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91_HB0542eng HB0542 Engrossed LRB9101956PTpk 1 AN ACT concerning taxation. 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 Section 3-5 as follows: 6 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5) 7 Sec. 3-5. Exemptions. Use of the following tangible 8 personal property is exempt from the tax imposed by this Act: 9 (1) Personal property purchased from a corporation, 10 society, association, foundation, institution, or 11 organization, other than a limited liability company, that is 12 organized and operated as a not-for-profit service enterprise 13 for the benefit of persons 65 years of age or older if the 14 personal property was not purchased by the enterprise for the 15 purpose of resale by the enterprise. 16 (2) Personal property purchased by a not-for-profit 17 Illinois county fair association for use in conducting, 18 operating, or promoting the county fair. 19 (3) Personal property purchased by a not-for-profit 20 music or dramatic arts organization that establishes, by 21 proof required by the Department by rule, that it has 22 received an exemption under Section 501(c)(3) of the Internal 23 Revenue Code and that is organized and operated for the 24 presentation of live public performances of musical or 25 theatrical works on a regular basis. 26 (4) Personal property purchased by a governmental body, 27 by a corporation, society, association, foundation, or 28 institution organized and operated exclusively for 29 charitable, religious, or educational purposes, or by a 30 not-for-profit corporation, society, association, foundation, 31 institution, or organization that has no compensated officers HB0542 Engrossed -2- LRB9101956PTpk 1 or employees and that is organized and operated primarily for 2 the recreation of persons 55 years of age or older. A limited 3 liability company may qualify for the exemption under this 4 paragraph only if the limited liability company is organized 5 and operated exclusively for educational purposes. On and 6 after July 1, 1987, however, no entity otherwise eligible for 7 this exemption shall make tax-free purchases unless it has an 8 active exemption identification number issued by the 9 Department. 10 (5) A passenger car that is a replacement vehicle to the 11 extent that the purchase price of the car is subject to the 12 Replacement Vehicle Tax. 13 (6) Graphic arts machinery and equipment, including 14 repair and replacement parts, both new and used, and 15 including that manufactured on special order, certified by 16 the purchaser to be used primarily for graphic arts 17 production, and including machinery and equipment purchased 18 for lease. 19 (7) Farm chemicals. 20 (8) Legal tender, currency, medallions, or gold or 21 silver coinage issued by the State of Illinois, the 22 government of the United States of America, or the government 23 of any foreign country, and bullion. 24 (9) Personal property purchased from a teacher-sponsored 25 student organization affiliated with an elementary or 26 secondary school located in Illinois. 27 (10) A motor vehicle of the first division, a motor 28 vehicle of the second division that is a self-contained motor 29 vehicle designed or permanently converted to provide living 30 quarters for recreational, camping, or travel use, with 31 direct walk through to the living quarters from the driver's 32 seat, or a motor vehicle of the second division that is of 33 the van configuration designed for the transportation of not 34 less than 7 nor more than 16 passengers, as defined in HB0542 Engrossed -3- LRB9101956PTpk 1 Section 1-146 of the Illinois Vehicle Code, that is used for 2 automobile renting, as defined in the Automobile Renting 3 Occupation and Use Tax Act. 4 (11) Farm machinery and equipment, both new and used, 5 including that manufactured on special order, certified by 6 the purchaser to be used primarily for production agriculture 7 or State or federal agricultural programs, including 8 individual replacement parts for the machinery and equipment, 9 including machinery and equipment purchased for lease, and 10 including implements of husbandry defined in Section 1-130 of 11 the Illinois Vehicle Code, farm machinery and agricultural 12 chemical and fertilizer spreaders, and nurse wagons required 13 to be registered under Section 3-809 of the Illinois Vehicle 14 Code, but excluding other motor vehicles required to be 15 registered under the Illinois Vehicle Code. Horticultural 16 polyhouses or hoop houses used for propagating, growing, or 17 overwintering plants shall be considered farm machinery and 18 equipment under this item (11). Agricultural chemical tender 19 tanks and dry boxes shall include units sold separately from 20 a motor vehicle required to be licensed and units sold 21 mounted on a motor vehicle required to be licensed if the 22 selling price of the tender is separately stated. 23 Farm machinery and equipment shall include precision 24 farming equipment that is installed or purchased to be 25 installed on farm machinery and equipment including, but not 26 limited to, tractors, harvesters, sprayers, planters, 27 seeders, or spreaders. Precision farming equipment includes, 28 but is not limited to, soil testing sensors, computers, 29 monitors, software, global positioning and mapping systems, 30 and other such equipment. 31 Farm machinery and equipment also includes computers, 32 sensors, software, and related equipment used primarily in 33 the computer-assisted operation of production agriculture 34 facilities, equipment, and activities such as, but not HB0542 Engrossed -4- LRB9101956PTpk 1 limited to, the collection, monitoring, and correlation of 2 animal and crop data for the purpose of formulating animal 3 diets and agricultural chemicals. This item (11) is exempt 4 from the provisions of Section 3-90. 5 (12) Fuel and petroleum products sold to or used by an 6 air common carrier, certified by the carrier to be used for 7 consumption, shipment, or storage in the conduct of its 8 business as an air common carrier, for a flight destined for 9 or returning from a location or locations outside the United 10 States without regard to previous or subsequent domestic 11 stopovers. 12 (13) Proceeds of mandatory service charges separately 13 stated on customers' bills for the purchase and consumption 14 of food and beverages purchased at retail from a retailer, to 15 the extent that the proceeds of the service charge are in 16 fact turned over as tips or as a substitute for tips to the 17 employees who participate directly in preparing, serving, 18 hosting or cleaning up the food or beverage function with 19 respect to which the service charge is imposed. 20 (14) Oil field exploration, drilling, and production 21 equipment, including (i) rigs and parts of rigs, rotary rigs, 22 cable tool rigs, and workover rigs, (ii) pipe and tubular 23 goods, including casing and drill strings, (iii) pumps and 24 pump-jack units, (iv) storage tanks and flow lines, (v) any 25 individual replacement part for oil field exploration, 26 drilling, and production equipment, and (vi) machinery and 27 equipment purchased for lease; but excluding motor vehicles 28 required to be registered under the Illinois Vehicle Code. 29 (15) Photoprocessing machinery and equipment, including 30 repair and replacement parts, both new and used, including 31 that manufactured on special order, certified by the 32 purchaser to be used primarily for photoprocessing, and 33 including photoprocessing machinery and equipment purchased 34 for lease. HB0542 Engrossed -5- LRB9101956PTpk 1 (16) Coal exploration, mining, offhighway hauling, 2 processing, maintenance, and reclamation equipment, including 3 replacement parts and equipment, and including equipment 4 purchased for lease, but excluding motor vehicles required to 5 be registered under the Illinois Vehicle Code. 6 (17) Distillation machinery and equipment, sold as a 7 unit or kit, assembled or installed by the retailer, 8 certified by the user to be used only for the production of 9 ethyl alcohol that will be used for consumption as motor fuel 10 or as a component of motor fuel for the personal use of the 11 user, and not subject to sale or resale. 12 (18) Manufacturing and assembling machinery and 13 equipment used primarily in the process of manufacturing or 14 assembling tangible personal property for wholesale or retail 15 sale or lease, whether that sale or lease is made directly by 16 the manufacturer or by some other person, whether the 17 materials used in the process are owned by the manufacturer 18 or some other person, or whether that sale or lease is made 19 apart from or as an incident to the seller's engaging in the 20 service occupation of producing machines, tools, dies, jigs, 21 patterns, gauges, or other similar items of no commercial 22 value on special order for a particular purchaser. 23 (19) Personal property delivered to a purchaser or 24 purchaser's donee inside Illinois when the purchase order for 25 that personal property was received by a florist located 26 outside Illinois who has a florist located inside Illinois 27 deliver the personal property. 28 (20) Semen used for artificial insemination of livestock 29 for direct agricultural production. 30 (21) Horses, or interests in horses, registered with and 31 meeting the requirements of any of the Arabian Horse Club 32 Registry of America, Appaloosa Horse Club, American Quarter 33 Horse Association, United States Trotting Association, or 34 Jockey Club, as appropriate, used for purposes of breeding or HB0542 Engrossed -6- LRB9101956PTpk 1 racing for prizes. 2 (22) Computers and communications equipment utilized for 3 any hospital purpose and equipment used in the diagnosis, 4 analysis, or treatment of hospital patients purchased by a 5 lessor who leases the equipment, under a lease of one year or 6 longer executed or in effect at the time the lessor would 7 otherwise be subject to the tax imposed by this Act, to a 8 hospital that has been issued an active tax exemption 9 identification number by the Department under Section 1g of 10 the Retailers' Occupation Tax Act. If the equipment is 11 leased in a manner that does not qualify for this exemption 12 or is used in any other non-exempt manner, the lessor shall 13 be liable for the tax imposed under this Act or the Service 14 Use Tax Act, as the case may be, based on the fair market 15 value of the property at the time the non-qualifying use 16 occurs. No lessor shall collect or attempt to collect an 17 amount (however designated) that purports to reimburse that 18 lessor for the tax imposed by this Act or the Service Use Tax 19 Act, as the case may be, if the tax has not been paid by the 20 lessor. If a lessor improperly collects any such amount from 21 the lessee, the lessee shall have a legal right to claim a 22 refund of that amount from the lessor. If, however, that 23 amount is not refunded to the lessee for any reason, the 24 lessor is liable to pay that amount to the Department. 25 (23) Personal property purchased by a lessor who leases 26 the property, under a lease of one year or longer executed 27 or in effect at the time the lessor would otherwise be 28 subject to the tax imposed by this Act, to a governmental 29 body that has been issued an active sales tax exemption 30 identification number by the Department under Section 1g of 31 the Retailers' Occupation Tax Act. If the property is leased 32 in a manner that does not qualify for this exemption or used 33 in any other non-exempt manner, the lessor shall be liable 34 for the tax imposed under this Act or the Service Use Tax HB0542 Engrossed -7- LRB9101956PTpk 1 Act, as the case may be, based on the fair market value of 2 the property at the time the non-qualifying use occurs. No 3 lessor shall collect or attempt to collect an amount (however 4 designated) that purports to reimburse that lessor for the 5 tax imposed by this Act or the Service Use Tax Act, as the 6 case may be, if the tax has not been paid by the lessor. If 7 a lessor improperly collects any such amount from the lessee, 8 the lessee shall have a legal right to claim a refund of that 9 amount from the lessor. If, however, that amount is not 10 refunded to the lessee for any reason, the lessor is liable 11 to pay that amount to the Department. 12 (24) Beginning with taxable years ending on or after 13 December 31, 1995 and ending with taxable years ending on or 14 before December 31, 2004, personal property that is donated 15 for disaster relief to be used in a State or federally 16 declared disaster area in Illinois or bordering Illinois by a 17 manufacturer or retailer that is registered in this State to 18 a corporation, society, association, foundation, or 19 institution that has been issued a sales tax exemption 20 identification number by the Department that assists victims 21 of the disaster who reside within the declared disaster area. 22 (25) Beginning with taxable years ending on or after 23 December 31, 1995 and ending with taxable years ending on or 24 before December 31, 2004, personal property that is used in 25 the performance of infrastructure repairs in this State, 26 including but not limited to municipal roads and streets, 27 access roads, bridges, sidewalks, waste disposal systems, 28 water and sewer line extensions, water distribution and 29 purification facilities, storm water drainage and retention 30 facilities, and sewage treatment facilities, resulting from a 31 State or federally declared disaster in Illinois or bordering 32 Illinois when such repairs are initiated on facilities 33 located in the declared disaster area within 6 months after 34 the disaster. HB0542 Engrossed -8- LRB9101956PTpk 1 (26) Beginning January 1, 2000, personal property, 2 including food, purchased through fundraising events for the 3 benefit of a public or private elementary or secondary 4 school, a group of those schools, or one or more school 5 districts if the events are sponsored by an entity that 6 consists primarily of volunteers and includes parents of the 7 school children. This paragraph does not apply to 8 fundraising events for the benefit of private home 9 instruction. This paragraph is exempt from the provisions of 10 Section 3-90. 11 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 12 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 13 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552, 14 eff. 12-12-97; 90-605, eff. 6-30-98.) 15 Section 10. The Service Use Tax Act is amended by 16 changing Section 3-5 as follows: 17 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5) 18 Sec. 3-5. Exemptions. Use of the following tangible 19 personal property is exempt from the tax imposed by this Act: 20 (1) Personal property purchased from a corporation, 21 society, association, foundation, institution, or 22 organization, other than a limited liability company, that is 23 organized and operated as a not-for-profit service enterprise 24 for the benefit of persons 65 years of age or older if the 25 personal property was not purchased by the enterprise for the 26 purpose of resale by the enterprise. 27 (2) Personal property purchased by a non-profit Illinois 28 county fair association for use in conducting, operating, or 29 promoting the county fair. 30 (3) Personal property purchased by a not-for-profit 31 music or dramatic arts organization that establishes, by 32 proof required by the Department by rule, that it has HB0542 Engrossed -9- LRB9101956PTpk 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) 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 purchased from a teacher-sponsored 15 student organization affiliated with an elementary or 16 secondary school located in Illinois. 17 (7) Farm machinery and equipment, both new and used, 18 including that manufactured on special order, certified by 19 the purchaser to be used primarily for production agriculture 20 or State or federal agricultural programs, including 21 individual replacement parts for the machinery and equipment, 22 including machinery and equipment purchased for lease, and 23 including implements of husbandry defined in Section 1-130 of 24 the Illinois Vehicle Code, farm machinery and agricultural 25 chemical and fertilizer spreaders, and nurse wagons required 26 to be registered under Section 3-809 of the Illinois Vehicle 27 Code, but excluding other motor vehicles required to be 28 registered under the Illinois Vehicle Code. Horticultural 29 polyhouses or hoop houses used for propagating, growing, or 30 overwintering plants shall be considered farm machinery and 31 equipment under this item (7). Agricultural chemical tender 32 tanks and dry boxes shall include units sold separately from 33 a motor vehicle required to be licensed and units sold 34 mounted on a motor vehicle required to be licensed if the HB0542 Engrossed -10- LRB9101956PTpk 1 selling price of the tender is separately stated. 2 Farm machinery and equipment shall include precision 3 farming equipment that is installed or purchased to be 4 installed on farm machinery and equipment including, but not 5 limited to, tractors, harvesters, sprayers, planters, 6 seeders, or spreaders. Precision farming equipment includes, 7 but is not limited to, soil testing sensors, computers, 8 monitors, software, global positioning and mapping systems, 9 and other such equipment. 10 Farm machinery and equipment also includes computers, 11 sensors, software, and related equipment used primarily in 12 the computer-assisted operation of production agriculture 13 facilities, equipment, and activities such as, but not 14 limited to, the collection, monitoring, and correlation of 15 animal and crop data for the purpose of formulating animal 16 diets and agricultural chemicals. This item (7) is exempt 17 from the provisions of Section 3-75. 18 (8) Fuel and petroleum products sold to or used by an 19 air common carrier, certified by the carrier to be used for 20 consumption, shipment, or storage in the conduct of its 21 business as an air common carrier, for a flight destined for 22 or returning from a location or locations outside the United 23 States without regard to previous or subsequent domestic 24 stopovers. 25 (9) Proceeds of mandatory service charges separately 26 stated on customers' bills for the purchase and consumption 27 of food and beverages acquired as an incident to the purchase 28 of a service from a serviceman, to the extent that the 29 proceeds of the service charge are in fact turned over as 30 tips or as a substitute for tips to the employees who 31 participate directly in preparing, serving, hosting or 32 cleaning up the food or beverage function with respect to 33 which the service charge is imposed. 34 (10) Oil field exploration, drilling, and production HB0542 Engrossed -11- LRB9101956PTpk 1 equipment, including (i) rigs and parts of rigs, rotary rigs, 2 cable tool rigs, and workover rigs, (ii) pipe and tubular 3 goods, including casing and drill strings, (iii) pumps and 4 pump-jack units, (iv) storage tanks and flow lines, (v) any 5 individual replacement part for oil field exploration, 6 drilling, and production equipment, and (vi) machinery and 7 equipment purchased for lease; but excluding motor vehicles 8 required to be registered under the Illinois Vehicle Code. 9 (11) Proceeds from the sale of photoprocessing machinery 10 and equipment, including repair and replacement parts, both 11 new and used, including that manufactured on special order, 12 certified by the purchaser to be used primarily for 13 photoprocessing, and including photoprocessing machinery and 14 equipment purchased for lease. 15 (12) Coal exploration, mining, offhighway hauling, 16 processing, maintenance, and reclamation equipment, including 17 replacement parts and equipment, and including equipment 18 purchased for lease, but excluding motor vehicles required to 19 be registered under the Illinois Vehicle Code. 20 (13) Semen used for artificial insemination of livestock 21 for direct agricultural production. 22 (14) Horses, or interests in horses, registered with and 23 meeting the requirements of any of the Arabian Horse Club 24 Registry of America, Appaloosa Horse Club, American Quarter 25 Horse Association, United States Trotting Association, or 26 Jockey Club, as appropriate, used for purposes of breeding or 27 racing for prizes. 28 (15) Computers and communications equipment utilized for 29 any hospital purpose and equipment used in the diagnosis, 30 analysis, or treatment of hospital patients purchased by a 31 lessor who leases the equipment, under a lease of one year or 32 longer executed or in effect at the time the lessor would 33 otherwise be subject to the tax imposed by this Act, to a 34 hospital that has been issued an active tax exemption HB0542 Engrossed -12- LRB9101956PTpk 1 identification number by the Department under Section 1g of 2 the Retailers' Occupation Tax Act. If the equipment is leased 3 in a manner that does not qualify for this exemption or is 4 used in any other non-exempt manner, the lessor shall be 5 liable for the tax imposed under this Act or the Use Tax Act, 6 as the case may be, based on the fair market value of the 7 property at the time the non-qualifying use occurs. No 8 lessor shall collect or attempt to collect an amount (however 9 designated) that purports to reimburse that lessor for the 10 tax imposed by this Act or the Use Tax Act, as the case may 11 be, if the tax has not been paid by the lessor. If a lessor 12 improperly collects any such amount from the lessee, the 13 lessee shall have a legal right to claim a refund of that 14 amount from the lessor. If, however, that amount is not 15 refunded to the lessee for any reason, the lessor is liable 16 to pay that amount to the Department. 17 (16) Personal property purchased by a lessor who leases 18 the property, under a lease of one year or longer executed or 19 in effect at the time the lessor would otherwise be subject 20 to the tax imposed by this Act, to a governmental body that 21 has been issued an active tax exemption identification number 22 by the Department under Section 1g of the Retailers' 23 Occupation Tax Act. If the property is leased in a manner 24 that does not qualify for this exemption or is used in any 25 other non-exempt manner, the lessor shall be liable for the 26 tax imposed under this Act or the Use Tax Act, as the case 27 may be, based on the fair market value of the property at the 28 time the non-qualifying use occurs. No lessor shall collect 29 or attempt to collect an amount (however designated) that 30 purports to reimburse that lessor for the tax imposed by this 31 Act or the Use Tax Act, as the case may be, if the tax has 32 not been paid by the lessor. If a lessor improperly collects 33 any such amount from the lessee, the lessee shall have a 34 legal right to claim a refund of that amount from the lessor. HB0542 Engrossed -13- LRB9101956PTpk 1 If, however, that amount is not refunded to the lessee for 2 any reason, the lessor is liable to pay that amount to the 3 Department. 4 (17) Beginning with taxable years ending on or after 5 December 31, 1995 and ending with taxable years ending on or 6 before December 31, 2004, personal property that is donated 7 for disaster relief to be used in a State or federally 8 declared disaster area in Illinois or bordering Illinois by a 9 manufacturer or retailer that is registered in this State to 10 a corporation, society, association, foundation, or 11 institution that has been issued a sales tax exemption 12 identification number by the Department that assists victims 13 of the disaster who reside within the declared disaster area. 14 (18) Beginning with taxable years ending on or after 15 December 31, 1995 and ending with taxable years ending on or 16 before December 31, 2004, personal property that is used in 17 the performance of infrastructure repairs in this State, 18 including but not limited to municipal roads and streets, 19 access roads, bridges, sidewalks, waste disposal systems, 20 water and sewer line extensions, water distribution and 21 purification facilities, storm water drainage and retention 22 facilities, and sewage treatment facilities, resulting from a 23 State or federally declared disaster in Illinois or bordering 24 Illinois when such repairs are initiated on facilities 25 located in the declared disaster area within 6 months after 26 the disaster. 27 (19) Beginning January 1, 2000, personal property, 28 including food, purchased through fundraising events for the 29 benefit of a public or private elementary or secondary 30 school, a group of those schools, or one or more school 31 districts if the events are sponsored by an entity that 32 consists primarily of volunteers and includes parents of the 33 school children. This paragraph does not apply to 34 fundraising events for the benefit of private home HB0542 Engrossed -14- LRB9101956PTpk 1 instruction. This paragraph is exempt from the provisions of 2 Section 3-75. 3 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 4 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 5 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552, 6 eff. 12-12-97; 90-605, eff. 6-30-98.) 7 Section 15. The Service Occupation Tax Act is amended by 8 changing Section 3-5 as follows: 9 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5) 10 Sec. 3-5. Exemptions. The following tangible personal 11 property is exempt from the tax imposed by this Act: 12 (1) Personal property sold by a corporation, society, 13 association, foundation, institution, or organization, other 14 than a limited liability company, that is organized and 15 operated as a not-for-profit service enterprise for the 16 benefit of persons 65 years of age or older if the personal 17 property was not purchased by the enterprise for the purpose 18 of resale by the enterprise. 19 (2) Personal property purchased by a not-for-profit 20 Illinois county fair association for use in conducting, 21 operating, or promoting the county fair. 22 (3) Personal property purchased by any not-for-profit 23 music or dramatic arts organization that establishes, by 24 proof required by the Department by rule, that it has 25 received an exemption under Section 501(c)(3) of the 26 Internal Revenue Code and that is organized and operated for 27 the presentation of live public performances of musical or 28 theatrical works on a regular basis. 29 (4) Legal tender, currency, medallions, or gold or 30 silver coinage issued by the State of Illinois, the 31 government of the United States of America, or the government 32 of any foreign country, and bullion. HB0542 Engrossed -15- LRB9101956PTpk 1 (5) Graphic arts machinery and equipment, including 2 repair and replacement parts, both new and used, and 3 including that manufactured on special order or purchased for 4 lease, certified by the purchaser to be used primarily for 5 graphic arts production. 6 (6) Personal property sold by a teacher-sponsored 7 student organization affiliated with an elementary or 8 secondary school located in Illinois. 9 (7) Farm machinery and equipment, both new and used, 10 including that manufactured on special order, certified by 11 the purchaser to be used primarily for production agriculture 12 or State or federal agricultural programs, including 13 individual replacement parts for the machinery and equipment, 14 including machinery and equipment purchased for lease, and 15 including implements of husbandry defined in Section 1-130 of 16 the Illinois Vehicle Code, farm machinery and agricultural 17 chemical and fertilizer spreaders, and nurse wagons required 18 to be registered under Section 3-809 of the Illinois Vehicle 19 Code, but excluding other motor vehicles required to be 20 registered under the Illinois Vehicle Code. Horticultural 21 polyhouses or hoop houses used for propagating, growing, or 22 overwintering plants shall be considered farm machinery and 23 equipment under this item (7). Agricultural chemical tender 24 tanks and dry boxes shall include units sold separately from 25 a motor vehicle required to be licensed and units sold 26 mounted on a motor vehicle required to be licensed if the 27 selling price of the tender is separately stated. 28 Farm machinery and equipment shall include precision 29 farming equipment that is installed or purchased to be 30 installed on farm machinery and equipment including, but not 31 limited to, tractors, harvesters, sprayers, planters, 32 seeders, or spreaders. Precision farming equipment includes, 33 but is not limited to, soil testing sensors, computers, 34 monitors, software, global positioning and mapping systems, HB0542 Engrossed -16- LRB9101956PTpk 1 and other such equipment. 2 Farm machinery and equipment also includes computers, 3 sensors, software, and related equipment used primarily in 4 the computer-assisted operation of production agriculture 5 facilities, equipment, and activities such as, but not 6 limited to, the collection, monitoring, and correlation of 7 animal and crop data for the purpose of formulating animal 8 diets and agricultural chemicals. This item (7) is exempt 9 from the provisions of Section 3-553-75. 10 (8) Fuel and petroleum products sold to or used by an 11 air common carrier, certified by the carrier to be used for 12 consumption, shipment, or storage in the conduct of its 13 business as an air common carrier, for a flight destined for 14 or returning from a location or locations outside the United 15 States without regard to previous or subsequent domestic 16 stopovers. 17 (9) Proceeds of mandatory service charges separately 18 stated on customers' bills for the purchase and consumption 19 of food and beverages, to the extent that the proceeds of the 20 service charge are in fact turned over as tips or as a 21 substitute for tips to the employees who participate directly 22 in preparing, serving, hosting or cleaning up the food or 23 beverage function with respect to which the service charge is 24 imposed. 25 (10) Oil field exploration, drilling, and production 26 equipment, including (i) rigs and parts of rigs, rotary rigs, 27 cable tool rigs, and workover rigs, (ii) pipe and tubular 28 goods, including casing and drill strings, (iii) pumps and 29 pump-jack units, (iv) storage tanks and flow lines, (v) any 30 individual replacement part for oil field exploration, 31 drilling, and production equipment, and (vi) machinery and 32 equipment purchased for lease; but excluding motor vehicles 33 required to be registered under the Illinois Vehicle Code. 34 (11) Photoprocessing machinery and equipment, including HB0542 Engrossed -17- LRB9101956PTpk 1 repair and replacement parts, both new and used, including 2 that manufactured on special order, certified by the 3 purchaser to be used primarily for photoprocessing, and 4 including photoprocessing machinery and equipment purchased 5 for lease. 6 (12) Coal exploration, mining, offhighway hauling, 7 processing, maintenance, and reclamation equipment, including 8 replacement parts and equipment, and including equipment 9 purchased for lease, but excluding motor vehicles required to 10 be registered under the Illinois Vehicle Code. 11 (13) Food for human consumption that is to be consumed 12 off the premises where it is sold (other than alcoholic 13 beverages, soft drinks and food that has been prepared for 14 immediate consumption) and prescription and non-prescription 15 medicines, drugs, medical appliances, and insulin, urine 16 testing materials, syringes, and needles used by diabetics, 17 for human use, when purchased for use by a person receiving 18 medical assistance under Article 5 of the Illinois Public Aid 19 Code who resides in a licensed long-term care facility, as 20 defined in the Nursing Home Care Act. 21 (14) Semen used for artificial insemination of livestock 22 for direct agricultural production. 23 (15) Horses, or interests in horses, registered with and 24 meeting the requirements of any of the Arabian Horse Club 25 Registry of America, Appaloosa Horse Club, American Quarter 26 Horse Association, United States Trotting Association, or 27 Jockey Club, as appropriate, used for purposes of breeding or 28 racing for prizes. 29 (16) Computers and communications equipment utilized for 30 any hospital purpose and equipment used in the diagnosis, 31 analysis, or treatment of hospital patients sold to a lessor 32 who leases the equipment, under a lease of one year or longer 33 executed or in effect at the time of the purchase, to a 34 hospital that has been issued an active tax exemption HB0542 Engrossed -18- LRB9101956PTpk 1 identification number by the Department under Section 1g of 2 the Retailers' Occupation Tax Act. 3 (17) Personal property sold to a lessor who leases the 4 property, under a lease of one year or longer executed or in 5 effect at the time of the purchase, to a governmental body 6 that has been issued an active tax exemption identification 7 number by the Department under Section 1g of the Retailers' 8 Occupation Tax Act. 9 (18) Beginning with taxable years ending on or after 10 December 31, 1995 and ending with taxable years ending on or 11 before December 31, 2004, personal property that is donated 12 for disaster relief to be used in a State or federally 13 declared disaster area in Illinois or bordering Illinois by a 14 manufacturer or retailer that is registered in this State to 15 a corporation, society, association, foundation, or 16 institution that has been issued a sales tax exemption 17 identification number by the Department that assists victims 18 of the disaster who reside within the declared disaster area. 19 (19) Beginning with taxable years ending on or after 20 December 31, 1995 and ending with taxable years ending on or 21 before December 31, 2004, personal property that is used in 22 the performance of infrastructure repairs in this State, 23 including but not limited to municipal roads and streets, 24 access roads, bridges, sidewalks, waste disposal systems, 25 water and sewer line extensions, water distribution and 26 purification facilities, storm water drainage and retention 27 facilities, and sewage treatment facilities, resulting from a 28 State or federally declared disaster in Illinois or bordering 29 Illinois when such repairs are initiated on facilities 30 located in the declared disaster area within 6 months after 31 the disaster. 32 (20) Beginning January 1, 2000, personal property, 33 including food, sold through fundraising events for the 34 benefit of a public or private elementary or secondary HB0542 Engrossed -19- LRB9101956PTpk 1 school, a group of those schools, or one or more school 2 districts if the events are sponsored by an entity that 3 consists primarily of volunteers and includes parents of the 4 school children. This paragraph does not apply to 5 fundraising events for the benefit of private home 6 instruction. This paragraph is exempt from the provisions of 7 Section 3-55. 8 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 9 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 10 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552, 11 eff. 12-12-97; 90-605, eff. 6-30-98; revised 2-10-99.) 12 Section 20. The Retailers' Occupation Tax Act is amended 13 by changing Section 2-5 as follows: 14 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5) 15 Sec. 2-5. Exemptions. Gross receipts from proceeds from 16 the sale of the following tangible personal property are 17 exempt from the tax imposed by this Act: 18 (1) Farm chemicals. 19 (2) 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 including machinery and equipment purchased for lease, and 25 including implements of husbandry defined in Section 1-130 of 26 the Illinois Vehicle Code, farm machinery and agricultural 27 chemical and fertilizer spreaders, and nurse wagons required 28 to be registered under Section 3-809 of the Illinois Vehicle 29 Code, but excluding other motor vehicles required to be 30 registered under the Illinois Vehicle Code. Horticultural 31 polyhouses or hoop houses used for propagating, growing, or 32 overwintering plants shall be considered farm machinery and HB0542 Engrossed -20- LRB9101956PTpk 1 equipment under this item (2). Agricultural chemical tender 2 tanks and dry boxes shall include units sold separately from 3 a motor vehicle required to be licensed and units sold 4 mounted on a motor vehicle required to be licensed, if the 5 selling price of the tender is separately stated. 6 Farm machinery and equipment shall include precision 7 farming equipment that is installed or purchased to be 8 installed on farm machinery and equipment including, but not 9 limited to, tractors, harvesters, sprayers, planters, 10 seeders, or spreaders. Precision farming equipment includes, 11 but is not limited to, soil testing sensors, computers, 12 monitors, software, global positioning and mapping systems, 13 and other such equipment. 14 Farm machinery and equipment also includes computers, 15 sensors, software, and related equipment used primarily in 16 the computer-assisted operation of production agriculture 17 facilities, equipment, and activities such as, but not 18 limited to, the collection, monitoring, and correlation of 19 animal and crop data for the purpose of formulating animal 20 diets and agricultural chemicals. This item (7) is exempt 21 from the provisions of Section 2-703-75. 22 (3) Distillation machinery and equipment, sold as a unit 23 or kit, assembled or installed by the retailer, certified by 24 the user to be used only for the production of ethyl alcohol 25 that will be used for consumption as motor fuel or as a 26 component of motor fuel for the personal use of the user, and 27 not subject to sale or resale. 28 (4) Graphic arts machinery and equipment, including 29 repair and replacement parts, both new and used, and 30 including that manufactured on special order or purchased for 31 lease, certified by the purchaser to be used primarily for 32 graphic arts production. 33 (5) A motor vehicle of the first division, a motor 34 vehicle of the second division that is a self-contained motor HB0542 Engrossed -21- LRB9101956PTpk 1 vehicle designed or permanently converted to provide living 2 quarters for recreational, camping, or travel use, with 3 direct walk through access to the living quarters from the 4 driver's seat, or a motor vehicle of the second division that 5 is of the van configuration designed for the transportation 6 of not less than 7 nor more than 16 passengers, as defined in 7 Section 1-146 of the Illinois Vehicle Code, that is used for 8 automobile renting, as defined in the Automobile Renting 9 Occupation and Use Tax Act. 10 (6) Personal property sold by a teacher-sponsored 11 student organization affiliated with an elementary or 12 secondary school located in Illinois. 13 (7) Proceeds of that portion of the selling price of a 14 passenger car the sale of which is subject to the Replacement 15 Vehicle Tax. 16 (8) Personal property sold to an Illinois county fair 17 association for use in conducting, operating, or promoting 18 the county fair. 19 (9) Personal property sold to a not-for-profit music or 20 dramatic arts organization that establishes, by proof 21 required by the Department by rule, that it has received an 22 exemption under Section 501(c) (3) of the Internal Revenue 23 Code and that is organized and operated for the presentation 24 of live public performances of musical or theatrical works on 25 a regular basis. 26 (10) Personal property sold by a corporation, society, 27 association, foundation, institution, or organization, other 28 than a limited liability company, that is organized and 29 operated as a not-for-profit service enterprise for the 30 benefit of persons 65 years of age or older if the personal 31 property was not purchased by the enterprise for the purpose 32 of resale by the enterprise. 33 (11) Personal property sold to a governmental body, to a 34 corporation, society, association, foundation, or institution HB0542 Engrossed -22- LRB9101956PTpk 1 organized and operated exclusively for charitable, religious, 2 or educational purposes, or to a not-for-profit corporation, 3 society, association, foundation, institution, or 4 organization that has no compensated officers or employees 5 and that is organized and operated primarily for the 6 recreation of persons 55 years of age or older. A limited 7 liability company may qualify for the exemption under this 8 paragraph only if the limited liability company is organized 9 and operated exclusively for educational purposes. On and 10 after July 1, 1987, however, no entity otherwise eligible for 11 this exemption shall make tax-free purchases unless it has an 12 active identification number issued by the Department. 13 (12) Personal property sold to interstate carriers for 14 hire for use as rolling stock moving in interstate commerce 15 or to lessors under leases of one year or longer executed or 16 in effect at the time of purchase by interstate carriers for 17 hire for use as rolling stock moving in interstate commerce 18 and equipment operated by a telecommunications provider, 19 licensed as a common carrier by the Federal Communications 20 Commission, which is permanently installed in or affixed to 21 aircraft moving in interstate commerce. 22 (13) Proceeds from sales to owners, lessors, or shippers 23 of tangible personal property that is utilized by interstate 24 carriers for hire for use as rolling stock moving in 25 interstate commerce and equipment operated by a 26 telecommunications provider, licensed as a common carrier by 27 the Federal Communications Commission, which is permanently 28 installed in or affixed to aircraft moving in interstate 29 commerce. 30 (14) Machinery and equipment that will be used by the 31 purchaser, or a lessee of the purchaser, primarily in the 32 process of manufacturing or assembling tangible personal 33 property for wholesale or retail sale or lease, whether the 34 sale or lease is made directly by the manufacturer or by some HB0542 Engrossed -23- LRB9101956PTpk 1 other person, whether the materials used in the process are 2 owned by the manufacturer or some other person, or whether 3 the sale or lease is made apart from or as an incident to the 4 seller's engaging in the service occupation of producing 5 machines, tools, dies, jigs, patterns, gauges, or other 6 similar items of no commercial value on special order for a 7 particular purchaser. 8 (15) Proceeds of mandatory service charges separately 9 stated on customers' bills for purchase and consumption of 10 food and beverages, to the extent that the proceeds of the 11 service charge are in fact turned over as tips or as a 12 substitute for tips to the employees who participate directly 13 in preparing, serving, hosting or cleaning up the food or 14 beverage function with respect to which the service charge is 15 imposed. 16 (16) Petroleum products sold to a purchaser if the 17 seller is prohibited by federal law from charging tax to the 18 purchaser. 19 (17) Tangible personal property sold to a common carrier 20 by rail or motor that receives the physical possession of the 21 property in Illinois and that transports the property, or 22 shares with another common carrier in the transportation of 23 the property, out of Illinois on a standard uniform bill of 24 lading showing the seller of the property as the shipper or 25 consignor of the property to a destination outside Illinois, 26 for use outside Illinois. 27 (18) Legal tender, currency, medallions, or gold or 28 silver coinage issued by the State of Illinois, the 29 government of the United States of America, or the government 30 of any foreign country, and bullion. 31 (19) Oil field exploration, drilling, and production 32 equipment, including (i) rigs and parts of rigs, rotary rigs, 33 cable tool rigs, and workover rigs, (ii) pipe and tubular 34 goods, including casing and drill strings, (iii) pumps and HB0542 Engrossed -24- LRB9101956PTpk 1 pump-jack units, (iv) storage tanks and flow lines, (v) any 2 individual replacement part for oil field exploration, 3 drilling, and production equipment, and (vi) machinery and 4 equipment purchased for lease; but excluding motor vehicles 5 required to be registered under the Illinois Vehicle Code. 6 (20) Photoprocessing machinery and equipment, including 7 repair and replacement parts, both new and used, including 8 that manufactured on special order, certified by the 9 purchaser to be used primarily for photoprocessing, and 10 including photoprocessing machinery and equipment purchased 11 for lease. 12 (21) Coal exploration, mining, offhighway hauling, 13 processing, maintenance, and reclamation equipment, including 14 replacement parts and equipment, and including equipment 15 purchased for lease, but excluding motor vehicles required to 16 be registered under the Illinois Vehicle Code. 17 (22) Fuel and petroleum products sold to or used by an 18 air carrier, certified by the carrier to be used for 19 consumption, shipment, or storage in the conduct of its 20 business as an air common carrier, for a flight destined for 21 or returning from a location or locations outside the United 22 States without regard to previous or subsequent domestic 23 stopovers. 24 (23) A transaction in which the purchase order is 25 received by a florist who is located outside Illinois, but 26 who has a florist located in Illinois deliver the property to 27 the purchaser or the purchaser's donee in Illinois. 28 (24) Fuel consumed or used in the operation of ships, 29 barges, or vessels that are used primarily in or for the 30 transportation of property or the conveyance of persons for 31 hire on rivers bordering on this State if the fuel is 32 delivered by the seller to the purchaser's barge, ship, or 33 vessel while it is afloat upon that bordering river. 34 (25) A motor vehicle sold in this State to a nonresident HB0542 Engrossed -25- LRB9101956PTpk 1 even though the motor vehicle is delivered to the nonresident 2 in this State, if the motor vehicle is not to be titled in 3 this State, and if a driveaway decal permit is issued to the 4 motor vehicle as provided in Section 3-603 of the Illinois 5 Vehicle Code or if the nonresident purchaser has vehicle 6 registration plates to transfer to the motor vehicle upon 7 returning to his or her home state. The issuance of the 8 driveaway decal permit or having the out-of-state 9 registration plates to be transferred is prima facie evidence 10 that the motor vehicle will not be titled in this State. 11 (26) Semen used for artificial insemination of livestock 12 for direct agricultural production. 13 (27) Horses, or interests in horses, registered with and 14 meeting the requirements of any of the Arabian Horse Club 15 Registry of America, Appaloosa Horse Club, American Quarter 16 Horse Association, United States Trotting Association, or 17 Jockey Club, as appropriate, used for purposes of breeding or 18 racing for prizes. 19 (28) Computers and communications equipment utilized for 20 any hospital purpose and equipment used in the diagnosis, 21 analysis, or treatment of hospital patients sold to a lessor 22 who leases the equipment, under a lease of one year or longer 23 executed or in effect at the time of the purchase, to a 24 hospital that has been issued an active tax exemption 25 identification number by the Department under Section 1g of 26 this Act. 27 (29) Personal property sold to a lessor who leases the 28 property, under a lease of one year or longer executed or in 29 effect at the time of the purchase, to a governmental body 30 that has been issued an active tax exemption identification 31 number by the Department under Section 1g of this Act. 32 (30) 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 donated HB0542 Engrossed -26- LRB9101956PTpk 1 for disaster relief to be used in a State or federally 2 declared disaster area in Illinois or bordering Illinois by a 3 manufacturer or retailer that is registered in this State to 4 a corporation, society, association, foundation, or 5 institution that has been issued a sales tax exemption 6 identification number by the Department that assists victims 7 of the disaster who reside within the declared disaster area. 8 (31) Beginning with taxable years ending on or after 9 December 31, 1995 and ending with taxable years ending on or 10 before December 31, 2004, personal property that is used in 11 the performance of infrastructure repairs in this State, 12 including but not limited to municipal roads and streets, 13 access roads, bridges, sidewalks, waste disposal systems, 14 water and sewer line extensions, water distribution and 15 purification facilities, storm water drainage and retention 16 facilities, and sewage treatment facilities, resulting from a 17 State or federally declared disaster in Illinois or bordering 18 Illinois when such repairs are initiated on facilities 19 located in the declared disaster area within 6 months after 20 the disaster. 21 (32) Beginning January 1, 2000, personal property, 22 including food, sold through fundraising events for the 23 benefit of a public or private elementary or secondary 24 school, a group of those schools, or one or more school 25 districts, if the events are sponsored by an entity that 26 consists primarily of volunteers and includes parents of the 27 school children. This paragraph does not apply to 28 fundraising events for the benefit of private home 29 instruction. This paragraph is exempt from the provisions of 30 Section 2-70. 31 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 32 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 33 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-519, 34 eff. 6-1-98; 90-552, eff. 12-12-97; 90-605, eff. 6-30-98; HB0542 Engrossed -27- LRB9101956PTpk 1 revised 2-10-99.) 2 Section 99. Effective date. This Act takes effect upon 3 becoming law.