State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Enrolled ][ Senate Amendment 001 ]


92_SB0617eng

 
SB617 Engrossed                                LRB9205192SMdv

 1        AN ACT in relation to taxes.

 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 arts
20    or cultural organization that establishes, by proof  required
21    by  the Department by rule, that it has received an exemption
22    under Section 501(c)(3) of the Internal Revenue Code and that
23    is organized and operated for the presentation or support  of
24    arts or cultural programming, activities, or services.  These
25    organizations  include,  but  are  not  limited to, music and
26    dramatic arts organizations such as symphony  orchestras  and
27    theatrical  groups,  arts and cultural service organizations,
28    local arts councils, visual  arts  organizations,  and  media
29    arts organizations.
30        (4)  Personal  property purchased by a governmental body,
31    by  a  corporation,  society,  association,  foundation,   or
 
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 1    institution    organized   and   operated   exclusively   for
 2    charitable, religious,  or  educational  purposes,  or  by  a
 3    not-for-profit corporation, society, association, foundation,
 4    institution, or organization that has no compensated officers
 5    or employees and that is organized and operated primarily for
 6    the 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  exemption  identification  number   issued   by   the
13    Department.
14        (5)  A passenger car that is a replacement vehicle to the
15    extent  that  the purchase price of the car is subject to the
16    Replacement Vehicle Tax.
17        (6)  Graphic  arts  machinery  and  equipment,  including
18    repair  and  replacement  parts,  both  new  and  used,   and
19    including  that  manufactured  on special order, certified by
20    the  purchaser  to  be  used  primarily  for   graphic   arts
21    production,  and  including machinery and equipment purchased
22    for lease.
23        (7)  Farm chemicals.
24        (8)  Legal  tender,  currency,  medallions,  or  gold  or
25    silver  coinage  issued  by  the  State  of   Illinois,   the
26    government of the United States of America, or the government
27    of any foreign country, and bullion.
28        (9)  Personal property purchased from a teacher-sponsored
29    student   organization   affiliated  with  an  elementary  or
30    secondary school located in Illinois.
31        (10)  A motor vehicle of  the  first  division,  a  motor
32    vehicle of the second division that is a self-contained motor
33    vehicle  designed  or permanently converted to provide living
34    quarters for  recreational,  camping,  or  travel  use,  with
 
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 1    direct  walk through to the living quarters from the driver's
 2    seat, or a motor vehicle of the second division  that  is  of
 3    the  van configuration designed for the transportation of not
 4    less than 7 nor  more  than  16  passengers,  as  defined  in
 5    Section  1-146 of the Illinois Vehicle Code, that is used for
 6    automobile renting, as  defined  in  the  Automobile  Renting
 7    Occupation and Use Tax Act.
 8        (11)  Farm  machinery  and  equipment, both new and used,
 9    including that manufactured on special  order,  certified  by
10    the purchaser to be used primarily for production agriculture
11    or   State   or   federal  agricultural  programs,  including
12    individual replacement parts for the machinery and equipment,
13    including machinery and equipment purchased  for  lease,  and
14    including implements of husbandry defined in Section 1-130 of
15    the  Illinois  Vehicle  Code, farm machinery and agricultural
16    chemical and fertilizer spreaders, and nurse wagons  required
17    to  be registered under Section 3-809 of the Illinois Vehicle
18    Code, but excluding  other  motor  vehicles  required  to  be
19    registered  under  the  Illinois  Vehicle Code. Horticultural
20    polyhouses or hoop houses used for propagating,  growing,  or
21    overwintering  plants  shall be considered farm machinery and
22    equipment under this item (11). Agricultural chemical  tender
23    tanks  and dry boxes shall include units sold separately from
24    a motor vehicle  required  to  be  licensed  and  units  sold
25    mounted  on  a  motor  vehicle required to be licensed if the
26    selling price of the tender is separately stated.
27        Farm machinery  and  equipment  shall  include  precision
28    farming  equipment  that  is  installed  or  purchased  to be
29    installed on farm machinery and equipment including, but  not
30    limited   to,   tractors,   harvesters,  sprayers,  planters,
31    seeders, or spreaders. Precision farming equipment  includes,
32    but  is  not  limited  to,  soil  testing sensors, computers,
33    monitors, software, global positioning and  mapping  systems,
34    and other such equipment.
 
SB617 Engrossed             -4-                LRB9205192SMdv
 1        Farm  machinery  and  equipment  also includes computers,
 2    sensors, software, and related equipment  used  primarily  in
 3    the  computer-assisted  operation  of  production agriculture
 4    facilities,  equipment,  and  activities  such  as,  but  not
 5    limited to, the collection, monitoring,  and  correlation  of
 6    animal  and  crop  data for the purpose of formulating animal
 7    diets and agricultural chemicals.  This item (11)  is  exempt
 8    from the provisions of Section 3-90.
 9        (12)  Fuel  and  petroleum products sold to or used by an
10    air common carrier, certified by the carrier to be  used  for
11    consumption,  shipment,  or  storage  in  the  conduct of its
12    business as an air common carrier, for a flight destined  for
13    or  returning from a location or locations outside the United
14    States without regard  to  previous  or  subsequent  domestic
15    stopovers.
16        (13)  Proceeds  of  mandatory  service charges separately
17    stated on customers' bills for the purchase  and  consumption
18    of food and beverages purchased at retail from a retailer, to
19    the  extent  that  the  proceeds of the service charge are in
20    fact turned over as tips or as a substitute for tips  to  the
21    employees  who  participate  directly  in preparing, serving,
22    hosting or cleaning up the food  or  beverage  function  with
23    respect to which the service charge is imposed.
24        (14)  Oil  field  exploration,  drilling,  and production
25    equipment, including (i) rigs and parts of rigs, rotary rigs,
26    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
27    goods,  including  casing  and drill strings, (iii) pumps and
28    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
29    individual   replacement  part  for  oil  field  exploration,
30    drilling, and production equipment, and  (vi)  machinery  and
31    equipment  purchased  for lease; but excluding motor vehicles
32    required to be registered under the Illinois Vehicle Code.
33        (15)  Photoprocessing machinery and equipment,  including
34    repair  and  replacement  parts, both new and used, including
 
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 1    that  manufactured  on  special  order,  certified   by   the
 2    purchaser  to  be  used  primarily  for  photoprocessing, and
 3    including photoprocessing machinery and  equipment  purchased
 4    for lease.
 5        (16)  Coal   exploration,   mining,  offhighway  hauling,
 6    processing, maintenance, and reclamation equipment, including
 7    replacement parts  and  equipment,  and  including  equipment
 8    purchased for lease, but excluding motor vehicles required to
 9    be registered under the Illinois Vehicle Code.
10        (17)  Distillation  machinery  and  equipment,  sold as a
11    unit  or  kit,  assembled  or  installed  by  the   retailer,
12    certified  by  the user to be used only for the production of
13    ethyl alcohol that will be used for consumption as motor fuel
14    or as a component of motor fuel for the personal use  of  the
15    user, and not subject to sale or resale.
16        (18)  Manufacturing    and   assembling   machinery   and
17    equipment used primarily in the process of  manufacturing  or
18    assembling tangible personal property for wholesale or retail
19    sale or lease, whether that sale or lease is made directly by
20    the  manufacturer  or  by  some  other  person,  whether  the
21    materials  used  in the process are owned by the manufacturer
22    or some other person, or whether that sale or lease  is  made
23    apart  from or as an incident to the seller's engaging in the
24    service occupation of producing machines, tools, dies,  jigs,
25    patterns,  gauges,  or  other  similar items of no commercial
26    value on special order for a particular purchaser.
27        (19)  Personal  property  delivered  to  a  purchaser  or
28    purchaser's donee inside Illinois when the purchase order for
29    that personal property was  received  by  a  florist  located
30    outside  Illinois  who  has a florist located inside Illinois
31    deliver the personal property.
32        (20)  Semen used for artificial insemination of livestock
33    for direct agricultural production.
34        (21)  Horses, or interests in horses, registered with and
 
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 1    meeting the requirements of any of  the  Arabian  Horse  Club
 2    Registry  of  America, Appaloosa Horse Club, American Quarter
 3    Horse Association, United  States  Trotting  Association,  or
 4    Jockey Club, as appropriate, used for purposes of breeding or
 5    racing for prizes.
 6        (22)  Computers and communications equipment utilized for
 7    any  hospital  purpose  and  equipment used in the diagnosis,
 8    analysis, or treatment of hospital patients  purchased  by  a
 9    lessor who leases the equipment, under a lease of one year or
10    longer  executed  or  in  effect at the time the lessor would
11    otherwise be subject to the tax imposed by  this  Act,  to  a
12    hospital    that  has  been  issued  an  active tax exemption
13    identification number by the Department under Section  1g  of
14    the  Retailers'  Occupation  Tax  Act.   If  the equipment is
15    leased in a manner that does not qualify for  this  exemption
16    or is used in any other nonexempt manner, the lessor shall be
17    liable  for the tax imposed under this Act or the Service Use
18    Tax Act, as the case may be, based on the fair  market  value
19    of the property at the time the nonqualifying use occurs.  No
20    lessor shall collect or attempt to collect an amount (however
21    designated)  that  purports  to reimburse that lessor for the
22    tax imposed by this Act or the Service Use Tax  Act,  as  the
23    case  may be, if the tax has not been paid by the lessor.  If
24    a lessor improperly collects any such amount from the lessee,
25    the lessee shall have a legal right to claim a refund of that
26    amount from the lessor.  If,  however,  that  amount  is  not
27    refunded  to  the lessee for any reason, the lessor is liable
28    to pay that amount to the Department.
29        (23)  Personal property purchased by a lessor who  leases
30    the  property,  under a lease of  one year or longer executed
31    or in effect at  the  time  the  lessor  would  otherwise  be
32    subject  to  the  tax  imposed by this Act, to a governmental
33    body that has been  issued  an  active  sales  tax  exemption
34    identification  number  by the Department under Section 1g of
 
SB617 Engrossed             -7-                LRB9205192SMdv
 1    the Retailers' Occupation Tax Act. If the property is  leased
 2    in  a manner that does not qualify for this exemption or used
 3    in any other nonexempt manner, the lessor shall be liable for
 4    the tax imposed under this Act or the Service Use Tax Act, as
 5    the case may be, based  on  the  fair  market  value  of  the
 6    property at the time the nonqualifying use occurs.  No lessor
 7    shall  collect  or  attempt  to  collect  an  amount (however
 8    designated) that purports to reimburse that  lessor  for  the
 9    tax  imposed  by  this Act or the Service Use Tax Act, as the
10    case may be, if the tax has not been paid by the lessor.   If
11    a lessor improperly collects any such amount from the lessee,
12    the lessee shall have a legal right to claim a refund of that
13    amount  from  the  lessor.   If,  however, that amount is not
14    refunded to the lessee for any reason, the lessor  is  liable
15    to pay that amount to the Department.
16        (24)  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 donated
19    for disaster relief to  be  used  in  a  State  or  federally
20    declared disaster area in Illinois or bordering Illinois by a
21    manufacturer  or retailer that is registered in this State to
22    a   corporation,   society,   association,   foundation,   or
23    institution that  has  been  issued  a  sales  tax  exemption
24    identification  number by the Department that assists victims
25    of the disaster who reside within the declared disaster area.
26        (25)  Beginning with taxable years  ending  on  or  after
27    December  31, 1995 and ending with taxable years ending on or
28    before December 31, 2004, personal property that is  used  in
29    the  performance  of  infrastructure  repairs  in this State,
30    including but not limited to  municipal  roads  and  streets,
31    access  roads,  bridges,  sidewalks,  waste disposal systems,
32    water and  sewer  line  extensions,  water  distribution  and
33    purification  facilities,  storm water drainage and retention
34    facilities, and sewage treatment facilities, resulting from a
 
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 1    State or federally declared disaster in Illinois or bordering
 2    Illinois  when  such  repairs  are  initiated  on  facilities
 3    located in the declared disaster area within 6  months  after
 4    the disaster.
 5        (26)  Beginning   July   1,  1999,  game  or  game  birds
 6    purchased at a "game breeding and hunting preserve  area"  or
 7    an  "exotic game hunting area" as those terms are used in the
 8    Wildlife Code or at  a  hunting  enclosure  approved  through
 9    rules  adopted  by the Department of Natural Resources.  This
10    paragraph is exempt from the provisions of Section 3-90.
11        (27)  A motor vehicle, as that term is defined in Section
12    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
13    corporation, limited liability company, society, association,
14    foundation,   or   institution  that  is  determined  by  the
15    Department to  be  organized  and  operated  exclusively  for
16    educational  purposes.    For  purposes of this exemption, "a
17    corporation, limited liability company, society, association,
18    foundation, or institution organized and operated exclusively
19    for educational  purposes"  means  all  tax-supported  public
20    schools, private schools that offer systematic instruction in
21    useful  branches  of  learning  by  methods  common to public
22    schools  and  that  compare  favorably  in  their  scope  and
23    intensity with the course of study presented in tax-supported
24    schools, and vocational or technical  schools  or  institutes
25    organized  and  operated  exclusively  to provide a course of
26    study of not less than  6  weeks  duration  and  designed  to
27    prepare  individuals to follow a trade or to pursue a manual,
28    technical, mechanical, industrial,  business,  or  commercial
29    occupation.
30        (28)  Beginning  January  1,  2000,   personal  property,
31    including  food, purchased through fundraising events for the
32    benefit of  a  public  or  private  elementary  or  secondary
33    school,  a  group  of  those  schools,  or one or more school
34    districts if the events are sponsored by an entity recognized
 
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 1    by the school district that consists primarily of  volunteers
 2    and  includes  parents  and  teachers of the school children.
 3    This paragraph does not apply to fundraising events  (i)  for
 4    the benefit of private home instruction or (ii) for which the
 5    fundraising  entity  purchases  the personal property sold at
 6    the events from another individual or entity  that  sold  the
 7    property  for the purpose of resale by the fundraising entity
 8    and that profits from the sale  to  the  fundraising  entity.
 9    This paragraph is exempt from the provisions of Section 3-90.
10        (29)  Beginning  January  1,  2000, new or used automatic
11    vending  machines  that  prepare  and  serve  hot  food   and
12    beverages,  including  coffee,  soup,  and  other  items, and
13    replacement parts for these  machines.    This  paragraph  is
14    exempt from the provisions of Section 3-90.
15        (30)  Food  for  human consumption that is to be consumed
16    off the premises where  it  is  sold  (other  than  alcoholic
17    beverages,  soft  drinks, and food that has been prepared for
18    immediate consumption) and prescription  and  nonprescription
19    medicines,  drugs,  medical  appliances,  and  insulin, urine
20    testing materials, syringes, and needles used  by  diabetics,
21    for  human  use, when purchased for use by a person receiving
22    medical assistance under Article 5 of the Illinois Public Aid
23    Code who resides in a licensed long-term  care  facility,  as
24    defined in the Nursing Home Care Act.
25        (31)  Beginning  on the effective date of this amendatory
26    Act   of   the   92nd   General   Assembly,   computers   and
27    communications equipment utilized for  any  hospital  purpose
28    and  equipment  used in the diagnosis, analysis, or treatment
29    of hospital patients purchased by a  lessor  who  leases  the
30    equipment, under a lease of one year or longer executed or in
31    effect  at  the time the lessor would otherwise be subject to
32    the tax imposed by this Act, to  a  hospital  that  has  been
33    issued  an  active tax exemption identification number by the
34    Department under Section 1g of the Retailers' Occupation  Tax
 
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 1    Act.   If  the  equipment is leased in a manner that does not
 2    qualify for this exemption or is used in any other  nonexempt
 3    manner,  the lessor shall be liable for the tax imposed under
 4    this Act or the Service Use Tax Act,  as  the  case  may  be,
 5    based  on  the  fair market value of the property at the time
 6    the nonqualifying use occurs.  No  lessor  shall  collect  or
 7    attempt  to  collect  an  amount  (however  designated)  that
 8    purports to reimburse that lessor for the tax imposed by this
 9    Act  or  the  Service Use Tax Act, as the case may be, if the
10    tax has not been paid by the lessor.  If a lessor  improperly
11    collects  any  such  amount from the lessee, the lessee shall
12    have a legal right to claim a refund of that amount from  the
13    lessor.   If,  however,  that  amount  is not refunded to the
14    lessee for any reason, the  lessor  is  liable  to  pay  that
15    amount  to  the Department. This paragraph is exempt from the
16    provisions of Section 3-90.
17        (32)  Beginning on the effective date of this  amendatory
18    Act of the 92nd General Assembly, personal property purchased
19    by  a  lessor  who  leases the property, under a lease of one
20    year or longer executed or in effect at the time  the  lessor
21    would otherwise be subject to the tax imposed by this Act, to
22    a  governmental body that has been issued an active sales tax
23    exemption  identification  number  by  the  Department  under
24    Section 1g of the Retailers'  Occupation  Tax  Act.   If  the
25    property is leased in a manner that does not qualify for this
26    exemption  or  used in any other nonexempt manner, the lessor
27    shall be liable for the tax imposed under  this  Act  or  the
28    Service  Use  Tax  Act, as the case may be, based on the fair
29    market value of the property at the  time  the  nonqualifying
30    use occurs.  No lessor shall collect or attempt to collect an
31    amount  (however  designated) that purports to reimburse that
32    lessor for the tax imposed by this Act or the Service Use Tax
33    Act, as the case may be, if the tax has not been paid by  the
34    lessor.  If a lessor improperly collects any such amount from
 
SB617 Engrossed             -11-               LRB9205192SMdv
 1    the  lessee,  the  lessee shall have a legal right to claim a
 2    refund of that amount from the  lessor.   If,  however,  that
 3    amount  is  not  refunded  to  the lessee for any reason, the
 4    lessor is liable to pay that amount to the Department.   This
 5    paragraph is exempt from the provisions of Section 3-90.
 6    (Source:  P.A.  90-14,  eff.  7-1-97;  90-552, eff. 12-12-97;
 7    90-605, eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200,  eff.
 8    7-20-99;  91-439,  eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
 9    eff. 8-20-99; 91-901, eff. 1-1-01.)

10        Section 10.  The  Service  Use  Tax  Act  is  amended  by
11    changing Section 3-5 as follows:

12        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
13        Sec.  3-5.   Exemptions.   Use  of the following tangible
14    personal property is exempt from the tax imposed by this Act:
15        (1)  Personal  property  purchased  from  a  corporation,
16    society,    association,    foundation,    institution,    or
17    organization, other than a limited liability company, that is
18    organized and operated as a not-for-profit service enterprise
19    for the benefit of persons 65 years of age or  older  if  the
20    personal property was not purchased by the enterprise for the
21    purpose of resale by the enterprise.
22        (2)  Personal property purchased by a non-profit Illinois
23    county  fair association for use in conducting, operating, or
24    promoting the county fair.
25        (3)  Personal property purchased by a not-for-profit arts
26    or cultural organization that establishes, by proof  required
27    by  the Department by rule, that it has received an exemption
28    under Section 501(c)(3) of the Internal Revenue Code and that
29    is organized and operated for the presentation or support  of
30    arts or cultural programming, activities, or services.  These
31    organizations  include,  but  are  not  limited to, music and
32    dramatic arts organizations such as symphony  orchestras  and
 
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 1    theatrical  groups,  arts and cultural service organizations,
 2    local arts councils, visual  arts  organizations,  and  media
 3    arts organizations.
 4        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 5    silver   coinage   issued  by  the  State  of  Illinois,  the
 6    government of the United States of America, or the government
 7    of any foreign country, and bullion.
 8        (5)  Graphic  arts  machinery  and  equipment,  including
 9    repair  and  replacement  parts,  both  new  and  used,   and
10    including that manufactured on special order or purchased for
11    lease,  certified  by  the purchaser to be used primarily for
12    graphic arts production.
13        (6)  Personal property purchased from a teacher-sponsored
14    student  organization  affiliated  with  an   elementary   or
15    secondary school located in Illinois.
16        (7)  Farm  machinery  and  equipment,  both new and used,
17    including that manufactured on special  order,  certified  by
18    the purchaser to be used primarily for production agriculture
19    or   State   or   federal  agricultural  programs,  including
20    individual replacement parts for the machinery and equipment,
21    including machinery and equipment purchased  for  lease,  and
22    including implements of husbandry defined in Section 1-130 of
23    the  Illinois  Vehicle  Code, farm machinery and agricultural
24    chemical and fertilizer spreaders, and nurse wagons  required
25    to  be registered under Section 3-809 of the Illinois Vehicle
26    Code, but excluding  other  motor  vehicles  required  to  be
27    registered  under  the  Illinois  Vehicle Code. Horticultural
28    polyhouses or hoop houses used for propagating,  growing,  or
29    overwintering  plants  shall be considered farm machinery and
30    equipment under this item (7). Agricultural  chemical  tender
31    tanks  and dry boxes shall include units sold separately from
32    a motor vehicle  required  to  be  licensed  and  units  sold
33    mounted  on  a  motor  vehicle required to be licensed if the
34    selling price of the tender is separately stated.
 
SB617 Engrossed             -13-               LRB9205192SMdv
 1        Farm machinery  and  equipment  shall  include  precision
 2    farming  equipment  that  is  installed  or  purchased  to be
 3    installed on farm machinery and equipment including, but  not
 4    limited   to,   tractors,   harvesters,  sprayers,  planters,
 5    seeders, or spreaders. Precision farming equipment  includes,
 6    but  is  not  limited  to,  soil  testing sensors, computers,
 7    monitors, software, global positioning and  mapping  systems,
 8    and other such equipment.
 9        Farm  machinery  and  equipment  also includes computers,
10    sensors, software, and related equipment  used  primarily  in
11    the  computer-assisted  operation  of  production agriculture
12    facilities,  equipment,  and  activities  such  as,  but  not
13    limited to, the collection, monitoring,  and  correlation  of
14    animal  and  crop  data for the purpose of formulating animal
15    diets and agricultural chemicals.  This item  (7)  is  exempt
16    from the provisions of Section 3-75.
17        (8)  Fuel  and  petroleum  products sold to or used by an
18    air common 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        (9)  Proceeds  of  mandatory  service  charges separately
25    stated on customers' bills for the purchase  and  consumption
26    of food and beverages acquired as an incident to the purchase
27    of  a  service  from  a  serviceman,  to  the extent that the
28    proceeds of the service charge are in  fact  turned  over  as
29    tips  or  as  a  substitute  for  tips  to  the employees who
30    participate  directly  in  preparing,  serving,  hosting   or
31    cleaning  up  the  food  or beverage function with respect to
32    which the service charge is imposed.
33        (10)  Oil field  exploration,  drilling,  and  production
34    equipment, including (i) rigs and parts of rigs, rotary rigs,
 
SB617 Engrossed             -14-               LRB9205192SMdv
 1    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 2    goods, including casing and drill strings,  (iii)  pumps  and
 3    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
 4    individual  replacement  part  for  oil  field   exploration,
 5    drilling,  and  production  equipment, and (vi) machinery and
 6    equipment purchased for lease; but excluding  motor  vehicles
 7    required to be registered under the Illinois Vehicle Code.
 8        (11)  Proceeds from the sale of photoprocessing machinery
 9    and  equipment,  including repair and replacement parts, both
10    new and used, including that manufactured on  special  order,
11    certified   by   the  purchaser  to  be  used  primarily  for
12    photoprocessing, and including photoprocessing machinery  and
13    equipment purchased for lease.
14        (12)  Coal   exploration,   mining,  offhighway  hauling,
15    processing, maintenance, and reclamation equipment, including
16    replacement parts  and  equipment,  and  including  equipment
17    purchased for lease, but excluding motor vehicles required to
18    be registered under the Illinois Vehicle Code.
19        (13)  Semen used for artificial insemination of livestock
20    for direct agricultural production.
21        (14)  Horses, or interests in horses, registered with and
22    meeting  the  requirements  of  any of the Arabian Horse Club
23    Registry of America, Appaloosa Horse Club,  American  Quarter
24    Horse  Association,  United  States  Trotting Association, or
25    Jockey Club, as appropriate, used for purposes of breeding or
26    racing for prizes.
27        (15)  Computers and communications equipment utilized for
28    any hospital purpose and equipment  used  in  the  diagnosis,
29    analysis,  or  treatment  of hospital patients purchased by a
30    lessor who leases the equipment, under a lease of one year or
31    longer executed or in effect at the  time  the  lessor  would
32    otherwise  be  subject  to  the tax imposed by this Act, to a
33    hospital  that  has  been  issued  an  active  tax  exemption
34    identification number by the Department under Section  1g  of
 
SB617 Engrossed             -15-               LRB9205192SMdv
 1    the Retailers' Occupation Tax Act. If the equipment is leased
 2    in  a  manner  that does not qualify for this exemption or is
 3    used in any other non-exempt  manner,  the  lessor  shall  be
 4    liable for the tax imposed under this Act or the Use Tax Act,
 5    as  the  case  may  be, based on the fair market value of the
 6    property at the  time  the  non-qualifying  use  occurs.   No
 7    lessor shall collect or attempt to collect an amount (however
 8    designated)  that  purports  to reimburse that lessor for the
 9    tax imposed by this Act or the Use Tax Act, as the  case  may
10    be,  if the tax has not been paid by the lessor.  If a lessor
11    improperly collects any such  amount  from  the  lessee,  the
12    lessee  shall  have  a  legal right to claim a refund of that
13    amount from the lessor.  If,  however,  that  amount  is  not
14    refunded  to  the lessee for any reason, the lessor is liable
15    to pay that amount to the Department.
16        (16)  Personal property purchased by a lessor who  leases
17    the property, under a lease of one year or longer executed or
18    in  effect  at the time the lessor would otherwise be subject
19    to the tax imposed by this Act, to a governmental  body  that
20    has been issued an active tax exemption identification number
21    by   the  Department  under  Section  1g  of  the  Retailers'
22    Occupation Tax Act.  If the property is leased  in  a  manner
23    that  does  not  qualify for this exemption or is used in any
24    other non-exempt manner, the lessor shall be liable  for  the
25    tax  imposed  under  this Act or the Use Tax Act, as the case
26    may be, based on the fair market value of the property at the
27    time the non-qualifying use occurs.  No lessor shall  collect
28    or  attempt  to  collect  an amount (however designated) that
29    purports to reimburse that lessor for the tax imposed by this
30    Act or the Use Tax Act, as the case may be, if  the  tax  has
31    not been paid by the lessor.  If a lessor improperly collects
32    any  such  amount  from  the  lessee, the lessee shall have a
33    legal right to claim a refund of that amount from the lessor.
34    If, however, that amount is not refunded to  the  lessee  for
 
SB617 Engrossed             -16-               LRB9205192SMdv
 1    any  reason,  the  lessor is liable to pay that amount to the
 2    Department.
 3        (17)  Beginning with taxable years  ending  on  or  after
 4    December  31, 1995 and ending with taxable years ending on or
 5    before December 31, 2004, personal property that  is  donated
 6    for  disaster  relief  to  be  used  in  a State or federally
 7    declared disaster area in Illinois or bordering Illinois by a
 8    manufacturer or retailer that is registered in this State  to
 9    a   corporation,   society,   association,   foundation,   or
10    institution  that  has  been  issued  a  sales  tax exemption
11    identification number by the Department that assists  victims
12    of the disaster who reside within the declared disaster area.
13        (18)  Beginning  with  taxable  years  ending on or after
14    December 31, 1995 and ending with taxable years ending on  or
15    before  December  31, 2004, personal property that is used in
16    the performance of  infrastructure  repairs  in  this  State,
17    including  but  not  limited  to municipal roads and streets,
18    access roads, bridges,  sidewalks,  waste  disposal  systems,
19    water  and  sewer  line  extensions,  water  distribution and
20    purification facilities, storm water drainage  and  retention
21    facilities, and sewage treatment facilities, resulting from a
22    State or federally declared disaster in Illinois or bordering
23    Illinois  when  such  repairs  are  initiated  on  facilities
24    located  in  the declared disaster area within 6 months after
25    the disaster.
26        (19)  Beginning  July  1,  1999,  game  or   game   birds
27    purchased  at  a "game breeding and hunting preserve area" or
28    an "exotic game hunting area" as those terms are used in  the
29    Wildlife  Code  or  at  a  hunting enclosure approved through
30    rules adopted by the Department of Natural  Resources.   This
31    paragraph is exempt from the provisions of Section 3-75.
32        (20)  (19)  A  motor  vehicle, as that term is defined in
33    Section 1-146 of the Illinois Vehicle Code, that  is  donated
34    to   a   corporation,  limited  liability  company,  society,
 
SB617 Engrossed             -17-               LRB9205192SMdv
 1    association, foundation, or institution that is determined by
 2    the Department to be organized and operated  exclusively  for
 3    educational  purposes.   For  purposes  of this exemption, "a
 4    corporation, limited liability company, society, association,
 5    foundation, or institution organized and operated exclusively
 6    for educational  purposes"  means  all  tax-supported  public
 7    schools, private schools that offer systematic instruction in
 8    useful  branches  of  learning  by  methods  common to public
 9    schools  and  that  compare  favorably  in  their  scope  and
10    intensity with the course of study presented in tax-supported
11    schools, and vocational or technical  schools  or  institutes
12    organized  and  operated  exclusively  to provide a course of
13    study of not less than  6  weeks  duration  and  designed  to
14    prepare  individuals to follow a trade or to pursue a manual,
15    technical, mechanical, industrial,  business,  or  commercial
16    occupation.
17        (21) (20)  Beginning January 1, 2000,  personal property,
18    including  food, purchased through fundraising events for the
19    benefit of  a  public  or  private  elementary  or  secondary
20    school,  a  group  of  those  schools,  or one or more school
21    districts if the events are sponsored by an entity recognized
22    by the school district that consists primarily of  volunteers
23    and  includes  parents  and  teachers of the school children.
24    This paragraph does not apply to fundraising events  (i)  for
25    the benefit of private home instruction or (ii) for which the
26    fundraising  entity  purchases  the personal property sold at
27    the events from another individual or entity  that  sold  the
28    property  for the purpose of resale by the fundraising entity
29    and that profits from the sale  to  the  fundraising  entity.
30    This paragraph is exempt from the provisions of Section 3-75.
31        (22)   (19)  Beginning  January  1,  2000,  new  or  used
32    automatic vending machines that prepare and  serve  hot  food
33    and  beverages,  including coffee, soup, and other items, and
34    replacement parts for these  machines.    This  paragraph  is
 
SB617 Engrossed             -18-               LRB9205192SMdv
 1    exempt from the provisions of Section 3-75.
 2        (23)  Beginning  on the effective date of this amendatory
 3    Act   of   the   92nd   General   Assembly,   computers   and
 4    communications equipment utilized for  any  hospital  purpose
 5    and  equipment  used in the diagnosis, analysis, or treatment
 6    of hospital patients purchased by a  lessor  who  leases  the
 7    equipment, under a lease of one year or longer executed or in
 8    effect  at  the time the lessor would otherwise be subject to
 9    the tax imposed by this Act, to  a  hospital  that  has  been
10    issued  an  active tax exemption identification number by the
11    Department under Section 1g of the Retailers' Occupation  Tax
12    Act.   If  the  equipment is leased in a manner that does not
13    qualify for this exemption or is used in any other  nonexempt
14    manner,  the lessor shall be liable for the tax imposed under
15    this Act or the Use Tax Act, as the case may be, based on the
16    fair  market  value  of  the  property  at   the   time   the
17    nonqualifying use occurs.  No lessor shall collect or attempt
18    to  collect  an  amount (however designated) that purports to
19    reimburse that lessor for the tax imposed by this Act or  the
20    Use Tax Act, as the case may be, if the tax has not been paid
21    by  the  lessor.   If  a  lessor improperly collects any such
22    amount from the lessee, the lessee shall have a  legal  right
23    to  claim  a  refund  of  that  amount  from the lessor.  If,
24    however, that amount is not refunded to the  lessee  for  any
25    reason,  the  lessor  is  liable  to  pay  that amount to the
26    Department. This paragraph is exempt from the  provisions  of
27    Section 3-75.
28        (24)  Beginning  on the effective date of this amendatory
29    Act of the 92nd General Assembly, personal property purchased
30    by a lessor who leases the property, under  a  lease  of  one
31    year  or  longer executed or in effect at the time the lessor
32    would otherwise be subject to the tax imposed by this Act, to
33    a governmental body  that  has  been  issued  an  active  tax
34    exemption  identification  number  by  the  Department  under
 
SB617 Engrossed             -19-               LRB9205192SMdv
 1    Section  1g  of  the  Retailers'  Occupation Tax Act.  If the
 2    property is leased in a manner that does not qualify for this
 3    exemption or is used  in  any  other  nonexempt  manner,  the
 4    lessor  shall be liable for the tax imposed under this Act or
 5    the Use Tax Act, as the case may be, based on the fair market
 6    value of the property  at  the  time  the  nonqualifying  use
 7    occurs.   No  lessor  shall  collect or attempt to collect an
 8    amount (however designated) that purports to  reimburse  that
 9    lessor for the tax imposed by this Act or the Use Tax Act, as
10    the  case may be, if the tax has not been paid by the lessor.
11    If a lessor improperly collects  any  such  amount  from  the
12    lessee, the lessee shall have a legal right to claim a refund
13    of  that amount from the lessor.  If, however, that amount is
14    not refunded to the lessee for  any  reason,  the  lessor  is
15    liable  to  pay that amount to the Department. This paragraph
16    is exempt from the provisions of Section 3-75.
17    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
18    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
19    7-20-99; 91-439, eff. 8-6-99; 91-637, eff.  8-20-99;  91-644,
20    eff. 8-20-99; revised 9-29-99.)

21        Section 15.  The Service Occupation Tax Act is amended by
22    changing Section 3-5 as follows:

23        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
24        Sec.  3-5.   Exemptions.  The following tangible personal
25    property is exempt from the tax imposed by this Act:
26        (1)  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.
 
SB617 Engrossed             -20-               LRB9205192SMdv
 1        (2)  Personal  property  purchased  by  a  not-for-profit
 2    Illinois county  fair  association  for  use  in  conducting,
 3    operating, or promoting the county fair.
 4        (3)  Personal  property  purchased  by any not-for-profit
 5    arts or cultural  organization  that  establishes,  by  proof
 6    required  by  the Department by rule, that it has received an
 7    exemption  under Section 501(c)(3) of  the  Internal  Revenue
 8    Code  and that is organized and operated for the presentation
 9    or support of arts or cultural  programming,  activities,  or
10    services.   These  organizations include, but are not limited
11    to, music and dramatic arts organizations  such  as  symphony
12    orchestras  and  theatrical groups, arts and cultural service
13    organizations,   local    arts    councils,    visual    arts
14    organizations, and media arts organizations.
15        (4)  Legal  tender,  currency,  medallions,  or  gold  or
16    silver   coinage   issued  by  the  State  of  Illinois,  the
17    government of the United States of America, or the government
18    of any foreign country, and bullion.
19        (5)  Graphic  arts  machinery  and  equipment,  including
20    repair  and  replacement  parts,  both  new  and  used,   and
21    including that manufactured on special order or purchased for
22    lease,  certified  by  the purchaser to be used primarily for
23    graphic arts production.
24        (6)  Personal  property  sold  by   a   teacher-sponsored
25    student   organization   affiliated  with  an  elementary  or
26    secondary school located in Illinois.
27        (7)  Farm machinery and equipment,  both  new  and  used,
28    including  that  manufactured  on special order, certified by
29    the purchaser to be used primarily for production agriculture
30    or  State  or  federal   agricultural   programs,   including
31    individual replacement parts for the machinery and equipment,
32    including  machinery  and  equipment purchased for lease, and
33    including implements of husbandry defined in Section 1-130 of
34    the Illinois Vehicle Code, farm  machinery  and  agricultural
 
SB617 Engrossed             -21-               LRB9205192SMdv
 1    chemical  and fertilizer spreaders, and nurse wagons required
 2    to be registered under Section 3-809 of the Illinois  Vehicle
 3    Code,  but  excluding  other  motor  vehicles  required to be
 4    registered under the  Illinois  Vehicle  Code.  Horticultural
 5    polyhouses  or  hoop houses used for propagating, growing, or
 6    overwintering plants shall be considered farm  machinery  and
 7    equipment  under  this item (7). Agricultural chemical tender
 8    tanks and dry boxes shall include units sold separately  from
 9    a  motor  vehicle  required  to  be  licensed  and units sold
10    mounted on a motor vehicle required to  be  licensed  if  the
11    selling price of the tender is separately stated.
12        Farm  machinery  and  equipment  shall  include precision
13    farming equipment  that  is  installed  or  purchased  to  be
14    installed  on farm machinery and equipment including, but not
15    limited  to,  tractors,   harvesters,   sprayers,   planters,
16    seeders,  or spreaders. Precision farming equipment includes,
17    but is not  limited  to,  soil  testing  sensors,  computers,
18    monitors,  software,  global positioning and mapping systems,
19    and other such equipment.
20        Farm machinery and  equipment  also  includes  computers,
21    sensors,  software,  and  related equipment used primarily in
22    the computer-assisted  operation  of  production  agriculture
23    facilities,  equipment,  and  activities  such  as,  but  not
24    limited  to,  the  collection, monitoring, and correlation of
25    animal and crop data for the purpose  of  formulating  animal
26    diets  and  agricultural  chemicals.  This item (7) is exempt
27    from the provisions of Section 3-55.
28        (8)  Fuel and petroleum products sold to or  used  by  an
29    air  common  carrier, certified by the carrier to be used for
30    consumption, shipment, or  storage  in  the  conduct  of  its
31    business  as an air common carrier, for a flight destined for
32    or returning from a location or locations outside the  United
33    States  without  regard  to  previous  or subsequent domestic
34    stopovers.
 
SB617 Engrossed             -22-               LRB9205192SMdv
 1        (9)  Proceeds of  mandatory  service  charges  separately
 2    stated  on  customers' bills for the purchase and consumption
 3    of food and beverages, to the extent that the proceeds of the
 4    service charge are in fact  turned  over  as  tips  or  as  a
 5    substitute for tips to the employees who participate directly
 6    in  preparing,  serving,  hosting  or cleaning up the food or
 7    beverage function with respect to which the service charge is
 8    imposed.
 9        (10)  Oil field  exploration,  drilling,  and  production
10    equipment, including (i) rigs and parts of rigs, rotary rigs,
11    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
12    goods, including casing and drill strings,  (iii)  pumps  and
13    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
14    individual  replacement  part  for  oil  field   exploration,
15    drilling,  and  production  equipment, and (vi) machinery and
16    equipment purchased for lease; but excluding  motor  vehicles
17    required to be registered under the Illinois Vehicle Code.
18        (11)  Photoprocessing  machinery and equipment, including
19    repair and replacement parts, both new  and  used,  including
20    that   manufactured   on  special  order,  certified  by  the
21    purchaser to  be  used  primarily  for  photoprocessing,  and
22    including  photoprocessing  machinery and equipment purchased
23    for lease.
24        (12)  Coal  exploration,  mining,   offhighway   hauling,
25    processing, maintenance, and reclamation equipment, including
26    replacement  parts  and  equipment,  and  including equipment
27    purchased for lease, but excluding motor vehicles required to
28    be registered under the Illinois Vehicle Code.
29        (13)  Food for human consumption that is to  be  consumed
30    off  the  premises  where  it  is  sold (other than alcoholic
31    beverages, soft drinks and food that has  been  prepared  for
32    immediate  consumption) and prescription and non-prescription
33    medicines, drugs,  medical  appliances,  and  insulin,  urine
34    testing  materials,  syringes, and needles used by diabetics,
 
SB617 Engrossed             -23-               LRB9205192SMdv
 1    for human use, when purchased for use by a  person  receiving
 2    medical assistance under Article 5 of the Illinois Public Aid
 3    Code  who  resides  in a licensed long-term care facility, as
 4    defined in the Nursing Home Care Act.
 5        (14)  Semen used for artificial insemination of livestock
 6    for direct agricultural production.
 7        (15)  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        (16)  Computers and communications equipment utilized for
14    any  hospital  purpose  and  equipment used in the diagnosis,
15    analysis, or treatment of hospital patients sold to a  lessor
16    who leases the equipment, under a lease of one year or longer
17    executed  or  in  effect  at  the  time of the purchase, to a
18    hospital  that  has  been  issued  an  active  tax  exemption
19    identification number by the Department under Section  1g  of
20    the Retailers' Occupation Tax Act.
21        (17)  Personal  property  sold to a lessor who leases the
22    property, under a lease of one year or longer executed or  in
23    effect  at  the  time of the purchase, to a governmental body
24    that has been issued an active tax  exemption  identification
25    number  by  the Department under Section 1g of the Retailers'
26    Occupation Tax Act.
27        (18)  Beginning with taxable years  ending  on  or  after
28    December  31, 1995 and ending with taxable years ending on or
29    before December 31, 2004, personal property that  is  donated
30    for  disaster  relief  to  be  used  in  a State or federally
31    declared disaster area in Illinois or bordering Illinois by a
32    manufacturer or retailer that is registered in this State  to
33    a   corporation,   society,   association,   foundation,   or
34    institution  that  has  been  issued  a  sales  tax exemption
 
SB617 Engrossed             -24-               LRB9205192SMdv
 1    identification number by the Department that assists  victims
 2    of the disaster who reside within the declared disaster area.
 3        (19)  Beginning  with  taxable  years  ending on or after
 4    December 31, 1995 and ending with taxable years ending on  or
 5    before  December  31, 2004, personal property that is used in
 6    the performance of  infrastructure  repairs  in  this  State,
 7    including  but  not  limited  to municipal roads and streets,
 8    access roads, bridges,  sidewalks,  waste  disposal  systems,
 9    water  and  sewer  line  extensions,  water  distribution and
10    purification facilities, storm water drainage  and  retention
11    facilities, and sewage treatment facilities, resulting from a
12    State or federally declared disaster in Illinois or bordering
13    Illinois  when  such  repairs  are  initiated  on  facilities
14    located  in  the declared disaster area within 6 months after
15    the disaster.
16        (20)  Beginning July 1, 1999, game or game birds sold  at
17    a  "game  breeding  and  hunting preserve area" or an "exotic
18    game hunting area" as those terms are used  in  the  Wildlife
19    Code or at a hunting enclosure approved through rules adopted
20    by  the  Department  of Natural Resources.  This paragraph is
21    exempt from the provisions of Section 3-55.
22        (21) (20)  A motor vehicle, as that term  is  defined  in
23    Section  1-146  of the Illinois Vehicle Code, that is donated
24    to  a  corporation,  limited  liability   company,   society,
25    association, foundation, or institution that is determined by
26    the  Department  to be organized and operated exclusively for
27    educational purposes.  For purposes  of  this  exemption,  "a
28    corporation, limited liability company, society, association,
29    foundation, or institution organized and operated exclusively
30    for  educational  purposes"  means  all  tax-supported public
31    schools, private schools that offer systematic instruction in
32    useful branches of  learning  by  methods  common  to  public
33    schools  and  that  compare  favorably  in  their  scope  and
34    intensity with the course of study presented in tax-supported
 
SB617 Engrossed             -25-               LRB9205192SMdv
 1    schools,  and  vocational  or technical schools or institutes
 2    organized and operated exclusively to  provide  a  course  of
 3    study  of  not  less  than  6  weeks duration and designed to
 4    prepare individuals to follow a trade or to pursue a  manual,
 5    technical,  mechanical,  industrial,  business, or commercial
 6    occupation.
 7        (22) (21)  Beginning January 1, 2000,  personal property,
 8    including food, purchased through fundraising events for  the
 9    benefit  of  a  public  or  private  elementary  or secondary
10    school, a group of those  schools,  or  one  or  more  school
11    districts if the events are sponsored by an entity recognized
12    by  the school district that consists primarily of volunteers
13    and includes parents and teachers  of  the  school  children.
14    This  paragraph  does not apply to fundraising events (i) for
15    the benefit of private home instruction or (ii) for which the
16    fundraising entity purchases the personal  property  sold  at
17    the  events  from  another individual or entity that sold the
18    property for the purpose of resale by the fundraising  entity
19    and  that  profits  from  the sale to the fundraising entity.
20    This paragraph is exempt from the provisions of Section 3-55.
21        (23)  (20)  Beginning  January  1,  2000,  new  or   used
22    automatic  vending  machines  that prepare and serve hot food
23    and beverages, including coffee, soup, and other  items,  and
24    replacement  parts  for  these  machines.   This paragraph is
25    exempt from the provisions of Section 3-55.
26        (24)  Beginning on the effective date of this  amendatory
27    Act   of   the   92nd   General   Assembly,   computers   and
28    communications  equipment  utilized  for any hospital purpose
29    and equipment used in the diagnosis, analysis,  or  treatment
30    of  hospital  patients  sold  to  a  lessor  who  leases  the
31    equipment, under a lease of one year or longer executed or in
32    effect  at  the  time of the purchase, to a hospital that has
33    been issued an active tax exemption identification number  by
34    the  Department under Section 1g of the Retailers' Occupation
 
SB617 Engrossed             -26-               LRB9205192SMdv
 1    Tax Act.  This paragraph is exempt  from  the  provisions  of
 2    Section 3-55.
 3        (25)  Beginning  on the effective date of this amendatory
 4    Act of the 92nd General Assembly, personal property sold to a
 5    lessor who leases the property, under a lease of one year  or
 6    longer  executed or in effect at the time of the purchase, to
 7    a governmental body  that  has  been  issued  an  active  tax
 8    exemption  identification  number  by  the  Department  under
 9    Section  1g  of  the  Retailers'  Occupation  Tax  Act.  This
10    paragraph is exempt from the provisions of Section 3-55.
11    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
12    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
13    7-20-99; 91-439, eff. 8-6-99; 91-533, eff.  8-13-99;  91-637,
14    eff. 8-20-99; 91-644, eff. 8-20-99; revised 9-29-99.)

15        Section 20.  The Retailers' Occupation Tax Act is amended
16    by changing Section 2-5 as follows:

17        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
18        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
19    the  sale  of  the  following  tangible personal property are
20    exempt from the tax imposed by this Act:
21        (1)  Farm chemicals.
22        (2)  Farm machinery and equipment,  both  new  and  used,
23    including  that  manufactured  on special order, certified by
24    the purchaser to be used primarily for production agriculture
25    or  State  or  federal   agricultural   programs,   including
26    individual replacement parts for the machinery and equipment,
27    including  machinery  and  equipment purchased for lease, and
28    including implements of husbandry defined in Section 1-130 of
29    the Illinois Vehicle Code, farm  machinery  and  agricultural
30    chemical  and fertilizer spreaders, and nurse wagons required
31    to be registered under Section 3-809 of the Illinois  Vehicle
32    Code,  but  excluding  other  motor  vehicles  required to be
 
SB617 Engrossed             -27-               LRB9205192SMdv
 1    registered under the  Illinois  Vehicle  Code.  Horticultural
 2    polyhouses  or  hoop houses used for propagating, growing, or
 3    overwintering plants shall be considered farm  machinery  and
 4    equipment  under  this item (2). Agricultural chemical tender
 5    tanks and dry boxes shall include units sold separately  from
 6    a  motor  vehicle  required  to  be  licensed  and units sold
 7    mounted on a motor vehicle required to be  licensed,  if  the
 8    selling price of the tender is separately stated.
 9        Farm  machinery  and  equipment  shall  include precision
10    farming equipment  that  is  installed  or  purchased  to  be
11    installed  on farm machinery and equipment including, but not
12    limited  to,  tractors,   harvesters,   sprayers,   planters,
13    seeders,  or spreaders. Precision farming equipment includes,
14    but is not  limited  to,  soil  testing  sensors,  computers,
15    monitors,  software,  global positioning and mapping systems,
16    and other such equipment.
17        Farm machinery and  equipment  also  includes  computers,
18    sensors,  software,  and  related equipment used primarily in
19    the computer-assisted  operation  of  production  agriculture
20    facilities,  equipment,  and  activities  such  as,  but  not
21    limited  to,  the  collection, monitoring, and correlation of
22    animal and crop data for the purpose  of  formulating  animal
23    diets  and  agricultural  chemicals.  This item (7) is exempt
24    from the provisions of Section 2-70.
25        (3)  Distillation machinery and equipment, sold as a unit
26    or kit, assembled or installed by the retailer, certified  by
27    the  user to be used only for the production of ethyl alcohol
28    that will be used for consumption  as  motor  fuel  or  as  a
29    component of motor fuel for the personal use of the user, and
30    not subject to sale or resale.
31        (4)  Graphic  arts  machinery  and  equipment,  including
32    repair   and  replacement  parts,  both  new  and  used,  and
33    including that manufactured on special order or purchased for
34    lease, certified by the purchaser to be  used  primarily  for
 
SB617 Engrossed             -28-               LRB9205192SMdv
 1    graphic arts production.
 2        (5)  A  motor  vehicle  of  the  first  division, a motor
 3    vehicle of the second division that is a self-contained motor
 4    vehicle designed or permanently converted to  provide  living
 5    quarters  for  recreational,  camping,  or  travel  use, with
 6    direct walk through access to the living  quarters  from  the
 7    driver's seat, or a motor vehicle of the second division that
 8    is  of  the van configuration designed for the transportation
 9    of not less than 7 nor more than 16 passengers, as defined in
10    Section 1-146 of the Illinois Vehicle Code, that is used  for
11    automobile  renting,  as  defined  in  the Automobile Renting
12    Occupation and Use Tax Act.
13        (6)  Personal  property  sold  by   a   teacher-sponsored
14    student   organization   affiliated  with  an  elementary  or
15    secondary school located in Illinois.
16        (7)  Proceeds of that portion of the selling price  of  a
17    passenger car the sale of which is subject to the Replacement
18    Vehicle Tax.
19        (8)  Personal  property  sold  to an Illinois county fair
20    association for use in conducting,  operating,  or  promoting
21    the county fair.
22        (9)  Personal  property  sold to a not-for-profit arts or
23    cultural organization that establishes, by proof required  by
24    the  Department  by  rule,  that it has received an exemption
25    under Section 501(c)(3) of the Internal Revenue Code and that
26    is organized and operated for the presentation or support  of
27    arts or cultural programming, activities, or services.  These
28    organizations  include,  but  are  not  limited to, music and
29    dramatic arts organizations such as symphony  orchestras  and
30    theatrical  groups,  arts and cultural service organizations,
31    local arts councils, visual  arts  organizations,  and  media
32    arts organizations.
33        (10)  Personal  property  sold by a corporation, society,
34    association, foundation, institution, or organization,  other
 
SB617 Engrossed             -29-               LRB9205192SMdv
 1    than  a  limited  liability  company,  that  is organized and
 2    operated as  a  not-for-profit  service  enterprise  for  the
 3    benefit  of  persons 65 years of age or older if the personal
 4    property was not purchased by the enterprise for the  purpose
 5    of resale by the enterprise.
 6        (11)  Personal property sold to a governmental body, to a
 7    corporation, society, association, foundation, or institution
 8    organized and operated exclusively for charitable, religious,
 9    or  educational purposes, or to a not-for-profit corporation,
10    society,    association,    foundation,    institution,    or
11    organization that has no compensated  officers  or  employees
12    and   that  is  organized  and  operated  primarily  for  the
13    recreation of persons 55 years of age  or  older.  A  limited
14    liability  company  may  qualify for the exemption under this
15    paragraph only if the limited liability company is  organized
16    and  operated  exclusively  for  educational purposes. On and
17    after July 1, 1987, however, no entity otherwise eligible for
18    this exemption shall make tax-free purchases unless it has an
19    active identification number issued by the Department.
20        (12)  Personal property sold to interstate  carriers  for
21    hire  for  use as rolling stock moving in interstate commerce
22    or to lessors under leases of one year or longer executed  or
23    in  effect at the time of purchase by interstate carriers for
24    hire for use as rolling stock moving in  interstate  commerce
25    and  equipment  operated  by  a  telecommunications provider,
26    licensed as a common carrier by  the  Federal  Communications
27    Commission,  which  is permanently installed in or affixed to
28    aircraft moving in interstate commerce.
29        (13)  Proceeds from sales to owners, lessors, or shippers
30    of tangible personal property that is utilized by  interstate
31    carriers  for  hire  for  use  as  rolling  stock  moving  in
32    interstate    commerce    and   equipment   operated   by   a
33    telecommunications provider, licensed as a common carrier  by
34    the  Federal  Communications Commission, which is permanently
 
SB617 Engrossed             -30-               LRB9205192SMdv
 1    installed in or affixed  to  aircraft  moving  in  interstate
 2    commerce.
 3        (14)  Machinery  and  equipment  that will be used by the
 4    purchaser, or a lessee of the  purchaser,  primarily  in  the
 5    process  of  manufacturing  or  assembling  tangible personal
 6    property for wholesale or retail sale or lease,  whether  the
 7    sale or lease is made directly by the manufacturer or by some
 8    other  person,  whether the materials used in the process are
 9    owned by the manufacturer or some other  person,  or  whether
10    the sale or lease is made apart from or as an incident to the
11    seller's  engaging  in  the  service  occupation of producing
12    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
13    similar  items  of no commercial value on special order for a
14    particular purchaser.
15        (15)  Proceeds of mandatory  service  charges  separately
16    stated  on  customers'  bills for purchase and consumption of
17    food and beverages, to the extent that the  proceeds  of  the
18    service  charge  are  in  fact  turned  over  as tips or as a
19    substitute for tips to the employees who participate directly
20    in preparing, serving, hosting or cleaning  up  the  food  or
21    beverage function with respect to which the service charge is
22    imposed.
23        (16)  Petroleum  products  sold  to  a  purchaser  if the
24    seller is prohibited by federal law from charging tax to  the
25    purchaser.
26        (17)  Tangible personal property sold to a common carrier
27    by rail or motor that receives the physical possession of the
28    property  in  Illinois  and  that transports the property, or
29    shares with another common carrier in the  transportation  of
30    the  property,  out of Illinois on a standard uniform bill of
31    lading showing the seller of the property as the  shipper  or
32    consignor  of the property to a destination outside Illinois,
33    for use outside Illinois.
34        (18)  Legal tender,  currency,  medallions,  or  gold  or
 
SB617 Engrossed             -31-               LRB9205192SMdv
 1    silver   coinage   issued  by  the  State  of  Illinois,  the
 2    government of the United States of America, or the government
 3    of any foreign country, and bullion.
 4        (19)  Oil field  exploration,  drilling,  and  production
 5    equipment, including (i) rigs and parts of rigs, rotary rigs,
 6    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 7    goods, including casing and drill strings,  (iii)  pumps  and
 8    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
 9    individual  replacement  part  for  oil  field   exploration,
10    drilling,  and  production  equipment, and (vi) machinery and
11    equipment purchased for lease; but excluding  motor  vehicles
12    required to be registered under the Illinois Vehicle Code.
13        (20)  Photoprocessing  machinery and equipment, including
14    repair and replacement parts, both new  and  used,  including
15    that   manufactured   on  special  order,  certified  by  the
16    purchaser to  be  used  primarily  for  photoprocessing,  and
17    including  photoprocessing  machinery and equipment purchased
18    for lease.
19        (21)  Coal  exploration,  mining,   offhighway   hauling,
20    processing, maintenance, and reclamation equipment, including
21    replacement  parts  and  equipment,  and  including equipment
22    purchased for lease, but excluding motor vehicles required to
23    be registered under the Illinois Vehicle Code.
24        (22)  Fuel and petroleum products sold to or used  by  an
25    air  carrier,  certified  by  the  carrier  to  be  used  for
26    consumption,  shipment,  or  storage  in  the  conduct of its
27    business as an air common carrier, for a flight destined  for
28    or  returning from a location or locations outside the United
29    States without regard  to  previous  or  subsequent  domestic
30    stopovers.
31        (23)  A  transaction  in  which  the  purchase  order  is
32    received  by  a  florist who is located outside Illinois, but
33    who has a florist located in Illinois deliver the property to
34    the purchaser or the purchaser's donee in Illinois.
 
SB617 Engrossed             -32-               LRB9205192SMdv
 1        (24)  Fuel consumed or used in the  operation  of  ships,
 2    barges,  or  vessels  that  are  used primarily in or for the
 3    transportation of property or the conveyance of  persons  for
 4    hire  on  rivers  bordering  on  this  State  if  the fuel is
 5    delivered by the seller to the purchaser's  barge,  ship,  or
 6    vessel while it is afloat upon that bordering river.
 7        (25)  A motor vehicle sold in this State to a nonresident
 8    even though the motor vehicle is delivered to the nonresident
 9    in  this  State,  if the motor vehicle is not to be titled in
10    this State, and if a driveaway decal permit is issued to  the
11    motor  vehicle  as  provided in Section 3-603 of the Illinois
12    Vehicle Code or if  the  nonresident  purchaser  has  vehicle
13    registration  plates  to  transfer  to the motor vehicle upon
14    returning to his or her home  state.   The  issuance  of  the
15    driveaway   decal   permit   or   having   the   out-of-state
16    registration plates to be transferred is prima facie evidence
17    that the motor vehicle will not be titled in this State.
18        (26)  Semen used for artificial insemination of livestock
19    for direct agricultural production.
20        (27)  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        (28)  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    this Act.
34        (29)  Personal property sold to a lessor who  leases  the
 
SB617 Engrossed             -33-               LRB9205192SMdv
 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 this Act.
 5        (30)  Beginning with taxable years  ending  on  or  after
 6    December  31, 1995 and ending with taxable years ending on or
 7    before December 31, 2004, personal property that  is  donated
 8    for  disaster  relief  to  be  used  in  a State or federally
 9    declared disaster area in Illinois or bordering Illinois by a
10    manufacturer or retailer that is registered in this State  to
11    a   corporation,   society,   association,   foundation,   or
12    institution  that  has  been  issued  a  sales  tax exemption
13    identification number by the Department that assists  victims
14    of the disaster who reside within the declared disaster area.
15        (31)  Beginning  with  taxable  years  ending on or after
16    December 31, 1995 and ending with taxable years ending on  or
17    before  December  31, 2004, personal property that is used in
18    the performance of  infrastructure  repairs  in  this  State,
19    including  but  not  limited  to municipal roads and streets,
20    access roads, bridges,  sidewalks,  waste  disposal  systems,
21    water  and  sewer  line  extensions,  water  distribution and
22    purification facilities, storm water drainage  and  retention
23    facilities, and sewage treatment facilities, resulting from a
24    State or federally declared disaster in Illinois or bordering
25    Illinois  when  such  repairs  are  initiated  on  facilities
26    located  in  the declared disaster area within 6 months after
27    the disaster.
28        (32)  Beginning July 1, 1999, game or game birds sold  at
29    a  "game  breeding  and  hunting preserve area" or an "exotic
30    game hunting area" as those terms are used  in  the  Wildlife
31    Code or at a hunting enclosure approved through rules adopted
32    by  the  Department  of Natural Resources.  This paragraph is
33    exempt from the provisions of Section 2-70.
34        (33) (32)  A motor vehicle, as that term  is  defined  in
 
SB617 Engrossed             -34-               LRB9205192SMdv
 1    Section  1-146  of the Illinois Vehicle Code, that is donated
 2    to  a  corporation,  limited  liability   company,   society,
 3    association, foundation, or institution that is determined by
 4    the  Department  to be organized and operated exclusively for
 5    educational purposes.  For purposes  of  this  exemption,  "a
 6    corporation, limited liability company, society, association,
 7    foundation, or institution organized and operated exclusively
 8    for  educational  purposes"  means  all  tax-supported public
 9    schools, private schools that offer systematic instruction in
10    useful branches of  learning  by  methods  common  to  public
11    schools  and  that  compare  favorably  in  their  scope  and
12    intensity with the course of study presented in tax-supported
13    schools,  and  vocational  or technical schools or institutes
14    organized and operated exclusively to  provide  a  course  of
15    study  of  not  less  than  6  weeks duration and designed to
16    prepare individuals to follow a trade or to pursue a  manual,
17    technical,  mechanical,  industrial,  business, or commercial
18    occupation.
19        (34) (33)  Beginning January 1, 2000,  personal property,
20    including food, purchased through fundraising events for  the
21    benefit  of  a  public  or  private  elementary  or secondary
22    school, a group of those  schools,  or  one  or  more  school
23    districts if the events are sponsored by an entity recognized
24    by  the school district that consists primarily of volunteers
25    and includes parents and teachers  of  the  school  children.
26    This  paragraph  does not apply to fundraising events (i) for
27    the benefit of private home instruction or (ii) for which the
28    fundraising entity purchases the personal  property  sold  at
29    the  events  from  another individual or entity that sold the
30    property for the purpose of resale by the fundraising  entity
31    and  that  profits  from  the sale to the fundraising entity.
32    This paragraph is exempt from the provisions of Section 2-70.
33        (35)  (32)  Beginning  January  1,  2000,  new  or   used
34    automatic  vending  machines  that prepare and serve hot food
 
SB617 Engrossed             -35-               LRB9205192SMdv
 1    and beverages, including coffee, soup, and other  items,  and
 2    replacement  parts  for  these  machines.   This paragraph is
 3    exempt from the provisions of Section 2-70.
 4        (36)  Beginning on the effective date of this  amendatory
 5    Act   of   the   92nd   General   Assembly,   computers   and
 6    communications  equipment  utilized  for any hospital purpose
 7    and equipment used in the diagnosis, analysis,  or  treatment
 8    of  hospital  patients  sold  to  a  lessor  who  leases  the
 9    equipment, under a lease of one year or longer executed or in
10    effect  at  the  time of the purchase, to a hospital that has
11    been issued an active tax exemption identification number  by
12    the  Department under Section 1g of this Act.  This paragraph
13    is exempt from the provisions of Section 2-70.
14        (37)  Beginning on the effective date of this  amendatory
15    Act of the 92nd General Assembly, personal property sold to a
16    lessor  who leases the property, under a lease of one year or
17    longer executed or in effect at the time of the purchase,  to
18    a  governmental  body  that  has  been  issued  an active tax
19    exemption  identification  number  by  the  Department  under
20    Section 1g of this Act.  This paragraph is  exempt  from  the
21    provisions of Section 2-70.
22    (Source: P.A.   90-14,  eff.  7-1-97;  90-519,  eff.  6-1-98;
23    90-552, eff. 12-12-97;  90-605,  eff.  6-30-98;  91-51,  eff.
24    6-30-99;  91-200,  eff. 7-20-99; 91-439, eff. 8-6-99; 91-533,
25    eff. 8-13-99; 91-637, eff.  8-20-99;  91-644,  eff.  8-20-99;
26    revised 9-28-99.)

27        Section  99.  Effective date.  This Act takes effect upon
28    becoming law.

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