Rep. Michael J. Zalewski

Filed: 5/17/2017

 

 


 

 


 
10000HB0160ham001LRB100 02289 HLH 26491 a

1
AMENDMENT TO HOUSE BILL 160

2    AMENDMENT NO. ______. Amend House Bill 160 by replacing
3everything after the enacting clause with the following:
 
4
"ARTICLE 3. KEEP ILLINOIS BUSINESS ACT

 
5    Section 3-1. Short title. This Act may be cited as the Keep
6Illinois Business Act.
 
7    Section 3-5. Purpose. The purpose of this Act is to
8encourage businesses with primary business operations in the
9State of Illinois to remain in this State by removing and
10recouping any economic development assistance or benefit
11provided to those businesses by the State should those
12businesses decide to relocate jobs out-of-State.
 
13    Section 3-10. Definitions. As used in this Act:
14    "Economic development assistance" means (1) tax credits

 

 

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1and tax exemptions given as an incentive to a recipient
2business organization under an initial certification or an
3initial designation made by the Department of Commerce and
4Economic Opportunity under the Economic Development for a
5Growing Economy Tax Credit Act, River Edge Redevelopment Zone
6Act, and the Illinois Enterprise Zone Act, including the High
7Impact Business program; (2) grants or loans given to a
8recipient as an incentive to a business organization under the
9River Edge Redevelopment Zone Act, Large Business Development
10Program, the Business Development Public Infrastructure
11Program, or the Industrial Training Program; (3) the State
12Treasurer's Economic Program Loans; (4) the Illinois
13Department of Transportation Economic Development Program; (5)
14all successor and subsequent programs and tax credits designed
15to promote business relocations and expansions; (6) any
16assistance provided by the Illinois Emergency Employment
17Program under the Illinois Emergency Development Act; and (7)
18any other economic incentive, benefit, assistance, credit,
19loan, or grant provided by a State granting agency to a
20recipient business with primary business operations in this
21State.
22    "Recipient business" means any corporation, limited
23liability company, partnership, joint venture, association,
24sole proprietorship, or other legally recognized entity with
25primary business operations in this State that receives
26economic development assistance.

 

 

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1    "State agency" has the meaning provided in Section 1-7 of
2the Illinois State Auditing Act.
3    "State granting agency" means any State department or State
4agency that provides economic development assistance to a
5recipient business.
 
6    Section 3-15. Recovery of economic development assistance.
7    (a) Subject to the procedures outlined in this Section, any
8recipient business that chooses to move all or part of its
9business operations and the jobs created by its business
10out-of-State shall be deemed to no longer qualify for State
11economic development assistance, and shall be required to pay
12to the relevant State granting agency the full amount of any
13economic development assistance it received.
14    (b) Whenever a State granting agency believes that the
15economic development assistance it provided to a recipient
16business is subject to recovery, the State granting agency
17shall provide the recipient business the opportunity for at
18least one informal hearing to determine the facts and issues,
19and to resolve any conflicts as amicably as possible before
20taking any formal recovery actions.
21    (c) If a State granting agency determines that economic
22development assistance is to be recovered, then, prior to
23taking any action to recover, the State granting agency shall
24provide the recipient business with a written notice of the
25intended recovery. This notice shall identify the funds and the

 

 

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1amount to be recovered and the specific facts which permit
2recovery.
3    (d) A recipient business shall have 35 days from the
4receipt of the notice required in subsection (c) of this
5Section to request a hearing to show why recovery is not
6justified or proper. If a recipient business requests a hearing
7under this subsection (d), then:
8        (1) the State granting agency shall hold a hearing
9    before the Director of that agency, or his or her designee,
10    at which a representative of the recipient business may
11    present an argument for why recovery should not be
12    permitted; and
13        (2) after the conclusion of the hearing, the Director
14    of the State granting agency, or his or her designee, shall
15    issue a written final recovery order and send a copy of the
16    order to the recipient business.
17    (e) A recipient business may seek judicial review of any
18final recovery order under the provisions of the Administrative
19Review Law.
20    (f) If a recipient business requests a hearing under
21subsection (d) of this Section, then the State granting agency
22may not take any action of recovery until at least 35 days
23after the State granting agency has issued a final recovery
24order under the requirements of subsection (d) of this Section.
25If a recipient business does not request a hearing as permitted
26in subsection (d) of this Section, then the State granting

 

 

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1agency may proceed with recovery of the economic development
2assistance amount specified in the notice issued under the
3requirements of subsection (c) of this Section, at any time
4after the expiration of the 35-day request period established
5in subsection (d) of this Section.
6    (g) Any notice or mailing required or permitted by this
7Section shall be deemed received 5 days after the notice or
8mailing is deposited in the United States mail, properly
9addressed with the current business address of the recipient
10business and with sufficient U.S. postage affixed.
 
11
ARTICLE 4. NEW MARKETS DEVELOPMENT PROGRAM

 
12    Section 4-5. The New Markets Development Program Act is
13amended by changing Sections 5, 25, 40, and 50 and by adding
14Sections 43 and 55 as follows:
 
15    (20 ILCS 663/5)
16    Sec. 5. Definitions. As used in this Act:
17    "Applicable percentage" means 0% for each of the first 2
18credit allowance dates, 7% for the third credit allowance date,
19and 8% for the next 4 credit allowance dates.
20    "Credit allowance date" means with respect to any qualified
21equity investment:
22        (1) the date on which the investment is initially made;
23    and

 

 

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1        (2) each of the 6 anniversary dates of that date
2    thereafter.
3    "Department" means the Department of Commerce and Economic
4Opportunity.
5    "Long-term debt security" means any debt instrument issued
6by a qualified community development entity, at par value or a
7premium, with an original maturity date of at least 7 years
8from the date of its issuance, with no acceleration of
9repayment, amortization, or prepayment features prior to its
10original maturity date. Cumulative cash payments of interest on
11the qualified debt instrument during the period commencing with
12the issuance of the qualified debt instrument and ending with
13the seventh anniversary of its issuance shall not exceed the
14sum of such cash interest payments and the cumulative net
15income of the issuing community development entity for the same
16period. This definition in no way limits the holder's ability
17to accelerate payments on the debt instrument in situations
18where the issuer has defaulted on covenants designed to ensure
19compliance with this Act or Section 45D of the Internal Revenue
20Code of 1986, as amended.
21    "Purchase price" means the amount paid to the issuer of a
22qualified equity investment for that qualified equity
23investment.
24    "Qualified active low-income community business" has the
25meaning given to that term in Section 45D of the Internal
26Revenue Code of 1986, as amended; except that any business that

 

 

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1derives or projects to derive 15% or more of its annual revenue
2from the rental or sale of real estate is not considered to be
3a qualified active low-income community business. This
4exception does not apply to a business that is controlled by or
5under common control with another business if the second
6business (i) does not derive or project to derive 15% or more
7of its annual revenue from the rental or sale of real estate
8and (ii) is the primary tenant of the real estate leased from
9the initial business. A business shall be considered a
10qualified active low-income community business for the
11duration of the qualified community development entity's
12investment in or loan to the business if the entity reasonably
13expects, at the time it makes the investment or loan, that the
14business will continue to satisfy the requirements for being a
15qualified active low-income community business throughout the
16entire period of the investment or loan.
17    "Qualified community development entity" has the meaning
18given to that term in Section 45D of the Internal Revenue Code
19of 1986, as amended; provided that such entity has entered
20into, or is controlled by an entity that has entered into, an
21allocation agreement with the Community Development Financial
22Institutions Fund of the U.S. Treasury Department with respect
23to credits authorized by Section 45D of the Internal Revenue
24Code of 1986, as amended, that includes the State of Illinois
25within the service area set forth in that allocation agreement.
26    "Qualified equity investment" means any equity investment

 

 

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1in, or long-term debt security issued by, a qualified community
2development entity that:
3        (1) is acquired after the effective date of this Act at
4    its original issuance solely in exchange for cash;
5        (2) with respect to qualified equity investments made
6    before January 1, 2017, has at least 85% of its cash
7    purchase price used by the issuer to make qualified
8    low-income community investments in the State of Illinois,
9    and, with respect to qualified equity investments made on
10    or after January 1, 2017, has 100% of the cash purchase
11    price used by the issuer to make qualified low-income
12    community investments in the State of Illinois; and
13        (3) is designated by the issuer as a qualified equity
14    investment under this Act; with respect to qualified equity
15    investments made on or after January 1, 2017, is designated
16    by the issuer as a qualified equity investment under
17    Section 45D of the Internal Revenue Code of 1986, as
18    amended; and is certified by the Department as not
19    exceeding the limitation contained in Section 20.
20    This term includes any qualified equity investment that
21does not meet the provisions of item (1) of this definition if
22the investment was a qualified equity investment in the hands
23of a prior holder.
24    "Qualified low-income community investment" means any
25capital or equity investment in, or loan to, any qualified
26active low-income community business. With respect to any one

 

 

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1qualified active low-income community business, the maximum
2amount of qualified low-income community investments made in
3that business, on a collective basis with all of its affiliates
4that may be counted towards the satisfaction of paragraph (2)
5of the definition of qualified equity investment, shall be
6$10,000,000 whether issued to one or several qualified
7community development entities.
8    "Tax credit" means a credit against any income, franchise,
9or insurance premium taxes, including insurance retaliatory
10taxes, otherwise due under Illinois law.
11    "Taxpayer" means any individual or entity subject to any
12income, franchise, or insurance premium tax under Illinois law.
13(Source: P.A. 95-1024, eff. 12-31-08.)
 
14    (20 ILCS 663/25)
15    Sec. 25. Certification of qualified equity investments.
16    (a) A qualified community development entity that seeks to
17have an equity investment or long-term debt security designated
18as a qualified equity investment and eligible for tax credits
19under this Section shall apply to the Department. The qualified
20community development entity must submit an application on a
21form that the Department provides that includes:
22        (1) The name, address, tax identification number of the
23    entity, and evidence of the entity's certification as a
24    qualified community development entity.
25        (2) A copy of the allocation agreement executed by the

 

 

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1    entity, or its controlling entity, and the Community
2    Development Financial Institutions Fund.
3        (3) A certificate executed by an executive officer of
4    the entity attesting that the allocation agreement remains
5    in effect and has not been revoked or cancelled by the
6    Community Development Financial Institutions Fund.
7        (4) A description of the proposed amount, structure,
8    and purchaser of the equity investment or long-term debt
9    security.
10        (5) The name and tax identification number of any
11    taxpayer eligible to utilize tax credits earned as a result
12    of the issuance of the qualified equity investment.
13        (6) Information regarding the proposed use of proceeds
14    from the issuance of the qualified equity investment.
15        (7) A nonrefundable application fee of $5,000. This fee
16    shall be paid to the Department and shall be required of
17    each application submitted.
18        (8) With respect to qualified equity investments made
19    on or after January 1, 2017, the amount of qualified equity
20    investment authority the applicant agrees to designate as a
21    federal qualified equity investment under Section 45D of
22    the Internal Revenue Code, including a copy of the screen
23    shot from the Community Development Financial Institutions
24    Fund's Allocation Tracking System of the applicant's
25    remaining federal qualified equity investment authority.
26    (b) Within 30 days after receipt of a completed application

 

 

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1containing the information necessary for the Department to
2certify a potential qualified equity investment, including the
3payment of the application fee, the Department shall grant or
4deny the application in full or in part. If the Department
5denies any part of the application, it shall inform the
6qualified community development entity of the grounds for the
7denial. If the qualified community development entity provides
8any additional information required by the Department or
9otherwise completes its application within 15 days of the
10notice of denial, the application shall be considered completed
11as of the original date of submission. If the qualified
12community development entity fails to provide the information
13or complete its application within the 15-day period, the
14application remains denied and must be resubmitted in full with
15a new submission date.
16    (c) If the application is deemed complete, the Department
17shall certify the proposed equity investment or long-term debt
18security as a qualified equity investment that is eligible for
19tax credits under this Section, subject to the limitations
20contained in Section 20. The Department shall provide written
21notice of the certification to the qualified community
22development entity. The notice shall include the names of those
23taxpayers who are eligible to utilize the credits and their
24respective credit amounts. If the names of the taxpayers who
25are eligible to utilize the credits change due to a transfer of
26a qualified equity investment or a change in an allocation

 

 

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1pursuant to Section 15, the qualified community development
2entity shall notify the Department of such change.
3    (d) With respect to applications received before January 1,
42017, the The Department shall certify qualified equity
5investments in the order applications are received by the
6Department. Applications received on the same day shall be
7deemed to have been received simultaneously. For applications
8received on the same day and deemed complete, the Department
9shall certify, consistent with remaining tax credit capacity,
10qualified equity investments in proportionate percentages
11based upon the ratio of the amount of qualified equity
12investment requested in an application to the total amount of
13qualified equity investments requested in all applications
14received on the same day.
15    (d-5) With respect to applications received on or after
16January 1, 2017, the Department shall certify applications by
17applicants that agree to designate qualified equity
18investments as federal qualified equity investments in
19accordance with item (8) of subsection (a) of this Section in
20proportionate percentages based upon the ratio of the amount of
21qualified equity investments requested in an application to be
22designated as federal qualified equity investments to the total
23amount of qualified equity investments to be designated as
24federal qualified equity investments requested in all
25applications received on the same day.
26    (d-10) With respect to applications received on or after

 

 

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1January 1, 2017, after complying with subsection (d-5), the
2Department shall certify the qualified equity investments of
3all other applicants, including the remaining qualified equity
4investment authority requested by applicants not designated as
5federal qualified equity investments in accordance with item
6(8) of subsection (a) of this Section, in proportionate
7percentages based upon the ratio of the amount of qualified
8equity investments requested in the applications to the total
9amount of qualified equity investments requested in all
10applications received on the same day.
11    (e) Once the Department has certified qualified equity
12investments that, on a cumulative basis, are eligible for
13$20,000,000 in tax credits, the Department may not certify any
14more qualified equity investments. If a pending request cannot
15be fully certified, the Department shall certify the portion
16that may be certified unless the qualified community
17development entity elects to withdraw its request rather than
18receive partial credit.
19    (f) Within 30 days after receiving notice of certification,
20the qualified community development entity shall (i) issue the
21qualified equity investment and receive cash in the amount of
22the certified amount and (ii) with respect to qualified equity
23investments made on or after January 1, 2017, if applicable,
24designate the required amount of qualified equity investment
25authority as a federal qualified equity investment. The
26qualified community development entity must provide the

 

 

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1Department with evidence of the receipt of the cash investment
2within 10 business days after receipt and, with respect to
3qualified equity investments made on or after January 1, 2017,
4if applicable, provide evidence that the required amount of
5qualified equity investment authority was designated as a
6federal qualified equity investment. If the qualified
7community development entity does not receive the cash
8investment and issue the qualified equity investment within 30
9days following receipt of the certification notice, the
10certification shall lapse and the entity may not issue the
11qualified equity investment without reapplying to the
12Department for certification. A certification that lapses
13reverts back to the Department and may be reissued only in
14accordance with the application process outline in this Section
1525.
16(Source: P.A. 95-1024, eff. 12-31-08; 96-939, eff. 7-1-10.)
 
17    (20 ILCS 663/40)
18    Sec. 40. Recapture. The Department of Revenue shall
19recapture, from the taxpayer that claimed the credit on a
20return, the tax credit allowed under this Act if:
21        (1) any amount of the federal tax credit available with
22    respect to a qualified equity investment that is eligible
23    for a tax credit under this Act is recaptured under Section
24    45D of the Internal Revenue Code of 1986, as amended. In
25    that case, the Department of Revenue's recapture shall be

 

 

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1    proportionate to the federal recapture with respect to that
2    qualified equity investment;
3        (2) the issuer redeems or makes principal repayment
4    with respect to a qualified equity investment prior to the
5    7th anniversary of the issuance of the qualified equity
6    investment. In that case, the Department of Revenue's
7    recapture shall be proportionate to the amount of the
8    redemption or repayment with respect to the qualified
9    equity investment; or
10        (3) the issuer fails to invest at least 85% of the cash
11    purchase price of the qualified equity investment with
12    respect to qualified equity investments made before
13    January 1, 2017 and 100% of the cash purchase price of the
14    qualified equity investment with respect to qualified
15    equity investments made on or after January 1, 2017 in
16    qualified low-income community investments in the State of
17    Illinois within 12 months of the issuance of the qualified
18    equity investment and maintain such level of investment in
19    qualified low-income community investments in Illinois
20    until the last credit allowance date for such qualified
21    equity investment; or .
22        (4) with respect to qualified equity investments made
23    on or after January 1, 2017, the issuer violates Section 43
24    of this Act.
25    For purposes of this Section, an investment shall be
26considered held by an issuer even if the investment has been

 

 

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1sold or repaid; provided that the issuer reinvests an amount
2equal to the capital returned to or recovered by the issuer
3from the original investment, exclusive of any profits
4realized, in another qualified low-income community investment
5in this State within 12 months after the receipt of that
6capital. An issuer is not required to reinvest capital returned
7from qualified low-income community investments after the 6th
8anniversary of the issuance of the qualified equity investment,
9the proceeds of which were used to make the qualified
10low-income community investment, and the qualified low-income
11community investment shall be considered held by the issuer
12through the 7th anniversary of the qualified equity
13investment's issuance.
14    The Department of Revenue shall provide notice to the
15qualified community development entity of any proposed
16recapture of tax credits pursuant to this Section. The entity
17shall have 90 days to cure any deficiency indicated in the
18Department of Revenue's original recapture notice and avoid
19such recapture. If the entity fails or is unable to cure such
20deficiency with the 90-day period, the Department of Revenue
21shall provide the entity and the taxpayer from whom the credit
22is to be recaptured with a final order of recapture. Any tax
23credit for which a final recapture order has been issued shall
24be recaptured by the Department of Revenue from the taxpayer
25who claimed the tax credit on a tax return.
26(Source: P.A. 95-1024, eff. 12-31-08.)
 

 

 

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1    (20 ILCS 663/43 new)
2    Sec. 43. Prohibited activities and interests. For
3qualified equity investments made on or after January 1, 2017,
4no qualified active low-income community business that
5receives a qualified low-income community investment from a
6qualified community development entity that issues qualified
7equity investments under this Act, or any affiliates of such a
8qualified active low-income community business, may directly
9or indirectly (i) own or have the right to acquire an ownership
10interest in a qualified community development entity or member
11or affiliate of a qualified community development entity,
12including, but not limited to, a holder of a qualified equity
13investment issued by the qualified community development
14entity or (ii) loan to or invest in a qualified community
15development entity or member or affiliate of a qualified
16community development entity, including, but not limited to, a
17holder of a qualified equity investment issued by a qualified
18community development entity, where the proceeds of such loan
19or investment are directly or indirectly used to fund or
20refinance the purchase of a qualified equity investment under
21this Act. For purposes of this Section, "affiliate" means an
22entity that directly, or indirectly through one or more
23intermediaries, controls, is controlled by, or is under common
24control with another entity. For purposes of this Section, an
25entity is "controlled by" another entity if the controlling

 

 

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1person holds, directly or indirectly, the majority voting or
2ownership interest in the controlled person or has control over
3the day-to-day operations of the controlled person by contract
4or law, provided that a qualified community development entity
5shall not be considered an affiliate of a qualified active
6low-income community business solely as a result of its
7qualified low-income community investment in such business.
 
8    (20 ILCS 663/50)
9    Sec. 50. Sunset. No qualified equity investment shall be
10certified on or after June 30, 2021. For fiscal years following
11fiscal year 2017, qualified equity investments shall not be
12made under this Act unless reauthorization is made pursuant to
13this Section. For all fiscal years following fiscal year 2017,
14unless the General Assembly adopts a joint resolution granting
15authority to the Department to approve qualified equity
16investments for the Illinois new markets development program
17and clearly describing the amount of tax credits available for
18the next fiscal year, or otherwise complies with the provisions
19of this Section, no qualified equity investments may be
20permitted to be made under this Act. The amount of available
21tax credits contained in such a resolution shall not exceed the
22limitation provided under Section 20. Nothing in this Section
23precludes a taxpayer who makes a qualified equity investment
24prior to the expiration of authority to make qualified equity
25investments from claiming tax credits relating to that

 

 

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1qualified equity investment for each applicable credit
2allowance date.
3(Source: P.A. 97-636, eff. 6-1-12.)
 
4    (20 ILCS 663/55 new)
5    Sec. 55. Annual job creation report. Each qualified
6community development entity shall submit an annual job
7creation report to the Department within 45 days after the
8beginning of the calendar year during the compliance period. No
9annual report shall be due prior to the first anniversary of
10the initial credit allowance date. The report shall include,
11but is not limited to, the following:
12        (1) the number of employment positions created and
13    retained as a result of qualified low-income community
14    investments; and
15        (2) the average annual salary of positions described in
16    item (1).
17    The qualified community development entity is not required
18to provide the annual report set forth in this Section for
19qualified low-income community investments that have been
20redeemed or repaid.
 
21
ARTICLE 5. ILLINOIS INCOME TAX ACT

 
22    Section 5-5. The Illinois Income Tax Act is amended by
23changing Sections 201, 212, 218, 220, 221, 704A, and 901 and by

 

 

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1adding Sections 224, 225, 226, and 227 as follows:
 
2    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
3    Sec. 201. Tax Imposed.
4    (a) In general. A tax measured by net income is hereby
5imposed on every individual, corporation, trust and estate for
6each taxable year ending after July 31, 1969 on the privilege
7of earning or receiving income in or as a resident of this
8State. Such tax shall be in addition to all other occupation or
9privilege taxes imposed by this State or by any municipal
10corporation or political subdivision thereof.
11    (b) Rates. The tax imposed by subsection (a) of this
12Section shall be determined as follows, except as adjusted by
13subsection (d-1):
14        (1) In the case of an individual, trust or estate, for
15    taxable years ending prior to July 1, 1989, an amount equal
16    to 2 1/2% of the taxpayer's net income for the taxable
17    year.
18        (2) In the case of an individual, trust or estate, for
19    taxable years beginning prior to July 1, 1989 and ending
20    after June 30, 1989, an amount equal to the sum of (i) 2
21    1/2% of the taxpayer's net income for the period prior to
22    July 1, 1989, as calculated under Section 202.3, and (ii)
23    3% of the taxpayer's net income for the period after June
24    30, 1989, as calculated under Section 202.3.
25        (3) In the case of an individual, trust or estate, for

 

 

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1    taxable years beginning after June 30, 1989, and ending
2    prior to January 1, 2011, an amount equal to 3% of the
3    taxpayer's net income for the taxable year.
4        (4) In the case of an individual, trust, or estate, for
5    taxable years beginning prior to January 1, 2011, and
6    ending after December 31, 2010, an amount equal to the sum
7    of (i) 3% of the taxpayer's net income for the period prior
8    to January 1, 2011, as calculated under Section 202.5, and
9    (ii) 5% of the taxpayer's net income for the period after
10    December 31, 2010, as calculated under Section 202.5.
11        (5) In the case of an individual, trust, or estate, for
12    taxable years beginning on or after January 1, 2011, and
13    ending prior to January 1, 2015, an amount equal to 5% of
14    the taxpayer's net income for the taxable year.
15        (5.1) In the case of an individual, trust, or estate,
16    for taxable years beginning prior to January 1, 2015, and
17    ending after December 31, 2014, an amount equal to the sum
18    of (i) 5% of the taxpayer's net income for the period prior
19    to January 1, 2015, as calculated under Section 202.5, and
20    (ii) 3.75% of the taxpayer's net income for the period
21    after December 31, 2014, as calculated under Section 202.5.
22        (5.2) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2015,
24    and ending prior to January 1, 2025, an amount equal to
25    3.75% of the taxpayer's net income for the taxable year.
26        (5.3) In the case of an individual, trust, or estate,

 

 

10000HB0160ham001- 22 -LRB100 02289 HLH 26491 a

1    for taxable years beginning prior to January 1, 2025, and
2    ending after December 31, 2024, an amount equal to the sum
3    of (i) 3.75% of the taxpayer's net income for the period
4    prior to January 1, 2025, as calculated under Section
5    202.5, and (ii) 3.25% of the taxpayer's net income for the
6    period after December 31, 2024, as calculated under Section
7    202.5.
8        (5.4) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after January 1, 2025, an
10    amount equal to 3.25% of the taxpayer's net income for the
11    taxable year.
12        (6) In the case of a corporation, for taxable years
13    ending prior to July 1, 1989, an amount equal to 4% of the
14    taxpayer's net income for the taxable year.
15        (7) In the case of a corporation, for taxable years
16    beginning prior to July 1, 1989 and ending after June 30,
17    1989, an amount equal to the sum of (i) 4% of the
18    taxpayer's net income for the period prior to July 1, 1989,
19    as calculated under Section 202.3, and (ii) 4.8% of the
20    taxpayer's net income for the period after June 30, 1989,
21    as calculated under Section 202.3.
22        (8) In the case of a corporation, for taxable years
23    beginning after June 30, 1989, and ending prior to January
24    1, 2011, an amount equal to 4.8% of the taxpayer's net
25    income for the taxable year.
26        (9) In the case of a corporation, for taxable years

 

 

10000HB0160ham001- 23 -LRB100 02289 HLH 26491 a

1    beginning prior to January 1, 2011, and ending after
2    December 31, 2010, an amount equal to the sum of (i) 4.8%
3    of the taxpayer's net income for the period prior to
4    January 1, 2011, as calculated under Section 202.5, and
5    (ii) 7% of the taxpayer's net income for the period after
6    December 31, 2010, as calculated under Section 202.5.
7        (10) In the case of a corporation, for taxable years
8    beginning on or after January 1, 2011, and ending prior to
9    January 1, 2015, an amount equal to 7% of the taxpayer's
10    net income for the taxable year.
11        (11) In the case of a corporation, for taxable years
12    beginning prior to January 1, 2015, and ending after
13    December 31, 2014, an amount equal to the sum of (i) 7% of
14    the taxpayer's net income for the period prior to January
15    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
16    of the taxpayer's net income for the period after December
17    31, 2014, as calculated under Section 202.5.
18        (12) In the case of a corporation, for taxable years
19    beginning on or after January 1, 2015, and ending prior to
20    December 31, 2017 prior to January 1, 2025, an amount equal
21    to 5.25% of the taxpayer's net income for the taxable year.
22        (13) In the case of a corporation, for taxable years
23    ending on or after December 31, 2017, an amount equal to
24    2.625% of the taxpayer's net income for the taxable year
25    beginning prior to January 1, 2025, and ending after
26    December 31, 2024, an amount equal to the sum of (i) 5.25%

 

 

10000HB0160ham001- 24 -LRB100 02289 HLH 26491 a

1    of the taxpayer's net income for the period prior to
2    January 1, 2025, as calculated under Section 202.5, and
3    (ii) 4.8% of the taxpayer's net income for the period after
4    December 31, 2024, as calculated under Section 202.5.
5        (14) (Blank). In the case of a corporation, for taxable
6    years beginning on or after January 1, 2025, an amount
7    equal to 4.8% of the taxpayer's net income for the taxable
8    year.
9    The rates under this subsection (b) are subject to the
10provisions of Section 201.5.
11    (c) Personal Property Tax Replacement Income Tax.
12Beginning on July 1, 1979 and thereafter, in addition to such
13income tax, there is also hereby imposed the Personal Property
14Tax Replacement Income Tax measured by net income on every
15corporation (including Subchapter S corporations), partnership
16and trust, for each taxable year ending after June 30, 1979.
17Such taxes are imposed on the privilege of earning or receiving
18income in or as a resident of this State. The Personal Property
19Tax Replacement Income Tax shall be in addition to the income
20tax imposed by subsections (a) and (b) of this Section and in
21addition to all other occupation or privilege taxes imposed by
22this State or by any municipal corporation or political
23subdivision thereof.
24    (d) Additional Personal Property Tax Replacement Income
25Tax Rates. The personal property tax replacement income tax
26imposed by this subsection and subsection (c) of this Section

 

 

10000HB0160ham001- 25 -LRB100 02289 HLH 26491 a

1in the case of a corporation, other than a Subchapter S
2corporation and except as adjusted by subsection (d-1), shall
3be an additional amount equal to 2.85% of such taxpayer's net
4income for the taxable year, except that beginning on January
51, 1981, and thereafter, the rate of 2.85% specified in this
6subsection shall be reduced to 2.5%, and in the case of a
7partnership, trust or a Subchapter S corporation shall be an
8additional amount equal to 1.5% of such taxpayer's net income
9for the taxable year.
10    (d-1) Rate reduction for certain foreign insurers. In the
11case of a foreign insurer, as defined by Section 35A-5 of the
12Illinois Insurance Code, whose state or country of domicile
13imposes on insurers domiciled in Illinois a retaliatory tax
14(excluding any insurer whose premiums from reinsurance assumed
15are 50% or more of its total insurance premiums as determined
16under paragraph (2) of subsection (b) of Section 304, except
17that for purposes of this determination premiums from
18reinsurance do not include premiums from inter-affiliate
19reinsurance arrangements), beginning with taxable years ending
20on or after December 31, 1999, the sum of the rates of tax
21imposed by subsections (b) and (d) shall be reduced (but not
22increased) to the rate at which the total amount of tax imposed
23under this Act, net of all credits allowed under this Act,
24shall equal (i) the total amount of tax that would be imposed
25on the foreign insurer's net income allocable to Illinois for
26the taxable year by such foreign insurer's state or country of

 

 

10000HB0160ham001- 26 -LRB100 02289 HLH 26491 a

1domicile if that net income were subject to all income taxes
2and taxes measured by net income imposed by such foreign
3insurer's state or country of domicile, net of all credits
4allowed or (ii) a rate of zero if no such tax is imposed on such
5income by the foreign insurer's state of domicile. For the
6purposes of this subsection (d-1), an inter-affiliate includes
7a mutual insurer under common management.
8        (1) For the purposes of subsection (d-1), in no event
9    shall the sum of the rates of tax imposed by subsections
10    (b) and (d) be reduced below the rate at which the sum of:
11            (A) the total amount of tax imposed on such foreign
12        insurer under this Act for a taxable year, net of all
13        credits allowed under this Act, plus
14            (B) the privilege tax imposed by Section 409 of the
15        Illinois Insurance Code, the fire insurance company
16        tax imposed by Section 12 of the Fire Investigation
17        Act, and the fire department taxes imposed under
18        Section 11-10-1 of the Illinois Municipal Code,
19    equals 1.25% for taxable years ending prior to December 31,
20    2003, or 1.75% for taxable years ending on or after
21    December 31, 2003, of the net taxable premiums written for
22    the taxable year, as described by subsection (1) of Section
23    409 of the Illinois Insurance Code. This paragraph will in
24    no event increase the rates imposed under subsections (b)
25    and (d).
26        (2) Any reduction in the rates of tax imposed by this

 

 

10000HB0160ham001- 27 -LRB100 02289 HLH 26491 a

1    subsection shall be applied first against the rates imposed
2    by subsection (b) and only after the tax imposed by
3    subsection (a) net of all credits allowed under this
4    Section other than the credit allowed under subsection (i)
5    has been reduced to zero, against the rates imposed by
6    subsection (d).
7    This subsection (d-1) is exempt from the provisions of
8Section 250.
9    (e) Investment credit. A taxpayer shall be allowed a credit
10against the Personal Property Tax Replacement Income Tax for
11investment in qualified property.
12        (1) A taxpayer shall be allowed a credit equal to .5%
13    of the basis of qualified property placed in service during
14    the taxable year, provided such property is placed in
15    service on or after July 1, 1984. There shall be allowed an
16    additional credit equal to .5% of the basis of qualified
17    property placed in service during the taxable year,
18    provided such property is placed in service on or after
19    July 1, 1986, and the taxpayer's base employment within
20    Illinois has increased by 1% or more over the preceding
21    year as determined by the taxpayer's employment records
22    filed with the Illinois Department of Employment Security.
23    Taxpayers who are new to Illinois shall be deemed to have
24    met the 1% growth in base employment for the first year in
25    which they file employment records with the Illinois
26    Department of Employment Security. The provisions added to

 

 

10000HB0160ham001- 28 -LRB100 02289 HLH 26491 a

1    this Section by Public Act 85-1200 (and restored by Public
2    Act 87-895) shall be construed as declaratory of existing
3    law and not as a new enactment. If, in any year, the
4    increase in base employment within Illinois over the
5    preceding year is less than 1%, the additional credit shall
6    be limited to that percentage times a fraction, the
7    numerator of which is .5% and the denominator of which is
8    1%, but shall not exceed .5%. The investment credit shall
9    not be allowed to the extent that it would reduce a
10    taxpayer's liability in any tax year below zero, nor may
11    any credit for qualified property be allowed for any year
12    other than the year in which the property was placed in
13    service in Illinois. For tax years ending on or after
14    December 31, 1987, and on or before December 31, 1988, the
15    credit shall be allowed for the tax year in which the
16    property is placed in service, or, if the amount of the
17    credit exceeds the tax liability for that year, whether it
18    exceeds the original liability or the liability as later
19    amended, such excess may be carried forward and applied to
20    the tax liability of the 5 taxable years following the
21    excess credit years if the taxpayer (i) makes investments
22    which cause the creation of a minimum of 2,000 full-time
23    equivalent jobs in Illinois, (ii) is located in an
24    enterprise zone established pursuant to the Illinois
25    Enterprise Zone Act and (iii) is certified by the
26    Department of Commerce and Community Affairs (now

 

 

10000HB0160ham001- 29 -LRB100 02289 HLH 26491 a

1    Department of Commerce and Economic Opportunity) as
2    complying with the requirements specified in clause (i) and
3    (ii) by July 1, 1986. The Department of Commerce and
4    Community Affairs (now Department of Commerce and Economic
5    Opportunity) shall notify the Department of Revenue of all
6    such certifications immediately. For tax years ending
7    after December 31, 1988, the credit shall be allowed for
8    the tax year in which the property is placed in service,
9    or, if the amount of the credit exceeds the tax liability
10    for that year, whether it exceeds the original liability or
11    the liability as later amended, such excess may be carried
12    forward and applied to the tax liability of the 5 taxable
13    years following the excess credit years. The credit shall
14    be applied to the earliest year for which there is a
15    liability. If there is credit from more than one tax year
16    that is available to offset a liability, earlier credit
17    shall be applied first.
18        (2) The term "qualified property" means property
19    which:
20            (A) is tangible, whether new or used, including
21        buildings and structural components of buildings and
22        signs that are real property, but not including land or
23        improvements to real property that are not a structural
24        component of a building such as landscaping, sewer
25        lines, local access roads, fencing, parking lots, and
26        other appurtenances;

 

 

10000HB0160ham001- 30 -LRB100 02289 HLH 26491 a

1            (B) is depreciable pursuant to Section 167 of the
2        Internal Revenue Code, except that "3-year property"
3        as defined in Section 168(c)(2)(A) of that Code is not
4        eligible for the credit provided by this subsection
5        (e);
6            (C) is acquired by purchase as defined in Section
7        179(d) of the Internal Revenue Code;
8            (D) is used in Illinois by a taxpayer who is
9        primarily engaged in manufacturing, or in mining coal
10        or fluorite, or in retailing, or was placed in service
11        on or after July 1, 2006 in a River Edge Redevelopment
12        Zone established pursuant to the River Edge
13        Redevelopment Zone Act; and
14            (E) has not previously been used in Illinois in
15        such a manner and by such a person as would qualify for
16        the credit provided by this subsection (e) or
17        subsection (f).
18        (3) For purposes of this subsection (e),
19    "manufacturing" means the material staging and production
20    of tangible personal property by procedures commonly
21    regarded as manufacturing, processing, fabrication, or
22    assembling which changes some existing material into new
23    shapes, new qualities, or new combinations. For purposes of
24    this subsection (e) the term "mining" shall have the same
25    meaning as the term "mining" in Section 613(c) of the
26    Internal Revenue Code. For purposes of this subsection (e),

 

 

10000HB0160ham001- 31 -LRB100 02289 HLH 26491 a

1    the term "retailing" means the sale of tangible personal
2    property for use or consumption and not for resale, or
3    services rendered in conjunction with the sale of tangible
4    personal property for use or consumption and not for
5    resale. For purposes of this subsection (e), "tangible
6    personal property" has the same meaning as when that term
7    is used in the Retailers' Occupation Tax Act, and, for
8    taxable years ending after December 31, 2008, does not
9    include the generation, transmission, or distribution of
10    electricity.
11        (4) The basis of qualified property shall be the basis
12    used to compute the depreciation deduction for federal
13    income tax purposes.
14        (5) If the basis of the property for federal income tax
15    depreciation purposes is increased after it has been placed
16    in service in Illinois by the taxpayer, the amount of such
17    increase shall be deemed property placed in service on the
18    date of such increase in basis.
19        (6) The term "placed in service" shall have the same
20    meaning as under Section 46 of the Internal Revenue Code.
21        (7) If during any taxable year, any property ceases to
22    be qualified property in the hands of the taxpayer within
23    48 months after being placed in service, or the situs of
24    any qualified property is moved outside Illinois within 48
25    months after being placed in service, the Personal Property
26    Tax Replacement Income Tax for such taxable year shall be

 

 

10000HB0160ham001- 32 -LRB100 02289 HLH 26491 a

1    increased. Such increase shall be determined by (i)
2    recomputing the investment credit which would have been
3    allowed for the year in which credit for such property was
4    originally allowed by eliminating such property from such
5    computation and, (ii) subtracting such recomputed credit
6    from the amount of credit previously allowed. For the
7    purposes of this paragraph (7), a reduction of the basis of
8    qualified property resulting from a redetermination of the
9    purchase price shall be deemed a disposition of qualified
10    property to the extent of such reduction.
11        (8) Unless the investment credit is extended by law,
12    the basis of qualified property shall not include costs
13    incurred after December 31, 2018, except for costs incurred
14    pursuant to a binding contract entered into on or before
15    December 31, 2018.
16        (9) Each taxable year ending before December 31, 2000,
17    a partnership may elect to pass through to its partners the
18    credits to which the partnership is entitled under this
19    subsection (e) for the taxable year. A partner may use the
20    credit allocated to him or her under this paragraph only
21    against the tax imposed in subsections (c) and (d) of this
22    Section. If the partnership makes that election, those
23    credits shall be allocated among the partners in the
24    partnership in accordance with the rules set forth in
25    Section 704(b) of the Internal Revenue Code, and the rules
26    promulgated under that Section, and the allocated amount of

 

 

10000HB0160ham001- 33 -LRB100 02289 HLH 26491 a

1    the credits shall be allowed to the partners for that
2    taxable year. The partnership shall make this election on
3    its Personal Property Tax Replacement Income Tax return for
4    that taxable year. The election to pass through the credits
5    shall be irrevocable.
6        For taxable years ending on or after December 31, 2000,
7    a partner that qualifies its partnership for a subtraction
8    under subparagraph (I) of paragraph (2) of subsection (d)
9    of Section 203 or a shareholder that qualifies a Subchapter
10    S corporation for a subtraction under subparagraph (S) of
11    paragraph (2) of subsection (b) of Section 203 shall be
12    allowed a credit under this subsection (e) equal to its
13    share of the credit earned under this subsection (e) during
14    the taxable year by the partnership or Subchapter S
15    corporation, determined in accordance with the
16    determination of income and distributive share of income
17    under Sections 702 and 704 and Subchapter S of the Internal
18    Revenue Code. This paragraph is exempt from the provisions
19    of Section 250.
20    (f) Investment credit; Enterprise Zone; River Edge
21Redevelopment Zone.
22        (1) A taxpayer shall be allowed a credit against the
23    tax imposed by subsections (a) and (b) of this Section for
24    investment in qualified property which is placed in service
25    in an Enterprise Zone created pursuant to the Illinois
26    Enterprise Zone Act or, for property placed in service on

 

 

10000HB0160ham001- 34 -LRB100 02289 HLH 26491 a

1    or after July 1, 2006, a River Edge Redevelopment Zone
2    established pursuant to the River Edge Redevelopment Zone
3    Act. For partners, shareholders of Subchapter S
4    corporations, and owners of limited liability companies,
5    if the liability company is treated as a partnership for
6    purposes of federal and State income taxation, there shall
7    be allowed a credit under this subsection (f) to be
8    determined in accordance with the determination of income
9    and distributive share of income under Sections 702 and 704
10    and Subchapter S of the Internal Revenue Code. The credit
11    shall be .5% of the basis for such property. The credit
12    shall be available only in the taxable year in which the
13    property is placed in service in the Enterprise Zone or
14    River Edge Redevelopment Zone and shall not be allowed to
15    the extent that it would reduce a taxpayer's liability for
16    the tax imposed by subsections (a) and (b) of this Section
17    to below zero. For tax years ending on or after December
18    31, 1985, the credit shall be allowed for the tax year in
19    which the property is placed in service, or, if the amount
20    of the credit exceeds the tax liability for that year,
21    whether it exceeds the original liability or the liability
22    as later amended, such excess may be carried forward and
23    applied to the tax liability of the 5 taxable years
24    following the excess credit year. The credit shall be
25    applied to the earliest year for which there is a
26    liability. If there is credit from more than one tax year

 

 

10000HB0160ham001- 35 -LRB100 02289 HLH 26491 a

1    that is available to offset a liability, the credit
2    accruing first in time shall be applied first.
3        (2) The term qualified property means property which:
4            (A) is tangible, whether new or used, including
5        buildings and structural components of buildings;
6            (B) is depreciable pursuant to Section 167 of the
7        Internal Revenue Code, except that "3-year property"
8        as defined in Section 168(c)(2)(A) of that Code is not
9        eligible for the credit provided by this subsection
10        (f);
11            (C) is acquired by purchase as defined in Section
12        179(d) of the Internal Revenue Code;
13            (D) is used in the Enterprise Zone or River Edge
14        Redevelopment Zone by the taxpayer; and
15            (E) has not been previously used in Illinois in
16        such a manner and by such a person as would qualify for
17        the credit provided by this subsection (f) or
18        subsection (e).
19        (3) The basis of qualified property shall be the basis
20    used to compute the depreciation deduction for federal
21    income tax purposes.
22        (4) If the basis of the property for federal income tax
23    depreciation purposes is increased after it has been placed
24    in service in the Enterprise Zone or River Edge
25    Redevelopment Zone by the taxpayer, the amount of such
26    increase shall be deemed property placed in service on the

 

 

10000HB0160ham001- 36 -LRB100 02289 HLH 26491 a

1    date of such increase in basis.
2        (5) The term "placed in service" shall have the same
3    meaning as under Section 46 of the Internal Revenue Code.
4        (6) If during any taxable year, any property ceases to
5    be qualified property in the hands of the taxpayer within
6    48 months after being placed in service, or the situs of
7    any qualified property is moved outside the Enterprise Zone
8    or River Edge Redevelopment Zone within 48 months after
9    being placed in service, the tax imposed under subsections
10    (a) and (b) of this Section for such taxable year shall be
11    increased. Such increase shall be determined by (i)
12    recomputing the investment credit which would have been
13    allowed for the year in which credit for such property was
14    originally allowed by eliminating such property from such
15    computation, and (ii) subtracting such recomputed credit
16    from the amount of credit previously allowed. For the
17    purposes of this paragraph (6), a reduction of the basis of
18    qualified property resulting from a redetermination of the
19    purchase price shall be deemed a disposition of qualified
20    property to the extent of such reduction.
21        (7) There shall be allowed an additional credit equal
22    to 0.5% of the basis of qualified property placed in
23    service during the taxable year in a River Edge
24    Redevelopment Zone, provided such property is placed in
25    service on or after July 1, 2006, and the taxpayer's base
26    employment within Illinois has increased by 1% or more over

 

 

10000HB0160ham001- 37 -LRB100 02289 HLH 26491 a

1    the preceding year as determined by the taxpayer's
2    employment records filed with the Illinois Department of
3    Employment Security. Taxpayers who are new to Illinois
4    shall be deemed to have met the 1% growth in base
5    employment for the first year in which they file employment
6    records with the Illinois Department of Employment
7    Security. If, in any year, the increase in base employment
8    within Illinois over the preceding year is less than 1%,
9    the additional credit shall be limited to that percentage
10    times a fraction, the numerator of which is 0.5% and the
11    denominator of which is 1%, but shall not exceed 0.5%.
12    (g) (Blank).
13    (h) Investment credit; High Impact Business.
14        (1) Subject to subsections (b) and (b-5) of Section 5.5
15    of the Illinois Enterprise Zone Act, a taxpayer shall be
16    allowed a credit against the tax imposed by subsections (a)
17    and (b) of this Section for investment in qualified
18    property which is placed in service by a Department of
19    Commerce and Economic Opportunity designated High Impact
20    Business. The credit shall be .5% of the basis for such
21    property. The credit shall not be available (i) until the
22    minimum investments in qualified property set forth in
23    subdivision (a)(3)(A) of Section 5.5 of the Illinois
24    Enterprise Zone Act have been satisfied or (ii) until the
25    time authorized in subsection (b-5) of the Illinois
26    Enterprise Zone Act for entities designated as High Impact

 

 

10000HB0160ham001- 38 -LRB100 02289 HLH 26491 a

1    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
2    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
3    Act, and shall not be allowed to the extent that it would
4    reduce a taxpayer's liability for the tax imposed by
5    subsections (a) and (b) of this Section to below zero. The
6    credit applicable to such investments shall be taken in the
7    taxable year in which such investments have been completed.
8    The credit for additional investments beyond the minimum
9    investment by a designated high impact business authorized
10    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
11    Enterprise Zone Act shall be available only in the taxable
12    year in which the property is placed in service and shall
13    not be allowed to the extent that it would reduce a
14    taxpayer's liability for the tax imposed by subsections (a)
15    and (b) of this Section to below zero. For tax years ending
16    on or after December 31, 1987, the credit shall be allowed
17    for the tax year in which the property is placed in
18    service, or, if the amount of the credit exceeds the tax
19    liability for that year, whether it exceeds the original
20    liability or the liability as later amended, such excess
21    may be carried forward and applied to the tax liability of
22    the 5 taxable years following the excess credit year. The
23    credit shall be applied to the earliest year for which
24    there is a liability. If there is credit from more than one
25    tax year that is available to offset a liability, the
26    credit accruing first in time shall be applied first.

 

 

10000HB0160ham001- 39 -LRB100 02289 HLH 26491 a

1        Changes made in this subdivision (h)(1) by Public Act
2    88-670 restore changes made by Public Act 85-1182 and
3    reflect existing law.
4        (2) The term qualified property means property which:
5            (A) is tangible, whether new or used, including
6        buildings and structural components of buildings;
7            (B) is depreciable pursuant to Section 167 of the
8        Internal Revenue Code, except that "3-year property"
9        as defined in Section 168(c)(2)(A) of that Code is not
10        eligible for the credit provided by this subsection
11        (h);
12            (C) is acquired by purchase as defined in Section
13        179(d) of the Internal Revenue Code; and
14            (D) is not eligible for the Enterprise Zone
15        Investment Credit provided by subsection (f) of this
16        Section.
17        (3) The basis of qualified property shall be the basis
18    used to compute the depreciation deduction for federal
19    income tax purposes.
20        (4) If the basis of the property for federal income tax
21    depreciation purposes is increased after it has been placed
22    in service in a federally designated Foreign Trade Zone or
23    Sub-Zone located in Illinois by the taxpayer, the amount of
24    such increase shall be deemed property placed in service on
25    the date of such increase in basis.
26        (5) The term "placed in service" shall have the same

 

 

10000HB0160ham001- 40 -LRB100 02289 HLH 26491 a

1    meaning as under Section 46 of the Internal Revenue Code.
2        (6) If during any taxable year ending on or before
3    December 31, 1996, any property ceases to be qualified
4    property in the hands of the taxpayer within 48 months
5    after being placed in service, or the situs of any
6    qualified property is moved outside Illinois within 48
7    months after being placed in service, the tax imposed under
8    subsections (a) and (b) of this Section for such taxable
9    year shall be increased. Such increase shall be determined
10    by (i) recomputing the investment credit which would have
11    been allowed for the year in which credit for such property
12    was originally allowed by eliminating such property from
13    such computation, and (ii) subtracting such recomputed
14    credit from the amount of credit previously allowed. For
15    the purposes of this paragraph (6), a reduction of the
16    basis of qualified property resulting from a
17    redetermination of the purchase price shall be deemed a
18    disposition of qualified property to the extent of such
19    reduction.
20        (7) Beginning with tax years ending after December 31,
21    1996, if a taxpayer qualifies for the credit under this
22    subsection (h) and thereby is granted a tax abatement and
23    the taxpayer relocates its entire facility in violation of
24    the explicit terms and length of the contract under Section
25    18-183 of the Property Tax Code, the tax imposed under
26    subsections (a) and (b) of this Section shall be increased

 

 

10000HB0160ham001- 41 -LRB100 02289 HLH 26491 a

1    for the taxable year in which the taxpayer relocated its
2    facility by an amount equal to the amount of credit
3    received by the taxpayer under this subsection (h).
4    (i) Credit for Personal Property Tax Replacement Income
5Tax. For tax years ending prior to December 31, 2003, a credit
6shall be allowed against the tax imposed by subsections (a) and
7(b) of this Section for the tax imposed by subsections (c) and
8(d) of this Section. This credit shall be computed by
9multiplying the tax imposed by subsections (c) and (d) of this
10Section by a fraction, the numerator of which is base income
11allocable to Illinois and the denominator of which is Illinois
12base income, and further multiplying the product by the tax
13rate imposed by subsections (a) and (b) of this Section.
14    Any credit earned on or after December 31, 1986 under this
15subsection which is unused in the year the credit is computed
16because it exceeds the tax liability imposed by subsections (a)
17and (b) for that year (whether it exceeds the original
18liability or the liability as later amended) may be carried
19forward and applied to the tax liability imposed by subsections
20(a) and (b) of the 5 taxable years following the excess credit
21year, provided that no credit may be carried forward to any
22year ending on or after December 31, 2003. This credit shall be
23applied first to the earliest year for which there is a
24liability. If there is a credit under this subsection from more
25than one tax year that is available to offset a liability the
26earliest credit arising under this subsection shall be applied

 

 

10000HB0160ham001- 42 -LRB100 02289 HLH 26491 a

1first.
2    If, during any taxable year ending on or after December 31,
31986, the tax imposed by subsections (c) and (d) of this
4Section for which a taxpayer has claimed a credit under this
5subsection (i) is reduced, the amount of credit for such tax
6shall also be reduced. Such reduction shall be determined by
7recomputing the credit to take into account the reduced tax
8imposed by subsections (c) and (d). If any portion of the
9reduced amount of credit has been carried to a different
10taxable year, an amended return shall be filed for such taxable
11year to reduce the amount of credit claimed.
12    (j) Training expense credit. Beginning with tax years
13ending on or after December 31, 1986 and prior to December 31,
142003, a taxpayer shall be allowed a credit against the tax
15imposed by subsections (a) and (b) under this Section for all
16amounts paid or accrued, on behalf of all persons employed by
17the taxpayer in Illinois or Illinois residents employed outside
18of Illinois by a taxpayer, for educational or vocational
19training in semi-technical or technical fields or semi-skilled
20or skilled fields, which were deducted from gross income in the
21computation of taxable income. The credit against the tax
22imposed by subsections (a) and (b) shall be 1.6% of such
23training expenses. For partners, shareholders of subchapter S
24corporations, and owners of limited liability companies, if the
25liability company is treated as a partnership for purposes of
26federal and State income taxation, there shall be allowed a

 

 

10000HB0160ham001- 43 -LRB100 02289 HLH 26491 a

1credit under this subsection (j) to be determined in accordance
2with the determination of income and distributive share of
3income under Sections 702 and 704 and subchapter S of the
4Internal Revenue Code.
5    Any credit allowed under this subsection which is unused in
6the year the credit is earned may be carried forward to each of
7the 5 taxable years following the year for which the credit is
8first computed until it is used. This credit shall be applied
9first to the earliest year for which there is a liability. If
10there is a credit under this subsection from more than one tax
11year that is available to offset a liability the earliest
12credit arising under this subsection shall be applied first. No
13carryforward credit may be claimed in any tax year ending on or
14after December 31, 2003.
15    (k) Research and development credit. For tax years ending
16after July 1, 1990 and prior to December 31, 2003, and
17beginning again for tax years ending on or after December 31,
182004, and ending prior to January 1, 2016, a taxpayer shall be
19allowed a credit against the tax imposed by subsections (a) and
20(b) of this Section for increasing research activities in this
21State. The credit allowed against the tax imposed by
22subsections (a) and (b) shall be equal to 6 1/2% of the
23qualifying expenditures for increasing research activities in
24this State. For partners, shareholders of subchapter S
25corporations, and owners of limited liability companies, if the
26liability company is treated as a partnership for purposes of

 

 

10000HB0160ham001- 44 -LRB100 02289 HLH 26491 a

1federal and State income taxation, there shall be allowed a
2credit under this subsection to be determined in accordance
3with the determination of income and distributive share of
4income under Sections 702 and 704 and subchapter S of the
5Internal Revenue Code.
6    For purposes of this subsection, "qualifying expenditures"
7means the qualifying expenditures as defined for the federal
8credit for increasing research activities which would be
9allowable under Section 41 of the Internal Revenue Code and
10which are conducted in this State, "qualifying expenditures for
11increasing research activities in this State" means the excess
12of qualifying expenditures for the taxable year in which
13incurred over qualifying expenditures for the base period,
14"qualifying expenditures for the base period" means the average
15of the qualifying expenditures for each year in the base
16period, and "base period" means the 3 taxable years immediately
17preceding the taxable year for which the determination is being
18made.
19    Any credit in excess of the tax liability for the taxable
20year may be carried forward. A taxpayer may elect to have the
21unused credit shown on its final completed return carried over
22as a credit against the tax liability for the following 5
23taxable years or until it has been fully used, whichever occurs
24first; provided that no credit earned in a tax year ending
25prior to December 31, 2003 may be carried forward to any year
26ending on or after December 31, 2003.

 

 

10000HB0160ham001- 45 -LRB100 02289 HLH 26491 a

1    If an unused credit is carried forward to a given year from
22 or more earlier years, that credit arising in the earliest
3year will be applied first against the tax liability for the
4given year. If a tax liability for the given year still
5remains, the credit from the next earliest year will then be
6applied, and so on, until all credits have been used or no tax
7liability for the given year remains. Any remaining unused
8credit or credits then will be carried forward to the next
9following year in which a tax liability is incurred, except
10that no credit can be carried forward to a year which is more
11than 5 years after the year in which the expense for which the
12credit is given was incurred.
13    No inference shall be drawn from this amendatory Act of the
1491st General Assembly in construing this Section for taxable
15years beginning before January 1, 1999.
16    (l) Environmental Remediation Tax Credit.
17        (i) For tax years ending after December 31, 1997 and on
18    or before December 31, 2001, a taxpayer shall be allowed a
19    credit against the tax imposed by subsections (a) and (b)
20    of this Section for certain amounts paid for unreimbursed
21    eligible remediation costs, as specified in this
22    subsection. For purposes of this Section, "unreimbursed
23    eligible remediation costs" means costs approved by the
24    Illinois Environmental Protection Agency ("Agency") under
25    Section 58.14 of the Environmental Protection Act that were
26    paid in performing environmental remediation at a site for

 

 

10000HB0160ham001- 46 -LRB100 02289 HLH 26491 a

1    which a No Further Remediation Letter was issued by the
2    Agency and recorded under Section 58.10 of the
3    Environmental Protection Act. The credit must be claimed
4    for the taxable year in which Agency approval of the
5    eligible remediation costs is granted. The credit is not
6    available to any taxpayer if the taxpayer or any related
7    party caused or contributed to, in any material respect, a
8    release of regulated substances on, in, or under the site
9    that was identified and addressed by the remedial action
10    pursuant to the Site Remediation Program of the
11    Environmental Protection Act. After the Pollution Control
12    Board rules are adopted pursuant to the Illinois
13    Administrative Procedure Act for the administration and
14    enforcement of Section 58.9 of the Environmental
15    Protection Act, determinations as to credit availability
16    for purposes of this Section shall be made consistent with
17    those rules. For purposes of this Section, "taxpayer"
18    includes a person whose tax attributes the taxpayer has
19    succeeded to under Section 381 of the Internal Revenue Code
20    and "related party" includes the persons disallowed a
21    deduction for losses by paragraphs (b), (c), and (f)(1) of
22    Section 267 of the Internal Revenue Code by virtue of being
23    a related taxpayer, as well as any of its partners. The
24    credit allowed against the tax imposed by subsections (a)
25    and (b) shall be equal to 25% of the unreimbursed eligible
26    remediation costs in excess of $100,000 per site, except

 

 

10000HB0160ham001- 47 -LRB100 02289 HLH 26491 a

1    that the $100,000 threshold shall not apply to any site
2    contained in an enterprise zone as determined by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity). The
5    total credit allowed shall not exceed $40,000 per year with
6    a maximum total of $150,000 per site. For partners and
7    shareholders of subchapter S corporations, there shall be
8    allowed a credit under this subsection to be determined in
9    accordance with the determination of income and
10    distributive share of income under Sections 702 and 704 and
11    subchapter S of the Internal Revenue Code.
12        (ii) A credit allowed under this subsection that is
13    unused in the year the credit is earned may be carried
14    forward to each of the 5 taxable years following the year
15    for which the credit is first earned until it is used. The
16    term "unused credit" does not include any amounts of
17    unreimbursed eligible remediation costs in excess of the
18    maximum credit per site authorized under paragraph (i).
19    This credit shall be applied first to the earliest year for
20    which there is a liability. If there is a credit under this
21    subsection from more than one tax year that is available to
22    offset a liability, the earliest credit arising under this
23    subsection shall be applied first. A credit allowed under
24    this subsection may be sold to a buyer as part of a sale of
25    all or part of the remediation site for which the credit
26    was granted. The purchaser of a remediation site and the

 

 

10000HB0160ham001- 48 -LRB100 02289 HLH 26491 a

1    tax credit shall succeed to the unused credit and remaining
2    carry-forward period of the seller. To perfect the
3    transfer, the assignor shall record the transfer in the
4    chain of title for the site and provide written notice to
5    the Director of the Illinois Department of Revenue of the
6    assignor's intent to sell the remediation site and the
7    amount of the tax credit to be transferred as a portion of
8    the sale. In no event may a credit be transferred to any
9    taxpayer if the taxpayer or a related party would not be
10    eligible under the provisions of subsection (i).
11        (iii) For purposes of this Section, the term "site"
12    shall have the same meaning as under Section 58.2 of the
13    Environmental Protection Act.
14    (m) Education expense credit. Beginning with tax years
15ending after December 31, 1999, a taxpayer who is the custodian
16of one or more qualifying pupils shall be allowed a credit
17against the tax imposed by subsections (a) and (b) of this
18Section for qualified education expenses incurred on behalf of
19the qualifying pupils. The credit shall be equal to 25% of
20qualified education expenses, but in no event may the total
21credit under this subsection claimed by a family that is the
22custodian of qualifying pupils exceed $500. In no event shall a
23credit under this subsection reduce the taxpayer's liability
24under this Act to less than zero. This subsection is exempt
25from the provisions of Section 250 of this Act.
26    For purposes of this subsection:

 

 

10000HB0160ham001- 49 -LRB100 02289 HLH 26491 a

1    "Qualifying pupils" means individuals who (i) are
2residents of the State of Illinois, (ii) are under the age of
321 at the close of the school year for which a credit is
4sought, and (iii) during the school year for which a credit is
5sought were full-time pupils enrolled in a kindergarten through
6twelfth grade education program at any school, as defined in
7this subsection.
8    "Qualified education expense" means the amount incurred on
9behalf of a qualifying pupil in excess of $250 for tuition,
10book fees, and lab fees at the school in which the pupil is
11enrolled during the regular school year.
12    "School" means any public or nonpublic elementary or
13secondary school in Illinois that is in compliance with Title
14VI of the Civil Rights Act of 1964 and attendance at which
15satisfies the requirements of Section 26-1 of the School Code,
16except that nothing shall be construed to require a child to
17attend any particular public or nonpublic school to qualify for
18the credit under this Section.
19    "Custodian" means, with respect to qualifying pupils, an
20Illinois resident who is a parent, the parents, a legal
21guardian, or the legal guardians of the qualifying pupils.
22    (n) River Edge Redevelopment Zone site remediation tax
23credit.
24        (i) For tax years ending on or after December 31, 2006,
25    a taxpayer shall be allowed a credit against the tax
26    imposed by subsections (a) and (b) of this Section for

 

 

10000HB0160ham001- 50 -LRB100 02289 HLH 26491 a

1    certain amounts paid for unreimbursed eligible remediation
2    costs, as specified in this subsection. For purposes of
3    this Section, "unreimbursed eligible remediation costs"
4    means costs approved by the Illinois Environmental
5    Protection Agency ("Agency") under Section 58.14a of the
6    Environmental Protection Act that were paid in performing
7    environmental remediation at a site within a River Edge
8    Redevelopment Zone for which a No Further Remediation
9    Letter was issued by the Agency and recorded under Section
10    58.10 of the Environmental Protection Act. The credit must
11    be claimed for the taxable year in which Agency approval of
12    the eligible remediation costs is granted. The credit is
13    not available to any taxpayer if the taxpayer or any
14    related party caused or contributed to, in any material
15    respect, a release of regulated substances on, in, or under
16    the site that was identified and addressed by the remedial
17    action pursuant to the Site Remediation Program of the
18    Environmental Protection Act. Determinations as to credit
19    availability for purposes of this Section shall be made
20    consistent with rules adopted by the Pollution Control
21    Board pursuant to the Illinois Administrative Procedure
22    Act for the administration and enforcement of Section 58.9
23    of the Environmental Protection Act. For purposes of this
24    Section, "taxpayer" includes a person whose tax attributes
25    the taxpayer has succeeded to under Section 381 of the
26    Internal Revenue Code and "related party" includes the

 

 

10000HB0160ham001- 51 -LRB100 02289 HLH 26491 a

1    persons disallowed a deduction for losses by paragraphs
2    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
3    Code by virtue of being a related taxpayer, as well as any
4    of its partners. The credit allowed against the tax imposed
5    by subsections (a) and (b) shall be equal to 25% of the
6    unreimbursed eligible remediation costs in excess of
7    $100,000 per site.
8        (ii) A credit allowed under this subsection that is
9    unused in the year the credit is earned may be carried
10    forward to each of the 5 taxable years following the year
11    for which the credit is first earned until it is used. This
12    credit shall be applied first to the earliest year for
13    which there is a liability. If there is a credit under this
14    subsection from more than one tax year that is available to
15    offset a liability, the earliest credit arising under this
16    subsection shall be applied first. A credit allowed under
17    this subsection may be sold to a buyer as part of a sale of
18    all or part of the remediation site for which the credit
19    was granted. The purchaser of a remediation site and the
20    tax credit shall succeed to the unused credit and remaining
21    carry-forward period of the seller. To perfect the
22    transfer, the assignor shall record the transfer in the
23    chain of title for the site and provide written notice to
24    the Director of the Illinois Department of Revenue of the
25    assignor's intent to sell the remediation site and the
26    amount of the tax credit to be transferred as a portion of

 

 

10000HB0160ham001- 52 -LRB100 02289 HLH 26491 a

1    the sale. In no event may a credit be transferred to any
2    taxpayer if the taxpayer or a related party would not be
3    eligible under the provisions of subsection (i).
4        (iii) For purposes of this Section, the term "site"
5    shall have the same meaning as under Section 58.2 of the
6    Environmental Protection Act.
7    (o) For each of taxable years during the Compassionate Use
8of Medical Cannabis Pilot Program, a surcharge is imposed on
9all taxpayers on income arising from the sale or exchange of
10capital assets, depreciable business property, real property
11used in the trade or business, and Section 197 intangibles of
12an organization registrant under the Compassionate Use of
13Medical Cannabis Pilot Program Act. The amount of the surcharge
14is equal to the amount of federal income tax liability for the
15taxable year attributable to those sales and exchanges. The
16surcharge imposed does not apply if:
17        (1) the medical cannabis cultivation center
18    registration, medical cannabis dispensary registration, or
19    the property of a registration is transferred as a result
20    of any of the following:
21            (A) bankruptcy, a receivership, or a debt
22        adjustment initiated by or against the initial
23        registration or the substantial owners of the initial
24        registration;
25            (B) cancellation, revocation, or termination of
26        any registration by the Illinois Department of Public

 

 

10000HB0160ham001- 53 -LRB100 02289 HLH 26491 a

1        Health;
2            (C) a determination by the Illinois Department of
3        Public Health that transfer of the registration is in
4        the best interests of Illinois qualifying patients as
5        defined by the Compassionate Use of Medical Cannabis
6        Pilot Program Act;
7            (D) the death of an owner of the equity interest in
8        a registrant;
9            (E) the acquisition of a controlling interest in
10        the stock or substantially all of the assets of a
11        publicly traded company;
12            (F) a transfer by a parent company to a wholly
13        owned subsidiary; or
14            (G) the transfer or sale to or by one person to
15        another person where both persons were initial owners
16        of the registration when the registration was issued;
17        or
18        (2) the cannabis cultivation center registration,
19    medical cannabis dispensary registration, or the
20    controlling interest in a registrant's property is
21    transferred in a transaction to lineal descendants in which
22    no gain or loss is recognized or as a result of a
23    transaction in accordance with Section 351 of the Internal
24    Revenue Code in which no gain or loss is recognized.
25(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
26eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,

 

 

10000HB0160ham001- 54 -LRB100 02289 HLH 26491 a

1eff. 7-16-14.)
 
2    (35 ILCS 5/212)
3    Sec. 212. Earned income tax credit.
4    (a) With respect to the federal earned income tax credit
5allowed for the taxable year under Section 32 of the federal
6Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
7is entitled to a credit against the tax imposed by subsections
8(a) and (b) of Section 201 in an amount equal to (i) 5% of the
9federal tax credit for each taxable year beginning on or after
10January 1, 2000 and ending prior to December 31, 2012, (ii)
117.5% of the federal tax credit for each taxable year beginning
12on or after January 1, 2012 and ending prior to December 31,
132013, and (iii) 10% of the federal tax credit for each taxable
14year beginning on or after January 1, 2013 and beginning prior
15to January 1, 2017, (iv) 12.5% of the federal tax credit for
16each taxable year beginning on or after January 1, 2017 and
17beginning prior to January 1, 2018, and (v) 15% of the federal
18tax credit for each taxable year beginning on or after January
191, 2018.
20    For a non-resident or part-year resident, the amount of the
21credit under this Section shall be in proportion to the amount
22of income attributable to this State.
23    (b) For taxable years beginning before January 1, 2003, in
24no event shall a credit under this Section reduce the
25taxpayer's liability to less than zero. For each taxable year

 

 

10000HB0160ham001- 55 -LRB100 02289 HLH 26491 a

1beginning on or after January 1, 2003, if the amount of the
2credit exceeds the income tax liability for the applicable tax
3year, then the excess credit shall be refunded to the taxpayer.
4The amount of a refund shall not be included in the taxpayer's
5income or resources for the purposes of determining eligibility
6or benefit level in any means-tested benefit program
7administered by a governmental entity unless required by
8federal law.
9    (c) This Section is exempt from the provisions of Section
10250.
11(Source: P.A. 97-652, eff. 6-1-12.)
 
12    (35 ILCS 5/218)
13    Sec. 218. Credit for student-assistance contributions.
14    (a) For taxable years ending on or after December 31, 2009
15and on or before December 30, 2025 December 30, 2020, each
16taxpayer who, during the taxable year, makes a contribution (i)
17to a specified individual College Savings Pool Account under
18Section 16.5 of the State Treasurer Act or (ii) to the Illinois
19Prepaid Tuition Trust Fund in an amount matching a contribution
20made in the same taxable year by an employee of the taxpayer to
21that Account or Fund is entitled to a credit against the tax
22imposed under subsections (a) and (b) of Section 201 in an
23amount equal to 25% of that matching contribution, but not to
24exceed (i) $500 per contributing employee per taxable year for
25taxable years ending prior to December 31, 2017 and (ii) $1,000

 

 

10000HB0160ham001- 56 -LRB100 02289 HLH 26491 a

1per contributing employee per taxable year for taxable years
2ending on or after December 31, 2017.
3    (b) For partners, shareholders of Subchapter S
4corporations, and owners of limited liability companies, if the
5liability company is treated as a partnership for purposes of
6federal and State income taxation, there is allowed a credit
7under this Section to be determined in accordance with the
8determination of income and distributive share of income under
9Sections 702 and 704 and Subchapter S of the Internal Revenue
10Code.
11    (c) The credit may not be carried back. If the amount of
12the credit exceeds the tax liability for the year, the excess
13may be carried forward and applied to the tax liability of the
145 taxable years following the excess credit year. The tax
15credit shall be applied to the earliest year for which there is
16a tax liability. If there are credits for more than one year
17that are available to offset a liability, the earlier credit
18shall be applied first.
19    (d) A taxpayer claiming the credit under this Section must
20maintain and record any information that the Illinois Student
21Assistance Commission, the Office of the State Treasurer, or
22the Department may require regarding the matching contribution
23for which the credit is claimed.
24(Source: P.A. 96-198, eff. 8-10-09.)
 
25    (35 ILCS 5/220)

 

 

10000HB0160ham001- 57 -LRB100 02289 HLH 26491 a

1    Sec. 220. Angel investment credit.
2    (a) As used in this Section:
3    "Applicant" means a corporation, partnership, limited
4liability company, or a natural person that makes an investment
5in a qualified new business venture. The term "applicant" does
6not include a corporation, partnership, limited liability
7company, or a natural person who has a direct or indirect
8ownership interest of at least 51% in the profits, capital, or
9value of the investment or a related member.
10    "Claimant" means an applicant certified by the Department
11who files a claim for a credit under this Section.
12    "Department" means the Department of Commerce and Economic
13Opportunity.
14    "Investment" means money (or its equivalent) given to a
15qualified new business venture, at a risk of loss, in
16consideration for an equity interest of the qualified new
17business venture. The Department may adopt rules to permit
18certain forms of contingent equity investments to be considered
19eligible for a tax credit under this Section.
20    "Qualified new business venture" means a business that is
21registered with the Department under this Section.
22    "Related member" means a person that, with respect to the
23applicant investment, is any one of the following:
24        (1) An individual, if the individual and the members of
25    the individual's family (as defined in Section 318 of the
26    Internal Revenue Code) own directly, indirectly,

 

 

10000HB0160ham001- 58 -LRB100 02289 HLH 26491 a

1    beneficially, or constructively, in the aggregate, at
2    least 50% of the value of the outstanding profits, capital,
3    stock, or other ownership interest in the applicant.
4        (2) A partnership, estate, or trust and any partner or
5    beneficiary, if the partnership, estate, or trust and its
6    partners or beneficiaries own directly, indirectly,
7    beneficially, or constructively, in the aggregate, at
8    least 50% of the profits, capital, stock, or other
9    ownership interest in the applicant.
10        (3) A corporation, and any party related to the
11    corporation in a manner that would require an attribution
12    of stock from the corporation under the attribution rules
13    of Section 318 of the Internal Revenue Code, if the
14    applicant and any other related member own, in the
15    aggregate, directly, indirectly, beneficially, or
16    constructively, at least 50% of the value of the
17    corporation's outstanding stock.
18        (4) A corporation and any party related to that
19    corporation in a manner that would require an attribution
20    of stock from the corporation to the party or from the
21    party to the corporation under the attribution rules of
22    Section 318 of the Internal Revenue Code, if the
23    corporation and all such related parties own, in the
24    aggregate, at least 50% of the profits, capital, stock, or
25    other ownership interest in the applicant.
26        (5) A person to or from whom there is attribution of

 

 

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1    stock ownership in accordance with Section 1563(e) of the
2    Internal Revenue Code, except that for purposes of
3    determining whether a person is a related member under this
4    paragraph, "20%" shall be substituted for "5%" whenever
5    "5%" appears in Section 1563(e) of the Internal Revenue
6    Code.
7    (b) For taxable years beginning after December 31, 2010,
8and ending on or before December 31, 2021 December 31, 2016,
9subject to the limitations provided in this Section, a claimant
10may claim, as a credit against the tax imposed under
11subsections (a) and (b) of Section 201 of this Act, an amount
12equal to 25% of the claimant's investment made directly in a
13qualified new business venture. In order for an investment in a
14qualified new business venture to be eligible for tax credits,
15the business must have applied for and received certification
16under subsection (e) for the taxable year in which the
17investment was made prior to the date on which the investment
18was made. The credit under this Section may not exceed the
19taxpayer's Illinois income tax liability for the taxable year.
20If the amount of the credit exceeds the tax liability for the
21year, the excess may be carried forward and applied to the tax
22liability of the 5 taxable years following the excess credit
23year. The credit shall be applied to the earliest year for
24which there is a tax liability. If there are credits from more
25than one tax year that are available to offset a liability, the
26earlier credit shall be applied first. In the case of a

 

 

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1partnership or Subchapter S Corporation, the credit is allowed
2to the partners or shareholders in accordance with the
3determination of income and distributive share of income under
4Sections 702 and 704 and Subchapter S of the Internal Revenue
5Code.
6    (c) The minimum amount an applicant must invest in any
7single qualified new business venture in order to be eligible
8for a credit under this Section is $10,000. The maximum amount
9of an applicant's total investment made in any single qualified
10new business venture that may be used as the basis for a credit
11under this Section is $2,000,000 for each investment made
12directly in a qualified new business venture.
13    (d) The Department shall implement a program to certify an
14applicant for an angel investment credit. Upon satisfactory
15review, the Department shall issue a tax credit certificate
16stating the amount of the tax credit to which the applicant is
17entitled. The Department shall annually certify that: (i) each
18qualified new business venture that receives an angel
19investment under this Section has maintained a minimum
20employment threshold, as defined by rule, in the State (and
21continues to maintain a minimum employment threshold in the
22State for a period of no less than 3 years from the issue date
23of the last tax credit certificate issued by the Department
24with respect to such business pursuant to this Section); and
25(ii) the claimant's investment has been made and remains,
26except in the event of a qualifying liquidity event, in the

 

 

10000HB0160ham001- 61 -LRB100 02289 HLH 26491 a

1qualified new business venture for no less than 3 years.
2    If an investment for which a claimant is allowed a credit
3under subsection (b) is held by the claimant for less than 3
4years, other than as a result of a permitted sale of the
5investment to person who is not a related member, or, if within
6that period of time the qualified new business venture is moved
7from the State of Illinois, the claimant shall pay to the
8Department of Revenue, in the manner prescribed by the
9Department of Revenue, the aggregate amount of the disqualified
10credits credit that the claimant received related to the
11subject investment.
12    If the Department determines that a qualified new business
13venture failed to maintain a minimum employment threshold in
14the State through the date which is 3 years from the issue date
15of the last tax credit certificate issued by the Department
16with respect to the subject business pursuant to this Section,
17the claimant or claimants shall pay to the Department of
18Revenue, in the manner prescribed by the Department of Revenue,
19the aggregate amount of the disqualified credits that claimant
20or claimants received related to investments in that business.
21    (e) The Department shall implement a program to register
22qualified new business ventures for purposes of this Section. A
23business desiring registration under this Section shall be
24required to submit a full and complete an application to the
25Department in each taxable year for which the business desires
26registration. A submitted application shall be effective only

 

 

10000HB0160ham001- 62 -LRB100 02289 HLH 26491 a

1for the taxable year in which it is submitted, and a business
2desiring registration under this Section shall be required to
3submit a separate application in and for each taxable year for
4which the business desires registration. Further, if at any
5time prior to the acceptance of an application for registration
6under this Section by the Department one or more events occurs
7which makes the information provided in that application
8materially false or incomplete (in whole or in part), the
9business shall promptly notify the Department of the same. Any
10failure of a business to promptly provide the foregoing
11information to the Department may, at the discretion of the
12Department, result in a revocation of a previously approved
13application for that business, or disqualification of the
14business from future registration under this Section, or both.
15The Department may register the business only if the business
16satisfies all of the following conditions are satisfied:
17        (1) it has its principal place of business headquarters
18    in this State;
19        (2) at least 51% of the employees employed by the
20    business are employed in this State;
21        (3) the business it has the potential for increasing
22    jobs in this State, increasing capital investment in this
23    State, or both, as determined by the Department, and either
24    of the following apply:
25            (A) it is principally engaged in innovation in any
26        of the following: manufacturing; biotechnology;

 

 

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1        nanotechnology; communications; agricultural sciences;
2        clean energy creation or storage technology;
3        processing or assembling products, including medical
4        devices, pharmaceuticals, computer software, computer
5        hardware, semiconductors, other innovative technology
6        products, or other products that are produced using
7        manufacturing methods that are enabled by applying
8        proprietary technology; or providing services that are
9        enabled by applying proprietary technology; or
10            (B) it is undertaking pre-commercialization
11        activity related to proprietary technology that
12        includes conducting research, developing a new product
13        or business process, or developing a service that is
14        principally reliant on applying proprietary
15        technology;
16        (4) it is not principally engaged in real estate
17    development (except for development projects anticipated
18    to take more than 3 years to complete), insurance, banking,
19    lending, lobbying, political consulting, professional
20    services provided by attorneys, accountants, business
21    consultants, physicians, or health care consultants,
22    wholesale or retail trade, leisure, hospitality,
23    transportation, or construction, except construction of
24    power production plants that derive energy from a renewable
25    energy resource, as defined in Section 1 of the Illinois
26    Power Agency Act;

 

 

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1        (5) at the time it is first certified:
2            (A) it has fewer than 100 employees;
3            (B) it has been in operation in Illinois for not
4        more than 10 consecutive years prior to the year of
5        certification; and
6            (C) it has received not more than $10,000,000 in
7        aggregate investments private equity investment in
8        cash;
9        (5.1) it agrees to maintain a minimum employment
10    threshold in the State of Illinois prior to the date which
11    is 3 years from the issue date of the last tax credit
12    certificate issued by the Department with respect to that
13    business pursuant to this Section;
14        (6) it agrees not to move its operations from the State
15    of Illinois prior to the date which is 3 years from the
16    issue date of the last tax credit certificate issued by the
17    Department with respect to such business (blank); and
18        (7) it has received not more than $4,000,000 in
19    investments that qualified for tax credits under this
20    Section.
21    (f) The Department, in consultation with the Department of
22Revenue, shall adopt rules to administer this Section. The
23aggregate amount of the tax credits that may be claimed under
24this Section for investments made in qualified new business
25ventures shall be limited at $10,000,000 per calendar year, of
26which $500,000 shall be reserved for investments made in

 

 

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1qualified new business ventures which are "minority owned
2businesses", "female owned businesses", or "businesses owned
3by a person with a disability" (as those terms are used and
4defined in the Business Enterprise for Minorities, Females, and
5Persons with Disabilities Act), and an additional $500,000
6shall be reserved for investments made in qualified new
7business ventures with their principal place of business in
8counties with a population of not more than 250,000. The
9foregoing annual allowable amounts shall be allocated by the
10Department, on a per calendar quarter basis and prior to the
11commencement of each calendar year, in such proportion as
12determined by the Department, provided that: (i) the amount
13initially allocated by the Department for any one calendar
14quarter shall not exceed 35% of the total allowable amount; and
15(ii) any portion of the allocated allowable amount remaining
16unused as of the end of any of the first 2 calendar quarters of
17a given calendar year shall be rolled into, and added to, the
18total allocated amount for the next available calendar quarter.
19    (g) A claimant may not sell or otherwise transfer a credit
20awarded under this Section to another person.
21    (h) On or before March 1 of each year, the Department shall
22report to the Governor and to the General Assembly on the tax
23credit certificates awarded under this Section for the prior
24calendar year.
25        (1) This report must include, for each tax credit
26    certificate awarded:

 

 

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1            (A) the name of the claimant, and the amount of
2        credit awarded or allocated to that claimant, and the
3        name of the recipient qualified new business venture
4        that received the investment;
5            (B) the name and address (including the county) of
6        the qualified new business venture that received the
7        investment giving rise to the credit, the North
8        American Industry Classification System (NAICS) code
9        applicable to that qualified new business venture, and
10        the number of employees of the the qualified new
11        business venture that received the investment giving
12        rise to the credit and the county in which the
13        qualified new business venture is located; and
14            (C) the date of approval by the Department of each
15        claimant's the applications for the tax credit
16        certificate.
17        (2) The report must also include:
18            (A) the total number of applicants and the total
19        number of claimants, including the amount of each tax
20        credit certificate and amount for tax credit
21        certificates awarded to a claimant under this Section
22        in the prior calendar year;
23            (B) the total number of applications from
24        businesses seeking registration under this Section,
25        the total number of new qualified business ventures
26        registered by the Department, and the aggregate amount

 

 

10000HB0160ham001- 67 -LRB100 02289 HLH 26491 a

1        of investment upon which tax credit certificates were
2        issued in the prior calendar year the total number of
3        applications and amount for which tax credit
4        certificates were issued in the prior calendar year;
5        and
6            (C) the total amount of tax credit certificates
7        sought by applicants, the amount of each tax credit
8        certificate issued to a claimant, the aggregate amount
9        of all tax credit certificates issued in the prior
10        calendar year and the aggregate amount of tax credit
11        certificates issued as authorized under this Section
12        for all calendar years the total tax credit
13        certificates and amount authorized under this Section
14        for all calendar years.
15        (3) On and after the effective date of this amendatory
16    Act of the 100th General Assembly, the Department shall
17    require a business seeking registration as a qualified new
18    business venture to include in its application the North
19    American Industry Classification System (NAICS) code
20    associated with the business and the number of employees at
21    the time of application. Each business registered by the
22    Department as a qualified new business venture that
23    receives an investment giving rise to the issuance of a tax
24    credit certificate shall, for each of the 3 subsequent
25    years, report to the Department the following:
26            (A) the number of employees at the end of each

 

 

10000HB0160ham001- 68 -LRB100 02289 HLH 26491 a

1        year;
2            (B) the amount of additional new capital
3        investment raised within each year; and
4            (C) any liquidity event transpiring within the
5        3-year period; for purposes of this paragraph (C), a
6        liquidity event shall mean an event that allows some or
7        all investors in a company to cash out some or all of
8        their ownership shares or that is considered an exit
9        strategy for an illiquid investment.
10    (i) For each business seeking registration under this
11Section after December 31, 2016, the Department shall require
12the business to include in its application the North American
13Industry Classification System (NAICS) code applicable to the
14business and the number of employees of the business at the
15time of application. Each business registered by the Department
16as a qualified new business venture that receives an investment
17giving rise to the issuance of a tax credit certificate
18pursuant to this Section shall, for each of the 3 years
19following the issue date of the last tax credit certificate
20issued by the Department with respect to such business pursuant
21to this Section, report to the Department the following:
22        (1) the number of employees and the location at which
23    those employees are employed, both as of the end of each
24    year;
25        (2) the amount of additional new capital investment
26    raised as of the end of each year, if any; and

 

 

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1        (3) the terms of any liquidity event occurring during
2    such year; for the purposes of this Section, a "liquidity
3    event" means any event that would be considered an exit for
4    an illiquid investment, including any event that allows the
5    equity holders of the business (or any material portion
6    thereof) to cash out some or all of their respective equity
7    interests.
8(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11;
997-1097, eff. 8-24-12.)
 
10    (35 ILCS 5/221)
11    Sec. 221. Rehabilitation costs; qualified historic
12properties; River Edge Redevelopment Zone.
13    (a) For taxable years beginning on or after January 1, 2012
14and ending prior to January 1, 2023 January 1, 2018, there
15shall be allowed a tax credit against the tax imposed by
16subsections (a) and (b) of Section 201 in an amount equal to
1725% of qualified expenditures incurred by a qualified taxpayer
18during the taxable year in the restoration and preservation of
19a qualified historic structure located in a River Edge
20Redevelopment Zone pursuant to a qualified rehabilitation
21plan, provided that the total amount of such expenditures (i)
22must equal $5,000 or more and (ii) must exceed 50% of the
23purchase price of the property.
24    (b) To obtain a tax credit pursuant to this Section, the
25taxpayer must apply with the Department of Commerce and

 

 

10000HB0160ham001- 70 -LRB100 02289 HLH 26491 a

1Economic Opportunity. The Department of Commerce and Economic
2Opportunity, in consultation with the Historic Preservation
3Agency, shall determine the amount of eligible rehabilitation
4costs and expenses. The Historic Preservation Agency shall
5determine whether the rehabilitation is consistent with the
6standards of the Secretary of the United States Department of
7the Interior for rehabilitation. Upon completion and review of
8the project, the Department of Commerce and Economic
9Opportunity shall issue a certificate in the amount of the
10eligible credits. At the time the certificate is issued, an
11issuance fee up to the maximum amount of 2% of the amount of
12the credits issued by the certificate may be collected from the
13applicant to administer the provisions of this Section. If
14collected, this issuance fee shall be deposited into the
15Historic Property Administrative Fund, a special fund created
16in the State treasury. Subject to appropriation, moneys in the
17Historic Property Administrative Fund shall be evenly divided
18between the Department of Commerce and Economic Opportunity and
19the Historic Preservation Agency to reimburse the Department of
20Commerce and Economic Opportunity and the Historic
21Preservation Agency for the costs associated with
22administering this Section. The taxpayer must attach the
23certificate to the tax return on which the credits are to be
24claimed. The Department of Commerce and Economic Opportunity
25may adopt rules to implement this Section.
26    (c) The tax credit under this Section may not reduce the

 

 

10000HB0160ham001- 71 -LRB100 02289 HLH 26491 a

1taxpayer's liability to less than zero.
2    (d) As used in this Section, the following terms have the
3following meanings.
4    "Qualified expenditure" means all the costs and expenses
5defined as qualified rehabilitation expenditures under Section
647 of the federal Internal Revenue Code that were incurred in
7connection with a qualified historic structure.
8    "Qualified historic structure" means a certified historic
9structure as defined under Section 47 (c)(3) of the federal
10Internal Revenue Code.
11    "Qualified rehabilitation plan" means a project that is
12approved by the Historic Preservation Agency as being
13consistent with the standards in effect on the effective date
14of this amendatory Act of the 97th General Assembly for
15rehabilitation as adopted by the federal Secretary of the
16Interior.
17    "Qualified taxpayer" means the owner of the qualified
18historic structure or any other person who qualifies for the
19federal rehabilitation credit allowed by Section 47 of the
20federal Internal Revenue Code with respect to that qualified
21historic structure. Partners, shareholders of subchapter S
22corporations, and owners of limited liability companies (if the
23limited liability company is treated as a partnership for
24purposes of federal and State income taxation) are entitled to
25a credit under this Section to be determined in accordance with
26the determination of income and distributive share of income

 

 

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1under Sections 702 and 703 and subchapter S of the Internal
2Revenue Code, provided that credits granted to a partnership, a
3limited liability company taxed as a partnership, or other
4multiple owners of property shall be passed through to the
5partners, members, or owners respectively on a pro rata basis
6or pursuant to an executed agreement among the partners,
7members, or owners documenting any alternate distribution
8method.
9(Source: P.A. 99-914, eff. 12-20-16.)
 
10    (35 ILCS 5/224 new)
11    Sec. 224. Business Occupation Assessment credit. For tax
12years ending on or after December 31, 2017, a taxpayer is
13entitled to a credit against the taxes imposed under
14subsections (a) and (b) of Section 201 of this Act in an amount
15equal to the amount paid by the taxpayer pursuant to the
16Business Occupation Assessment Act during the tax year. If the
17amount of the credit exceeds the tax liability for the year,
18such excess shall not reduce the tax liability to less than
19zero, and it shall not be carried forward to any subsequent
20taxable year.
 
21    (35 ILCS 5/225 new)
22    Sec. 225. Internship credit.
23    (a) For each taxable year ending on or after December 31,
242017, each taxpayer is entitled to a credit against the tax

 

 

10000HB0160ham001- 73 -LRB100 02289 HLH 26491 a

1imposed by subsections (a) and (b) of Section 201 of this Act
2in an amount equal to 10% of the stipend or salary paid by the
3taxpayer during the taxable year to (i) up to 5 qualified
4college interns and (ii) up to 5 full-time employees, provided
5that the full-time employee had been a qualified college intern
6during either of the 2 taxable years immediately preceding the
7taxable year for which the credit is claimed. For partners,
8shareholders of Subchapter S corporations, and owners of
9limited liability companies, if the liability company is
10treated as a partnership for purposes of federal and State
11income taxation, there shall be allowed a credit under this
12Section to be determined in accordance with the determination
13of income and distributive share of income under Sections 702
14and 704 and Subchapter S of the Internal Revenue Code.
15    (b) For the purposes of this Section, "qualified college
16intern" means an Illinois resident (i) who is an enrolled
17student in an institution of higher education or vocational
18technical education program located in Illinois, (ii) who is
19seeking a degree or certification of completion in a major
20field of study closely related to the work experience performed
21for the taxpayer, (iii) whose internship is taken for academic
22credit or counts toward the completion of a vocational
23technical education program, (iv) who is supervised and
24evaluated by the taxpayer, and (v) whose position is located in
25Illinois. For purposes of this Section, "full-time employee"
26means an Illinois resident (i) who is employed by the taxpayer

 

 

10000HB0160ham001- 74 -LRB100 02289 HLH 26491 a

1for consideration for at least 35 hours each week or who
2renders any other standard of service generally accepted by
3industry custom or practice as full-time employment, and (ii)
4whose position is located in Illinois.
5    (c) In no event shall a credit under this Section reduce
6the taxpayer's liability to less than zero. If the amount of
7the credit exceeds the tax liability for the year, the excess
8may not be carried forward or carried back.
 
9    (35 ILCS 5/226 new)
10    Sec. 226. Federal child tax credit. For taxable years
11beginning on or after January 1, 2017 and beginning prior to
12January 1, 2022, with respect to the federal child tax credit
13allowed for the taxable year under Section 24 of the federal
14Internal Revenue Code, 26 U.S.C. 24, each individual taxpayer
15is entitled to a credit against the tax imposed by subsections
16(a) and (b) of Section 201 in an amount equal to 20% of the
17federal tax credit.
18    For a non-resident or part-year resident, the amount of the
19credit under this Section shall be in proportion to the amount
20of income attributable to this State.
21    If the amount of the credit exceeds the income tax
22liability for the applicable tax year, then the excess credit
23shall be refunded to the taxpayer. The amount of a refund shall
24not be included in the taxpayer's income or resources for the
25purposes of determining eligibility or benefit level in any

 

 

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1means-tested benefit program administered by a governmental
2entity unless required by federal law.
 
3    (35 ILCS 5/227 new)
4    Sec. 227. Apprenticeship training credit.
5    (a) For tax years beginning on or after January 1, 2017 and
6ending prior to January 1, 2022, a taxpayer shall be allowed a
7credit against the tax imposed by subsections (a) and (b) of
8Section 201 for certain amounts paid by the taxpayer as wages
9pursuant to a qualified apprenticeship program. The credit may
10not exceed the lesser of (i) 50% of the wages paid by the
11taxpayer to each apprentice during the taxable year or (ii)
12$4,800 per apprentice. The taxpayer shall apply with the
13Department of Commerce and Economic Opportunity annually for
14certification as a "qualified apprenticeship program". The
15application shall be in the form and manner prescribed by the
16Department of Commerce and Economic Opportunity.
17    (b) For partners, shareholders of Subchapter S
18corporations, and owners of limited liability companies, if the
19liability company is treated as a partnership for purposes of
20federal and State income taxation, the credit under this
21Section shall be determined in accordance with the
22determination of income and distributive share of income under
23Sections 702 and 704 and Subchapter S of the Internal Revenue
24Code.
25    (c) In no event shall a credit under this Section reduce

 

 

10000HB0160ham001- 76 -LRB100 02289 HLH 26491 a

1the taxpayer's liability to less than zero. If the amount of
2the credit exceeds the tax liability for the year, the excess
3may be carried forward and applied to the tax liability of the
45 taxable years following the excess credit year. The tax
5credit shall be applied to the earliest year for which there is
6a tax liability. If there are credits for more than one year
7that are available to offset a liability, the earlier credit
8shall be applied first.
9    (d) For the purposes of this Section, "qualified
10apprenticeship program" means an apprenticeship program in
11manufacturing, plastics, or construction trades that is
12certified by the Department of Commerce and Economic
13Opportunity under this Section and at least 3 years in
14duration.
 
15    (35 ILCS 5/704A)
16    Sec. 704A. Employer's return and payment of tax withheld.
17    (a) In general, every employer who deducts and withholds or
18is required to deduct and withhold tax under this Act on or
19after January 1, 2008 shall make those payments and returns as
20provided in this Section.
21    (b) Returns. Every employer shall, in the form and manner
22required by the Department, make returns with respect to taxes
23withheld or required to be withheld under this Article 7 for
24each quarter beginning on or after January 1, 2008, on or
25before the last day of the first month following the close of

 

 

10000HB0160ham001- 77 -LRB100 02289 HLH 26491 a

1that quarter. On and after January 1, 2017, an employer with an
2average employee head count of fewer than 25 employees during
3the previous calendar year shall make returns with respect to
4taxes withheld or required to be withheld under this Article 7
5annually.
6    (c) Payments. With respect to amounts withheld or required
7to be withheld on or after January 1, 2008:
8        (1) Semi-weekly payments. For each calendar year, each
9    employer who withheld or was required to withhold more than
10    $12,000 during the one-year period ending on June 30 of the
11    immediately preceding calendar year, payment must be made:
12            (A) on or before each Friday of the calendar year,
13        for taxes withheld or required to be withheld on the
14        immediately preceding Saturday, Sunday, Monday, or
15        Tuesday;
16            (B) on or before each Wednesday of the calendar
17        year, for taxes withheld or required to be withheld on
18        the immediately preceding Wednesday, Thursday, or
19        Friday.
20        Beginning with calendar year 2011, payments made under
21    this paragraph (1) of subsection (c) must be made by
22    electronic funds transfer.
23        (2) Semi-weekly payments. Any employer who withholds
24    or is required to withhold more than $12,000 in any quarter
25    of a calendar year is required to make payments on the
26    dates set forth under item (1) of this subsection (c) for

 

 

10000HB0160ham001- 78 -LRB100 02289 HLH 26491 a

1    each remaining quarter of that calendar year and for the
2    subsequent calendar year.
3        (3) Monthly payments. Each employer, other than an
4    employer described in items (1) or (2) of this subsection,
5    shall pay to the Department, on or before the 15th day of
6    each month the taxes withheld or required to be withheld
7    during the immediately preceding month.
8        (4) Payments with returns. Each employer shall pay to
9    the Department, on or before the due date for each return
10    required to be filed under this Section, any tax withheld
11    or required to be withheld during the period for which the
12    return is due and not previously paid to the Department.
13    (d) Regulatory authority. The Department may, by rule:
14        (1) Permit employers, in lieu of the requirements of
15    subsections (b) and (c), to file annual returns due on or
16    before January 31 of the year for taxes withheld or
17    required to be withheld during the previous calendar year
18    and, if the aggregate amounts required to be withheld by
19    the employer under this Article 7 (other than amounts
20    required to be withheld under Section 709.5) do not exceed
21    $1,000 for the previous calendar year, to pay the taxes
22    required to be shown on each such return no later than the
23    due date for such return.
24        (2) Provide that any payment required to be made under
25    subsection (c)(1) or (c)(2) is deemed to be timely to the
26    extent paid by electronic funds transfer on or before the

 

 

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1    due date for deposit of federal income taxes withheld from,
2    or federal employment taxes due with respect to, the wages
3    from which the Illinois taxes were withheld.
4        (3) Designate one or more depositories to which payment
5    of taxes required to be withheld under this Article 7 must
6    be paid by some or all employers.
7        (4) Increase the threshold dollar amounts at which
8    employers are required to make semi-weekly payments under
9    subsection (c)(1) or (c)(2).
10    (e) Annual return and payment. Every employer who deducts
11and withholds or is required to deduct and withhold tax from a
12person engaged in domestic service employment, as that term is
13defined in Section 3510 of the Internal Revenue Code, may
14comply with the requirements of this Section with respect to
15such employees by filing an annual return and paying the taxes
16required to be deducted and withheld on or before the 15th day
17of the fourth month following the close of the employer's
18taxable year. The Department may allow the employer's return to
19be submitted with the employer's individual income tax return
20or to be submitted with a return due from the employer under
21Section 1400.2 of the Unemployment Insurance Act.
22    (f) Magnetic media and electronic filing. Any W-2 Form
23that, under the Internal Revenue Code and regulations
24promulgated thereunder, is required to be submitted to the
25Internal Revenue Service on magnetic media or electronically
26must also be submitted to the Department on magnetic media or

 

 

10000HB0160ham001- 80 -LRB100 02289 HLH 26491 a

1electronically for Illinois purposes, if required by the
2Department.
3    (g) For amounts deducted or withheld after December 31,
42009, a taxpayer who makes an election under subsection (f) of
5Section 5-15 of the Economic Development for a Growing Economy
6Tax Credit Act for a taxable year shall be allowed a credit
7against payments due under this Section for amounts withheld
8during the first calendar year beginning after the end of that
9taxable year equal to the amount of the credit for the
10incremental income tax attributable to full-time employees of
11the taxpayer awarded to the taxpayer by the Department of
12Commerce and Economic Opportunity under the Economic
13Development for a Growing Economy Tax Credit Act for the
14taxable year and credits not previously claimed and allowed to
15be carried forward under Section 211(4) of this Act as provided
16in subsection (f) of Section 5-15 of the Economic Development
17for a Growing Economy Tax Credit Act. The credit or credits may
18not reduce the taxpayer's obligation for any payment due under
19this Section to less than zero. If the amount of the credit or
20credits exceeds the total payments due under this Section with
21respect to amounts withheld during the calendar year, the
22excess may be carried forward and applied against the
23taxpayer's liability under this Section in the succeeding
24calendar years as allowed to be carried forward under paragraph
25(4) of Section 211 of this Act. The credit or credits shall be
26applied to the earliest year for which there is a tax

 

 

10000HB0160ham001- 81 -LRB100 02289 HLH 26491 a

1liability. If there are credits from more than one taxable year
2that are available to offset a liability, the earlier credit
3shall be applied first. Each employer who deducts and withholds
4or is required to deduct and withhold tax under this Act and
5who retains income tax withholdings under subsection (f) of
6Section 5-15 of the Economic Development for a Growing Economy
7Tax Credit Act must make a return with respect to such taxes
8and retained amounts in the form and manner that the
9Department, by rule, requires and pay to the Department or to a
10depositary designated by the Department those withheld taxes
11not retained by the taxpayer. For purposes of this subsection
12(g), the term taxpayer shall include taxpayer and members of
13the taxpayer's unitary business group as defined under
14paragraph (27) of subsection (a) of Section 1501 of this Act.
15This Section is exempt from the provisions of Section 250 of
16this Act. No credit awarded under the Economic Development for
17a Growing Economy Tax Credit Act for agreements entered into on
18or after January 1, 2015 may be credited against payments due
19under this Section.
20    (h) An employer may claim a credit against payments due
21under this Section for amounts withheld during the first
22calendar year ending after the date on which a tax credit
23certificate was issued under Section 35 of the Small Business
24Job Creation Tax Credit Act. The credit shall be equal to the
25amount shown on the certificate, but may not reduce the
26taxpayer's obligation for any payment due under this Section to

 

 

10000HB0160ham001- 82 -LRB100 02289 HLH 26491 a

1less than zero. If the amount of the credit exceeds the total
2payments due under this Section with respect to amounts
3withheld during the calendar year, the excess may be carried
4forward and applied against the taxpayer's liability under this
5Section in the 5 succeeding calendar years. The credit shall be
6applied to the earliest year for which there is a tax
7liability. If there are credits from more than one calendar
8year that are available to offset a liability, the earlier
9credit shall be applied first. This Section is exempt from the
10provisions of Section 250 of this Act.
11(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;
1296-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
138-12-11; 97-507, eff. 8-23-11.)
 
14    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
15    Sec. 901. Collection authority.
16    (a) In general.
17    The Department shall collect the taxes imposed by this Act.
18The Department shall collect certified past due child support
19amounts under Section 2505-650 of the Department of Revenue Law
20(20 ILCS 2505/2505-650). Except as provided in subsections (c),
21(e), (f), (g), and (h) of this Section, money collected
22pursuant to subsections (a) and (b) of Section 201 of this Act
23shall be paid into the General Revenue Fund in the State
24treasury; money collected pursuant to subsections (c) and (d)
25of Section 201 of this Act shall be paid into the Personal

 

 

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1Property Tax Replacement Fund, a special fund in the State
2Treasury; and money collected under Section 2505-650 of the
3Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
4into the Child Support Enforcement Trust Fund, a special fund
5outside the State Treasury, or to the State Disbursement Unit
6established under Section 10-26 of the Illinois Public Aid
7Code, as directed by the Department of Healthcare and Family
8Services.
9    (b) Local Government Distributive Fund.
10    Beginning August 1, 1969, and continuing through June 30,
111994, the Treasurer shall transfer each month from the General
12Revenue Fund to a special fund in the State treasury, to be
13known as the "Local Government Distributive Fund", an amount
14equal to 1/12 of the net revenue realized from the tax imposed
15by subsections (a) and (b) of Section 201 of this Act during
16the preceding month. Beginning July 1, 1994, and continuing
17through June 30, 1995, the Treasurer shall transfer each month
18from the General Revenue Fund to the Local Government
19Distributive Fund an amount equal to 1/11 of the net revenue
20realized from the tax imposed by subsections (a) and (b) of
21Section 201 of this Act during the preceding month. Beginning
22July 1, 1995 and continuing through January 31, 2011, the
23Treasurer shall transfer each month from the General Revenue
24Fund to the Local Government Distributive Fund an amount equal
25to the net of (i) 1/10 of the net revenue realized from the tax
26imposed by subsections (a) and (b) of Section 201 of the

 

 

10000HB0160ham001- 84 -LRB100 02289 HLH 26491 a

1Illinois Income Tax Act during the preceding month (ii) minus,
2beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
3and beginning July 1, 2004, zero. Beginning February 1, 2011,
4and continuing through January 31, 2015, the Treasurer shall
5transfer each month from the General Revenue Fund to the Local
6Government Distributive Fund an amount equal to the sum of (i)
76% (10% of the ratio of the 3% individual income tax rate prior
8to 2011 to the 5% individual income tax rate after 2010) of the
9net revenue realized from the tax imposed by subsections (a)
10and (b) of Section 201 of this Act upon individuals, trusts,
11and estates during the preceding month and (ii) 6.86% (10% of
12the ratio of the 4.8% corporate income tax rate prior to 2011
13to the 7% corporate income tax rate after 2010) of the net
14revenue realized from the tax imposed by subsections (a) and
15(b) of Section 201 of this Act upon corporations during the
16preceding month. Beginning February 1, 2015 and continuing
17through January 31, 2025, the Treasurer shall transfer each
18month from the General Revenue Fund to the Local Government
19Distributive Fund an amount equal to the sum of (i) 8% (10% of
20the ratio of the 3% individual income tax rate prior to 2011 to
21the 3.75% individual income tax rate after 2014) of the net
22revenue realized from the tax imposed by subsections (a) and
23(b) of Section 201 of this Act upon individuals, trusts, and
24estates during the preceding month and (ii) 9.14% (10% of the
25ratio of the 4.8% corporate income tax rate prior to 2011 to
26the 5.25% corporate income tax rate after 2014) of the net

 

 

10000HB0160ham001- 85 -LRB100 02289 HLH 26491 a

1revenue realized from the tax imposed by subsections (a) and
2(b) of Section 201 of this Act upon corporations during the
3preceding month. Beginning February 1, 2025, the Treasurer
4shall transfer each month from the General Revenue Fund to the
5Local Government Distributive Fund an amount equal to the sum
6of (i) 9.23% (10% of the ratio of the 3% individual income tax
7rate prior to 2011 to the 3.25% individual income tax rate
8after 2024) of the net revenue realized from the tax imposed by
9subsections (a) and (b) of Section 201 of this Act upon
10individuals, trusts, and estates during the preceding month and
11(ii) 10% of the net revenue realized from the tax imposed by
12subsections (a) and (b) of Section 201 of this Act upon
13corporations during the preceding month. Net revenue realized
14for a month shall be defined as the revenue from the tax
15imposed by subsections (a) and (b) of Section 201 of this Act
16which is deposited in the General Revenue Fund, the Education
17Assistance Fund, the Income Tax Surcharge Local Government
18Distributive Fund, the Fund for the Advancement of Education,
19and the Commitment to Human Services Fund during the month
20minus the amount paid out of the General Revenue Fund in State
21warrants during that same month as refunds to taxpayers for
22overpayment of liability under the tax imposed by subsections
23(a) and (b) of Section 201 of this Act.
24    Beginning on August 26, 2014 (the effective date of Public
25Act 98-1052), the Comptroller shall perform the transfers
26required by this subsection (b) no later than 60 days after he

 

 

10000HB0160ham001- 86 -LRB100 02289 HLH 26491 a

1or she receives the certification from the Treasurer as
2provided in Section 1 of the State Revenue Sharing Act.
3    (c) Deposits Into Income Tax Refund Fund.
4        (1) Beginning on January 1, 1989 and thereafter, the
5    Department shall deposit a percentage of the amounts
6    collected pursuant to subsections (a) and (b)(1), (2), and
7    (3), (4), (5), (5.1), (5.2), (5.3), and (5.4) of Section
8    201 of this Act into a fund in the State treasury known as
9    the Income Tax Refund Fund. The Department shall deposit 6%
10    of such amounts during the period beginning January 1, 1989
11    and ending on June 30, 1989. Beginning with State fiscal
12    year 1990 and for each fiscal year thereafter, the
13    percentage deposited into the Income Tax Refund Fund during
14    a fiscal year shall be the Annual Percentage. For fiscal
15    years 1999 through 2001, the Annual Percentage shall be
16    7.1%. For fiscal year 2003, the Annual Percentage shall be
17    8%. For fiscal year 2004, the Annual Percentage shall be
18    11.7%. Upon the effective date of this amendatory Act of
19    the 93rd General Assembly, the Annual Percentage shall be
20    10% for fiscal year 2005. For fiscal year 2006, the Annual
21    Percentage shall be 9.75%. For fiscal year 2007, the Annual
22    Percentage shall be 9.75%. For fiscal year 2008, the Annual
23    Percentage shall be 7.75%. For fiscal year 2009, the Annual
24    Percentage shall be 9.75%. For fiscal year 2010, the Annual
25    Percentage shall be 9.75%. For fiscal year 2011, the Annual
26    Percentage shall be 8.75%. For fiscal year 2012, the Annual

 

 

10000HB0160ham001- 87 -LRB100 02289 HLH 26491 a

1    Percentage shall be 8.75%. For fiscal year 2013, the Annual
2    Percentage shall be 9.75%. For fiscal year 2014, the Annual
3    Percentage shall be 9.5%. For fiscal year 2015, the Annual
4    Percentage shall be 10%. For all other fiscal years, the
5    Annual Percentage shall be calculated as a fraction, the
6    numerator of which shall be the amount of refunds approved
7    for payment by the Department during the preceding fiscal
8    year as a result of overpayment of tax liability under
9    subsections (a) and (b)(1), (2), and (3), (4), (5), (5.1),
10    (5.2), (5.3), and (5.4) of Section 201 of this Act plus the
11    amount of such refunds remaining approved but unpaid at the
12    end of the preceding fiscal year, minus the amounts
13    transferred into the Income Tax Refund Fund from the
14    Tobacco Settlement Recovery Fund, and the denominator of
15    which shall be the amounts which will be collected pursuant
16    to subsections (a) and (b)(1), (2), and (3), (4), (5),
17    (5.1), (5.2), (5.3), and (5.4) of Section 201 of this Act
18    during the preceding fiscal year; except that in State
19    fiscal year 2002, the Annual Percentage shall in no event
20    exceed 7.6%. The Director of Revenue shall certify the
21    Annual Percentage to the Comptroller on the last business
22    day of the fiscal year immediately preceding the fiscal
23    year for which it is to be effective.
24        (2) Beginning on January 1, 1989 and thereafter, the
25    Department shall deposit a percentage of the amounts
26    collected pursuant to subsections (a), and (b)(6), (7), and

 

 

10000HB0160ham001- 88 -LRB100 02289 HLH 26491 a

1    (8), (9), (10), (11), (12), (13), and (14), (c), and (d) of
2    Section 201 of this Act and pursuant to the Business
3    Occupation Assessment Act into a fund in the State treasury
4    known as the Income Tax Refund Fund. The Department shall
5    deposit 18% of such amounts during the period beginning
6    January 1, 1989 and ending on June 30, 1989. Beginning with
7    State fiscal year 1990 and for each fiscal year thereafter,
8    the percentage deposited into the Income Tax Refund Fund
9    during a fiscal year shall be the Annual Percentage. For
10    fiscal years 1999, 2000, and 2001, the Annual Percentage
11    shall be 19%. For fiscal year 2003, the Annual Percentage
12    shall be 27%. For fiscal year 2004, the Annual Percentage
13    shall be 32%. Upon the effective date of this amendatory
14    Act of the 93rd General Assembly, the Annual Percentage
15    shall be 24% for fiscal year 2005. For fiscal year 2006,
16    the Annual Percentage shall be 20%. For fiscal year 2007,
17    the Annual Percentage shall be 17.5%. For fiscal year 2008,
18    the Annual Percentage shall be 15.5%. For fiscal year 2009,
19    the Annual Percentage shall be 17.5%. For fiscal year 2010,
20    the Annual Percentage shall be 17.5%. For fiscal year 2011,
21    the Annual Percentage shall be 17.5%. For fiscal year 2012,
22    the Annual Percentage shall be 17.5%. For fiscal year 2013,
23    the Annual Percentage shall be 14%. For fiscal year 2014,
24    the Annual Percentage shall be 13.4%. For fiscal year 2015,
25    the Annual Percentage shall be 14%. For all other fiscal
26    years, the Annual Percentage shall be calculated as a

 

 

10000HB0160ham001- 89 -LRB100 02289 HLH 26491 a

1    fraction, the numerator of which shall be the amount of
2    refunds approved for payment by the Department during the
3    preceding fiscal year as a result of overpayment of tax
4    liability under subsections (a), and (b)(6), (7), and (8),
5    (9), (10), (11), (12), (13), and (14), (c), and (d) of
6    Section 201 of this Act and pursuant to the Business
7    Occupation Assessment Act plus the amount of such refunds
8    remaining approved but unpaid at the end of the preceding
9    fiscal year, and the denominator of which shall be the
10    amounts which will be collected pursuant to subsections
11    (a), and (b)(6), (7), and (8), (9), (10), (11), (12), (13),
12    and (14), (c), and (d) of Section 201 of this Act and
13    pursuant to the Business Occupation Assessment Act during
14    the preceding fiscal year; except that in State fiscal year
15    2002, the Annual Percentage shall in no event exceed 23%.
16    The Director of Revenue shall certify the Annual Percentage
17    to the Comptroller on the last business day of the fiscal
18    year immediately preceding the fiscal year for which it is
19    to be effective.
20        (3) The Comptroller shall order transferred and the
21    Treasurer shall transfer from the Tobacco Settlement
22    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
23    in January, 2001, (ii) $35,000,000 in January, 2002, and
24    (iii) $35,000,000 in January, 2003.
25    (d) Expenditures from Income Tax Refund Fund.
26        (1) Beginning January 1, 1989, money in the Income Tax

 

 

10000HB0160ham001- 90 -LRB100 02289 HLH 26491 a

1    Refund Fund shall be expended exclusively for the purpose
2    of paying refunds resulting from overpayment of tax
3    liability under Section 201 of this Act or an overpayment
4    of the assessment under the Business Occupation Assessment
5    Act, for paying rebates under Section 208.1 in the event
6    that the amounts in the Homeowners' Tax Relief Fund are
7    insufficient for that purpose, and for making transfers
8    pursuant to this subsection (d).
9        (2) The Director shall order payment of refunds
10    resulting from overpayment of tax liability under Section
11    201 of this Act or an overpayment of the assessment under
12    the Business Occupation Assessment Act from the Income Tax
13    Refund Fund only to the extent that amounts collected
14    pursuant to Section 201 of this Act and transfers pursuant
15    to this subsection (d) and item (3) of subsection (c) have
16    been deposited and retained in the Fund.
17        (3) As soon as possible after the end of each fiscal
18    year, the Director shall order transferred and the State
19    Treasurer and State Comptroller shall transfer from the
20    Income Tax Refund Fund to the Personal Property Tax
21    Replacement Fund an amount, certified by the Director to
22    the Comptroller, equal to the excess of the amount
23    collected pursuant to subsections (c) and (d) of Section
24    201 of this Act deposited into the Income Tax Refund Fund
25    during the fiscal year over the amount of refunds resulting
26    from overpayment of tax liability under subsections (c) and

 

 

10000HB0160ham001- 91 -LRB100 02289 HLH 26491 a

1    (d) of Section 201 of this Act paid from the Income Tax
2    Refund Fund during the fiscal year.
3        (4) As soon as possible after the end of each fiscal
4    year, the Director shall order transferred and the State
5    Treasurer and State Comptroller shall transfer from the
6    Personal Property Tax Replacement Fund to the Income Tax
7    Refund Fund an amount, certified by the Director to the
8    Comptroller, equal to the excess of the amount of refunds
9    resulting from overpayment of tax liability under
10    subsections (c) and (d) of Section 201 of this Act paid
11    from the Income Tax Refund Fund during the fiscal year over
12    the amount collected pursuant to subsections (c) and (d) of
13    Section 201 of this Act deposited into the Income Tax
14    Refund Fund during the fiscal year.
15        (4.5) As soon as possible after the end of fiscal year
16    1999 and of each fiscal year thereafter, the Director shall
17    order transferred and the State Treasurer and State
18    Comptroller shall transfer from the Income Tax Refund Fund
19    to the General Revenue Fund any surplus remaining in the
20    Income Tax Refund Fund as of the end of such fiscal year;
21    excluding for fiscal years 2000, 2001, and 2002 amounts
22    attributable to transfers under item (3) of subsection (c)
23    less refunds resulting from the earned income tax credit.
24        (5) This Act shall constitute an irrevocable and
25    continuing appropriation from the Income Tax Refund Fund
26    for the purpose of paying refunds upon the order of the

 

 

10000HB0160ham001- 92 -LRB100 02289 HLH 26491 a

1    Director in accordance with the provisions of this Section.
2    (e) Deposits into the Education Assistance Fund and the
3Income Tax Surcharge Local Government Distributive Fund.
4    On July 1, 1991, and thereafter, of the amounts collected
5pursuant to subsections (a) and (b) of Section 201 of this Act,
6minus deposits into the Income Tax Refund Fund, the Department
7shall deposit 7.3% into the Education Assistance Fund in the
8State Treasury. Beginning July 1, 1991, and continuing through
9January 31, 1993, of the amounts collected pursuant to
10subsections (a) and (b) of Section 201 of the Illinois Income
11Tax Act, minus deposits into the Income Tax Refund Fund, the
12Department shall deposit 3.0% into the Income Tax Surcharge
13Local Government Distributive Fund in the State Treasury.
14Beginning February 1, 1993 and continuing through June 30,
151993, of the amounts collected pursuant to subsections (a) and
16(b) of Section 201 of the Illinois Income Tax Act, minus
17deposits into the Income Tax Refund Fund, the Department shall
18deposit 4.4% into the Income Tax Surcharge Local Government
19Distributive Fund in the State Treasury. Beginning July 1,
201993, and continuing through June 30, 1994, of the amounts
21collected under subsections (a) and (b) of Section 201 of this
22Act, minus deposits into the Income Tax Refund Fund, the
23Department shall deposit 1.475% into the Income Tax Surcharge
24Local Government Distributive Fund in the State Treasury.
25    (f) Deposits into the Fund for the Advancement of
26Education. Beginning February 1, 2015, the Department shall

 

 

10000HB0160ham001- 93 -LRB100 02289 HLH 26491 a

1deposit the following portions of the revenue realized from the
2tax imposed upon individuals, trusts, and estates by
3subsections (a) and (b) of Section 201 of this Act during the
4preceding month, minus deposits into the Income Tax Refund
5Fund, into the Fund for the Advancement of Education:
6        (1) beginning February 1, 2015, and prior to February
7    1, 2025, 1/30; and
8        (2) beginning February 1, 2025, 1/26.
9    If the rate of tax imposed by subsection (a) and (b) of
10Section 201 is reduced pursuant to Section 201.5 of this Act,
11the Department shall not make the deposits required by this
12subsection (f) on or after the effective date of the reduction.
13    (g) Deposits into the Commitment to Human Services Fund.
14Beginning February 1, 2015, the Department shall deposit the
15following portions of the revenue realized from the tax imposed
16upon individuals, trusts, and estates by subsections (a) and
17(b) of Section 201 of this Act during the preceding month,
18minus deposits into the Income Tax Refund Fund, into the
19Commitment to Human Services Fund:
20        (1) beginning February 1, 2015, and prior to February
21    1, 2025, 1/30; and
22        (2) beginning February 1, 2025, 1/26.
23    If the rate of tax imposed by subsection (a) and (b) of
24Section 201 is reduced pursuant to Section 201.5 of this Act,
25the Department shall not make the deposits required by this
26subsection (g) on or after the effective date of the reduction.

 

 

10000HB0160ham001- 94 -LRB100 02289 HLH 26491 a

1    (h) Deposits into the Tax Compliance and Administration
2Fund. Beginning on the first day of the first calendar month to
3occur on or after August 26, 2014 (the effective date of Public
4Act 98-1098), each month the Department shall pay into the Tax
5Compliance and Administration Fund, to be used, subject to
6appropriation, to fund additional auditors and compliance
7personnel at the Department, an amount equal to 1/12 of 5% of
8the cash receipts collected during the preceding fiscal year by
9the Audit Bureau of the Department from the tax imposed by
10subsections (a), (b), (c), and (d) of Section 201 of this Act,
11net of deposits into the Income Tax Refund Fund made from those
12cash receipts.
13(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
1498-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
157-20-15.)
 
16
ARTICLE 10. ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY TAX
17
CREDIT ACT

 
18    Section 10-5. The Economic Development for a Growing
19Economy Tax Credit Act is amended by changing Sections 5-5,
205-10, 5-15, 5-20, 5-25, 5-50, 5-65, and 5-70 and by adding
21Section 5-57 as follows:
 
22    (35 ILCS 10/5-5)
23    Sec. 5-5. Definitions. As used in this Act:

 

 

10000HB0160ham001- 95 -LRB100 02289 HLH 26491 a

1    "Agreement" means the Agreement between a Taxpayer and the
2Department under the provisions of Section 5-50 of this Act.
3    "Applicant" means a Taxpayer that is operating a business
4located or that the Taxpayer plans to locate within the State
5of Illinois and that is engaged in interstate or intrastate
6commerce for the purpose of manufacturing, processing,
7assembling, warehousing, or distributing products, conducting
8research and development, providing tourism services, or
9providing services in interstate commerce, office industries,
10health services, professional services, including, but not
11limited to, data centers, or agricultural processing, but
12excluding retail and , retail food, health, or professional
13services. "Applicant" does not include a Taxpayer who closes or
14substantially reduces an operation at one location in the State
15and relocates substantially the same operation to another
16location in the State. This does not prohibit a Taxpayer from
17expanding its operations at another location in the State,
18provided that existing operations of a similar nature located
19within the State are not closed or substantially reduced. This
20also does not prohibit a Taxpayer from moving its operations
21from one location in the State to another location in the State
22for the purpose of expanding the operation provided that the
23Department determines that expansion cannot reasonably be
24accommodated within the municipality in which the business is
25located, or in the case of a business located in an
26incorporated area of the county, within the county in which the

 

 

10000HB0160ham001- 96 -LRB100 02289 HLH 26491 a

1business is located, after conferring with the chief elected
2official of the municipality or county and taking into
3consideration any evidence offered by the municipality or
4county regarding the ability to accommodate expansion within
5the municipality or county.
6    "Committee" means the Illinois Business Investment
7Committee created under Section 5-25 of this Act within the
8Illinois Economic Development Board.
9    "Credit" means the amount agreed to between the Department
10and Applicant under this Act, but not to exceed the lesser of:
11(1) the sum of (i) 50% of the Incremental Income Tax
12attributable to the Applicant's project and (ii) 10% of the
13training costs of New Employees; or (2) 100% of the Incremental
14Income Tax attributable to the Applicant's project. However, if
15the project is located in an underserved area, then the amount
16of the Credit may not exceed the lesser of: (1) the sum of (i)
1775% of the Incremental Income Tax attributable to the
18Applicant's project and (ii) 10% of the training costs of New
19Employees; or (2) 100% of the Incremental Income Tax
20attributable to the Applicant's project.
21    "Data center" means a building or a series of buildings
22rehabilitated or constructed to house a group of networked
23server computers in one physical location or several sites in
24order to centralize the storage, management, and dissemination
25of data and information.
26    "Department" means the Department of Commerce and Economic

 

 

10000HB0160ham001- 97 -LRB100 02289 HLH 26491 a

1Opportunity.
2    "Director" means the Director of Commerce and Economic
3Opportunity.
4    "Full-time Employee" means an individual who is employed
5for consideration for at least 35 hours each week or who
6renders any other standard of service generally accepted by
7industry custom or practice as full-time employment. An
8individual for whom a W-2 is issued by a Professional Employer
9Organization (PEO) is a full-time employee if employed in the
10service of the Applicant for consideration for at least 35
11hours each week or who renders any other standard of service
12generally accepted by industry custom or practice as full-time
13employment to Applicant.
14    "Incremental Income Tax" means the total amount withheld
15during the taxable year from the compensation of New Employees
16under Article 7 of the Illinois Income Tax Act arising from
17employment at a project that is the subject of an Agreement.
18    "New Employee" means:
19        (a) A Full-time Employee first employed by a Taxpayer
20    in the project that is the subject of an Agreement and who
21    is hired after the Taxpayer enters into the tax credit
22    Agreement.
23        (b) The term "New Employee" does not include:
24            (1) an employee of the Taxpayer who performs a job
25        that was previously performed by another employee, if
26        that job existed for at least 6 months before hiring

 

 

10000HB0160ham001- 98 -LRB100 02289 HLH 26491 a

1        the employee;
2            (2) an employee of the Taxpayer who was previously
3        employed in Illinois by a Related Member of the
4        Taxpayer and whose employment was shifted to the
5        Taxpayer after the Taxpayer entered into the tax credit
6        Agreement; or
7            (3) a child, grandchild, parent, or spouse, other
8        than a spouse who is legally separated from the
9        individual, of any individual who has a direct or an
10        indirect ownership interest of at least 5% in the
11        profits, capital, or value of the Taxpayer.
12        (c) Notwithstanding paragraph (1) of subsection (b),
13    an employee may be considered a New Employee under the
14    Agreement if the employee performs a job that was
15    previously performed by an employee who was:
16            (1) treated under the Agreement as a New Employee;
17        and
18            (2) promoted by the Taxpayer to another job.
19        (d) Notwithstanding subsection (a), the Department may
20    award Credit to an Applicant with respect to an employee
21    hired prior to the date of the Agreement if:
22            (1) the Applicant is in receipt of a letter from
23        the Department stating an intent to enter into a credit
24        Agreement;
25            (2) the letter described in paragraph (1) is issued
26        by the Department not later than 15 days after the

 

 

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1        effective date of this Act; and
2            (3) the employee was hired after the date the
3        letter described in paragraph (1) was issued.
4    "Noncompliance Date" means, in the case of a Taxpayer that
5is not complying with the requirements of the Agreement or the
6provisions of this Act, the day following the last date upon
7which the Taxpayer was in compliance with the requirements of
8the Agreement and the provisions of this Act, as determined by
9the Director, pursuant to Section 5-65.
10    "Pass Through Entity" means an entity that is exempt from
11the tax under subsection (b) or (c) of Section 205 of the
12Illinois Income Tax Act.
13    "Professional Employer Organization" (PEO) means an
14employee leasing company, as defined in Section 206.1(A)(2) of
15the Illinois Unemployment Insurance Act.
16    "Related Member" means a person that, with respect to the
17Taxpayer during any portion of the taxable year, is any one of
18the following:
19        (1) An individual stockholder, if the stockholder and
20    the members of the stockholder's family (as defined in
21    Section 318 of the Internal Revenue Code) own directly,
22    indirectly, beneficially, or constructively, in the
23    aggregate, at least 50% of the value of the Taxpayer's
24    outstanding stock.
25        (2) A partnership, estate, or trust and any partner or
26    beneficiary, if the partnership, estate, or trust, and its

 

 

10000HB0160ham001- 100 -LRB100 02289 HLH 26491 a

1    partners or beneficiaries own directly, indirectly,
2    beneficially, or constructively, in the aggregate, at
3    least 50% of the profits, capital, stock, or value of the
4    Taxpayer.
5        (3) A corporation, and any party related to the
6    corporation in a manner that would require an attribution
7    of stock from the corporation to the party or from the
8    party to the corporation under the attribution rules of
9    Section 318 of the Internal Revenue Code, if the Taxpayer
10    owns directly, indirectly, beneficially, or constructively
11    at least 50% of the value of the corporation's outstanding
12    stock.
13        (4) A corporation and any party related to that
14    corporation in a manner that would require an attribution
15    of stock from the corporation to the party or from the
16    party to the corporation under the attribution rules of
17    Section 318 of the Internal Revenue Code, if the
18    corporation and all such related parties own in the
19    aggregate at least 50% of the profits, capital, stock, or
20    value of the Taxpayer.
21        (5) A person to or from whom there is attribution of
22    stock ownership in accordance with Section 1563(e) of the
23    Internal Revenue Code, except, for purposes of determining
24    whether a person is a Related Member under this paragraph,
25    20% shall be substituted for 5% wherever 5% appears in
26    Section 1563(e) of the Internal Revenue Code.

 

 

10000HB0160ham001- 101 -LRB100 02289 HLH 26491 a

1    "Taxpayer" means an individual, corporation, partnership,
2or other entity that has any Illinois Income Tax liability.
3    "Underserved area" means a geographic area that meets one
4or more of the following conditions:
5        (1) the area has a poverty rate of at least 20%
6    according to the latest federal decennial census;
7        (2) 50% or more of the children in the area participate
8    in the federal free lunch program according to reported
9    statistics from the State Board of Education;
10        (3) at least 20% of the households in the area receive
11    assistance under the Supplemental Nutrition Assistance
12    Program (SNAP); or
13        (4) the area has an average unemployment rate, as
14    determined by the Illinois Department of Employment
15    Security, that is more than 120% of the national
16    unemployment average, as determined by the U.S. Department
17    of Labor, for a period of at least 2 consecutive calendar
18    years preceding the date of the application.
19(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
 
20    (35 ILCS 10/5-10)
21    Sec. 5-10. Powers of the Department. The Department, in
22addition to those powers granted under the Civil Administrative
23Code of Illinois, is granted and shall have all the powers
24necessary or convenient to carry out and effectuate the
25purposes and provisions of this Act, including, but not limited

 

 

10000HB0160ham001- 102 -LRB100 02289 HLH 26491 a

1to, power and authority to:
2    (a) Promulgate procedures, rules, or regulations deemed
3necessary and appropriate for the administration of the
4programs; establish forms for applications, notifications,
5contracts, or any other agreements; and accept applications at
6any time during the year.
7    (b) Provide and assist Taxpayers pursuant to the provisions
8of this Act, and cooperate with Taxpayers that are parties to
9Agreements to promote, foster, and support economic
10development, capital investment, and job creation or retention
11within the State.
12    (c) Enter into agreements and memoranda of understanding
13for participation of and engage in cooperation with agencies of
14the federal government, local units of government,
15universities, research foundations or institutions, regional
16economic development corporations, or other organizations for
17the purposes of this Act.
18    (d) Gather information and conduct inquiries, in the manner
19and by the methods as it deems desirable, including without
20limitation, gathering information with respect to Applicants
21for the purpose of making any designations or certifications
22necessary or desirable or to gather information to assist the
23Committee with any recommendation or guidance in the
24furtherance of the purposes of this Act.
25    (e) Establish, negotiate and effectuate any term,
26agreement or other document with any person, necessary or

 

 

10000HB0160ham001- 103 -LRB100 02289 HLH 26491 a

1appropriate to accomplish the purposes of this Act; and to
2consent, subject to the provisions of any Agreement with
3another party, to the modification or restructuring of any
4Agreement to which the Department is a party.
5    (f) Fix, determine, charge, and collect any premiums, fees,
6charges, costs, and expenses from Applicants, including,
7without limitation, any application fees, commitment fees,
8program fees, financing charges, or publication fees as deemed
9appropriate to pay expenses necessary or incident to the
10administration, staffing, or operation in connection with the
11Department's or Committee's activities under this Act, or for
12preparation, implementation, and enforcement of the terms of
13the Agreement, or for consultation, advisory and legal fees,
14and other costs; however, all fees and expenses incident
15thereto shall be the responsibility of the Applicant.
16    (g) Provide for sufficient personnel to permit
17administration, staffing, operation, and related support
18required to adequately discharge its duties and
19responsibilities described in this Act from funds made
20available through charges to Applicants or from funds as may be
21appropriated by the General Assembly for the administration of
22this Act.
23    (h) Require Applicants, upon written request, to issue any
24necessary authorization to the appropriate federal, state, or
25local authority for the release of information concerning a
26project being considered under the provisions of this Act, with

 

 

10000HB0160ham001- 104 -LRB100 02289 HLH 26491 a

1the information requested to include, but not be limited to,
2financial reports, returns, or records relating to the
3Taxpayers' or its project.
4    (i) Require that a Taxpayer shall at all times keep proper
5books of record and account in accordance with generally
6accepted accounting principles consistently applied, with the
7books, records, or papers related to the Agreement in the
8custody or control of the Taxpayer open for reasonable
9Department inspection and audits, and including, without
10limitation, the making of copies of the books, records, or
11papers, and the inspection or appraisal of any of the Taxpayer
12or project assets.
13    (j) Take whatever actions are necessary or appropriate to
14protect the State's interest in the event of bankruptcy,
15default, foreclosure, or noncompliance with the terms and
16conditions of financial assistance or participation required
17under this Act, including the power to sell, dispose, lease, or
18rent, upon terms and conditions determined by the Director to
19be appropriate, real or personal property that the Department
20may receive as a result of these actions.
21(Source: P.A. 91-476, eff. 8-11-99.)
 
22    (35 ILCS 10/5-15)
23    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
24forth in this Act, a Taxpayer is entitled to a Credit against
25or, as described in subsection (g) of this Section, a payment

 

 

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1towards taxes imposed pursuant to subsections (a) and (b) of
2Section 201 of the Illinois Income Tax Act that may be imposed
3on the Taxpayer for a taxable year beginning on or after
4January 1, 1999, if the Taxpayer is awarded a Credit by the
5Department under this Act for that taxable year.
6    (a) The Department shall make Credit awards under this Act
7to foster job creation and retention in Illinois.
8    (b) A person that proposes a project to create new jobs in
9Illinois must enter into an Agreement with the Department for
10the Credit under this Act.
11    (c) The Credit shall be claimed for the taxable years
12specified in the Agreement.
13    (d) The Credit shall not exceed the Incremental Income Tax
14attributable to the project that is the subject of the
15Agreement.
16    (e) Nothing herein shall prohibit a Tax Credit Award to an
17Applicant that uses a PEO if all other award criteria are
18satisfied.
19    (f) In lieu of the Credit allowed under this Act against
20the taxes imposed pursuant to subsections (a) and (b) of
21Section 201 of the Illinois Income Tax Act for any taxable year
22ending on or after December 31, 2009, for Taxpayers that
23entered into Agreements prior to January 1, 2015 and otherwise
24meet the criteria set forth in this subsection (f), the
25Taxpayer may elect to claim the Credit against its obligation
26to pay over withholding under Section 704A of the Illinois

 

 

10000HB0160ham001- 106 -LRB100 02289 HLH 26491 a

1Income Tax Act.
2        (1) The election under this subsection (f) may be made
3    only by a Taxpayer that (i) is primarily engaged in one of
4    the following business activities: water purification and
5    treatment, motor vehicle metal stamping, automobile
6    manufacturing, automobile and light duty motor vehicle
7    manufacturing, motor vehicle manufacturing, light truck
8    and utility vehicle manufacturing, heavy duty truck
9    manufacturing, motor vehicle body manufacturing, cable
10    television infrastructure design or manufacturing, or
11    wireless telecommunication or computing terminal device
12    design or manufacturing for use on public networks and (ii)
13    meets the following criteria:
14            (A) the Taxpayer (i) had an Illinois net loss or an
15        Illinois net loss deduction under Section 207 of the
16        Illinois Income Tax Act for the taxable year in which
17        the Credit is awarded, (ii) employed a minimum of 1,000
18        full-time employees in this State during the taxable
19        year in which the Credit is awarded, (iii) has an
20        Agreement under this Act on December 14, 2009 (the
21        effective date of Public Act 96-834), and (iv) is in
22        compliance with all provisions of that Agreement;
23            (B) the Taxpayer (i) had an Illinois net loss or an
24        Illinois net loss deduction under Section 207 of the
25        Illinois Income Tax Act for the taxable year in which
26        the Credit is awarded, (ii) employed a minimum of 1,000

 

 

10000HB0160ham001- 107 -LRB100 02289 HLH 26491 a

1        full-time employees in this State during the taxable
2        year in which the Credit is awarded, and (iii) has
3        applied for an Agreement within 365 days after December
4        14, 2009 (the effective date of Public Act 96-834);
5            (C) the Taxpayer (i) had an Illinois net operating
6        loss carryforward under Section 207 of the Illinois
7        Income Tax Act in a taxable year ending during calendar
8        year 2008, (ii) has applied for an Agreement within 150
9        days after the effective date of this amendatory Act of
10        the 96th General Assembly, (iii) creates at least 400
11        new jobs in Illinois, (iv) retains at least 2,000 jobs
12        in Illinois that would have been at risk of relocation
13        out of Illinois over a 10-year period, and (v) makes a
14        capital investment of at least $75,000,000;
15            (D) the Taxpayer (i) had an Illinois net operating
16        loss carryforward under Section 207 of the Illinois
17        Income Tax Act in a taxable year ending during calendar
18        year 2009, (ii) has applied for an Agreement within 150
19        days after the effective date of this amendatory Act of
20        the 96th General Assembly, (iii) creates at least 150
21        new jobs, (iv) retains at least 1,000 jobs in Illinois
22        that would have been at risk of relocation out of
23        Illinois over a 10-year period, and (v) makes a capital
24        investment of at least $57,000,000; or
25            (E) the Taxpayer (i) employed at least 2,500
26        full-time employees in the State during the year in

 

 

10000HB0160ham001- 108 -LRB100 02289 HLH 26491 a

1        which the Credit is awarded, (ii) commits to make at
2        least $500,000,000 in combined capital improvements
3        and project costs under the Agreement, (iii) applies
4        for an Agreement between January 1, 2011 and June 30,
5        2011, (iv) executes an Agreement for the Credit during
6        calendar year 2011, and (v) was incorporated no more
7        than 5 years before the filing of an application for an
8        Agreement.
9        (1.5) The election under this subsection (f) may also
10    be made by a Taxpayer for any Credit awarded pursuant to an
11    agreement that was executed between January 1, 2011 and
12    June 30, 2011, if the Taxpayer (i) is primarily engaged in
13    the manufacture of inner tubes or tires, or both, from
14    natural and synthetic rubber, (ii) employs a minimum of
15    2,400 full-time employees in Illinois at the time of
16    application, (iii) creates at least 350 full-time jobs and
17    retains at least 250 full-time jobs in Illinois that would
18    have been at risk of being created or retained outside of
19    Illinois, and (iv) makes a capital investment of at least
20    $200,000,000 at the project location.
21        (1.6) The election under this subsection (f) may also
22    be made by a Taxpayer for any Credit awarded pursuant to an
23    agreement that was executed within 150 days after the
24    effective date of this amendatory Act of the 97th General
25    Assembly, if the Taxpayer (i) is primarily engaged in the
26    operation of a discount department store, (ii) maintains

 

 

10000HB0160ham001- 109 -LRB100 02289 HLH 26491 a

1    its corporate headquarters in Illinois, (iii) employs a
2    minimum of 4,250 full-time employees at its corporate
3    headquarters in Illinois at the time of application, (iv)
4    retains at least 4,250 full-time jobs in Illinois that
5    would have been at risk of being relocated outside of
6    Illinois, (v) had a minimum of $40,000,000,000 in total
7    revenue in 2010, and (vi) makes a capital investment of at
8    least $300,000,000 at the project location.
9        (1.7) Notwithstanding any other provision of law, the
10    election under this subsection (f) may also be made by a
11    Taxpayer for any Credit awarded pursuant to an agreement
12    that was executed or applied for on or after July 1, 2011
13    and on or before March 31, 2012, if the Taxpayer is
14    primarily engaged in the manufacture of original and
15    aftermarket filtration parts and products for automobiles,
16    motor vehicles, light duty motor vehicles, light trucks and
17    utility vehicles, and heavy duty trucks, (ii) employs a
18    minimum of 1,000 full-time employees in Illinois at the
19    time of application, (iii) creates at least 250 full-time
20    jobs in Illinois, (iv) relocates its corporate
21    headquarters to Illinois from another state, and (v) makes
22    a capital investment of at least $4,000,000 at the project
23    location.
24        (2) An election under this subsection shall allow the
25    credit to be taken against payments otherwise due under
26    Section 704A of the Illinois Income Tax Act during the

 

 

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1    first calendar year beginning after the end of the taxable
2    year in which the credit is awarded under this Act.
3        (3) The election shall be made in the form and manner
4    required by the Illinois Department of Revenue and, once
5    made, shall be irrevocable.
6        (4) If a Taxpayer who meets the requirements of
7    subparagraph (A) of paragraph (1) of this subsection (f)
8    elects to claim the Credit against its withholdings as
9    provided in this subsection (f), then, on and after the
10    date of the election, the terms of the Agreement between
11    the Taxpayer and the Department may not be further amended
12    during the term of the Agreement.
13    (g) A pass-through entity that has been awarded a credit
14under this Act, its shareholders, or its partners may treat
15some or all of the credit awarded pursuant to this Act as a tax
16payment for purposes of the Illinois Income Tax Act. The term
17"tax payment" means a payment as described in Article 6 or
18Article 8 of the Illinois Income Tax Act or a composite payment
19made by a pass-through entity on behalf of any of its
20shareholders or partners to satisfy such shareholders' or
21partners' taxes imposed pursuant to subsections (a) and (b) of
22Section 201 of the Illinois Income Tax Act. In no event shall
23the amount of the award credited pursuant to this Act exceed
24the Illinois income tax liability of the pass-through entity or
25its shareholders or partners for the taxable year.
26(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;

 

 

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196-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
23-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
3    (35 ILCS 10/5-20)
4    Sec. 5-20. Application for a project to create and retain
5new jobs.
6    (a) Any Taxpayer proposing a project located or planned to
7be located in Illinois may request consideration for
8designation of its project, by formal written letter of request
9or by formal application to the Department, in which the
10Applicant states its intent to make at least a specified level
11of investment and intends to hire or retain a specified number
12of full-time employees at a designated location in Illinois. As
13circumstances require, the Department may require a formal
14application from an Applicant and a formal letter of request
15for assistance.
16    (b) In order to qualify for Credits under this Act, an
17Applicant's project must:
18        (1) if the Applicant has more than 100 employees,
19    involve an investment of at least $2,500,000 $5,000,000 in
20    capital improvements to be placed in service and to employ
21    at least 25 New Employees within the State as a direct
22    result of the project; if the Applicant has 100 or fewer
23    employees, then there is no capital investment
24    requirement; and
25        (1.5) if the Applicant has more than 100 employees,

 

 

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1    employ a number of new employees in the State equal to the
2    lesser of (A) 10% of the number of full-time employees
3    employed by the applicant world-wide on the date the
4    application is filed with the Department or (B) 50 New
5    Employees; and, if the Applicant has 100 or fewer
6    employees, employ a number of new employees in the State
7    equal to the lesser of (A) 5% of the number of full-time
8    employees employed by the applicant world-wide on the date
9    the application is filed with the Department or (B) 50 New
10    Employees;
11        (2) (blank); involve an investment of at least an
12    amount (to be expressly specified by the Department and the
13    Committee) in capital improvements to be placed in service
14    and will employ at least an amount (to be expressly
15    specified by the Department and the Committee) of New
16    Employees within the State, provided that the Department
17    and the Committee have determined that the project will
18    provide a substantial economic benefit to the State; or
19        (3) (blank). if the applicant has 100 or fewer
20    employees, involve an investment of at least $1,000,000 in
21    capital improvements to be placed in service and to employ
22    at least 5 New Employees within the State as a direct
23    result of the project.
24    (c) After receipt of an application, the Department may
25enter into an Agreement with the Applicant if the application
26is accepted in accordance with Section 5-25.

 

 

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1(Source: P.A. 93-882, eff. 1-1-05.)
 
2    (35 ILCS 10/5-25)
3    Sec. 5-25. Review of Application.
4    (a) In addition to those duties granted under the Illinois
5Economic Development Board Act, the Illinois Economic
6Development Board shall form a Business Investment Committee
7for the purpose of making recommendations for applications. At
8the request of the Board, the Director of Commerce and Economic
9Opportunity or his or her designee, the Director of the
10Governor's Office of Management and Budget or his or her
11designee, the Director of Revenue or his or her designee, the
12Director of Employment Security or his or her designee, and an
13elected official of the affected locality, such as the chair of
14the county board or the mayor, may serve as members of the
15Committee to assist with its analysis and deliberations.
16    (b) At the Department's request, the Committee shall
17convene, make inquiries, and conduct studies in the manner and
18by the methods as it deems desirable, review information with
19respect to Applicants, and make recommendations for projects to
20benefit the State. In making its recommendation that an
21Applicant's application for Credit should or should not be
22accepted, which shall occur within a reasonable time frame as
23determined by the nature of the application, the Committee
24shall determine that all the following conditions exist:
25        (1) The Applicant's project intends, as required by

 

 

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1    subsection (b) of Section 5-20 to make the required
2    investment in the State and intends to hire the required
3    number of New Employees in Illinois as a result of that
4    project.
5        (2) The Applicant's project is economically sound and
6    will benefit the people of the State of Illinois by
7    increasing opportunities for employment and strengthen the
8    economy of Illinois.
9        (3) That, if not for the Credit, the project would not
10    occur in Illinois, which may be demonstrated by evidence
11    that receipt of the Credit is essential to the Applicant's
12    decision to create new jobs in the State, such as the
13    magnitude of the cost differential between Illinois and a
14    competing State any means including, but not limited to,
15    evidence the Applicant has multi-state location options
16    and could reasonably and efficiently locate outside of the
17    State, or demonstration that at least one other state is
18    being considered for the project, or evidence the receipt
19    of the Credit is a major factor in the Applicant's decision
20    and that without the Credit, the Applicant likely would not
21    create new jobs in Illinois, or demonstration that
22    receiving the Credit is essential to the Applicant's
23    decision to create or retain new jobs in the State.
24        (4) A cost differential is identified, using best
25    available data, in the projected costs for the Applicant's
26    project compared to the costs in the competing state,

 

 

10000HB0160ham001- 115 -LRB100 02289 HLH 26491 a

1    including the impact of the competing state's incentive
2    programs. The competing state's incentive programs shall
3    include state, local, private, and federal funds
4    available.
5        (5) The political subdivisions affected by the project
6    have committed local incentives with respect to the
7    project, considering local ability to assist.
8        (6) Awarding the Credit will result in an overall
9    positive fiscal impact to the State, as certified by the
10    Committee using the best available data.
11        (7) The Credit is not prohibited by Section 5-35 of
12    this Act.
13(Source: P.A. 94-793, eff. 5-19-06.)
 
14    (35 ILCS 10/5-50)
15    Sec. 5-50. Contents of Agreements with Applicants. The
16Department shall enter into an Agreement with an Applicant that
17is awarded a Credit under this Act. The Agreement must include
18all of the following:
19        (1) A detailed description of the project that is the
20    subject of the Agreement, including the location and amount
21    of the investment and jobs created or retained.
22        (2) The duration of the Credit and the first taxable
23    year for which the Credit may be claimed.
24        (3) The Credit amount that will be allowed for each
25    taxable year.

 

 

10000HB0160ham001- 116 -LRB100 02289 HLH 26491 a

1        (4) A requirement that the Taxpayer shall maintain
2    operations at the project location that shall be stated as
3    a minimum number of years not to exceed 10.
4        (5) A specific method for determining the number of New
5    Employees employed during a taxable year.
6        (6) A requirement that the Taxpayer shall annually
7    report to the Department the number of New Employees, the
8    Incremental Income Tax withheld in connection with the New
9    Employees, and any other information the Director needs to
10    perform the Director's duties under this Act.
11        (7) A requirement that the Director is authorized to
12    verify with the appropriate State agencies the amounts
13    reported under paragraph (6), and after doing so shall
14    issue a certificate to the Taxpayer stating that the
15    amounts have been verified.
16        (8) A requirement that the Taxpayer shall provide
17    written notification to the Director not more than 30 days
18    after the Taxpayer makes or receives a proposal that would
19    transfer the Taxpayer's State tax liability obligations to
20    a successor Taxpayer.
21        (9) A detailed description of the number of New
22    Employees to be hired, and the occupation and payroll of
23    the full-time jobs to be created or retained as a result of
24    the project.
25        (10) The minimum investment the business enterprise
26    will make in capital improvements, the time period for

 

 

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1    placing the property in service, and the designated
2    location in Illinois for the investment.
3        (11) A requirement that the Taxpayer shall provide
4    written notification to the Director and the Committee not
5    more than 30 days after the Taxpayer determines that the
6    minimum job creation or retention, employment payroll, or
7    investment no longer is being or will be achieved or
8    maintained as set forth in the terms and conditions of the
9    Agreement.
10        (12) A provision that, if the total number of New
11    Employees falls below a specified level, the allowance of
12    Credit shall be suspended until the number of New Employees
13    equals or exceeds the Agreement amount.
14        (13) A detailed description of the items for which the
15    costs incurred by the Taxpayer will be included in the
16    limitation on the Credit provided in Section 5-30.
17        (13.5) A provision that, if the Taxpayer never meets
18    either the investment or job creation and retention
19    requirements specified in the Agreement during the entire
20    5-year period beginning on the first day of the first
21    taxable year in which the Agreement is executed and ending
22    on the last day of the fifth taxable year after the
23    Agreement is executed, then the Agreement is automatically
24    terminated on the last day of the fifth taxable year after
25    the Agreement is executed and the Taxpayer is not entitled
26    to the award of any credits for any of that 5-year period.

 

 

10000HB0160ham001- 118 -LRB100 02289 HLH 26491 a

1        (14) Any other performance conditions or contract
2    provisions as the Department determines are appropriate.
3    The Department shall post on its website the terms of each
4Agreement entered into under this Act on or after the effective
5date of this amendatory Act of the 97th General Assembly. Such
6information shall be posted within 10 days after entering into
7the Agreement and must include the following:
8        (1) the name of the recipient business;
9        (2) the location of the project;
10        (3) the estimated value of the credit;
11        (4) the number of new jobs pledged as a result of the
12    project; and
13        (5) whether or not the project is located in an
14    underserved area.
15(Source: P.A. 97-2, eff. 5-6-11; 97-749, eff. 7-6-12.)
 
16    (35 ILCS 10/5-57 new)
17    Sec. 5-57. Supplier diversity goals; reports. Each
18taxpayer claiming a credit under this Act shall, no later than
19April 15 of each taxable year for which the taxpayer claims a
20credit under this Act, submit to the Department of Commerce and
21Economic Opportunity an annual report containing the
22information described in subsections (b), (c), (d), and (e) of
23Section 5-117 of the Public Utilities Act. Those reports shall
24be submitted in the form and manner required by the Department
25of Commerce and Economic Opportunity.
 

 

 

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1    (35 ILCS 10/5-65)
2    Sec. 5-65. Noncompliance; notice; assessment. If the
3Director determines that a Taxpayer who has received a Credit
4under this Act is not complying with the requirements of the
5Agreement or all of the provisions of this Act, the Director
6shall provide notice to the Taxpayer of the alleged
7noncompliance, and allow the Taxpayer a hearing under the
8provisions of the Illinois Administrative Procedure Act. If,
9after such notice and any hearing, the Director determines that
10a noncompliance exists, the Director shall issue to the
11Department of Revenue notice to that effect, stating the
12Noncompliance Date. If, during the term of the Agreement, the
13Taxpayer ceases operations at a project location that is the
14subject of an Agreement with the intent to terminate operations
15in the State, the Department and the Department of Revenue
16shall recapture from the Taxpayer the entire Credit amount
17awarded prior to the date the taxpayer ceases operations.
18(Source: P.A. 91-476, eff. 8-11-99.)
 
19    (35 ILCS 10/5-70)
20    Sec. 5-70. Annual report. On or before July 1 each year,
21the Committee shall submit a report to the Department on the
22tax credit program under this Act to the Governor and the
23General Assembly. The report shall include information on the
24number of Agreements that were entered into under this Act

 

 

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1during the preceding calendar year, a description of the
2project that is the subject of each Agreement, an update on the
3status of projects under Agreements entered into before the
4preceding calendar year, and the sum of the Credits awarded
5under this Act. A copy of the report shall be delivered to the
6Governor and to each member of the General Assembly.
7    The report must include, for each Agreement:
8        (1) the original estimates of the value of the Credit
9    and the number of new jobs to be created;
10        (2) any relevant modifications to existing Agreements;
11        (3) a statement of the progress made by each Taxpayer
12    in meeting the terms of the original Agreement;
13        (4) a statement of wages paid to New Employees and
14    existing employees in the State;
15        (5) any information reported under Section 5-57 of this
16    Act; and
17        (6) a copy of the original Agreement.
18(Source: P.A. 91-476, eff. 8-11-99.)
 
19
ARTICLE 15. FILM AND THEATER TAX CREDITS

 
20    Section 15-5. The Film Production Services Tax Credit Act
21of 2008 is amended by changing Section 42 as follows:
 
22    (35 ILCS 16/42)
23    Sec. 42. Sunset of credits. The application of credits

 

 

10000HB0160ham001- 121 -LRB100 02289 HLH 26491 a

1awarded pursuant to this Act shall be limited by a reasonable
2and appropriate sunset date. A taxpayer shall not be entitled
3to take a credit awarded pursuant to this Act for tax years
4beginning on or after January 1, 2026. 10 years after the
5effective date of this amendatory Act of the 97th General
6Assembly. After the initial 10-year sunset, the General
7Assembly may extend the sunset date by 5-year intervals.
8(Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
 
9    Section 15-10. The Live Theater Production Tax Credit Act
10is amended by adding Section 10-56 as follows:
 
11    (35 ILCS 17/10-56 new)
12    Sec. 10-56. Sunset of credits. A taxpayer shall not be
13entitled to take a credit awarded pursuant to this Act for tax
14years beginning on or after January 1, 2022.
 
15
ARTICLE 20. USE AND OCCUPATION TAXES

 
16    Section 20-5. The Use Tax Act is amended by changing
17Sections 2 and 3-5 as follows:
 
18    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
19    Sec. 2. Definitions.
20    "Use" means the exercise by any person of any right or
21power over tangible personal property incident to the ownership

 

 

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1of that property, except that it does not include the sale of
2such property in any form as tangible personal property in the
3regular course of business to the extent that such property is
4not first subjected to a use for which it was purchased, and
5does not include the use of such property by its owner for
6demonstration purposes: Provided that the property purchased
7is deemed to be purchased for the purpose of resale, despite
8first being used, to the extent to which it is resold as an
9ingredient of an intentionally produced product or by-product
10of manufacturing. "Use" does not mean the demonstration use or
11interim use of tangible personal property by a retailer before
12he sells that tangible personal property. For watercraft or
13aircraft, if the period of demonstration use or interim use by
14the retailer exceeds 18 months, the retailer shall pay on the
15retailers' original cost price the tax imposed by this Act, and
16no credit for that tax is permitted if the watercraft or
17aircraft is subsequently sold by the retailer. "Use" does not
18mean the physical incorporation of tangible personal property,
19to the extent not first subjected to a use for which it was
20purchased, as an ingredient or constituent, into other tangible
21personal property (a) which is sold in the regular course of
22business or (b) which the person incorporating such ingredient
23or constituent therein has undertaken at the time of such
24purchase to cause to be transported in interstate commerce to
25destinations outside the State of Illinois: Provided that the
26property purchased is deemed to be purchased for the purpose of

 

 

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1resale, despite first being used, to the extent to which it is
2resold as an ingredient of an intentionally produced product or
3by-product of manufacturing.
4    "Watercraft" means a Class 2, Class 3, or Class 4
5watercraft as defined in Section 3-2 of the Boat Registration
6and Safety Act, a personal watercraft, or any boat equipped
7with an inboard motor.
8    "Purchase at retail" means the acquisition of the ownership
9of or title to tangible personal property through a sale at
10retail.
11    "Purchaser" means anyone who, through a sale at retail,
12acquires the ownership of tangible personal property for a
13valuable consideration.
14    "Sale at retail" means any transfer of the ownership of or
15title to tangible personal property to a purchaser, for the
16purpose of use, and not for the purpose of resale in any form
17as tangible personal property to the extent not first subjected
18to a use for which it was purchased, for a valuable
19consideration: Provided that the property purchased is deemed
20to be purchased for the purpose of resale, despite first being
21used, to the extent to which it is resold as an ingredient of
22an intentionally produced product or by-product of
23manufacturing. For this purpose, slag produced as an incident
24to manufacturing pig iron or steel and sold is considered to be
25an intentionally produced by-product of manufacturing. "Sale
26at retail" includes any such transfer made for resale unless

 

 

10000HB0160ham001- 124 -LRB100 02289 HLH 26491 a

1made in compliance with Section 2c of the Retailers' Occupation
2Tax Act, as incorporated by reference into Section 12 of this
3Act. Transactions whereby the possession of the property is
4transferred but the seller retains the title as security for
5payment of the selling price are sales.
6    "Sale at retail" shall also be construed to include any
7Illinois florist's sales transaction in which the purchase
8order is received in Illinois by a florist and the sale is for
9use or consumption, but the Illinois florist has a florist in
10another state deliver the property to the purchaser or the
11purchaser's donee in such other state.
12    Nonreusable tangible personal property that is used by
13persons engaged in the business of operating a restaurant,
14cafeteria, or drive-in is a sale for resale when it is
15transferred to customers in the ordinary course of business as
16part of the sale of food or beverages and is used to deliver,
17package, or consume food or beverages, regardless of where
18consumption of the food or beverages occurs. Examples of those
19items include, but are not limited to nonreusable, paper and
20plastic cups, plates, baskets, boxes, sleeves, buckets or other
21containers, utensils, straws, placemats, napkins, doggie bags,
22and wrapping or packaging materials that are transferred to
23customers as part of the sale of food or beverages in the
24ordinary course of business.
25    The purchase, employment and transfer of such tangible
26personal property as newsprint and ink for the primary purpose

 

 

10000HB0160ham001- 125 -LRB100 02289 HLH 26491 a

1of conveying news (with or without other information) is not a
2purchase, use or sale of tangible personal property.
3    "Selling price" means the consideration for a sale valued
4in money whether received in money or otherwise, including
5cash, credits, property other than as hereinafter provided, and
6services, but not including the value of or credit given for
7traded-in tangible personal property where the item that is
8traded-in is of like kind and character as that which is being
9sold, and shall be determined without any deduction on account
10of the cost of the property sold, the cost of materials used,
11labor or service cost or any other expense whatsoever, but does
12not include interest or finance charges which appear as
13separate items on the bill of sale or sales contract nor
14charges that are added to prices by sellers on account of the
15seller's tax liability under the "Retailers' Occupation Tax
16Act", or on account of the seller's duty to collect, from the
17purchaser, the tax that is imposed by this Act, or, except as
18otherwise provided with respect to any cigarette tax imposed by
19a home rule unit, on account of the seller's tax liability
20under any local occupation tax administered by the Department,
21or, except as otherwise provided with respect to any cigarette
22tax imposed by a home rule unit on account of the seller's duty
23to collect, from the purchasers, the tax that is imposed under
24any local use tax administered by the Department. Effective
25December 1, 1985, "selling price" shall include charges that
26are added to prices by sellers on account of the seller's tax

 

 

10000HB0160ham001- 126 -LRB100 02289 HLH 26491 a

1liability under the Cigarette Tax Act, on account of the
2seller's duty to collect, from the purchaser, the tax imposed
3under the Cigarette Use Tax Act, and on account of the seller's
4duty to collect, from the purchaser, any cigarette tax imposed
5by a home rule unit. Beginning January 1, 2018, "selling price"
6shall not include any shipping or delivery charges, which means
7any freight, express, mail, truck, or other carrier conveyance
8or delivery process.
9    Notwithstanding any law to the contrary, for any motor
10vehicle, as defined in Section 1-146 of the Vehicle Code, that
11is sold on or after January 1, 2015 for the purpose of leasing
12the vehicle for a defined period that is longer than one year
13and (1) is a motor vehicle of the second division that: (A) is
14a self-contained motor vehicle designed or permanently
15converted to provide living quarters for recreational,
16camping, or travel use, with direct walk through access to the
17living quarters from the driver's seat; (B) is of the van
18configuration designed for the transportation of not less than
197 nor more than 16 passengers; or (C) has a gross vehicle
20weight rating of 8,000 pounds or less or (2) is a motor vehicle
21of the first division, "selling price" or "amount of sale"
22means the consideration received by the lessor pursuant to the
23lease contract, including amounts due at lease signing and all
24monthly or other regular payments charged over the term of the
25lease. Also included in the selling price is any amount
26received by the lessor from the lessee for the leased vehicle

 

 

10000HB0160ham001- 127 -LRB100 02289 HLH 26491 a

1that is not calculated at the time the lease is executed,
2including, but not limited to, excess mileage charges and
3charges for excess wear and tear. For sales that occur in
4Illinois, with respect to any amount received by the lessor
5from the lessee for the leased vehicle that is not calculated
6at the time the lease is executed, the lessor who purchased the
7motor vehicle does not incur the tax imposed by the Use Tax Act
8on those amounts, and the retailer who makes the retail sale of
9the motor vehicle to the lessor is not required to collect the
10tax imposed by this Act or to pay the tax imposed by the
11Retailers' Occupation Tax Act on those amounts. However, the
12lessor who purchased the motor vehicle assumes the liability
13for reporting and paying the tax on those amounts directly to
14the Department in the same form (Illinois Retailers' Occupation
15Tax, and local retailers' occupation taxes, if applicable) in
16which the retailer would have reported and paid such tax if the
17retailer had accounted for the tax to the Department. For
18amounts received by the lessor from the lessee that are not
19calculated at the time the lease is executed, the lessor must
20file the return and pay the tax to the Department by the due
21date otherwise required by this Act for returns other than
22transaction returns. If the retailer is entitled under this Act
23to a discount for collecting and remitting the tax imposed
24under this Act to the Department with respect to the sale of
25the motor vehicle to the lessor, then the right to the discount
26provided in this Act shall be transferred to the lessor with

 

 

10000HB0160ham001- 128 -LRB100 02289 HLH 26491 a

1respect to the tax paid by the lessor for any amount received
2by the lessor from the lessee for the leased vehicle that is
3not calculated at the time the lease is executed; provided that
4the discount is only allowed if the return is timely filed and
5for amounts timely paid. The "selling price" of a motor vehicle
6that is sold on or after January 1, 2015 for the purpose of
7leasing for a defined period of longer than one year shall not
8be reduced by the value of or credit given for traded-in
9tangible personal property owned by the lessor, nor shall it be
10reduced by the value of or credit given for traded-in tangible
11personal property owned by the lessee, regardless of whether
12the trade-in value thereof is assigned by the lessee to the
13lessor. In the case of a motor vehicle that is sold for the
14purpose of leasing for a defined period of longer than one
15year, the sale occurs at the time of the delivery of the
16vehicle, regardless of the due date of any lease payments. A
17lessor who incurs a Retailers' Occupation Tax liability on the
18sale of a motor vehicle coming off lease may not take a credit
19against that liability for the Use Tax the lessor paid upon the
20purchase of the motor vehicle (or for any tax the lessor paid
21with respect to any amount received by the lessor from the
22lessee for the leased vehicle that was not calculated at the
23time the lease was executed) if the selling price of the motor
24vehicle at the time of purchase was calculated using the
25definition of "selling price" as defined in this paragraph.
26Notwithstanding any other provision of this Act to the

 

 

10000HB0160ham001- 129 -LRB100 02289 HLH 26491 a

1contrary, lessors shall file all returns and make all payments
2required under this paragraph to the Department by electronic
3means in the manner and form as required by the Department.
4This paragraph does not apply to leases of motor vehicles for
5which, at the time the lease is entered into, the term of the
6lease is not a defined period, including leases with a defined
7initial period with the option to continue the lease on a
8month-to-month or other basis beyond the initial defined
9period.
10    The phrase "like kind and character" shall be liberally
11construed (including but not limited to any form of motor
12vehicle for any form of motor vehicle, or any kind of farm or
13agricultural implement for any other kind of farm or
14agricultural implement), while not including a kind of item
15which, if sold at retail by that retailer, would be exempt from
16retailers' occupation tax and use tax as an isolated or
17occasional sale.
18    "Department" means the Department of Revenue.
19    "Person" means any natural individual, firm, partnership,
20association, joint stock company, joint adventure, public or
21private corporation, limited liability company, or a receiver,
22executor, trustee, guardian or other representative appointed
23by order of any court.
24    "Retailer" means and includes every person engaged in the
25business of making sales at retail as defined in this Section.
26    A person who holds himself or herself out as being engaged

 

 

10000HB0160ham001- 130 -LRB100 02289 HLH 26491 a

1(or who habitually engages) in selling tangible personal
2property at retail is a retailer hereunder with respect to such
3sales (and not primarily in a service occupation)
4notwithstanding the fact that such person designs and produces
5such tangible personal property on special order for the
6purchaser and in such a way as to render the property of value
7only to such purchaser, if such tangible personal property so
8produced on special order serves substantially the same
9function as stock or standard items of tangible personal
10property that are sold at retail.
11    A person whose activities are organized and conducted
12primarily as a not-for-profit service enterprise, and who
13engages in selling tangible personal property at retail
14(whether to the public or merely to members and their guests)
15is a retailer with respect to such transactions, excepting only
16a person organized and operated exclusively for charitable,
17religious or educational purposes either (1), to the extent of
18sales by such person to its members, students, patients or
19inmates of tangible personal property to be used primarily for
20the purposes of such person, or (2), to the extent of sales by
21such person of tangible personal property which is not sold or
22offered for sale by persons organized for profit. The selling
23of school books and school supplies by schools at retail to
24students is not "primarily for the purposes of" the school
25which does such selling. This paragraph does not apply to nor
26subject to taxation occasional dinners, social or similar

 

 

10000HB0160ham001- 131 -LRB100 02289 HLH 26491 a

1activities of a person organized and operated exclusively for
2charitable, religious or educational purposes, whether or not
3such activities are open to the public.
4    A person who is the recipient of a grant or contract under
5Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
6serves meals to participants in the federal Nutrition Program
7for the Elderly in return for contributions established in
8amount by the individual participant pursuant to a schedule of
9suggested fees as provided for in the federal Act is not a
10retailer under this Act with respect to such transactions.
11    Persons who engage in the business of transferring tangible
12personal property upon the redemption of trading stamps are
13retailers hereunder when engaged in such business.
14    The isolated or occasional sale of tangible personal
15property at retail by a person who does not hold himself out as
16being engaged (or who does not habitually engage) in selling
17such tangible personal property at retail or a sale through a
18bulk vending machine does not make such person a retailer
19hereunder. However, any person who is engaged in a business
20which is not subject to the tax imposed by the "Retailers'
21Occupation Tax Act" because of involving the sale of or a
22contract to sell real estate or a construction contract to
23improve real estate, but who, in the course of conducting such
24business, transfers tangible personal property to users or
25consumers in the finished form in which it was purchased, and
26which does not become real estate, under any provision of a

 

 

10000HB0160ham001- 132 -LRB100 02289 HLH 26491 a

1construction contract or real estate sale or real estate sales
2agreement entered into with some other person arising out of or
3because of such nontaxable business, is a retailer to the
4extent of the value of the tangible personal property so
5transferred. If, in such transaction, a separate charge is made
6for the tangible personal property so transferred, the value of
7such property, for the purposes of this Act, is the amount so
8separately charged, but not less than the cost of such property
9to the transferor; if no separate charge is made, the value of
10such property, for the purposes of this Act, is the cost to the
11transferor of such tangible personal property.
12    "Retailer maintaining a place of business in this State",
13or any like term, means and includes any of the following
14retailers:
15        1. A retailer having or maintaining within this State,
16    directly or by a subsidiary, an office, distribution house,
17    sales house, warehouse or other place of business, or any
18    agent or other representative operating within this State
19    under the authority of the retailer or its subsidiary,
20    irrespective of whether such place of business or agent or
21    other representative is located here permanently or
22    temporarily, or whether such retailer or subsidiary is
23    licensed to do business in this State. However, the
24    ownership of property that is located at the premises of a
25    printer with which the retailer has contracted for printing
26    and that consists of the final printed product, property

 

 

10000HB0160ham001- 133 -LRB100 02289 HLH 26491 a

1    that becomes a part of the final printed product, or copy
2    from which the printed product is produced shall not result
3    in the retailer being deemed to have or maintain an office,
4    distribution house, sales house, warehouse, or other place
5    of business within this State.
6        1.1. A retailer having a contract with a person located
7    in this State under which the person, for a commission or
8    other consideration based upon the sale of tangible
9    personal property by the retailer, directly or indirectly
10    refers potential customers to the retailer by providing to
11    the potential customers a promotional code or other
12    mechanism that allows the retailer to track purchases
13    referred by such persons. Examples of mechanisms that allow
14    the retailer to track purchases referred by such persons
15    include but are not limited to the use of a link on the
16    person's Internet website, promotional codes distributed
17    through the person's hand-delivered or mailed material,
18    and promotional codes distributed by the person through
19    radio or other broadcast media. The provisions of this
20    paragraph 1.1 shall apply only if the cumulative gross
21    receipts from sales of tangible personal property by the
22    retailer to customers who are referred to the retailer by
23    all persons in this State under such contracts exceed
24    $10,000 during the preceding 4 quarterly periods ending on
25    the last day of March, June, September, and December. A
26    retailer meeting the requirements of this paragraph 1.1

 

 

10000HB0160ham001- 134 -LRB100 02289 HLH 26491 a

1    shall be presumed to be maintaining a place of business in
2    this State but may rebut this presumption by submitting
3    proof that the referrals or other activities pursued within
4    this State by such persons were not sufficient to meet the
5    nexus standards of the United States Constitution during
6    the preceding 4 quarterly periods.
7        1.2. Beginning July 1, 2011, a retailer having a
8    contract with a person located in this State under which:
9            A. the retailer sells the same or substantially
10        similar line of products as the person located in this
11        State and does so using an identical or substantially
12        similar name, trade name, or trademark as the person
13        located in this State; and
14            B. the retailer provides a commission or other
15        consideration to the person located in this State based
16        upon the sale of tangible personal property by the
17        retailer.
18    The provisions of this paragraph 1.2 shall apply only if
19    the cumulative gross receipts from sales of tangible
20    personal property by the retailer to customers in this
21    State under all such contracts exceed $10,000 during the
22    preceding 4 quarterly periods ending on the last day of
23    March, June, September, and December.
24        2. A retailer soliciting orders for tangible personal
25    property by means of a telecommunication or television
26    shopping system (which utilizes toll free numbers) which is

 

 

10000HB0160ham001- 135 -LRB100 02289 HLH 26491 a

1    intended by the retailer to be broadcast by cable
2    television or other means of broadcasting, to consumers
3    located in this State.
4        3. A retailer, pursuant to a contract with a
5    broadcaster or publisher located in this State, soliciting
6    orders for tangible personal property by means of
7    advertising which is disseminated primarily to consumers
8    located in this State and only secondarily to bordering
9    jurisdictions.
10        4. A retailer soliciting orders for tangible personal
11    property by mail if the solicitations are substantial and
12    recurring and if the retailer benefits from any banking,
13    financing, debt collection, telecommunication, or
14    marketing activities occurring in this State or benefits
15    from the location in this State of authorized installation,
16    servicing, or repair facilities.
17        5. A retailer that is owned or controlled by the same
18    interests that own or control any retailer engaging in
19    business in the same or similar line of business in this
20    State.
21        6. A retailer having a franchisee or licensee operating
22    under its trade name if the franchisee or licensee is
23    required to collect the tax under this Section.
24        7. A retailer, pursuant to a contract with a cable
25    television operator located in this State, soliciting
26    orders for tangible personal property by means of

 

 

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1    advertising which is transmitted or distributed over a
2    cable television system in this State.
3        8. A retailer engaging in activities in Illinois, which
4    activities in the state in which the retail business
5    engaging in such activities is located would constitute
6    maintaining a place of business in that state.
7    "Bulk vending machine" means a vending machine, containing
8unsorted confections, nuts, toys, or other items designed
9primarily to be used or played with by children which, when a
10coin or coins of a denomination not larger than $0.50 are
11inserted, are dispensed in equal portions, at random and
12without selection by the customer.
13(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
1498-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)
 
15    (35 ILCS 105/3-5)
16    Sec. 3-5. Exemptions. Use of the following tangible
17personal property is exempt from the tax imposed by this Act:
18    (1) Personal property purchased from a corporation,
19society, association, foundation, institution, or
20organization, other than a limited liability company, that is
21organized and operated as a not-for-profit service enterprise
22for the benefit of persons 65 years of age or older if the
23personal property was not purchased by the enterprise for the
24purpose of resale by the enterprise.
25    (2) Personal property purchased by a not-for-profit

 

 

10000HB0160ham001- 137 -LRB100 02289 HLH 26491 a

1Illinois county fair association for use in conducting,
2operating, or promoting the county fair.
3    (3) Personal property purchased by a not-for-profit arts or
4cultural organization that establishes, by proof required by
5the Department by rule, that it has received an exemption under
6Section 501(c)(3) of the Internal Revenue Code and that is
7organized and operated primarily for the presentation or
8support of arts or cultural programming, activities, or
9services. These organizations include, but are not limited to,
10music and dramatic arts organizations such as symphony
11orchestras and theatrical groups, arts and cultural service
12organizations, local arts councils, visual arts organizations,
13and media arts organizations. On and after the effective date
14of this amendatory Act of the 92nd General Assembly, however,
15an entity otherwise eligible for this exemption shall not make
16tax-free purchases unless it has an active identification
17number issued by the Department.
18    (4) Personal property purchased by a governmental body, by
19a corporation, society, association, foundation, or
20institution organized and operated exclusively for charitable,
21religious, or educational purposes, or by a not-for-profit
22corporation, society, association, foundation, institution, or
23organization that has no compensated officers or employees and
24that is organized and operated primarily for the recreation of
25persons 55 years of age or older. A limited liability company
26may qualify for the exemption under this paragraph only if the

 

 

10000HB0160ham001- 138 -LRB100 02289 HLH 26491 a

1limited liability company is organized and operated
2exclusively for educational purposes. On and after July 1,
31987, however, no entity otherwise eligible for this exemption
4shall make tax-free purchases unless it has an active exemption
5identification number issued by the Department.
6    (5) Until July 1, 2003, a passenger car that is a
7replacement vehicle to the extent that the purchase price of
8the car is subject to the Replacement Vehicle Tax.
9    (6) Until July 1, 2003 and beginning again on September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new and
12used, and including that manufactured on special order,
13certified by the purchaser to be used primarily for graphic
14arts production, and including machinery and equipment
15purchased for lease. Equipment includes chemicals or chemicals
16acting as catalysts but only if the chemicals or chemicals
17acting as catalysts effect a direct and immediate change upon a
18graphic arts product.
19    (7) Farm chemicals.
20    (8) Legal tender, currency, medallions, or gold or silver
21coinage issued by the State of Illinois, the government of the
22United States of America, or the government of any foreign
23country, and bullion.
24    (9) Personal property purchased from a teacher-sponsored
25student organization affiliated with an elementary or
26secondary school located in Illinois.

 

 

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

 

 

10000HB0160ham001- 140 -LRB100 02289 HLH 26491 a

1or spreaders. Precision farming equipment includes, but is not
2limited to, soil testing sensors, computers, monitors,
3software, global positioning and mapping systems, and other
4such equipment.
5    Farm machinery and equipment also includes computers,
6sensors, software, and related equipment used primarily in the
7computer-assisted operation of production agriculture
8facilities, equipment, and activities such as, but not limited
9to, the collection, monitoring, and correlation of animal and
10crop data for the purpose of formulating animal diets and
11agricultural chemicals. This item (11) is exempt from the
12provisions of Section 3-90.
13    (12) Until June 30, 2013, fuel and petroleum products sold
14to or used by an air common carrier, certified by the carrier
15to be used for consumption, shipment, or storage in the conduct
16of its business as an air common carrier, for a flight destined
17for or returning from a location or locations outside the
18United States without regard to previous or subsequent domestic
19stopovers.
20    Beginning July 1, 2013, fuel and petroleum products sold to
21or used by an air carrier, certified by the carrier to be used
22for consumption, shipment, or storage in the conduct of its
23business as an air common carrier, for a flight that (i) is
24engaged in foreign trade or is engaged in trade between the
25United States and any of its possessions and (ii) transports at
26least one individual or package for hire from the city of

 

 

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1origination to the city of final destination on the same
2aircraft, without regard to a change in the flight number of
3that aircraft.
4    (13) Proceeds of mandatory service charges separately
5stated on customers' bills for the purchase and consumption of
6food and beverages purchased at retail from a retailer, to the
7extent that the proceeds of the service charge are in fact
8turned over as tips or as a substitute for tips to the
9employees who participate directly in preparing, serving,
10hosting or cleaning up the food or beverage function with
11respect to which the service charge is imposed.
12    (14) Until July 1, 2003, oil field exploration, drilling,
13and production equipment, including (i) rigs and parts of rigs,
14rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
15tubular goods, including casing and drill strings, (iii) pumps
16and pump-jack units, (iv) storage tanks and flow lines, (v) any
17individual replacement part for oil field exploration,
18drilling, and production equipment, and (vi) machinery and
19equipment purchased for lease; but excluding motor vehicles
20required to be registered under the Illinois Vehicle Code.
21    (15) Photoprocessing machinery and equipment, including
22repair and replacement parts, both new and used, including that
23manufactured on special order, certified by the purchaser to be
24used primarily for photoprocessing, and including
25photoprocessing machinery and equipment purchased for lease.
26    (16) Until December 31, 2022, coal Coal and aggregate

 

 

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1exploration, mining, off-highway hauling, processing,
2maintenance, and reclamation equipment, including replacement
3parts and equipment, and including equipment purchased for
4lease, but excluding motor vehicles required to be registered
5under the Illinois Vehicle Code. The changes made to this
6Section by Public Act 97-767 apply on and after July 1, 2003,
7but no claim for credit or refund is allowed on or after August
816, 2013 (the effective date of Public Act 98-456) for such
9taxes paid during the period beginning July 1, 2003 and ending
10on August 16, 2013 (the effective date of Public Act 98-456).
11    (17) Until July 1, 2003, distillation machinery and
12equipment, sold as a unit or kit, assembled or installed by the
13retailer, certified by the user to be used only for the
14production of ethyl alcohol that will be used for consumption
15as motor fuel or as a component of motor fuel for the personal
16use of the user, and not subject to sale or resale.
17    (18) Manufacturing and assembling machinery and equipment
18used primarily in the process of manufacturing or assembling
19tangible personal property for wholesale or retail sale or
20lease, whether that sale or lease is made directly by the
21manufacturer or by some other person, whether the materials
22used in the process are owned by the manufacturer or some other
23person, or whether that sale or lease is made apart from or as
24an incident to the seller's engaging in the service occupation
25of producing machines, tools, dies, jigs, patterns, gauges, or
26other similar items of no commercial value on special order for

 

 

10000HB0160ham001- 143 -LRB100 02289 HLH 26491 a

1a particular purchaser. The exemption provided by this
2paragraph (18) does not include machinery and equipment used in
3(i) the generation of electricity for wholesale or retail sale;
4(ii) the generation or treatment of natural or artificial gas
5for wholesale or retail sale that is delivered to customers
6through pipes, pipelines, or mains; or (iii) the treatment of
7water for wholesale or retail sale that is delivered to
8customers through pipes, pipelines, or mains. The provisions of
9Public Act 98-583 are declaratory of existing law as to the
10meaning and scope of this exemption.
11    (19) Personal property delivered to a purchaser or
12purchaser's donee inside Illinois when the purchase order for
13that personal property was received by a florist located
14outside Illinois who has a florist located inside Illinois
15deliver the personal property.
16    (20) Semen used for artificial insemination of livestock
17for direct agricultural production.
18    (21) Horses, or interests in horses, registered with and
19meeting the requirements of any of the Arabian Horse Club
20Registry of America, Appaloosa Horse Club, American Quarter
21Horse Association, United States Trotting Association, or
22Jockey Club, as appropriate, used for purposes of breeding or
23racing for prizes. This item (21) is exempt from the provisions
24of Section 3-90, and the exemption provided for under this item
25(21) applies for all periods beginning May 30, 1995, but no
26claim for credit or refund is allowed on or after January 1,

 

 

10000HB0160ham001- 144 -LRB100 02289 HLH 26491 a

12008 for such taxes paid during the period beginning May 30,
22000 and ending on January 1, 2008.
3    (22) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients purchased by a
6lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time the lessor would
8otherwise be subject to the tax imposed by this Act, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act. If the equipment is leased in a
12manner that does not qualify for this exemption or is used in
13any other non-exempt manner, the lessor shall be liable for the
14tax imposed under this Act or the Service Use Tax Act, as the
15case may be, based on the fair market value of the property at
16the time the non-qualifying use occurs. No lessor shall collect
17or attempt to collect an amount (however designated) that
18purports to reimburse that lessor for the tax imposed by this
19Act or the Service Use Tax Act, as the case may be, if the tax
20has not been paid by the lessor. If a lessor improperly
21collects any such amount from the lessee, the lessee shall have
22a legal right to claim a refund of that amount from the lessor.
23If, however, that amount is not refunded to the lessee for any
24reason, the lessor is liable to pay that amount to the
25Department.
26    (23) Personal property purchased by a lessor who leases the

 

 

10000HB0160ham001- 145 -LRB100 02289 HLH 26491 a

1property, under a lease of one year or longer executed or in
2effect at the time the lessor would otherwise be subject to the
3tax imposed by this Act, to a governmental body that has been
4issued an active sales tax exemption identification number by
5the Department under Section 1g of the Retailers' Occupation
6Tax Act. If the property is leased in a manner that does not
7qualify for this exemption or used in any other non-exempt
8manner, the lessor shall be liable for the tax imposed under
9this Act or the Service Use Tax Act, as the case may be, based
10on the fair market value of the property at the time the
11non-qualifying use occurs. No lessor shall collect or attempt
12to collect an amount (however designated) that purports to
13reimburse that lessor for the tax imposed by this Act or the
14Service Use Tax Act, as the case may be, if the tax has not been
15paid by the lessor. If a lessor improperly collects any such
16amount from the lessee, the lessee shall have a legal right to
17claim a refund of that amount from the lessor. If, however,
18that amount is not refunded to the lessee for any reason, the
19lessor is liable to pay that amount to the Department.
20    (24) Beginning with taxable years ending on or after
21December 31, 1995 and ending with taxable years ending on or
22before December 31, 2004, personal property that is donated for
23disaster relief to be used in a State or federally declared
24disaster area in Illinois or bordering Illinois by a
25manufacturer or retailer that is registered in this State to a
26corporation, society, association, foundation, or institution

 

 

10000HB0160ham001- 146 -LRB100 02289 HLH 26491 a

1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (25) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in the
7performance of infrastructure repairs in this State, including
8but not limited to municipal roads and streets, access roads,
9bridges, sidewalks, waste disposal systems, water and sewer
10line extensions, water distribution and purification
11facilities, storm water drainage and retention facilities, and
12sewage treatment facilities, resulting from a State or
13federally declared disaster in Illinois or bordering Illinois
14when such repairs are initiated on facilities located in the
15declared disaster area within 6 months after the disaster.
16    (26) Beginning July 1, 1999, game or game birds purchased
17at a "game breeding and hunting preserve area" as that term is
18used in the Wildlife Code. This paragraph is exempt from the
19provisions of Section 3-90.
20    (27) A motor vehicle, as that term is defined in Section
211-146 of the Illinois Vehicle Code, that is donated to a
22corporation, limited liability company, society, association,
23foundation, or institution that is determined by the Department
24to be organized and operated exclusively for educational
25purposes. For purposes of this exemption, "a corporation,
26limited liability company, society, association, foundation,

 

 

10000HB0160ham001- 147 -LRB100 02289 HLH 26491 a

1or institution organized and operated exclusively for
2educational purposes" means all tax-supported public schools,
3private schools that offer systematic instruction in useful
4branches of learning by methods common to public schools and
5that compare favorably in their scope and intensity with the
6course of study presented in tax-supported schools, and
7vocational or technical schools or institutes organized and
8operated exclusively to provide a course of study of not less
9than 6 weeks duration and designed to prepare individuals to
10follow a trade or to pursue a manual, technical, mechanical,
11industrial, business, or commercial occupation.
12    (28) Beginning January 1, 2000, personal property,
13including food, purchased through fundraising events for the
14benefit of a public or private elementary or secondary school,
15a group of those schools, or one or more school districts if
16the events are sponsored by an entity recognized by the school
17district that consists primarily of volunteers and includes
18parents and teachers of the school children. This paragraph
19does not apply to fundraising events (i) for the benefit of
20private home instruction or (ii) for which the fundraising
21entity purchases the personal property sold at the events from
22another individual or entity that sold the property for the
23purpose of resale by the fundraising entity and that profits
24from the sale to the fundraising entity. This paragraph is
25exempt from the provisions of Section 3-90.
26    (29) Beginning January 1, 2000 and through December 31,

 

 

10000HB0160ham001- 148 -LRB100 02289 HLH 26491 a

12001, new or used automatic vending machines that prepare and
2serve hot food and beverages, including coffee, soup, and other
3items, and replacement parts for these machines. Beginning
4January 1, 2002 and through June 30, 2003, machines and parts
5for machines used in commercial, coin-operated amusement and
6vending business if a use or occupation tax is paid on the
7gross receipts derived from the use of the commercial,
8coin-operated amusement and vending machines. This paragraph
9is exempt from the provisions of Section 3-90.
10    (30) Beginning January 1, 2001 and through June 30, 2016,
11food for human consumption that is to be consumed off the
12premises where it is sold (other than alcoholic beverages, soft
13drinks, and food that has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, and insulin, urine testing
16materials, syringes, and needles used by diabetics, for human
17use, when purchased for use by a person receiving medical
18assistance under Article V of the Illinois Public Aid Code who
19resides in a licensed long-term care facility, as defined in
20the Nursing Home Care Act, or in a licensed facility as defined
21in the ID/DD Community Care Act, the MC/DD Act, or the
22Specialized Mental Health Rehabilitation Act of 2013.
23    (31) Beginning on the effective date of this amendatory Act
24of the 92nd General Assembly, computers and communications
25equipment utilized for any hospital purpose and equipment used
26in the diagnosis, analysis, or treatment of hospital patients

 

 

10000HB0160ham001- 149 -LRB100 02289 HLH 26491 a

1purchased by a lessor who leases the equipment, under a lease
2of one year or longer executed or in effect at the time the
3lessor would otherwise be subject to the tax imposed by this
4Act, to a hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of the
6Retailers' Occupation Tax Act. If the equipment is leased in a
7manner that does not qualify for this exemption or is used in
8any other nonexempt manner, the lessor shall be liable for the
9tax imposed under this Act or the Service Use Tax Act, as the
10case may be, based on the fair market value of the property at
11the time the nonqualifying use occurs. No lessor shall collect
12or attempt to collect an amount (however designated) that
13purports to reimburse that lessor for the tax imposed by this
14Act or the Service Use Tax Act, as the case may be, if the tax
15has not been paid by the lessor. If a lessor improperly
16collects any such amount from the lessee, the lessee shall have
17a legal right to claim a refund of that amount from the lessor.
18If, however, that amount is not refunded to the lessee for any
19reason, the lessor is liable to pay that amount to the
20Department. This paragraph is exempt from the provisions of
21Section 3-90.
22    (32) Beginning on the effective date of this amendatory Act
23of the 92nd General Assembly, personal property purchased by a
24lessor who leases the property, under a lease of one year or
25longer executed or in effect at the time the lessor would
26otherwise be subject to the tax imposed by this Act, to a

 

 

10000HB0160ham001- 150 -LRB100 02289 HLH 26491 a

1governmental body that has been issued an active sales tax
2exemption identification number by the Department under
3Section 1g of the Retailers' Occupation Tax Act. If the
4property is leased in a manner that does not qualify for this
5exemption or used in any other nonexempt manner, the lessor
6shall be liable for the tax imposed under this Act or the
7Service Use Tax Act, as the case may be, based on the fair
8market value of the property at the time the nonqualifying use
9occurs. No lessor shall collect or attempt to collect an amount
10(however designated) that purports to reimburse that lessor for
11the tax imposed by this Act or the Service Use Tax Act, as the
12case may be, if the tax has not been paid by the lessor. If a
13lessor improperly collects any such amount from the lessee, the
14lessee shall have a legal right to claim a refund of that
15amount from the lessor. If, however, that amount is not
16refunded to the lessee for any reason, the lessor is liable to
17pay that amount to the Department. This paragraph is exempt
18from the provisions of Section 3-90.
19    (33) On and after July 1, 2003 and through June 30, 2004,
20the use in this State of motor vehicles of the second division
21with a gross vehicle weight in excess of 8,000 pounds and that
22are subject to the commercial distribution fee imposed under
23Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
241, 2004 and through June 30, 2005, the use in this State of
25motor vehicles of the second division: (i) with a gross vehicle
26weight rating in excess of 8,000 pounds; (ii) that are subject

 

 

10000HB0160ham001- 151 -LRB100 02289 HLH 26491 a

1to the commercial distribution fee imposed under Section
23-815.1 of the Illinois Vehicle Code; and (iii) that are
3primarily used for commercial purposes. Through June 30, 2005,
4this exemption applies to repair and replacement parts added
5after the initial purchase of such a motor vehicle if that
6motor vehicle is used in a manner that would qualify for the
7rolling stock exemption otherwise provided for in this Act. For
8purposes of this paragraph, the term "used for commercial
9purposes" means the transportation of persons or property in
10furtherance of any commercial or industrial enterprise,
11whether for-hire or not.
12    (34) Beginning January 1, 2008, tangible personal property
13used in the construction or maintenance of a community water
14supply, as defined under Section 3.145 of the Environmental
15Protection Act, that is operated by a not-for-profit
16corporation that holds a valid water supply permit issued under
17Title IV of the Environmental Protection Act. This paragraph is
18exempt from the provisions of Section 3-90.
19    (35) Beginning January 1, 2010, materials, parts,
20equipment, components, and furnishings incorporated into or
21upon an aircraft as part of the modification, refurbishment,
22completion, replacement, repair, or maintenance of the
23aircraft. This exemption includes consumable supplies used in
24the modification, refurbishment, completion, replacement,
25repair, and maintenance of aircraft, but excludes any
26materials, parts, equipment, components, and consumable

 

 

10000HB0160ham001- 152 -LRB100 02289 HLH 26491 a

1supplies used in the modification, replacement, repair, and
2maintenance of aircraft engines or power plants, whether such
3engines or power plants are installed or uninstalled upon any
4such aircraft. "Consumable supplies" include, but are not
5limited to, adhesive, tape, sandpaper, general purpose
6lubricants, cleaning solution, latex gloves, and protective
7films. This exemption applies only to the use of qualifying
8tangible personal property by persons who modify, refurbish,
9complete, repair, replace, or maintain aircraft and who (i)
10hold an Air Agency Certificate and are empowered to operate an
11approved repair station by the Federal Aviation
12Administration, (ii) have a Class IV Rating, and (iii) conduct
13operations in accordance with Part 145 of the Federal Aviation
14Regulations. The exemption does not include aircraft operated
15by a commercial air carrier providing scheduled passenger air
16service pursuant to authority issued under Part 121 or Part 129
17of the Federal Aviation Regulations. The changes made to this
18paragraph (35) by Public Act 98-534 are declarative of existing
19law.
20    (36) Tangible personal property purchased by a
21public-facilities corporation, as described in Section
2211-65-10 of the Illinois Municipal Code, for purposes of
23constructing or furnishing a municipal convention hall, but
24only if the legal title to the municipal convention hall is
25transferred to the municipality without any further
26consideration by or on behalf of the municipality at the time

 

 

10000HB0160ham001- 153 -LRB100 02289 HLH 26491 a

1of the completion of the municipal convention hall or upon the
2retirement or redemption of any bonds or other debt instruments
3issued by the public-facilities corporation in connection with
4the development of the municipal convention hall. This
5exemption includes existing public-facilities corporations as
6provided in Section 11-65-25 of the Illinois Municipal Code.
7This paragraph is exempt from the provisions of Section 3-90.
8    (37) Beginning January 1, 2017, menstrual pads, tampons,
9and menstrual cups.
10(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1198-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
121-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
137-29-15; 99-855, eff. 8-19-16.)
 
14    Section 20-10. The Service Use Tax Act is amended by
15changing Sections 2 and 3-5 as follows:
 
16    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
17    Sec. 2. Definitions.
18    "Use" means the exercise by any person of any right or
19power over tangible personal property incident to the ownership
20of that property, but does not include the sale or use for
21demonstration by him of that property in any form as tangible
22personal property in the regular course of business. "Use" does
23not mean the interim use of tangible personal property nor the
24physical incorporation of tangible personal property, as an

 

 

10000HB0160ham001- 154 -LRB100 02289 HLH 26491 a

1ingredient or constituent, into other tangible personal
2property, (a) which is sold in the regular course of business
3or (b) which the person incorporating such ingredient or
4constituent therein has undertaken at the time of such purchase
5to cause to be transported in interstate commerce to
6destinations outside the State of Illinois.
7    "Purchased from a serviceman" means the acquisition of the
8ownership of, or title to, tangible personal property through a
9sale of service.
10    "Purchaser" means any person who, through a sale of
11service, acquires the ownership of, or title to, any tangible
12personal property.
13    "Cost price" means the consideration paid by the serviceman
14for a purchase valued in money, whether paid in money or
15otherwise, including cash, credits and services, and shall be
16determined without any deduction on account of the supplier's
17cost of the property sold or on account of any other expense
18incurred by the supplier. When a serviceman contracts out part
19or all of the services required in his sale of service, it
20shall be presumed that the cost price to the serviceman of the
21property transferred to him or her by his or her subcontractor
22is equal to 50% of the subcontractor's charges to the
23serviceman in the absence of proof of the consideration paid by
24the subcontractor for the purchase of such property.
25    "Selling price" means the consideration for a sale valued
26in money whether received in money or otherwise, including

 

 

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1cash, credits and service, and shall be determined without any
2deduction on account of the serviceman's cost of the property
3sold, the cost of materials used, labor or service cost or any
4other expense whatsoever, but does not include interest or
5finance charges which appear as separate items on the bill of
6sale or sales contract nor charges that are added to prices by
7sellers on account of the seller's duty to collect, from the
8purchaser, the tax that is imposed by this Act. Beginning
9January 1, 2018, "selling price" shall not include any shipping
10or delivery charges, which means any freight, express, mail,
11truck, or other carrier conveyance or delivery process.
12    "Department" means the Department of Revenue.
13    "Person" means any natural individual, firm, partnership,
14association, joint stock company, joint venture, public or
15private corporation, limited liability company, and any
16receiver, executor, trustee, guardian or other representative
17appointed by order of any court.
18    "Sale of service" means any transaction except:
19        (1) a retail sale of tangible personal property taxable
20    under the Retailers' Occupation Tax Act or under the Use
21    Tax Act.
22        (2) a sale of tangible personal property for the
23    purpose of resale made in compliance with Section 2c of the
24    Retailers' Occupation Tax Act.
25        (3) except as hereinafter provided, a sale or transfer
26    of tangible personal property as an incident to the

 

 

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1    rendering of service for or by any governmental body, or
2    for or by any corporation, society, association,
3    foundation or institution organized and operated
4    exclusively for charitable, religious or educational
5    purposes or any not-for-profit corporation, society,
6    association, foundation, institution or organization which
7    has no compensated officers or employees and which is
8    organized and operated primarily for the recreation of
9    persons 55 years of age or older. A limited liability
10    company may qualify for the exemption under this paragraph
11    only if the limited liability company is organized and
12    operated exclusively for educational purposes.
13        (4) a sale or transfer of tangible personal property as
14    an incident to the rendering of service for interstate
15    carriers for hire for use as rolling stock moving in
16    interstate commerce or by lessors under a lease of one year
17    or longer, executed or in effect at the time of purchase of
18    personal property, to interstate carriers for hire for use
19    as rolling stock moving in interstate commerce so long as
20    so used by such interstate carriers for hire, and equipment
21    operated by a telecommunications provider, licensed as a
22    common carrier by the Federal Communications Commission,
23    which is permanently installed in or affixed to aircraft
24    moving in interstate commerce.
25        (4a) a sale or transfer of tangible personal property
26    as an incident to the rendering of service for owners,

 

 

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

 

 

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1    purposes" means the transportation of persons or property
2    in furtherance of any commercial or industrial enterprise
3    whether for-hire or not.
4        (5) a sale or transfer of machinery and equipment used
5    primarily in the process of the manufacturing or
6    assembling, either in an existing, an expanded or a new
7    manufacturing facility, of tangible personal property for
8    wholesale or retail sale or lease, whether such sale or
9    lease is made directly by the manufacturer or by some other
10    person, whether the materials used in the process are owned
11    by the manufacturer or some other person, or whether such
12    sale or lease is made apart from or as an incident to the
13    seller's engaging in a service occupation and the
14    applicable tax is a Service Use Tax or Service Occupation
15    Tax, rather than Use Tax or Retailers' Occupation Tax. The
16    exemption provided by this paragraph (5) does not include
17    machinery and equipment used in (i) the generation of
18    electricity for wholesale or retail sale; (ii) the
19    generation or treatment of natural or artificial gas for
20    wholesale or retail sale that is delivered to customers
21    through pipes, pipelines, or mains; or (iii) the treatment
22    of water for wholesale or retail sale that is delivered to
23    customers through pipes, pipelines, or mains. The
24    provisions of this amendatory Act of the 98th General
25    Assembly are declaratory of existing law as to the meaning
26    and scope of this exemption.

 

 

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1        (5a) the repairing, reconditioning or remodeling, for
2    a common carrier by rail, of tangible personal property
3    which belongs to such carrier for hire, and as to which
4    such carrier receives the physical possession of the
5    repaired, reconditioned or remodeled item of tangible
6    personal property in Illinois, and which such carrier
7    transports, or shares with another common carrier in the
8    transportation of such property, out of Illinois on a
9    standard uniform bill of lading showing the person who
10    repaired, reconditioned or remodeled the property to a
11    destination outside Illinois, for use outside Illinois.
12        (5b) a sale or transfer of tangible personal property
13    which is produced by the seller thereof on special order in
14    such a way as to have made the applicable tax the Service
15    Occupation Tax or the Service Use Tax, rather than the
16    Retailers' Occupation Tax or the Use Tax, for an interstate
17    carrier by rail which receives the physical possession of
18    such property in Illinois, and which transports such
19    property, or shares with another common carrier in the
20    transportation of such property, out of Illinois on a
21    standard uniform bill of lading showing the seller of the
22    property as the shipper or consignor of such property to a
23    destination outside Illinois, for use outside Illinois.
24        (6) until July 1, 2003, a sale or transfer of
25    distillation machinery and equipment, sold as a unit or kit
26    and assembled or installed by the retailer, which machinery

 

 

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1    and equipment is certified by the user to be used only for
2    the production of ethyl alcohol that will be used for
3    consumption as motor fuel or as a component of motor fuel
4    for the personal use of such user and not subject to sale
5    or resale.
6        (7) at the election of any serviceman not required to
7    be otherwise registered as a retailer under Section 2a of
8    the Retailers' Occupation Tax Act, made for each fiscal
9    year sales of service in which the aggregate annual cost
10    price of tangible personal property transferred as an
11    incident to the sales of service is less than 35%, or 75%
12    in the case of servicemen transferring prescription drugs
13    or servicemen engaged in graphic arts production, of the
14    aggregate annual total gross receipts from all sales of
15    service. The purchase of such tangible personal property by
16    the serviceman shall be subject to tax under the Retailers'
17    Occupation Tax Act and the Use Tax Act. However, if a
18    primary serviceman who has made the election described in
19    this paragraph subcontracts service work to a secondary
20    serviceman who has also made the election described in this
21    paragraph, the primary serviceman does not incur a Use Tax
22    liability if the secondary serviceman (i) has paid or will
23    pay Use Tax on his or her cost price of any tangible
24    personal property transferred to the primary serviceman
25    and (ii) certifies that fact in writing to the primary
26    serviceman.

 

 

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1    Tangible personal property transferred incident to the
2completion of a maintenance agreement is exempt from the tax
3imposed pursuant to this Act.
4    Exemption (5) also includes machinery and equipment used in
5the general maintenance or repair of such exempt machinery and
6equipment or for in-house manufacture of exempt machinery and
7equipment. The machinery and equipment exemption does not
8include machinery and equipment used in (i) the generation of
9electricity for wholesale or retail sale; (ii) the generation
10or treatment of natural or artificial gas for wholesale or
11retail sale that is delivered to customers through pipes,
12pipelines, or mains; or (iii) the treatment of water for
13wholesale or retail sale that is delivered to customers through
14pipes, pipelines, or mains. The provisions of this amendatory
15Act of the 98th General Assembly are declaratory of existing
16law as to the meaning and scope of this exemption. For the
17purposes of exemption (5), each of these terms shall have the
18following meanings: (1) "manufacturing process" shall mean the
19production of any article of tangible personal property,
20whether such article is a finished product or an article for
21use in the process of manufacturing or assembling a different
22article of tangible personal property, by procedures commonly
23regarded as manufacturing, processing, fabricating, or
24refining which changes some existing material or materials into
25a material with a different form, use or name. In relation to a
26recognized integrated business composed of a series of

 

 

10000HB0160ham001- 162 -LRB100 02289 HLH 26491 a

1operations which collectively constitute manufacturing, or
2individually constitute manufacturing operations, the
3manufacturing process shall be deemed to commence with the
4first operation or stage of production in the series, and shall
5not be deemed to end until the completion of the final product
6in the last operation or stage of production in the series; and
7further, for purposes of exemption (5), photoprocessing is
8deemed to be a manufacturing process of tangible personal
9property for wholesale or retail sale; (2) "assembling process"
10shall mean the production of any article of tangible personal
11property, whether such article is a finished product or an
12article for use in the process of manufacturing or assembling a
13different article of tangible personal property, by the
14combination of existing materials in a manner commonly regarded
15as assembling which results in a material of a different form,
16use or name; (3) "machinery" shall mean major mechanical
17machines or major components of such machines contributing to a
18manufacturing or assembling process; and (4) "equipment" shall
19include any independent device or tool separate from any
20machinery but essential to an integrated manufacturing or
21assembly process; including computers used primarily in a
22manufacturer's computer assisted design, computer assisted
23manufacturing (CAD/CAM) system; or any subunit or assembly
24comprising a component of any machinery or auxiliary, adjunct
25or attachment parts of machinery, such as tools, dies, jigs,
26fixtures, patterns and molds; or any parts which require

 

 

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1periodic replacement in the course of normal operation; but
2shall not include hand tools. Equipment includes chemicals or
3chemicals acting as catalysts but only if the chemicals or
4chemicals acting as catalysts effect a direct and immediate
5change upon a product being manufactured or assembled for
6wholesale or retail sale or lease. The purchaser of such
7machinery and equipment who has an active resale registration
8number shall furnish such number to the seller at the time of
9purchase. The user of such machinery and equipment and tools
10without an active resale registration number shall prepare a
11certificate of exemption for each transaction stating facts
12establishing the exemption for that transaction, which
13certificate shall be available to the Department for inspection
14or audit. The Department shall prescribe the form of the
15certificate.
16    Any informal rulings, opinions or letters issued by the
17Department in response to an inquiry or request for any opinion
18from any person regarding the coverage and applicability of
19exemption (5) to specific devices shall be published,
20maintained as a public record, and made available for public
21inspection and copying. If the informal ruling, opinion or
22letter contains trade secrets or other confidential
23information, where possible the Department shall delete such
24information prior to publication. Whenever such informal
25rulings, opinions, or letters contain any policy of general
26applicability, the Department shall formulate and adopt such

 

 

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1policy as a rule in accordance with the provisions of the
2Illinois Administrative Procedure Act.
3    On and after July 1, 1987, no entity otherwise eligible
4under exemption (3) of this Section shall make tax free
5purchases unless it has an active exemption identification
6number issued by the Department.
7    The purchase, employment and transfer of such tangible
8personal property as newsprint and ink for the primary purpose
9of conveying news (with or without other information) is not a
10purchase, use or sale of service or of tangible personal
11property within the meaning of this Act.
12    "Serviceman" means any person who is engaged in the
13occupation of making sales of service.
14    "Sale at retail" means "sale at retail" as defined in the
15Retailers' Occupation Tax Act.
16    "Supplier" means any person who makes sales of tangible
17personal property to servicemen for the purpose of resale as an
18incident to a sale of service.
19    "Serviceman maintaining a place of business in this State",
20or any like term, means and includes any serviceman:
21        1. having or maintaining within this State, directly or
22    by a subsidiary, an office, distribution house, sales
23    house, warehouse or other place of business, or any agent
24    or other representative operating within this State under
25    the authority of the serviceman or its subsidiary,
26    irrespective of whether such place of business or agent or

 

 

10000HB0160ham001- 165 -LRB100 02289 HLH 26491 a

1    other representative is located here permanently or
2    temporarily, or whether such serviceman or subsidiary is
3    licensed to do business in this State;
4        1.1. having a contract with a person located in this
5    State under which the person, for a commission or other
6    consideration based on the sale of service by the
7    serviceman, directly or indirectly refers potential
8    customers to the serviceman by providing to the potential
9    customers a promotional code or other mechanism that allows
10    the serviceman to track purchases referred by such persons.
11    Examples of mechanisms that allow the serviceman to track
12    purchases referred by such persons include but are not
13    limited to the use of a link on the person's Internet
14    website, promotional codes distributed through the
15    person's hand-delivered or mailed material, and
16    promotional codes distributed by the person through radio
17    or other broadcast media. The provisions of this paragraph
18    1.1 shall apply only if the cumulative gross receipts from
19    sales of service by the serviceman to customers who are
20    referred to the serviceman by all persons in this State
21    under such contracts exceed $10,000 during the preceding 4
22    quarterly periods ending on the last day of March, June,
23    September, and December; a serviceman meeting the
24    requirements of this paragraph 1.1 shall be presumed to be
25    maintaining a place of business in this State but may rebut
26    this presumption by submitting proof that the referrals or

 

 

10000HB0160ham001- 166 -LRB100 02289 HLH 26491 a

1    other activities pursued within this State by such persons
2    were not sufficient to meet the nexus standards of the
3    United States Constitution during the preceding 4
4    quarterly periods;
5        1.2. beginning July 1, 2011, having a contract with a
6    person located in this State under which:
7            A. the serviceman sells the same or substantially
8        similar line of services as the person located in this
9        State and does so using an identical or substantially
10        similar name, trade name, or trademark as the person
11        located in this State; and
12            B. the serviceman provides a commission or other
13        consideration to the person located in this State based
14        upon the sale of services by the serviceman.
15    The provisions of this paragraph 1.2 shall apply only if
16    the cumulative gross receipts from sales of service by the
17    serviceman to customers in this State under all such
18    contracts exceed $10,000 during the preceding 4 quarterly
19    periods ending on the last day of March, June, September,
20    and December;
21        2. soliciting orders for tangible personal property by
22    means of a telecommunication or television shopping system
23    (which utilizes toll free numbers) which is intended by the
24    retailer to be broadcast by cable television or other means
25    of broadcasting, to consumers located in this State;
26        3. pursuant to a contract with a broadcaster or

 

 

10000HB0160ham001- 167 -LRB100 02289 HLH 26491 a

1    publisher located in this State, soliciting orders for
2    tangible personal property by means of advertising which is
3    disseminated primarily to consumers located in this State
4    and only secondarily to bordering jurisdictions;
5        4. soliciting orders for tangible personal property by
6    mail if the solicitations are substantial and recurring and
7    if the retailer benefits from any banking, financing, debt
8    collection, telecommunication, or marketing activities
9    occurring in this State or benefits from the location in
10    this State of authorized installation, servicing, or
11    repair facilities;
12        5. being owned or controlled by the same interests
13    which own or control any retailer engaging in business in
14    the same or similar line of business in this State;
15        6. having a franchisee or licensee operating under its
16    trade name if the franchisee or licensee is required to
17    collect the tax under this Section;
18        7. pursuant to a contract with a cable television
19    operator located in this State, soliciting orders for
20    tangible personal property by means of advertising which is
21    transmitted or distributed over a cable television system
22    in this State; or
23        8. engaging in activities in Illinois, which
24    activities in the state in which the supply business
25    engaging in such activities is located would constitute
26    maintaining a place of business in that state.

 

 

10000HB0160ham001- 168 -LRB100 02289 HLH 26491 a

1(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
2    (35 ILCS 110/3-5)
3    Sec. 3-5. Exemptions. Use of the following tangible
4personal property is exempt from the tax imposed by this Act:
5    (1) Personal property purchased from a corporation,
6society, association, foundation, institution, or
7organization, other than a limited liability company, that is
8organized and operated as a not-for-profit service enterprise
9for the benefit of persons 65 years of age or older if the
10personal property was not purchased by the enterprise for the
11purpose of resale by the enterprise.
12    (2) Personal property purchased by a non-profit Illinois
13county fair association for use in conducting, operating, or
14promoting the county fair.
15    (3) Personal property purchased by a not-for-profit arts or
16cultural organization that establishes, by proof required by
17the Department by rule, that it has received an exemption under
18Section 501(c)(3) of the Internal Revenue Code and that is
19organized and operated primarily for the presentation or
20support of arts or cultural programming, activities, or
21services. These organizations include, but are not limited to,
22music and dramatic arts organizations such as symphony
23orchestras and theatrical groups, arts and cultural service
24organizations, local arts councils, visual arts organizations,
25and media arts organizations. On and after the effective date

 

 

10000HB0160ham001- 169 -LRB100 02289 HLH 26491 a

1of this amendatory Act of the 92nd General Assembly, however,
2an entity otherwise eligible for this exemption shall not make
3tax-free purchases unless it has an active identification
4number issued by the Department.
5    (4) Legal tender, currency, medallions, or gold or silver
6coinage issued by the State of Illinois, the government of the
7United States of America, or the government of any foreign
8country, and bullion.
9    (5) Until July 1, 2003 and beginning again on September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new and
12used, and including that manufactured on special order or
13purchased for lease, certified by the purchaser to be used
14primarily for graphic arts production. Equipment includes
15chemicals or chemicals acting as catalysts but only if the
16chemicals or chemicals acting as catalysts effect a direct and
17immediate change upon a graphic arts product.
18    (6) Personal property purchased from a teacher-sponsored
19student organization affiliated with an elementary or
20secondary school located in Illinois.
21    (7) Farm machinery and equipment, both new and used,
22including that manufactured on special order, certified by the
23purchaser to be used primarily for production agriculture or
24State or federal agricultural programs, including individual
25replacement parts for the machinery and equipment, including
26machinery and equipment purchased for lease, and including

 

 

10000HB0160ham001- 170 -LRB100 02289 HLH 26491 a

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

 

 

10000HB0160ham001- 171 -LRB100 02289 HLH 26491 a

1crop data for the purpose of formulating animal diets and
2agricultural chemicals. This item (7) is exempt from the
3provisions of Section 3-75.
4    (8) Until June 30, 2013, fuel and petroleum products sold
5to or used by an air common carrier, certified by the carrier
6to be used for consumption, shipment, or storage in the conduct
7of its business as an air common carrier, for a flight destined
8for or returning from a location or locations outside the
9United States without regard to previous or subsequent domestic
10stopovers.
11    Beginning July 1, 2013, fuel and petroleum products sold to
12or used by an air carrier, certified by the carrier to be used
13for consumption, shipment, or storage in the conduct of its
14business as an air common carrier, for a flight that (i) is
15engaged in foreign trade or is engaged in trade between the
16United States and any of its possessions and (ii) transports at
17least one individual or package for hire from the city of
18origination to the city of final destination on the same
19aircraft, without regard to a change in the flight number of
20that aircraft.
21    (9) Proceeds of mandatory service charges separately
22stated on customers' bills for the purchase and consumption of
23food and beverages acquired as an incident to the purchase of a
24service from a serviceman, to the extent that the proceeds of
25the service charge are in fact turned over as tips or as a
26substitute for tips to the employees who participate directly

 

 

10000HB0160ham001- 172 -LRB100 02289 HLH 26491 a

1in preparing, serving, hosting or cleaning up the food or
2beverage function with respect to which the service charge is
3imposed.
4    (10) Until July 1, 2003, oil field exploration, drilling,
5and production equipment, including (i) rigs and parts of rigs,
6rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
7tubular goods, including casing and drill strings, (iii) pumps
8and pump-jack units, (iv) storage tanks and flow lines, (v) any
9individual replacement part for oil field exploration,
10drilling, and production equipment, and (vi) machinery and
11equipment purchased for lease; but excluding motor vehicles
12required to be registered under the Illinois Vehicle Code.
13    (11) Proceeds from the sale of photoprocessing machinery
14and equipment, including repair and replacement parts, both new
15and used, including that manufactured on special order,
16certified by the purchaser to be used primarily for
17photoprocessing, and including photoprocessing machinery and
18equipment purchased for lease.
19    (12) Until December 31, 2022, coal Coal and aggregate
20exploration, mining, off-highway hauling, processing,
21maintenance, and reclamation equipment, including replacement
22parts and equipment, and including equipment purchased for
23lease, but excluding motor vehicles required to be registered
24under the Illinois Vehicle Code. The changes made to this
25Section by Public Act 97-767 apply on and after July 1, 2003,
26but no claim for credit or refund is allowed on or after August

 

 

10000HB0160ham001- 173 -LRB100 02289 HLH 26491 a

116, 2013 (the effective date of Public Act 98-456) for such
2taxes paid during the period beginning July 1, 2003 and ending
3on August 16, 2013 (the effective date of Public Act 98-456).
4    (13) Semen used for artificial insemination of livestock
5for direct agricultural production.
6    (14) Horses, or interests in horses, registered with and
7meeting the requirements of any of the Arabian Horse Club
8Registry of America, Appaloosa Horse Club, American Quarter
9Horse Association, United States Trotting Association, or
10Jockey Club, as appropriate, used for purposes of breeding or
11racing for prizes. This item (14) is exempt from the provisions
12of Section 3-75, and the exemption provided for under this item
13(14) applies for all periods beginning May 30, 1995, but no
14claim for credit or refund is allowed on or after the effective
15date of this amendatory Act of the 95th General Assembly for
16such taxes paid during the period beginning May 30, 2000 and
17ending on the effective date of this amendatory Act of the 95th
18General Assembly.
19    (15) Computers and communications equipment utilized for
20any hospital purpose and equipment used in the diagnosis,
21analysis, or treatment of hospital patients purchased by a
22lessor who leases the equipment, under a lease of one year or
23longer executed or in effect at the time the lessor would
24otherwise be subject to the tax imposed by this Act, to a
25hospital that has been issued an active tax exemption
26identification number by the Department under Section 1g of the

 

 

10000HB0160ham001- 174 -LRB100 02289 HLH 26491 a

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

 

 

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1to collect an amount (however designated) that purports to
2reimburse that lessor for the tax imposed by this Act or the
3Use Tax Act, as the case may be, if the tax has not been paid by
4the lessor. If a lessor improperly collects any such amount
5from the lessee, the lessee shall have a legal right to claim a
6refund of that amount from the lessor. If, however, that amount
7is not refunded to the lessee for any reason, the lessor is
8liable to pay that amount to the Department.
9    (17) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is donated for
12disaster relief to be used in a State or federally declared
13disaster area in Illinois or bordering Illinois by a
14manufacturer or retailer that is registered in this State to a
15corporation, society, association, foundation, or institution
16that has been issued a sales tax exemption identification
17number by the Department that assists victims of the disaster
18who reside within the declared disaster area.
19    (18) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is used in the
22performance of infrastructure repairs in this State, including
23but not limited to municipal roads and streets, access roads,
24bridges, sidewalks, waste disposal systems, water and sewer
25line extensions, water distribution and purification
26facilities, storm water drainage and retention facilities, and

 

 

10000HB0160ham001- 176 -LRB100 02289 HLH 26491 a

1sewage treatment facilities, resulting from a State or
2federally declared disaster in Illinois or bordering Illinois
3when such repairs are initiated on facilities located in the
4declared disaster area within 6 months after the disaster.
5    (19) Beginning July 1, 1999, game or game birds purchased
6at a "game breeding and hunting preserve area" as that term is
7used in the Wildlife Code. This paragraph is exempt from the
8provisions of Section 3-75.
9    (20) A motor vehicle, as that term is defined in Section
101-146 of the Illinois Vehicle Code, that is donated to a
11corporation, limited liability company, society, association,
12foundation, or institution that is determined by the Department
13to be organized and operated exclusively for educational
14purposes. For purposes of this exemption, "a corporation,
15limited liability company, society, association, foundation,
16or institution organized and operated exclusively for
17educational purposes" means all tax-supported public schools,
18private schools that offer systematic instruction in useful
19branches of learning by methods common to public schools and
20that compare favorably in their scope and intensity with the
21course of study presented in tax-supported schools, and
22vocational or technical schools or institutes organized and
23operated exclusively to provide a course of study of not less
24than 6 weeks duration and designed to prepare individuals to
25follow a trade or to pursue a manual, technical, mechanical,
26industrial, business, or commercial occupation.

 

 

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1    (21) Beginning January 1, 2000, personal property,
2including food, purchased through fundraising events for the
3benefit of a public or private elementary or secondary school,
4a group of those schools, or one or more school districts if
5the events are sponsored by an entity recognized by the school
6district that consists primarily of volunteers and includes
7parents and teachers of the school children. This paragraph
8does not apply to fundraising events (i) for the benefit of
9private home instruction or (ii) for which the fundraising
10entity purchases the personal property sold at the events from
11another individual or entity that sold the property for the
12purpose of resale by the fundraising entity and that profits
13from the sale to the fundraising entity. This paragraph is
14exempt from the provisions of Section 3-75.
15    (22) Beginning January 1, 2000 and through December 31,
162001, new or used automatic vending machines that prepare and
17serve hot food and beverages, including coffee, soup, and other
18items, and replacement parts for these machines. Beginning
19January 1, 2002 and through June 30, 2003, machines and parts
20for machines used in commercial, coin-operated amusement and
21vending business if a use or occupation tax is paid on the
22gross receipts derived from the use of the commercial,
23coin-operated amusement and vending machines. This paragraph
24is exempt from the provisions of Section 3-75.
25    (23) Beginning August 23, 2001 and through June 30, 2016,
26food for human consumption that is to be consumed off the

 

 

10000HB0160ham001- 178 -LRB100 02289 HLH 26491 a

1premises where it is sold (other than alcoholic beverages, soft
2drinks, and food that has been prepared for immediate
3consumption) and prescription and nonprescription medicines,
4drugs, medical appliances, and insulin, urine testing
5materials, syringes, and needles used by diabetics, for human
6use, when purchased for use by a person receiving medical
7assistance under Article V of the Illinois Public Aid Code who
8resides in a licensed long-term care facility, as defined in
9the Nursing Home Care Act, or in a licensed facility as defined
10in the ID/DD Community Care Act, the MC/DD Act, or the
11Specialized Mental Health Rehabilitation Act of 2013.
12    (24) Beginning on the effective date of this amendatory Act
13of the 92nd General Assembly, computers and communications
14equipment utilized for any hospital purpose and equipment used
15in the diagnosis, analysis, or treatment of hospital patients
16purchased by a lessor who leases the equipment, under a lease
17of one year or longer executed or in effect at the time the
18lessor would otherwise be subject to the tax imposed by this
19Act, to a hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act. If the equipment is leased in a
22manner that does not qualify for this exemption or is used in
23any other nonexempt manner, the lessor shall be liable for the
24tax imposed under this Act or the Use Tax Act, as the case may
25be, based on the fair market value of the property at the time
26the nonqualifying use occurs. No lessor shall collect or

 

 

10000HB0160ham001- 179 -LRB100 02289 HLH 26491 a

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

 

 

10000HB0160ham001- 180 -LRB100 02289 HLH 26491 a

1from the lessee, the lessee shall have a legal right to claim a
2refund of that amount from the lessor. If, however, that amount
3is not refunded to the lessee for any reason, the lessor is
4liable to pay that amount to the Department. This paragraph is
5exempt from the provisions of Section 3-75.
6    (26) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 3-75.
13    (27) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

10000HB0160ham001- 181 -LRB100 02289 HLH 26491 a

1films. This exemption applies only to the use of qualifying
2tangible personal property transferred incident to the
3modification, refurbishment, completion, replacement, repair,
4or maintenance of aircraft by persons who (i) hold an Air
5Agency Certificate and are empowered to operate an approved
6repair station by the Federal Aviation Administration, (ii)
7have a Class IV Rating, and (iii) conduct operations in
8accordance with Part 145 of the Federal Aviation Regulations.
9The exemption does not include aircraft operated by a
10commercial air carrier providing scheduled passenger air
11service pursuant to authority issued under Part 121 or Part 129
12of the Federal Aviation Regulations. The changes made to this
13paragraph (27) by Public Act 98-534 are declarative of existing
14law.
15    (28) Tangible personal property purchased by a
16public-facilities corporation, as described in Section
1711-65-10 of the Illinois Municipal Code, for purposes of
18constructing or furnishing a municipal convention hall, but
19only if the legal title to the municipal convention hall is
20transferred to the municipality without any further
21consideration by or on behalf of the municipality at the time
22of the completion of the municipal convention hall or upon the
23retirement or redemption of any bonds or other debt instruments
24issued by the public-facilities corporation in connection with
25the development of the municipal convention hall. This
26exemption includes existing public-facilities corporations as

 

 

10000HB0160ham001- 182 -LRB100 02289 HLH 26491 a

1provided in Section 11-65-25 of the Illinois Municipal Code.
2This paragraph is exempt from the provisions of Section 3-75.
3    (29) Beginning January 1, 2017, menstrual pads, tampons,
4and menstrual cups.
5(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
698-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
77-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
8    Section 20-15. The Service Occupation Tax Act is amended by
9changing Section 3-5 as follows:
 
10    (35 ILCS 115/3-5)
11    Sec. 3-5. Exemptions. The following tangible personal
12property is exempt from the tax imposed by this Act:
13    (1) Personal property sold by a corporation, society,
14association, foundation, institution, or organization, other
15than a limited liability company, that is organized and
16operated as a not-for-profit service enterprise for the benefit
17of persons 65 years of age or older if the personal property
18was not purchased by the enterprise for the purpose of resale
19by the enterprise.
20    (2) Personal property purchased by a not-for-profit
21Illinois county fair association for use in conducting,
22operating, or promoting the county fair.
23    (3) Personal property purchased by any not-for-profit arts
24or cultural organization that establishes, by proof required by

 

 

10000HB0160ham001- 183 -LRB100 02289 HLH 26491 a

1the Department by rule, that it has received an exemption under
2Section 501(c)(3) of the Internal Revenue Code and that is
3organized and operated primarily for the presentation or
4support of arts or cultural programming, activities, or
5services. These organizations include, but are not limited to,
6music and dramatic arts organizations such as symphony
7orchestras and theatrical groups, arts and cultural service
8organizations, local arts councils, visual arts organizations,
9and media arts organizations. On and after the effective date
10of this amendatory Act of the 92nd General Assembly, however,
11an entity otherwise eligible for this exemption shall not make
12tax-free purchases unless it has an active identification
13number issued by the Department.
14    (4) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (5) Until July 1, 2003 and beginning again on September 1,
192004 through August 30, 2014, graphic arts machinery and
20equipment, including repair and replacement parts, both new and
21used, and including that manufactured on special order or
22purchased for lease, certified by the purchaser to be used
23primarily for graphic arts production. Equipment includes
24chemicals or chemicals acting as catalysts but only if the
25chemicals or chemicals acting as catalysts effect a direct and
26immediate change upon a graphic arts product.

 

 

10000HB0160ham001- 184 -LRB100 02289 HLH 26491 a

1    (6) Personal property sold by a teacher-sponsored student
2organization affiliated with an elementary or secondary school
3located in Illinois.
4    (7) Farm machinery and equipment, both new and used,
5including that manufactured on special order, certified by the
6purchaser to be used primarily for production agriculture or
7State or federal agricultural programs, including individual
8replacement parts for the machinery and equipment, including
9machinery and equipment purchased for lease, and including
10implements of husbandry defined in Section 1-130 of the
11Illinois Vehicle Code, farm machinery and agricultural
12chemical and fertilizer spreaders, and nurse wagons required to
13be registered under Section 3-809 of the Illinois Vehicle Code,
14but excluding other motor vehicles required to be registered
15under the Illinois Vehicle Code. Horticultural polyhouses or
16hoop houses used for propagating, growing, or overwintering
17plants shall be considered farm machinery and equipment under
18this item (7). Agricultural chemical tender tanks and dry boxes
19shall include units sold separately from a motor vehicle
20required to be licensed and units sold mounted on a motor
21vehicle required to be licensed if the selling price of the
22tender is separately stated.
23    Farm machinery and equipment shall include precision
24farming equipment that is installed or purchased to be
25installed on farm machinery and equipment including, but not
26limited to, tractors, harvesters, sprayers, planters, seeders,

 

 

10000HB0160ham001- 185 -LRB100 02289 HLH 26491 a

1or spreaders. Precision farming equipment includes, but is not
2limited to, soil testing sensors, computers, monitors,
3software, global positioning and mapping systems, and other
4such equipment.
5    Farm machinery and equipment also includes computers,
6sensors, software, and related equipment used primarily in the
7computer-assisted operation of production agriculture
8facilities, equipment, and activities such as, but not limited
9to, the collection, monitoring, and correlation of animal and
10crop data for the purpose of formulating animal diets and
11agricultural chemicals. This item (7) is exempt from the
12provisions of Section 3-55.
13    (8) Until June 30, 2013, fuel and petroleum products sold
14to or used by an air common carrier, certified by the carrier
15to be used for consumption, shipment, or storage in the conduct
16of its business as an air common carrier, for a flight destined
17for or returning from a location or locations outside the
18United States without regard to previous or subsequent domestic
19stopovers.
20    Beginning July 1, 2013, fuel and petroleum products sold to
21or used by an air carrier, certified by the carrier to be used
22for consumption, shipment, or storage in the conduct of its
23business as an air common carrier, for a flight that (i) is
24engaged in foreign trade or is engaged in trade between the
25United States and any of its possessions and (ii) transports at
26least one individual or package for hire from the city of

 

 

10000HB0160ham001- 186 -LRB100 02289 HLH 26491 a

1origination to the city of final destination on the same
2aircraft, without regard to a change in the flight number of
3that aircraft.
4    (9) Proceeds of mandatory service charges separately
5stated on customers' bills for the purchase and consumption of
6food and beverages, to the extent that the proceeds of the
7service charge are in fact turned over as tips or as a
8substitute for tips to the employees who participate directly
9in preparing, serving, hosting or cleaning up the food or
10beverage function with respect to which the service charge is
11imposed.
12    (10) Until July 1, 2003, oil field exploration, drilling,
13and production equipment, including (i) rigs and parts of rigs,
14rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
15tubular goods, including casing and drill strings, (iii) pumps
16and pump-jack units, (iv) storage tanks and flow lines, (v) any
17individual replacement part for oil field exploration,
18drilling, and production equipment, and (vi) machinery and
19equipment purchased for lease; but excluding motor vehicles
20required to be registered under the Illinois Vehicle Code.
21    (11) Photoprocessing machinery and equipment, including
22repair and replacement parts, both new and used, including that
23manufactured on special order, certified by the purchaser to be
24used primarily for photoprocessing, and including
25photoprocessing machinery and equipment purchased for lease.
26    (12) Until December 31, 2022, coal Coal and aggregate

 

 

10000HB0160ham001- 187 -LRB100 02289 HLH 26491 a

1exploration, mining, off-highway hauling, processing,
2maintenance, and reclamation equipment, including replacement
3parts and equipment, and including equipment purchased for
4lease, but excluding motor vehicles required to be registered
5under the Illinois Vehicle Code. The changes made to this
6Section by Public Act 97-767 apply on and after July 1, 2003,
7but no claim for credit or refund is allowed on or after August
816, 2013 (the effective date of Public Act 98-456) for such
9taxes paid during the period beginning July 1, 2003 and ending
10on August 16, 2013 (the effective date of Public Act 98-456).
11    (13) Beginning January 1, 1992 and through June 30, 2016,
12food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages, soft
14drinks and food that has been prepared for immediate
15consumption) and prescription and non-prescription medicines,
16drugs, medical appliances, and insulin, urine testing
17materials, syringes, and needles used by diabetics, for human
18use, when purchased for use by a person receiving medical
19assistance under Article V of the Illinois Public Aid Code who
20resides in a licensed long-term care facility, as defined in
21the Nursing Home Care Act, or in a licensed facility as defined
22in the ID/DD Community Care Act, the MC/DD Act, or the
23Specialized Mental Health Rehabilitation Act of 2013.
24    (14) Semen used for artificial insemination of livestock
25for direct agricultural production.
26    (15) Horses, or interests in horses, registered with and

 

 

10000HB0160ham001- 188 -LRB100 02289 HLH 26491 a

1meeting the requirements of any of the Arabian Horse Club
2Registry of America, Appaloosa Horse Club, American Quarter
3Horse Association, United States Trotting Association, or
4Jockey Club, as appropriate, used for purposes of breeding or
5racing for prizes. This item (15) is exempt from the provisions
6of Section 3-55, and the exemption provided for under this item
7(15) applies for all periods beginning May 30, 1995, but no
8claim for credit or refund is allowed on or after January 1,
92008 (the effective date of Public Act 95-88) for such taxes
10paid during the period beginning May 30, 2000 and ending on
11January 1, 2008 (the effective date of Public Act 95-88).
12    (16) Computers and communications equipment utilized for
13any hospital purpose and equipment used in the diagnosis,
14analysis, or treatment of hospital patients sold to a lessor
15who leases the equipment, under a lease of one year or longer
16executed or in effect at the time of the purchase, to a
17hospital that has been issued an active tax exemption
18identification number by the Department under Section 1g of the
19Retailers' Occupation Tax Act.
20    (17) Personal property sold to a lessor who leases the
21property, under a lease of one year or longer executed or in
22effect at the time of the purchase, to a governmental body that
23has been issued an active tax exemption identification number
24by the Department under Section 1g of the Retailers' Occupation
25Tax Act.
26    (18) Beginning with taxable years ending on or after

 

 

10000HB0160ham001- 189 -LRB100 02289 HLH 26491 a

1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is donated for
3disaster relief to be used in a State or federally declared
4disaster area in Illinois or bordering Illinois by a
5manufacturer or retailer that is registered in this State to a
6corporation, society, association, foundation, or institution
7that has been issued a sales tax exemption identification
8number by the Department that assists victims of the disaster
9who reside within the declared disaster area.
10    (19) Beginning with taxable years ending on or after
11December 31, 1995 and ending with taxable years ending on or
12before December 31, 2004, personal property that is used in the
13performance of infrastructure repairs in this State, including
14but not limited to municipal roads and streets, access roads,
15bridges, sidewalks, waste disposal systems, water and sewer
16line extensions, water distribution and purification
17facilities, storm water drainage and retention facilities, and
18sewage treatment facilities, resulting from a State or
19federally declared disaster in Illinois or bordering Illinois
20when such repairs are initiated on facilities located in the
21declared disaster area within 6 months after the disaster.
22    (20) Beginning July 1, 1999, game or game birds sold at a
23"game breeding and hunting preserve area" as that term is used
24in the Wildlife Code. This paragraph is exempt from the
25provisions of Section 3-55.
26    (21) A motor vehicle, as that term is defined in Section

 

 

10000HB0160ham001- 190 -LRB100 02289 HLH 26491 a

11-146 of the Illinois Vehicle Code, that is donated to a
2corporation, limited liability company, society, association,
3foundation, or institution that is determined by the Department
4to be organized and operated exclusively for educational
5purposes. For purposes of this exemption, "a corporation,
6limited liability company, society, association, foundation,
7or institution organized and operated exclusively for
8educational purposes" means all tax-supported public schools,
9private schools that offer systematic instruction in useful
10branches of learning by methods common to public schools and
11that compare favorably in their scope and intensity with the
12course of study presented in tax-supported schools, and
13vocational or technical schools or institutes organized and
14operated exclusively to provide a course of study of not less
15than 6 weeks duration and designed to prepare individuals to
16follow a trade or to pursue a manual, technical, mechanical,
17industrial, business, or commercial occupation.
18    (22) Beginning January 1, 2000, personal property,
19including food, purchased through fundraising events for the
20benefit of a public or private elementary or secondary school,
21a group of those schools, or one or more school districts if
22the events are sponsored by an entity recognized by the school
23district that consists primarily of volunteers and includes
24parents and teachers of the school children. This paragraph
25does not apply to fundraising events (i) for the benefit of
26private home instruction or (ii) for which the fundraising

 

 

10000HB0160ham001- 191 -LRB100 02289 HLH 26491 a

1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-55.
6    (23) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and other
9items, and replacement parts for these machines. Beginning
10January 1, 2002 and through June 30, 2003, machines and parts
11for machines used in commercial, coin-operated amusement and
12vending business if a use or occupation tax is paid on the
13gross receipts derived from the use of the commercial,
14coin-operated amusement and vending machines. This paragraph
15is exempt from the provisions of Section 3-55.
16    (24) Beginning on the effective date of this amendatory Act
17of the 92nd General Assembly, computers and communications
18equipment utilized for any hospital purpose and equipment used
19in the diagnosis, analysis, or treatment of hospital patients
20sold to a lessor who leases the equipment, under a lease of one
21year or longer executed or in effect at the time of the
22purchase, to a hospital that has been issued an active tax
23exemption identification number by the Department under
24Section 1g of the Retailers' Occupation Tax Act. This paragraph
25is exempt from the provisions of Section 3-55.
26    (25) Beginning on the effective date of this amendatory Act

 

 

10000HB0160ham001- 192 -LRB100 02289 HLH 26491 a

1of the 92nd General Assembly, personal property sold to a
2lessor who leases the property, under a lease of one year or
3longer executed or in effect at the time of the purchase, to a
4governmental body that has been issued an active tax exemption
5identification number by the Department under Section 1g of the
6Retailers' Occupation Tax Act. This paragraph is exempt from
7the provisions of Section 3-55.
8    (26) Beginning on January 1, 2002 and through June 30,
92016, tangible personal property purchased from an Illinois
10retailer by a taxpayer engaged in centralized purchasing
11activities in Illinois who will, upon receipt of the property
12in Illinois, temporarily store the property in Illinois (i) for
13the purpose of subsequently transporting it outside this State
14for use or consumption thereafter solely outside this State or
15(ii) for the purpose of being processed, fabricated, or
16manufactured into, attached to, or incorporated into other
17tangible personal property to be transported outside this State
18and thereafter used or consumed solely outside this State. The
19Director of Revenue shall, pursuant to rules adopted in
20accordance with the Illinois Administrative Procedure Act,
21issue a permit to any taxpayer in good standing with the
22Department who is eligible for the exemption under this
23paragraph (26). The permit issued under this paragraph (26)
24shall authorize the holder, to the extent and in the manner
25specified in the rules adopted under this Act, to purchase
26tangible personal property from a retailer exempt from the

 

 

10000HB0160ham001- 193 -LRB100 02289 HLH 26491 a

1taxes imposed by this Act. Taxpayers shall maintain all
2necessary books and records to substantiate the use and
3consumption of all such tangible personal property outside of
4the State of Illinois.
5    (27) Beginning January 1, 2008, tangible personal property
6used in the construction or maintenance of a community water
7supply, as defined under Section 3.145 of the Environmental
8Protection Act, that is operated by a not-for-profit
9corporation that holds a valid water supply permit issued under
10Title IV of the Environmental Protection Act. This paragraph is
11exempt from the provisions of Section 3-55.
12    (28) Tangible personal property sold to a
13public-facilities corporation, as described in Section
1411-65-10 of the Illinois Municipal Code, for purposes of
15constructing or furnishing a municipal convention hall, but
16only if the legal title to the municipal convention hall is
17transferred to the municipality without any further
18consideration by or on behalf of the municipality at the time
19of the completion of the municipal convention hall or upon the
20retirement or redemption of any bonds or other debt instruments
21issued by the public-facilities corporation in connection with
22the development of the municipal convention hall. This
23exemption includes existing public-facilities corporations as
24provided in Section 11-65-25 of the Illinois Municipal Code.
25This paragraph is exempt from the provisions of Section 3-55.
26    (29) Beginning January 1, 2010, materials, parts,

 

 

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1equipment, components, and furnishings incorporated into or
2upon an aircraft as part of the modification, refurbishment,
3completion, replacement, repair, or maintenance of the
4aircraft. This exemption includes consumable supplies used in
5the modification, refurbishment, completion, replacement,
6repair, and maintenance of aircraft, but excludes any
7materials, parts, equipment, components, and consumable
8supplies used in the modification, replacement, repair, and
9maintenance of aircraft engines or power plants, whether such
10engines or power plants are installed or uninstalled upon any
11such aircraft. "Consumable supplies" include, but are not
12limited to, adhesive, tape, sandpaper, general purpose
13lubricants, cleaning solution, latex gloves, and protective
14films. This exemption applies only to the transfer of
15qualifying tangible personal property incident to the
16modification, refurbishment, completion, replacement, repair,
17or maintenance of an aircraft by persons who (i) hold an Air
18Agency Certificate and are empowered to operate an approved
19repair station by the Federal Aviation Administration, (ii)
20have a Class IV Rating, and (iii) conduct operations in
21accordance with Part 145 of the Federal Aviation Regulations.
22The exemption does not include aircraft operated by a
23commercial air carrier providing scheduled passenger air
24service pursuant to authority issued under Part 121 or Part 129
25of the Federal Aviation Regulations. The changes made to this
26paragraph (29) by Public Act 98-534 are declarative of existing

 

 

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1law.
2    (30) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
67-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
7    Section 20-20. The Retailers' Occupation Tax Act is amended
8by changing Sections 1, 2-5, and 2a as follows:
 
9    (35 ILCS 120/1)  (from Ch. 120, par. 440)
10    Sec. 1. Definitions. "Sale at retail" means any transfer of
11the ownership of or title to tangible personal property to a
12purchaser, for the purpose of use or consumption, and not for
13the purpose of resale in any form as tangible personal property
14to the extent not first subjected to a use for which it was
15purchased, for a valuable consideration: Provided that the
16property purchased is deemed to be purchased for the purpose of
17resale, despite first being used, to the extent to which it is
18resold as an ingredient of an intentionally produced product or
19byproduct of manufacturing. For this purpose, slag produced as
20an incident to manufacturing pig iron or steel and sold is
21considered to be an intentionally produced byproduct of
22manufacturing. Transactions whereby the possession of the
23property is transferred but the seller retains the title as
24security for payment of the selling price shall be deemed to be

 

 

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1sales.
2    "Sale at retail" shall be construed to include any transfer
3of the ownership of or title to tangible personal property to a
4purchaser, for use or consumption by any other person to whom
5such purchaser may transfer the tangible personal property
6without a valuable consideration, and to include any transfer,
7whether made for or without a valuable consideration, for
8resale in any form as tangible personal property unless made in
9compliance with Section 2c of this Act.
10    Sales of tangible personal property, which property, to the
11extent not first subjected to a use for which it was purchased,
12as an ingredient or constituent, goes into and forms a part of
13tangible personal property subsequently the subject of a "Sale
14at retail", are not sales at retail as defined in this Act:
15Provided that the property purchased is deemed to be purchased
16for the purpose of resale, despite first being used, to the
17extent to which it is resold as an ingredient of an
18intentionally produced product or byproduct of manufacturing.
19    "Sale at retail" shall be construed to include any Illinois
20florist's sales transaction in which the purchase order is
21received in Illinois by a florist and the sale is for use or
22consumption, but the Illinois florist has a florist in another
23state deliver the property to the purchaser or the purchaser's
24donee in such other state.
25    Nonreusable tangible personal property that is used by
26persons engaged in the business of operating a restaurant,

 

 

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1cafeteria, or drive-in is a sale for resale when it is
2transferred to customers in the ordinary course of business as
3part of the sale of food or beverages and is used to deliver,
4package, or consume food or beverages, regardless of where
5consumption of the food or beverages occurs. Examples of those
6items include, but are not limited to nonreusable, paper and
7plastic cups, plates, baskets, boxes, sleeves, buckets or other
8containers, utensils, straws, placemats, napkins, doggie bags,
9and wrapping or packaging materials that are transferred to
10customers as part of the sale of food or beverages in the
11ordinary course of business.
12    The purchase, employment and transfer of such tangible
13personal property as newsprint and ink for the primary purpose
14of conveying news (with or without other information) is not a
15purchase, use or sale of tangible personal property.
16    A person whose activities are organized and conducted
17primarily as a not-for-profit service enterprise, and who
18engages in selling tangible personal property at retail
19(whether to the public or merely to members and their guests)
20is engaged in the business of selling tangible personal
21property at retail with respect to such transactions, excepting
22only a person organized and operated exclusively for
23charitable, religious or educational purposes either (1), to
24the extent of sales by such person to its members, students,
25patients or inmates of tangible personal property to be used
26primarily for the purposes of such person, or (2), to the

 

 

10000HB0160ham001- 198 -LRB100 02289 HLH 26491 a

1extent of sales by such person of tangible personal property
2which is not sold or offered for sale by persons organized for
3profit. The selling of school books and school supplies by
4schools at retail to students is not "primarily for the
5purposes of" the school which does such selling. The provisions
6of this paragraph shall not apply to nor subject to taxation
7occasional dinners, socials or similar activities of a person
8organized and operated exclusively for charitable, religious
9or educational purposes, whether or not such activities are
10open to the public.
11    A person who is the recipient of a grant or contract under
12Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
13serves meals to participants in the federal Nutrition Program
14for the Elderly in return for contributions established in
15amount by the individual participant pursuant to a schedule of
16suggested fees as provided for in the federal Act is not
17engaged in the business of selling tangible personal property
18at retail with respect to such transactions.
19    "Purchaser" means anyone who, through a sale at retail,
20acquires the ownership of or title to tangible personal
21property for a valuable consideration.
22    "Reseller of motor fuel" means any person engaged in the
23business of selling or delivering or transferring title of
24motor fuel to another person other than for use or consumption.
25No person shall act as a reseller of motor fuel within this
26State without first being registered as a reseller pursuant to

 

 

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1Section 2c or a retailer pursuant to Section 2a.
2    "Selling price" or the "amount of sale" means the
3consideration for a sale valued in money whether received in
4money or otherwise, including cash, credits, property, other
5than as hereinafter provided, and services, but not including
6the value of or credit given for traded-in tangible personal
7property where the item that is traded-in is of like kind and
8character as that which is being sold, and shall be determined
9without any deduction on account of the cost of the property
10sold, the cost of materials used, labor or service cost or any
11other expense whatsoever, but does not include charges that are
12added to prices by sellers on account of the seller's tax
13liability under this Act, or on account of the seller's duty to
14collect, from the purchaser, the tax that is imposed by the Use
15Tax Act, or, except as otherwise provided with respect to any
16cigarette tax imposed by a home rule unit, on account of the
17seller's tax liability under any local occupation tax
18administered by the Department, or, except as otherwise
19provided with respect to any cigarette tax imposed by a home
20rule unit on account of the seller's duty to collect, from the
21purchasers, the tax that is imposed under any local use tax
22administered by the Department. Effective December 1, 1985,
23"selling price" shall include charges that are added to prices
24by sellers on account of the seller's tax liability under the
25Cigarette Tax Act, on account of the sellers' duty to collect,
26from the purchaser, the tax imposed under the Cigarette Use Tax

 

 

10000HB0160ham001- 200 -LRB100 02289 HLH 26491 a

1Act, and on account of the seller's duty to collect, from the
2purchaser, any cigarette tax imposed by a home rule unit.
3Beginning January 1, 2018, "selling price" shall not include
4any shipping or delivery charges, which means any freight,
5express, mail, truck, or other carrier conveyance or delivery
6process.
7    Notwithstanding any law to the contrary, for any motor
8vehicle, as defined in Section 1-146 of the Vehicle Code, that
9is sold on or after January 1, 2015 for the purpose of leasing
10the vehicle for a defined period that is longer than one year
11and (1) is a motor vehicle of the second division that: (A) is
12a self-contained motor vehicle designed or permanently
13converted to provide living quarters for recreational,
14camping, or travel use, with direct walk through access to the
15living quarters from the driver's seat; (B) is of the van
16configuration designed for the transportation of not less than
177 nor more than 16 passengers; or (C) has a gross vehicle
18weight rating of 8,000 pounds or less or (2) is a motor vehicle
19of the first division, "selling price" or "amount of sale"
20means the consideration received by the lessor pursuant to the
21lease contract, including amounts due at lease signing and all
22monthly or other regular payments charged over the term of the
23lease. Also included in the selling price is any amount
24received by the lessor from the lessee for the leased vehicle
25that is not calculated at the time the lease is executed,
26including, but not limited to, excess mileage charges and

 

 

10000HB0160ham001- 201 -LRB100 02289 HLH 26491 a

1charges for excess wear and tear. For sales that occur in
2Illinois, with respect to any amount received by the lessor
3from the lessee for the leased vehicle that is not calculated
4at the time the lease is executed, the lessor who purchased the
5motor vehicle does not incur the tax imposed by the Use Tax Act
6on those amounts, and the retailer who makes the retail sale of
7the motor vehicle to the lessor is not required to collect the
8tax imposed by the Use Tax Act or to pay the tax imposed by this
9Act on those amounts. However, the lessor who purchased the
10motor vehicle assumes the liability for reporting and paying
11the tax on those amounts directly to the Department in the same
12form (Illinois Retailers' Occupation Tax, and local retailers'
13occupation taxes, if applicable) in which the retailer would
14have reported and paid such tax if the retailer had accounted
15for the tax to the Department. For amounts received by the
16lessor from the lessee that are not calculated at the time the
17lease is executed, the lessor must file the return and pay the
18tax to the Department by the due date otherwise required by
19this Act for returns other than transaction returns. If the
20retailer is entitled under this Act to a discount for
21collecting and remitting the tax imposed under this Act to the
22Department with respect to the sale of the motor vehicle to the
23lessor, then the right to the discount provided in this Act
24shall be transferred to the lessor with respect to the tax paid
25by the lessor for any amount received by the lessor from the
26lessee for the leased vehicle that is not calculated at the

 

 

10000HB0160ham001- 202 -LRB100 02289 HLH 26491 a

1time the lease is executed; provided that the discount is only
2allowed if the return is timely filed and for amounts timely
3paid. The "selling price" of a motor vehicle that is sold on or
4after January 1, 2015 for the purpose of leasing for a defined
5period of longer than one year shall not be reduced by the
6value of or credit given for traded-in tangible personal
7property owned by the lessor, nor shall it be reduced by the
8value of or credit given for traded-in tangible personal
9property owned by the lessee, regardless of whether the
10trade-in value thereof is assigned by the lessee to the lessor.
11In the case of a motor vehicle that is sold for the purpose of
12leasing for a defined period of longer than one year, the sale
13occurs at the time of the delivery of the vehicle, regardless
14of the due date of any lease payments. A lessor who incurs a
15Retailers' Occupation Tax liability on the sale of a motor
16vehicle coming off lease may not take a credit against that
17liability for the Use Tax the lessor paid upon the purchase of
18the motor vehicle (or for any tax the lessor paid with respect
19to any amount received by the lessor from the lessee for the
20leased vehicle that was not calculated at the time the lease
21was executed) if the selling price of the motor vehicle at the
22time of purchase was calculated using the definition of
23"selling price" as defined in this paragraph. Notwithstanding
24any other provision of this Act to the contrary, lessors shall
25file all returns and make all payments required under this
26paragraph to the Department by electronic means in the manner

 

 

10000HB0160ham001- 203 -LRB100 02289 HLH 26491 a

1and form as required by the Department. This paragraph does not
2apply to leases of motor vehicles for which, at the time the
3lease is entered into, the term of the lease is not a defined
4period, including leases with a defined initial period with the
5option to continue the lease on a month-to-month or other basis
6beyond the initial defined period.
7    The phrase "like kind and character" shall be liberally
8construed (including but not limited to any form of motor
9vehicle for any form of motor vehicle, or any kind of farm or
10agricultural implement for any other kind of farm or
11agricultural implement), while not including a kind of item
12which, if sold at retail by that retailer, would be exempt from
13retailers' occupation tax and use tax as an isolated or
14occasional sale.
15    "Gross receipts" from the sales of tangible personal
16property at retail means the total selling price or the amount
17of such sales, as hereinbefore defined. In the case of charge
18and time sales, the amount thereof shall be included only as
19and when payments are received by the seller. Receipts or other
20consideration derived by a seller from the sale, transfer or
21assignment of accounts receivable to a wholly owned subsidiary
22will not be deemed payments prior to the time the purchaser
23makes payment on such accounts.
24    "Department" means the Department of Revenue.
25    "Person" means any natural individual, firm, partnership,
26association, joint stock company, joint adventure, public or

 

 

10000HB0160ham001- 204 -LRB100 02289 HLH 26491 a

1private corporation, limited liability company, or a receiver,
2executor, trustee, guardian or other representative appointed
3by order of any court.
4    The isolated or occasional sale of tangible personal
5property at retail by a person who does not hold himself out as
6being engaged (or who does not habitually engage) in selling
7such tangible personal property at retail, or a sale through a
8bulk vending machine, does not constitute engaging in a
9business of selling such tangible personal property at retail
10within the meaning of this Act; provided that any person who is
11engaged in a business which is not subject to the tax imposed
12by this Act because of involving the sale of or a contract to
13sell real estate or a construction contract to improve real
14estate or a construction contract to engineer, install, and
15maintain an integrated system of products, but who, in the
16course of conducting such business, transfers tangible
17personal property to users or consumers in the finished form in
18which it was purchased, and which does not become real estate
19or was not engineered and installed, under any provision of a
20construction contract or real estate sale or real estate sales
21agreement entered into with some other person arising out of or
22because of such nontaxable business, is engaged in the business
23of selling tangible personal property at retail to the extent
24of the value of the tangible personal property so transferred.
25If, in such a transaction, a separate charge is made for the
26tangible personal property so transferred, the value of such

 

 

10000HB0160ham001- 205 -LRB100 02289 HLH 26491 a

1property, for the purpose of this Act, shall be the amount so
2separately charged, but not less than the cost of such property
3to the transferor; if no separate charge is made, the value of
4such property, for the purposes of this Act, is the cost to the
5transferor of such tangible personal property. Construction
6contracts for the improvement of real estate consisting of
7engineering, installation, and maintenance of voice, data,
8video, security, and all telecommunication systems do not
9constitute engaging in a business of selling tangible personal
10property at retail within the meaning of this Act if they are
11sold at one specified contract price.
12    A person who holds himself or herself out as being engaged
13(or who habitually engages) in selling tangible personal
14property at retail is a person engaged in the business of
15selling tangible personal property at retail hereunder with
16respect to such sales (and not primarily in a service
17occupation) notwithstanding the fact that such person designs
18and produces such tangible personal property on special order
19for the purchaser and in such a way as to render the property
20of value only to such purchaser, if such tangible personal
21property so produced on special order serves substantially the
22same function as stock or standard items of tangible personal
23property that are sold at retail.
24    Persons who engage in the business of transferring tangible
25personal property upon the redemption of trading stamps are
26engaged in the business of selling such property at retail and

 

 

10000HB0160ham001- 206 -LRB100 02289 HLH 26491 a

1shall be liable for and shall pay the tax imposed by this Act
2on the basis of the retail value of the property transferred
3upon redemption of such stamps.
4    "Bulk vending machine" means a vending machine, containing
5unsorted confections, nuts, toys, or other items designed
6primarily to be used or played with by children which, when a
7coin or coins of a denomination not larger than $0.50 are
8inserted, are dispensed in equal portions, at random and
9without selection by the customer.
10(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14.)
 
11    (35 ILCS 120/2-5)
12    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
13sale of the following tangible personal property are exempt
14from the tax imposed by this Act:
15    (1) Farm chemicals.
16    (2) Farm machinery and equipment, both new and used,
17including that manufactured on special order, certified by the
18purchaser to be used primarily for production agriculture or
19State or federal agricultural programs, including individual
20replacement parts for the machinery and equipment, including
21machinery and equipment purchased for lease, and including
22implements of husbandry defined in Section 1-130 of the
23Illinois Vehicle Code, farm machinery and agricultural
24chemical and fertilizer spreaders, and nurse wagons required to
25be registered under Section 3-809 of the Illinois Vehicle Code,

 

 

10000HB0160ham001- 207 -LRB100 02289 HLH 26491 a

1but excluding other motor vehicles required to be registered
2under the Illinois Vehicle Code. Horticultural polyhouses or
3hoop houses used for propagating, growing, or overwintering
4plants shall be considered farm machinery and equipment under
5this item (2). Agricultural chemical tender tanks and dry boxes
6shall include units sold separately from a motor vehicle
7required to be licensed and units sold mounted on a motor
8vehicle required to be licensed, if the selling price of the
9tender is separately stated.
10    Farm machinery and equipment shall include precision
11farming equipment that is installed or purchased to be
12installed on farm machinery and equipment including, but not
13limited to, tractors, harvesters, sprayers, planters, seeders,
14or spreaders. Precision farming equipment includes, but is not
15limited to, soil testing sensors, computers, monitors,
16software, global positioning and mapping systems, and other
17such equipment.
18    Farm machinery and equipment also includes computers,
19sensors, software, and related equipment used primarily in the
20computer-assisted operation of production agriculture
21facilities, equipment, and activities such as, but not limited
22to, the collection, monitoring, and correlation of animal and
23crop data for the purpose of formulating animal diets and
24agricultural chemicals. This item (2) is exempt from the
25provisions of Section 2-70.
26    (3) Until July 1, 2003, distillation machinery and

 

 

10000HB0160ham001- 208 -LRB100 02289 HLH 26491 a

1equipment, sold as a unit or kit, assembled or installed by the
2retailer, certified by the user to be used only for the
3production of ethyl alcohol that will be used for consumption
4as motor fuel or as a component of motor fuel for the personal
5use of the user, and not subject to sale or resale.
6    (4) Until July 1, 2003 and beginning again September 1,
72004 through August 30, 2014, graphic arts machinery and
8equipment, including repair and replacement parts, both new and
9used, and including that manufactured on special order or
10purchased for lease, certified by the purchaser to be used
11primarily for graphic arts production. Equipment includes
12chemicals or chemicals acting as catalysts but only if the
13chemicals or chemicals acting as catalysts effect a direct and
14immediate change upon a graphic arts product.
15    (5) A motor vehicle that is used for automobile renting, as
16defined in the Automobile Renting Occupation and Use Tax Act.
17This paragraph is exempt from the provisions of Section 2-70.
18    (6) Personal property sold by a teacher-sponsored student
19organization affiliated with an elementary or secondary school
20located in Illinois.
21    (7) Until July 1, 2003, proceeds of that portion of the
22selling price of a passenger car the sale of which is subject
23to the Replacement Vehicle Tax.
24    (8) Personal property sold to an Illinois county fair
25association for use in conducting, operating, or promoting the
26county fair.

 

 

10000HB0160ham001- 209 -LRB100 02289 HLH 26491 a

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

 

 

10000HB0160ham001- 210 -LRB100 02289 HLH 26491 a

1society, association, foundation, institution, or organization
2that has no compensated officers or employees and that is
3organized and operated primarily for the recreation of persons
455 years of age or older. A limited liability company may
5qualify for the exemption under this paragraph only if the
6limited liability company is organized and operated
7exclusively for educational purposes. On and after July 1,
81987, however, no entity otherwise eligible for this exemption
9shall make tax-free purchases unless it has an active
10identification number issued by the Department.
11    (12) Tangible personal property sold to interstate
12carriers for hire for use as rolling stock moving in interstate
13commerce or to lessors under leases of one year or longer
14executed or in effect at the time of purchase by interstate
15carriers for hire for use as rolling stock moving in interstate
16commerce and equipment operated by a telecommunications
17provider, licensed as a common carrier by the Federal
18Communications Commission, which is permanently installed in
19or affixed to aircraft moving in interstate commerce.
20    (12-5) On and after July 1, 2003 and through June 30, 2004,
21motor vehicles of the second division with a gross vehicle
22weight in excess of 8,000 pounds that are subject to the
23commercial distribution fee imposed under Section 3-815.1 of
24the Illinois Vehicle Code. Beginning on July 1, 2004 and
25through June 30, 2005, the use in this State of motor vehicles
26of the second division: (i) with a gross vehicle weight rating

 

 

10000HB0160ham001- 211 -LRB100 02289 HLH 26491 a

1in excess of 8,000 pounds; (ii) that are subject to the
2commercial distribution fee imposed under Section 3-815.1 of
3the Illinois Vehicle Code; and (iii) that are primarily used
4for commercial purposes. Through June 30, 2005, this exemption
5applies to repair and replacement parts added after the initial
6purchase of such a motor vehicle if that motor vehicle is used
7in a manner that would qualify for the rolling stock exemption
8otherwise provided for in this Act. For purposes of this
9paragraph, "used for commercial purposes" means the
10transportation of persons or property in furtherance of any
11commercial or industrial enterprise whether for-hire or not.
12    (13) Proceeds from sales to owners, lessors, or shippers of
13tangible personal property that is utilized by interstate
14carriers for hire for use as rolling stock moving in interstate
15commerce and equipment operated by a telecommunications
16provider, licensed as a common carrier by the Federal
17Communications Commission, which is permanently installed in
18or affixed to aircraft moving in interstate commerce.
19    (14) Machinery and equipment that will be used by the
20purchaser, or a lessee of the purchaser, primarily in the
21process of manufacturing or assembling tangible personal
22property for wholesale or retail sale or lease, whether the
23sale or lease is made directly by the manufacturer or by some
24other person, whether the materials used in the process are
25owned by the manufacturer or some other person, or whether the
26sale or lease is made apart from or as an incident to the

 

 

10000HB0160ham001- 212 -LRB100 02289 HLH 26491 a

1seller's engaging in the service occupation of producing
2machines, tools, dies, jigs, patterns, gauges, or other similar
3items of no commercial value on special order for a particular
4purchaser. The exemption provided by this paragraph (14) does
5not include machinery and equipment used in (i) the generation
6of electricity for wholesale or retail sale; (ii) the
7generation or treatment of natural or artificial gas for
8wholesale or retail sale that is delivered to customers through
9pipes, pipelines, or mains; or (iii) the treatment of water for
10wholesale or retail sale that is delivered to customers through
11pipes, pipelines, or mains. The provisions of Public Act 98-583
12are declaratory of existing law as to the meaning and scope of
13this exemption.
14    (15) Proceeds of mandatory service charges separately
15stated on customers' bills for purchase and consumption of food
16and beverages, to the extent that the proceeds of the service
17charge are in fact turned over as tips or as a substitute for
18tips to the employees who participate directly in preparing,
19serving, hosting or cleaning up the food or beverage function
20with respect to which the service charge is imposed.
21    (16) Petroleum products sold to a purchaser if the seller
22is prohibited by federal law from charging tax to the
23purchaser.
24    (17) Tangible personal property sold to a common carrier by
25rail or motor that receives the physical possession of the
26property in Illinois and that transports the property, or

 

 

10000HB0160ham001- 213 -LRB100 02289 HLH 26491 a

1shares with another common carrier in the transportation of the
2property, out of Illinois on a standard uniform bill of lading
3showing the seller of the property as the shipper or consignor
4of the property to a destination outside Illinois, for use
5outside Illinois.
6    (18) Legal tender, currency, medallions, or gold or silver
7coinage issued by the State of Illinois, the government of the
8United States of America, or the government of any foreign
9country, and bullion.
10    (19) Until July 1 2003, oil field exploration, drilling,
11and production equipment, including (i) rigs and parts of rigs,
12rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
13tubular goods, including casing and drill strings, (iii) pumps
14and pump-jack units, (iv) storage tanks and flow lines, (v) any
15individual replacement part for oil field exploration,
16drilling, and production equipment, and (vi) machinery and
17equipment purchased for lease; but excluding motor vehicles
18required to be registered under the Illinois Vehicle Code.
19    (20) Photoprocessing machinery and equipment, including
20repair and replacement parts, both new and used, including that
21manufactured on special order, certified by the purchaser to be
22used primarily for photoprocessing, and including
23photoprocessing machinery and equipment purchased for lease.
24    (21) Until December 31, 2022, coal Coal and aggregate
25exploration, mining, off-highway hauling, processing,
26maintenance, and reclamation equipment, including replacement

 

 

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1parts and equipment, and including equipment purchased for
2lease, but excluding motor vehicles required to be registered
3under the Illinois Vehicle Code. The changes made to this
4Section by Public Act 97-767 apply on and after July 1, 2003,
5but no claim for credit or refund is allowed on or after August
616, 2013 (the effective date of Public Act 98-456) for such
7taxes paid during the period beginning July 1, 2003 and ending
8on August 16, 2013 (the effective date of Public Act 98-456).
9    (22) Until June 30, 2013, fuel and petroleum products sold
10to or used by an air carrier, certified by the carrier to be
11used for consumption, shipment, or storage in the conduct of
12its business as an air common carrier, for a flight destined
13for or returning from a location or locations outside the
14United States without regard to previous or subsequent domestic
15stopovers.
16    Beginning July 1, 2013, fuel and petroleum products sold to
17or used by an air carrier, certified by the carrier to be used
18for consumption, shipment, or storage in the conduct of its
19business as an air common carrier, for a flight that (i) is
20engaged in foreign trade or is engaged in trade between the
21United States and any of its possessions and (ii) transports at
22least one individual or package for hire from the city of
23origination to the city of final destination on the same
24aircraft, without regard to a change in the flight number of
25that aircraft.
26    (23) A transaction in which the purchase order is received

 

 

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1by a florist who is located outside Illinois, but who has a
2florist located in Illinois deliver the property to the
3purchaser or the purchaser's donee in Illinois.
4    (24) Fuel consumed or used in the operation of ships,
5barges, or vessels that are used primarily in or for the
6transportation of property or the conveyance of persons for
7hire on rivers bordering on this State if the fuel is delivered
8by the seller to the purchaser's barge, ship, or vessel while
9it is afloat upon that bordering river.
10    (25) Except as provided in item (25-5) of this Section, a
11motor vehicle sold in this State to a nonresident even though
12the motor vehicle is delivered to the nonresident in this
13State, if the motor vehicle is not to be titled in this State,
14and if a drive-away permit is issued to the motor vehicle as
15provided in Section 3-603 of the Illinois Vehicle Code or if
16the nonresident purchaser has vehicle registration plates to
17transfer to the motor vehicle upon returning to his or her home
18state. The issuance of the drive-away permit or having the
19out-of-state registration plates to be transferred is prima
20facie evidence that the motor vehicle will not be titled in
21this State.
22    (25-5) The exemption under item (25) does not apply if the
23state in which the motor vehicle will be titled does not allow
24a reciprocal exemption for a motor vehicle sold and delivered
25in that state to an Illinois resident but titled in Illinois.
26The tax collected under this Act on the sale of a motor vehicle

 

 

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1in this State to a resident of another state that does not
2allow a reciprocal exemption shall be imposed at a rate equal
3to the state's rate of tax on taxable property in the state in
4which the purchaser is a resident, except that the tax shall
5not exceed the tax that would otherwise be imposed under this
6Act. At the time of the sale, the purchaser shall execute a
7statement, signed under penalty of perjury, of his or her
8intent to title the vehicle in the state in which the purchaser
9is a resident within 30 days after the sale and of the fact of
10the payment to the State of Illinois of tax in an amount
11equivalent to the state's rate of tax on taxable property in
12his or her state of residence and shall submit the statement to
13the appropriate tax collection agency in his or her state of
14residence. In addition, the retailer must retain a signed copy
15of the statement in his or her records. Nothing in this item
16shall be construed to require the removal of the vehicle from
17this state following the filing of an intent to title the
18vehicle in the purchaser's state of residence if the purchaser
19titles the vehicle in his or her state of residence within 30
20days after the date of sale. The tax collected under this Act
21in accordance with this item (25-5) shall be proportionately
22distributed as if the tax were collected at the 6.25% general
23rate imposed under this Act.