103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3565

 

Introduced 2/17/2023, by Rep. Mark L. Walker

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 200/Art. 10 Div. 22 heading new
35 ILCS 200/10-900 new
35 ILCS 200/10-910 new
35 ILCS 200/10-915 new
35 ILCS 200/10-920 new
35 ILCS 200/10-925 new
35 ILCS 200/10-930 new
35 ILCS 200/10-935 new
35 ILCS 200/10-937 new
35 ILCS 200/10-940 new
35 ILCS 200/10-945 new
35 ILCS 200/10-950 new
35 ILCS 200/10-955 new
35 ILCS 200/10-960 new
35 ILCS 200/10-965 new
35 ILCS 200/10-970 new
35 ILCS 200/10-980 new
35 ILCS 200/10-990 new

    Amends the Property Tax Code. Provides that certain property may be certified by the Department of Revenue as containing a mega project. Provides that a "mega project" is a project with respect to which a company makes a specified investment during a specified investment period. Provides that the mega project property is eligible for an assessment freeze. Provides that mega project property may be granted an abatement. Provides that a company that operates a mega project shall enter into an agreement with the municipality in which the project is located to make certain special payments. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that qualified tangible personal property used in the construction or operation of a mega project is exempt from the taxes imposed under those Acts. Effective June 1, 2023.


LRB103 30626 HLH 57078 b

 

 

A BILL FOR

 

HB3565LRB103 30626 HLH 57078 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active
24exemption identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon
11a graphic arts product. Beginning on July 1, 2017, graphic
12arts machinery and equipment is included in the manufacturing
13and assembling machinery and equipment exemption under
14paragraph (18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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

 

 

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1    Farm machinery and equipment also includes computers,
2sensors, software, and related equipment used primarily in the
3computer-assisted operation of production agriculture
4facilities, equipment, and activities such as, but not limited
5to, the collection, monitoring, and correlation of animal and
6crop data for the purpose of formulating animal diets and
7agricultural chemicals. This item (11) is exempt from the
8provisions of Section 3-90.
9    (12) Until June 30, 2013, fuel and petroleum products sold
10to or used by an air common carrier, certified by the carrier
11to be used for consumption, shipment, or storage in the
12conduct of its business as an air common carrier, for a flight
13destined for or returning from a location or locations outside
14the United States without regard to previous or subsequent
15domestic stopovers.
16    Beginning July 1, 2013, fuel and petroleum products sold
17to or used by an air carrier, certified by the carrier to be
18used for consumption, shipment, or storage in the conduct of
19its business 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
22at least 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    (13) Proceeds of mandatory service charges separately

 

 

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1stated on customers' bills for the purchase and consumption of
2food and beverages purchased at retail from a retailer, to the
3extent that the proceeds of the service charge are in fact
4turned over as tips or as a substitute for tips to the
5employees who participate directly in preparing, serving,
6hosting or cleaning up the food or beverage function with
7respect to which the service charge is imposed.
8    (14) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of
10rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
11pipe and tubular goods, including casing and drill strings,
12(iii) pumps and pump-jack units, (iv) storage tanks and flow
13lines, (v) any individual replacement part for oil field
14exploration, drilling, and production equipment, and (vi)
15machinery and equipment purchased for lease; but excluding
16motor vehicles required to be registered under the Illinois
17Vehicle Code.
18    (15) Photoprocessing machinery and equipment, including
19repair and replacement parts, both new and used, including
20that manufactured on special order, certified by the purchaser
21to be used primarily for photoprocessing, and including
22photoprocessing machinery and equipment purchased for lease.
23    (16) Until July 1, 2028, coal and aggregate exploration,
24mining, off-highway hauling, processing, maintenance, and
25reclamation equipment, including replacement parts and
26equipment, and including equipment purchased for lease, but

 

 

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1excluding motor vehicles required to be registered under the
2Illinois Vehicle Code. The changes made to this Section by
3Public Act 97-767 apply on and after July 1, 2003, but no claim
4for credit or refund is allowed on or after August 16, 2013
5(the effective date of Public Act 98-456) for such taxes paid
6during the period beginning July 1, 2003 and ending on August
716, 2013 (the effective date of Public Act 98-456).
8    (17) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (18) Manufacturing and assembling machinery and equipment
15used primarily in the process of manufacturing or assembling
16tangible personal property for wholesale or retail sale or
17lease, whether that sale or lease is made directly by the
18manufacturer or by some other person, whether the materials
19used in the process are owned by the manufacturer or some other
20person, or whether that sale or lease is made apart from or as
21an incident to the seller's engaging in the service occupation
22of producing machines, tools, dies, jigs, patterns, gauges, or
23other similar items of no commercial value on special order
24for a particular purchaser. The exemption provided by this
25paragraph (18) includes production related tangible personal
26property, as defined in Section 3-50, purchased on or after

 

 

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1July 1, 2019. The exemption provided by this paragraph (18)
2does not include machinery and equipment used in (i) the
3generation of electricity for wholesale or retail sale; (ii)
4the generation or treatment of natural or artificial gas for
5wholesale 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
9of Public Act 98-583 are declaratory of existing law as to the
10meaning and scope of this exemption. Beginning on July 1,
112017, the exemption provided by this paragraph (18) includes,
12but is not limited to, graphic arts machinery and equipment,
13as defined in paragraph (6) of this Section.
14    (19) Personal property delivered to a purchaser or
15purchaser's donee inside Illinois when the purchase order for
16that personal property was received by a florist located
17outside Illinois who has a florist located inside Illinois
18deliver the personal property.
19    (20) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (21) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (21) is exempt from the

 

 

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1provisions of Section 3-90, and the exemption provided for
2under this item (21) applies for all periods beginning May 30,
31995, but no claim for credit or refund is allowed on or after
4January 1, 2008 for such taxes paid during the period
5beginning May 30, 2000 and ending on January 1, 2008.
6    (22) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Service Use Tax Act, as
18the case may be, based on the fair market value of the property
19at the time the non-qualifying use occurs. No lessor shall
20collect or attempt to collect an amount (however designated)
21that purports to reimburse that lessor for the tax imposed by
22this Act or the Service Use Tax Act, as the case may be, if the
23tax has not been paid by the lessor. If a lessor improperly
24collects any such amount from the lessee, the lessee shall
25have a legal right to claim a refund of that amount from the
26lessor. If, however, that amount is not refunded to the lessee

 

 

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

 

 

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1for disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (25) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in
11the performance of infrastructure repairs in this State,
12including but not limited to municipal roads and streets,
13access roads, bridges, sidewalks, waste disposal systems,
14water and sewer line extensions, water distribution and
15purification facilities, storm water drainage and retention
16facilities, and sewage treatment facilities, resulting from a
17State or federally declared disaster in Illinois or bordering
18Illinois when such repairs are initiated on facilities located
19in the declared disaster area within 6 months after the
20disaster.
21    (26) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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1corporation, limited liability company, society, association,
2foundation, or institution that is determined by the
3Department to be organized and operated exclusively for
4educational purposes. For purposes of this exemption, "a
5corporation, limited liability company, society, association,
6foundation, or institution organized and operated exclusively
7for educational purposes" means all tax-supported public
8schools, private schools that offer systematic instruction in
9useful branches of learning by methods common to public
10schools and that compare favorably in their scope and
11intensity with the course of study presented in tax-supported
12schools, and vocational or technical schools or institutes
13organized and operated exclusively to provide a course of
14study of not less than 6 weeks duration and designed to prepare
15individuals to follow a trade or to pursue a manual,
16technical, mechanical, industrial, business, or commercial
17occupation.
18    (28) 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

 

 

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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 3-90.
6    (29) 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
9other items, and replacement parts for these machines.
10Beginning January 1, 2002 and through June 30, 2003, machines
11and parts for machines used in commercial, coin-operated
12amusement and vending business if a use or occupation tax is
13paid on the gross receipts derived from the use of the
14commercial, coin-operated amusement and vending machines. This
15paragraph is exempt from the provisions of Section 3-90.
16    (30) Beginning January 1, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19soft drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (31) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), computers and communications equipment
5utilized for any hospital purpose and equipment used in the
6diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other nonexempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Service Use Tax Act, as
16the case may be, based on the fair market value of the property
17at the time the nonqualifying use occurs. No lessor shall
18collect or attempt to collect an amount (however designated)
19that purports to reimburse that lessor for the tax imposed by
20this Act or the Service Use Tax Act, as the case may be, if the
21tax has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall
23have a legal right to claim a refund of that amount from the
24lessor. If, however, that amount is not refunded to the lessee
25for any reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

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1Section 3-90.
2    (32) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), personal property purchased by a lessor
4who leases the property, under a lease of one year or longer
5executed or in effect at the time the lessor would otherwise be
6subject to the tax imposed by this Act, to a governmental body
7that has been issued an active sales tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act. If the property is leased
10in a manner that does not qualify for this exemption or used in
11any other nonexempt manner, the lessor shall be liable for the
12tax imposed under this Act or the Service Use Tax Act, as the
13case may be, based on the fair market value of the property at
14the time the nonqualifying use occurs. No lessor shall collect
15or attempt to collect an amount (however designated) that
16purports to reimburse that lessor for the tax imposed by this
17Act or the Service Use Tax Act, as the case may be, if the tax
18has not been paid by the lessor. If a lessor improperly
19collects any such amount from the lessee, the lessee shall
20have a legal right to claim a refund of that amount from the
21lessor. If, however, that amount is not refunded to the lessee
22for any reason, the lessor is liable to pay that amount to the
23Department. This paragraph is exempt from the provisions of
24Section 3-90.
25    (33) On and after July 1, 2003 and through June 30, 2004,
26the use in this State of motor vehicles of the second division

 

 

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1with a gross vehicle weight in excess of 8,000 pounds and that
2are subject to the commercial distribution fee imposed under
3Section 3-815.1 of the Illinois Vehicle Code. Beginning on
4July 1, 2004 and through June 30, 2005, the use in this State
5of motor vehicles of the second division: (i) with a gross
6vehicle weight rating in excess of 8,000 pounds; (ii) that are
7subject to the commercial distribution fee imposed under
8Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
9are primarily used for commercial purposes. Through June 30,
102005, this exemption applies to repair and replacement parts
11added after the initial purchase of such a motor vehicle if
12that motor vehicle is used in a manner that would qualify for
13the rolling stock exemption otherwise provided for in this
14Act. For purposes of this paragraph, the term "used for
15commercial purposes" means the transportation of persons or
16property in furtherance of any commercial or industrial
17enterprise, whether for-hire or not.
18    (34) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued
23under Title IV of the Environmental Protection Act. This
24paragraph is exempt from the provisions of Section 3-90.
25    (35) Beginning January 1, 2010 and continuing through
26December 31, 2024, materials, parts, equipment, components,

 

 

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1and furnishings incorporated into or upon an aircraft as part
2of the modification, refurbishment, completion, replacement,
3repair, or maintenance of the aircraft. This exemption
4includes consumable supplies used in the modification,
5refurbishment, completion, replacement, repair, and
6maintenance of aircraft, but excludes any materials, parts,
7equipment, components, and consumable supplies used in the
8modification, replacement, repair, and maintenance of aircraft
9engines or power plants, whether such engines or power plants
10are installed or uninstalled upon any such aircraft.
11"Consumable supplies" include, but are not limited to,
12adhesive, tape, sandpaper, general purpose lubricants,
13cleaning solution, latex gloves, and protective films. This
14exemption applies only to the use of qualifying tangible
15personal property by persons who modify, refurbish, complete,
16repair, replace, or maintain aircraft and who (i) hold an Air
17Agency Certificate and are empowered to operate an approved
18repair station by the Federal Aviation Administration, (ii)
19have a Class IV Rating, and (iii) conduct operations in
20accordance with Part 145 of the Federal Aviation Regulations.
21The exemption does not include aircraft operated by a
22commercial air carrier providing scheduled passenger air
23service pursuant to authority issued under Part 121 or Part
24129 of the Federal Aviation Regulations. The changes made to
25this paragraph (35) by Public Act 98-534 are declarative of
26existing law. It is the intent of the General Assembly that the

 

 

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1exemption under this paragraph (35) applies continuously from
2January 1, 2010 through December 31, 2024; however, no claim
3for credit or refund is allowed for taxes paid as a result of
4the disallowance of this exemption on or after January 1, 2015
5and prior to February 5, 2020 (the effective date of Public Act
6101-629) this amendatory Act of the 101st General Assembly.
7    (36) Tangible personal property purchased by a
8public-facilities corporation, as described in Section
911-65-10 of the Illinois Municipal Code, for purposes of
10constructing or furnishing a municipal convention hall, but
11only if the legal title to the municipal convention hall is
12transferred to the municipality without any further
13consideration by or on behalf of the municipality at the time
14of the completion of the municipal convention hall or upon the
15retirement or redemption of any bonds or other debt
16instruments issued by the public-facilities corporation in
17connection with the development of the municipal convention
18hall. This exemption includes existing public-facilities
19corporations as provided in Section 11-65-25 of the Illinois
20Municipal Code. This paragraph is exempt from the provisions
21of Section 3-90.
22    (37) Beginning January 1, 2017 and through December 31,
232026, menstrual pads, tampons, and menstrual cups.
24    (38) Merchandise that is subject to the Rental Purchase
25Agreement Occupation and Use Tax. The purchaser must certify
26that the item is purchased to be rented subject to a rental

 

 

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1purchase agreement, as defined in the Rental Purchase
2Agreement Act, and provide proof of registration under the
3Rental Purchase Agreement Occupation and Use Tax Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (39) Tangible personal property purchased by a purchaser
6who is exempt from the tax imposed by this Act by operation of
7federal law. This paragraph is exempt from the provisions of
8Section 3-90.
9    (40) Qualified tangible personal property used in the
10construction or operation of a data center that has been
11granted a certificate of exemption by the Department of
12Commerce and Economic Opportunity, whether that tangible
13personal property is purchased by the owner, operator, or
14tenant of the data center or by a contractor or subcontractor
15of the owner, operator, or tenant. Data centers that would
16have qualified for a certificate of exemption prior to January
171, 2020 had Public Act 101-31 been in effect may apply for and
18obtain an exemption for subsequent purchases of computer
19equipment or enabling software purchased or leased to upgrade,
20supplement, or replace computer equipment or enabling software
21purchased or leased in the original investment that would have
22qualified.
23    The Department of Commerce and Economic Opportunity shall
24grant a certificate of exemption under this item (40) to
25qualified data centers as defined by Section 605-1025 of the
26Department of Commerce and Economic Opportunity Law of the

 

 

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1Civil Administrative Code of Illinois.
2    For the purposes of this item (40):
3        "Data center" means a building or a series of
4    buildings rehabilitated or constructed to house working
5    servers in one physical location or multiple sites within
6    the State of Illinois.
7        "Qualified tangible personal property" means:
8    electrical systems and equipment; climate control and
9    chilling equipment and systems; mechanical systems and
10    equipment; monitoring and secure systems; emergency
11    generators; hardware; computers; servers; data storage
12    devices; network connectivity equipment; racks; cabinets;
13    telecommunications cabling infrastructure; raised floor
14    systems; peripheral components or systems; software;
15    mechanical, electrical, or plumbing systems; battery
16    systems; cooling systems and towers; temperature control
17    systems; other cabling; and other data center
18    infrastructure equipment and systems necessary to operate
19    qualified tangible personal property, including fixtures;
20    and component parts of any of the foregoing, including
21    installation, maintenance, repair, refurbishment, and
22    replacement of qualified tangible personal property to
23    generate, transform, transmit, distribute, or manage
24    electricity necessary to operate qualified tangible
25    personal property; and all other tangible personal
26    property that is essential to the operations of a computer

 

 

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1    data center. The term "qualified tangible personal
2    property" also includes building materials physically
3    incorporated in to the qualifying data center. To document
4    the exemption allowed under this Section, the retailer
5    must obtain from the purchaser a copy of the certificate
6    of eligibility issued by the Department of Commerce and
7    Economic Opportunity.
8    This item (40) is exempt from the provisions of Section
93-90.
10    (41) Beginning July 1, 2022, breast pumps, breast pump
11collection and storage supplies, and breast pump kits. This
12item (41) is exempt from the provisions of Section 3-90. As
13used in this item (41):
14        "Breast pump" means an electrically controlled or
15    manually controlled pump device designed or marketed to be
16    used to express milk from a human breast during lactation,
17    including the pump device and any battery, AC adapter, or
18    other power supply unit that is used to power the pump
19    device and is packaged and sold with the pump device at the
20    time of sale.
21        "Breast pump collection and storage supplies" means
22    items of tangible personal property designed or marketed
23    to be used in conjunction with a breast pump to collect
24    milk expressed from a human breast and to store collected
25    milk until it is ready for consumption.
26        "Breast pump collection and storage supplies"

 

 

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1    includes, but is not limited to: breast shields and breast
2    shield connectors; breast pump tubes and tubing adapters;
3    breast pump valves and membranes; backflow protectors and
4    backflow protector adaptors; bottles and bottle caps
5    specific to the operation of the breast pump; and breast
6    milk storage bags.
7        "Breast pump collection and storage supplies" does not
8    include: (1) bottles and bottle caps not specific to the
9    operation of the breast pump; (2) breast pump travel bags
10    and other similar carrying accessories, including ice
11    packs, labels, and other similar products; (3) breast pump
12    cleaning supplies; (4) nursing bras, bra pads, breast
13    shells, and other similar products; and (5) creams,
14    ointments, and other similar products that relieve
15    breastfeeding-related symptoms or conditions of the
16    breasts or nipples, unless sold as part of a breast pump
17    kit that is pre-packaged by the breast pump manufacturer
18    or distributor.
19        "Breast pump kit" means a kit that: (1) contains no
20    more than a breast pump, breast pump collection and
21    storage supplies, a rechargeable battery for operating the
22    breast pump, a breastmilk cooler, bottle stands, ice
23    packs, and a breast pump carrying case; and (2) is
24    pre-packaged as a breast pump kit by the breast pump
25    manufacturer or distributor.
26    (42) (41) Tangible personal property sold by or on behalf

 

 

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1of the State Treasurer pursuant to the Revised Uniform
2Unclaimed Property Act. This item (42) (41) is exempt from the
3provisions of Section 3-90.
4    (43) Qualified tangible personal property used in the
5construction or operation of a mega project for which a
6certificate has been issued by the Department under Division
722 of Article 10 of the Property Tax Code, whether that
8tangible personal property is purchased by the owner,
9operator, or tenant of the mega project or by a contractor or
10subcontractor of the owner, operator, or tenant.
11    As used in this item (43):
12    "Facility" means a building or series of buildings.
13    "Mega project" means a facility that is rehabilitated or
14constructed as described in Division 22 of Article 10 of the
15Property Tax Code.
16    "Qualified tangible personal property" means: electrical
17systems and equipment; climate control and chilling equipment
18and systems; mechanical systems and equipment; monitoring and
19secure systems; emergency generators; hardware; computers;
20servers; data storage devices; network connectivity equipment;
21racks; cabinets; telecommunications cabling infrastructure;
22raised floor systems; peripheral components or systems;
23software; mechanical, electrical, or plumbing systems; battery
24systems; cooling systems and towers; temperature control
25systems; other cabling; and other data center infrastructure
26equipment and systems necessary to operate qualified tangible

 

 

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1personal property, including fixtures; and component parts of
2those items, including installation, maintenance, repair,
3refurbishment, and replacement of qualified tangible personal
4property to generate, transform, transmit, distribute, or
5manage electricity necessary to operate qualified tangible
6personal property; and all other tangible personal property
7that is essential to the operations of a mega project. The term
8"qualified tangible personal property" also includes building
9materials to be incorporated into the mega project. To
10document the exemption allowed under this Section, the
11retailer, contractor or subcontractor or supplier must obtain
12from the purchaser a copy of the certificate issued by the
13Department of Revenue for the mega project as described and
14defined in Division 22 of Article 10 of the Property Tax Code.
15    This item (43) is exempt from the provisions of Section
163-90.
17(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
18101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
196-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;
20102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,
21eff. 5-27-22; revised 8-1-22.)
 
22    Section 10. The Service Use Tax Act is amended by changing
23Section 3-5 as follows:
 
24    (35 ILCS 110/3-5)

 

 

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1    Sec. 3-5. Exemptions. Use of the following tangible
2personal property is exempt from the tax imposed by this Act:
3    (1) Personal property purchased from a corporation,
4society, association, foundation, institution, or
5organization, other than a limited liability company, that is
6organized and operated as a not-for-profit service enterprise
7for the benefit of persons 65 years of age or older if the
8personal property was not purchased by the enterprise for the
9purpose of resale by the enterprise.
10    (2) Personal property purchased by a non-profit Illinois
11county fair association for use in conducting, operating, or
12promoting the county fair.
13    (3) Personal property purchased by a not-for-profit arts
14or cultural organization that establishes, by proof required
15by the Department by rule, that it has received an exemption
16under Section 501(c)(3) of the Internal Revenue Code and that
17is organized and operated primarily for the presentation or
18support of arts or cultural programming, activities, or
19services. These organizations include, but are not limited to,
20music and dramatic arts organizations such as symphony
21orchestras and theatrical groups, arts and cultural service
22organizations, local arts councils, visual arts organizations,
23and media arts organizations. On and after July 1, 2001 (the
24effective date of Public Act 92-35), however, an entity
25otherwise eligible for this exemption shall not make tax-free
26purchases unless it has an active identification number issued

 

 

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1by the Department.
2    (4) Legal tender, currency, medallions, or gold or silver
3coinage issued by the State of Illinois, the government of the
4United States of America, or the government of any foreign
5country, and bullion.
6    (5) Until July 1, 2003 and beginning again on September 1,
72004 through August 30, 2014, graphic arts machinery and
8equipment, including repair and replacement parts, both new
9and used, 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. Beginning on
15July 1, 2017, graphic arts machinery and equipment is included
16in the manufacturing and assembling machinery and equipment
17exemption under Section 2 of this Act.
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

 

 

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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
4to be registered under Section 3-809 of the Illinois Vehicle
5Code, but excluding other motor vehicles required to be
6registered under the Illinois Vehicle Code. Horticultural
7polyhouses or hoop houses used for propagating, growing, or
8overwintering plants shall be considered farm machinery and
9equipment under this item (7). Agricultural chemical tender
10tanks and dry boxes shall include units sold separately from a
11motor vehicle required to be licensed and units sold mounted
12on a motor vehicle required to be licensed if the selling price
13of the tender 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

 

 

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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
7conduct of its business as an air common carrier, for a flight
8destined for or returning from a location or locations outside
9the United States without regard to previous or subsequent
10domestic stopovers.
11    Beginning July 1, 2013, fuel and petroleum products sold
12to or used by an air carrier, certified by the carrier to be
13used for consumption, shipment, or storage in the conduct of
14its business 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
17at least 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

 

 

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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
6rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
7pipe and tubular goods, including casing and drill strings,
8(iii) pumps and pump-jack units, (iv) storage tanks and flow
9lines, (v) any individual replacement part for oil field
10exploration, drilling, and production equipment, and (vi)
11machinery and equipment purchased for lease; but excluding
12motor vehicles required to be registered under the Illinois
13Vehicle Code.
14    (11) Proceeds from the sale of photoprocessing machinery
15and equipment, including repair and replacement parts, both
16new and used, including that manufactured on special order,
17certified by the purchaser to be used primarily for
18photoprocessing, and including photoprocessing machinery and
19equipment purchased for lease.
20    (12) Until July 1, 2028, coal and aggregate exploration,
21mining, off-highway hauling, processing, maintenance, and
22reclamation equipment, including replacement parts and
23equipment, and including equipment purchased for lease, but
24excluding motor vehicles required to be registered under the
25Illinois Vehicle Code. The changes made to this Section by
26Public Act 97-767 apply on and after July 1, 2003, but no claim

 

 

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1for credit or refund is allowed on or after August 16, 2013
2(the effective date of Public Act 98-456) for such taxes paid
3during the period beginning July 1, 2003 and ending on August
416, 2013 (the effective date of Public Act 98-456).
5    (13) Semen used for artificial insemination of livestock
6for direct agricultural production.
7    (14) Horses, or interests in horses, registered with and
8meeting the requirements of any of the Arabian Horse Club
9Registry of America, Appaloosa Horse Club, American Quarter
10Horse Association, United States Trotting Association, or
11Jockey Club, as appropriate, used for purposes of breeding or
12racing for prizes. This item (14) is exempt from the
13provisions of Section 3-75, and the exemption provided for
14under this item (14) applies for all periods beginning May 30,
151995, but no claim for credit or refund is allowed on or after
16January 1, 2008 (the effective date of Public Act 95-88) for
17such taxes paid during the period beginning May 30, 2000 and
18ending on January 1, 2008 (the effective date of Public Act
1995-88).
20    (15) Computers and communications equipment utilized for
21any hospital purpose and equipment used in the diagnosis,
22analysis, or treatment of hospital patients purchased by a
23lessor who leases the equipment, under a lease of one year or
24longer executed or in effect at the time the lessor would
25otherwise be subject to the tax imposed by this Act, to a
26hospital that has been issued an active tax exemption

 

 

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

 

 

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1fair market value of the property at the time the
2non-qualifying use occurs. No lessor shall collect or attempt
3to collect an amount (however designated) that purports to
4reimburse that lessor for the tax imposed by this Act or the
5Use Tax Act, as the case may be, if the tax has not been paid
6by the lessor. If a lessor improperly collects any such amount
7from the lessee, the lessee shall have a legal right to claim a
8refund of that amount from the lessor. If, however, that
9amount is not refunded to the lessee for any reason, the lessor
10is liable to pay that amount to the Department.
11    (17) Beginning with taxable years ending on or after
12December 31, 1995 and ending with taxable years ending on or
13before December 31, 2004, personal property that is donated
14for disaster relief to be used in a State or federally declared
15disaster area in Illinois or bordering Illinois by a
16manufacturer or retailer that is registered in this State to a
17corporation, society, association, foundation, or institution
18that has been issued a sales tax exemption identification
19number by the Department that assists victims of the disaster
20who reside within the declared disaster area.
21    (18) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is used in
24the performance of infrastructure repairs in this State,
25including but not limited to municipal roads and streets,
26access roads, bridges, sidewalks, waste disposal systems,

 

 

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1water and sewer line extensions, water distribution and
2purification facilities, storm water drainage and retention
3facilities, and sewage treatment facilities, resulting from a
4State or federally declared disaster in Illinois or bordering
5Illinois when such repairs are initiated on facilities located
6in the declared disaster area within 6 months after the
7disaster.
8    (19) Beginning July 1, 1999, game or game birds purchased
9at a "game breeding and hunting preserve area" as that term is
10used in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 3-75.
12    (20) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the
16Department to be organized and operated exclusively for
17educational purposes. For purposes of this exemption, "a
18corporation, limited liability company, society, association,
19foundation, or institution organized and operated exclusively
20for educational purposes" means all tax-supported public
21schools, private schools that offer systematic instruction in
22useful branches of learning by methods common to public
23schools and that compare favorably in their scope and
24intensity with the course of study presented in tax-supported
25schools, and vocational or technical schools or institutes
26organized and operated exclusively to provide a course of

 

 

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1study of not less than 6 weeks duration and designed to prepare
2individuals to follow a trade or to pursue a manual,
3technical, mechanical, industrial, business, or commercial
4occupation.
5    (21) Beginning January 1, 2000, personal property,
6including food, purchased through fundraising events for the
7benefit of a public or private elementary or secondary school,
8a group of those schools, or one or more school districts if
9the events are sponsored by an entity recognized by the school
10district that consists primarily of volunteers and includes
11parents and teachers of the school children. This paragraph
12does not apply to fundraising events (i) for the benefit of
13private home instruction or (ii) for which the fundraising
14entity purchases the personal property sold at the events from
15another individual or entity that sold the property for the
16purpose of resale by the fundraising entity and that profits
17from the sale to the fundraising entity. This paragraph is
18exempt from the provisions of Section 3-75.
19    (22) Beginning January 1, 2000 and through December 31,
202001, new or used automatic vending machines that prepare and
21serve hot food and beverages, including coffee, soup, and
22other items, and replacement parts for these machines.
23Beginning January 1, 2002 and through June 30, 2003, machines
24and parts for machines used in commercial, coin-operated
25amusement and vending business if a use or occupation tax is
26paid on the gross receipts derived from the use of the

 

 

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1commercial, coin-operated amusement and vending machines. This
2paragraph is exempt from the provisions of Section 3-75.
3    (23) Beginning August 23, 2001 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages,
6soft drinks, and food that has been prepared for immediate
7consumption) and prescription and nonprescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16    (24) Beginning on August 2, 2001 (the effective date of
17Public Act 92-227), computers and communications equipment
18utilized for any hospital purpose and equipment used in the
19diagnosis, analysis, or treatment of hospital patients
20purchased by a lessor who leases the equipment, under a lease
21of one year or longer executed or in effect at the time the
22lessor would otherwise be subject to the tax imposed by this
23Act, to a hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of
25the Retailers' Occupation Tax Act. If the equipment is leased
26in a manner that does not qualify for this exemption or is used

 

 

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1in any other nonexempt manner, the lessor shall be liable for
2the tax imposed under this Act or the Use Tax Act, as the case
3may be, based on the fair market value of the property at the
4time the nonqualifying use occurs. No lessor shall collect or
5attempt to collect an amount (however designated) that
6purports to reimburse that lessor for the tax imposed by this
7Act or the Use Tax Act, as the case may be, if the tax has not
8been paid by the lessor. If a lessor improperly collects any
9such amount from the lessee, the lessee shall have a legal
10right to claim a refund of that amount from the lessor. If,
11however, that amount is not refunded to the lessee for any
12reason, the lessor is liable to pay that amount to the
13Department. This paragraph is exempt from the provisions of
14Section 3-75.
15    (25) Beginning on August 2, 2001 (the effective date of
16Public Act 92-227), personal property purchased by a lessor
17who leases the property, under a lease of one year or longer
18executed or in effect at the time the lessor would otherwise be
19subject to the tax imposed by this Act, to a governmental body
20that has been issued an active tax exemption identification
21number by the Department under Section 1g of the Retailers'
22Occupation Tax Act. If the property is leased in a manner that
23does not qualify for this exemption or is used in any other
24nonexempt manner, the lessor shall be liable for the tax
25imposed under this Act or the Use Tax Act, as the case may be,
26based on the fair market value of the property at the time the

 

 

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1nonqualifying use occurs. No lessor shall collect or attempt
2to collect an amount (however designated) that purports to
3reimburse that lessor for the tax imposed by this Act or the
4Use Tax Act, as the case may be, if the tax has not been paid
5by the lessor. If a lessor improperly collects any such amount
6from the lessee, the lessee shall have a legal right to claim a
7refund of that amount from the lessor. If, however, that
8amount is not refunded to the lessee for any reason, the lessor
9is liable to pay that amount to the Department. This paragraph
10is exempt from the provisions of Section 3-75.
11    (26) Beginning January 1, 2008, tangible personal property
12used in the construction or maintenance of a community water
13supply, as defined under Section 3.145 of the Environmental
14Protection Act, that is operated by a not-for-profit
15corporation that holds a valid water supply permit issued
16under Title IV of the Environmental Protection Act. This
17paragraph is exempt from the provisions of Section 3-75.
18    (27) Beginning January 1, 2010 and continuing through
19December 31, 2024, materials, parts, equipment, components,
20and furnishings incorporated into or upon an aircraft as part
21of the modification, refurbishment, completion, replacement,
22repair, or maintenance of the aircraft. This exemption
23includes consumable supplies used in the modification,
24refurbishment, completion, replacement, repair, and
25maintenance of aircraft, but excludes any materials, parts,
26equipment, components, and consumable supplies used in the

 

 

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1modification, replacement, repair, and maintenance of aircraft
2engines or power plants, whether such engines or power plants
3are installed or uninstalled upon any such aircraft.
4"Consumable supplies" include, but are not limited to,
5adhesive, tape, sandpaper, general purpose lubricants,
6cleaning solution, latex gloves, and protective films. This
7exemption applies only to the use of qualifying tangible
8personal property transferred incident to the modification,
9refurbishment, completion, replacement, repair, or maintenance
10of aircraft by persons who (i) hold an Air Agency Certificate
11and are empowered to operate an approved repair station by the
12Federal Aviation Administration, (ii) have a Class IV Rating,
13and (iii) conduct operations in accordance with Part 145 of
14the Federal Aviation Regulations. The exemption does not
15include aircraft operated by a commercial air carrier
16providing scheduled passenger air service pursuant to
17authority issued under Part 121 or Part 129 of the Federal
18Aviation Regulations. The changes made to this paragraph (27)
19by Public Act 98-534 are declarative of existing law. It is the
20intent of the General Assembly that the exemption under this
21paragraph (27) applies continuously from January 1, 2010
22through December 31, 2024; however, no claim for credit or
23refund is allowed for taxes paid as a result of the
24disallowance of this exemption on or after January 1, 2015 and
25prior to February 5, 2020 (the effective date of Public Act
26101-629) this amendatory Act of the 101st General Assembly.

 

 

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1    (28) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt
10instruments issued by the public-facilities corporation in
11connection with the development of the municipal convention
12hall. This exemption includes existing public-facilities
13corporations as provided in Section 11-65-25 of the Illinois
14Municipal Code. This paragraph is exempt from the provisions
15of Section 3-75.
16    (29) Beginning January 1, 2017 and through December 31,
172026, menstrual pads, tampons, and menstrual cups.
18    (30) Tangible personal property transferred to a purchaser
19who is exempt from the tax imposed by this Act by operation of
20federal law. This paragraph is exempt from the provisions of
21Section 3-75.
22    (31) Qualified tangible personal property used in the
23construction or operation of a data center that has been
24granted a certificate of exemption by the Department of
25Commerce and Economic Opportunity, whether that tangible
26personal property is purchased by the owner, operator, or

 

 

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1tenant of the data center or by a contractor or subcontractor
2of the owner, operator, or tenant. Data centers that would
3have qualified for a certificate of exemption prior to January
41, 2020 had Public Act 101-31 this amendatory Act of the 101st
5General Assembly been in effect, may apply for and obtain an
6exemption for subsequent purchases of computer equipment or
7enabling software purchased or leased to upgrade, supplement,
8or replace computer equipment or enabling software purchased
9or leased in the original investment that would have
10qualified.
11    The Department of Commerce and Economic Opportunity shall
12grant a certificate of exemption under this item (31) to
13qualified data centers as defined by Section 605-1025 of the
14Department of Commerce and Economic Opportunity Law of the
15Civil Administrative Code of Illinois.
16    For the purposes of this item (31):
17        "Data center" means a building or a series of
18    buildings rehabilitated or constructed to house working
19    servers in one physical location or multiple sites within
20    the State of Illinois.
21        "Qualified tangible personal property" means:
22    electrical systems and equipment; climate control and
23    chilling equipment and systems; mechanical systems and
24    equipment; monitoring and secure systems; emergency
25    generators; hardware; computers; servers; data storage
26    devices; network connectivity equipment; racks; cabinets;

 

 

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1    telecommunications cabling infrastructure; raised floor
2    systems; peripheral components or systems; software;
3    mechanical, electrical, or plumbing systems; battery
4    systems; cooling systems and towers; temperature control
5    systems; other cabling; and other data center
6    infrastructure equipment and systems necessary to operate
7    qualified tangible personal property, including fixtures;
8    and component parts of any of the foregoing, including
9    installation, maintenance, repair, refurbishment, and
10    replacement of qualified tangible personal property to
11    generate, transform, transmit, distribute, or manage
12    electricity necessary to operate qualified tangible
13    personal property; and all other tangible personal
14    property that is essential to the operations of a computer
15    data center. The term "qualified tangible personal
16    property" also includes building materials physically
17    incorporated in to the qualifying data center. To document
18    the exemption allowed under this Section, the retailer
19    must obtain from the purchaser a copy of the certificate
20    of eligibility issued by the Department of Commerce and
21    Economic Opportunity.
22    This item (31) is exempt from the provisions of Section
233-75.
24    (32) Beginning July 1, 2022, breast pumps, breast pump
25collection and storage supplies, and breast pump kits. This
26item (32) is exempt from the provisions of Section 3-75. As

 

 

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1used in this item (32):
2        "Breast pump" means an electrically controlled or
3    manually controlled pump device designed or marketed to be
4    used to express milk from a human breast during lactation,
5    including the pump device and any battery, AC adapter, or
6    other power supply unit that is used to power the pump
7    device and is packaged and sold with the pump device at the
8    time of sale.
9        "Breast pump collection and storage supplies" means
10    items of tangible personal property designed or marketed
11    to be used in conjunction with a breast pump to collect
12    milk expressed from a human breast and to store collected
13    milk until it is ready for consumption.
14        "Breast pump collection and storage supplies"
15    includes, but is not limited to: breast shields and breast
16    shield connectors; breast pump tubes and tubing adapters;
17    breast pump valves and membranes; backflow protectors and
18    backflow protector adaptors; bottles and bottle caps
19    specific to the operation of the breast pump; and breast
20    milk storage bags.
21        "Breast pump collection and storage supplies" does not
22    include: (1) bottles and bottle caps not specific to the
23    operation of the breast pump; (2) breast pump travel bags
24    and other similar carrying accessories, including ice
25    packs, labels, and other similar products; (3) breast pump
26    cleaning supplies; (4) nursing bras, bra pads, breast

 

 

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1    shells, and other similar products; and (5) creams,
2    ointments, and other similar products that relieve
3    breastfeeding-related symptoms or conditions of the
4    breasts or nipples, unless sold as part of a breast pump
5    kit that is pre-packaged by the breast pump manufacturer
6    or distributor.
7        "Breast pump kit" means a kit that: (1) contains no
8    more than a breast pump, breast pump collection and
9    storage supplies, a rechargeable battery for operating the
10    breast pump, a breastmilk cooler, bottle stands, ice
11    packs, and a breast pump carrying case; and (2) is
12    pre-packaged as a breast pump kit by the breast pump
13    manufacturer or distributor.
14    (33) (32) Tangible personal property sold by or on behalf
15of the State Treasurer pursuant to the Revised Uniform
16Unclaimed Property Act. This item (33) (32) is exempt from the
17provisions of Section 3-75.
18    (34) Qualified tangible personal property used in the
19construction or operation of a mega project for which a
20certificate has been issued by the Department of Revenue as
21described and defined in Division 22 of Article 10 of the
22Property Tax Code, whether that tangible personal property is
23purchased by the owner, operator, or tenant of the mega
24project or by a contractor or subcontractor of the owner,
25operator, or tenant.
26    For the purposes of this item (34):

 

 

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1    "Facility" means a building or series of buildings.
2    "Mega project" means a facility that is rehabilitated or
3constructed as described in Division 22 of Article 10 of the
4Property Tax Code.
5    "Qualified tangible personal property" means: electrical
6systems and equipment; climate control and chilling equipment
7and systems; mechanical systems and equipment; monitoring and
8secure systems; emergency generators; hardware; computers;
9servers; data storage devices; network connectivity equipment;
10racks; cabinets; telecommunications cabling infrastructure;
11raised floor systems; peripheral components or systems;
12software; mechanical, electrical, or plumbing systems; battery
13systems; cooling systems and towers; temperature control
14systems; other cabling; and other data center infrastructure
15equipment and systems necessary to operate qualified tangible
16personal property, including fixtures; and component parts of
17any of the foregoing, including installation, maintenance,
18repair, refurbishment, and replacement of qualified tangible
19personal property to generate, transform, transmit,
20distribute, or manage electricity necessary to operate
21qualified tangible personal property; and all other tangible
22personal property that is essential to the operations of a
23mega project. The term "qualified tangible personal property"
24also includes building materials to be incorporated into the
25mega project. To document the exemption allowed under this
26Section, the retailer, contractor or subcontractor or supplier

 

 

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1must obtain from the purchaser a copy of the certificate
2issued by the Department of Revenue for the mega project as
3described and defined in Division 22 of Article 10 of the
4Property Tax Code.
5    This item (34) is exempt from the provisions of Section
63-75.
7(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
8101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
970, Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1075-10, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-3-22.)
 
11    Section 15. The Service Occupation Tax Act is amended by
12changing Section 3-5 as follows:
 
13    (35 ILCS 115/3-5)
14    Sec. 3-5. Exemptions. The following tangible personal
15property is exempt from the tax imposed by this Act:
16    (1) 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
20benefit of persons 65 years of age or older if the personal
21property was not purchased by the enterprise for the purpose
22of resale by the enterprise.
23    (2) Personal property purchased by a not-for-profit
24Illinois county fair association for use in conducting,

 

 

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1operating, or promoting the county fair.
2    (3) Personal property purchased by any not-for-profit arts
3or cultural organization that establishes, by proof required
4by the Department by rule, that it has received an exemption
5under Section 501(c)(3) of the Internal Revenue Code and that
6is organized and operated primarily for the presentation or
7support of arts or cultural programming, activities, or
8services. These organizations include, but are not limited to,
9music and dramatic arts organizations such as symphony
10orchestras and theatrical groups, arts and cultural service
11organizations, local arts councils, visual arts organizations,
12and media arts organizations. On and after July 1, 2001 (the
13effective date of Public Act 92-35), however, an entity
14otherwise eligible for this exemption shall not make tax-free
15purchases unless it has an active identification number issued
16by the Department.
17    (4) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21    (5) Until July 1, 2003 and beginning again on September 1,
222004 through August 30, 2014, graphic arts machinery and
23equipment, including repair and replacement parts, both new
24and used, and including that manufactured on special order or
25purchased for lease, certified by the purchaser to be used
26primarily for graphic arts production. Equipment includes

 

 

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1chemicals or chemicals acting as catalysts but only if the
2chemicals or chemicals acting as catalysts effect a direct and
3immediate change upon a graphic arts product. Beginning on
4July 1, 2017, graphic arts machinery and equipment is included
5in the manufacturing and assembling machinery and equipment
6exemption under Section 2 of this Act.
7    (6) Personal property sold by a teacher-sponsored student
8organization affiliated with an elementary or secondary school
9located in Illinois.
10    (7) Farm machinery and equipment, both new and used,
11including that manufactured on special order, certified by the
12purchaser to be used primarily for production agriculture or
13State or federal agricultural programs, including individual
14replacement parts for the machinery and equipment, including
15machinery and equipment purchased for lease, and including
16implements of husbandry defined in Section 1-130 of the
17Illinois Vehicle Code, farm machinery and agricultural
18chemical and fertilizer spreaders, and nurse wagons required
19to be registered under Section 3-809 of the Illinois Vehicle
20Code, but excluding other motor vehicles required to be
21registered under the Illinois Vehicle Code. Horticultural
22polyhouses or hoop houses used for propagating, growing, or
23overwintering plants shall be considered farm machinery and
24equipment under this item (7). Agricultural chemical tender
25tanks and dry boxes shall include units sold separately from a
26motor vehicle required to be licensed and units sold mounted

 

 

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1on a motor vehicle required to be licensed if the selling price
2of the tender is separately stated.
3    Farm machinery and equipment shall include precision
4farming equipment that is installed or purchased to be
5installed on farm machinery and equipment including, but not
6limited to, tractors, harvesters, sprayers, planters, seeders,
7or spreaders. Precision farming equipment includes, but is not
8limited to, soil testing sensors, computers, monitors,
9software, global positioning and mapping systems, and other
10such equipment.
11    Farm machinery and equipment also includes computers,
12sensors, software, and related equipment used primarily in the
13computer-assisted operation of production agriculture
14facilities, equipment, and activities such as, but not limited
15to, the collection, monitoring, and correlation of animal and
16crop data for the purpose of formulating animal diets and
17agricultural chemicals. This item (7) is exempt from the
18provisions of Section 3-55.
19    (8) Until June 30, 2013, fuel and petroleum products sold
20to or used by an air common carrier, certified by the carrier
21to be used for consumption, shipment, or storage in the
22conduct of its business as an air common carrier, for a flight
23destined for or returning from a location or locations outside
24the United States without regard to previous or subsequent
25domestic stopovers.
26    Beginning July 1, 2013, fuel and petroleum products sold

 

 

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1to or used by an air carrier, certified by the carrier to be
2used for consumption, shipment, or storage in the conduct of
3its business as an air common carrier, for a flight that (i) is
4engaged in foreign trade or is engaged in trade between the
5United States and any of its possessions and (ii) transports
6at least one individual or package for hire from the city of
7origination to the city of final destination on the same
8aircraft, without regard to a change in the flight number of
9that aircraft.
10    (9) Proceeds of mandatory service charges separately
11stated on customers' bills for the purchase and consumption of
12food and beverages, to the extent that the proceeds of the
13service charge are in fact turned over as tips or as a
14substitute for tips to the employees who participate directly
15in preparing, serving, hosting or cleaning up the food or
16beverage function with respect to which the service charge is
17imposed.
18    (10) Until July 1, 2003, oil field exploration, drilling,
19and production equipment, including (i) rigs and parts of
20rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
21pipe and tubular goods, including casing and drill strings,
22(iii) pumps and pump-jack units, (iv) storage tanks and flow
23lines, (v) any individual replacement part for oil field
24exploration, drilling, and production equipment, and (vi)
25machinery and equipment purchased for lease; but excluding
26motor vehicles required to be registered under the Illinois

 

 

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1Vehicle Code.
2    (11) Photoprocessing machinery and equipment, including
3repair and replacement parts, both new and used, including
4that manufactured on special order, certified by the purchaser
5to be used primarily for photoprocessing, and including
6photoprocessing machinery and equipment purchased for lease.
7    (12) Until July 1, 2028, coal and aggregate exploration,
8mining, off-highway hauling, processing, maintenance, and
9reclamation equipment, including replacement parts and
10equipment, and including equipment purchased for lease, but
11excluding motor vehicles required to be registered under the
12Illinois Vehicle Code. The changes made to this Section by
13Public Act 97-767 apply on and after July 1, 2003, but no claim
14for credit or refund is allowed on or after August 16, 2013
15(the effective date of Public Act 98-456) for such taxes paid
16during the period beginning July 1, 2003 and ending on August
1716, 2013 (the effective date of Public Act 98-456).
18    (13) Beginning January 1, 1992 and through June 30, 2016,
19food for human consumption that is to be consumed off the
20premises where it is sold (other than alcoholic beverages,
21soft drinks and food that has been prepared for immediate
22consumption) and prescription and non-prescription medicines,
23drugs, medical appliances, and insulin, urine testing
24materials, syringes, and needles used by diabetics, for human
25use, when purchased for use by a person receiving medical
26assistance under Article V of the Illinois Public Aid Code who

 

 

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1resides in a licensed long-term care facility, as defined in
2the Nursing Home Care Act, or in a licensed facility as defined
3in the ID/DD Community Care Act, the MC/DD Act, or the
4Specialized Mental Health Rehabilitation Act of 2013.
5    (14) Semen used for artificial insemination of livestock
6for direct agricultural production.
7    (15) Horses, or interests in horses, registered with and
8meeting the requirements of any of the Arabian Horse Club
9Registry of America, Appaloosa Horse Club, American Quarter
10Horse Association, United States Trotting Association, or
11Jockey Club, as appropriate, used for purposes of breeding or
12racing for prizes. This item (15) is exempt from the
13provisions of Section 3-55, and the exemption provided for
14under this item (15) applies for all periods beginning May 30,
151995, but no claim for credit or refund is allowed on or after
16January 1, 2008 (the effective date of Public Act 95-88) for
17such taxes paid during the period beginning May 30, 2000 and
18ending on January 1, 2008 (the effective date of Public Act
1995-88).
20    (16) Computers and communications equipment utilized for
21any hospital purpose and equipment used in the diagnosis,
22analysis, or treatment of hospital patients sold to a lessor
23who leases the equipment, under a lease of one year or longer
24executed or in effect at the time of the purchase, to a
25hospital that has been issued an active tax exemption
26identification number by the Department under Section 1g of

 

 

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1the Retailers' Occupation Tax Act.
2    (17) Personal property sold to a lessor who leases the
3property, under a lease of one year or longer executed or in
4effect at the time of the purchase, to a governmental body that
5has been issued an active tax exemption identification number
6by the Department under Section 1g of the Retailers'
7Occupation Tax Act.
8    (18) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is donated
11for disaster relief to be used in a State or federally declared
12disaster area in Illinois or bordering Illinois by a
13manufacturer or retailer that is registered in this State to a
14corporation, society, association, foundation, or institution
15that has been issued a sales tax exemption identification
16number by the Department that assists victims of the disaster
17who reside within the declared disaster area.
18    (19) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is used in
21the performance of infrastructure repairs in this State,
22including but not limited to municipal roads and streets,
23access roads, bridges, sidewalks, waste disposal systems,
24water and sewer line extensions, water distribution and
25purification facilities, storm water drainage and retention
26facilities, and sewage treatment facilities, resulting from a

 

 

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1State or federally declared disaster in Illinois or bordering
2Illinois when such repairs are initiated on facilities located
3in the declared disaster area within 6 months after the
4disaster.
5    (20) Beginning July 1, 1999, game or game birds sold at a
6"game breeding and hunting preserve area" as that term is used
7in the Wildlife Code. This paragraph is exempt from the
8provisions of Section 3-55.
9    (21) 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
13Department to be organized and operated exclusively for
14educational purposes. For purposes of this exemption, "a
15corporation, limited liability company, society, association,
16foundation, or institution organized and operated exclusively
17for educational purposes" means all tax-supported public
18schools, private schools that offer systematic instruction in
19useful branches of learning by methods common to public
20schools and that compare favorably in their scope and
21intensity with the course of study presented in tax-supported
22schools, and vocational or technical schools or institutes
23organized and operated exclusively to provide a course of
24study of not less than 6 weeks duration and designed to prepare
25individuals to follow a trade or to pursue a manual,
26technical, mechanical, industrial, business, or commercial

 

 

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1occupation.
2    (22) Beginning January 1, 2000, personal property,
3including food, purchased through fundraising events for the
4benefit of a public or private elementary or secondary school,
5a group of those schools, or one or more school districts if
6the events are sponsored by an entity recognized by the school
7district that consists primarily of volunteers and includes
8parents and teachers of the school children. This paragraph
9does not apply to fundraising events (i) for the benefit of
10private home instruction or (ii) for which the fundraising
11entity purchases the personal property sold at the events from
12another individual or entity that sold the property for the
13purpose of resale by the fundraising entity and that profits
14from the sale to the fundraising entity. This paragraph is
15exempt from the provisions of Section 3-55.
16    (23) Beginning January 1, 2000 and through December 31,
172001, new or used automatic vending machines that prepare and
18serve hot food and beverages, including coffee, soup, and
19other items, and replacement parts for these machines.
20Beginning January 1, 2002 and through June 30, 2003, machines
21and parts for machines used in commercial, coin-operated
22amusement and vending business if a use or occupation tax is
23paid on the gross receipts derived from the use of the
24commercial, coin-operated amusement and vending machines. This
25paragraph is exempt from the provisions of Section 3-55.
26    (24) Beginning on August 2, 2001 (the effective date of

 

 

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1Public Act 92-227), computers and communications equipment
2utilized for any hospital purpose and equipment used in the
3diagnosis, analysis, or treatment of hospital patients sold to
4a lessor who leases the equipment, under a lease of one year or
5longer executed or in effect at the time of the purchase, to a
6hospital that has been issued an active tax exemption
7identification number by the Department under Section 1g of
8the Retailers' Occupation Tax Act. This paragraph is exempt
9from the provisions of Section 3-55.
10    (25) Beginning on August 2, 2001 (the effective date of
11Public Act 92-227), personal property sold to a lessor who
12leases the property, under a lease of one year or longer
13executed or in effect at the time of the purchase, to a
14governmental body that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16the Retailers' Occupation Tax Act. This paragraph is exempt
17from the provisions of Section 3-55.
18    (26) Beginning on January 1, 2002 and through June 30,
192016, tangible personal property purchased from an Illinois
20retailer by a taxpayer engaged in centralized purchasing
21activities in Illinois who will, upon receipt of the property
22in Illinois, temporarily store the property in Illinois (i)
23for the purpose of subsequently transporting it outside this
24State for use or consumption thereafter solely outside this
25State or (ii) for the purpose of being processed, fabricated,
26or manufactured into, attached to, or incorporated into other

 

 

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1tangible personal property to be transported outside this
2State and thereafter used or consumed solely outside this
3State. The Director of Revenue shall, pursuant to rules
4adopted in accordance with the Illinois Administrative
5Procedure Act, issue a permit to any taxpayer in good standing
6with the Department who is eligible for the exemption under
7this paragraph (26). The permit issued under this paragraph
8(26) shall authorize the holder, to the extent and in the
9manner specified in the rules adopted under this Act, to
10purchase tangible personal property from a retailer exempt
11from the taxes imposed by this Act. Taxpayers shall maintain
12all necessary books and records to substantiate the use and
13consumption of all such tangible personal property outside of
14the State of Illinois.
15    (27) Beginning January 1, 2008, tangible personal property
16used in the construction or maintenance of a community water
17supply, as defined under Section 3.145 of the Environmental
18Protection Act, that is operated by a not-for-profit
19corporation that holds a valid water supply permit issued
20under Title IV of the Environmental Protection Act. This
21paragraph is exempt from the provisions of Section 3-55.
22    (28) Tangible personal property sold to a
23public-facilities corporation, as described in Section
2411-65-10 of the Illinois Municipal Code, for purposes of
25constructing or furnishing a municipal convention hall, but
26only if the legal title to the municipal convention hall is

 

 

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1transferred to the municipality without any further
2consideration by or on behalf of the municipality at the time
3of the completion of the municipal convention hall or upon the
4retirement or redemption of any bonds or other debt
5instruments issued by the public-facilities corporation in
6connection with the development of the municipal convention
7hall. This exemption includes existing public-facilities
8corporations as provided in Section 11-65-25 of the Illinois
9Municipal Code. This paragraph is exempt from the provisions
10of Section 3-55.
11    (29) Beginning January 1, 2010 and continuing through
12December 31, 2024, materials, parts, equipment, components,
13and furnishings incorporated into or upon an aircraft as part
14of the modification, refurbishment, completion, replacement,
15repair, or maintenance of the aircraft. This exemption
16includes consumable supplies used in the modification,
17refurbishment, completion, replacement, repair, and
18maintenance of aircraft, but excludes any materials, parts,
19equipment, components, and consumable supplies used in the
20modification, replacement, repair, and maintenance of aircraft
21engines or power plants, whether such engines or power plants
22are installed or uninstalled upon any such aircraft.
23"Consumable supplies" include, but are not limited to,
24adhesive, tape, sandpaper, general purpose lubricants,
25cleaning solution, latex gloves, and protective films. This
26exemption applies only to the transfer of qualifying tangible

 

 

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1personal property incident to the modification, refurbishment,
2completion, replacement, repair, or maintenance of an aircraft
3by persons who (i) hold an Air Agency Certificate and are
4empowered to operate an approved repair station by the Federal
5Aviation Administration, (ii) have a Class IV Rating, and
6(iii) conduct operations in accordance with Part 145 of the
7Federal Aviation Regulations. The exemption does not include
8aircraft operated by a commercial air carrier providing
9scheduled passenger air service pursuant to authority issued
10under Part 121 or Part 129 of the Federal Aviation
11Regulations. The changes made to this paragraph (29) by Public
12Act 98-534 are declarative of existing law. It is the intent of
13the General Assembly that the exemption under this paragraph
14(29) applies continuously from January 1, 2010 through
15December 31, 2024; however, no claim for credit or refund is
16allowed for taxes paid as a result of the disallowance of this
17exemption on or after January 1, 2015 and prior to February 5,
182020 (the effective date of Public Act 101-629) this
19amendatory Act of the 101st General Assembly.
20    (30) Beginning January 1, 2017 and through December 31,
212026, menstrual pads, tampons, and menstrual cups.
22    (31) Tangible personal property transferred to a purchaser
23who is exempt from tax by operation of federal law. This
24paragraph is exempt from the provisions of Section 3-55.
25    (32) Qualified tangible personal property used in the
26construction or operation of a data center that has been

 

 

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1granted a certificate of exemption by the Department of
2Commerce and Economic Opportunity, whether that tangible
3personal property is purchased by the owner, operator, or
4tenant of the data center or by a contractor or subcontractor
5of the owner, operator, or tenant. Data centers that would
6have qualified for a certificate of exemption prior to January
71, 2020 had Public Act 101-31 this amendatory Act of the 101st
8General Assembly been in effect, may apply for and obtain an
9exemption for subsequent purchases of computer equipment or
10enabling software purchased or leased to upgrade, supplement,
11or replace computer equipment or enabling software purchased
12or leased in the original investment that would have
13qualified.
14    The Department of Commerce and Economic Opportunity shall
15grant a certificate of exemption under this item (32) to
16qualified data centers as defined by Section 605-1025 of the
17Department of Commerce and Economic Opportunity Law of the
18Civil Administrative Code of Illinois.
19    For the purposes of this item (32):
20        "Data center" means a building or a series of
21    buildings rehabilitated or constructed to house working
22    servers in one physical location or multiple sites within
23    the State of Illinois.
24        "Qualified tangible personal property" means:
25    electrical systems and equipment; climate control and
26    chilling equipment and systems; mechanical systems and

 

 

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1    equipment; monitoring and secure systems; emergency
2    generators; hardware; computers; servers; data storage
3    devices; network connectivity equipment; racks; cabinets;
4    telecommunications cabling infrastructure; raised floor
5    systems; peripheral components or systems; software;
6    mechanical, electrical, or plumbing systems; battery
7    systems; cooling systems and towers; temperature control
8    systems; other cabling; and other data center
9    infrastructure equipment and systems necessary to operate
10    qualified tangible personal property, including fixtures;
11    and component parts of any of the foregoing, including
12    installation, maintenance, repair, refurbishment, and
13    replacement of qualified tangible personal property to
14    generate, transform, transmit, distribute, or manage
15    electricity necessary to operate qualified tangible
16    personal property; and all other tangible personal
17    property that is essential to the operations of a computer
18    data center. The term "qualified tangible personal
19    property" also includes building materials physically
20    incorporated in to the qualifying data center. To document
21    the exemption allowed under this Section, the retailer
22    must obtain from the purchaser a copy of the certificate
23    of eligibility issued by the Department of Commerce and
24    Economic Opportunity.
25    This item (32) is exempt from the provisions of Section
263-55.

 

 

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1    (33) Beginning July 1, 2022, breast pumps, breast pump
2collection and storage supplies, and breast pump kits. This
3item (33) is exempt from the provisions of Section 3-55. As
4used in this item (33):
5        "Breast pump" means an electrically controlled or
6    manually controlled pump device designed or marketed to be
7    used to express milk from a human breast during lactation,
8    including the pump device and any battery, AC adapter, or
9    other power supply unit that is used to power the pump
10    device and is packaged and sold with the pump device at the
11    time of sale.
12        "Breast pump collection and storage supplies" means
13    items of tangible personal property designed or marketed
14    to be used in conjunction with a breast pump to collect
15    milk expressed from a human breast and to store collected
16    milk until it is ready for consumption.
17        "Breast pump collection and storage supplies"
18    includes, but is not limited to: breast shields and breast
19    shield connectors; breast pump tubes and tubing adapters;
20    breast pump valves and membranes; backflow protectors and
21    backflow protector adaptors; bottles and bottle caps
22    specific to the operation of the breast pump; and breast
23    milk storage bags.
24        "Breast pump collection and storage supplies" does not
25    include: (1) bottles and bottle caps not specific to the
26    operation of the breast pump; (2) breast pump travel bags

 

 

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1    and other similar carrying accessories, including ice
2    packs, labels, and other similar products; (3) breast pump
3    cleaning supplies; (4) nursing bras, bra pads, breast
4    shells, and other similar products; and (5) creams,
5    ointments, and other similar products that relieve
6    breastfeeding-related symptoms or conditions of the
7    breasts or nipples, unless sold as part of a breast pump
8    kit that is pre-packaged by the breast pump manufacturer
9    or distributor.
10        "Breast pump kit" means a kit that: (1) contains no
11    more than a breast pump, breast pump collection and
12    storage supplies, a rechargeable battery for operating the
13    breast pump, a breastmilk cooler, bottle stands, ice
14    packs, and a breast pump carrying case; and (2) is
15    pre-packaged as a breast pump kit by the breast pump
16    manufacturer or distributor.
17    (34) (33) Tangible personal property sold by or on behalf
18of the State Treasurer pursuant to the Revised Uniform
19Unclaimed Property Act. This item (34) (33) is exempt from the
20provisions of Section 3-55.
21    (35) Qualified tangible personal property used in the
22construction or operation of a mega project for which a
23certificate has been issued by the Department of Revenue as
24described and defined in Division 22 of Article 10 of the
25Property Tax Code, whether that tangible personal property is
26purchased by the owner, operator, or tenant of the mega

 

 

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1project or by a contractor or subcontractor of the owner,
2operator, or tenant.
3    For the purposes of this item (35):
4    "Facility" means a building or series of buildings.
5    "Mega project" means a facility that is rehabilitated or
6constructed as described in Division 22 of Article 10 of the
7Property Tax Code.
8    "Qualified tangible personal property" means: electrical
9systems and equipment; climate control and chilling equipment
10and systems; mechanical systems and equipment; monitoring and
11secure systems; emergency generators; hardware; computers;
12servers; data storage devices; network connectivity equipment;
13racks; cabinets; telecommunications cabling infrastructure;
14raised floor systems; peripheral components or systems;
15software; mechanical, electrical, or plumbing systems; battery
16systems; cooling systems and towers; temperature control
17systems; other cabling; and other data center infrastructure
18equipment and systems necessary to operate qualified tangible
19personal property, including fixtures; and component parts of
20any of the foregoing, including installation, maintenance,
21repair, refurbishment, and replacement of qualified tangible
22personal property to generate, transform, transmit,
23distribute, or manage electricity necessary to operate
24qualified tangible personal property; and all other tangible
25personal property that is essential to the operations of a
26mega project. The term "qualified tangible personal property"

 

 

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1also includes building materials to be incorporated into the
2mega project. To document the exemption allowed under this
3Section, the retailer, contractor or subcontractor or supplier
4must obtain from the purchaser a copy of the certificate
5issued by the Department of Revenue for the mega project as
6described and defined in Division 22 of Article 10 of the
7Property Tax Code.
8    This item (35) is exempt from the provisions of Section
93-55.
10(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
11101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
1270, Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
1375-15, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-9-22.)
 
14    Section 20. The Retailers' Occupation Tax Act is amended
15by changing Section 2-5 as follows:
 
16    (35 ILCS 120/2-5)
17    Sec. 2-5. Exemptions. Gross receipts from proceeds from
18the sale of the following tangible personal property are
19exempt from the tax imposed by this Act:
20        (1) Farm chemicals.
21        (2) Farm machinery and equipment, both new and used,
22    including that manufactured on special order, certified by
23    the purchaser to be used primarily for production
24    agriculture or State or federal agricultural programs,

 

 

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

 

 

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1    sensors, software, and related equipment used primarily in
2    the computer-assisted operation of production agriculture
3    facilities, equipment, and activities such as, but not
4    limited to, the collection, monitoring, and correlation of
5    animal and crop data for the purpose of formulating animal
6    diets and agricultural chemicals. This item (2) is exempt
7    from the provisions of Section 2-70.
8        (3) Until July 1, 2003, distillation machinery and
9    equipment, sold as a unit or kit, assembled or installed
10    by the retailer, certified by the user to be used only for
11    the production of ethyl alcohol that will be used for
12    consumption as motor fuel or as a component of motor fuel
13    for the personal use of the user, and not subject to sale
14    or resale.
15        (4) Until July 1, 2003 and beginning again September
16    1, 2004 through August 30, 2014, graphic arts machinery
17    and equipment, including repair and replacement parts,
18    both new and used, and including that manufactured on
19    special order or purchased for lease, certified by the
20    purchaser to be used primarily for graphic arts
21    production. Equipment includes chemicals or chemicals
22    acting as catalysts but only if the chemicals or chemicals
23    acting as catalysts effect a direct and immediate change
24    upon a graphic arts product. Beginning on July 1, 2017,
25    graphic arts machinery and equipment is included in the
26    manufacturing and assembling machinery and equipment

 

 

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1    exemption under paragraph (14).
2        (5) A motor vehicle that is used for automobile
3    renting, as defined in the Automobile Renting Occupation
4    and Use Tax Act. This paragraph is exempt from the
5    provisions of Section 2-70.
6        (6) Personal property sold by a teacher-sponsored
7    student organization affiliated with an elementary or
8    secondary school located in Illinois.
9        (7) Until July 1, 2003, proceeds of that portion of
10    the selling price of a passenger car the sale of which is
11    subject to the Replacement Vehicle Tax.
12        (8) Personal property sold to an Illinois county fair
13    association for use in conducting, operating, or promoting
14    the county fair.
15        (9) Personal property sold to a not-for-profit arts or
16    cultural organization that establishes, by proof required
17    by the Department by rule, that it has received an
18    exemption under Section 501(c)(3) of the Internal Revenue
19    Code and that is organized and operated primarily for the
20    presentation or support of arts or cultural programming,
21    activities, or services. These organizations include, but
22    are not limited to, music and dramatic arts organizations
23    such as symphony orchestras and theatrical groups, arts
24    and cultural service organizations, local arts councils,
25    visual arts organizations, and media arts organizations.
26    On and after July 1, 2001 (the effective date of Public Act

 

 

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1    92-35), however, an entity otherwise eligible for this
2    exemption shall not make tax-free purchases unless it has
3    an active identification number issued by the Department.
4        (10) Personal property sold by a corporation, society,
5    association, foundation, institution, or organization,
6    other than a limited liability company, that is organized
7    and operated as a not-for-profit service enterprise for
8    the benefit of persons 65 years of age or older if the
9    personal property was not purchased by the enterprise for
10    the purpose of resale by the enterprise.
11        (11) Personal property sold to a governmental body, to
12    a corporation, society, association, foundation, or
13    institution organized and operated exclusively for
14    charitable, religious, or educational purposes, or to a
15    not-for-profit corporation, society, association,
16    foundation, institution, or organization that has no
17    compensated officers or employees and that is organized
18    and operated primarily for the recreation of persons 55
19    years of age or older. A limited liability company may
20    qualify for the exemption under this paragraph only if the
21    limited liability company is organized and operated
22    exclusively for educational purposes. On and after July 1,
23    1987, however, no entity otherwise eligible for this
24    exemption shall make tax-free purchases unless it has an
25    active identification number issued by the Department.
26        (12) (Blank).

 

 

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1        (12-5) On and after July 1, 2003 and through June 30,
2    2004, motor vehicles of the second division with a gross
3    vehicle weight in excess of 8,000 pounds that are subject
4    to the commercial distribution fee imposed under Section
5    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
6    2004 and through June 30, 2005, the use in this State of
7    motor vehicles of the second division: (i) with a gross
8    vehicle weight rating in excess of 8,000 pounds; (ii) that
9    are subject to the commercial distribution fee imposed
10    under Section 3-815.1 of the Illinois Vehicle Code; and
11    (iii) that are primarily used for commercial purposes.
12    Through June 30, 2005, this exemption applies to repair
13    and replacement parts added after the initial purchase of
14    such a motor vehicle if that motor vehicle is used in a
15    manner that would qualify for the rolling stock exemption
16    otherwise provided for in this Act. For purposes of this
17    paragraph, "used for commercial purposes" means the
18    transportation of persons or property in furtherance of
19    any commercial or industrial enterprise whether for-hire
20    or not.
21        (13) Proceeds from sales to owners, lessors, or
22    shippers of tangible personal property that is utilized by
23    interstate carriers for hire for use as rolling stock
24    moving in interstate commerce and equipment operated by a
25    telecommunications provider, licensed as a common carrier
26    by the Federal Communications Commission, which is

 

 

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1    permanently installed in or affixed to aircraft moving in
2    interstate commerce.
3        (14) Machinery and equipment that will be used by the
4    purchaser, or a lessee of the purchaser, primarily in the
5    process of manufacturing or assembling tangible personal
6    property for wholesale or retail sale or lease, whether
7    the sale or lease is made directly by the manufacturer or
8    by some other person, whether the materials used in the
9    process are owned by the manufacturer or some other
10    person, or whether the sale or lease is made apart from or
11    as an incident to the seller's engaging in the service
12    occupation of producing machines, tools, dies, jigs,
13    patterns, gauges, or other similar items of no commercial
14    value on special order for a particular purchaser. The
15    exemption provided by this paragraph (14) does not include
16    machinery and equipment used in (i) the generation of
17    electricity for wholesale or retail sale; (ii) the
18    generation or treatment of natural or artificial gas for
19    wholesale or retail sale that is delivered to customers
20    through pipes, pipelines, or mains; or (iii) the treatment
21    of water for wholesale or retail sale that is delivered to
22    customers through pipes, pipelines, or mains. The
23    provisions of Public Act 98-583 are declaratory of
24    existing law as to the meaning and scope of this
25    exemption. Beginning on July 1, 2017, the exemption
26    provided by this paragraph (14) includes, but is not

 

 

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1    limited to, graphic arts machinery and equipment, as
2    defined in paragraph (4) of this Section.
3        (15) Proceeds of mandatory service charges separately
4    stated on customers' bills for purchase and consumption of
5    food and beverages, to the extent that the proceeds of the
6    service charge are in fact turned over as tips or as a
7    substitute for tips to the employees who participate
8    directly in preparing, serving, hosting or cleaning up the
9    food or beverage function with respect to which the
10    service charge is imposed.
11        (16) Tangible personal property sold to a purchaser if
12    the purchaser is exempt from use tax by operation of
13    federal law. This paragraph is exempt from the provisions
14    of Section 2-70.
15        (17) Tangible personal property sold to a common
16    carrier by rail or motor that receives the physical
17    possession of the property in Illinois and that transports
18    the property, or shares with another common carrier in the
19    transportation of the property, out of Illinois on a
20    standard uniform bill of lading showing the seller of the
21    property as the shipper or consignor of the property to a
22    destination outside Illinois, for use outside Illinois.
23        (18) Legal tender, currency, medallions, or gold or
24    silver coinage issued by the State of Illinois, the
25    government of the United States of America, or the
26    government of any foreign country, and bullion.

 

 

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1        (19) Until July 1, 2003, oil field exploration,
2    drilling, and production equipment, including (i) rigs and
3    parts of rigs, rotary rigs, cable tool rigs, and workover
4    rigs, (ii) pipe and tubular goods, including casing and
5    drill strings, (iii) pumps and pump-jack units, (iv)
6    storage tanks and flow lines, (v) any individual
7    replacement part for oil field exploration, drilling, and
8    production equipment, and (vi) machinery and equipment
9    purchased for lease; but excluding motor vehicles required
10    to be registered under the Illinois Vehicle Code.
11        (20) Photoprocessing machinery and equipment,
12    including repair and replacement parts, both new and used,
13    including that manufactured on special order, certified by
14    the purchaser to be used primarily for photoprocessing,
15    and including photoprocessing machinery and equipment
16    purchased for lease.
17        (21) Until July 1, 2028, coal and aggregate
18    exploration, mining, off-highway hauling, processing,
19    maintenance, and reclamation equipment, including
20    replacement parts and equipment, and including equipment
21    purchased for lease, but excluding motor vehicles required
22    to be registered under the Illinois Vehicle Code. The
23    changes made to this Section by Public Act 97-767 apply on
24    and after July 1, 2003, but no claim for credit or refund
25    is allowed on or after August 16, 2013 (the effective date
26    of Public Act 98-456) for such taxes paid during the

 

 

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1    period beginning July 1, 2003 and ending on August 16,
2    2013 (the effective date of Public Act 98-456).
3        (22) Until June 30, 2013, fuel and petroleum products
4    sold to or used by an air carrier, certified by the carrier
5    to be used for consumption, shipment, or storage in the
6    conduct of its business as an air common carrier, for a
7    flight destined for or returning from a location or
8    locations outside the United States without regard to
9    previous or subsequent domestic stopovers.
10        Beginning July 1, 2013, fuel and petroleum products
11    sold to or used by an air carrier, certified by the carrier
12    to be used for consumption, shipment, or storage in the
13    conduct of its business as an air common carrier, for a
14    flight that (i) is engaged in foreign trade or is engaged
15    in trade between the United States and any of its
16    possessions and (ii) transports at least one individual or
17    package for hire from the city of origination to the city
18    of final destination on the same aircraft, without regard
19    to a change in the flight number of that aircraft.
20        (23) A transaction in which the purchase order is
21    received by a florist who is located outside Illinois, but
22    who has a florist located in Illinois deliver the property
23    to the purchaser or the purchaser's donee in Illinois.
24        (24) Fuel consumed or used in the operation of ships,
25    barges, or vessels that are used primarily in or for the
26    transportation of property or the conveyance of persons

 

 

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

 

 

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1    that would otherwise be imposed under this Act. At the
2    time of the sale, the purchaser shall execute a statement,
3    signed under penalty of perjury, of his or her intent to
4    title the vehicle in the state in which the purchaser is a
5    resident within 30 days after the sale and of the fact of
6    the payment to the State of Illinois of tax in an amount
7    equivalent to the state's rate of tax on taxable property
8    in his or her state of residence and shall submit the
9    statement to the appropriate tax collection agency in his
10    or her state of residence. In addition, the retailer must
11    retain a signed copy of the statement in his or her
12    records. Nothing in this item shall be construed to
13    require the removal of the vehicle from this state
14    following the filing of an intent to title the vehicle in
15    the purchaser's state of residence if the purchaser titles
16    the vehicle in his or her state of residence within 30 days
17    after the date of sale. The tax collected under this Act in
18    accordance with this item (25-5) shall be proportionately
19    distributed as if the tax were collected at the 6.25%
20    general rate imposed under this Act.
21        (25-7) Beginning on July 1, 2007, no tax is imposed
22    under this Act on the sale of an aircraft, as defined in
23    Section 3 of the Illinois Aeronautics Act, if all of the
24    following conditions are met:
25            (1) the aircraft leaves this State within 15 days
26        after the later of either the issuance of the final

 

 

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1        billing for the sale of the aircraft, or the
2        authorized approval for return to service, completion
3        of the maintenance record entry, and completion of the
4        test flight and ground test for inspection, as
5        required by 14 CFR C.F.R. 91.407;
6            (2) the aircraft is not based or registered in
7        this State after the sale of the aircraft; and
8            (3) the seller retains in his or her books and
9        records and provides to the Department a signed and
10        dated certification from the purchaser, on a form
11        prescribed by the Department, certifying that the
12        requirements of this item (25-7) are met. The
13        certificate must also include the name and address of
14        the purchaser, the address of the location where the
15        aircraft is to be titled or registered, the address of
16        the primary physical location of the aircraft, and
17        other information that the Department may reasonably
18        require.
19        For purposes of this item (25-7):
20        "Based in this State" means hangared, stored, or
21    otherwise used, excluding post-sale customizations as
22    defined in this Section, for 10 or more days in each
23    12-month period immediately following the date of the sale
24    of the aircraft.
25        "Registered in this State" means an aircraft
26    registered with the Department of Transportation,

 

 

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1    Aeronautics Division, or titled or registered with the
2    Federal Aviation Administration to an address located in
3    this State.
4        This paragraph (25-7) is exempt from the provisions of
5    Section 2-70.
6        (26) Semen used for artificial insemination of
7    livestock for direct agricultural production.
8        (27) Horses, or interests in horses, registered with
9    and meeting the requirements of any of the Arabian Horse
10    Club Registry of America, Appaloosa Horse Club, American
11    Quarter Horse Association, United States Trotting
12    Association, or Jockey Club, as appropriate, used for
13    purposes of breeding or racing for prizes. This item (27)
14    is exempt from the provisions of Section 2-70, and the
15    exemption provided for under this item (27) applies for
16    all periods beginning May 30, 1995, but no claim for
17    credit or refund is allowed on or after January 1, 2008
18    (the effective date of Public Act 95-88) for such taxes
19    paid during the period beginning May 30, 2000 and ending
20    on January 1, 2008 (the effective date of Public Act
21    95-88).
22        (28) Computers and communications equipment utilized
23    for any hospital purpose and equipment used in the
24    diagnosis, analysis, or treatment of hospital patients
25    sold to a lessor who leases the equipment, under a lease of
26    one year or longer executed or in effect at the time of the

 

 

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1    purchase, to a hospital that has been issued an active tax
2    exemption identification number by the Department under
3    Section 1g of this Act.
4        (29) Personal property sold to a lessor who leases the
5    property, under a lease of one year or longer executed or
6    in effect at the time of the purchase, to a governmental
7    body that has been issued an active tax exemption
8    identification number by the Department under Section 1g
9    of this Act.
10        (30) Beginning with taxable years ending on or after
11    December 31, 1995 and ending with taxable years ending on
12    or before December 31, 2004, personal property that is
13    donated for disaster relief to be used in a State or
14    federally declared disaster area in Illinois or bordering
15    Illinois by a manufacturer or retailer that is registered
16    in this State to a corporation, society, association,
17    foundation, or institution that has been issued a sales
18    tax exemption identification number by the Department that
19    assists victims of the disaster who reside within the
20    declared disaster area.
21        (31) Beginning with taxable years ending on or after
22    December 31, 1995 and ending with taxable years ending on
23    or before December 31, 2004, personal property that is
24    used in the performance of infrastructure repairs in this
25    State, including but not limited to municipal roads and
26    streets, access roads, bridges, sidewalks, waste disposal

 

 

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1    systems, water and sewer line extensions, water
2    distribution and purification facilities, storm water
3    drainage and retention facilities, and sewage treatment
4    facilities, resulting from a State or federally declared
5    disaster in Illinois or bordering Illinois when such
6    repairs are initiated on facilities located in the
7    declared disaster area within 6 months after the disaster.
8        (32) Beginning July 1, 1999, game or game birds sold
9    at a "game breeding and hunting preserve area" as that
10    term is used in the Wildlife Code. This paragraph is
11    exempt from the provisions of Section 2-70.
12        (33) A motor vehicle, as that term is defined in
13    Section 1-146 of the Illinois Vehicle Code, that is
14    donated to a corporation, limited liability company,
15    society, association, foundation, or institution that is
16    determined by the Department to be organized and operated
17    exclusively for educational purposes. For purposes of this
18    exemption, "a corporation, limited liability company,
19    society, association, foundation, or institution organized
20    and operated exclusively for educational purposes" means
21    all tax-supported public schools, private schools that
22    offer systematic instruction in useful branches of
23    learning by methods common to public schools and that
24    compare favorably in their scope and intensity with the
25    course of study presented in tax-supported schools, and
26    vocational or technical schools or institutes organized

 

 

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1    and operated exclusively to provide a course of study of
2    not less than 6 weeks duration and designed to prepare
3    individuals to follow a trade or to pursue a manual,
4    technical, mechanical, industrial, business, or commercial
5    occupation.
6        (34) Beginning January 1, 2000, personal property,
7    including food, purchased through fundraising events for
8    the benefit of a public or private elementary or secondary
9    school, a group of those schools, or one or more school
10    districts if the events are sponsored by an entity
11    recognized by the school district that consists primarily
12    of volunteers and includes parents and teachers of the
13    school children. This paragraph does not apply to
14    fundraising events (i) for the benefit of private home
15    instruction or (ii) for which the fundraising entity
16    purchases the personal property sold at the events from
17    another individual or entity that sold the property for
18    the purpose of resale by the fundraising entity and that
19    profits from the sale to the fundraising entity. This
20    paragraph is exempt from the provisions of Section 2-70.
21        (35) Beginning January 1, 2000 and through December
22    31, 2001, new or used automatic vending machines that
23    prepare and serve hot food and beverages, including
24    coffee, soup, and other items, and replacement parts for
25    these machines. Beginning January 1, 2002 and through June
26    30, 2003, machines and parts for machines used in

 

 

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1    commercial, coin-operated amusement and vending business
2    if a use or occupation tax is paid on the gross receipts
3    derived from the use of the commercial, coin-operated
4    amusement and vending machines. This paragraph is exempt
5    from the provisions of Section 2-70.
6        (35-5) Beginning August 23, 2001 and through June 30,
7    2016, food for human consumption that is to be consumed
8    off the premises where it is sold (other than alcoholic
9    beverages, soft drinks, and food that has been prepared
10    for immediate consumption) and prescription and
11    nonprescription medicines, drugs, medical appliances, and
12    insulin, urine testing materials, syringes, and needles
13    used by diabetics, for human use, when purchased for use
14    by a person receiving medical assistance under Article V
15    of the Illinois Public Aid Code who resides in a licensed
16    long-term care facility, as defined in the Nursing Home
17    Care Act, or a licensed facility as defined in the ID/DD
18    Community Care Act, the MC/DD Act, or the Specialized
19    Mental Health Rehabilitation Act of 2013.
20        (36) Beginning August 2, 2001, computers and
21    communications equipment utilized for any hospital purpose
22    and equipment used in the diagnosis, analysis, or
23    treatment of hospital patients sold to a lessor who leases
24    the equipment, under a lease of one year or longer
25    executed or in effect at the time of the purchase, to a
26    hospital that has been issued an active tax exemption

 

 

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1    identification number by the Department under Section 1g
2    of this Act. This paragraph is exempt from the provisions
3    of Section 2-70.
4        (37) Beginning August 2, 2001, personal property sold
5    to a lessor who leases the property, under a lease of one
6    year or longer executed or in effect at the time of the
7    purchase, to a governmental body that has been issued an
8    active tax exemption identification number by the
9    Department under Section 1g of this Act. This paragraph is
10    exempt from the provisions of Section 2-70.
11        (38) Beginning on January 1, 2002 and through June 30,
12    2016, tangible personal property purchased from an
13    Illinois retailer by a taxpayer engaged in centralized
14    purchasing activities in Illinois who will, upon receipt
15    of the property in Illinois, temporarily store the
16    property in Illinois (i) for the purpose of subsequently
17    transporting it outside this State for use or consumption
18    thereafter solely outside this State or (ii) for the
19    purpose of being processed, fabricated, or manufactured
20    into, attached to, or incorporated into other tangible
21    personal property to be transported outside this State and
22    thereafter used or consumed solely outside this State. The
23    Director of Revenue shall, pursuant to rules adopted in
24    accordance with the Illinois Administrative Procedure Act,
25    issue a permit to any taxpayer in good standing with the
26    Department who is eligible for the exemption under this

 

 

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1    paragraph (38). The permit issued under this paragraph
2    (38) shall authorize the holder, to the extent and in the
3    manner specified in the rules adopted under this Act, to
4    purchase tangible personal property from a retailer exempt
5    from the taxes imposed by this Act. Taxpayers shall
6    maintain all necessary books and records to substantiate
7    the use and consumption of all such tangible personal
8    property outside of the State of Illinois.
9        (39) Beginning January 1, 2008, tangible personal
10    property used in the construction or maintenance of a
11    community water supply, as defined under Section 3.145 of
12    the Environmental Protection Act, that is operated by a
13    not-for-profit corporation that holds a valid water supply
14    permit issued under Title IV of the Environmental
15    Protection Act. This paragraph is exempt from the
16    provisions of Section 2-70.
17        (40) Beginning January 1, 2010 and continuing through
18    December 31, 2024, materials, parts, equipment,
19    components, and furnishings incorporated into or upon an
20    aircraft as part of the modification, refurbishment,
21    completion, replacement, repair, or maintenance of the
22    aircraft. This exemption includes consumable supplies used
23    in the modification, refurbishment, completion,
24    replacement, repair, and maintenance of aircraft, but
25    excludes any materials, parts, equipment, components, and
26    consumable supplies used in the modification, replacement,

 

 

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1    repair, and maintenance of aircraft engines or power
2    plants, whether such engines or power plants are installed
3    or uninstalled upon any such aircraft. "Consumable
4    supplies" include, but are not limited to, adhesive, tape,
5    sandpaper, general purpose lubricants, cleaning solution,
6    latex gloves, and protective films. This exemption applies
7    only to the sale of qualifying tangible personal property
8    to persons who modify, refurbish, complete, replace, or
9    maintain an aircraft and who (i) hold an Air Agency
10    Certificate and are empowered to operate an approved
11    repair station by the Federal Aviation Administration,
12    (ii) have a Class IV Rating, and (iii) conduct operations
13    in accordance with Part 145 of the Federal Aviation
14    Regulations. The exemption does not include aircraft
15    operated by a commercial air carrier providing scheduled
16    passenger air service pursuant to authority issued under
17    Part 121 or Part 129 of the Federal Aviation Regulations.
18    The changes made to this paragraph (40) by Public Act
19    98-534 are declarative of existing law. It is the intent
20    of the General Assembly that the exemption under this
21    paragraph (40) applies continuously from January 1, 2010
22    through December 31, 2024; however, no claim for credit or
23    refund is allowed for taxes paid as a result of the
24    disallowance of this exemption on or after January 1, 2015
25    and prior to February 5, 2020 (the effective date of
26    Public Act 101-629) this amendatory Act of the 101st

 

 

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1    General Assembly.
2        (41) Tangible personal property sold to a
3    public-facilities corporation, as described in Section
4    11-65-10 of the Illinois Municipal Code, for purposes of
5    constructing or furnishing a municipal convention hall,
6    but only if the legal title to the municipal convention
7    hall is transferred to the municipality without any
8    further consideration by or on behalf of the municipality
9    at the time of the completion of the municipal convention
10    hall or upon the retirement or redemption of any bonds or
11    other debt instruments issued by the public-facilities
12    corporation in connection with the development of the
13    municipal convention hall. This exemption includes
14    existing public-facilities corporations as provided in
15    Section 11-65-25 of the Illinois Municipal Code. This
16    paragraph is exempt from the provisions of Section 2-70.
17        (42) Beginning January 1, 2017 and through December
18    31, 2026, menstrual pads, tampons, and menstrual cups.
19        (43) Merchandise that is subject to the Rental
20    Purchase Agreement Occupation and Use Tax. The purchaser
21    must certify that the item is purchased to be rented
22    subject to a rental purchase agreement, as defined in the
23    Rental Purchase Agreement Act, and provide proof of
24    registration under the Rental Purchase Agreement
25    Occupation and Use Tax Act. This paragraph is exempt from
26    the provisions of Section 2-70.

 

 

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1        (44) Qualified tangible personal property used in the
2    construction or operation of a data center that has been
3    granted a certificate of exemption by the Department of
4    Commerce and Economic Opportunity, whether that tangible
5    personal property is purchased by the owner, operator, or
6    tenant of the data center or by a contractor or
7    subcontractor of the owner, operator, or tenant. Data
8    centers that would have qualified for a certificate of
9    exemption prior to January 1, 2020 had Public Act 101-31
10    this amendatory Act of the 101st General Assembly been in
11    effect, may apply for and obtain an exemption for
12    subsequent purchases of computer equipment or enabling
13    software purchased or leased to upgrade, supplement, or
14    replace computer equipment or enabling software purchased
15    or leased in the original investment that would have
16    qualified.
17        The Department of Commerce and Economic Opportunity
18    shall grant a certificate of exemption under this item
19    (44) to qualified data centers as defined by Section
20    605-1025 of the Department of Commerce and Economic
21    Opportunity Law of the Civil Administrative Code of
22    Illinois.
23        For the purposes of this item (44):
24            "Data center" means a building or a series of
25        buildings rehabilitated or constructed to house
26        working servers in one physical location or multiple

 

 

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1        sites within the State of Illinois.
2            "Qualified tangible personal property" means:
3        electrical systems and equipment; climate control and
4        chilling equipment and systems; mechanical systems and
5        equipment; monitoring and secure systems; emergency
6        generators; hardware; computers; servers; data storage
7        devices; network connectivity equipment; racks;
8        cabinets; telecommunications cabling infrastructure;
9        raised floor systems; peripheral components or
10        systems; software; mechanical, electrical, or plumbing
11        systems; battery systems; cooling systems and towers;
12        temperature control systems; other cabling; and other
13        data center infrastructure equipment and systems
14        necessary to operate qualified tangible personal
15        property, including fixtures; and component parts of
16        any of the foregoing, including installation,
17        maintenance, repair, refurbishment, and replacement of
18        qualified tangible personal property to generate,
19        transform, transmit, distribute, or manage electricity
20        necessary to operate qualified tangible personal
21        property; and all other tangible personal property
22        that is essential to the operations of a computer data
23        center. The term "qualified tangible personal
24        property" also includes building materials physically
25        incorporated into the qualifying data center. To
26        document the exemption allowed under this Section, the

 

 

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1        retailer must obtain from the purchaser a copy of the
2        certificate of eligibility issued by the Department of
3        Commerce and Economic Opportunity.
4        This item (44) is exempt from the provisions of
5    Section 2-70.
6        (45) Beginning January 1, 2020 and through December
7    31, 2020, sales of tangible personal property made by a
8    marketplace seller over a marketplace for which tax is due
9    under this Act but for which use tax has been collected and
10    remitted to the Department by a marketplace facilitator
11    under Section 2d of the Use Tax Act are exempt from tax
12    under this Act. A marketplace seller claiming this
13    exemption shall maintain books and records demonstrating
14    that the use tax on such sales has been collected and
15    remitted by a marketplace facilitator. Marketplace sellers
16    that have properly remitted tax under this Act on such
17    sales may file a claim for credit as provided in Section 6
18    of this Act. No claim is allowed, however, for such taxes
19    for which a credit or refund has been issued to the
20    marketplace facilitator under the Use Tax Act, or for
21    which the marketplace facilitator has filed a claim for
22    credit or refund under the Use Tax Act.
23        (46) Beginning July 1, 2022, breast pumps, breast pump
24    collection and storage supplies, and breast pump kits.
25    This item (46) is exempt from the provisions of Section
26    2-70. As used in this item (46):

 

 

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1        "Breast pump" means an electrically controlled or
2    manually controlled pump device designed or marketed to be
3    used to express milk from a human breast during lactation,
4    including the pump device and any battery, AC adapter, or
5    other power supply unit that is used to power the pump
6    device and is packaged and sold with the pump device at the
7    time of sale.
8        "Breast pump collection and storage supplies" means
9    items of tangible personal property designed or marketed
10    to be used in conjunction with a breast pump to collect
11    milk expressed from a human breast and to store collected
12    milk until it is ready for consumption.
13        "Breast pump collection and storage supplies"
14    includes, but is not limited to: breast shields and breast
15    shield connectors; breast pump tubes and tubing adapters;
16    breast pump valves and membranes; backflow protectors and
17    backflow protector adaptors; bottles and bottle caps
18    specific to the operation of the breast pump; and breast
19    milk storage bags.
20        "Breast pump collection and storage supplies" does not
21    include: (1) bottles and bottle caps not specific to the
22    operation of the breast pump; (2) breast pump travel bags
23    and other similar carrying accessories, including ice
24    packs, labels, and other similar products; (3) breast pump
25    cleaning supplies; (4) nursing bras, bra pads, breast
26    shells, and other similar products; and (5) creams,

 

 

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1    ointments, and other similar products that relieve
2    breastfeeding-related symptoms or conditions of the
3    breasts or nipples, unless sold as part of a breast pump
4    kit that is pre-packaged by the breast pump manufacturer
5    or distributor.
6        "Breast pump kit" means a kit that: (1) contains no
7    more than a breast pump, breast pump collection and
8    storage supplies, a rechargeable battery for operating the
9    breast pump, a breastmilk cooler, bottle stands, ice
10    packs, and a breast pump carrying case; and (2) is
11    pre-packaged as a breast pump kit by the breast pump
12    manufacturer or distributor.
13        (47) (46) Tangible personal property sold by or on
14    behalf of the State Treasurer pursuant to the Revised
15    Uniform Unclaimed Property Act. This item (47) (46) is
16    exempt from the provisions of Section 2-70.
17        (48) Qualified tangible personal property used in the
18    construction or operation of a Mega Project for which a
19    certificate has been issued by the Department of Revenue
20    as described and defined in Division 22 of Article 10 of
21    the Property Tax Code, whether that tangible personal
22    property is purchased by the owner, operator, or tenant of
23    the mega project or by a contractor or subcontractor of
24    the owner, operator, or tenant. For the purposes of this
25    item (48):
26        "Facility" means a building or series of buildings.

 

 

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1        "Mega project" means a facility that is rehabilitated
2    or constructed as described in Division 22 of Article 10
3    of the Property Tax Code.
4        "Qualified tangible personal property" means:
5    electrical systems and equipment; climate control and
6    chilling equipment and systems; mechanical systems and
7    equipment; monitoring and secure systems; emergency
8    generators; hardware; computers; servers; data storage
9    devices; network connectivity equipment; racks; cabinets;
10    telecommunications cabling infrastructure; raised floor
11    systems; peripheral components or systems; software;
12    mechanical, electrical, or plumbing systems; battery
13    systems; cooling systems and towers; temperature control
14    systems; other cabling; and other data center
15    infrastructure equipment and systems necessary to operate
16    qualified tangible personal property, including fixtures;
17    and component parts of any of the foregoing, including
18    installation, maintenance, repair, refurbishment, and
19    replacement of qualified tangible personal property to
20    generate, transform, transmit, distribute, or manage
21    electricity necessary to operate qualified tangible
22    personal property; and all other tangible personal
23    property that is essential to the operations of a mega
24    project. The term "qualified tangible personal property"
25    also includes building materials to be incorporated into
26    the mega project. To document the exemption allowed under

 

 

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1    this Section, the retailer, contractor or subcontractor or
2    supplier must obtain from the purchaser a copy of the
3    certificate issued by the Department of Revenue for the
4    mega project as described and defined in Division 22 of
5    Article 10 of the Property Tax Code.
6        This item (48) is exempt from the provisions of
7    Section 2-70.
8(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
9101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
108-27-21; 102-700, Article 70, Section 70-20, eff. 4-19-22;
11102-700, Article 75, Section 75-20, eff. 4-19-22; 102-813,
12eff. 5-13-22; 102-1026, eff. 5-27-22; revised 8-15-22.)
 
13    Section 25. The Property Tax Code is amended by adding
14Division 22 to Article 10 as follows:
 
15    (35 ILCS 200/Art. 10 Div. 22 heading new)
16
Division 22. Mega projects

 
17    (35 ILCS 200/10-900 new)
18    Sec. 10-900. Findings. The State's economy is highly
19vulnerable to other states that have major financial incentive
20programs and competitive tax incentives. Certain businesses
21and commercial operations that generate significant economic
22activity bear a disproportionately high property tax burden
23compared to their impact on government services and compared

 

 

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1to their positive economic benefits to the State and the local
2economy and their derivative benefits to taxing districts. To
3incentivize the significant capital investment and economic
4activity of certain large-scale businesses and industrial and
5commercial operations, the State finds that a valuation
6procedure for real property taxes on special properties, known
7as mega projects, will reduce barriers to investment and
8economic activity in Illinois. The General Assembly finds that
9it is in the best interest of Illinois to establish a new
10category of valuation for mega projects that recognizes their
11complexity and encourages local development at underutilized
12properties.
 
13    (35 ILCS 200/10-910 new)
14    Sec. 10-910. Mega Project Assessment Freeze and Payment
15Law; definitions. This Division 22 may be cited as the Mega
16Project Assessment Freeze and Payment Law.
17    As used in this Division:
18    "Assessment officer" means the chief county assessment
19officer of the county in which the mega project is located.
20    "Assessment period" means the period beginning on the
21first day of the calendar year after the calendar year in which
22a mega project is placed in service and ending on the date when
23the mega project no longer qualifies as a mega project under
24this Division.
25    "Base tax year" means the tax year prior to the first

 

 

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1calendar year during which the Department issues a mega
2project certificate under this Division.
3    "Base year" means:
4        (1) the calendar year prior to the calendar year in
5    which the Department issues the mega project certificate,
6    if the Department issues a mega project certificate for a
7    project located on the property without granting
8    preliminary approval for the project pursuant to Section
9    10-940; or
10        (2) the calendar year prior to the calendar year in
11    which the Department grants that preliminary approval, if
12    the Department grants preliminary approval pursuant to
13    Section 10-940 for a mega project located on the property.
14    "Base year valuation" means the assessed value, in the
15base year, of the property comprising the mega project.
16    "Company" means one or more entities whose aggregate
17investment in the mega project meets the minimum investment
18required under this Division. The term company shall include a
19company affiliate unless the context clearly indicates
20otherwise.
21    "Company affiliate" means an entity that joins with or is
22an affiliate of a company and that participates in the
23investment in, or financing of, a mega project.
24    "Department" means the Department of Revenue.
25    "Eligible costs" means all costs incurred by or on behalf
26of, or allocated to, a company, prior to the Department's

 

 

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1issuance of the mega project certificate or during the
2investment period, to create or construct a mega project.
3"Eligible costs" includes, without limitation:
4        (1) the purchase, site preparation, renovation,
5    rehabilitation and construction of land, buildings,
6    structures, equipment and furnishings used for or in the
7    mega project;
8        (2) any goods or services for the mega project that
9    are purchased and capitalized under generally accepted
10    accounting principles, including any organizational costs
11    and research and development costs incurred in Illinois;
12        (3) capitalized lease costs for land, buildings,
13    structures and equipment valued at their present value
14    using the interest rate at which the company borrows funds
15    prevailing at the time the company entered into the lease;
16        (4) infrastructure development costs;
17        (5) debt service and project financing costs;
18        (6) non-capitalized research and development costs;
19        (7) job training and education costs;
20        (8) lease and relocation costs; and
21        (9) amounts expended by a company or company affiliate
22    as a non-responsible party pursuant to a voluntary program
23    of site remediation, including amounts expended to obtain
24    a certification of completion, if completion of
25    remediation is certified by the Illinois Environmental
26    Protection Agency.

 

 

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1    "Entity" means a sole proprietor, partnership, firm,
2corporation, limited liability company, association, or other
3business enterprise.
4    "Incentive agreement" means an agreement between a company
5and a local municipality obligating the company to make the
6special payment under this Division, in addition to paying
7property taxes, during the incentive period for a mega
8project.
9    "Incentive period" means the period beginning on the first
10day of the calendar year after the calendar year in which the
11mega project is placed in service and each calendar year
12thereafter until the earlier of (i) the expiration or
13termination of the incentive agreement or (ii) the revocation
14of the mega project certificate.
15    "Inducement resolution" means a resolution adopted by the
16local municipality setting forth the commitment of the local
17municipality to enter into an incentive agreement.
18    "Investment period" means the period ending 7 years after
19the date on which the Department issues the mega project
20certificate, or such other longer period of time as the local
21municipality and the company may agree to, not to exceed an
22initial period of 10 years.
23    "Local municipality" means the city, village, or
24incorporated town in which the mega project is located or, if
25the mega project is located in an unincorporated area, the
26county in which the mega project is located.

 

 

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1    "Mega project" means a project that satisfies the minimum
2investment, investment period, and other requirements of this
3Division.
4    "Mega project certificate" means a certificate issued by
5the Department that authorizes an assessment freeze as
6provided in this Division.
7    "Minimum investment" means an investment in the mega
8project of at least $500,000,000 in eligible costs within the
9investment period.
10    "Minority person" means a person who is a citizen or
11lawful permanent resident of the United States and who is any
12of the following:
13        (1) American Indian or Alaska Native (a person having
14    origins in any of the original peoples of North and South
15    America, including Central America, and who maintains
16    tribal affiliation or community attachment).
17        (2) Asian (a person having origins in any of the
18    original peoples of the Far East, Southeast Asia, or the
19    Indian subcontinent, including, but not limited to,
20    Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
21    the Philippine Islands, Thailand, and Vietnam).
22        (3) Black or African American (a person having origins
23    in any of the black racial groups of Africa).
24        (4) Hispanic or Latino (a person of Cuban, Mexican,
25    Puerto Rican, South or Central American, or other Spanish
26    culture or origin, regardless of race).

 

 

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1        (5) Native Hawaiian or Other Pacific Islander (a
2    person having origins in any of the original peoples of
3    Hawaii, Guam, Samoa, or other Pacific Islands).
4    "Minority-owned business" means a business that is at
5least 51% owned by one or more minority persons, or in the case
6of a corporation, at least 51% of the stock in which is owned
7by one or more minority persons; and the management and daily
8business operations of which are controlled by one or more of
9the minority individuals who own it.
10    "Placed in service" means that construction of the mega
11project is substantially complete, which may be evidenced by
12issuance of a certificate of occupancy for the mega project by
13the local municipality or any other governmental body having
14jurisdiction over construction of the mega project or, if no
15certificate of occupancy is required as to the mega project,
16commencement of operations at the mega project site.
17    "Project" means land, buildings, and other improvements on
18the land, including water, sewage treatment and disposal
19facilities, air pollution control facilities, and all other
20machinery, apparatus, equipment, office facilities, related
21infrastructure, and furnishings which are considered
22necessary, suitable, or useful by a company and comprise the
23mega project, including all such property subject to
24assessment under the Property Tax Code.
25    "Special payment" means the annual amount paid in addition
26to property taxes paid during the incentive period as provided

 

 

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1in the incentive agreement.
2    "Taxing district" has the meaning set forth in Section
31-150.
4    "Termination date" means the last day of a calendar year
5that is no later than the 23rd year following the first
6calendar year in which a mega project is placed in service. A
7company may apply to the local municipality prior to the
8termination date for an extension of the termination date
9beyond the 23rd year for up to 17 additional years, for a total
10of 40 years. The corporate authorities of the local
11municipality shall approve an extension by resolution upon a
12finding of substantial public benefit. A copy of the
13resolution must be delivered to the Department within 30 days
14of the date the resolution was adopted. If the incentive
15agreement is terminated under Section 10-937, then the
16termination date is the date the agreement is terminated.
 
17    (35 ILCS 200/10-915 new)
18    Sec. 10-915. Valuation during incentive period;
19eligibility.
20    (a) Property certified by the Department as mega project
21property pursuant to this Division is eligible for an
22assessment freeze, as provided in this Division, eliminating
23from consideration, for assessment purposes during the
24incentive period, the value added to the property by the
25project and limiting the total valuation of the property

 

 

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1during the incentive period to the base year valuation. If the
2company does not anticipate completing the project within the
3investment period, then the local municipality may approve one
4or more extensions of time to complete the project. However,
5the local municipality may not extend the project for a period
6that exceeds 5 years after the last day of the investment
7period. Unless approved as part of the original incentive
8agreement, the corporate authorities may approve an extension
9under this subsection by resolution, a copy of which must be
10delivered to the Department within 30 days after the date the
11resolution is adopted.
12    (b) To qualify for a mega project certificate, the company
13must:
14        (1) make the minimum investment in the mega project
15    during the investment period; minimum investment
16    requirements shall be construed broadly for purposes of
17    this Division;
18        (2) enter into an incentive agreement with the local
19    municipality as described in this Division;
20        (3) enter into a project labor agreement with the
21    applicable local building trades council prior to the
22    commencement of any demolition, building construction, or
23    building renovation related to the project; and
24        (4) establish the goal of awarding 20% of the total
25    dollar amount of contracts that are related to the project
26    and are awarded by the company during each calendar year

 

 

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1    to minority-owned businesses.
2    (c) For purposes of this Division, if a single company
3enters into a financing arrangement of the type described in
4subsection (b) of Section 10-950, the investment in or
5financing of the property by a developer, lessor, financing
6entity, or other third party in accordance with this
7arrangement is considered investment by the company.
8Investment by a related person to the company is considered
9investment by the company.
 
10    (35 ILCS 200/10-920 new)
11    Sec. 10-920. Incentive agreement; assessment freeze for
12mega projects; incentive period; inducement resolution;
13location of the project; criteria to qualify.
14    (a) To obtain the benefits provided in this Division, the
15company shall apply in writing to the local municipality to
16enter into an incentive agreement with the municipality, in
17the form and manner required by the local municipality, and
18shall certify to the facts asserted in the application.
19    (b) The corporate authorities of the local municipality,
20prior to entering into an incentive agreement under this
21Section, shall hold a public hearing to consider the
22application. The amount and terms of the proposed special
23payment and the duration of the incentive agreement shall be
24considered at the public hearing.
25    (c) Copies of the completed application shall be provided

 

 

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1to each taxing district for which property taxes were assessed
2on the property for the immediately preceding tax year. Those
3copies shall be provided at least 30 days prior to the
4scheduled public hearing at which the corporate authorities of
5the local municipality will consider the application.
6    (d) The company and the local municipality shall enter
7into an incentive agreement requiring the special payment
8described in Section 10-925. The corporate authorities of the
9local municipality shall adopt an ordinance approving the
10incentive agreement.
11    (e) If an incentive agreement is not executed within 5
12years after the local municipality's adoption of an inducement
13resolution, expenditures incurred by the company more than 5
14years prior to the execution of the incentive agreement shall
15not qualify as part of the minimum investment.
16    (f) To be eligible to enter into an incentive agreement
17under this Division, the company must commit to a project that
18meets the minimum investment set forth in this Division.
 
19    (35 ILCS 200/10-925 new)
20    Sec. 10-925. Contents of incentive agreement.
21    (a) The incentive agreement under Section 10-920 must
22require the company to pay, or be responsible for the payment
23of, an annual special payment to the local municipality,
24beginning with the first tax year for which the assessment
25freeze under this Division is applied to the mega project. The

 

 

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1amount of the special payment shall be established by the
2local municipality in the incentive agreement and may be a
3fixed amount for the duration of the incentive period or may be
4subject to adjustment (downward or upward) based on factors
5memorialized in the incentive agreement.
6    (b) The incentive agreement shall obligate the company to
7operate the mega project at the designated project location
8for a minimum of 20 years.
9    (c) The incentive agreement may contain such other terms
10and conditions as are mutually agreeable to the local
11municipality and the company and are consistent with the
12requirements of this Division, including, without limitation,
13operational and job creation requirements.
14    (d) In addition, all incentive agreements entered into
15pursuant to Section 10-920 must include, as the first portion
16of the document, a recapitulation of the remaining contents of
17the document which includes, but is not limited to, the
18following:
19        (1) the legal name of each party to the agreement;
20        (2) the street address of the project and the property
21    subject to the agreement;
22        (3) the agreed minimum investment;
23        (4) the term of the agreement;
24        (5) a schedule showing the amount of the special
25    payment and its calculation for each year of the
26    agreement;

 

 

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1        (6) a schedule showing the amount to be distributed
2    annually to each affected taxing district, which amount
3    shall be a percentage of the special payment equal to the
4    taxing district's proportionate share of property taxes
5    due and payable for the base tax year;
6        (7) any other feature or aspect of the agreement which
7    may affect the calculation of items (5) and (6) of this
8    subsection; and
9        (8) the party or parties to the agreement who are
10    responsible for updating the information contained in the
11    summary document.
 
12    (35 ILCS 200/10-930 new)
13    Sec. 10-930. Installment bills; distribution of special
14payments.
15    (a) The local municipality shall prepare a bill for each
16installment of the special payment according to the schedule
17set forth in paragraph (5) of subsection (d) of Section
1810-925, or as modified pursuant to paragraph (7) of subsection
19(d) of Section 10-925, and that payment must be distributed to
20the affected taxing entities according to the schedule in
21paragraph (6) of subsection (d) of Section 10-925 or as
22modified in paragraph (7) of subsection (d) of Section 10-925.
23    (b) Distribution to taxing districts of the special
24payments associated with a mega project must be made within 30
25days after receipt by the local municipality of the special

 

 

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1payment amounts.
2    (c) Misallocations of the distribution of the special
3payments may be corrected by adjusting later distributions,
4but these adjustments must be made in the next succeeding year
5following identification and resolution of the misallocation.
6To the extent that distributions have been made improperly in
7previous years, claims for adjustment must be made within one
8year of the distribution.
 
9    (35 ILCS 200/10-935 new)
10    Sec. 10-935. Use of revenues. A taxing district that
11receives and retains revenues from a special payment under
12this Division may use all or a portion of the revenues for the
13purposes of financing the issuance of revenue bonds.
 
14    (35 ILCS 200/10-937 new)
15    Sec. 10-937. Termination of incentive agreement; automatic
16termination; minimum level of investment required to remain
17qualified for assessment freeze.
18    (a) The local municipality and the company may mutually
19agree to terminate the incentive agreement at any time. From
20the date of termination, the mega project is subject to
21assessment on the basis of the then current fair cash value.
22    (b) An incentive agreement shall be terminated if the
23company fails to satisfy the minimum investment level provided
24in this Division. If the incentive agreement is terminated

 

 

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1under this subsection, the mega project is subject to
2assessment on the basis of the then current fair cash value
3beginning in the tax year during which the termination occurs.
4    (c) An incentive agreement shall terminate if, at any
5time, the company no longer has the minimum level of
6investment as provided in this Division, without regard to
7depreciation.
 
8    (35 ILCS 200/10-940 new)
9    Sec. 10-940. Mega project applications; certification as a
10mega project and revocation of certification.
11    (a) The Department shall receive applications for mega
12project certificates under this Division in a form and manner
13provided by the Department by rule. The Department shall
14promptly notify the assessment officer when the Department
15receives an application under this Section. The Department's
16rules shall provide that an applicant may request preliminary
17approval of the mega project before the project begins, before
18the applicant has entered into a fully executed incentive
19agreement with the local municipality, or before the project
20has been placed in service.
21    (b) An applicant for a mega project certificate under this
22Division must provide evidence to the Department of a fully
23executed incentive agreement between the company and the local
24municipality as described in this Division.
25    (c) An applicant for a mega project certificate under this

 

 

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1Division must provide evidence to the Department of a fully
2executed project labor agreement entered into with the
3applicable local building trades council prior to the
4commencement of any demolition, building construction, or
5building renovation at the project. If the demolition,
6building construction, or building renovation begins after the
7application is approved, then the applicant must transmit a
8copy of the fully executed project labor agreement to the
9Department as soon as possible after the agreement is
10executed.
11    (d) An applicant for a mega project certificate under this
12Division must provide evidence to the Department that the
13company has established the goal of awarding 20% of the total
14dollar amount of contracts awarded during each calendar year
15by the company, that are related to the project, to
16minority-owned businesses.
17    (e) The Department shall approve an application for a mega
18project certificate if the Department finds that the project
19meets the requirements of this Division.
20    (f) Upon approval of the application, the Department shall
21issue a mega project certificate to the applicant and transmit
22a copy to the assessment officer. The certificate shall
23identify the property on which the mega project is located.
24    (g) For each calendar year following issuance of the mega
25project certificate, until the minimum investment requirements
26have been met and the mega project has been placed in service,

 

 

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1the company shall deliver a report to the Department on the
2status of construction or creation of the mega project and the
3amount of minimum investment made in the mega project during
4the preceding calendar year. If the Department determines, in
5accordance with the Administrative Review Law and the Illinois
6Administrative Procedure Act, that a project for which a
7certificate has been issued has not met the minimum investment
8requirements of this Division within the investment period,
9the Department shall revoke the certificate by written notice
10to the taxpayer of record and transmit a copy of the revocation
11to the assessment officer.
12    (h) If the local municipality notifies the Department that
13the incentive agreement between the company and the local
14municipality has been terminated, the Department shall revoke
15the certificate by written notice to the taxpayer of record
16and transmit a copy of the revocation to the assessment
17officer.
 
18    (35 ILCS 200/10-945 new)
19    Sec. 10-945. Computation of valuation.
20    (a) Upon receipt of the mega project certificate from the
21Department, the assessment officer shall determine the base
22year valuation and shall make a notation on each statement of
23assessment during the assessment period that the valuation of
24the project is based upon the issuance of a mega project
25certificate.

 

 

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1    (b) Upon revocation of a mega project certificate, the
2assessment officer shall compute the assessed valuation of the
3project on the basis of the then current fair cash value of the
4property.
 
5    (35 ILCS 200/10-950 new)
6    Sec. 10-950. Transfers of interest in a mega project;
7sale-leaseback arrangement; requirements.
8    (a) Subject to the terms of the incentive agreement
9between the company and the local municipality, ownership of
10or any interest in the mega project and any and all related
11project property, including, without limitation, transfers of
12indirect beneficial interests and equity interests in a
13company owning a mega project, shall not affect the assessment
14freeze or the validity of the mega project certificate issued
15under this Division. Notwithstanding the provisions of this
16subsection, the incentive agreement shall be a covenant
17running with the land.
18    (b) A company may enter into lending, financing, security,
19leasing, or similar arrangements, or a succession of such
20arrangements, with a financing entity concerning all or part
21of a project including, without limitation, a sale-leaseback
22arrangement, equipment lease, build-to-suit lease, synthetic
23lease, nordic lease, defeased tax benefit, or transfer lease,
24an assignment, sublease, or similar arrangement, or succession
25of those arrangements, with one or more financing entities

 

 

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1concerning all or part of a project, regardless of the
2identity of the income tax or fee owner of the mega project.
3Neither the original transfer to the financing entity nor the
4later transfer from the financing entity back to the company,
5pursuant to terms in the sale-leaseback agreement, shall
6affect the assessment freeze or the validity of the mega
7project certificate issued under this Division, regardless of
8whether the income tax basis is changed for income tax
9purposes.
10    (c) The Department must receive notice of all transfers
11undertaken with respect to other projects to effect a
12financing. Notice shall be made in writing within 60 days
13after the transfer, identifying each transferee and containing
14other information required by the Department with the
15appropriate returns. Failure to meet this notice requirement
16does not adversely affect the assessment freeze.
 
17    (35 ILCS 200/10-955 new)
18    Sec. 10-955. Minimum investment by company affiliates. To
19be eligible for the benefits of this Division, a company must
20invest the minimum investment. Investments by company
21affiliates during the investment period may be applied toward
22the minimum investment under this Division regardless of
23whether the company affiliate was part of the project. To
24qualify for the assessment freeze, the minimum investments
25pursuant must be at the mega project.
 

 

 

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1    (35 ILCS 200/10-960 new)
2    Sec. 10-960. Projects to be valued at fair cash value for
3purposes of bonded indebtedness and limitations on property
4tax extensions. Projects to which an assessment freeze applies
5pursuant to this Division shall be valued at their fair cash
6value for purposes of calculating a municipality's general
7obligation bond limits and a taxing district's limitation on
8tax extensions.
 
9    (35 ILCS 200/10-965 new)
10    Sec. 10-965. Abatements. Any taxing district, upon a
11majority vote of its governing authority, may, after the
12determination of the assessed valuation as set forth in this
13Division, order the clerk of the appropriate municipality or
14county to abate any portion of real property taxes otherwise
15levied or extended by the taxing district on a mega project.
 
16    (35 ILCS 200/10-970 new)
17    Sec. 10-970. Filing of returns, contracts, and other
18information; due date of payments and returns.
19    (a) The company and the local municipality shall file
20notices, reports, and other information as required by the
21Department.
22    (b) Special payments are due at the same time as property
23tax payments and property tax returns are due for the mega

 

 

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1project property.
2    (c) Failure to make a timely special payment results in
3the assessment of penalties as if the payment were a
4delinquent property tax payment or return.
5    (d) Within 30 days after the date of execution of an
6incentive agreement, a copy of the incentive agreement must be
7filed with the Department, the county assessor, and the county
8auditor for the county in which the mega project is located.
 
9    (35 ILCS 200/10-980 new)
10    Sec. 10-980. Rules. The Department may issue rulings and
11adopt rules as necessary to carry out the purpose of this
12Division.
 
13    (35 ILCS 200/10-990 new)
14    Sec. 10-990. Invalidity. If all or any part of this
15Division is determined to be unconstitutional or otherwise
16unenforceable by a court of competent jurisdiction, a company
17has 180 days from the date of the determination to transfer
18title to a mega project to an authorized economic development
19authority, which may qualify for property tax assessment under
20this Division or which may be exempt from property taxes.
 
21    Section 97. Severability. The provisions of this Act are
22severable under Section 1.31 of the Statute on Statutes.
 
23    Section 99. Effective date. This Act takes effect June 1,

 

 

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12023.