 nor more than 16 passengers, as defined in
18 Section 1-146 of the Illinois Vehicle Code, that is used for
19 automobile renting, as defined in the Automobile Renting
20 Occupation and Use Tax Act.
21 (6) Personal property sold by a teacher-sponsored
22 student organization affiliated with an elementary or
23 secondary school located in Illinois.
24 (6-5) Books sold for use as textbooks for courses in any
25 private or public, elementary or secondary school.
26 (7) Proceeds of that portion of the selling price of a
27 passenger car the sale of which is subject to the Replacement
28 Vehicle Tax.
29 (8) Personal property sold to an Illinois county fair
30 association for use in conducting, operating, or promoting
31 the county fair.
32 (9) Personal property sold to a not-for-profit music or
33 dramatic arts organization that establishes, by proof
34 required by the Department by rule, that it has received an
-31- LRB9000053KRsb
1 exemption under Section 501(c) (3) of the Internal Revenue
2 Code and that is organized and operated for the presentation
3 of live public performances of musical or theatrical works on
4 a regular basis.
5 (10) Personal property sold by a corporation, society,
6 association, foundation, institution, or organization, other
7 than a limited liability company, that is organized and
8 operated as a not-for-profit service enterprise for the
9 benefit of persons 65 years of age or older if the personal
10 property was not purchased by the enterprise for the purpose
11 of resale by the enterprise.
12 (11) Personal property sold to a governmental body, to a
13 corporation, society, association, foundation, or institution
14 organized and operated exclusively for charitable, religious,
15 or educational purposes, or to a not-for-profit corporation,
16 society, association, foundation, institution, or
17 organization that has no compensated officers or employees
18 and that is organized and operated primarily for the
19 recreation of persons 55 years of age or older. A limited
20 liability company may qualify for the exemption under this
21 paragraph only if the limited liability company is organized
22 and operated exclusively for educational purposes. On and
23 after July 1, 1987, however, no entity otherwise eligible for
24 this exemption shall make tax-free purchases unless it has an
25 active identification number issued by the Department.
26 (12) Personal property sold to interstate carriers for
27 hire for use as rolling stock moving in interstate commerce
28 or to lessors under leases of one year or longer executed or
29 in effect at the time of purchase by interstate carriers for
30 hire for use as rolling stock moving in interstate commerce
31 and equipment operated by a telecommunications provider,
32 licensed as a common carrier by the Federal Communications
33 Commission, which is permanently installed in or affixed to
34 aircraft moving in interstate commerce.
-32- LRB9000053KRsb
1 (13) Proceeds from sales to owners, lessors, or shippers
2 of tangible personal property that is utilized by interstate
3 carriers for hire for use as rolling stock moving in
4 interstate commerce and equipment operated by a
5 telecommunications provider, licensed as a common carrier by
6 the Federal Communications Commission, which is permanently
7 installed in or affixed to aircraft moving in interstate
8 commerce.
9 (14) Machinery and equipment that will be used by the
10 purchaser, or a lessee of the purchaser, primarily in the
11 process of manufacturing or assembling tangible personal
12 property for wholesale or retail sale or lease, whether the
13 sale or lease is made directly by the manufacturer or by some
14 other person, whether the materials used in the process are
15 owned by the manufacturer or some other person, or whether
16 the sale or lease is made apart from or as an incident to the
17 seller's engaging in the service occupation of producing
18 machines, tools, dies, jigs, patterns, gauges, or other
19 similar items of no commercial value on special order for a
20 particular purchaser.
21 (15) Proceeds of mandatory service charges separately
22 stated on customers' bills for purchase and consumption of
23 food and beverages, to the extent that the proceeds of the
24 service charge are in fact turned over as tips or as a
25 substitute for tips to the employees who participate directly
26 in preparing, serving, hosting or cleaning up the food or
27 beverage function with respect to which the service charge is
28 imposed.
29 (16) Petroleum products sold to a purchaser if the
30 seller is prohibited by federal law from charging tax to the
31 purchaser.
32 (17) Tangible personal property sold to a common carrier
33 by rail that receives the physical possession of the property
34 in Illinois and that transports the property, or shares with
-33- LRB9000053KRsb
1 another common carrier in the transportation of the property,
2 out of Illinois on a standard uniform bill of lading showing
3 the seller of the property as the shipper or consignor of the
4 property to a destination outside Illinois, for use outside
5 Illinois.
6 (18) Legal tender, currency, medallions, or gold or
7 silver coinage issued by the State of Illinois, the
8 government of the United States of America, or the government
9 of any foreign country, and bullion.
10 (19) Oil field exploration, drilling, and production
11 equipment, including (i) rigs and parts of rigs, rotary rigs,
12 cable tool rigs, and workover rigs, (ii) pipe and tubular
13 goods, including casing and drill strings, (iii) pumps and
14 pump-jack units, (iv) storage tanks and flow lines, (v) any
15 individual replacement part for oil field exploration,
16 drilling, and production equipment, and (vi) machinery and
17 equipment purchased for lease; but excluding motor vehicles
18 required to be registered under the Illinois Vehicle Code.
19 (20) Photoprocessing machinery and equipment, including
20 repair and replacement parts, both new and used, including
21 that manufactured on special order, certified by the
22 purchaser to be used primarily for photoprocessing, and
23 including photoprocessing machinery and equipment purchased
24 for lease.
25 (21) Coal exploration, mining, offhighway hauling,
26 processing, maintenance, and reclamation equipment, including
27 replacement parts and equipment, and including equipment
28 purchased for lease, but excluding motor vehicles required to
29 be registered under the Illinois Vehicle Code.
30 (22) Fuel and petroleum products sold to or used by an
31 air carrier, certified by the carrier to be used for
32 consumption, shipment, or storage in the conduct of its
33 business as an air common carrier, for a flight destined for
34 or returning from a location or locations outside the United
-34- LRB9000053KRsb
1 States without regard to previous or subsequent domestic
2 stopovers.
3 (23) A transaction in which the purchase order is
4 received by a florist who is located outside Illinois, but
5 who has a florist located in Illinois deliver the property to
6 the purchaser or the purchaser's donee in Illinois.
7 (24) Fuel consumed or used in the operation of ships,
8 barges, or vessels that are used primarily in or for the
9 transportation of property or the conveyance of persons for
10 hire on rivers bordering on this State if the fuel is
11 delivered by the seller to the purchaser's barge, ship, or
12 vessel while it is afloat upon that bordering river.
13 (25) A motor vehicle sold in this State to a nonresident
14 even though the motor vehicle is delivered to the nonresident
15 in this State, if the motor vehicle is not to be titled in
16 this State, and if a driveaway decal permit is issued to the
17 motor vehicle as provided in Section 3-603 of the Illinois
18 Vehicle Code or if the nonresident purchaser has vehicle
19 registration plates to transfer to the motor vehicle upon
20 returning to his or her home state. The issuance of the
21 driveaway decal permit or having the out-of-state
22 registration plates to be transferred is prima facie evidence
23 that the motor vehicle will not be titled in this State.
24 (26) Semen used for artificial insemination of livestock
25 for direct agricultural production.
26 (27) Horses, or interests in horses, registered with and
27 meeting the requirements of any of the Arabian Horse Club
28 Registry of America, Appaloosa Horse Club, American Quarter
29 Horse Association, United States Trotting Association, or
30 Jockey Club, as appropriate, used for purposes of breeding or
31 racing for prizes.
32 (28) Computers and communications equipment utilized
33 for any hospital purpose and equipment used in the diagnosis,
34 analysis, or treatment of hospital patients sold to a lessor
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1 who leases the equipment, under a lease of one year or longer
2 executed or in effect at the time of the purchase, to a
3 hospital that has been issued an active tax exemption
4 identification number by the Department under Section 1g of
5 this Act.
6 (29) Personal property sold to a lessor who leases the
7 property, under a lease of one year or longer executed or in
8 effect at the time of the purchase, to a governmental body
9 that has been issued an active tax exemption identification
10 number by the Department under Section 1g of this Act.
11 (30) Beginning with taxable years ending on or after
12 December 31, 1995 and ending with taxable years ending on or
13 before December 31, 2004, personal property that is donated
14 for disaster relief to be used in a State or federally
15 declared disaster area in Illinois or bordering Illinois by a
16 manufacturer or retailer that is registered in this State to
17 a corporation, society, association, foundation, or
18 institution that has been issued a sales tax exemption
19 identification number by the Department that assists victims
20 of the disaster who reside within the declared disaster area.
21 (31) Beginning with taxable years ending on or after
22 December 31, 1995 and ending with taxable years ending on or
23 before December 31, 2004, personal property that is used in
24 the performance of infrastructure repairs in this State,
25 including but not limited to municipal roads and streets,
26 access roads, bridges, sidewalks, waste disposal systems,
27 water and sewer line extensions, water distribution and
28 purification facilities, storm water drainage and retention
29 facilities, and sewage treatment facilities, resulting from a
30 State or federally declared disaster in Illinois or bordering
31 Illinois when such repairs are initiated on facilities
32 located in the declared disaster area within 6 months after
33 the disaster.
34 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
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1 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
2 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
3 eff. 8-9-96; revised 8-21-96.)