Public Act 93-0017

SB46 Enrolled                        LRB093 02617 SJM 02627 b

    AN ACT concerning taxes.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.   If  and  only  if both Senate Bill 1212 and
House Bill 46 of the 93rd General Assembly become  law,  then
the  Use  Tax  Act is amended by changing Section 3-10 and by
adding  Sections  3-41,  3-42,  3-43,  3-44,  and  3-44.5  as
follows:

    (35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10)
    Sec. 3-10.  Rate of tax.  Unless  otherwise  provided  in
this  Section,  the tax imposed by this Act is at the rate of
6.25% of either the selling price or the fair  market  value,
if  any,  of  the  tangible  personal property.  In all cases
where property functionally used or consumed is the  same  as
the  property  that  was purchased at retail, then the tax is
imposed on the selling price of the property.  In  all  cases
where  property functionally used or consumed is a by-product
or waste product that  has  been  refined,  manufactured,  or
produced  from  property purchased at retail, then the tax is
imposed on the lower of the fair market value, if any, of the
specific property so used in this State  or  on  the  selling
price  of  the  property purchased at retail. For purposes of
this Section "fair market value" means  the  price  at  which
property  would  change  hands  between a willing buyer and a
willing seller, neither being under any compulsion to buy  or
sell  and  both  having  reasonable knowledge of the relevant
facts. The fair market value shall be established by Illinois
sales  by  the  taxpayer  of  the  same  property   as   that
functionally  used or consumed, or if there are no such sales
by the  taxpayer,  then  comparable  sales  or  purchases  of
property of like kind and character in Illinois.
    Beginning  on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of  the
Motor  Fuel  Tax Law, and gasohol, as defined in Section 3-40
of the Use Tax Act, the tax is imposed at the rate of 1.25%.
    With respect to gasohol, the  tax  imposed  by  this  Act
applies  to (i) 70% of the proceeds of sales made on or after
January 1, 1990, and before July 1, 2003,  (ii)  80%  of  the
proceeds  of  sales  made  on or after July 1, 2003 and on or
before December 31, 2013, and (iii) to 100% of  the  proceeds
of  sales  made thereafter. If, at any time, however, the tax
under this Act on sales of gasohol is imposed at the rate  of
1.25%,  then  the  tax imposed by this Act applies to 100% of
the proceeds of sales of gasohol made during that time.
    With respect to majority blended ethanol  fuel,  the  tax
imposed  by  this Act does not apply to the proceeds of sales
made on or after July 1, 2003 and on or before  December  31,
2013  but  applies  to  100%  of  the  proceeds of sales made
thereafter.
    With respect to biodiesel blends with no less than 1% and
no more than 10% biodiesel,  the  tax  imposed  by  this  Act
applies  to (i) 80% of the proceeds of sales made on or after
July 1, 2003 and on or before December 31, 2013 and (ii) 100%
of the proceeds of sales made thereafter. If,  at  any  time,
however,  the tax under this Act on sales of biodiesel blends
with no less than 1%  and  no  more  than  10%  biodiesel  is
imposed  at  the  rate of 1.25%, then the tax imposed by this
Act applies to 100% of the proceeds  of  sales  of  biodiesel
blends  with  no  less than 1% and no more than 10% biodiesel
made during that time.
    With respect to 100% biodiesel and biodiesel blends  with
more than 10% but no more than 99% biodiesel, the tax imposed
by  this  Act does not apply to the proceeds of sales made on
or after July 1, 2003 and on or before December 31, 2013  but
applies to 100% of the proceeds of sales made thereafter.
    With  respect to 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,
modifications to a motor vehicle for the purpose of rendering
it  usable  by  a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For  the  purposes
of  this  Section, the term "soft drinks" means any complete,
finished,   ready-to-use,   non-alcoholic   drink,    whether
carbonated  or  not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of  whatever
kind  or  description  that  are  contained  in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include  coffee,  tea,  non-carbonated
water,  infant  formula,  milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
    Notwithstanding any other provisions of this  Act,  "food
for human consumption that is to be consumed off the premises
where  it  is  sold" includes all food sold through a vending
machine, except  soft  drinks  and  food  products  that  are
dispensed  hot  from  a  vending  machine,  regardless of the
location of the vending machine.
    If the property  that  is  purchased  at  retail  from  a
retailer  is  acquired  outside  Illinois  and  used  outside
Illinois before being brought to Illinois for use here and is
taxable  under this Act, the "selling price" on which the tax
is computed shall be reduced by an amount that  represents  a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source:  P.A.  90-605,  eff.  6-30-98; 90-606, eff. 6-30-98;
91-51, eff. 6-30-99; 91-872, eff. 7-1-00.)

    (35 ILCS 105/3-41 new)
    Sec.  3-41.  Biodiesel.  "Biodiesel"  means  a  renewable
diesel fuel derived from biomass that is intended for use  in
diesel engines.

    (35 ILCS 105/3-42 new)
    Sec.  3-42.  Biodiesel  blend.  "Biodiesel blend" means a
blend of biodiesel with petroleum-based diesel fuel in  which
the  resultant  product  contains no less than 1% and no more
than 99% biodiesel.

    (35 ILCS 105/3-43 new)
    Sec. 3-43.  Biomass.  "Biomass" means non-fossil  organic
materials  that  have  an  intrinsic chemical energy content.
"Biomass" includes, but is not limited to, soybean oil, other
vegetable oils, and ethanol.

    (35 ILCS 105/3-44 new)
    Sec. 3-44.  Majority  blended  ethanol  fuel.   "Majority
blended ethanol fuel" means motor fuel that contains not less
than  70%  and no more than 90% denatured ethanol and no less
than 10% and no more than 30% gasoline.

    (35 ILCS 105/3-44.5 new)
    Sec.  3-44.5.  Diesel  fuel.  "Diesel  fuel"  means   any
product  intended  for  use or offered for sale as a fuel for
engines in which the fuel is  injected  into  the  combustion
chamber and ignited by pressure without electric spark.

    Section  10.   If  and  only if both Senate Bill 1212 and
House Bill 46 of the 93rd General Assembly become  law,  then
the  Service  Use Tax Act is amended by changing Section 3-10
as follows:

    (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
    Sec. 3-10.  Rate of tax.  Unless  otherwise  provided  in
this  Section,  the tax imposed by this Act is at the rate of
6.25% of the selling  price  of  tangible  personal  property
transferred  as  an incident to the sale of service, but, for
the purpose of computing this tax,  in  no  event  shall  the
selling  price be less than the cost price of the property to
the serviceman.
    Beginning on July 1, 2000 and through December 31,  2000,
with  respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
of the Use Tax Act, the tax is imposed at the rate of 1.25%.
    With  respect  to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act applies to (i) 70% of the selling
price of property transferred as an incident to the  sale  of
service on or after January 1, 1990, and before July 1, 2003,
(ii)  80%  of the selling price of property transferred as an
incident to the sale of service on or after July 1, 2003  and
on  or  before  December  31,  2013, and (iii) to 100% of the
selling price thereafter. If, at any time, however,  the  tax
under this Act on sales of gasohol, as defined in the Use Tax
Act, is imposed at the rate of 1.25%, then the tax imposed by
this  Act applies to 100% of the proceeds of sales of gasohol
made during that time.
    With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed  by  this  Act  does  not
apply  to  the  selling  price  of property transferred as an
incident to the sale of service on or after July 1, 2003  and
on  or  before  December  31, 2013 but applies to 100% of the
selling price thereafter.
    With respect to biodiesel blends, as defined in  the  Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the selling
price  of  property transferred as an incident to the sale of
service on or after July 1, 2003 and on  or  before  December
31,  2013  and (ii) 100% of the proceeds of the selling price
thereafter. If, at any time, however, the tax under this  Act
on  sales of biodiesel blends, as defined in the Use Tax Act,
with no less than 1%  and  no  more  than  10%  biodiesel  is
imposed  at  the  rate of 1.25%, then the tax imposed by this
Act applies to 100% of the proceeds  of  sales  of  biodiesel
blends  with  no  less than 1% and no more than 10% biodiesel
made during that time.
    With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in  the  Use  Tax  Act,
with  more  than  10% but no more than 99% biodiesel, the tax
imposed by this Act does not apply to  the  proceeds  of  the
selling  price  of property transferred as an incident to the
sale of service on or after July 1, 2003  and  on  or  before
December  31,  2013  but applies to 100% of the selling price
thereafter.
    At the election of any  registered  serviceman  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 tax imposed by this Act shall be  based  on  the
serviceman's  cost  price  of  the tangible personal property
transferred as an incident to the sale of those services.
    The tax shall be imposed  at  the  rate  of  1%  on  food
prepared  for  immediate consumption and transferred incident
to a sale of service subject  to  this  Act  or  the  Service
Occupation  Tax  Act by an entity licensed under the Hospital
Licensing Act, the Nursing Home Care Act, or the  Child  Care
Act of 1969.  The tax shall also be imposed at the rate of 1%
on  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 is not otherwise included in this  paragraph)
and   prescription   and  nonprescription  medicines,  drugs,
medical appliances, modifications to a motor vehicle for  the
purpose  of  rendering  it  usable  by a disabled person, and
insulin, urine testing materials, syringes, and needles  used
by  diabetics,  for  human  use.  For  the  purposes  of this
Section, the term "soft drinks" means any complete, finished,
ready-to-use, non-alcoholic drink, whether carbonated or not,
including but not limited to soda water, cola,  fruit  juice,
vegetable juice, carbonated water, and all other preparations
commonly known as soft drinks of whatever kind or description
that  are  contained  in  any  closed  or sealed bottle, can,
carton, or container, regardless of size.  "Soft drinks" does
not  include  coffee,  tea,  non-carbonated   water,   infant
formula,  milk  or  milk  products  as defined in the Grade A
Pasteurized Milk and Milk Products Act, or drinks  containing
50% or more natural fruit or vegetable juice.
    Notwithstanding  any  other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold  through  a  vending
machine,  except  soft  drinks  and  food  products  that are
dispensed hot from  a  vending  machine,  regardless  of  the
location of the vending machine.
    If  the  property  that  is acquired from a serviceman is
acquired outside Illinois and used  outside  Illinois  before
being  brought  to Illinois for use here and is taxable under
this Act, the "selling price" on which the  tax  is  computed
shall  be  reduced  by an amount that represents a reasonable
allowance  for  depreciation  for   the   period   of   prior
out-of-state use.
(Source: P.A.  90-605,  eff.  6-30-98;  90-606, eff. 6-30-98;
91-51, eff.  6-30-99;  91-541,  eff.  8-13-99;  91-872,  eff.
7-1-00.)

    Section  15.   If  and  only if both Senate Bill 1212 and
House Bill 46 of the 93rd General Assembly become  law,  then
the Service Occupation Tax Act is amended by changing Section
3-10 as follows:

    (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
    Sec.  3-10.  Rate  of  tax.  Unless otherwise provided in
this Section, the tax imposed by this Act is at the  rate  of
6.25%  of the "selling price", as defined in Section 2 of the
Service Use Tax Act, of the tangible personal property.   For
the  purpose  of  computing  this  tax, in no event shall the
"selling price" be less than the cost price to the serviceman
of the tangible personal property transferred.   The  selling
price  of each item of tangible personal property transferred
as an incident of a  sale  of  service  may  be  shown  as  a
distinct and separate item on the serviceman's billing to the
service  customer.  If the selling price is not so shown, the
selling price of the tangible personal property is deemed  to
be  50%  of  the  serviceman's  entire billing to the service
customer.  When, however, a serviceman contracts  to  design,
develop,  and  produce  special order machinery or equipment,
the  tax  imposed  by  this  Act  shall  be  based   on   the
serviceman's  cost  price  of  the tangible personal property
transferred incident to the completion of the contract.
    Beginning on July 1, 2000 and through December 31,  2000,
with  respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
of the Use Tax Act, the tax is imposed at the rate of 1.25%.
    With  respect  to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act shall apply to  (i)  70%  of  the
cost price of property transferred as an incident to the sale
of  service  on  or after January 1, 1990, and before July 1,
2003, (ii) 80% of the selling price of  property  transferred
as  an  incident  to  the sale of service on or after July 1,
2003 and on or before December 31, 2013, and (iii) to 100% of
the cost price thereafter. If, at any time, however, the  tax
under this Act on sales of gasohol, as defined in the Use Tax
Act, is imposed at the rate of 1.25%, then the tax imposed by
this  Act applies to 100% of the proceeds of sales of gasohol
made during that time.
    With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed  by  this  Act  does  not
apply  to  the  selling  price  of property transferred as an
incident to the sale of service on or after July 1, 2003  and
on  or  before  December  31, 2013 but applies to 100% of the
selling price thereafter.
    With respect to biodiesel blends, as defined in  the  Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the selling
price  of  property transferred as an incident to the sale of
service on or after July 1, 2003 and on  or  before  December
31,  2013  and (ii) 100% of the proceeds of the selling price
thereafter. If, at any time, however, the tax under this  Act
on  sales of biodiesel blends, as defined in the Use Tax Act,
with no less than 1%  and  no  more  than  10%  biodiesel  is
imposed  at  the  rate of 1.25%, then the tax imposed by this
Act applies to 100% of the proceeds  of  sales  of  biodiesel
blends  with  no  less than 1% and no more than 10% biodiesel
made during that time.
    With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in  the  Use  Tax  Act,
with  more  than 10% but no more than 99% biodiesel material,
the tax imposed by this Act does not apply to the proceeds of
the selling price of property transferred as an  incident  to
the sale of service on or after July 1, 2003 and on or before
December  31,  2013  but applies to 100% of the selling price
thereafter.
    At the election of any  registered  serviceman  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 tax imposed by this Act shall be  based  on  the
serviceman's  cost  price  of  the tangible personal property
transferred incident to the sale of those services.
    The tax shall be imposed  at  the  rate  of  1%  on  food
prepared  for  immediate consumption and transferred incident
to a sale of service subject  to  this  Act  or  the  Service
Occupation  Tax  Act by an entity licensed under the Hospital
Licensing Act, the Nursing Home Care Act, or the  Child  Care
Act of 1969.  The tax shall also be imposed at the rate of 1%
on  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 is not otherwise included in this  paragraph)
and   prescription   and  nonprescription  medicines,  drugs,
medical appliances, modifications to a motor vehicle for  the
purpose  of  rendering  it  usable  by a disabled person, and
insulin, urine testing materials, syringes, and needles  used
by  diabetics,  for  human  use.   For  the  purposes of this
Section, the term "soft drinks" means any complete, finished,
ready-to-use, non-alcoholic drink, whether carbonated or not,
including but not limited to soda water, cola,  fruit  juice,
vegetable juice, carbonated water, and all other preparations
commonly known as soft drinks of whatever kind or description
that  are  contained  in any closed or sealed can, carton, or
container,  regardless  of  size.   "Soft  drinks"  does  not
include coffee, tea, non-carbonated  water,  infant  formula,
milk  or  milk products as defined in the Grade A Pasteurized
Milk and Milk Products Act, or drinks containing 50% or  more
natural fruit or vegetable juice.
    Notwithstanding  any  other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold  through  a  vending
machine,  except  soft  drinks  and  food  products  that are
dispensed hot from  a  vending  machine,  regardless  of  the
location of the vending machine.
(Source:  P.A.  90-605,  eff.  6-30-98; 90-606, eff. 6-30-98;
91-51, 6-30-99; 91-541, eff. 8-13-99; 91-872, eff. 7-1-00.)

    Section 20.  If and only if both  Senate  Bill  1212  and
House  Bill  46 of the 93rd General Assembly become law, then
the Retailers' Occupation Tax  Act  is  amended  by  changing
Section 2-10 as follows:

    (35 ILCS 120/2-10) (from Ch. 120, par. 441-10)
    Sec.  2-10.  Rate  of  tax.  Unless otherwise provided in
this Section, the tax imposed by this Act is at the  rate  of
6.25%  of  gross  receipts  from  sales  of tangible personal
property made in the course of business.
    Beginning on July 1, 2000 and through December 31,  2000,
with  respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
of the Use Tax Act, the tax is imposed at the rate of 1.25%.
    Within   14   days  after  the  effective  date  of  this
amendatory Act of the 91st General Assembly, each retailer of
motor fuel and gasohol shall cause the following notice to be
posted  in  a  prominently  visible  place  on  each   retail
dispensing  device  that  is  used  to dispense motor fuel or
gasohol in the State of Illinois:  "As of July 1,  2000,  the
State  of  Illinois has eliminated the State's share of sales
tax on motor fuel and gasohol through December 31, 2000.  The
price  on  this  pump  should  reflect the elimination of the
tax."  The notice shall be printed in bold print  on  a  sign
that is no smaller than 4 inches by 8 inches.  The sign shall
be  clearly  visible to customers.  Any retailer who fails to
post or maintain a required sign through December 31, 2000 is
guilty of a petty offense for which the fine  shall  be  $500
per day per each retail premises where a violation occurs.
    With  respect  to gasohol, as defined in the Use Tax Act,
the tax imposed by  this  Act  applies  to  (i)  70%  of  the
proceeds  of  sales  made  on  or  after January 1, 1990, and
before July 1, 2003, (ii) 80% of the proceeds of  sales  made
on  or after July 1, 2003 and on or before December 31, 2013,
and (iii) to 100% of the proceeds of sales  made  thereafter.
If,  at any time, however, the tax under this Act on sales of
gasohol, as defined in the Use Tax Act,  is  imposed  at  the
rate  of  1.25%,  then the tax imposed by this Act applies to
100% of the proceeds of sales of  gasohol  made  during  that
time.
    With respect to majority blended ethanol fuel, as defined
in  the  Use  Tax  Act,  the tax imposed by this Act does not
apply to the proceeds of sales made on or after July 1,  2003
and on or before December 31, 2013 but applies to 100% of the
proceeds of sales made thereafter.
    With  respect  to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by  this  Act  applies  to  (i)  80%  of  the
proceeds  of  sales  made  on or after July 1, 2003 and on or
before December 31, 2013 and (ii) 100%  of  the  proceeds  of
sales  made  thereafter.  If,  at  any time, however, the tax
under this Act on sales of biodiesel blends,  as  defined  in
the  Use  Tax  Act, with no less than 1% and no more than 10%
biodiesel is imposed at the  rate  of  1.25%,  then  the  tax
imposed  by this Act applies to 100% of the proceeds of sales
of biodiesel blends with no less than 1% and no more than 10%
biodiesel  made during that time.
    With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in  the  Use  Tax  Act,
with  more  than  10% but no more than 99% biodiesel, the tax
imposed by this Act does not apply to the proceeds  of  sales
made  on  or after July 1, 2003 and on or before December 31,
2013 but applies to  100%  of  the  proceeds  of  sales  made
thereafter.
    With  respect to 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,
modifications to a motor vehicle for the purpose of rendering
it  usable  by  a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For  the  purposes
of  this  Section, the term "soft drinks" means any complete,
finished,   ready-to-use,   non-alcoholic   drink,    whether
carbonated  or  not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of  whatever
kind  or  description  that  are  contained  in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include  coffee,  tea,  non-carbonated
water,  infant  formula,  milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
    Notwithstanding any other provisions of this  Act,  "food
for human consumption that is to be consumed off the premises
where  it  is  sold" includes all food sold through a vending
machine, except  soft  drinks  and  food  products  that  are
dispensed  hot  from  a  vending  machine,  regardless of the
location of the vending machine.
(Source: P.A. 90-605, eff.  6-30-98;  90-606,  eff.  6-30-98;
91-51, eff. 6-30-99; 91-872, eff. 7-1-00.)

    Section  25.  If  and  only  if both Senate Bill 1212 and
House Bill 46 of the 93rd General Assembly become  law,  then
the  Motor  Fuel  Tax Law is amended by changing Section 2 as
follows:

    (35 ILCS 505/2) (from Ch. 120, par. 418)
    Sec. 2.  A tax is imposed on the privilege  of  operating
motor vehicles upon the public highways and recreational-type
watercraft upon the waters of this State.
    (a)  Prior  to  August 1, 1989, the tax is imposed at the
rate of 13 cents per gallon on all motor fuel used  in  motor
vehicles  operating  on  the public highways and recreational
type watercraft operating upon  the  waters  of  this  State.
Beginning  on  August  1, 1989 and until January 1, 1990, the
rate of the tax imposed in this paragraph shall be  16  cents
per  gallon.   Beginning  January  1,  1990,  the rate of tax
imposed in this paragraph shall be 19 cents per gallon.
    (b)  The tax on the privilege of operating motor vehicles
which  use  diesel  fuel  shall  be  the  rate  according  to
paragraph (a) plus an  additional  2 1/2  cents  per  gallon.
"Diesel  fuel"  is  defined as any petroleum product intended
for use or offered for sale as a fuel for  engines  in  which
the  fuel is injected into the combustion chamber and ignited
by pressure without electric spark.
    (c)  A tax is imposed upon the privilege of  engaging  in
the  business of selling motor fuel as a retailer or reseller
on all motor fuel used in motor  vehicles  operating  on  the
public  highways  and  recreational type watercraft operating
upon the waters of this State: (1) at the rate of 3 cents per
gallon on motor fuel owned or possessed by such  retailer  or
reseller at 12:01 a.m. on August 1, 1989; and (2) at the rate
of  3  cents  per  gallon on motor fuel owned or possessed by
such retailer or reseller at 12:01 A.M. on January 1, 1990.
    Retailers  and  resellers  who  are   subject   to   this
additional tax shall be required to inventory such motor fuel
and  pay  this  additional  tax in a manner prescribed by the
Department of Revenue.
    The tax  imposed  in  this  paragraph  (c)  shall  be  in
addition  to all other taxes imposed by the State of Illinois
or any unit of local government in this State.
    (d)  Except as provided in Section 2a, the collection  of
a  tax based on gallonage of gasoline used for the propulsion
of any aircraft is prohibited on and after October 1, 1979.
    (e)  The collection of a tax, based on gallonage  of  all
products  commonly  or  commercially  known  or  sold  as 1-K
kerosene,  regardless  of  its  classification  or  uses,  is
prohibited (i) on and after July 1, 1992 until  December  31,
1999,  except  when the 1-K kerosene is either: (1) delivered
into bulk storage facilities of a bulk user, or (2) delivered
directly into the fuel supply tanks  of  motor  vehicles  and
(ii)  on  and after January 1, 2000.  Beginning on January 1,
2000, the collection of a tax,  based  on  gallonage  of  all
products  commonly  or  commercially  known  or  sold  as 1-K
kerosene,  regardless  of  its  classification  or  uses,  is
prohibited except when the 1-K kerosene is delivered directly
into a storage tank that is located at a  facility  that  has
withdrawal  facilities that are readily accessible to and are
capable of dispensing 1-K kerosene into the fuel supply tanks
of motor vehicles.
    Any person who sells or uses  1-K  kerosene  for  use  in
motor vehicles upon which the tax imposed by this Law has not
been paid shall be liable for any tax due on the sales or use
of 1-K kerosene.
(Source: P.A. 91-173, eff. 1-1-00.)

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