Public Act 93-0024
SB842 Enrolled LRB093 02890 SJM 02906 b
AN ACT concerning taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
ARTICLE 10
Section 10-1. Short title. This Article may be cited as
the Aircraft Use Tax Law.
Section 10-10. Definition. For the purposes of this Law,
"Department" means the Department of Revenue of the State of
Illinois.
Section 10-15. Tax imposed. A tax is hereby imposed on
the privilege of using, in this State, any aircraft as
defined in Section 3 of the Illinois Aeronautics Act acquired
by gift, transfer, or purchase after June 30, 2003. This tax
does not apply (i) if the use of the aircraft is otherwise
taxed under the Use Tax Act; (ii) if the aircraft is bought
and used by a governmental agency or a society, association,
foundation, or institution organized and operated exclusively
for charitable, religious, or educational purposes; (iii) if
the use of the aircraft is not subject to the Use Tax Act by
reason of subsection (a), (b), (c), (d), or (e) of Section
3-55 of that Act dealing with the prevention of actual or
likely multistate taxation; or (iv) if the transfer is a gift
to a beneficiary in the administration of an estate and the
beneficiary is a surviving spouse. The rate of tax shall be
6.25% of the selling price for each purchase of aircraft that
qualifies under this Law. For purposes of calculating the tax
due under this Law when an aircraft is acquired by gift or
transfer, the tax shall be imposed on the fair market value
of the aircraft on the date the aircraft is acquired or the
date the aircraft is brought into the State, whichever is
later. Tax shall be imposed on the selling price of an
aircraft acquired through purchase. However, the selling
price shall not be less than the fair market value of the
aircraft on the date the aircraft is purchased or the date
the aircraft is brought into the State, whichever is later.
Section 10-20. Returns. The purchaser, transferee, or
donee shall file a return signed by the purchaser,
transferee, or donee with the Department of Revenue on a form
prescribed by the Department. The return shall contain
substantially the following paragraph and such other
information as the Department may reasonably require:
VERIFICATION
I declare that I have examined this return and, to the
best of my knowledge, it is true, correct, and complete. I
understand that the penalty for willfully filing a false
return shall be a fine not to exceed $1,000 or imprisonment
in a penal institution other than the penitentiary not to
exceed one year, or both a fine and imprisonment.
............... ......................
Date Signature of purchaser,
transferee, or donee
The return and payment from the purchaser, transferee, or
donee shall be submitted to the Department within 30 days
after the date of purchase, donation, or other transfer or
the date the aircraft is brought into the State, whichever is
later. Payment of tax shall be a condition to securing
registration of the aircraft from the Division of Aeronautics
of the Department of Transportation.
When a purchaser, transferee, or donee pays the tax
imposed by Section 10-15 of this Law, the Department (upon
request therefor from the purchaser, transferee, or donee)
shall issue an appropriate receipt to the purchaser,
transferee, or donee showing that he or she has paid such tax
to the Department. The receipt shall be sufficient to relieve
the purchaser, transferee, or donee from further liability
for the tax to which the receipt may refer.
Section 10-25. Filing false or incomplete return. Any
person required to file a return under this Law who willfully
files a false or incomplete return is guilty of a Class A
misdemeanor.
Section 10-30. Determining selling price. For the purpose
of assisting in determining the validity of the "selling
price" reported on returns filed with the Department, the
Department may furnish the following information to persons
with whom the Department has contracted for service related
to making that determination: the selling price stated on the
return; the aircraft identification number; the year, the
make, and the model name or number of the aircraft; the
purchase date; and the hours of operation.
Section 10-35. Powers of Department. The Department shall
have full power to administer and enforce this Law; to
collect all taxes, penalties, and interest due hereunder; to
dispose of taxes, penalties, and interest so collected in the
manner hereinafter provided, and to determine all rights to
credit memoranda or refunds arising on account of the
erroneous payment of tax, penalty, or interest hereunder. In
the administration of, and compliance with, this Law, the
Department and persons who are subject to this Law shall have
the same rights, remedies, privileges, immunities, powers,
and duties, and be subject to the same conditions,
restrictions, limitations, penalties, and definitions of
terms, and employ the same modes of procedure, as are
prescribed in the Use Tax Act, as now or hereafter amended
(except for the provisions of Section 3-70), which are not
inconsistent with this Law, as fully as if the provisions of
the Use Tax Act were set forth in this Law. In addition to
any other penalties imposed under law, any person convicted
of violating the provisions of this Law, shall be assessed a
fine of $1,000.
Section 10-40. Payments to Local Government Distributive
Fund and General Revenue Fund. The Department of Revenue
shall each month, upon collecting any taxes as provided in
this Law, pay the money collected from the 1.25% portion of
the 6.25% rate into the Local Government Distributive Fund, a
special fund in the State treasury. The remainder shall be
paid into the General Revenue Fund.
Section 10-45. Rules. The Department shall have the
authority to adopt such rules as are reasonable and necessary
to implement the provisions of this Law.
Section 10-905. The Retailers' Occupation Tax Act is
amended by changing Section 1c as follows:
(35 ILCS 120/1c) (from Ch. 120, par. 440c)
Sec. 1c. A person who is engaged in the business of
leasing or renting motor vehicles or, beginning July 1, 2003,
aircraft to others and who, in connection with such business
sells any used motor vehicle or aircraft to a purchaser for
his use and not for the purpose of resale, is a retailer
engaged in the business of selling tangible personal property
at retail under this Act to the extent of the value of the
vehicle or aircraft sold. For the purpose of this Section
"motor vehicle" has the meaning prescribed in Section 1-157
of the Illinois Vehicle Code, as now or hereafter amended.
For the purpose of this Section "aircraft" has the meaning
prescribed in Section 3 of the Illinois Aeronautics Act.
(Nothing provided herein shall affect liability incurred
under this Act because of the sale at retail of such motor
vehicles or aircraft to a lessor.)
(Source: P.A. 80-598.)
Section 10-910. The Illinois Aeronautics Act is amended
by changing Section 42 as follows:
(620 ILCS 5/42) (from Ch. 15 1/2, par. 22.42)
Sec. 42. Regulation of aircraft, airmen, and airports.
(a) The general public interest and safety, the safety
of persons operating, using, or traveling in, aircraft, and
of persons and property on the ground, and the interest of
aeronautical progress require that aircraft operated within
this State should be airworthy, that airmen should be
properly qualified, and that air navigation facilities should
be suitable for the purposes for which they are designed.
The purposes of this Act require that the Department should
be enabled to exercise the powers of regulation and
supervision herein granted. The advantage of uniform
regulation makes it desirable that aircraft operated within
this State should conform with respect to design,
construction, and airworthiness to the standards prescribed
by the United States Government with respect to civil
aircraft subject to its jurisdiction and that persons
engaging in aeronautics within this State should have the
qualifications necessary for obtaining and holding
appropriate airman certificates of the United States. It is
desirable and right that all applicable fees and taxes shall
be paid with respect to aircraft operated within this State.
(b) In light of the findings in subsection (a), the
Department is authorized:
(1) To require the registration, every 2 years, of
federal licenses, certificates or permits of civil
aircraft engaged in air navigation within this State, and
of airmen engaged in aeronautics within this State, and
to issue certificates of such registration. These
certificates of registration constitute the authorization
of such aircraft and airmen for operations within this
State to the extent permitted by the federal licenses,
certificates or permits so registered. It shall charge a
fee, payable every 2 years, for the registration of each
federal license, certificate or permit of $10 for each
airman's certificate and $20 for each aircraft
certificate. It may accept as evidence of the holding of
a federal license, certificate or permit the verified
application of the airman or the owner of the aircraft,
which application shall contain such information as the
Department may by rule, ruling, regulation, order or
decision prescribe. The Department's authority to
register aircraft or to issue certificates of
registration is limited as follows:
(i) Except as to any aircraft vehicle
purchased before March 8, 1963, the Department, in
the case of the first registration of any aircraft
vehicle for any given owner on or after March 8,
1963, may not issue a certificate of registration
with respect to any aircraft vehicle until after the
Department has been satisfied that no tax under the
Use Tax Act, the Aircraft Use Tax Law, the Municipal
Use Tax Act, or the Home Rule County Use Tax Law is
owing by reason of the use of the vehicle in
Illinois or that any tax so imposed has been paid. A
receipt issued under those Acts by the Department of
Revenue constitutes proof of payment of the tax. For
the purpose of this paragraph, "aircraft vehicle"
means a single aircraft.
(ii) If the proof of payment of the tax or of
nonliability therefor is, after the issuance of the
certificate of registration, found to be invalid,
the Department shall revoke the certificate and
require that the certificate be returned to the
Department.
(2) To classify and approve airports and restricted
landing areas and any alterations or extensions thereof.
Certificates of approval issued pursuant to this
paragraph, or pursuant to any prior law, shall be issued
in the name of the applicant and shall be transferable
upon a change of ownership or control of the airport or
restricted landing area only after approval of the
Department. No charge or fee shall be made or imposed for
any kind of certificate of approval or a transfer
thereof.
(3) To revoke, temporarily or permanently, any
certificate of registration of an aircraft or airman
issued by it, or to refuse to issue any such certificate
of registration, when it shall reasonably determine that
any aircraft is not airworthy, or that any airman:
(i) is not qualified;
(ii) has willfully violated the laws of this
State pertaining to aeronautics or any rules,
rulings, regulations, orders, or decisions issued
pursuant thereto, or any Federal law or any rule or
regulation issued pursuant thereto;
(iii) is addicted to the use of narcotics or
other habit forming drug, or to the excessive use of
intoxicating liquor;
(iv) has made any false statement in any
application for registration of a federal license,
certificate or permit; or
(v) has been guilty of other conduct, acts, or
practices dangerous to the public safety or the
safety of those engaged in aeronautics.
(c) The Department may refuse to issue or may suspend
the certificate of any person who fails to file a return, or
to pay the tax, penalty or interest shown in a filed return,
or to pay any final assessment of tax, penalty or interest,
as required by any tax Act administered by the Illinois
Department of Revenue, until such time as the requirements of
any such tax Act are satisfied.
(Source: P.A. 92-341, eff. 8-10-01.)
ARTICLE 50
Section 50-22. The Use Tax Act is amended by changing
Sections 2a, 3-5, 3-7, and 3-85 as follows:
(35 ILCS 105/2a) (from Ch. 120, par. 439.2a)
Sec. 2a. "Pollution control facilities" means any system,
method, construction, device or appliance appurtenant thereto
sold or used or intended for the primary purpose of
eliminating, preventing, or reducing air and water pollution
as the term "air pollution" or "water pollution" is defined
in the "Environmental Protection Act", enacted by the 76th
General Assembly, or for the primary purpose of treating,
pretreating, modifying or disposing of any potential solid,
liquid or gaseous pollutant which if released without such
treatment, pretreatment, modification or disposal might be
harmful, detrimental or offensive to human, plant or animal
life, or to property.
Until July 1, 2003, the purchase, employment and transfer
of such tangible personal property as pollution control
facilities is not a purchase, use or sale of tangible
personal property.
(Source: P.A. 76-2447.)
(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) Until July 1, 2003, 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) Until July 1, 2003, 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) Until July 1, 2003, 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) Until July 1, 2003, 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) Until July 1, 2003, 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 and through June 30, 2003, 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.
(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 105/3-7)
Sec. 3-7. Aggregate manufacturing exemption. Through
June 30, 2003 December 31, 2007, the use of aggregate
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, is exempt from the tax
imposed by this Act.
(Source: P.A. 92-603, eff. 6-28-02.)
(35 ILCS 105/3-85)
Sec. 3-85. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995
and through June 30, 2003, a purchaser of manufacturing
machinery and equipment that qualifies for the exemption
provided by paragraph (18) of Section 3-5 of this Act earns a
credit in an amount equal to a fixed percentage of the tax
which would have been incurred under this Act on those
purchases. For purchases of graphic arts machinery and
equipment made on or after July 1, 1996 and through June 30,
2003, a purchaser of graphic arts machinery and equipment
that qualifies for the exemption provided by paragraph (6) of
Section 3-5 of this Act earns a credit in an amount equal to
a fixed percentage of the tax that would have been incurred
under this Act on those purchases. The credit earned for
purchases of manufacturing machinery and equipment or graphic
arts machinery and equipment shall be referred to as the
Manufacturer's Purchase Credit. A graphic arts producer is a
person engaged in graphic arts production as defined in
Section 2-30 of the Retailers' Occupation Tax Act. Beginning
July 1, 1996, all references in this Section to manufacturers
or manufacturing shall also be deemed to refer to graphic
arts producers or graphic arts production.
The amount of credit shall be a percentage of the tax
that would have been incurred on the purchase of
manufacturing machinery and equipment or graphic arts
machinery and equipment if the exemptions provided by
paragraph (6) or paragraph (18) of Section 3-5 of this Act
had not been applicable. The percentage shall be as follows:
(1) 15% for purchases made on or before June 30,
1995.
(2) 25% for purchases made after June 30, 1995, and
on or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and
on or before June 30, 1997.
(4) 50% for purchases made on or after July 1,
1997.
A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller prior to October 1, 2003 that the
purchaser is satisfying all or part of the liability under
the Use Tax Act or the Service Use Tax Act that is due on the
purchase of the production related tangible personal property
by use of Manufacturer's Purchase Credit. The Manufacturer's
Purchase Credit certification must be dated and shall include
the name and address of the purchaser, the purchaser's
registration number, if registered, the credit being applied,
and a statement that the State Use Tax or Service Use Tax
liability is being satisfied with the manufacturer's or
graphic arts producer's accumulated purchase credit.
Certification may be incorporated into the manufacturer's or
graphic arts producer's purchase order. Manufacturer's
Purchase Credit certification provided by the manufacturer or
graphic arts producer prior to October 1, 2003 may be used to
satisfy the retailer's or serviceman's liability under the
Retailers' Occupation Tax Act or Service Occupation Tax Act
for the credit claimed, not to exceed 6.25% of the receipts
subject to tax from a qualifying purchase, but only if the
retailer or serviceman reports the Manufacturer's Purchase
Credit claimed as required by the Department. A
Manufacturer's Purchase Credit reported on any original or
amended return filed under this Act after October 20, 2003
shall be disallowed. The Manufacturer's Purchase Credit
earned by purchase of exempt manufacturing machinery and
equipment or graphic arts machinery and equipment is a
non-transferable credit. A manufacturer or graphic arts
producer that enters into a contract involving the
installation of tangible personal property into real estate
within a manufacturing or graphic arts production facility
may, prior to October 1, 2003, authorize a construction
contractor to utilize credit accumulated by the manufacturer
or graphic arts producer to purchase the tangible personal
property. A manufacturer or graphic arts producer intending
to use accumulated credit to purchase such tangible personal
property shall execute a written contract authorizing the
contractor to utilize a specified dollar amount of credit.
The contractor shall furnish, prior to October 1, 2003, the
supplier with the manufacturer's or graphic arts producer's
name, registration or resale number, and a statement that a
specific amount of the Use Tax or Service Use Tax liability,
not to exceed 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used
for all credit utilized by a construction contractor.
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act
due on the purchase of production related tangible personal
property (including purchases by a manufacturer, by a graphic
arts producer, or by a lessor who rents or leases the use of
the property to a manufacturer or graphic arts producer) that
does not otherwise qualify for the manufacturing machinery
and equipment exemption or the graphic arts machinery and
equipment exemption. "Production related tangible personal
property" means (i) all tangible personal property used or
consumed by the purchaser in a manufacturing facility in
which a manufacturing process described in Section 2-45 of
the Retailers' Occupation Tax Act takes place, including
tangible personal property purchased for incorporation into
real estate within a manufacturing facility and including,
but not limited to, tangible personal property used or
consumed in activities such as preproduction material
handling, receiving, quality control, inventory control,
storage, staging, and packaging for shipping and
transportation purposes; (ii) all tangible personal property
used or consumed by the purchaser in a graphic arts facility
in which graphic arts production as described in Section 2-30
of the Retailers' Occupation Tax Act takes place, including
tangible personal property purchased for incorporation into
real estate within a graphic arts facility and including, but
not limited to, all tangible personal property used or
consumed in activities such as graphic arts preliminary or
pre-press production, pre-production material handling,
receiving, quality control, inventory control, storage,
staging, sorting, labeling, mailing, tying, wrapping, and
packaging; and (iii) all tangible personal property used or
consumed by the purchaser for research and development.
"Production related tangible personal property" does not
include (i) tangible personal property used, within or
without a manufacturing facility, in sales, purchasing,
accounting, fiscal management, marketing, personnel
recruitment or selection, or landscaping or (ii) tangible
personal property required to be titled or registered with a
department, agency, or unit of federal, state, or local
government. The Manufacturer's Purchase Credit may be used,
prior to October 1, 2003, to satisfy the tax arising either
from the purchase of machinery and equipment on or after
January 1, 1995 for which the exemption provided by paragraph
(18) of Section 3-5 of this Act was erroneously claimed, or
the purchase of machinery and equipment on or after July 1,
1996 for which the exemption provided by paragraph (6) of
Section 3-5 of this Act was erroneously claimed, but not in
satisfaction of penalty, if any, and interest for failure to
pay the tax when due. A purchaser of production related
tangible personal property who is required to pay Illinois
Use Tax or Service Use Tax on the purchase directly to the
Department may, prior to October 1, 2003, utilize the
Manufacturer's Purchase Credit in satisfaction of the tax
arising from that purchase, but not in satisfaction of
penalty and interest. A purchaser who uses the Manufacturer's
Purchase Credit to purchase property which is later
determined not to be production related tangible personal
property may be liable for tax, penalty, and interest on the
purchase of that property as of the date of purchase but
shall be entitled to use the disallowed Manufacturer's
Purchase Credit, so long as it has not expired and is used
prior to October 1, 2003, on qualifying purchases of
production related tangible personal property not previously
subject to credit usage. The Manufacturer's Purchase Credit
earned by a manufacturer or graphic arts producer expires the
last day of the second calendar year following the calendar
year in which the credit arose. No Manufacturer's Purchase
Credit may be used after September 30, 2003 regardless of
when that credit was earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last
day of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic
arts machinery on which the credit was earned; (ii) the total
State Use Tax or Service Use Tax which would have been due on
those items; (iii) the percentage used to calculate the
amount of credit earned; (iv) the amount of credit earned;
and (v) such other information as the Department may
reasonably require. A purchaser earning Manufacturer's
Purchase Credit shall maintain records which identify, as to
each purchase of manufacturing or graphic arts machinery and
equipment on which the purchaser earned Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of production related tangible personal property
purchased from Illinois suppliers; (ii) the total purchase
price of production related tangible personal property
purchased from out-of-state suppliers; (iii) the total amount
of credit used during such month; and (iv) such other
information as the Department may reasonably require. A
purchaser using Manufacturer's Purchase Credit shall maintain
records that identify, as to each purchase of production
related tangible personal property on which the purchaser
used Manufacturer's Purchase Credit, the vendor (including,
if applicable, either the vendor's registration number or
Federal Employer Identification Number), the purchase price,
and the amount of Manufacturer's Purchase Credit used on each
purchase.
No annual report shall be filed before May 1, 1996 or
after June 30, 2004. A purchaser that fails to file an annual
Report of Manufacturer's Purchase Credit Earned or an annual
Report of Manufacturer's Purchase Credit Used by the last day
of the sixth month following the end of the calendar year
shall forfeit all Manufacturer's Purchase Credit for that
calendar year unless it establishes that its failure to file
was due to reasonable cause. Manufacturer's Purchase Credit
reports may be amended to report and claim credit on
qualifying purchases not previously reported at any time
before the credit would have expired, unless both the
Department and the purchaser have agreed to an extension of
the statute of limitations for the issuance of a notice of
tax liability as provided in Section 4 of the Retailers'
Occupation Tax Act. If the time for assessment or refund has
been extended, then amended reports for a calendar year may
be filed at any time prior to the date to which the statute
of limitations for the calendar year or portion thereof has
been extended. No Manufacturer's Purchase Credit report filed
with the Department for periods prior to January 1, 1995
shall be approved. Manufacturer's Purchase Credit claimed on
an amended report may be used, until October 1, 2003, to
satisfy tax liability under the Use Tax Act or the Service
Use Tax Act (i) on qualifying purchases of production related
tangible personal property made after the date the amended
report is filed or (ii) assessed by the Department on
qualifying purchases of production related tangible personal
property made in the case of manufacturers on or after
January 1, 1995, or in the case of graphic arts producers on
or after July 1, 1996.
If the purchaser is not the manufacturer or a graphic
arts producer, but rents or leases the use of the property to
a manufacturer or graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be
reported and is not timely reported as provided in this
Section. A purchaser remains liable for (i) any tax that was
satisfied by use of a Manufacturer's Purchase Credit, as of
the date of purchase, if that use is not timely reported as
required in this Section and (ii) for any applicable
penalties and interest for failing to pay the tax when due.
No Manufacturer's Purchase Credit may be used after September
30, 2003 to satisfy any tax liability imposed under this Act,
including any audit liability.
(Source: P.A. 88-547, eff. 6-30-94; 89-89, eff. 6-30-95;
89-235, eff. 8-4-95; 89-531, eff. 7-19-96.)
Section 50-23. The Service Use Tax Act is amended by
changing Sections 2, 2a, 3-5, 3-7, and 3-70 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.
(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) until July 1, 2003, 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 110/2a) (from Ch. 120, par. 439.32a)
Sec. 2a. "Pollution control facilities" means any system,
method, construction, device or appliance appurtenant thereto
used in this State acquired as an incident to the purchase of
a service from a serviceman for the primary purpose of
eliminating, preventing, or reducing air and water pollution
as the term "air pollution" or "water pollution" is defined
in the "Environmental Protection Act", enacted by the 76th
General Assembly, or for the primary purpose of treating,
pretreating, modifying or disposing of any potential solid,
liquid or gaseous pollutant which if released without such
treatment, pretreatment, modification or disposal might be
harmful, detrimental or offensive to human, plant or animal
life, or to property.
Until July 1, 2003, the purchase, employment or transfer
of such tangible personal property as pollution control
facilities is not a purchase, use or sale of service or of
tangible personal property within the meaning of this Act.
(Source: P.A. 76-2248.)
(35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
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 non-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) 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.
(5) Until July 1, 2003, 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.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) 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 (7). 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 3-75.
(8) 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.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages acquired as an incident to the purchase
of a service from a serviceman, 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.
(10) Until July 1, 2003, 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.
(11) Proceeds from the sale of 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.
(12) Until July 1, 2003, 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.
(13) Semen used for artificial insemination of livestock
for direct agricultural production.
(14) 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.
(15) 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 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 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.
(16) 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 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 is used in any
other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the 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 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.
(17) 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.
(18) 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.
(19) 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 3-75.
(20) 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.
(21) 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 3-75.
(22) 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 and through June 30, 2003, 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 3-75.
(23) 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.
(24) 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 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
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 3-75.
(25) 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 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 is used in any other nonexempt manner, the
lessor shall be liable for the tax imposed under this Act or
the 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 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 3-75.
(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; 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;
92-651, eff. 7-11-02.)
(35 ILCS 110/3-7)
Sec. 3-7. Aggregate manufacturing exemption. Through
June 30, 2003 December 31, 2007, the use of aggregate
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, is exempt from the tax
imposed by this Act.
(Source: P.A. 92-603, eff. 6-28-02.)
(35 ILCS 110/3-70)
Sec. 3-70. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995
and through June 30, 2003, a purchaser of manufacturing
machinery and equipment that qualifies for the exemption
provided by Section 2 of this Act earns a credit in an amount
equal to a fixed percentage of the tax which would have been
incurred under this Act on those purchases. For purchases of
graphic arts machinery and equipment made on or after July 1,
1996 and through June 30, 2003, a purchase of graphic arts
machinery and equipment that qualifies for the exemption
provided by paragraph (5) of Section 3-5 of this Act earns a
credit in an amount equal to a fixed percentage of the tax
that would have been incurred under this Act on those
purchases. The credit earned for the purchase of
manufacturing machinery and equipment and graphic arts
machinery and equipment shall be referred to as the
Manufacturer's Purchase Credit. A graphic arts producer is a
person engaged in graphic arts production as defined in
Section 3-30 of the Service Occupation Tax Act. Beginning
July 1, 1996, all references in this Section to manufacturers
or manufacturing shall also refer to graphic arts producers
or graphic arts production.
The amount of credit shall be a percentage of the tax
that would have been incurred on the purchase of the
manufacturing machinery and equipment or graphic arts
machinery and equipment if the exemptions provided by Section
2 or paragraph (5) of Section 3-5 of this Act had not been
applicable.
All purchases prior to October 1, 2003 of manufacturing
machinery and equipment and graphic arts machinery and
equipment that qualify for the exemptions provided by
paragraph (5) of Section 2 or paragraph (5) of Section 3-5 of
this Act qualify for the credit without regard to whether the
serviceman elected, or could have elected, under paragraph
(7) of Section 2 of this Act to exclude the transaction from
this Act. If the serviceman's billing to the service
customer separately states a selling price for the exempt
manufacturing machinery or equipment or the exempt graphic
arts machinery and equipment, the credit shall be calculated,
as otherwise provided herein, based on that selling price.
If the serviceman's billing does not separately state a
selling price for the exempt manufacturing machinery and
equipment or the exempt graphic arts machinery and equipment,
the credit shall be calculated, as otherwise provided herein,
based on 50% of the entire billing. If the serviceman
contracts to design, develop, and produce special order
manufacturing machinery and equipment or special order
graphic arts machinery and equipment, and the billing does
not separately state a selling price for such special order
machinery and equipment, the credit shall be calculated, as
otherwise provided herein, based on 50% of the entire
billing. The provisions of this paragraph are effective for
purchases made on or after January 1, 1995.
The percentage shall be as follows:
(1) 15% for purchases made on or before June 30,
1995.
(2) 25% for purchases made after June 30, 1995, and
on or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and
on or before June 30, 1997.
(4) 50% for purchases made on or after July 1,
1997.
A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller prior to October 1, 2003 that the
purchaser is satisfying all or part of the liability under
the Use Tax Act or the Service Use Tax Act that is due on the
purchase of the production related tangible personal property
by use of a Manufacturer's Purchase Credit. The
Manufacturer's Purchase Credit certification must be dated
and shall include the name and address of the purchaser, the
purchaser's registration number, if registered, the credit
being applied, and a statement that the State Use Tax or
Service Use Tax liability is being satisfied with the
manufacturer's or graphic arts producer's accumulated
purchase credit. Certification may be incorporated into the
manufacturer's or graphic arts producer's purchase order.
Manufacturer's Purchase Credit certification provided by the
manufacturer or graphic arts producer prior to October 1,
2003 may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed
6.25% of the receipts subject to tax from a qualifying
purchase, but only if the retailer or serviceman reports the
Manufacturer's Purchase Credit claimed as required by the
Department. A Manufacturer's Purchase Credit reported on any
original or amended return filed under this Act after October
20, 2003 shall be disallowed. The Manufacturer's Purchase
Credit earned by purchase of exempt manufacturing machinery
and equipment or graphic arts machinery and equipment is a
non-transferable credit. A manufacturer or graphic arts
producer that enters into a contract involving the
installation of tangible personal property into real estate
within a manufacturing or graphic arts production facility,
prior to October 1, 2003, may authorize a construction
contractor to utilize credit accumulated by the manufacturer
or graphic arts producer to purchase the tangible personal
property. A manufacturer or graphic arts producer intending
to use accumulated credit to purchase such tangible personal
property shall execute a written contract authorizing the
contractor to utilize a specified dollar amount of credit.
The contractor shall furnish, prior to October 1, 2003, the
supplier with the manufacturer's or graphic arts producer's
name, registration or resale number, and a statement that a
specific amount of the Use Tax or Service Use Tax liability,
not to exceed 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used
for credit utilized by a construction contractor.
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act
due on the purchase of production related tangible personal
property (including purchases by a manufacturer, by a graphic
arts producer, or a lessor who rents or leases the use of the
property to a manufacturer or graphic arts producer) that
does not otherwise qualify for the manufacturing machinery
and equipment exemption or the graphic arts machinery and
equipment exemption. "Production related tangible personal
property" means (i) all tangible personal property used or
consumed by the purchaser in a manufacturing facility in
which a manufacturing process described in Section 2-45 of
the Retailers' Occupation Tax Act takes place, including
tangible personal property purchased for incorporation into
real estate within a manufacturing facility and including,
but not limited to, tangible personal property used or
consumed in activities such as pre-production material
handling, receiving, quality control, inventory control,
storage, staging, and packaging for shipping and
transportation purposes; (ii) all tangible personal property
used or consumed by the purchaser in a graphic arts facility
in which graphic arts production as described in Section 2-30
of the Retailers' Occupation Tax Act takes place, including
tangible personal property purchased for incorporation into
real estate within a graphic arts facility and including, but
not limited to, all tangible personal property used or
consumed in activities such as graphic arts preliminary or
pre-press production, pre-production material handling,
receiving, quality control, inventory control, storage,
staging, sorting, labeling, mailing, tying, wrapping, and
packaging; and (iii) all tangible personal property used or
consumed by the purchaser for research and development.
"Production related tangible personal property" does not
include (i) tangible personal property used, within or
without a manufacturing or graphic arts facility, in sales,
purchasing, accounting, fiscal management, marketing,
personnel recruitment or selection, or landscaping or (ii)
tangible personal property required to be titled or
registered with a department, agency, or unit of federal,
state, or local government. The Manufacturer's Purchase
Credit may be used, prior to October 1, 2003, to satisfy the
tax arising either from the purchase of machinery and
equipment on or after January 1, 1995 for which the
manufacturing machinery and equipment exemption provided by
Section 2 of this Act was erroneously claimed, or the
purchase of machinery and equipment on or after July 1, 1996
for which the exemption provided by paragraph (5) of Section
3-5 of this Act was erroneously claimed, but not in
satisfaction of penalty, if any, and interest for failure to
pay the tax when due. A purchaser of production related
tangible personal property who is required to pay Illinois
Use Tax or Service Use Tax on the purchase directly to the
Department may, prior to October 1, 2003, utilize the
Manufacturer's Purchase Credit in satisfaction of the tax
arising from that purchase, but not in satisfaction of
penalty and interest. A purchaser who uses the Manufacturer's
Purchase Credit to purchase property which is later
determined not to be production related tangible personal
property may be liable for tax, penalty, and interest on the
purchase of that property as of the date of purchase but
shall be entitled to use the disallowed Manufacturer's
Purchase Credit, so long as it has not expired and is used
prior to October 1, 2003, on qualifying purchases of
production related tangible personal property not previously
subject to credit usage. The Manufacturer's Purchase Credit
earned by a manufacturer or graphic arts producer expires the
last day of the second calendar year following the calendar
year in which the credit arose. No Manufacturer's Purchase
Credit may be used after September 30, 2003 regardless of
when that credit was earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last
day of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic
arts machinery on which the credit was earned; (ii) the total
State Use Tax or Service Use Tax which would have been due on
those items; (iii) the percentage used to calculate the
amount of credit earned; (iv) the amount of credit earned;
and (v) such other information as the Department may
reasonably require. A purchaser earning Manufacturer's
Purchase Credit shall maintain records which identify, as to
each purchase of manufacturing or graphic arts machinery and
equipment on which the purchaser earned Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of production related tangible personal property
purchased from Illinois suppliers; (ii) the total purchase
price of production related tangible personal property
purchased from out-of-state suppliers; (iii) the total amount
of credit used during such month; and (iv) such other
information as the Department may reasonably require. A
purchaser using Manufacturer's Purchase Credit shall maintain
records that identify, as to each purchase of production
related tangible personal property on which the purchaser
used Manufacturer's Purchase Credit, the vendor (including,
if applicable, either the vendor's registration number or
Federal Employer Identification Number), the purchase price,
and the amount of Manufacturer's Purchase Credit used on each
purchase.
No annual report shall be filed before May 1, 1996 or
after June 30, 2004. A purchaser that fails to file an annual
Report of Manufacturer's Purchase Credit Earned or an annual
Report of Manufacturer's Purchase Credit Used by the last day
of the sixth month following the end of the calendar year
shall forfeit all Manufacturer's Purchase Credit for that
calendar year unless it establishes that its failure to file
was due to reasonable cause. Manufacturer's Purchase Credit
reports may be amended to report and claim credit on
qualifying purchases not previously reported at any time
before the credit would have expired, unless both the
Department and the purchaser have agreed to an extension of
the statute of limitations for the issuance of a notice of
tax liability as provided in Section 4 of the Retailers'
Occupation Tax Act. If the time for assessment or refund has
been extended, then amended reports for a calendar year may
be filed at any time prior to the date to which the statute
of limitations for the calendar year or portion thereof has
been extended. No Manufacturer's Purchase Credit report filed
with the Department for periods prior to January 1, 1995
shall be approved. Manufacturer's Purchase Credit claimed on
an amended report may be used, prior to October 1, 2003, to
satisfy tax liability under the Use Tax Act or the Service
Use Tax Act (i) on qualifying purchases of production related
tangible personal property made after the date the amended
report is filed or (ii) assessed by the Department on
qualifying purchases of production related tangible personal
property made in the case of manufacturers on or after
January 1, 1995, or in the case of graphic arts producers on
or after July 1, 1996.
If the purchaser is not the manufacturer or a graphic
arts producer, but rents or leases the use of the property to
a manufacturer or a graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be
reported and is not timely reported as provided in this
Section. A purchaser remains liable for (i) any tax that was
satisfied by use of a Manufacturer's Purchase Credit, as of
the date of purchase, if that use is not timely reported as
required in this Section and (ii) for any applicable
penalties and interest for failing to pay the tax when due.
No Manufacturer's Purchase Credit may be used after September
30, 2003 to satisfy any tax liability imposed under this Act,
including any audit liability.
(Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95;
89-531, eff. 7-19-96; 90-166, eff. 7-23-97.)
Section 50-24. The Service Occupation Tax Act is amended
by changing Sections 2, 2a, 3-5, 3-7, and 9 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-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) Until July 1, 2003, 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.
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 115/2a) (from Ch. 120, par. 439.102a)
Sec. 2a. "Pollution control facilities" means any system,
method, construction, device or appliance appurtenant thereto
transferred by a serviceman for the primary purpose of
eliminating, preventing, or reducing air and water pollution
as the term "air pollution" or "water pollution" is defined
in the "Environmental Protection Act", enacted by the 76th
General Assembly, or for the primary purpose of treating,
pretreating, modifying or disposing of any potential solid,
liquid or gaseous pollutant which if released without such
treatment, pretreatment, modification or disposal might be
harmful, detrimental or offensive to human, plant or animal
life, or to property.
Until July 1, 2003, the purchase, employment and transfer
of such tangible personal property as pollution control
facilities shall not be deemed to be a purchase, use or sale
of service or of tangible personal property, but shall be
deemed to be intangible personal property.
(Source: P.A. 76-2449.)
(35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:
(1) 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.
(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 any 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) 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.
(5) Until July 1, 2003, 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.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) 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 (7). 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 3-55.
(8) 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.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the 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.
(10) Until July 1, 2003, 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.
(11) 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.
(12) Until July 1, 2003, 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.
(13) 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 non-prescription
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.
(14) Semen used for artificial insemination of livestock
for direct agricultural production.
(15) 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.
(16) 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
the Retailers' Occupation Tax Act.
(17) 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 the Retailers'
Occupation Tax Act.
(18) 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.
(19) 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.
(20) 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 3-55.
(21) 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.
(22) 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 3-55.
(23) 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 and through June 30, 2003, 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 3-55.
(24) 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 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 the Retailers' Occupation
Tax Act. This paragraph is exempt from the provisions of
Section 3-55.
(25) Beginning 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 the Retailers' Occupation Tax Act. This
paragraph is exempt from the provisions of Section 3-55.
(26) 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 (26). The permit issued under this paragraph (26)
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.)
(35 ILCS 115/3-7)
Sec. 3-7. Aggregate manufacturing exemption. Through
June 30, 2003 December 31, 2007, aggregate 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, is exempt from the tax imposed by this
Act.
(Source: P.A. 92-603, eff. 6-28-02.)
(35 ILCS 115/9) (from Ch. 120, par. 439.109)
Sec. 9. Each serviceman required or authorized to
collect the tax herein imposed shall pay to the Department
the amount of such tax at the time when he is required to
file his return for the period during which such tax was
collectible, less a discount of 2.1% prior to January 1,
1990, and 1.75% on and after January 1, 1990, or $5 per
calendar year, whichever is greater, which is allowed to
reimburse the serviceman for expenses incurred in collecting
the tax, keeping records, preparing and filing returns,
remitting the tax and supplying data to the Department on
request.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof,
is extended beyond the close of the period for which the
return is filed, the serviceman, in collecting the tax may
collect, for each tax return period, only the tax applicable
to the part of the selling price actually received during
such tax return period.
Except as provided hereinafter in this Section, on or
before the twentieth day of each calendar month, such
serviceman shall file a return for the preceding calendar
month in accordance with reasonable rules and regulations to
be promulgated by the Department of Revenue. Such return
shall be filed on a form prescribed by the Department and
shall contain such information as the Department may
reasonably require.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in business as a serviceman in this
State;
3. The total amount of taxable receipts received by
him during the preceding calendar month, including
receipts from charge and time sales, but less all
deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Prior to October 1, 2003, a serviceman may accept a
Manufacturer's Purchase Credit certification from a purchaser
in satisfaction of Service Use Tax as provided in Section
3-70 of the Service Use Tax Act if the purchaser provides the
appropriate documentation as required by Section 3-70 of the
Service Use Tax Act. A Manufacturer's Purchase Credit
certification, accepted prior to October 1, 2003 by a
serviceman as provided in Section 3-70 of the Service Use Tax
Act, may be used by that serviceman to satisfy Service
Occupation Tax liability in the amount claimed in the
certification, not to exceed 6.25% of the receipts subject to
tax from a qualifying purchase. A Manufacturer's Purchase
Credit reported on any original or amended return filed under
this Act after October 20, 2003 shall be disallowed. No
Manufacturer's Purchase Credit may be used after September
30, 2003 to satisfy any tax liability imposed under this Act,
including any audit liability.
If the serviceman's average monthly tax liability to the
Department does not exceed $200, the Department may authorize
his returns to be filed on a quarter annual basis, with the
return for January, February and March of a given year being
due by April 20 of such year; with the return for April, May
and June of a given year being due by July 20 of such year;
with the return for July, August and September of a given
year being due by October 20 of such year, and with the
return for October, November and December of a given year
being due by January 20 of the following year.
If the serviceman's average monthly tax liability to the
Department does not exceed $50, the Department may authorize
his returns to be filed on an annual basis, with the return
for a given year being due by January 20 of the following
year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a serviceman may file his
return, in the case of any serviceman who ceases to engage in
a kind of business which makes him responsible for filing
returns under this Act, such serviceman shall file a final
return under this Act with the Department not more than 1
month after discontinuing such business.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who
has an average monthly tax liability of $100,000 or more
shall make all payments required by rules of the Department
by electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October
1, 2000, a taxpayer who has an annual tax liability of
$200,000 or more shall make all payments required by rules of
the Department by electronic funds transfer. The term
"annual tax liability" shall be the sum of the taxpayer's
liabilities under this Act, and under all other State and
local occupation and use tax laws administered by the
Department, for the immediately preceding calendar year. The
term "average monthly tax liability" means the sum of the
taxpayer's liabilities under this Act, and under all other
State and local occupation and use tax laws administered by
the Department, for the immediately preceding calendar year
divided by 12. Beginning on October 1, 2002, a taxpayer who
has a tax liability in the amount set forth in subsection (b)
of Section 2505-210 of the Department of Revenue Law shall
make all payments required by rules of the Department by
electronic funds transfer.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers
required to make payments by electronic funds transfer shall
make those payments for a minimum of one year beginning on
October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Where a serviceman collects the tax with respect to the
selling price of tangible personal property which he sells
and the purchaser thereafter returns such tangible personal
property and the serviceman refunds the selling price thereof
to the purchaser, such serviceman shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the serviceman may deduct the amount of the
tax so refunded by him to the purchaser from any other
Service Occupation Tax, Service Use Tax, Retailers'
Occupation Tax or Use Tax which such serviceman may be
required to pay or remit to the Department, as shown by such
return, provided that the amount of the tax to be deducted
shall previously have been remitted to the Department by such
serviceman. If the serviceman shall not previously have
remitted the amount of such tax to the Department, he shall
be entitled to no deduction hereunder upon refunding such tax
to the purchaser.
If experience indicates such action to be practicable,
the Department may prescribe and furnish a combination or
joint return which will enable servicemen, who are required
to file returns hereunder and also under the Retailers'
Occupation Tax Act, the Use Tax Act or the Service Use Tax
Act, to furnish all the return information required by all
said Acts on the one form.
Where the serviceman has more than one business
registered with the Department under separate registrations
hereunder, such serviceman shall file separate returns for
each registered business.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund the revenue
realized for the preceding month from the 1% tax on sales of
food for human consumption which is to be consumed off the
premises where it is sold (other than alcoholic beverages,
soft drinks and food which 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.
Beginning January 1, 1990, each month the Department
shall pay into the County and Mass Transit District Fund 4%
of the revenue realized for the preceding month from the
6.25% general rate.
Beginning August 1, 2000, each month the Department shall
pay into the County and Mass Transit District Fund 20% of the
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund 16% of the
revenue realized for the preceding month from the 6.25%
general rate on transfers of tangible personal property.
Beginning August 1, 2000, each month the Department shall
pay into the Local Government Tax Fund 80% of the net revenue
realized for the preceding month from the 1.25% rate on the
selling price of motor fuel and gasohol.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to Section 3 of the Retailers' Occupation Tax Act, Section 9
of the Use Tax Act, Section 9 of the Service Use Tax Act, and
Section 9 of the Service Occupation Tax Act, such Acts being
hereinafter called the "Tax Acts" and such aggregate of 2.2%
or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount
(as defined in Section 3 of the Retailers' Occupation Tax
Act), an amount equal to the difference shall be immediately
paid into the Build Illinois Fund from other moneys received
by the Department pursuant to the Tax Acts; and further
provided, that if on the last business day of any month the
sum of (1) the Tax Act Amount required to be deposited into
the Build Illinois Account in the Build Illinois Fund during
such month and (2) the amount transferred during such month
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall have been less than 1/12 of the Annual
Specified Amount, an amount equal to the difference shall be
immediately paid into the Build Illinois Fund from other
moneys received by the Department pursuant to the Tax Acts;
and, further provided, that in no event shall the payments
required under the preceding proviso result in aggregate
payments into the Build Illinois Fund pursuant to this clause
(b) for any fiscal year in excess of the greater of (i) the
Tax Act Amount or (ii) the Annual Specified Amount for such
fiscal year; and, further provided, that the amounts payable
into the Build Illinois Fund under this clause (b) shall be
payable only until such time as the aggregate amount on
deposit under each trust indenture securing Bonds issued and
outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and
on any Bonds expected to be issued thereafter and all fees
and costs payable with respect thereto, all as certified by
the Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of the
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of the sums designated
as "Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000
2021 246,000,000
2022 260,000,000
2023 and 275,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority
Act, but not after fiscal year 2042.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year,
but not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendments thereto
hereafter enacted, beginning July 1, 1993, the Department
shall each month pay into the Illinois Tax Increment Fund
0.27% of 80% of the net revenue realized for the preceding
month from the 6.25% general rate on the selling price of
tangible personal property.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendments thereto
hereafter enacted, beginning with the receipt of the first
report of taxes paid by an eligible business and continuing
for a 25-year period, the Department shall each month pay
into the Energy Infrastructure Fund 80% of the net revenue
realized from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business.
For purposes of this paragraph, the term "eligible business"
means a new electric generating facility certified pursuant
to Section 605-332 of the Department of Commerce and
Community Affairs Law of the Civil Administrative Code of
Illinois.
Remaining moneys received by the Department pursuant to
this Act shall be paid into the General Revenue Fund of the
State Treasury.
The Department may, upon separate written notice to a
taxpayer, require the taxpayer to prepare and file with the
Department on a form prescribed by the Department within not
less than 60 days after receipt of the notice an annual
information return for the tax year specified in the notice.
Such annual return to the Department shall include a
statement of gross receipts as shown by the taxpayer's last
Federal income tax return. If the total receipts of the
business as reported in the Federal income tax return do not
agree with the gross receipts reported to the Department of
Revenue for the same period, the taxpayer shall attach to his
annual return a schedule showing a reconciliation of the 2
amounts and the reasons for the difference. The taxpayer's
annual return to the Department shall also disclose the cost
of goods sold by the taxpayer during the year covered by such
return, opening and closing inventories of such goods for
such year, cost of goods used from stock or taken from stock
and given away by the taxpayer during such year, pay roll
information of the taxpayer's business during such year and
any additional reasonable information which the Department
deems would be helpful in determining the accuracy of the
monthly, quarterly or annual returns filed by such taxpayer
as hereinbefore provided for in this Section.
If the annual information return required by this Section
is not filed when and as required, the taxpayer shall be
liable as follows:
(i) Until January 1, 1994, the taxpayer shall be
liable for a penalty equal to 1/6 of 1% of the tax due
from such taxpayer under this Act during the period to be
covered by the annual return for each month or fraction
of a month until such return is filed as required, the
penalty to be assessed and collected in the same manner
as any other penalty provided for in this Act.
(ii) On and after January 1, 1994, the taxpayer
shall be liable for a penalty as described in Section 3-4
of the Uniform Penalty and Interest Act.
The chief executive officer, proprietor, owner or highest
ranking manager shall sign the annual return to certify the
accuracy of the information contained therein. Any person
who willfully signs the annual return containing false or
inaccurate information shall be guilty of perjury and
punished accordingly. The annual return form prescribed by
the Department shall include a warning that the person
signing the return may be liable for perjury.
The foregoing portion of this Section concerning the
filing of an annual information return shall not apply to a
serviceman who is not required to file an income tax return
with the United States Government.
As soon as possible after the first day of each month,
upon certification of the Department of Revenue, the
Comptroller shall order transferred and the Treasurer shall
transfer from the General Revenue Fund to the Motor Fuel Tax
Fund an amount equal to 1.7% of 80% of the net revenue
realized under this Act for the second preceding month.
Beginning April 1, 2000, this transfer is no longer required
and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, it shall be
permissible for manufacturers, importers and wholesalers
whose products are sold by numerous servicemen in Illinois,
and who wish to do so, to assume the responsibility for
accounting and paying to the Department all tax accruing
under this Act with respect to such sales, if the servicemen
who are affected do not make written objection to the
Department to this arrangement.
(Source: P.A. 91-37, eff. 7-1-99; 91-51, eff. 6-30-99;
91-101, eff. 7-12-99; 91-541, eff. 8-13-99; 91-872, eff.
7-1-00; 92-12, eff. 7-1-01; 92-208, eff. 8-2-01; 92-492, eff.
1-1-02; 92-600, eff. 6-28-02; 92-651, eff. 7-11-02.)
Section 50-25. The Retailers' Occupation Tax Act is
amended by changing Sections 1a, 2-5, 2-7, and 3 as follows:
(35 ILCS 120/1a) (from Ch. 120, par. 440a)
Sec. 1a. "Pollution control facilities" means any system,
method, construction, device or appliance appurtenant thereto
sold or used or intended for the primary purpose of
eliminating, preventing, or reducing air and water pollution
as the term "air pollution" or "water pollution" is defined
in the "Environmental Protection Act", enacted by the 76th
General Assembly, or for the primary purpose of treating,
pretreating, modifying or disposing of any potential solid,
liquid or gaseous pollutant which if released without such
treatment, pretreatment, modification or disposal might be
harmful, detrimental or offensive to human, plant or animal
life, or to property.
Until July 1, 2003, the purchase, employment and transfer
of such tangible personal property as pollution control
facilities is not a purchase, use or sale of tangible
personal property.
(Source: P.A. 76-2450.)
(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) Until July 1, 2003, 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) Until July 1, 2003, 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) Until July 1, 2003, 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) 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.
(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) Until July 1, 2003, 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) Until July 1, 2003, 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 and through June 30, 2003, 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 120/2-7)
Sec. 2-7. Aggregate manufacturing exemption. Through
June 30, 2003 December 31, 2007, gross receipts from proceeds
from the sale of aggregate 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,
are exempt from the tax imposed by this Act.
(Source: P.A. 92-603, eff. 6-28-02.)
(35 ILCS 120/3) (from Ch. 120, par. 442)
Sec. 3. Except as provided in this Section, on or before
the twentieth day of each calendar month, every person
engaged in the business of selling tangible personal property
at retail in this State during the preceding calendar month
shall file a return with the Department, stating:
1. The name of the seller;
2. His residence address and the address of his
principal place of business and the address of the
principal place of business (if that is a different
address) from which he engages in the business of selling
tangible personal property at retail in this State;
3. Total amount of receipts received by him during
the preceding calendar month or quarter, as the case may
be, from sales of tangible personal property, and from
services furnished, by him during such preceding calendar
month or quarter;
4. Total amount received by him during the
preceding calendar month or quarter on charge and time
sales of tangible personal property, and from services
furnished, by him prior to the month or quarter for which
the return is filed;
5. Deductions allowed by law;
6. Gross receipts which were received by him during
the preceding calendar month or quarter and upon the
basis of which the tax is imposed;
7. The amount of credit provided in Section 2d of
this Act;
8. The amount of tax due;
9. The signature of the taxpayer; and
10. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Each return shall be accompanied by the statement of
prepaid tax issued pursuant to Section 2e for which credit is
claimed.
Prior to October 1, 2003, a retailer may accept a
Manufacturer's Purchase Credit certification from a purchaser
in satisfaction of Use Tax as provided in Section 3-85 of the
Use Tax Act if the purchaser provides the appropriate
documentation as required by Section 3-85 of the Use Tax Act.
A Manufacturer's Purchase Credit certification, accepted by a
retailer prior to October 1, 2003 as provided in Section 3-85
of the Use Tax Act, may be used by that retailer to satisfy
Retailers' Occupation Tax liability in the amount claimed in
the certification, not to exceed 6.25% of the receipts
subject to tax from a qualifying purchase. A Manufacturer's
Purchase Credit reported on any original or amended return
filed under this Act after October 20, 2003 shall be
disallowed. No Manufacturer's Purchase Credit may be used
after September 30, 2003 to satisfy any tax liability imposed
under this Act, including any audit liability.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due; and
6. Such other reasonable information as the
Department may require.
If a total amount of less than $1 is payable, refundable
or creditable, such amount shall be disregarded if it is less
than 50 cents and shall be increased to $1 if it is 50 cents
or more.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who
has an average monthly tax liability of $100,000 or more
shall make all payments required by rules of the Department
by electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October
1, 2000, a taxpayer who has an annual tax liability of
$200,000 or more shall make all payments required by rules of
the Department by electronic funds transfer. The term
"annual tax liability" shall be the sum of the taxpayer's
liabilities under this Act, and under all other State and
local occupation and use tax laws administered by the
Department, for the immediately preceding calendar year. The
term "average monthly tax liability" shall be the sum of the
taxpayer's liabilities under this Act, and under all other
State and local occupation and use tax laws administered by
the Department, for the immediately preceding calendar year
divided by 12. Beginning on October 1, 2002, a taxpayer who
has a tax liability in the amount set forth in subsection (b)
of Section 2505-210 of the Department of Revenue Law shall
make all payments required by rules of the Department by
electronic funds transfer.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers
required to make payments by electronic funds transfer shall
make those payments for a minimum of one year beginning on
October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Any amount which is required to be shown or reported on
any return or other document under this Act shall, if such
amount is not a whole-dollar amount, be increased to the
nearest whole-dollar amount in any case where the fractional
part of a dollar is 50 cents or more, and decreased to the
nearest whole-dollar amount where the fractional part of a
dollar is less than 50 cents.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of
a given year being due by October 20 of such year, and with
the return for October, November and December of a given year
being due by January 20 of the following year.
If the retailer is otherwise required to file a monthly
or quarterly return and if the retailer's average monthly tax
liability with the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January
20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a retailer may file his
return, in the case of any retailer who ceases to engage in a
kind of business which makes him responsible for filing
returns under this Act, such retailer shall file a final
return under this Act with the Department not more than one
month after discontinuing such business.
Where the same person has more than one business
registered with the Department under separate registrations
under this Act, such person may not file each return that is
due as a single return covering all such registered
businesses, but shall file separate returns for each such
registered business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, every retailer selling this
kind of tangible personal property shall file, with the
Department, upon a form to be prescribed and supplied by the
Department, a separate return for each such item of tangible
personal property which the retailer sells, except that if,
in the same transaction, (i) a retailer of aircraft,
watercraft, motor vehicles or trailers transfers more than
one aircraft, watercraft, motor vehicle or trailer to another
aircraft, watercraft, motor vehicle retailer or trailer
retailer for the purpose of resale or (ii) a retailer of
aircraft, watercraft, motor vehicles, or trailers transfers
more than one aircraft, watercraft, motor vehicle, or trailer
to a purchaser for use as a qualifying rolling stock as
provided in Section 2-5 of this Act, then that seller may
report the transfer of all aircraft, watercraft, motor
vehicles or trailers involved in that transaction to the
Department on the same uniform invoice-transaction reporting
return form. For purposes of this Section, "watercraft"
means a Class 2, Class 3, or Class 4 watercraft as defined in
Section 3-2 of the Boat Registration and Safety Act, a
personal watercraft, or any boat equipped with an inboard
motor.
Any retailer who sells only motor vehicles, watercraft,
aircraft, or trailers that are required to be registered with
an agency of this State, so that all retailers' occupation
tax liability is required to be reported, and is reported, on
such transaction reporting returns and who is not otherwise
required to file monthly or quarterly returns, need not file
monthly or quarterly returns. However, those retailers shall
be required to file returns on an annual basis.
The transaction reporting return, in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the
Uniform Invoice referred to in Section 5-402 of The Illinois
Vehicle Code and must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 1 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale; a sufficient identification of
the property sold; such other information as is required in
Section 5-402 of The Illinois Vehicle Code, and such other
information as the Department may reasonably require.
The transaction reporting return in the case of
watercraft or aircraft must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 1 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale, a sufficient identification of
the property sold, and such other information as the
Department may reasonably require.
Such transaction reporting return shall be filed not
later than 20 days after the day of delivery of the item that
is being sold, but may be filed by the retailer at any time
sooner than that if he chooses to do so. The transaction
reporting return and tax remittance or proof of exemption
from the Illinois use tax may be transmitted to the
Department by way of the State agency with which, or State
officer with whom the tangible personal property must be
titled or registered (if titling or registration is required)
if the Department and such agency or State officer determine
that this procedure will expedite the processing of
applications for title or registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a use tax
receipt (or a certificate of exemption if the Department is
satisfied that the particular sale is tax exempt) which such
purchaser may submit to the agency with which, or State
officer with whom, he must title or register the tangible
personal property that is involved (if titling or
registration is required) in support of such purchaser's
application for an Illinois certificate or other evidence of
title or registration to such tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user
has paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of the tax or proof of exemption made to the Department
before the retailer is willing to take these actions and such
user has not paid the tax to the retailer, such user may
certify to the fact of such delay by the retailer and may
(upon the Department being satisfied of the truth of such
certification) transmit the information required by the
transaction reporting return and the remittance for tax or
proof of exemption directly to the Department and obtain his
tax receipt or exemption determination, in which event the
transaction reporting return and tax remittance (if a tax
payment was required) shall be credited by the Department to
the proper retailer's account with the Department, but
without the 2.1% or 1.75% discount provided for in this
Section being allowed. When the user pays the tax directly
to the Department, he shall pay the tax in the same amount
and in the same form in which it would be remitted if the tax
had been remitted to the Department by the retailer.
Refunds made by the seller during the preceding return
period to purchasers, on account of tangible personal
property returned to the seller, shall be allowed as a
deduction under subdivision 5 of his monthly or quarterly
return, as the case may be, in case the seller had
theretofore included the receipts from the sale of such
tangible personal property in a return filed by him and had
paid the tax imposed by this Act with respect to such
receipts.
Where the seller is a corporation, the return filed on
behalf of such corporation shall be signed by the president,
vice-president, secretary or treasurer or by the properly
accredited agent of such corporation.
Where the seller is a limited liability company, the
return filed on behalf of the limited liability company shall
be signed by a manager, member, or properly accredited agent
of the limited liability company.
Except as provided in this Section, the retailer filing
the return under this Section shall, at the time of filing
such return, pay to the Department the amount of tax imposed
by this Act less a discount of 2.1% prior to January 1, 1990
and 1.75% on and after January 1, 1990, or $5 per calendar
year, whichever is greater, which is allowed to reimburse the
retailer for the expenses incurred in keeping records,
preparing and filing returns, remitting the tax and supplying
data to the Department on request. Any prepayment made
pursuant to Section 2d of this Act shall be included in the
amount on which such 2.1% or 1.75% discount is computed. In
the case of retailers who report and pay the tax on a
transaction by transaction basis, as provided in this
Section, such discount shall be taken with each such tax
remittance instead of when such retailer files his periodic
return.
Before October 1, 2000, if the taxpayer's average monthly
tax liability to the Department under this Act, the Use Tax
Act, the Service Occupation Tax Act, and the Service Use Tax
Act, excluding any liability for prepaid sales tax to be
remitted in accordance with Section 2d of this Act, was
$10,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payments to the Department on or before the 7th, 15th, 22nd
and last day of the month during which such liability is
incurred. On and after October 1, 2000, if the taxpayer's
average monthly tax liability to the Department under this
Act, the Use Tax Act, the Service Occupation Tax Act, and the
Service Use Tax Act, excluding any liability for prepaid
sales tax to be remitted in accordance with Section 2d of
this Act, was $20,000 or more during the preceding 4 complete
calendar quarters, he shall file a return with the Department
each month by the 20th day of the month next following the
month during which such tax liability is incurred and shall
make payment to the Department on or before the 7th, 15th,
22nd and last day of the month during which such liability is
incurred. If the month during which such tax liability is
incurred began prior to January 1, 1985, each payment shall
be in an amount equal to 1/4 of the taxpayer's actual
liability for the month or an amount set by the Department
not to exceed 1/4 of the average monthly liability of the
taxpayer to the Department for the preceding 4 complete
calendar quarters (excluding the month of highest liability
and the month of lowest liability in such 4 quarter period).
If the month during which such tax liability is incurred
begins on or after January 1, 1985 and prior to January 1,
1987, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 27.5% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1987 and prior to
January 1, 1988, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or
26.25% of the taxpayer's liability for the same calendar
month of the preceding year. If the month during which such
tax liability is incurred begins on or after January 1, 1988,
and prior to January 1, 1989, or begins on or after January
1, 1996, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 25% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1989, and prior to
January 1, 1996, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or 25%
of the taxpayer's liability for the same calendar month of
the preceding year or 100% of the taxpayer's actual liability
for the quarter monthly reporting period. The amount of such
quarter monthly payments shall be credited against the final
tax liability of the taxpayer's return for that month.
Before October 1, 2000, once applicable, the requirement of
the making of quarter monthly payments to the Department by
taxpayers having an average monthly tax liability of $10,000
or more as determined in the manner provided above shall
continue until such taxpayer's average monthly liability to
the Department during the preceding 4 complete calendar
quarters (excluding the month of highest liability and the
month of lowest liability) is less than $9,000, or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding
complete calendar quarter period is less than $10,000.
However, if a taxpayer can show the Department that a
substantial change in the taxpayer's business has occurred
which causes the taxpayer to anticipate that his average
monthly tax liability for the reasonably foreseeable future
will fall below the $10,000 threshold stated above, then such
taxpayer may petition the Department for a change in such
taxpayer's reporting status. On and after October 1, 2000,
once applicable, the requirement of the making of quarter
monthly payments to the Department by taxpayers having an
average monthly tax liability of $20,000 or more as
determined in the manner provided above shall continue until
such taxpayer's average monthly liability to the Department
during the preceding 4 complete calendar quarters (excluding
the month of highest liability and the month of lowest
liability) is less than $19,000 or until such taxpayer's
average monthly liability to the Department as computed for
each calendar quarter of the 4 preceding complete calendar
quarter period is less than $20,000. However, if a taxpayer
can show the Department that a substantial change in the
taxpayer's business has occurred which causes the taxpayer to
anticipate that his average monthly tax liability for the
reasonably foreseeable future will fall below the $20,000
threshold stated above, then such taxpayer may petition the
Department for a change in such taxpayer's reporting status.
The Department shall change such taxpayer's reporting status
unless it finds that such change is seasonal in nature and
not likely to be long term. If any such quarter monthly
payment is not paid at the time or in the amount required by
this Section, then the taxpayer shall be liable for penalties
and interest on the difference between the minimum amount due
as a payment and the amount of such quarter monthly payment
actually and timely paid, except insofar as the taxpayer has
previously made payments for that month to the Department in
excess of the minimum payments previously due as provided in
this Section. The Department shall make reasonable rules and
regulations to govern the quarter monthly payment amount and
quarter monthly payment dates for taxpayers who file on other
than a calendar monthly basis.
The provisions of this paragraph apply before October 1,
2001. Without regard to whether a taxpayer is required to
make quarter monthly payments as specified above, any
taxpayer who is required by Section 2d of this Act to collect
and remit prepaid taxes and has collected prepaid taxes which
average in excess of $25,000 per month during the preceding 2
complete calendar quarters, shall file a return with the
Department as required by Section 2f and shall make payments
to the Department on or before the 7th, 15th, 22nd and last
day of the month during which such liability is incurred. If
the month during which such tax liability is incurred began
prior to the effective date of this amendatory Act of 1985,
each payment shall be in an amount not less than 22.5% of the
taxpayer's actual liability under Section 2d. If the month
during which such tax liability is incurred begins on or
after January 1, 1986, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 27.5% of the taxpayer's liability for the same
calendar month of the preceding calendar year. If the month
during which such tax liability is incurred begins on or
after January 1, 1987, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 26.25% of the taxpayer's liability for the same
calendar month of the preceding year. The amount of such
quarter monthly payments shall be credited against the final
tax liability of the taxpayer's return for that month filed
under this Section or Section 2f, as the case may be. Once
applicable, the requirement of the making of quarter monthly
payments to the Department pursuant to this paragraph shall
continue until such taxpayer's average monthly prepaid tax
collections during the preceding 2 complete calendar quarters
is $25,000 or less. If any such quarter monthly payment is
not paid at the time or in the amount required, the taxpayer
shall be liable for penalties and interest on such
difference, except insofar as the taxpayer has previously
made payments for that month in excess of the minimum
payments previously due.
The provisions of this paragraph apply on and after
October 1, 2001. Without regard to whether a taxpayer is
required to make quarter monthly payments as specified above,
any taxpayer who is required by Section 2d of this Act to
collect and remit prepaid taxes and has collected prepaid
taxes that average in excess of $20,000 per month during the
preceding 4 complete calendar quarters shall file a return
with the Department as required by Section 2f and shall make
payments to the Department on or before the 7th, 15th, 22nd
and last day of the month during which the liability is
incurred. Each payment shall be in an amount equal to 22.5%
of the taxpayer's actual liability for the month or 25% of
the taxpayer's liability for the same calendar month of the
preceding year. The amount of the quarter monthly payments
shall be credited against the final tax liability of the
taxpayer's return for that month filed under this Section or
Section 2f, as the case may be. Once applicable, the
requirement of the making of quarter monthly payments to the
Department pursuant to this paragraph shall continue until
the taxpayer's average monthly prepaid tax collections during
the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability)
is less than $19,000 or until such taxpayer's average monthly
liability to the Department as computed for each calendar
quarter of the 4 preceding complete calendar quarters is less
than $20,000. If any such quarter monthly payment is not
paid at the time or in the amount required, the taxpayer
shall be liable for penalties and interest on such
difference, except insofar as the taxpayer has previously
made payments for that month in excess of the minimum
payments previously due.
If any payment provided for in this Section exceeds the
taxpayer's liabilities under this Act, the Use Tax Act, the
Service Occupation Tax Act and the Service Use Tax Act, as
shown on an original monthly return, the Department shall, if
requested by the taxpayer, issue to the taxpayer a credit
memorandum no later than 30 days after the date of payment.
The credit evidenced by such credit memorandum may be
assigned by the taxpayer to a similar taxpayer under this
Act, the Use Tax Act, the Service Occupation Tax Act or the
Service Use Tax Act, in accordance with reasonable rules and
regulations to be prescribed by the Department. If no such
request is made, the taxpayer may credit such excess payment
against tax liability subsequently to be remitted to the
Department under this Act, the Use Tax Act, the Service
Occupation Tax Act or the Service Use Tax Act, in accordance
with reasonable rules and regulations prescribed by the
Department. If the Department subsequently determined that
all or any part of the credit taken was not actually due to
the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount
shall be reduced by 2.1% or 1.75% of the difference between
the credit taken and that actually due, and that taxpayer
shall be liable for penalties and interest on such
difference.
If a retailer of motor fuel is entitled to a credit under
Section 2d of this Act which exceeds the taxpayer's liability
to the Department under this Act for the month which the
taxpayer is filing a return, the Department shall issue the
taxpayer a credit memorandum for the excess.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund, a special fund
in the State treasury which is hereby created, the net
revenue realized for the preceding month from the 1% tax on
sales of food for human consumption which is to be consumed
off the premises where it is sold (other than alcoholic
beverages, soft drinks and food which 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.
Beginning January 1, 1990, each month the Department
shall pay into the County and Mass Transit District Fund, a
special fund in the State treasury which is hereby created,
4% of the net revenue realized for the preceding month from
the 6.25% general rate.
Beginning August 1, 2000, each month the Department shall
pay into the County and Mass Transit District Fund 20% of the
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund 16% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property.
Beginning August 1, 2000, each month the Department shall
pay into the Local Government Tax Fund 80% of the net revenue
realized for the preceding month from the 1.25% rate on the
selling price of motor fuel and gasohol.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to this Act, Section 9 of the Use Tax Act, Section 9 of the
Service Use Tax Act, and Section 9 of the Service Occupation
Tax Act, such Acts being hereinafter called the "Tax Acts"
and such aggregate of 2.2% or 3.8%, as the case may be, of
moneys being hereinafter called the "Tax Act Amount", and (2)
the amount transferred to the Build Illinois Fund from the
State and Local Sales Tax Reform Fund shall be less than the
Annual Specified Amount (as hereinafter defined), an amount
equal to the difference shall be immediately paid into the
Build Illinois Fund from other moneys received by the
Department pursuant to the Tax Acts; the "Annual Specified
Amount" means the amounts specified below for fiscal years
1986 through 1993:
Fiscal Year Annual Specified Amount
1986 $54,800,000
1987 $76,650,000
1988 $80,480,000
1989 $88,510,000
1990 $115,330,000
1991 $145,470,000
1992 $182,730,000
1993 $206,520,000;
and means the Certified Annual Debt Service Requirement (as
defined in Section 13 of the Build Illinois Bond Act) or the
Tax Act Amount, whichever is greater, for fiscal year 1994
and each fiscal year thereafter; and further provided, that
if on the last business day of any month the sum of (1) the
Tax Act Amount required to be deposited into the Build
Illinois Bond Account in the Build Illinois Fund during such
month and (2) the amount transferred to the Build Illinois
Fund from the State and Local Sales Tax Reform Fund shall
have been less than 1/12 of the Annual Specified Amount, an
amount equal to the difference shall be immediately paid into
the Build Illinois Fund from other moneys received by the
Department pursuant to the Tax Acts; and, further provided,
that in no event shall the payments required under the
preceding proviso result in aggregate payments into the Build
Illinois Fund pursuant to this clause (b) for any fiscal year
in excess of the greater of (i) the Tax Act Amount or (ii)
the Annual Specified Amount for such fiscal year. The
amounts payable into the Build Illinois Fund under clause (b)
of the first sentence in this paragraph shall be payable only
until such time as the aggregate amount on deposit under each
trust indenture securing Bonds issued and outstanding
pursuant to the Build Illinois Bond Act is sufficient, taking
into account any future investment income, to fully provide,
in accordance with such indenture, for the defeasance of or
the payment of the principal of, premium, if any, and
interest on the Bonds secured by such indenture and on any
Bonds expected to be issued thereafter and all fees and costs
payable with respect thereto, all as certified by the
Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the first sentence of this paragraph and shall reduce the
amount otherwise payable for such fiscal year pursuant to
that clause (b). The moneys received by the Department
pursuant to this Act and required to be deposited into the
Build Illinois Fund are subject to the pledge, claim and
charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of sums designated as
"Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000
2021 246,000,000
2022 260,000,000
2023 and 275,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority
Act, but not after fiscal year 2042.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year,
but not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendments thereto
hereafter enacted, beginning July 1, 1993, the Department
shall each month pay into the Illinois Tax Increment Fund
0.27% of 80% of the net revenue realized for the preceding
month from the 6.25% general rate on the selling price of
tangible personal property.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendments thereto
hereafter enacted, beginning with the receipt of the first
report of taxes paid by an eligible business and continuing
for a 25-year period, the Department shall each month pay
into the Energy Infrastructure Fund 80% of the net revenue
realized from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business.
For purposes of this paragraph, the term "eligible business"
means a new electric generating facility certified pursuant
to Section 605-332 of the Department of Commerce and
Community Affairs Law of the Civil Administrative Code of
Illinois.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the
State Treasury and 25% shall be reserved in a special account
and used only for the transfer to the Common School Fund as
part of the monthly transfer from the General Revenue Fund in
accordance with Section 8a of the State Finance Act.
The Department may, upon separate written notice to a
taxpayer, require the taxpayer to prepare and file with the
Department on a form prescribed by the Department within not
less than 60 days after receipt of the notice an annual
information return for the tax year specified in the notice.
Such annual return to the Department shall include a
statement of gross receipts as shown by the retailer's last
Federal income tax return. If the total receipts of the
business as reported in the Federal income tax return do not
agree with the gross receipts reported to the Department of
Revenue for the same period, the retailer shall attach to his
annual return a schedule showing a reconciliation of the 2
amounts and the reasons for the difference. The retailer's
annual return to the Department shall also disclose the cost
of goods sold by the retailer during the year covered by such
return, opening and closing inventories of such goods for
such year, costs of goods used from stock or taken from stock
and given away by the retailer during such year, payroll
information of the retailer's business during such year and
any additional reasonable information which the Department
deems would be helpful in determining the accuracy of the
monthly, quarterly or annual returns filed by such retailer
as provided for in this Section.
If the annual information return required by this Section
is not filed when and as required, the taxpayer shall be
liable as follows:
(i) Until January 1, 1994, the taxpayer shall be
liable for a penalty equal to 1/6 of 1% of the tax due
from such taxpayer under this Act during the period to be
covered by the annual return for each month or fraction
of a month until such return is filed as required, the
penalty to be assessed and collected in the same manner
as any other penalty provided for in this Act.
(ii) On and after January 1, 1994, the taxpayer
shall be liable for a penalty as described in Section 3-4
of the Uniform Penalty and Interest Act.
The chief executive officer, proprietor, owner or highest
ranking manager shall sign the annual return to certify the
accuracy of the information contained therein. Any person
who willfully signs the annual return containing false or
inaccurate information shall be guilty of perjury and
punished accordingly. The annual return form prescribed by
the Department shall include a warning that the person
signing the return may be liable for perjury.
The provisions of this Section concerning the filing of
an annual information return do not apply to a retailer who
is not required to file an income tax return with the United
States Government.
As soon as possible after the first day of each month,
upon certification of the Department of Revenue, the
Comptroller shall order transferred and the Treasurer shall
transfer from the General Revenue Fund to the Motor Fuel Tax
Fund an amount equal to 1.7% of 80% of the net revenue
realized under this Act for the second preceding month.
Beginning April 1, 2000, this transfer is no longer required
and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, manufacturers,
importers and wholesalers whose products are sold at retail
in Illinois by numerous retailers, and who wish to do so, may
assume the responsibility for accounting and paying to the
Department all tax accruing under this Act with respect to
such sales, if the retailers who are affected do not make
written objection to the Department to this arrangement.
Any person who promotes, organizes, provides retail
selling space for concessionaires or other types of sellers
at the Illinois State Fair, DuQuoin State Fair, county fairs,
local fairs, art shows, flea markets and similar exhibitions
or events, including any transient merchant as defined by
Section 2 of the Transient Merchant Act of 1987, is required
to file a report with the Department providing the name of
the merchant's business, the name of the person or persons
engaged in merchant's business, the permanent address and
Illinois Retailers Occupation Tax Registration Number of the
merchant, the dates and location of the event and other
reasonable information that the Department may require. The
report must be filed not later than the 20th day of the month
next following the month during which the event with retail
sales was held. Any person who fails to file a report
required by this Section commits a business offense and is
subject to a fine not to exceed $250.
Any person engaged in the business of selling tangible
personal property at retail as a concessionaire or other type
of seller at the Illinois State Fair, county fairs, art
shows, flea markets and similar exhibitions or events, or any
transient merchants, as defined by Section 2 of the Transient
Merchant Act of 1987, may be required to make a daily report
of the amount of such sales to the Department and to make a
daily payment of the full amount of tax due. The Department
shall impose this requirement when it finds that there is a
significant risk of loss of revenue to the State at such an
exhibition or event. Such a finding shall be based on
evidence that a substantial number of concessionaires or
other sellers who are not residents of Illinois will be
engaging in the business of selling tangible personal
property at retail at the exhibition or event, or other
evidence of a significant risk of loss of revenue to the
State. The Department shall notify concessionaires and other
sellers affected by the imposition of this requirement. In
the absence of notification by the Department, the
concessionaires and other sellers shall file their returns as
otherwise required in this Section.
(Source: P.A. 91-37, eff. 7-1-99; 91-51, eff. 6-30-99;
91-101, eff. 7-12-99; 91-541, eff. 8-13-99; 91-872, eff.
7-1-00; 91-901, eff. 1-1-01; 92-12, eff. 7-1-01; 92-16, eff.
6-28-01; 92-208, eff. 8-2-01; 92-484, eff. 8-23-01; 92-492,
eff. 1-1-02; 92-600, eff. 6-28-02; 92-651, eff. 7-11-02.)
Section 50-30. The Illinois Vehicle Code is amended by
changing Section 3-2001 as follows:
(625 ILCS 5/3-2001) (from Ch. 95 1/2, par. 3-2001)
Sec. 3-2001. Until July 1, 2003, a tax of $200 is hereby
imposed on the purchase of any passenger car as defined in
Section 1-157 of this Code, purchased in Illinois by or on
behalf of an insurance company to replace a passenger car of
an insured person in settlement of a total loss claim. The
tax imposed by this Section shall apply only to that portion
of the purchase price of the replacement vehicle paid by the
insurance company in settlement of the total loss claim, but
not including any portion of such insurance payment which
exceeds the market value of the total loss vehicle.
(Source: P.A. 83-1353.)
ARTICLE 99
Section 99-99. Effective date. This Act takes effect
upon becoming law.