Public Act 93-0023
SB841 Enrolled LRB093 02887 SJM 02903 b
AN ACT concerning taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 2. The Illinois Income Tax Act is amended by
adding Section 215 as follows:
(35 ILCS 5/215 new)
Sec. 215. Transportation Employee Credit.
(a) For each taxable year beginning on or after January
1, 2004, a qualified employer shall be allowed a credit
against the tax imposed by subsections (a) and (b) of Section
201 of this Act in the amount of $50 for each eligible
employee employed by the taxpayer as of the last day of the
taxable year.
(b) For purposes of this Section, "qualified employer"
means:
(1) any employer who pays a commercial distribution
fee under Section 3-815.1 of the Illinois Vehicle Code
during the taxable year; or
(2) any employer who, as of the end of the taxable
year, has one or more employees whose compensation is
subject to tax only by the employee's state of residence
pursuant to 49 U.S.C 14503(a)(1).
(c) For purposes of this Section, "employee" includes an
individual who is treated as an employee of the taxpayer
under Section 401(c) of the Internal Revenue Code and whose
actual assigned duties are such that, if the individual were
a common-law employee performing such duties in 2 or more
states, the individual's compensation would be subject to tax
only by the individual's state of residence pursuant to 49
U.S.C. 14503(a)(1).
(d) An employee is an "eligible employee" only if all of
the following criteria are met:
(1) The employee is an operator of a motor vehicle;
(2) The employee's compensation, pursuant to 49
U.S.C. 14503(a)(1), is subject to tax only by the
employee's state of residence, or would be subject to tax
only by the employee's state of residence if the
employee's actual duties were performed in 2 or more
states;
(3) As of the end of the taxable year for which the
credit is claimed, the employee is a resident of this
State for purposes of this Act and 49 U.S.C. 14503(a)(1);
and
(4) The employee is a full-time employee working 30
or more hours per week for 180 consecutive days; provided
that such 180-day period may be completed after the end
of the taxable year for which the credit under this
Section is claimed.
(e) For partners, shareholders of subchapter S
corporations, and owners of limited liability companies, if
the limited liability company is treated as a partnership for
purposes of federal and State income taxation, there shall be
allowed a credit under this Section to be determined in
accordance with the determination of income and distributive
share of income under Sections 702 and 704 and subchapter S
of the Internal Revenue Code.
(f) Any credit allowed under this Section which is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year for
which the credit is first computed until it is used. This
credit shall be applied first to the earliest year for which
there is a liability. If there is a credit under this Section
from more than one tax year that is available to offset a
liability, the earliest credit arising under this Section
shall be applied first.
(g) This Section is exempt from the provisions of
Section 250 of this Act.
(h) The Department of Revenue shall promulgate such
rules and regulations as may be deemed necessary to carry out
the purposes of this Section.
Section 5. The Use Tax Act is amended by changing
Sections 3-5, 3-55, 3-60, and 3-61 as follows:
(35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit arts
or cultural organization that establishes, by proof required
by the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited
to, music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts
organizations, and media arts organizations. On and after the
effective date of this amendatory Act of the 92nd General
Assembly, however, an entity otherwise eligible for this
exemption shall not make tax-free purchases unless it has an
active identification number issued by the Department.
(4) Personal property purchased by a governmental body,
by a corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or by a
not-for-profit corporation, society, association, foundation,
institution, or organization that has no compensated officers
or employees and that is organized and operated primarily for
the recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active exemption identification number issued by the
Department.
(5) A passenger car that is a replacement vehicle to the
extent that the purchase price of the car is subject to the
Replacement Vehicle Tax.
(6) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order, certified by
the purchaser to be used primarily for graphic arts
production, and including machinery and equipment purchased
for lease. Equipment includes chemicals or chemicals acting
as catalysts but only if the chemicals or chemicals acting as
catalysts effect a direct and immediate change upon a graphic
arts product.
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through to the living quarters from the driver's
seat, or a motor vehicle of the second division that is of
the van configuration designed for the transportation of not
less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(11) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
including machinery and equipment purchased for lease, and
including implements of husbandry defined in Section 1-130 of
the Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (11). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from
a motor vehicle required to be licensed and units sold
mounted on a motor vehicle required to be licensed if the
selling price of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (11) is exempt
from the provisions of Section 3-90.
(12) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(13) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages purchased at retail from a retailer, to
the extent that the proceeds of the service charge are in
fact turned over as tips or as a substitute for tips to the
employees who participate directly in preparing, serving,
hosting or cleaning up the food or beverage function with
respect to which the service charge is imposed.
(14) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(15) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(16) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(17) Distillation machinery and equipment, sold as a
unit or kit, assembled or installed by the retailer,
certified by the user to be used only for the production of
ethyl alcohol that will be used for consumption as motor fuel
or as a component of motor fuel for the personal use of the
user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and
equipment used primarily in the process of manufacturing or
assembling tangible personal property for wholesale or retail
sale or lease, whether that sale or lease is made directly by
the manufacturer or by some other person, whether the
materials used in the process are owned by the manufacturer
or some other person, or whether that sale or lease is made
apart from or as an incident to the seller's engaging in the
service occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar items of no commercial
value on special order for a particular purchaser.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is
leased in a manner that does not qualify for this exemption
or is used in any other non-exempt manner, the lessor shall
be liable for the tax imposed under this Act or the Service
Use Tax Act, as the case may be, based on the fair market
value of the property at the time the non-qualifying use
occurs. No lessor shall collect or attempt to collect an
amount (however designated) that purports to reimburse that
lessor for the tax imposed by this Act or the Service Use Tax
Act, as the case may be, if the tax has not been paid by the
lessor. If a lessor improperly collects any such amount from
the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department.
(23) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed
or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental
body that has been issued an active sales tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the property is leased
in a manner that does not qualify for this exemption or used
in any other non-exempt manner, the lessor shall be liable
for the tax imposed under this Act or the Service Use Tax
Act, as the case may be, based on the fair market value of
the property at the time the non-qualifying use occurs. No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that lessor for the
tax imposed by this Act or the Service Use Tax Act, as the
case may be, if the tax has not been paid by the lessor. If
a lessor improperly collects any such amount from the lessee,
the lessee shall have a legal right to claim a refund of that
amount from the lessor. If, however, that amount is not
refunded to the lessee for any reason, the lessor is liable
to pay that amount to the Department.
(24) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(26) Beginning July 1, 1999, game or game birds
purchased at a "game breeding and hunting preserve area" or
an "exotic game hunting area" as those terms are used in the
Wildlife Code or at a hunting enclosure approved through
rules adopted by the Department of Natural Resources. This
paragraph is exempt from the provisions of Section 3-90.
(27) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in
useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to
prepare individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(28) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary
school, a group of those schools, or one or more school
districts if the events are sponsored by an entity recognized
by the school district that consists primarily of volunteers
and includes parents and teachers of the school children.
This paragraph does not apply to fundraising events (i) for
the benefit of private home instruction or (ii) for which the
fundraising entity purchases the personal property sold at
the events from another individual or entity that sold the
property for the purpose of resale by the fundraising entity
and that profits from the sale to the fundraising entity.
This paragraph is exempt from the provisions of Section 3-90.
(29) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and
other items, and replacement parts for these machines.
Beginning January 1, 2002, machines and parts for machines
used in commercial, coin-operated amusement and vending
business if a use or occupation tax is paid on the gross
receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 3-90.
(30) Food for human consumption that is to be consumed
off the premises where it is sold (other than alcoholic
beverages, soft drinks, and food that has been prepared for
immediate consumption) and prescription and nonprescription
medicines, drugs, medical appliances, and insulin, urine
testing materials, syringes, and needles used by diabetics,
for human use, when purchased for use by a person receiving
medical assistance under Article 5 of the Illinois Public Aid
Code who resides in a licensed long-term care facility, as
defined in the Nursing Home Care Act.
(31) Beginning on the effective date of this amendatory
Act of the 92nd General Assembly, computers and
communications equipment utilized for any hospital purpose
and equipment used in the diagnosis, analysis, or treatment
of hospital patients purchased by a lessor who leases the
equipment, under a lease of one year or longer executed or in
effect at the time the lessor would otherwise be subject to
the tax imposed by this Act, to a hospital that has been
issued an active tax exemption identification number by the
Department under Section 1g of the Retailers' Occupation Tax
Act. If the equipment is leased in a manner that does not
qualify for this exemption or is used in any other nonexempt
manner, the lessor shall be liable for the tax imposed under
this Act or the Service Use Tax Act, as the case may be,
based on the fair market value of the property at the time
the nonqualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Service Use Tax Act, as the case may be, if the
tax has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall
have a legal right to claim a refund of that amount from the
lessor. If, however, that amount is not refunded to the
lessee for any reason, the lessor is liable to pay that
amount to the Department. This paragraph is exempt from the
provisions of Section 3-90.
(32) Beginning on the effective date of this amendatory
Act of the 92nd General Assembly, personal property purchased
by a lessor who leases the property, under a lease of one
year or longer executed or in effect at the time the lessor
would otherwise be subject to the tax imposed by this Act, to
a governmental body that has been issued an active sales tax
exemption identification number by the Department under
Section 1g of the Retailers' Occupation Tax Act. If the
property is leased in a manner that does not qualify for this
exemption or used in any other nonexempt manner, the lessor
shall be liable for the tax imposed under this Act or the
Service Use Tax Act, as the case may be, based on the fair
market value of the property at the time the nonqualifying
use occurs. No lessor shall collect or attempt to collect an
amount (however designated) that purports to reimburse that
lessor for the tax imposed by this Act or the Service Use Tax
Act, as the case may be, if the tax has not been paid by the
lessor. If a lessor improperly collects any such amount from
the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department. This
paragraph is exempt from the provisions of Section 3-90.
(33) On and after July 1, 2003, the use in this State of
motor vehicles of the second division with a gross vehicle
weight in excess of 8,000 pounds and that are subject to the
commercial distribution fee imposed under Section 3-815.1 of
the Illinois Vehicle Code. This exemption applies to repair
and replacement parts added after the initial purchase of
such a motor vehicle if that motor vehicle is used in a
manner that would qualify for the rolling stock exemption
otherwise provided for in this Act.
(Source: P.A. 91-51, eff. 6-30-99; 91-200, eff. 7-20-99;
91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644, eff.
8-20-99; 91-901, eff. 1-1-01; 92-35, eff. 7-1-01; 92-227,
eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
92-651, eff. 7-11-02.)
(35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
Sec. 3-55. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of tangible personal
property acquired outside this State by a nonresident
individual and brought into this State by the individual for
his or her own use while temporarily within this State or
while passing through this State.
(b) The use, in this State, of tangible personal
property by an interstate carrier for hire as rolling stock
moving in interstate commerce or by lessors under a lease of
one year or longer executed or in effect at the time of
purchase of tangible personal property by interstate carriers
for-hire for use as rolling stock moving in interstate
commerce as long as so used by the interstate carriers
for-hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed in
or affixed to aircraft moving in interstate commerce.
(c) The use, in this State, by owners, lessors, or
shippers of tangible personal property that is utilized by
interstate carriers for hire for use as rolling stock moving
in interstate commerce as long as so used by the interstate
carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d) The use, in this State, of tangible personal
property that is acquired outside this State and caused to be
brought into this State by a person who has already paid a
tax in another State in respect to the sale, purchase, or use
of that property, to the extent of the amount of the tax
properly due and paid in the other State.
(e) The temporary storage, in this State, of tangible
personal property that is acquired outside this State and
that, after being brought into this State and stored here
temporarily, is used solely outside this State or is
physically attached to or incorporated into other tangible
personal property that is used solely outside this State, or
is altered by converting, fabricating, manufacturing,
printing, processing, or shaping, and, as altered, is used
solely outside this State.
(f) The temporary storage in this State of building
materials and fixtures that are acquired either in this State
or outside this State by an Illinois registered combination
retailer and construction contractor, and that the purchaser
thereafter uses outside this State by incorporating that
property into real estate located outside this State.
(g) The use or purchase of tangible personal property by
a common carrier by rail or motor that receives the physical
possession of the property in Illinois, and that transports
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a standard
uniform bill of lading showing the seller of the property as
the shipper or consignor of the property to a destination
outside Illinois, for use outside Illinois.
(h) The use, in this State, of a motor vehicle that was
sold in this State to a nonresident, even though the motor
vehicle is delivered to the nonresident in this State, if the
motor vehicle is not to be titled in this State, and if a
drive-away permit is issued to the motor vehicle as provided
in Section 3-603 of the Illinois Vehicle Code or if the
nonresident purchaser has vehicle registration plates to
transfer to the motor vehicle upon returning to his or her
home state. The issuance of the drive-away permit or having
the out-of-state registration plates to be transferred shall
be prima facie evidence that the motor vehicle will not be
titled in this State.
(i) Beginning July 1, 1999, the use, in this State, of
fuel acquired outside this State and brought into this State
in the fuel supply tanks of locomotives engaged in freight
hauling and passenger service for interstate commerce. This
subsection is exempt from the provisions of Section 3-90.
(j) Beginning on January 1, 2002, the use of tangible
personal property purchased from an Illinois retailer by a
taxpayer engaged in centralized purchasing activities in
Illinois who will, upon receipt of the property in Illinois,
temporarily store the property in Illinois (i) for the
purpose of subsequently transporting it outside this State
for use or consumption thereafter solely outside this State
or (ii) for the purpose of being processed, fabricated, or
manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this
State and thereafter used or consumed solely outside this
State. The Director of Revenue shall, pursuant to rules
adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good
standing with the Department who is eligible for the
exemption under this subsection (j). The permit issued under
this subsection (j) shall authorize the holder, to the extent
and in the manner specified in the rules adopted under this
Act, to purchase tangible personal property from a retailer
exempt from the taxes imposed by this Act. Taxpayers shall
maintain all necessary books and records to substantiate the
use and consumption of all such tangible personal property
outside of the State of Illinois.
(Source: P.A. 91-51, eff. 6-30-99; 91-313, eff. 7-29-99;
91-587, eff. 8-14-99; 92-16, eff. 6-28-01; 92-488, eff.
8-23-01; 92-680, eff. 7-16-02.)
(35 ILCS 105/3-60) (from Ch. 120, par. 439.3-60)
Sec. 3-60. Rolling stock exemption. Except as provided
in Section 3-61 of this Act, the rolling stock exemption
applies to rolling stock used by an interstate carrier for
hire, even just between points in Illinois, if the rolling
stock transports, for hire, persons whose journeys or
property whose shipments originate or terminate outside
Illinois.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 105/3-61)
Sec. 3-61. Motor vehicles; use as rolling stock
definition. Through June 30, 2003, "use as rolling stock
moving in interstate commerce" in subsections (b) and (c) of
Section 3-55 means for motor vehicles, as defined in Section
1-146 of the Illinois Vehicle Code, and trailers, as defined
in Section 1-209 of the Illinois Vehicle Code, when on 15 or
more occasions in a 12-month period the motor vehicle and
trailer has carried persons or property for hire in
interstate commerce, even just between points in Illinois, if
the motor vehicle and trailer transports persons whose
journeys or property whose shipments originate or terminate
outside Illinois. This definition applies to all property
purchased for the purpose of being attached to those motor
vehicles or trailers as a part thereof. On and after July 1,
2003, "use as rolling stock moving in interstate commerce" in
paragraphs (b) and (c) of Section 3-55 occurs for motor
vehicles, as defined in Section 1-146 of the Illinois Vehicle
Code, when during a 12-month period the rolling stock has
carried persons or property for hire in interstate commerce
for 51% of its total trips and transports persons whose
journeys or property whose shipments originate or terminate
outside Illinois. Trips that are only between points in
Illinois shall not be counted as interstate trips when
calculating whether the tangible personal property qualifies
for the exemption but such trips shall be included in total
trips taken.
(Source: P.A. 91-587, eff. 8-14-99.)
Section 10. The Service Use Tax Act is amended by
changing Sections 2, 3-45, 3-50, and 3-51 as follows:
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
Sec. 2. "Use" means the exercise by any person of any
right or power over tangible personal property incident to
the ownership of that property, but does not include the sale
or use for demonstration by him of that property in any form
as tangible personal property in the regular course of
business. "Use" does not mean the interim use of tangible
personal property nor the physical incorporation of tangible
personal property, as an ingredient or constituent, into
other tangible personal property, (a) which is sold in the
regular course of business or (b) which the person
incorporating such ingredient or constituent therein has
undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside
the State of Illinois.
"Purchased from a serviceman" means the acquisition of
the ownership of, or title to, tangible personal property
through a sale of service.
"Purchaser" means any person who, through a sale of
service, acquires the ownership of, or title to, any tangible
personal property.
"Cost price" means the consideration paid by the
serviceman for a purchase valued in money, whether paid in
money or otherwise, including cash, credits and services, and
shall be determined without any deduction on account of the
supplier's cost of the property sold or on account of any
other expense incurred by the supplier. When a serviceman
contracts out part or all of the services required in his
sale of service, it shall be presumed that the cost price to
the serviceman of the property transferred to him or her by
his or her subcontractor is equal to 50% of the
subcontractor's charges to the serviceman in the absence of
proof of the consideration paid by the subcontractor for the
purchase of such property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits and service, and shall be determined without
any deduction on account of the serviceman's cost of the
property sold, the cost of materials used, labor or service
cost or any other expense whatsoever, but does not include
interest or finance charges which appear as separate items on
the bill of sale or sales contract nor charges that are added
to prices by sellers on account of the seller's duty to
collect, from the purchaser, the tax that is imposed by this
Act.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of service" means any transaction except:
(1) a retail sale of tangible personal property
taxable under the Retailers' Occupation Tax Act or under
the Use Tax Act.
(2) a sale of tangible personal property for the
purpose of resale made in compliance with Section 2c of
the Retailers' Occupation Tax Act.
(3) except as hereinafter provided, a sale or
transfer of tangible personal property as an incident to
the rendering of service for or by any governmental body,
or for or by any corporation, society, association,
foundation or institution organized and operated
exclusively for charitable, religious or educational
purposes or any not-for-profit corporation, society,
association, foundation, institution or organization
which has no compensated officers or employees and which
is organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability
company may qualify for the exemption under this
paragraph only if the limited liability company is
organized and operated exclusively for educational
purposes.
(4) a sale or transfer of tangible personal
property as an incident to the rendering of service for
interstate carriers for hire for use as rolling stock
moving in interstate commerce or by lessors under a lease
of one year or longer, executed or in effect at the time
of purchase of personal property, to interstate carriers
for hire for use as rolling stock moving in interstate
commerce so long as so used by such interstate carriers
for hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed
in or affixed to aircraft moving in interstate commerce.
(4a) a sale or transfer of tangible personal
property as an incident to the rendering of service for
owners, lessors, or shippers of tangible personal
property which is utilized by interstate carriers for
hire for use as rolling stock moving in interstate
commerce so long as so used by interstate carriers for
hire, and equipment operated by a telecommunications
provider, licensed as a common carrier by the Federal
Communications Commission, which is permanently installed
in or affixed to aircraft moving in interstate commerce.
(4a-5) on and after July 1, 2003, a sale or
transfer of a motor vehicle of the second division with
a gross vehicle weight in excess of 8,000 pounds as an
incident to the rendering of service if that motor
vehicle is subject to the commercial distribution fee
imposed under Section 3-815.1 of the Illinois Vehicle
Code. This exemption applies to repair and replacement
parts added after the initial purchase of such a motor
vehicle if that motor vehicle is used in a manner that
would qualify for the rolling stock exemption otherwise
provided for in this Act.
(5) a sale or transfer of machinery and equipment
used primarily in the process of the manufacturing or
assembling, either in an existing, an expanded or a new
manufacturing facility, of tangible personal property for
wholesale or retail sale or lease, whether such sale or
lease is made directly by the manufacturer or by some
other person, whether the materials used in the process
are owned by the manufacturer or some other person, or
whether such sale or lease is made apart from or as an
incident to the seller's engaging in a service occupation
and the applicable tax is a Service Use Tax or Service
Occupation Tax, rather than Use Tax or Retailers'
Occupation Tax.
(5a) the repairing, reconditioning or remodeling,
for a common carrier by rail, of tangible personal
property which belongs to such carrier for hire, and as
to which such carrier receives the physical possession of
the repaired, reconditioned or remodeled item of tangible
personal property in Illinois, and which such carrier
transports, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a
destination outside Illinois, for use outside Illinois.
(5b) a sale or transfer of tangible personal
property which is produced by the seller thereof on
special order in such a way as to have made the
applicable tax the Service Occupation Tax or the Service
Use Tax, rather than the Retailers' Occupation Tax or the
Use Tax, for an interstate carrier by rail which receives
the physical possession of such property in Illinois, and
which transports such property, or shares with another
common carrier in the transportation of such property,
out of Illinois on a standard uniform bill of lading
showing the seller of the property as the shipper or
consignor of such property to a destination outside
Illinois, for use outside Illinois.
(6) a sale or transfer of distillation machinery
and equipment, sold as a unit or kit and assembled or
installed by the retailer, which machinery and equipment
is certified by the user to be used only for the
production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of such user and not subject to sale
or resale.
(7) at the election of any serviceman not required
to be otherwise registered as a retailer under Section 2a
of the Retailers' Occupation Tax Act, made for each
fiscal year sales of service in which the aggregate
annual cost price of tangible personal property
transferred as an incident to the sales of service is
less than 35%, or 75% in the case of servicemen
transferring prescription drugs or servicemen engaged in
graphic arts production, of the aggregate annual total
gross receipts from all sales of service. The purchase of
such tangible personal property by the serviceman shall
be subject to tax under the Retailers' Occupation Tax Act
and the Use Tax Act. However, if a primary serviceman who
has made the election described in this paragraph
subcontracts service work to a secondary serviceman who
has also made the election described in this paragraph,
the primary serviceman does not incur a Use Tax liability
if the secondary serviceman (i) has paid or will pay Use
Tax on his or her cost price of any tangible personal
property transferred to the primary serviceman and (ii)
certifies that fact in writing to the primary serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (5) also includes machinery and equipment used
in the general maintenance or repair of such exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. For the purposes of exemption (5), each of
these terms shall have the following meanings: (1)
"manufacturing process" shall mean the production of any
article of tangible personal property, whether such article
is a finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by procedures commonly regarded as
manufacturing, processing, fabricating, or refining which
changes some existing material or materials into a material
with a different form, use or name. In relation to a
recognized integrated business composed of a series of
operations which collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and
shall not be deemed to end until the completion of the final
product in the last operation or stage of production in the
series; and further, for purposes of exemption (5),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials
in a manner commonly regarded as assembling which results in
a material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to
an integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's computer
assisted design, computer assisted manufacturing (CAD/CAM)
system; or any subunit or assembly comprising a component of
any machinery or auxiliary, adjunct or attachment parts of
machinery, such as tools, dies, jigs, fixtures, patterns and
molds; or any parts which require periodic replacement in the
course of normal operation; but shall not include hand tools.
Equipment includes chemicals or chemicals acting as catalysts
but only if the chemicals or chemicals acting as catalysts
effect a direct and immediate change upon a product being
manufactured or assembled for wholesale or retail sale or
lease. The purchaser of such machinery and equipment who has
an active resale registration number shall furnish such
number to the seller at the time of purchase. The user of
such machinery and equipment and tools without an active
resale registration number shall prepare a certificate of
exemption for each transaction stating facts establishing the
exemption for that transaction, which certificate shall be
available to the Department for inspection or audit. The
Department shall prescribe the form of the certificate.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any
opinion from any person regarding the coverage and
applicability of exemption (5) to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion or letter contains trade secrets or other
confidential information, where possible the Department shall
delete such information prior to publication. Whenever such
informal rulings, opinions, or letters contain any policy of
general applicability, the Department shall formulate and
adopt such policy as a rule in accordance with the provisions
of the Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (3) of this Section shall make tax free
purchases unless it has an active exemption identification
number issued by the Department.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary
purpose of conveying news (with or without other information)
is not a purchase, use or sale of service or of tangible
personal property within the meaning of this Act.
"Serviceman" means any person who is engaged in the
occupation of making sales of service.
"Sale at retail" means "sale at retail" as defined in the
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as
an incident to a sale of service.
"Serviceman maintaining a place of business in this
State", or any like term, means and includes any serviceman:
1. having or maintaining within this State,
directly or by a subsidiary, an office, distribution
house, sales house, warehouse or other place of business,
or any agent or other representative operating within
this State under the authority of the serviceman or its
subsidiary, irrespective of whether such place of
business or agent or other representative is located here
permanently or temporarily, or whether such serviceman or
subsidiary is licensed to do business in this State;
2. soliciting orders for tangible personal property
by means of a telecommunication or television shopping
system (which utilizes toll free numbers) which is
intended by the retailer to be broadcast by cable
television or other means of broadcasting, to consumers
located in this State;
3. pursuant to a contract with a broadcaster or
publisher located in this State, soliciting orders for
tangible personal property by means of advertising which
is disseminated primarily to consumers located in this
State and only secondarily to bordering jurisdictions;
4. soliciting orders for tangible personal property
by mail if the solicitations are substantial and
recurring and if the retailer benefits from any banking,
financing, debt collection, telecommunication, or
marketing activities occurring in this State or benefits
from the location in this State of authorized
installation, servicing, or repair facilities;
5. being owned or controlled by the same interests
which own or control any retailer engaging in business in
the same or similar line of business in this State;
6. having a franchisee or licensee operating under
its trade name if the franchisee or licensee is required
to collect the tax under this Section;
7. pursuant to a contract with a cable television
operator located in this State, soliciting orders for
tangible personal property by means of advertising which
is transmitted or distributed over a cable television
system in this State; or
8. engaging in activities in Illinois, which
activities in the state in which the supply business
engaging in such activities is located would constitute
maintaining a place of business in that state.
(Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
(35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
Sec. 3-45. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of property acquired outside
this State by a nonresident individual and brought into this
State by the individual for his or her own use while
temporarily within this State or while passing through this
State.
(b) The use, in this State, of property that is acquired
outside this State and that is moved into this State for use
as rolling stock moving in interstate commerce.
(c) The use, in this State, of property that is acquired
outside this State and caused to be brought into this State
by a person who has already paid a tax in another state in
respect to the sale, purchase, or use of that property, to
the extent of the amount of the tax properly due and paid in
the other state.
(d) The temporary storage, in this State, of property
that is acquired outside this State and that after being
brought into this State and stored here temporarily, is used
solely outside this State or is physically attached to or
incorporated into other property that is used solely outside
this State, or is altered by converting, fabricating,
manufacturing, printing, processing, or shaping, and, as
altered, is used solely outside this State.
(e) Beginning July 1, 1999, the use, in this State, of
fuel acquired outside this State and brought into this State
in the fuel supply tanks of locomotives engaged in freight
hauling and passenger service for interstate commerce. This
subsection is exempt from the provisions of Section 3-75.
(f) Beginning on January 1, 2002, the use of tangible
personal property purchased from an Illinois retailer by a
taxpayer engaged in centralized purchasing activities in
Illinois who will, upon receipt of the property in Illinois,
temporarily store the property in Illinois (i) for the
purpose of subsequently transporting it outside this State
for use or consumption thereafter solely outside this State
or (ii) for the purpose of being processed, fabricated, or
manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this
State and thereafter used or consumed solely outside this
State. The Director of Revenue shall, pursuant to rules
adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good
standing with the Department who is eligible for the
exemption under this subsection (f). The permit issued under
this subsection (f) shall authorize the holder, to the extent
and in the manner specified in the rules adopted under this
Act, to purchase tangible personal property from a retailer
exempt from the taxes imposed by this Act. Taxpayers shall
maintain all necessary books and records to substantiate the
use and consumption of all such tangible personal property
outside of the State of Illinois.
(Source: P.A. 91-51, eff. 6-30-99; 91-313, eff. 7-29-99;
91-587, eff. 8-14-99; 92-16, eff. 6-28-01; 92-488, eff.
8-23-01.)
(35 ILCS 110/3-50) (from Ch. 120, par. 439.33-50)
Sec. 3-50. Rolling stock exemption. Except as provided
in Section 3-51 of this Act, the rolling stock exemption
applies to rolling stock used by an interstate carrier for
hire, even just between points in Illinois, if the rolling
stock transports, for hire, persons whose journeys or
property whose shipments originate or terminate outside
Illinois.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 110/3-51)
Sec. 3-51. Motor vehicles; use as rolling stock
definition. Through June 30, 2003, "use as rolling stock
moving in interstate commerce" in subsection (b) of Section
3-45 means for motor vehicles, as defined in Section 1-46 of
the Illinois Vehicle Code, and trailers, as defined in
Section 1-209 of the Illinois Vehicle Code, when on 15 or
more occasions in a 12-month period the motor vehicle and
trailer has carried persons or property for hire in
interstate commerce, even just between points in Illinois, if
the motor vehicle and trailer transports persons whose
journeys or property whose shipments originate or terminate
outside Illinois. This definition applies to all property
purchased for the purpose of being attached to those motor
vehicles or trailers as a part thereof. On and after July 1,
2003, "use as rolling stock moving in interstate commerce" in
paragraphs (4) and (4a) of the definition of "sale of
service" in Section 2 and subsection (b) of Section 3-45
occurs for motor vehicles, as defined in Section 1-146 of the
Illinois Vehicle Code, when during a 12-month period the
rolling stock has carried persons or property for hire in
interstate commerce for 51% of its total trips and transports
persons whose journeys or property whose shipments originate
or terminate outside Illinois. Trips that are only between
points in Illinois shall not be counted as interstate trips
when calculating whether the tangible personal property
qualifies for the exemption but such trips shall be included
in total trips taken.
(Source: P.A. 91-587, eff. 8-14-99.)
Section 15. The Service Occupation Tax Act is amended by
changing Sections 2 and 2d as follows:
(35 ILCS 115/2) (from Ch. 120, par. 439.102)
Sec. 2. "Transfer" means any transfer of the title to
property or of the ownership of property whether or not the
transferor retains title as security for the payment of
amounts due him from the transferee.
"Cost Price" means the consideration paid by the
serviceman for a purchase valued in money, whether paid in
money or otherwise, including cash, credits and services, and
shall be determined without any deduction on account of the
supplier's cost of the property sold or on account of any
other expense incurred by the supplier. When a serviceman
contracts out part or all of the services required in his
sale of service, it shall be presumed that the cost price to
the serviceman of the property transferred to him by his or
her subcontractor is equal to 50% of the subcontractor's
charges to the serviceman in the absence of proof of the
consideration paid by the subcontractor for the purchase of
such property.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of Service" means any transaction except:
(a) A retail sale of tangible personal property taxable
under the Retailers' Occupation Tax Act or under the Use Tax
Act.
(b) A sale of tangible personal property for the purpose
of resale made in compliance with Section 2c of the
Retailers' Occupation Tax Act.
(c) Except as hereinafter provided, a sale or transfer
of tangible personal property as an incident to the rendering
of service for or by any governmental body or for or by any
corporation, society, association, foundation or institution
organized and operated exclusively for charitable, religious
or educational purposes or any not-for-profit corporation,
society, association, foundation, institution or organization
which has no compensated officers or employees and which is
organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability company
may qualify for the exemption under this paragraph only if
the limited liability company is organized and operated
exclusively for educational purposes.
(d) A sale or transfer of tangible personal property as
an incident to the rendering of service for interstate
carriers for hire for use as rolling stock moving in
interstate commerce or lessors under leases of one year or
longer, executed or in effect at the time of purchase, to
interstate carriers for hire for use as rolling stock moving
in interstate commerce, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d-1) A sale or transfer of tangible personal property
as an incident to the rendering of service for owners,
lessors or shippers of tangible personal property which is
utilized by interstate carriers for hire for use as rolling
stock moving in interstate commerce, and equipment operated
by a telecommunications provider, licensed as a common
carrier by the Federal Communications Commission, which is
permanently installed in or affixed to aircraft moving in
interstate commerce.
(d-1.1) On and after July 1, 2003, a sale or transfer of
a motor vehicle of the second division with a gross vehicle
weight in excess of 8,000 pounds as an incident to the
rendering of service if that motor vehicle is subject to the
commercial distribution fee imposed under Section 3-815.1 of
the Illinois Vehicle Code. This exemption applies to repair
and replacement parts added after the initial purchase of
such a motor vehicle if that motor vehicle is used in a
manner that would qualify for the rolling stock exemption
otherwise provided for in this Act.
(d-2) The repairing, reconditioning or remodeling, for a
common carrier by rail, of tangible personal property which
belongs to such carrier for hire, and as to which such
carrier receives the physical possession of the repaired,
reconditioned or remodeled item of tangible personal property
in Illinois, and which such carrier transports, or shares
with another common carrier in the transportation of such
property, out of Illinois on a standard uniform bill of
lading showing the person who repaired, reconditioned or
remodeled the property as the shipper or consignor of such
property to a destination outside Illinois, for use outside
Illinois.
(d-3) A sale or transfer of tangible personal property
which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service
Occupation Tax or the Service Use Tax, rather than the
Retailers' Occupation Tax or the Use Tax, for an interstate
carrier by rail which receives the physical possession of
such property in Illinois, and which transports such
property, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of such property to a
destination outside Illinois, for use outside Illinois.
(d-4) Until January 1, 1997, a sale, by a registered
serviceman paying tax under this Act to the Department, of
special order printed materials delivered outside Illinois
and which are not returned to this State, if delivery is made
by the seller or agent of the seller, including an agent who
causes the product to be delivered outside Illinois by a
common carrier or the U.S. postal service.
(e) A sale or transfer of machinery and equipment used
primarily in the process of the manufacturing or assembling,
either in an existing, an expanded or a new manufacturing
facility, of tangible personal property for wholesale or
retail sale or lease, whether such sale or lease is made
directly by the manufacturer or by some other person, whether
the materials used in the process are owned by the
manufacturer or some other person, or whether such sale or
lease is made apart from or as an incident to the seller's
engaging in a service occupation and the applicable tax is a
Service Occupation Tax or Service Use Tax, rather than
Retailers' Occupation Tax or Use Tax.
(f) The sale or transfer of distillation machinery and
equipment, sold as a unit or kit and assembled or installed
by the retailer, which machinery and equipment is certified
by the user to be used only for the production of ethyl
alcohol that will be used for consumption as motor fuel or as
a component of motor fuel for the personal use of such user
and not subject to sale or resale.
(g) At the election of any serviceman not required to be
otherwise registered as a retailer under Section 2a of the
Retailers' Occupation Tax Act, made for each fiscal year
sales of service in which the aggregate annual cost price of
tangible personal property transferred as an incident to the
sales of service is less than 35% (75% in the case of
servicemen transferring prescription drugs or servicemen
engaged in graphic arts production) of the aggregate annual
total gross receipts from all sales of service. The purchase
of such tangible personal property by the serviceman shall be
subject to tax under the Retailers' Occupation Tax Act and
the Use Tax Act. However, if a primary serviceman who has
made the election described in this paragraph subcontracts
service work to a secondary serviceman who has also made the
election described in this paragraph, the primary serviceman
does not incur a Use Tax liability if the secondary
serviceman (i) has paid or will pay Use Tax on his or her
cost price of any tangible personal property transferred to
the primary serviceman and (ii) certifies that fact in
writing to the primary serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (e) also includes machinery and equipment used
in the general maintenance or repair of such exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. For the purposes of exemption (e), each of
these terms shall have the following meanings: (1)
"manufacturing process" shall mean the production of any
article of tangible personal property, whether such article
is a finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by procedures commonly regarded as
manufacturing, processing, fabricating, or refining which
changes some existing material or materials into a material
with a different form, use or name. In relation to a
recognized integrated business composed of a series of
operations which collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and
shall not be deemed to end until the completion of the final
product in the last operation or stage of production in the
series; and further for purposes of exemption (e),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials
in a manner commonly regarded as assembling which results in
a material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to
an integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's manufacuturer's
computer assisted design, computer assisted manufacturing
(CAD/CAM) system; or any subunit or assembly comprising a
component of any machinery or auxiliary, adjunct or
attachment parts of machinery, such as tools, dies, jigs,
fixtures, patterns and molds; or any parts which require
periodic replacement in the course of normal operation; but
shall not include hand tools. Equipment includes chemicals
or chemicals acting as catalysts but only if the chemicals or
chemicals acting as catalysts effect a direct and immediate
change upon a product being manufactured or assembled for
wholesale or retail sale or lease. The purchaser of such
machinery and equipment who has an active resale registration
number shall furnish such number to the seller at the time of
purchase. The purchaser of such machinery and equipment and
tools without an active resale registration number shall
furnish to the seller a certificate of exemption for each
transaction stating facts establishing the exemption for that
transaction, which certificate shall be available to the
Department for inspection or audit.
Except as provided in Section 2d of this Act, the rolling
stock exemption applies to rolling stock used by an
interstate carrier for hire, even just between points in
Illinois, if such rolling stock transports, for hire, persons
whose journeys or property whose shipments originate or
terminate outside Illinois.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any
opinion from any person regarding the coverage and
applicability of exemption (e) to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion or letter contains trade secrets or other
confidential information, where possible the Department shall
delete such information prior to publication. Whenever such
informal rulings, opinions, or letters contain any policy of
general applicability, the Department shall formulate and
adopt such policy as a rule in accordance with the provisions
of the Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (c) of this Section shall make tax free
purchases unless it has an active exemption identification
number issued by the Department.
"Serviceman" means any person who is engaged in the
occupation of making sales of service.
"Sale at Retail" means "sale at retail" as defined in the
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as
an incident to a sale of service.
(Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01;
revised 11-22-02.)
(35 ILCS 115/2d)
Sec. 2d. Motor vehicles; use as rolling stock definition.
Through June 30, 2003, "use as rolling stock moving in
interstate commerce" in subsections (d) and (d-1) of the
definition of "sale of service" in Section 2 means for motor
vehicles, as defined in Section 1-146 of the Illinois Vehicle
Code, and trailers, as defined in Section 1-209 of the
Illinois Vehicle Code, when on 15 or more occasions in a
12-month period the motor vehicle and trailer has carried
persons or property for hire in interstate commerce, even
just between points in Illinois, if the motor vehicle and
trailer transports persons whose journeys or property whose
shipments originate or terminate outside Illinois. This
definition applies to all property purchased for the purpose
of being attached to those motor vehicles or trailers as a
part thereof. On and after July 1, 2003, "use as rolling
stock moving in interstate commerce" in paragraphs (d) and
(d-1) of the definition of "sale of service" in Section 2
occurs for motor vehicles, as defined in Section 1-146 of the
Illinois Vehicle Code, when during a 12-month period the
rolling stock has carried persons or property for hire in
interstate commerce for 51% of its total trips and transports
persons whose journeys or property whose shipments originate
or terminate outside Illinois. Trips that are only between
points in Illinois will not be counted as interstate trips
when calculating whether the tangible personal property
qualifies for the exemption but such trips will be included
in total trips taken.
(Source: P.A. 91-587, eff. 8-14-99.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Sections 2-5, 2-50, and 2-51 as follows:
(35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
Sec. 2-5. Exemptions. Gross receipts from proceeds from
the sale of the following tangible personal property are
exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
including machinery and equipment purchased for lease, and
including implements of husbandry defined in Section 1-130 of
the Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (2). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from
a motor vehicle required to be licensed and units sold
mounted on a motor vehicle required to be licensed, if the
selling price of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 2-70.
(3) Distillation machinery and equipment, sold as a unit
or kit, assembled or installed by the retailer, certified by
the user to be used only for the production of ethyl alcohol
that will be used for consumption as motor fuel or as a
component of motor fuel for the personal use of the user, and
not subject to sale or resale.
(4) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production. Equipment includes chemicals or
chemicals acting as catalysts but only if the chemicals or
chemicals acting as catalysts effect a direct and immediate
change upon a graphic arts product.
(5) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through access to the living quarters from the
driver's seat, or a motor vehicle of the second division that
is of the van configuration designed for the transportation
of not less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Proceeds of that portion of the selling price of a
passenger car the sale of which is subject to the Replacement
Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit arts or
cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited
to, music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts
organizations, and media arts organizations. On and after the
effective date of this amendatory Act of the 92nd General
Assembly, however, an entity otherwise eligible for this
exemption shall not make tax-free purchases unless it has an
active identification number issued by the Department.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(11) Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or educational purposes, or to a not-for-profit corporation,
society, association, foundation, institution, or
organization that has no compensated officers or employees
and that is organized and operated primarily for the
recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
(12) Tangible personal property sold to interstate
carriers for hire for use as rolling stock moving in
interstate commerce or to lessors under leases of one year or
longer executed or in effect at the time of purchase by
interstate carriers for hire for use as rolling stock moving
in interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(12-5) On and after July 1, 2003, motor vehicles of the
second division with a gross vehicle weight in excess of
8,000 pounds that are subject to the commercial distribution
fee imposed under Section 3-815.1 of the Illinois Vehicle
Code. This exemption applies to repair and replacement parts
added after the initial purchase of such a motor vehicle if
that motor vehicle is used in a manner that would qualify for
the rolling stock exemption otherwise provided for in this
Act.
(13) Proceeds from sales to owners, lessors, or shippers
of tangible personal property that is utilized by interstate
carriers for hire for use as rolling stock moving in
interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal
property for wholesale or retail sale or lease, whether the
sale or lease is made directly by the manufacturer or by some
other person, whether the materials used in the process are
owned by the manufacturer or some other person, or whether
the sale or lease is made apart from or as an incident to the
seller's engaging in the service occupation of producing
machines, tools, dies, jigs, patterns, gauges, or other
similar items of no commercial value on special order for a
particular purchaser.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(16) Petroleum products sold to a purchaser if the
seller is prohibited by federal law from charging tax to the
purchaser.
(17) Tangible personal property sold to a common carrier
by rail or motor that receives the physical possession of the
property in Illinois and that transports the property, or
shares with another common carrier in the transportation of
the property, out of Illinois on a standard uniform bill of
lading showing the seller of the property as the shipper or
consignor of the property to a destination outside Illinois,
for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(19) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(21) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(22) Fuel and petroleum products sold to or used by an
air carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property to
the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons for
hire on rivers bordering on this State if the fuel is
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) A motor vehicle sold in this State to a nonresident
even though the motor vehicle is delivered to the nonresident
in this State, if the motor vehicle is not to be titled in
this State, and if a drive-away permit is issued to the motor
vehicle as provided in Section 3-603 of the Illinois Vehicle
Code or if the nonresident purchaser has vehicle registration
plates to transfer to the motor vehicle upon returning to his
or her home state. The issuance of the drive-away permit or
having the out-of-state registration plates to be transferred
is prima facie evidence that the motor vehicle will not be
titled in this State.
(26) Semen used for artificial insemination of livestock
for direct agricultural production.
(27) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(28) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
this Act.
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(32) Beginning July 1, 1999, game or game birds sold at
a "game breeding and hunting preserve area" or an "exotic
game hunting area" as those terms are used in the Wildlife
Code or at a hunting enclosure approved through rules adopted
by the Department of Natural Resources. This paragraph is
exempt from the provisions of Section 2-70.
(33) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in
useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to
prepare individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(34) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary
school, a group of those schools, or one or more school
districts if the events are sponsored by an entity recognized
by the school district that consists primarily of volunteers
and includes parents and teachers of the school children.
This paragraph does not apply to fundraising events (i) for
the benefit of private home instruction or (ii) for which the
fundraising entity purchases the personal property sold at
the events from another individual or entity that sold the
property for the purpose of resale by the fundraising entity
and that profits from the sale to the fundraising entity.
This paragraph is exempt from the provisions of Section 2-70.
(35) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and
other items, and replacement parts for these machines.
Beginning January 1, 2002, machines and parts for machines
used in commercial, coin-operated amusement and vending
business if a use or occupation tax is paid on the gross
receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 2-70.
(35-5) (36) Food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks, and food that has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances, and
insulin, urine testing materials, syringes, and needles used
by diabetics, for human use, when purchased for use by a
person receiving medical assistance under Article 5 of the
Illinois Public Aid Code who resides in a licensed long-term
care facility, as defined in the Nursing Home Care Act.
(36) Beginning August 2, 2001 on the effective date of
this amendatory Act of the 92nd General Assembly, computers
and communications equipment utilized for any hospital
purpose and equipment used in the diagnosis, analysis, or
treatment of hospital patients sold to a lessor who leases
the equipment, under a lease of one year or longer executed
or in effect at the time of the purchase, to a hospital that
has been issued an active tax exemption identification number
by the Department under Section 1g of this Act. This
paragraph is exempt from the provisions of Section 2-70.
(37) Beginning August 2, 2001 on the effective date of
this amendatory Act of the 92nd General Assembly, personal
property sold to a lessor who leases the property, under a
lease of one year or longer executed or in effect at the time
of the purchase, to a governmental body that has been issued
an active tax exemption identification number by the
Department under Section 1g of this Act. This paragraph is
exempt from the provisions of Section 2-70.
(38) Beginning on January 1, 2002, tangible personal
property purchased from an Illinois retailer by a taxpayer
engaged in centralized purchasing activities in Illinois who
will, upon receipt of the property in Illinois, temporarily
store the property in Illinois (i) for the purpose of
subsequently transporting it outside this State for use or
consumption thereafter solely outside this State or (ii) for
the purpose of being processed, fabricated, or manufactured
into, attached to, or incorporated into other tangible
personal property to be transported outside this State and
thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the
Department who is eligible for the exemption under this
paragraph (38). The permit issued under this paragraph (38)
shall authorize the holder, to the extent and in the manner
specified in the rules adopted under this Act, to purchase
tangible personal property from a retailer exempt from the
taxes imposed by this Act. Taxpayers shall maintain all
necessary books and records to substantiate the use and
consumption of all such tangible personal property outside of
the State of Illinois.
(Source: P.A. 91-51, eff. 6-30-99; 91-200, eff. 7-20-99;
91-439, eff. 8-6-99; 91-533, eff. 8-13-99; 91-637, eff.
8-20-99; 91-644, eff. 8-20-99; 92-16, eff. 6-28-01; 92-35,
eff. 7-1-01; 92-227, eff. 8-2-01; 92-337, eff. 8-10-01;
92-484, eff. 8-23-01; 92-488, eff. 8-23-01; 92-651, eff.
7-11-02; 92-680, eff. 7-16-02; revised 1-26-03.)
(35 ILCS 120/2-50) (from Ch. 120, par. 441-50)
Sec. 2-50. Rolling stock exemption. Except as provided
in Section 2-51 of this Act, the rolling stock exemption
applies to rolling stock used by an interstate carrier for
hire, even just between points in Illinois, if the rolling
stock transports, for hire, persons whose journeys or
property whose shipments originate or terminate outside
Illinois.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 120/2-51)
Sec. 2-51. Motor vehicles; use as rolling stock
definition. Through June 30, 2003, "use as rolling stock
moving in interstate commerce" in paragraphs (12) and (13) of
Section 2-5 means for motor vehicles, as defined in Section
1-146 of the Illinois Vehicle Code, and trailers, as defined
in Section 1-209 of the Illinois Vehicle Code, when on 15 or
more occasions in a 12-month period the motor vehicle and
trailer has carried persons or property for hire in
interstate commerce, even just between points in Illinois, if
the motor vehicle and trailer transports persons whose
journeys or property whose shipments originate or terminate
outside Illinois. This definition applies to all property
purchased for the purpose of being attached to those motor
vehicles or trailers as a part thereof. On and after July 1,
2003, "use as rolling stock moving in interstate commerce" in
paragraphs (12) and (13) of Section 2-5 occurs for motor
vehicles, as defined in Section 1-146 of the Illinois Vehicle
Code, when during a 12-month period the rolling stock has
carried persons or property for hire in interstate commerce
for 51% of its total trips and transports persons whose
journeys or property whose shipments originate or terminate
outside Illinois. Trips that are only between points in
Illinois shall not be counted as interstate trips when
calculating whether the tangible personal property qualifies
for the exemption but such trips shall be included in total
trips taken.
(Source: P.A. 91-587, eff. 8-14-99.)
Section 25. The Illinois Vehicle Code is amended by
changing Sections 3-402.1 and 20-101 and by adding Section
3-815.1 as follows:
(625 ILCS 5/3-402.1) (from Ch. 95 1/2, par. 3-402.1)
Sec. 3-402.1. Proportional Registration. Any owner or
rental owner engaged in operating a fleet of apportionable
vehicles in this state and one or more other states may, in
lieu of registration of such vehicles under the general
provisions of sections 3-402, 3-815, 3-815.1, and 3-819,
register and license such fleet for operations in this state
by filing an application statement, signed under penalties of
perjury, with the Secretary of State which shall be in such
form and contain such information as the Secretary of State
shall require, declaring the total mileage operated in all
states by such fleet, the total mileage operated in this
state by such fleet during the preceding year, and describing
and identifying each apportionable vehicle to be operated in
this state during the ensuing year. If mileage data is not
available for the preceding year, the Secretary of State may
accept the latest 12-month period available. "Preceding year"
means the period of 12 consecutive months immediately prior
to July 1st of the year immediately preceding the
registration or license year for which proportional
registration is sought.
Such owner shall determine the proportion of in-state
miles to total fleet miles. Such percentage figure shall be
such owner's apportionment factor. In determining the total
fee payment, such owner shall first compute the license fee
or fees for each vehicle within the fleet which would
otherwise be required, and then multiply the said amount by
the Illinois apportionment factor adding the fees for each
vehicle to arrive at a total amount for the fleet.
Apportionable trailers and semitrailers will be registered in
accordance with the provisions of Section 3-813 of this Code.
Upon receipt of the appropriate fees from such owner as
computed under the provisions of this section, the Secretary
of State shall, when this state is the base jurisdiction,
issue to such owner number plates or other distinctive tags
or such evidence of registration as the Secretary of State
shall deem appropriate to identify each vehicle in the fleet
as a part of a proportionally registered interstate fleet.
Vehicles registered under the provision of this section
shall be considered fully licensed and properly registered in
Illinois for any type of movement or operation. The
proportional registration and licensing provisions of this
section shall apply to vehicles added to fleets and operated
in this state during the registration year, applying the same
apportionment factor to such fees as would be payable for the
remainder of the registration year.
Apportionment factors for apportionable vehicles not
operated in this state during the preceding year shall be
determined by the Secretary of State on the basis of a full
statement of the proposed methods of operation and in
conformity with an estimated mileage chart as calculated by
the Secretary of State. An established fleet adding states
at the time of renewal shall estimate mileage for the added
states in conformity with a mileage chart developed by the
Secretary of State.
(Source: P.A. 90-89, eff. 1-1-98.)
(625 ILCS 5/3-815.1 new)
Sec. 3-815.1. Commercial distribution fee. Beginning
July 1, 2003, in addition to any tax or fee imposed under
this Code:
(a) vehicles of the second division with a gross vehicle
weight that exceeds 8,000 pounds and that incur any tax or
fee under subsection (a) of Section 3-815 of this Code or
subsection (a) of Section 3-818 of this Code, as applicable,
and shall pay to the Secretary of State a commercial
distribution fee, for each registration year, for the use of
the public highways, State infrastructure, and State
services, in an amount equal to 36% of the taxes and fees
incurred under subsection (a) of Section 3-815 of this Code,
or subsection (a) of Section 3-818 of this Code, as
applicable, rounded up to the nearest whole dollar.
(b) vehicles of the second division with a gross vehicle
weight of 8,000 pounds or less and that incur any tax or fee
under subsection (a) of Section 3-815 of this Code or
subsection (a) of Section 3-818 of this Code, as applicable,
and have claimed the rolling stock exemption under the
Retailers' Occupation Tax Act, Use Tax Act, Service
Occupation Tax Act, or Service Use Tax Act shall pay to the
Illinois Department of Revenue (or the Secretary of State
under an intergovernmental agreement) a commercial
distribution fee, for each registration year, for the use of
the public highways, State infrastructure, and State
services, in an amount equal to 36% of the taxes and fees
incurred under subsection (a) of Section 3-815 of this Code
or subsection (a) of Section 3-818 of this Code, as
applicable, rounded up to the nearest whole dollar.
The fees paid under this Section shall be deposited by
the Secretary of State into the General Revenue Fund.
(625 ILCS 5/20-101) (from Ch. 95 1/2, par. 20-101)
Sec. 20-101. Moneys derived from registration, operation
and use of automobiles and from fuel taxes - Use. From and
after the effective date of this Act, except as provided in
Section 3-815.1 of this Code, no public moneys derived from
fees, excises or license taxes relating to registration,
operation and use of vehicles on public highways or to fuels
used for the propulsion of such vehicles, shall be
appropriated or expended other than for costs of
administering the laws imposing such fees, excises and
license taxes, statutory refunds and adjustments allowed
thereunder, administrative costs of the Department of
Transportation, payment of debts and liabilities incurred in
construction and reconstruction of public highways and
bridges, acquisition of rights-of-way for, and the cost of
construction, reconstruction, maintenance, repair and
operation of public highways and bridges under the direction
and supervision of the State, political subdivision or
municipality collecting such moneys, and the costs for
patrolling and policing the public highways (by the State,
political subdivision or municipality collecting such money)
for enforcement of traffic laws; provided, that such moneys
may be used for the retirement of and interest on bonds
heretofore issued for purposes other than the construction of
public highways or bridges but not to a greater extent, nor a
greater length of time, than is provided in acts heretofore
adopted and now in force. Further the separation of grades of
such highways with railroads and costs associated with
protection of at-grade highway and railroad crossings shall
also be permissible.
(Source: P.A. 81-2nd S.S.-3.)
Section 99. Effective date. This Act takes effect upon
becoming law.