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91_HB1390
LRB9105020PTmb
1 AN ACT in relation to precision farming.
2 WHEREAS, In furtherance of the provisions of the
3 Sustainable Agriculture Act, effective January 9, 1990, which
4 found that production agriculture in Illinois faces rapidly
5 growing competition for international markets, for which the
6 basis of competition is cost of production, and that in order
7 to compete effectively, agricultural producers in Illinois
8 must be the early and most effective adapters of new
9 productivity-enhancing, cost-cutting, and quality-improving
10 technology; and
11 WHEREAS, In order to keep Illinois agricultural producers
12 on at least an equal footing with those of other states; and
13 WHEREAS, In order to clarify the rules under the use and
14 occupation tax provisions as they relate to production
15 agricultural producers to allow and encourage Illinois
16 farmers, directly or through custom farmers and special
17 service operators, to implement the precision farming methods
18 that optimize their production and profitability while
19 minimizing environmental impacts; therefore,
20 Be it enacted by the People of the State of Illinois,
21 represented in the General Assembly:
22 Section 5. The Use Tax Act is amended by changing
23 Section 3-5 as follows:
24 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
25 Sec. 3-5. Exemptions. Use of the following tangible
26 personal property is exempt from the tax imposed by this Act:
27 (1) Personal property purchased from a corporation,
28 society, association, foundation, institution, or
29 organization, other than a limited liability company, that is
30 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 not-for-profit
5 Illinois county fair association for use in conducting,
6 operating, or 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) Personal property purchased by a governmental body,
15 by a corporation, society, association, foundation, or
16 institution organized and operated exclusively for
17 charitable, religious, or educational purposes, or by a
18 not-for-profit corporation, society, association, foundation,
19 institution, or organization that has no compensated officers
20 or employees and that is organized and operated primarily for
21 the recreation of persons 55 years of age or older. A limited
22 liability company may qualify for the exemption under this
23 paragraph only if the limited liability company is organized
24 and operated exclusively for educational purposes. On and
25 after July 1, 1987, however, no entity otherwise eligible for
26 this exemption shall make tax-free purchases unless it has an
27 active exemption identification number issued by the
28 Department.
29 (5) A passenger car that is a replacement vehicle to the
30 extent that the purchase price of the car is subject to the
31 Replacement Vehicle Tax.
32 (6) Graphic arts machinery and equipment, including
33 repair and replacement parts, both new and used, and
34 including that manufactured on special order, certified by
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1 the purchaser to be used primarily for graphic arts
2 production, and including machinery and equipment purchased
3 for lease.
4 (7) Farm chemicals.
5 (8) 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 (9) Personal property purchased from a teacher-sponsored
10 student organization affiliated with an elementary or
11 secondary school located in Illinois.
12 (10) A motor vehicle of the first division, a motor
13 vehicle of the second division that is a self-contained motor
14 vehicle designed or permanently converted to provide living
15 quarters for recreational, camping, or travel use, with
16 direct walk through to the living quarters from the driver's
17 seat, or a motor vehicle of the second division that is of
18 the van configuration designed for the transportation of not
19 less than 7 nor more than 16 passengers, as defined in
20 Section 1-146 of the Illinois Vehicle Code, that is used for
21 automobile renting, as defined in the Automobile Renting
22 Occupation and Use Tax Act.
23 (11) Farm machinery and equipment, both new and used,
24 including that manufactured on special order, certified by
25 the purchaser to be used primarily for production agriculture
26 or State or federal agricultural programs, including
27 individual replacement parts for the machinery and equipment,
28 including machinery and equipment purchased for lease, and
29 including implements of husbandry defined in Section 1-130 of
30 the Illinois Vehicle Code, farm machinery and agricultural
31 chemical and fertilizer spreaders, and nurse wagons required
32 to be registered under Section 3-809 of the Illinois Vehicle
33 Code, but excluding other motor vehicles required to be
34 registered under the Illinois Vehicle Code. Horticultural
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1 polyhouses or hoop houses used for propagating, growing, or
2 overwintering plants shall be considered farm machinery and
3 equipment under this item (11). Agricultural chemical tender
4 tanks and dry boxes shall include units sold separately from
5 a motor vehicle required to be licensed and units sold
6 mounted on a motor vehicle required to be licensed if the
7 selling price of the tender is separately stated.
8 Farm machinery and equipment shall include precision
9 farming equipment that is installed or purchased to be
10 installed on farm machinery and equipment including, but not
11 limited to, tractors, harvesters, sprayers, planters,
12 seeders, or spreaders. Production agriculture includes
13 machinery and equipment used by farmers, custom farmers, and
14 special service operators, whether employed before, during,
15 or after a crop is planted and harvested, primarily in
16 furtherance of precision agriculture methods as they are
17 developed, in activities such as, but not limited to, the
18 computer-assisted operation of production agriculture
19 facilities, and the collection, monitoring, and correlation
20 of animal and crop data for the purpose of formulating animal
21 diets and agricultural chemicals and their applications.
22 Precision farming machinery and equipment includes, but is
23 not limited to, soil testing, moisture and yield sensors and
24 monitors, including machinery and equipment used on soils and
25 plants for the purpose of generating data used in furtherance
26 of production agriculture such as laboratory equipment,
27 computers, monitors, software, global positioning and mapping
28 systems, vehicle guidance systems, modems and data
29 communications equipment, and other such equipment and
30 necessary mounting hardware, wiring, and antennas.
31 All-terrain vehicles on which production agriculture
32 machinery and equipment is mounted is exempt only if the
33 vehicles are used only incidentally in non-production
34 agriculture activities. Precision farming equipment includes,
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1 but is not limited to, soil testing sensors, computers,
2 monitors, software, global positioning and mapping systems,
3 and other such equipment.
4 Farm machinery and equipment also includes computers,
5 sensors, software, and related equipment used primarily in
6 the computer-assisted operation of production agriculture
7 facilities, equipment, and activities such as, but not
8 limited to, the collection, monitoring, and correlation of
9 animal and crop data for the purpose of formulating animal
10 diets and agricultural chemicals. This item (11) is exempt
11 from the provisions of Section 3-90.
12 (12) Fuel and petroleum products sold to or used by an
13 air common carrier, certified by the carrier to be used for
14 consumption, shipment, or storage in the conduct of its
15 business as an air common carrier, for a flight destined for
16 or returning from a location or locations outside the United
17 States without regard to previous or subsequent domestic
18 stopovers.
19 (13) Proceeds of mandatory service charges separately
20 stated on customers' bills for the purchase and consumption
21 of food and beverages purchased at retail from a retailer, to
22 the extent that the proceeds of the service charge are in
23 fact turned over as tips or as a substitute for tips to the
24 employees who participate directly in preparing, serving,
25 hosting or cleaning up the food or beverage function with
26 respect to which the service charge is imposed.
27 (14) Oil field exploration, drilling, and production
28 equipment, including (i) rigs and parts of rigs, rotary rigs,
29 cable tool rigs, and workover rigs, (ii) pipe and tubular
30 goods, including casing and drill strings, (iii) pumps and
31 pump-jack units, (iv) storage tanks and flow lines, (v) any
32 individual replacement part for oil field exploration,
33 drilling, and production equipment, and (vi) machinery and
34 equipment purchased for lease; but excluding motor vehicles
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1 required to be registered under the Illinois Vehicle Code.
2 (15) Photoprocessing machinery and equipment, including
3 repair and replacement parts, both new and used, including
4 that manufactured on special order, certified by the
5 purchaser to be used primarily for photoprocessing, and
6 including photoprocessing machinery and equipment purchased
7 for lease.
8 (16) Coal exploration, mining, offhighway hauling,
9 processing, maintenance, and reclamation equipment, including
10 replacement parts and equipment, and including equipment
11 purchased for lease, but excluding motor vehicles required to
12 be registered under the Illinois Vehicle Code.
13 (17) Distillation machinery and equipment, sold as a
14 unit or kit, assembled or installed by the retailer,
15 certified by the user to be used only for the production of
16 ethyl alcohol that will be used for consumption as motor fuel
17 or as a component of motor fuel for the personal use of the
18 user, and not subject to sale or resale.
19 (18) Manufacturing and assembling machinery and
20 equipment used primarily in the process of manufacturing or
21 assembling tangible personal property for wholesale or retail
22 sale or lease, whether that sale or lease is made directly by
23 the manufacturer or by some other person, whether the
24 materials used in the process are owned by the manufacturer
25 or some other person, or whether that sale or lease is made
26 apart from or as an incident to the seller's engaging in the
27 service occupation of producing machines, tools, dies, jigs,
28 patterns, gauges, or other similar items of no commercial
29 value on special order for a particular purchaser.
30 (19) Personal property delivered to a purchaser or
31 purchaser's donee inside Illinois when the purchase order for
32 that personal property was received by a florist located
33 outside Illinois who has a florist located inside Illinois
34 deliver the personal property.
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1 (20) Semen used for artificial insemination of livestock
2 for direct agricultural production.
3 (21) Horses, or interests in horses, registered with and
4 meeting the requirements of any of the Arabian Horse Club
5 Registry of America, Appaloosa Horse Club, American Quarter
6 Horse Association, United States Trotting Association, or
7 Jockey Club, as appropriate, used for purposes of breeding or
8 racing for prizes.
9 (22) Computers and communications equipment utilized for
10 any hospital purpose and equipment used in the diagnosis,
11 analysis, or treatment of hospital patients purchased by a
12 lessor who leases the equipment, under a lease of one year or
13 longer executed or in effect at the time the lessor would
14 otherwise be subject to the tax imposed by this Act, to a
15 hospital that has been issued an active tax exemption
16 identification number by the Department under Section 1g of
17 the Retailers' Occupation Tax Act. If the equipment is
18 leased in a manner that does not qualify for this exemption
19 or is used in any other non-exempt manner, the lessor shall
20 be liable for the tax imposed under this Act or the Service
21 Use Tax Act, as the case may be, based on the fair market
22 value of the property at the time the non-qualifying use
23 occurs. No lessor shall collect or attempt to collect an
24 amount (however designated) that purports to reimburse that
25 lessor for the tax imposed by this Act or the Service Use Tax
26 Act, as the case may be, if the tax has not been paid by the
27 lessor. If a lessor improperly collects any such amount from
28 the lessee, the lessee shall have a legal right to claim a
29 refund of that amount from the lessor. If, however, that
30 amount is not refunded to the lessee for any reason, the
31 lessor is liable to pay that amount to the Department.
32 (23) Personal property purchased by a lessor who leases
33 the property, under a lease of one year or longer executed
34 or in effect at the time the lessor would otherwise be
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1 subject to the tax imposed by this Act, to a governmental
2 body that has been issued an active sales tax exemption
3 identification number by the Department under Section 1g of
4 the Retailers' Occupation Tax Act. If the property is leased
5 in a manner that does not qualify for this exemption or used
6 in any other non-exempt manner, the lessor shall be liable
7 for the tax imposed under this Act or the Service Use Tax
8 Act, as the case may be, based on the fair market value of
9 the property at the time the non-qualifying use occurs. No
10 lessor shall collect or attempt to collect an amount (however
11 designated) that purports to reimburse that lessor for the
12 tax imposed by this Act or the Service Use Tax Act, as the
13 case may be, if the tax has not been paid by the lessor. If
14 a lessor improperly collects any such amount from the lessee,
15 the lessee shall have a legal right to claim a refund of that
16 amount from the lessor. If, however, that amount is not
17 refunded to the lessee for any reason, the lessor is liable
18 to pay that amount to the Department.
19 (24) 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 donated
22 for disaster relief to be used in a State or federally
23 declared disaster area in Illinois or bordering Illinois by a
24 manufacturer or retailer that is registered in this State to
25 a corporation, society, association, foundation, or
26 institution that has been issued a sales tax exemption
27 identification number by the Department that assists victims
28 of the disaster who reside within the declared disaster area.
29 (25) Beginning with taxable years ending on or after
30 December 31, 1995 and ending with taxable years ending on or
31 before December 31, 2004, personal property that is used in
32 the performance of infrastructure repairs in this State,
33 including but not limited to municipal roads and streets,
34 access roads, bridges, sidewalks, waste disposal systems,
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1 water and sewer line extensions, water distribution and
2 purification facilities, storm water drainage and retention
3 facilities, and sewage treatment facilities, resulting from a
4 State or federally declared disaster in Illinois or bordering
5 Illinois when such repairs are initiated on facilities
6 located in the declared disaster area within 6 months after
7 the disaster.
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.)
12 Section 10. The Service Use Tax Act is amended by
13 changing Section 3-5 as follows:
14 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
15 Sec. 3-5. Exemptions. Use of the following tangible
16 personal property is exempt from the tax imposed by this Act:
17 (1) Personal property purchased from a corporation,
18 society, association, foundation, institution, or
19 organization, other than a limited liability company, that is
20 organized and operated as a not-for-profit service enterprise
21 for the benefit of persons 65 years of age or older if the
22 personal property was not purchased by the enterprise for the
23 purpose of resale by the enterprise.
24 (2) Personal property purchased by a non-profit Illinois
25 county fair association for use in conducting, operating, or
26 promoting the county fair.
27 (3) Personal property purchased by a not-for-profit
28 music or dramatic arts organization that establishes, by
29 proof required by the Department by rule, that it has
30 received an exemption under Section 501(c)(3) of the Internal
31 Revenue Code and that is organized and operated for the
32 presentation of live public performances of musical or
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1 theatrical works on a regular basis.
2 (4) Legal tender, currency, medallions, or gold or
3 silver coinage issued by the State of Illinois, the
4 government of the United States of America, or the government
5 of any foreign country, and bullion.
6 (5) Graphic arts machinery and equipment, including
7 repair and replacement parts, both new and used, and
8 including that manufactured on special order or purchased for
9 lease, certified by the purchaser to be used primarily for
10 graphic arts production.
11 (6) Personal property purchased from a teacher-sponsored
12 student organization affiliated with an elementary or
13 secondary school located in Illinois.
14 (7) Farm machinery and equipment, both new and used,
15 including that manufactured on special order, certified by
16 the purchaser to be used primarily for production agriculture
17 or State or federal agricultural programs, including
18 individual replacement parts for the machinery and equipment,
19 including machinery and equipment purchased for lease, and
20 including implements of husbandry defined in Section 1-130 of
21 the Illinois Vehicle Code, farm machinery and agricultural
22 chemical and fertilizer spreaders, and nurse wagons required
23 to be registered under Section 3-809 of the Illinois Vehicle
24 Code, but excluding other motor vehicles required to be
25 registered under the Illinois Vehicle Code. Horticultural
26 polyhouses or hoop houses used for propagating, growing, or
27 overwintering plants shall be considered farm machinery and
28 equipment under this item (7). Agricultural chemical tender
29 tanks and dry boxes shall include units sold separately from
30 a motor vehicle required to be licensed and units sold
31 mounted on a motor vehicle required to be licensed if the
32 selling price of the tender is separately stated.
33 Farm machinery and equipment shall include precision
34 farming equipment that is installed or purchased to be
-11- LRB9105020PTmb
1 installed on farm machinery and equipment including, but not
2 limited to, tractors, harvesters, sprayers, planters,
3 seeders, or spreaders. Production agriculture includes
4 machinery and equipment used by farmers, custom farmers, and
5 special service operators, whether employed before, during,
6 or after a crop is planted and harvested, primarily in
7 furtherance of precision agriculture methods as they are
8 developed, in activities such as, but not limited to, the
9 computer-assisted operation of production agriculture
10 facilities, and the collection, monitoring, and correlation
11 of animal and crop data for the purpose of formulating animal
12 diets and agricultural chemicals and their applications.
13 Precision farming machinery and equipment includes, but is
14 not limited to, soil testing, moisture and yield sensors and
15 monitors, including machinery and equipment used on soils and
16 plants for the purpose of generating data used in furtherance
17 of production agriculture such as laboratory equipment,
18 computers, monitors, software, global positioning and mapping
19 systems, vehicle guidance systems, modems and data
20 communications equipment, and other such equipment and
21 necessary mounting hardware, wiring, and antennas.
22 All-terrain vehicles on which production agriculture
23 machinery and equipment is mounted is exempt only if the
24 vehicles are used only incidentally in non-production
25 agriculture activities. Precision farming equipment includes,
26 but is not limited to, soil testing sensors, computers,
27 monitors, software, global positioning and mapping systems,
28 and other such equipment.
29 Farm machinery and equipment also includes computers,
30 sensors, software, and related equipment used primarily in
31 the computer-assisted operation of production agriculture
32 facilities, equipment, and activities such as, but not
33 limited to, the collection, monitoring, and correlation of
34 animal and crop data for the purpose of formulating animal
-12- LRB9105020PTmb
1 diets and agricultural chemicals. This item (7) is exempt
2 from the provisions of Section 3-75.
3 (8) Fuel and petroleum products sold to or used by an
4 air common carrier, certified by the carrier to be used for
5 consumption, shipment, or storage in the conduct of its
6 business as an air common carrier, for a flight destined for
7 or returning from a location or locations outside the United
8 States without regard to previous or subsequent domestic
9 stopovers.
10 (9) Proceeds of mandatory service charges separately
11 stated on customers' bills for the purchase and consumption
12 of food and beverages acquired as an incident to the purchase
13 of a service from a serviceman, to the extent that the
14 proceeds of the service charge are in fact turned over as
15 tips or as a substitute for tips to the employees who
16 participate directly in preparing, serving, hosting or
17 cleaning up the food or beverage function with respect to
18 which the service charge is imposed.
19 (10) Oil field exploration, drilling, and production
20 equipment, including (i) rigs and parts of rigs, rotary rigs,
21 cable tool rigs, and workover rigs, (ii) pipe and tubular
22 goods, including casing and drill strings, (iii) pumps and
23 pump-jack units, (iv) storage tanks and flow lines, (v) any
24 individual replacement part for oil field exploration,
25 drilling, and production equipment, and (vi) machinery and
26 equipment purchased for lease; but excluding motor vehicles
27 required to be registered under the Illinois Vehicle Code.
28 (11) Proceeds from the sale of photoprocessing machinery
29 and equipment, including repair and replacement parts, both
30 new and used, including that manufactured on special order,
31 certified by the purchaser to be used primarily for
32 photoprocessing, and including photoprocessing machinery and
33 equipment purchased for lease.
34 (12) Coal exploration, mining, offhighway hauling,
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1 processing, maintenance, and reclamation equipment, including
2 replacement parts and equipment, and including equipment
3 purchased for lease, but excluding motor vehicles required to
4 be registered under the Illinois Vehicle Code.
5 (13) Semen used for artificial insemination of livestock
6 for direct agricultural production.
7 (14) Horses, or interests in horses, registered with and
8 meeting the requirements of any of the Arabian Horse Club
9 Registry of America, Appaloosa Horse Club, American Quarter
10 Horse Association, United States Trotting Association, or
11 Jockey Club, as appropriate, used for purposes of breeding or
12 racing for prizes.
13 (15) Computers and communications equipment utilized for
14 any hospital purpose and equipment used in the diagnosis,
15 analysis, or treatment of hospital patients purchased by a
16 lessor who leases the equipment, under a lease of one year or
17 longer executed or in effect at the time the lessor would
18 otherwise be subject to the tax imposed by this Act, to a
19 hospital that has been issued an active tax exemption
20 identification number by the Department under Section 1g of
21 the Retailers' Occupation Tax Act. If the equipment is leased
22 in a manner that does not qualify for this exemption or is
23 used in any other non-exempt manner, the lessor shall be
24 liable for the tax imposed under this Act or the Use Tax Act,
25 as the case may be, based on the fair market value of the
26 property at the time the non-qualifying use occurs. No
27 lessor shall collect or attempt to collect an amount (however
28 designated) that purports to reimburse that lessor for the
29 tax imposed by this Act or the Use Tax Act, as the case may
30 be, if the tax has not been paid by the lessor. If a lessor
31 improperly collects any such amount from the lessee, the
32 lessee shall have a legal right to claim a refund of that
33 amount from the lessor. If, however, that amount is not
34 refunded to the lessee for any reason, the lessor is liable
-14- LRB9105020PTmb
1 to pay that amount to the Department.
2 (16) Personal property purchased by a lessor who leases
3 the property, under a lease of one year or longer executed or
4 in effect at the time the lessor would otherwise be subject
5 to the tax imposed by this Act, to a governmental body that
6 has been issued an active tax exemption identification number
7 by the Department under Section 1g of the Retailers'
8 Occupation Tax Act. If the property is leased in a manner
9 that does not qualify for this exemption or is used in any
10 other non-exempt manner, the lessor shall be liable for the
11 tax imposed under this Act or the Use Tax Act, as the case
12 may be, based on the fair market value of the property at the
13 time the non-qualifying use occurs. No lessor shall collect
14 or attempt to collect an amount (however designated) that
15 purports to reimburse that lessor for the tax imposed by this
16 Act or the Use Tax Act, as the case may be, if the tax has
17 not been paid by the lessor. If a lessor improperly collects
18 any such amount from the lessee, the lessee shall have a
19 legal right to claim a refund of that amount from the lessor.
20 If, however, that amount is not refunded to the lessee for
21 any reason, the lessor is liable to pay that amount to the
22 Department.
23 (17) Beginning with taxable years ending on or after
24 December 31, 1995 and ending with taxable years ending on or
25 before December 31, 2004, personal property that is donated
26 for disaster relief to be used in a State or federally
27 declared disaster area in Illinois or bordering Illinois by a
28 manufacturer or retailer that is registered in this State to
29 a corporation, society, association, foundation, or
30 institution that has been issued a sales tax exemption
31 identification number by the Department that assists victims
32 of the disaster who reside within the declared disaster area.
33 (18) Beginning with taxable years ending on or after
34 December 31, 1995 and ending with taxable years ending on or
-15- LRB9105020PTmb
1 before December 31, 2004, personal property that is used in
2 the performance of infrastructure repairs in this State,
3 including but not limited to municipal roads and streets,
4 access roads, bridges, sidewalks, waste disposal systems,
5 water and sewer line extensions, water distribution and
6 purification facilities, storm water drainage and retention
7 facilities, and sewage treatment facilities, resulting from a
8 State or federally declared disaster in Illinois or bordering
9 Illinois when such repairs are initiated on facilities
10 located in the declared disaster area within 6 months after
11 the disaster.
12 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
13 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
14 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
15 eff. 12-12-97; 90-605, eff. 6-30-98.)
16 Section 15. The Service Occupation Tax Act is amended by
17 changing Section 3-5 as follows:
18 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
19 Sec. 3-5. Exemptions. The following tangible personal
20 property is exempt from the tax imposed by this Act:
21 (1) Personal property sold by a corporation, society,
22 association, foundation, institution, or organization, other
23 than a limited liability company, that is organized and
24 operated as a not-for-profit service enterprise for the
25 benefit of persons 65 years of age or older if the personal
26 property was not purchased by the enterprise for the purpose
27 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 any not-for-profit
32 music or dramatic arts organization that establishes, by
-16- LRB9105020PTmb
1 proof required by the Department by rule, that it has
2 received an exemption under Section 501(c)(3) of the
3 Internal Revenue Code and that is organized and operated for
4 the presentation of live public performances of musical or
5 theatrical works on a regular basis.
6 (4) 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 (5) Graphic arts machinery and equipment, including
11 repair and replacement parts, both new and used, and
12 including that manufactured on special order or purchased for
13 lease, certified by the purchaser to be used primarily for
14 graphic arts production.
15 (6) Personal property sold by a teacher-sponsored
16 student organization affiliated with an elementary or
17 secondary school located in Illinois.
18 (7) Farm machinery and equipment, both new and used,
19 including that manufactured on special order, certified by
20 the purchaser to be used primarily for production agriculture
21 or State or federal agricultural programs, including
22 individual replacement parts for the machinery and equipment,
23 including machinery and equipment purchased for lease, and
24 including implements of husbandry defined in Section 1-130 of
25 the Illinois Vehicle Code, farm machinery and agricultural
26 chemical and fertilizer spreaders, and nurse wagons required
27 to be registered under Section 3-809 of the Illinois Vehicle
28 Code, but excluding other motor vehicles required to be
29 registered under the Illinois Vehicle Code. Horticultural
30 polyhouses or hoop houses used for propagating, growing, or
31 overwintering plants shall be considered farm machinery and
32 equipment under this item (7). Agricultural chemical tender
33 tanks and dry boxes shall include units sold separately from
34 a motor vehicle required to be licensed and units sold
-17- LRB9105020PTmb
1 mounted on a motor vehicle required to be licensed if the
2 selling price of the tender is separately stated.
3 Farm machinery and equipment shall include precision
4 farming equipment that is installed or purchased to be
5 installed on farm machinery and equipment including, but not
6 limited to, tractors, harvesters, sprayers, planters,
7 seeders, or spreaders. Production agriculture includes
8 machinery and equipment used by farmers, custom farmers, and
9 special service operators, whether employed before, during,
10 or after a crop is planted and harvested, primarily in
11 furtherance of precision agriculture methods as they are
12 developed, in activities such as, but not limited to, the
13 computer-assisted operation of production agriculture
14 facilities, and the collection, monitoring, and correlation
15 of animal and crop data for the purpose of formulating animal
16 diets and agricultural chemicals and their applications.
17 Precision farming machinery and equipment includes, but is
18 not limited to, soil testing, moisture and yield sensors and
19 monitors, including machinery and equipment used on soils and
20 plants for the purpose of generating data used in furtherance
21 of production agriculture such as laboratory equipment,
22 computers, monitors, software, global positioning and mapping
23 systems, vehicle guidance systems, modems and data
24 communications equipment, and other such equipment and
25 necessary mounting hardware, wiring, and antennas.
26 All-terrain vehicles on which production agriculture
27 machinery and equipment is mounted is exempt only if the
28 vehicles are used only incidentally in non-production
29 agriculture activities. Precision farming equipment includes,
30 but is not limited to, soil testing sensors, computers,
31 monitors, software, global positioning and mapping systems,
32 and other such equipment.
33 Farm machinery and equipment also includes computers,
34 sensors, software, and related equipment used primarily in
-18- LRB9105020PTmb
1 the computer-assisted operation of production agriculture
2 facilities, equipment, and activities such as, but not
3 limited to, the collection, monitoring, and correlation of
4 animal and crop data for the purpose of formulating animal
5 diets and agricultural chemicals. This item (7) is exempt
6 from the provisions of Section 3-55 3-75.
7 (8) Fuel and petroleum products sold to or used by an
8 air common carrier, certified by the carrier to be used for
9 consumption, shipment, or storage in the conduct of its
10 business as an air common carrier, for a flight destined for
11 or returning from a location or locations outside the United
12 States without regard to previous or subsequent domestic
13 stopovers.
14 (9) Proceeds of mandatory service charges separately
15 stated on customers' bills for the purchase and consumption
16 of food and beverages, to the extent that the proceeds of the
17 service charge are in fact turned over as tips or as a
18 substitute for tips to the employees who participate directly
19 in preparing, serving, hosting or cleaning up the food or
20 beverage function with respect to which the service charge is
21 imposed.
22 (10) Oil field exploration, drilling, and production
23 equipment, including (i) rigs and parts of rigs, rotary rigs,
24 cable tool rigs, and workover rigs, (ii) pipe and tubular
25 goods, including casing and drill strings, (iii) pumps and
26 pump-jack units, (iv) storage tanks and flow lines, (v) any
27 individual replacement part for oil field exploration,
28 drilling, and production equipment, and (vi) machinery and
29 equipment purchased for lease; but excluding motor vehicles
30 required to be registered under the Illinois Vehicle Code.
31 (11) Photoprocessing machinery and equipment, including
32 repair and replacement parts, both new and used, including
33 that manufactured on special order, certified by the
34 purchaser to be used primarily for photoprocessing, and
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1 including photoprocessing machinery and equipment purchased
2 for lease.
3 (12) Coal exploration, mining, offhighway hauling,
4 processing, maintenance, and reclamation equipment, including
5 replacement parts and equipment, and including equipment
6 purchased for lease, but excluding motor vehicles required to
7 be registered under the Illinois Vehicle Code.
8 (13) Food for human consumption that is to be consumed
9 off the premises where it is sold (other than alcoholic
10 beverages, soft drinks and food that has been prepared for
11 immediate consumption) and prescription and non-prescription
12 medicines, drugs, medical appliances, and insulin, urine
13 testing materials, syringes, and needles used by diabetics,
14 for human use, when purchased for use by a person receiving
15 medical assistance under Article 5 of the Illinois Public Aid
16 Code who resides in a licensed long-term care facility, as
17 defined in the Nursing Home Care Act.
18 (14) Semen used for artificial insemination of livestock
19 for direct agricultural production.
20 (15) Horses, or interests in horses, registered with and
21 meeting the requirements of any of the Arabian Horse Club
22 Registry of America, Appaloosa Horse Club, American Quarter
23 Horse Association, United States Trotting Association, or
24 Jockey Club, as appropriate, used for purposes of breeding or
25 racing for prizes.
26 (16) Computers and communications equipment utilized for
27 any hospital purpose and equipment used in the diagnosis,
28 analysis, or treatment of hospital patients sold to a lessor
29 who leases the equipment, under a lease of one year or longer
30 executed or in effect at the time of the purchase, to a
31 hospital that has been issued an active tax exemption
32 identification number by the Department under Section 1g of
33 the Retailers' Occupation Tax Act.
34 (17) Personal property sold to a lessor who leases the
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1 property, under a lease of one year or longer executed or in
2 effect at the time of the purchase, to a governmental body
3 that has been issued an active tax exemption identification
4 number by the Department under Section 1g of the Retailers'
5 Occupation Tax Act.
6 (18) Beginning with taxable years ending on or after
7 December 31, 1995 and ending with taxable years ending on or
8 before December 31, 2004, personal property that is donated
9 for disaster relief to be used in a State or federally
10 declared disaster area in Illinois or bordering Illinois by a
11 manufacturer or retailer that is registered in this State to
12 a corporation, society, association, foundation, or
13 institution that has been issued a sales tax exemption
14 identification number by the Department that assists victims
15 of the disaster who reside within the declared disaster area.
16 (19) Beginning with taxable years ending on or after
17 December 31, 1995 and ending with taxable years ending on or
18 before December 31, 2004, personal property that is used in
19 the performance of infrastructure repairs in this State,
20 including but not limited to municipal roads and streets,
21 access roads, bridges, sidewalks, waste disposal systems,
22 water and sewer line extensions, water distribution and
23 purification facilities, storm water drainage and retention
24 facilities, and sewage treatment facilities, resulting from a
25 State or federally declared disaster in Illinois or bordering
26 Illinois when such repairs are initiated on facilities
27 located in the declared disaster area within 6 months after
28 the disaster.
29 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
30 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
31 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
32 eff. 12-12-97; 90-605, eff. 6-30-98; revised 2-10-99.)
33 Section 20. The Retailers' Occupation Tax Act is amended
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1 by changing Section 2-5 as follows:
2 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
3 Sec. 2-5. Exemptions. Gross receipts from proceeds from
4 the sale of the following tangible personal property are
5 exempt from the tax imposed by this Act:
6 (1) Farm chemicals.
7 (2) Farm machinery and equipment, both new and used,
8 including that manufactured on special order, certified by
9 the purchaser to be used primarily for production agriculture
10 or State or federal agricultural programs, including
11 individual replacement parts for the machinery and equipment,
12 including machinery and equipment purchased for lease, and
13 including implements of husbandry defined in Section 1-130 of
14 the Illinois Vehicle Code, farm machinery and agricultural
15 chemical and fertilizer spreaders, and nurse wagons required
16 to be registered under Section 3-809 of the Illinois Vehicle
17 Code, but excluding other motor vehicles required to be
18 registered under the Illinois Vehicle Code. Horticultural
19 polyhouses or hoop houses used for propagating, growing, or
20 overwintering plants shall be considered farm machinery and
21 equipment under this item (2). Agricultural chemical tender
22 tanks and dry boxes shall include units sold separately from
23 a motor vehicle required to be licensed and units sold
24 mounted on a motor vehicle required to be licensed, if the
25 selling price of the tender is separately stated.
26 Farm machinery and equipment shall include precision
27 farming equipment that is installed or purchased to be
28 installed on farm machinery and equipment including, but not
29 limited to, tractors, harvesters, sprayers, planters,
30 seeders, or spreaders. Production agriculture includes
31 machinery and equipment used by farmers, custom farmers, and
32 special service operators, whether employed before, during,
33 or after a crop is planted and harvested, primarily in
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1 furtherance of precision agriculture methods as they are
2 developed, in activities such as, but not limited to, the
3 computer-assisted operation of production agriculture
4 facilities, and the collection, monitoring, and correlation
5 of animal and crop data for the purpose of formulating animal
6 diets and agricultural chemicals and their applications.
7 Precision farming machinery and equipment includes, but is
8 not limited to, soil testing, moisture and yield sensors and
9 monitors, including machinery and equipment used on soils and
10 plants for the purpose of generating data used in furtherance
11 of production agriculture such as laboratory equipment,
12 computers, monitors, software, global positioning and mapping
13 systems, vehicle guidance systems, modems and data
14 communications equipment, and other such equipment and
15 necessary mounting hardware, wiring, and antennas.
16 All-terrain vehicles on which production agriculture
17 machinery and equipment is mounted is exempt only if the
18 vehicles are used only incidentally in non-production
19 agriculture activities. Precision farming equipment includes,
20 but is not limited to, soil testing sensors, computers,
21 monitors, software, global positioning and mapping systems,
22 and other such equipment.
23 Farm machinery and equipment also includes computers,
24 sensors, software, and related equipment used primarily in
25 the computer-assisted operation of production agriculture
26 facilities, equipment, and activities such as, but not
27 limited to, the collection, monitoring, and correlation of
28 animal and crop data for the purpose of formulating animal
29 diets and agricultural chemicals. This item (7) is exempt
30 from the provisions of Section 2-70 3-75.
31 (3) Distillation machinery and equipment, sold as a unit
32 or kit, assembled or installed by the retailer, certified by
33 the user to be used only for the production of ethyl alcohol
34 that will be used for consumption as motor fuel or as a
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1 component of motor fuel for the personal use of the user, and
2 not subject to sale or resale.
3 (4) Graphic arts machinery and equipment, including
4 repair and replacement parts, both new and used, and
5 including that manufactured on special order or purchased for
6 lease, certified by the purchaser to be used primarily for
7 graphic arts production.
8 (5) A motor vehicle of the first division, a motor
9 vehicle of the second division that is a self-contained motor
10 vehicle designed or permanently converted to provide living
11 quarters for recreational, camping, or travel use, with
12 direct walk through access to the living quarters from the
13 driver's seat, or a motor vehicle of the second division that
14 is of the van configuration designed for the transportation
15 of not less than 7 nor more than 16 passengers, as defined in
16 Section 1-146 of the Illinois Vehicle Code, that is used for
17 automobile renting, as defined in the Automobile Renting
18 Occupation and Use Tax Act.
19 (6) Personal property sold by a teacher-sponsored
20 student organization affiliated with an elementary or
21 secondary school located in Illinois.
22 (7) Proceeds of that portion of the selling price of a
23 passenger car the sale of which is subject to the Replacement
24 Vehicle Tax.
25 (8) Personal property sold to an Illinois county fair
26 association for use in conducting, operating, or promoting
27 the county fair.
28 (9) Personal property sold to a not-for-profit music or
29 dramatic arts organization that establishes, by proof
30 required by the Department by rule, that it has received an
31 exemption under Section 501(c) (3) of the Internal Revenue
32 Code and that is organized and operated for the presentation
33 of live public performances of musical or theatrical works on
34 a regular basis.
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1 (10) Personal property sold by a corporation, society,
2 association, foundation, institution, or organization, other
3 than a limited liability company, that is organized and
4 operated as a not-for-profit service enterprise for the
5 benefit of persons 65 years of age or older if the personal
6 property was not purchased by the enterprise for the purpose
7 of resale by the enterprise.
8 (11) Personal property sold to a governmental body, to a
9 corporation, society, association, foundation, or institution
10 organized and operated exclusively for charitable, religious,
11 or educational purposes, or to a not-for-profit corporation,
12 society, association, foundation, institution, or
13 organization that has no compensated officers or employees
14 and that is organized and operated primarily for the
15 recreation of persons 55 years of age or older. A limited
16 liability company may qualify for the exemption under this
17 paragraph only if the limited liability company is organized
18 and operated exclusively for educational purposes. On and
19 after July 1, 1987, however, no entity otherwise eligible for
20 this exemption shall make tax-free purchases unless it has an
21 active identification number issued by the Department.
22 (12) Personal property sold to interstate carriers for
23 hire for use as rolling stock moving in interstate commerce
24 or to lessors under leases of one year or longer executed or
25 in effect at the time of purchase by interstate carriers for
26 hire for use as rolling stock moving in interstate commerce
27 and equipment operated by a telecommunications provider,
28 licensed as a common carrier by the Federal Communications
29 Commission, which is permanently installed in or affixed to
30 aircraft moving in interstate commerce.
31 (13) Proceeds from sales to owners, lessors, or shippers
32 of tangible personal property that is utilized by interstate
33 carriers for hire for use as rolling stock moving in
34 interstate commerce and equipment operated by a
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1 telecommunications provider, licensed as a common carrier by
2 the Federal Communications Commission, which is permanently
3 installed in or affixed to aircraft moving in interstate
4 commerce.
5 (14) Machinery and equipment that will be used by the
6 purchaser, or a lessee of the purchaser, primarily in the
7 process of manufacturing or assembling tangible personal
8 property for wholesale or retail sale or lease, whether the
9 sale or lease is made directly by the manufacturer or by some
10 other person, whether the materials used in the process are
11 owned by the manufacturer or some other person, or whether
12 the sale or lease is made apart from or as an incident to the
13 seller's engaging in the service occupation of producing
14 machines, tools, dies, jigs, patterns, gauges, or other
15 similar items of no commercial value on special order for a
16 particular purchaser.
17 (15) Proceeds of mandatory service charges separately
18 stated on customers' bills for purchase and consumption of
19 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 (16) Petroleum products sold to a purchaser if the
26 seller is prohibited by federal law from charging tax to the
27 purchaser.
28 (17) Tangible personal property sold to a common carrier
29 by rail or motor that receives the physical possession of the
30 property in Illinois and that transports the property, or
31 shares with another common carrier in the transportation of
32 the property, out of Illinois on a standard uniform bill of
33 lading showing the seller of the property as the shipper or
34 consignor of the property to a destination outside Illinois,
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1 for use outside Illinois.
2 (18) Legal tender, currency, medallions, or gold or
3 silver coinage issued by the State of Illinois, the
4 government of the United States of America, or the government
5 of any foreign country, and bullion.
6 (19) Oil field exploration, drilling, and production
7 equipment, including (i) rigs and parts of rigs, rotary rigs,
8 cable tool rigs, and workover rigs, (ii) pipe and tubular
9 goods, including casing and drill strings, (iii) pumps and
10 pump-jack units, (iv) storage tanks and flow lines, (v) any
11 individual replacement part for oil field exploration,
12 drilling, and production equipment, and (vi) machinery and
13 equipment purchased for lease; but excluding motor vehicles
14 required to be registered under the Illinois Vehicle Code.
15 (20) Photoprocessing machinery and equipment, including
16 repair and replacement parts, both new and used, including
17 that manufactured on special order, certified by the
18 purchaser to be used primarily for photoprocessing, and
19 including photoprocessing machinery and equipment purchased
20 for lease.
21 (21) Coal exploration, mining, offhighway hauling,
22 processing, maintenance, and reclamation equipment, including
23 replacement parts and equipment, and including equipment
24 purchased for lease, but excluding motor vehicles required to
25 be registered under the Illinois Vehicle Code.
26 (22) Fuel and petroleum products sold to or used by an
27 air carrier, certified by the carrier to be used for
28 consumption, shipment, or storage in the conduct of its
29 business as an air common carrier, for a flight destined for
30 or returning from a location or locations outside the United
31 States without regard to previous or subsequent domestic
32 stopovers.
33 (23) A transaction in which the purchase order is
34 received by a florist who is located outside Illinois, but
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1 who has a florist located in Illinois deliver the property to
2 the purchaser or the purchaser's donee in Illinois.
3 (24) Fuel consumed or used in the operation of ships,
4 barges, or vessels that are used primarily in or for the
5 transportation of property or the conveyance of persons for
6 hire on rivers bordering on this State if the fuel is
7 delivered by the seller to the purchaser's barge, ship, or
8 vessel while it is afloat upon that bordering river.
9 (25) A motor vehicle sold in this State to a nonresident
10 even though the motor vehicle is delivered to the nonresident
11 in this State, if the motor vehicle is not to be titled in
12 this State, and if a driveaway decal permit is issued to the
13 motor vehicle as provided in Section 3-603 of the Illinois
14 Vehicle Code or if the nonresident purchaser has vehicle
15 registration plates to transfer to the motor vehicle upon
16 returning to his or her home state. The issuance of the
17 driveaway decal permit or having the out-of-state
18 registration plates to be transferred is prima facie evidence
19 that the motor vehicle will not be titled in this State.
20 (26) Semen used for artificial insemination of livestock
21 for direct agricultural production.
22 (27) 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 (28) Computers and communications equipment utilized for
29 any hospital purpose and equipment used in the diagnosis,
30 analysis, or treatment of hospital patients sold to a lessor
31 who leases the equipment, under a lease of one year or longer
32 executed or in effect at the time of the purchase, to a
33 hospital that has been issued an active tax exemption
34 identification number by the Department under Section 1g of
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1 this Act.
2 (29) Personal property sold to a lessor who leases the
3 property, under a lease of one year or longer executed or in
4 effect at the time of the purchase, to a governmental body
5 that has been issued an active tax exemption identification
6 number by the Department under Section 1g of this Act.
7 (30) 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 donated
10 for disaster relief to be used in a State or federally
11 declared disaster area in Illinois or bordering Illinois by a
12 manufacturer or retailer that is registered in this State to
13 a corporation, society, association, foundation, or
14 institution that has been issued a sales tax exemption
15 identification number by the Department that assists victims
16 of the disaster who reside within the declared disaster area.
17 (31) Beginning with taxable years ending on or after
18 December 31, 1995 and ending with taxable years ending on or
19 before December 31, 2004, personal property that is used in
20 the performance of infrastructure repairs in this State,
21 including but not limited to municipal roads and streets,
22 access roads, bridges, sidewalks, waste disposal systems,
23 water and sewer line extensions, water distribution and
24 purification facilities, storm water drainage and retention
25 facilities, and sewage treatment facilities, resulting from a
26 State or federally declared disaster in Illinois or bordering
27 Illinois when such repairs are initiated on facilities
28 located in the declared disaster area within 6 months after
29 the disaster.
30 (Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
31 89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
32 6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-519,
33 eff. 6-1-98; 90-552, eff. 12-12-97; 90-605, eff. 6-30-98;
34 revised 2-10-99.)
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1 Section 99. Effective date. This Act takes effect July
2 1, 1999.