HB6934 93RD GENERAL ASSEMBLY

LRB093 18503 SJM 44220 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6934

Introduced 02/09/04, by Ed Sullivan Jr. - James H. Meyer - Sidney H. Mathias

SYNOPSIS AS INTRODUCED:

35 ILCS 105/2a	from Ch. 120, par. 439.2a
35 ILCS 105/3-5	from Ch. 120, par. 439.3-5
35 ILCS 105/3-7
35 ILCS 105/3-85
35 ILCS 110/2	from Ch. 120, par. 439.32
35 ILCS 110/2a	from Ch. 120, par. 439.32a
35 ILCS 110/3-5	from Ch. 120, par. 439.33-5
35 ILCS 110/3-7
35 ILCS 110/3-70
35 ILCS 115/2	from Ch. 120, par. 439.102
35 ILCS 115/2a	from Ch. 120, par. 439.102a
35 ILCS 115/3-5	from Ch. 120, par. 439.103-5
35 ILCS 115/3-7
35 ILCS 115/9	from Ch. 120, par. 439.109
35 ILCS 120/1a	from Ch. 120, par. 440a
35 ILCS 120/2-5	from Ch. 120, par. 441-5
35 ILCS 120/2-7
35 ILCS 120/3	from Ch. 120, par. 442
625 ILCS 5/3-2001	from Ch. 95 1/2, par. 3-2001

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Restores the tax exemptions eliminated by Public Act 93-24. Amends the Illinois Vehicle Code. Reinstates the replacement vehicle tax concerning a transaction for which the use and occupation tax exemption is restored under this amendatory Act. Effective July 1, 2004.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning taxes.

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

4		Section 5. The Use Tax Act is amended by changing Sections
5		2a, 3-5, 3-7, and 3-85 as follows:
6		(35 ILCS 105/2a) (from Ch. 120, par. 439.2a)
7		Sec. 2a. "Pollution control facilities" means any system,
8		method, construction, device or appliance appurtenant thereto
9		sold or used or intended for the primary purpose of
10		eliminating, preventing, or reducing air and water pollution as
11		the term "air pollution" or "water pollution" is defined in the
12		"Environmental Protection Act", enacted by the 76th General
13		Assembly, or for the primary purpose of treating, pretreating,
14		modifying or disposing of any potential solid, liquid or
15		gaseous pollutant which if released without such treatment,
16		pretreatment, modification or disposal might be harmful,
17		detrimental or offensive to human, plant or animal life, or to
18		property.
19		Until July 1, 2003 and beginning again on July 1, 2004, the
20		purchase, employment and transfer of such tangible personal
21		property as pollution control facilities is not a purchase, use
22		or sale of tangible personal property.
23		(Source: P.A. 93-24, eff. 6-20-03.)
24		(35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
25		Sec. 3-5. Exemptions. Use of the following tangible
26		personal property is exempt from the tax imposed by this Act:
27		(1) Personal property purchased from a corporation,
28		society, association, foundation, institution, or
29		organization, other than a limited liability company, that is
30		organized and operated as a not-for-profit service enterprise
31		for the benefit of persons 65 years of age or older if the

1		personal property was not purchased by the enterprise for the
2		purpose of resale by the enterprise.
3		(2) Personal property purchased by a not-for-profit
4		Illinois county fair association for use in conducting,
5		operating, or promoting the county fair.
6		(3) Personal property purchased by a not-for-profit arts or
7		cultural organization that establishes, by proof required by
8		the Department by rule, that it has received an exemption under
9		Section 501(c)(3) of the Internal Revenue Code and that is
10		organized and operated primarily for the presentation or
11		support of arts or cultural programming, activities, or
12		services. These organizations include, but are not limited to,
13		music and dramatic arts organizations such as symphony
14		orchestras and theatrical groups, arts and cultural service
15		organizations, local arts councils, visual arts organizations,
16		and media arts organizations. On and after the effective date
17		of this amendatory Act of the 92nd General Assembly, however,
18		an entity otherwise eligible for this exemption shall not make
19		tax-free purchases unless it has an active identification
20		number issued by the Department.
21		(4) Personal property purchased by a governmental body, by
22		a corporation, society, association, foundation, or
23		institution organized and operated exclusively for charitable,
24		religious, or educational purposes, or by a not-for-profit
25		corporation, society, association, foundation, institution, or
26		organization that has no compensated officers or employees and
27		that is organized and operated primarily for the recreation of
28		persons 55 years of age or older. A limited liability company
29		may qualify for the exemption under this paragraph only if the
30		limited liability company is organized and operated
31		exclusively for educational purposes. On and after July 1,
32		1987, however, no entity otherwise eligible for this exemption
33		shall make tax-free purchases unless it has an active exemption
34		identification number issued by the Department.
35		(5) Until July 1, 2003 and beginning again on July 1, 2004,
36		a passenger car that is a replacement vehicle to the extent

1		that the purchase price of the car is subject to the
2		Replacement Vehicle Tax.
3		(6) Until July 1, 2003 and beginning again on July 1, 2004,
4		graphic arts machinery and equipment, including repair and
5		replacement parts, both new and used, and including that
6		manufactured on special order, certified by the purchaser to be
7		used primarily for graphic arts production, and including
8		machinery and equipment purchased for lease. Equipment
9		includes chemicals or chemicals acting as catalysts but only if
10		the chemicals or chemicals acting as catalysts effect a direct
11		and immediate change upon a graphic arts product.
12		(7) Farm chemicals.
13		(8) Legal tender, currency, medallions, or gold or silver
14		coinage issued by the State of Illinois, the government of the
15		United States of America, or the government of any foreign
16		country, and bullion.
17		(9) Personal property purchased from a teacher-sponsored
18		student organization affiliated with an elementary or
19		secondary school located in Illinois.
20		(10) A motor vehicle of the first division, a motor vehicle
21		of the second division that is a self-contained motor vehicle
22		designed or permanently converted to provide living quarters
23		for recreational, camping, or travel use, with direct walk
24		through to the living quarters from the driver's seat, or a
25		motor vehicle of the second division that is of the van
26		configuration designed for the transportation of not less than
27		7 nor more than 16 passengers, as defined in Section 1-146 of
28		the Illinois Vehicle Code, that is used for automobile renting,
29		as defined in the Automobile Renting Occupation and Use Tax
30		Act.
31		(11) Farm machinery and equipment, both new and used,
32		including that manufactured on special order, certified by the
33		purchaser to be used primarily for production agriculture or
34		State or federal agricultural programs, including individual
35		replacement parts for the machinery and equipment, including
36		machinery and equipment purchased for lease, and including

1		implements of husbandry defined in Section 1-130 of the
2		Illinois Vehicle Code, farm machinery and agricultural
3		chemical and fertilizer spreaders, and nurse wagons required to
4		be registered under Section 3-809 of the Illinois Vehicle Code,
5		but excluding other motor vehicles required to be registered
6		under the Illinois Vehicle Code. Horticultural polyhouses or
7		hoop houses used for propagating, growing, or overwintering
8		plants shall be considered farm machinery and equipment under
9		this item (11). Agricultural chemical tender tanks and dry
10		boxes shall include units sold separately from a motor vehicle
11		required to be licensed and units sold mounted on a motor
12		vehicle required to be licensed if the selling price of the
13		tender is separately stated.
14		Farm machinery and equipment shall include precision
15		farming equipment that is installed or purchased to be
16		installed on farm machinery and equipment including, but not
17		limited to, tractors, harvesters, sprayers, planters, seeders,
18		or spreaders. Precision farming equipment includes, but is not
19		limited to, soil testing sensors, computers, monitors,
20		software, global positioning and mapping systems, and other
21		such equipment.
22		Farm machinery and equipment also includes computers,
23		sensors, software, and related equipment used primarily in the
24		computer-assisted operation of production agriculture
25		facilities, equipment, and activities such as, but not limited
26		to, the collection, monitoring, and correlation of animal and
27		crop data for the purpose of formulating animal diets and
28		agricultural chemicals. This item (11) is exempt from the
29		provisions of Section 3-90.
30		(12) Fuel and petroleum products sold to or used by an air
31		common carrier, certified by the carrier to be used for
32		consumption, shipment, or storage in the conduct of its
33		business as an air common carrier, for a flight destined for or
34		returning from a location or locations outside the United
35		States without regard to previous or subsequent domestic
36		stopovers.

1		(13) Proceeds of mandatory service charges separately
2		stated on customers' bills for the purchase and consumption of
3		food and beverages purchased at retail from a retailer, to the
4		extent that the proceeds of the service charge are in fact
5		turned over as tips or as a substitute for tips to the
6		employees who participate directly in preparing, serving,
7		hosting or cleaning up the food or beverage function with
8		respect to which the service charge is imposed.
9		(14) Until July 1, 2003 and beginning again on July 1,
10		2004, oil field exploration, drilling, and production
11		equipment, including (i) rigs and parts of rigs, rotary rigs,
12		cable tool rigs, and workover rigs, (ii) pipe and tubular
13		goods, including casing and drill strings, (iii) pumps and
14		pump-jack units, (iv) storage tanks and flow lines, (v) any
15		individual replacement part for oil field exploration,
16		drilling, and production equipment, and (vi) machinery and
17		equipment purchased for lease; but excluding motor vehicles
18		required to be registered under the Illinois Vehicle Code.
19		(15) Photoprocessing machinery and equipment, including
20		repair and replacement parts, both new and used, including that
21		manufactured on special order, certified by the purchaser to be
22		used primarily for photoprocessing, and including
23		photoprocessing machinery and equipment purchased for lease.
24		(16) Until July 1, 2003 and beginning again on July 1,
25		2004, coal exploration, mining, offhighway hauling,
26		processing, maintenance, and reclamation equipment, including
27		replacement parts and equipment, and including equipment
28		purchased for lease, but excluding motor vehicles required to
29		be registered under the Illinois Vehicle Code.
30		(17) Until July 1, 2003 and beginning again on July 1,
31		2004, distillation machinery and equipment, sold as a unit or
32		kit, assembled or installed by the retailer, certified by the
33		user to be used only for the production of ethyl alcohol that
34		will be used for consumption as motor fuel or as a component of
35		motor fuel for the personal use of the user, and not subject to
36		sale or resale.

1		(18) Manufacturing and assembling machinery and equipment
2		used primarily in the process of manufacturing or assembling
3		tangible personal property for wholesale or retail sale or
4		lease, whether that sale or lease is made directly by the
5		manufacturer or by some other person, whether the materials
6		used in the process are owned by the manufacturer or some other
7		person, or whether that sale or lease is made apart from or as
8		an incident to the seller's engaging in the service occupation
9		of producing machines, tools, dies, jigs, patterns, gauges, or
10		other similar items of no commercial value on special order for
11		a particular purchaser.
12		(19) Personal property delivered to a purchaser or
13		purchaser's donee inside Illinois when the purchase order for
14		that personal property was received by a florist located
15		outside Illinois who has a florist located inside Illinois
16		deliver the personal property.
17		(20) Semen used for artificial insemination of livestock
18		for direct agricultural production.
19		(21) Horses, or interests in horses, registered with and
20		meeting the requirements of any of the Arabian Horse Club
21		Registry of America, Appaloosa Horse Club, American Quarter
22		Horse Association, United States Trotting Association, or
23		Jockey Club, as appropriate, used for purposes of breeding or
24		racing for prizes.
25		(22) Computers and communications equipment utilized for
26		any hospital purpose and equipment used in the diagnosis,
27		analysis, or treatment of hospital patients purchased by a
28		lessor who leases the equipment, under a lease of one year or
29		longer executed or in effect at the time the lessor would
30		otherwise be subject to the tax imposed by this Act, to a
31		hospital that has been issued an active tax exemption
32		identification number by the Department under Section 1g of the
33		Retailers' Occupation Tax Act. If the equipment is leased in a
34		manner that does not qualify for this exemption or is used in
35		any other non-exempt manner, the lessor shall be liable for the
36		tax imposed under this Act or the Service Use Tax Act, as the

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

1		manufacturer or retailer that is registered in this State to a
2		corporation, society, association, foundation, or institution
3		that has been issued a sales tax exemption identification
4		number by the Department that assists victims of the disaster
5		who reside within the declared disaster area.
6		(25) Beginning with taxable years ending on or after
7		December 31, 1995 and ending with taxable years ending on or
8		before December 31, 2004, personal property that is used in the
9		performance of infrastructure repairs in this State, including
10		but not limited to municipal roads and streets, access roads,
11		bridges, sidewalks, waste disposal systems, water and sewer
12		line extensions, water distribution and purification
13		facilities, storm water drainage and retention facilities, and
14		sewage treatment facilities, resulting from a State or
15		federally declared disaster in Illinois or bordering Illinois
16		when such repairs are initiated on facilities located in the
17		declared disaster area within 6 months after the disaster.
18		(26) Beginning July 1, 1999, game or game birds purchased
19		at a "game breeding and hunting preserve area" or an "exotic
20		game hunting area" as those terms are used in the Wildlife Code
21		or at a hunting enclosure approved through rules adopted by the
22		Department of Natural Resources. This paragraph is exempt from
23		the provisions of Section 3-90.
24		(27) A motor vehicle, as that term is defined in Section
25		1-146 of the Illinois Vehicle Code, that is donated to a
26		corporation, limited liability company, society, association,
27		foundation, or institution that is determined by the Department
28		to be organized and operated exclusively for educational
29		purposes. For purposes of this exemption, "a corporation,
30		limited liability company, society, association, foundation,
31		or institution organized and operated exclusively for
32		educational purposes" means all tax-supported public schools,
33		private schools that offer systematic instruction in useful
34		branches of learning by methods common to public schools and
35		that compare favorably in their scope and intensity with the
36		course of study presented in tax-supported schools, and

1		vocational or technical schools or institutes organized and
2		operated exclusively to provide a course of study of not less
3		than 6 weeks duration and designed to prepare individuals to
4		follow a trade or to pursue a manual, technical, mechanical,
5		industrial, business, or commercial occupation.
6		(28) Beginning January 1, 2000, personal property,
7		including food, purchased through fundraising events for the
8		benefit of a public or private elementary or secondary school,
9		a group of those schools, or one or more school districts if
10		the events are sponsored by an entity recognized by the school
11		district that consists primarily of volunteers and includes
12		parents and teachers of the school children. This paragraph
13		does not apply to fundraising events (i) for the benefit of
14		private home instruction or (ii) for which the fundraising
15		entity purchases the personal property sold at the events from
16		another individual or entity that sold the property for the
17		purpose of resale by the fundraising entity and that profits
18		from the sale to the fundraising entity. This paragraph is
19		exempt from the provisions of Section 3-90.
20		(29) Beginning January 1, 2000 and through December 31,
21		2001, new or used automatic vending machines that prepare and
22		serve hot food and beverages, including coffee, soup, and other
23		items, and replacement parts for these machines. Beginning
24		January 1, 2002 and through June 30, 2003, and beginning again
25		on July 1, 2004, machines and parts for machines used in
26		commercial, coin-operated amusement and vending business if a
27		use or occupation tax is paid on the gross receipts derived
28		from the use of the commercial, coin-operated amusement and
29		vending machines. This paragraph is exempt from the provisions
30		of Section 3-90.
31		(30) Food for human consumption that is to be consumed off
32		the premises where it is sold (other than alcoholic beverages,
33		soft drinks, and food that has been prepared for immediate
34		consumption) and prescription and nonprescription medicines,
35		drugs, medical appliances, and insulin, urine testing
36		materials, syringes, and needles used by diabetics, for human

1		use, when purchased for use by a person receiving medical
2		assistance under Article 5 of the Illinois Public Aid Code who
3		resides in a licensed long-term care facility, as defined in
4		the Nursing Home Care Act.
5		(31) Beginning on the effective date of this amendatory Act
6		of the 92nd General Assembly, computers and communications
7		equipment utilized for any hospital purpose and equipment used
8		in the diagnosis, analysis, or treatment of hospital patients
9		purchased by a lessor who leases the equipment, under a lease
10		of one year or longer executed or in effect at the time the
11		lessor would otherwise be subject to the tax imposed by this
12		Act, to a hospital that has been issued an active tax exemption
13		identification number by the Department under Section 1g of the
14		Retailers' Occupation Tax Act. If the equipment is leased in a
15		manner that does not qualify for this exemption or is used in
16		any other nonexempt manner, the lessor shall be liable for the
17		tax imposed under this Act or the Service Use Tax Act, as the
18		case may be, based on the fair market value of the property at
19		the time the nonqualifying use occurs. No lessor shall collect
20		or attempt to collect an amount (however designated) that
21		purports to reimburse that lessor for the tax imposed by this
22		Act or the Service Use Tax Act, as the case may be, if the tax
23		has not been paid by the lessor. If a lessor improperly
24		collects any such amount from the lessee, the lessee shall have
25		a legal right to claim a refund of that amount from the lessor.
26		If, however, that amount is not refunded to the lessee for any
27		reason, the lessor is liable to pay that amount to the
28		Department. This paragraph is exempt from the provisions of
29		Section 3-90.
30		(32) Beginning on the effective date of this amendatory Act
31		of the 92nd General Assembly, personal property purchased by a
32		lessor who leases the property, under a lease of one year or
33		longer executed or in effect at the time the lessor would
34		otherwise be subject to the tax imposed by this Act, to a
35		governmental body that has been issued an active sales tax
36		exemption identification number by the Department under

1		Section 1g of the Retailers' Occupation Tax Act. If the
2		property is leased in a manner that does not qualify for this
3		exemption or used in any other nonexempt manner, the lessor
4		shall be liable for the tax imposed under this Act or the
5		Service Use Tax Act, as the case may be, based on the fair
6		market value of the property at the time the nonqualifying use
7		occurs. No lessor shall collect or attempt to collect an amount
8		(however designated) that purports to reimburse that lessor for
9		the tax imposed by this Act or the Service Use Tax Act, as the
10		case may be, if the tax has not been paid by the lessor. If a
11		lessor improperly collects any such amount from the lessee, the
12		lessee shall have a legal right to claim a refund of that
13		amount from the lessor. If, however, that amount is not
14		refunded to the lessee for any reason, the lessor is liable to
15		pay that amount to the Department. This paragraph is exempt
16		from the provisions of Section 3-90.
17		(33) On and after July 1, 2003, the use in this State of
18		motor vehicles of the second division with a gross vehicle
19		weight in excess of 8,000 pounds and that are subject to the
20		commercial distribution fee imposed under Section 3-815.1 of
21		the Illinois Vehicle Code. This exemption applies to repair and
22		replacement parts added after the initial purchase of such a
23		motor vehicle if that motor vehicle is used in a manner that
24		would qualify for the rolling stock exemption otherwise
25		provided for in this Act.
26		(Source: P.A. 92-35, eff. 7-1-01; 92-227, eff. 8-2-01; 92-337,
27		eff. 8-10-01; 92-484, eff. 8-23-01; 92-651, eff. 7-11-02;
28		93-23, eff. 6-20-03; 93-24, eff. 6-20-03; revised 9-11-03.)
29		(35 ILCS 105/3-7)
30		Sec. 3-7. Aggregate manufacturing exemption. Through June
31		30, 2003, and beginning again on July 1, 2004, the use of
32		aggregate exploration, mining, offhighway hauling, processing,
33		maintenance, and reclamation equipment, including replacement
34		parts and equipment, and including equipment purchased for
35		lease, but excluding motor vehicles required to be registered

1		under the Illinois Vehicle Code, is exempt from the tax imposed
2		by this Act.
3		(Source: P.A. 92-603, eff. 6-28-02; 93-24, eff. 6-20-03.)
4		(35 ILCS 105/3-85)
5		Sec. 3-85. Manufacturer's Purchase Credit. For purchases
6		of machinery and equipment made on and after January 1, 1995
7		and through June 30, 2003, or made on or after July 1, 2004, a
8		purchaser of manufacturing machinery and equipment that
9		qualifies for the exemption provided by paragraph (18) of
10		Section 3-5 of this Act earns a credit in an amount equal to a
11		fixed percentage of the tax which would have been incurred
12		under this Act on those purchases. For purchases of graphic
13		arts machinery and equipment made on or after July 1, 1996 and
14		through June 30, 2003, or made on or after July 1, 2004, a
15		purchaser of graphic arts machinery and equipment that
16		qualifies for the exemption provided by paragraph (6) of
17		Section 3-5 of this Act earns a credit in an amount equal to a
18		fixed percentage of the tax that would have been incurred under
19		this Act on those purchases. The credit earned for purchases of
20		manufacturing machinery and equipment or graphic arts
21		machinery and equipment shall be referred to as the
22		Manufacturer's Purchase Credit. A graphic arts producer is a
23		person engaged in graphic arts production as defined in Section
24		2-30 of the Retailers' Occupation Tax Act. Beginning July 1,
25		1996, all references in this Section to manufacturers or
26		manufacturing shall also be deemed to refer to graphic arts
27		producers or graphic arts production.
28		The amount of credit shall be a percentage of the tax that
29		would have been incurred on the purchase of manufacturing
30		machinery and equipment or graphic arts machinery and equipment
31		if the exemptions provided by paragraph (6) or paragraph (18)
32		of Section 3-5 of this Act had not been applicable. The
33		percentage shall be as follows:
34		(1) 15% for purchases made on or before June 30, 1995.
35		(2) 25% for purchases made after June 30, 1995, and on

1		or before June 30, 1996.
2		(3) 40% for purchases made after June 30, 1996, and on
3		or before June 30, 1997.
4		(4) 50% for purchases made on or after July 1, 1997.
5		A purchaser of production related tangible personal
6		property desiring to use the Manufacturer's Purchase Credit
7		shall certify to the seller prior to October 1, 2003 that the
8		purchaser is satisfying all or part of the liability under the
9		Use Tax Act or the Service Use Tax Act that is due on the
10		purchase of the production related tangible personal property
11		by use of Manufacturer's Purchase Credit. The Manufacturer's
12		Purchase Credit certification must be dated and shall include
13		the name and address of the purchaser, the purchaser's
14		registration number, if registered, the credit being applied,
15		and a statement that the State Use Tax or Service Use Tax
16		liability is being satisfied with the manufacturer's or graphic
17		arts producer's accumulated purchase credit. Certification may
18		be incorporated into the manufacturer's or graphic arts
19		producer's purchase order. Manufacturer's Purchase Credit
20		certification provided by the manufacturer or graphic arts
21		producer prior to October 1, 2003 may be used to satisfy the
22		retailer's or serviceman's liability under the Retailers'
23		Occupation Tax Act or Service Occupation Tax Act for the credit
24		claimed, not to exceed 6.25% of the receipts subject to tax
25		from a qualifying purchase, but only if the retailer or
26		serviceman reports the Manufacturer's Purchase Credit claimed
27		as required by the Department. A Manufacturer's Purchase Credit
28		reported on any original or amended return filed under this Act
29		after October 20, 2003 shall be disallowed. The Manufacturer's
30		Purchase Credit earned by purchase of exempt manufacturing
31		machinery and equipment or graphic arts machinery and equipment
32		is a non-transferable credit. A manufacturer or graphic arts
33		producer that enters into a contract involving the installation
34		of tangible personal property into real estate within a
35		manufacturing or graphic arts production facility may, prior to
36		October 1, 2003, authorize a construction contractor to utilize

1		credit accumulated by the manufacturer or graphic arts producer
2		to purchase the tangible personal property. A manufacturer or
3		graphic arts producer intending to use accumulated credit to
4		purchase such tangible personal property shall execute a
5		written contract authorizing the contractor to utilize a
6		specified dollar amount of credit. The contractor shall
7		furnish, prior to October 1, 2003, the supplier with the
8		manufacturer's or graphic arts producer's name, registration
9		or resale number, and a statement that a specific amount of the
10		Use Tax or Service Use Tax liability, not to exceed 6.25% of
11		the selling price, is being satisfied with the credit. The
12		manufacturer or graphic arts producer shall remain liable to
13		timely report all information required by the annual Report of
14		Manufacturer's Purchase Credit Used for all credit utilized by
15		a construction contractor.
16		The Manufacturer's Purchase Credit may be used to satisfy
17		liability under the Use Tax Act or the Service Use Tax Act due
18		on the purchase of production related tangible personal
19		property (including purchases by a manufacturer, by a graphic
20		arts producer, or by a lessor who rents or leases the use of
21		the property to a manufacturer or graphic arts producer) that
22		does not otherwise qualify for the manufacturing machinery and
23		equipment exemption or the graphic arts machinery and equipment
24		exemption. "Production related tangible personal property"
25		means (i) all tangible personal property used or consumed by
26		the purchaser in a manufacturing facility in which a
27		manufacturing process described in Section 2-45 of the
28		Retailers' Occupation Tax Act takes place, including tangible
29		personal property purchased for incorporation into real estate
30		within a manufacturing facility and including, but not limited
31		to, tangible personal property used or consumed in activities
32		such as preproduction material handling, receiving, quality
33		control, inventory control, storage, staging, and packaging
34		for shipping and transportation purposes; (ii) all tangible
35		personal property used or consumed by the purchaser in a
36		graphic arts facility in which graphic arts production as

1		described in Section 2-30 of the Retailers' Occupation Tax Act
2		takes place, including tangible personal property purchased
3		for incorporation into real estate within a graphic arts
4		facility and including, but not limited to, all tangible
5		personal property used or consumed in activities such as
6		graphic arts preliminary or pre-press production,
7		pre-production material handling, receiving, quality control,
8		inventory control, storage, staging, sorting, labeling,
9		mailing, tying, wrapping, and packaging; and (iii) all tangible
10		personal property used or consumed by the purchaser for
11		research and development. "Production related tangible
12		personal property" does not include (i) tangible personal
13		property used, within or without a manufacturing facility, in
14		sales, purchasing, accounting, fiscal management, marketing,
15		personnel recruitment or selection, or landscaping or (ii)
16		tangible personal property required to be titled or registered
17		with a department, agency, or unit of federal, state, or local
18		government. The Manufacturer's Purchase Credit may be used,
19		prior to October 1, 2003, to satisfy the tax arising either
20		from the purchase of machinery and equipment on or after
21		January 1, 1995 for which the exemption provided by paragraph
22		(18) of Section 3-5 of this Act was erroneously claimed, or the
23		purchase of machinery and equipment on or after July 1, 1996
24		for which the exemption provided by paragraph (6) of Section
25		3-5 of this Act was erroneously claimed, but not in
26		satisfaction of penalty, if any, and interest for failure to
27		pay the tax when due. A purchaser of production related
28		tangible personal property who is required to pay Illinois Use
29		Tax or Service Use Tax on the purchase directly to the
30		Department may, prior to October 1, 2003, utilize the
31		Manufacturer's Purchase Credit in satisfaction of the tax
32		arising from that purchase, but not in satisfaction of penalty
33		and interest. A purchaser who uses the Manufacturer's Purchase
34		Credit to purchase property which is later determined not to be
35		production related tangible personal property may be liable for
36		tax, penalty, and interest on the purchase of that property as

1		of the date of purchase but shall be entitled to use the
2		disallowed Manufacturer's Purchase Credit, so long as it has
3		not expired and is used prior to October 1, 2003, on qualifying
4		purchases of production related tangible personal property not
5		previously subject to credit usage. The Manufacturer's
6		Purchase Credit earned by a manufacturer or graphic arts
7		producer expires the last day of the second calendar year
8		following the calendar year in which the credit arose. No
9		Manufacturer's Purchase Credit may be used after September 30,
10		2003 regardless of when that credit was earned.
11		A purchaser earning Manufacturer's Purchase Credit shall
12		sign and file an annual Report of Manufacturer's Purchase
13		Credit Earned for each calendar year no later than the last day
14		of the sixth month following the calendar year in which a
15		Manufacturer's Purchase Credit is earned. A Report of
16		Manufacturer's Purchase Credit Earned shall be filed on forms
17		as prescribed or approved by the Department and shall state,
18		for each month of the calendar year: (i) the total purchase
19		price of all purchases of exempt manufacturing or graphic arts
20		machinery on which the credit was earned; (ii) the total State
21		Use Tax or Service Use Tax which would have been due on those
22		items; (iii) the percentage used to calculate the amount of
23		credit earned; (iv) the amount of credit earned; and (v) such
24		other information as the Department may reasonably require. A
25		purchaser earning Manufacturer's Purchase Credit shall
26		maintain records which identify, as to each purchase of
27		manufacturing or graphic arts machinery and equipment on which
28		the purchaser earned Manufacturer's Purchase Credit, the
29		vendor (including, if applicable, either the vendor's
30		registration number or Federal Employer Identification
31		Number), the purchase price, and the amount of Manufacturer's
32		Purchase Credit earned on each purchase.
33		A purchaser using Manufacturer's Purchase Credit shall
34		sign and file an annual Report of Manufacturer's Purchase
35		Credit Used for each calendar year no later than the last day
36		of the sixth month following the calendar year in which a

1		Manufacturer's Purchase Credit is used. A Report of
2		Manufacturer's Purchase Credit Used shall be filed on forms as
3		prescribed or approved by the Department and shall state, for
4		each month of the calendar year: (i) the total purchase price
5		of production related tangible personal property purchased
6		from Illinois suppliers; (ii) the total purchase price of
7		production related tangible personal property purchased from
8		out-of-state suppliers; (iii) the total amount of credit used
9		during such month; and (iv) such other information as the
10		Department may reasonably require. A purchaser using
11		Manufacturer's Purchase Credit shall maintain records that
12		identify, as to each purchase of production related tangible
13		personal property on which the purchaser used Manufacturer's
14		Purchase Credit, the vendor (including, if applicable, either
15		the vendor's registration number or Federal Employer
16		Identification Number), the purchase price, and the amount of
17		Manufacturer's Purchase Credit used on each purchase.
18		No annual report shall be filed before May 1, 1996 or after
19		June 30, 2004. A purchaser that fails to file an annual Report
20		of Manufacturer's Purchase Credit Earned or an annual Report of
21		Manufacturer's Purchase Credit Used by the last day of the
22		sixth month following the end of the calendar year shall
23		forfeit all Manufacturer's Purchase Credit for that calendar
24		year unless it establishes that its failure to file was due to
25		reasonable cause. Manufacturer's Purchase Credit reports may
26		be amended to report and claim credit on qualifying purchases
27		not previously reported at any time before the credit would
28		have expired, unless both the Department and the purchaser have
29		agreed to an extension of the statute of limitations for the
30		issuance of a notice of tax liability as provided in Section 4
31		of the Retailers' Occupation Tax Act. If the time for
32		assessment or refund has been extended, then amended reports
33		for a calendar year may be filed at any time prior to the date
34		to which the statute of limitations for the calendar year or
35		portion thereof has been extended. No Manufacturer's Purchase
36		Credit report filed with the Department for periods prior to

1		January 1, 1995 shall be approved. Manufacturer's Purchase
2		Credit claimed on an amended report may be used, until October
3		1, 2003, to satisfy tax liability under the Use Tax Act or the
4		Service Use Tax Act (i) on qualifying purchases of production
5		related tangible personal property made after the date the
6		amended report is filed or (ii) assessed by the Department on
7		qualifying purchases of production related tangible personal
8		property made in the case of manufacturers on or after January
9		1, 1995, or in the case of graphic arts producers on or after
10		July 1, 1996.
11		If the purchaser is not the manufacturer or a graphic arts
12		producer, but rents or leases the use of the property to a
13		manufacturer or graphic arts producer, the purchaser may earn,
14		report, and use Manufacturer's Purchase Credit in the same
15		manner as a manufacturer or graphic arts producer.
16		A purchaser shall not be entitled to any Manufacturer's
17		Purchase Credit for a purchase that is required to be reported
18		and is not timely reported as provided in this Section. A
19		purchaser remains liable for (i) any tax that was satisfied by
20		use of a Manufacturer's Purchase Credit, as of the date of
21		purchase, if that use is not timely reported as required in
22		this Section and (ii) for any applicable penalties and interest
23		for failing to pay the tax when due. No Manufacturer's Purchase
24		Credit may be used after September 30, 2003 to satisfy any tax
25		liability imposed under this Act, including any audit
26		liability.
27		(Source: P.A. 93-24, eff. 6-20-03.)

28		Section 10. The Service Use Tax Act is amended by changing
29		Sections 2, 2a, 3-5, 3-7, and 3-70 as follows:
30		(35 ILCS 110/2) (from Ch. 120, par. 439.32)
31		Sec. 2. "Use" means the exercise by any person of any right
32		or power over tangible personal property incident to the
33		ownership of that property, but does not include the sale or
34		use for demonstration by him of that property in any form as

1		tangible personal property in the regular course of business.
2		"Use" does not mean the interim use of tangible personal
3		property nor the physical incorporation of tangible personal
4		property, as an ingredient or constituent, into other tangible
5		personal property, (a) which is sold in the regular course of
6		business or (b) which the person incorporating such ingredient
7		or constituent therein has undertaken at the time of such
8		purchase to cause to be transported in interstate commerce to
9		destinations outside the State of Illinois.
10		"Purchased from a serviceman" means the acquisition of the
11		ownership of, or title to, tangible personal property through a
12		sale of service.
13		"Purchaser" means any person who, through a sale of
14		service, acquires the ownership of, or title to, any tangible
15		personal property.
16		"Cost price" means the consideration paid by the serviceman
17		for a purchase valued in money, whether paid in money or
18		otherwise, including cash, credits and services, and shall be
19		determined without any deduction on account of the supplier's
20		cost of the property sold or on account of any other expense
21		incurred by the supplier. When a serviceman contracts out part
22		or all of the services required in his sale of service, it
23		shall be presumed that the cost price to the serviceman of the
24		property transferred to him or her by his or her subcontractor
25		is equal to 50% of the subcontractor's charges to the
26		serviceman in the absence of proof of the consideration paid by
27		the subcontractor for the purchase of such property.
28		"Selling price" means the consideration for a sale valued
29		in money whether received in money or otherwise, including
30		cash, credits and service, and shall be determined without any
31		deduction on account of the serviceman's cost of the property
32		sold, the cost of materials used, labor or service cost or any
33		other expense whatsoever, but does not include interest or
34		finance charges which appear as separate items on the bill of
35		sale or sales contract nor charges that are added to prices by
36		sellers on account of the seller's duty to collect, from the

1		purchaser, the tax that is imposed by this Act.
2		"Department" means the Department of Revenue.
3		"Person" means any natural individual, firm, partnership,
4		association, joint stock company, joint venture, public or
5		private corporation, limited liability company, and any
6		receiver, executor, trustee, guardian or other representative
7		appointed by order of any court.
8		"Sale of service" means any transaction except:
9		(1) a retail sale of tangible personal property taxable
10		under the Retailers' Occupation Tax Act or under the Use
11		Tax Act.
12		(2) a sale of tangible personal property for the
13		purpose of resale made in compliance with Section 2c of the
14		Retailers' Occupation Tax Act.
15		(3) except as hereinafter provided, a sale or transfer
16		of tangible personal property as an incident to the
17		rendering of service for or by any governmental body, or
18		for or by any corporation, society, association,
19		foundation or institution organized and operated
20		exclusively for charitable, religious or educational
21		purposes or any not-for-profit corporation, society,
22		association, foundation, institution or organization which
23		has no compensated officers or employees and which is
24		organized and operated primarily for the recreation of
25		persons 55 years of age or older. A limited liability
26		company may qualify for the exemption under this paragraph
27		only if the limited liability company is organized and
28		operated exclusively for educational purposes.
29		(4) a sale or transfer of tangible personal property as
30		an incident to the rendering of service for interstate
31		carriers for hire for use as rolling stock moving in
32		interstate commerce or by lessors under a lease of one year
33		or longer, executed or in effect at the time of purchase of
34		personal property, to interstate carriers for hire for use
35		as rolling stock moving in interstate commerce so long as
36		so used by such interstate carriers for hire, and equipment

1		operated by a telecommunications provider, licensed as a
2		common carrier by the Federal Communications Commission,
3		which is permanently installed in or affixed to aircraft
4		moving in interstate commerce.
5		(4a) a sale or transfer of tangible personal property
6		as an incident to the rendering of service for owners,
7		lessors, or shippers of tangible personal property which is
8		utilized by interstate carriers for hire for use as rolling
9		stock moving in interstate commerce so long as so used by
10		interstate carriers for hire, and equipment operated by a
11		telecommunications provider, licensed as a common carrier
12		by the Federal Communications Commission, which is
13		permanently installed in or affixed to aircraft moving in
14		interstate commerce.
15		(4a-5) on and after July 1, 2003, a sale or transfer of
16		a motor vehicle of the second division with a gross vehicle
17		weight in excess of 8,000 pounds as an incident to the
18		rendering of service if that motor vehicle is subject to
19		the commercial distribution fee imposed under Section
20		3-815.1 of the Illinois Vehicle Code. This exemption
21		applies to repair and replacement parts added after the
22		initial purchase of such a motor vehicle if that motor
23		vehicle is used in a manner that would qualify for the
24		rolling stock exemption otherwise provided for in this Act.
25		(5) a sale or transfer of machinery and equipment used
26		primarily in the process of the manufacturing or
27		assembling, either in an existing, an expanded or a new
28		manufacturing facility, of tangible personal property for
29		wholesale or retail sale or lease, whether such sale or
30		lease is made directly by the manufacturer or by some other
31		person, whether the materials used in the process are owned
32		by the manufacturer or some other person, or whether such
33		sale or lease is made apart from or as an incident to the
34		seller's engaging in a service occupation and the
35		applicable tax is a Service Use Tax or Service Occupation
36		Tax, rather than Use Tax or Retailers' Occupation Tax.

1		(5a) the repairing, reconditioning or remodeling, for
2		a common carrier by rail, of tangible personal property
3		which belongs to such carrier for hire, and as to which
4		such carrier receives the physical possession of the
5		repaired, reconditioned or remodeled item of tangible
6		personal property in Illinois, and which such carrier
7		transports, or shares with another common carrier in the
8		transportation of such property, out of Illinois on a
9		standard uniform bill of lading showing the person who
10		repaired, reconditioned or remodeled the property to a
11		destination outside Illinois, for use outside Illinois.
12		(5b) a sale or transfer of tangible personal property
13		which is produced by the seller thereof on special order in
14		such a way as to have made the applicable tax the Service
15		Occupation Tax or the Service Use Tax, rather than the
16		Retailers' Occupation Tax or the Use Tax, for an interstate
17		carrier by rail which receives the physical possession of
18		such property in Illinois, and which transports such
19		property, or shares with another common carrier in the
20		transportation of such property, out of Illinois on a
21		standard uniform bill of lading showing the seller of the
22		property as the shipper or consignor of such property to a
23		destination outside Illinois, for use outside Illinois.
24		(6) until July 1, 2003 and beginning again on July 1,
25		2004, a sale or transfer of distillation machinery and
26		equipment, sold as a unit or kit and assembled or installed
27		by the retailer, which machinery and equipment is certified
28		by the user to be used only for the production of ethyl
29		alcohol that will be used for consumption as motor fuel or
30		as a component of motor fuel for the personal use of such
31		user and not subject to sale or resale.
32		(7) at the election of any serviceman not required to
33		be otherwise registered as a retailer under Section 2a of
34		the Retailers' Occupation Tax Act, made for each fiscal
35		year sales of service in which the aggregate annual cost
36		price of tangible personal property transferred as an

1		incident to the sales of service is less than 35%, or 75%
2		in the case of servicemen transferring prescription drugs
3		or servicemen engaged in graphic arts production, of the
4		aggregate annual total gross receipts from all sales of
5		service. The purchase of such tangible personal property by
6		the serviceman shall be subject to tax under the Retailers'
7		Occupation Tax Act and the Use Tax Act. However, if a
8		primary serviceman who has made the election described in
9		this paragraph subcontracts service work to a secondary
10		serviceman who has also made the election described in this
11		paragraph, the primary serviceman does not incur a Use Tax
12		liability if the secondary serviceman (i) has paid or will
13		pay Use Tax on his or her cost price of any tangible
14		personal property transferred to the primary serviceman
15		and (ii) certifies that fact in writing to the primary
16		serviceman.
17		Tangible personal property transferred incident to the
18		completion of a maintenance agreement is exempt from the tax
19		imposed pursuant to this Act.
20		Exemption (5) also includes machinery and equipment used in
21		the general maintenance or repair of such exempt machinery and
22		equipment or for in-house manufacture of exempt machinery and
23		equipment. For the purposes of exemption (5), each of these
24		terms shall have the following meanings: (1) "manufacturing
25		process" shall mean the production of any article of tangible
26		personal property, whether such article is a finished product
27		or an article for use in the process of manufacturing or
28		assembling a different article of tangible personal property,
29		by procedures commonly regarded as manufacturing, processing,
30		fabricating, or refining which changes some existing material
31		or materials into a material with a different form, use or
32		name. In relation to a recognized integrated business composed
33		of a series of operations which collectively constitute
34		manufacturing, or individually constitute manufacturing
35		operations, the manufacturing process shall be deemed to
36		commence with the first operation or stage of production in the

1		series, and shall not be deemed to end until the completion of
2		the final product in the last operation or stage of production
3		in the series; and further, for purposes of exemption (5),
4		photoprocessing is deemed to be a manufacturing process of
5		tangible personal property for wholesale or retail sale; (2)
6		"assembling process" shall mean the production of any article
7		of tangible personal property, whether such article is a
8		finished product or an article for use in the process of
9		manufacturing or assembling a different article of tangible
10		personal property, by the combination of existing materials in
11		a manner commonly regarded as assembling which results in a
12		material of a different form, use or name; (3) "machinery"
13		shall mean major mechanical machines or major components of
14		such machines contributing to a manufacturing or assembling
15		process; and (4) "equipment" shall include any independent
16		device or tool separate from any machinery but essential to an
17		integrated manufacturing or assembly process; including
18		computers used primarily in a manufacturer's computer assisted
19		design, computer assisted manufacturing (CAD/CAM) system; or
20		any subunit or assembly comprising a component of any machinery
21		or auxiliary, adjunct or attachment parts of machinery, such as
22		tools, dies, jigs, fixtures, patterns and molds; or any parts
23		which require periodic replacement in the course of normal
24		operation; but shall not include hand tools. Equipment includes
25		chemicals or chemicals acting as catalysts but only if the
26		chemicals or chemicals acting as catalysts effect a direct and
27		immediate change upon a product being manufactured or assembled
28		for wholesale or retail sale or lease. The purchaser of such
29		machinery and equipment who has an active resale registration
30		number shall furnish such number to the seller at the time of
31		purchase. The user of such machinery and equipment and tools
32		without an active resale registration number shall prepare a
33		certificate of exemption for each transaction stating facts
34		establishing the exemption for that transaction, which
35		certificate shall be available to the Department for inspection
36		or audit. The Department shall prescribe the form of the

1		certificate.
2		Any informal rulings, opinions or letters issued by the
3		Department in response to an inquiry or request for any opinion
4		from any person regarding the coverage and applicability of
5		exemption (5) to specific devices shall be published,
6		maintained as a public record, and made available for public
7		inspection and copying. If the informal ruling, opinion or
8		letter contains trade secrets or other confidential
9		information, where possible the Department shall delete such
10		information prior to publication. Whenever such informal
11		rulings, opinions, or letters contain any policy of general
12		applicability, the Department shall formulate and adopt such
13		policy as a rule in accordance with the provisions of the
14		Illinois Administrative Procedure Act.
15		On and after July 1, 1987, no entity otherwise eligible
16		under exemption (3) of this Section shall make tax free
17		purchases unless it has an active exemption identification
18		number issued by the Department.
19		The purchase, employment and transfer of such tangible
20		personal property as newsprint and ink for the primary purpose
21		of conveying news (with or without other information) is not a
22		purchase, use or sale of service or of tangible personal
23		property within the meaning of this Act.
24		"Serviceman" means any person who is engaged in the
25		occupation of making sales of service.
26		"Sale at retail" means "sale at retail" as defined in the
27		Retailers' Occupation Tax Act.
28		"Supplier" means any person who makes sales of tangible
29		personal property to servicemen for the purpose of resale as an
30		incident to a sale of service.
31		"Serviceman maintaining a place of business in this State",
32		or any like term, means and includes any serviceman:
33		1. having or maintaining within this State, directly or
34		by a subsidiary, an office, distribution house, sales
35		house, warehouse or other place of business, or any agent
36		or other representative operating within this State under

1		the authority of the serviceman or its subsidiary,
2		irrespective of whether such place of business or agent or
3		other representative is located here permanently or
4		temporarily, or whether such serviceman or subsidiary is
5		licensed to do business in this State;
6		2. soliciting orders for tangible personal property by
7		means of a telecommunication or television shopping system
8		(which utilizes toll free numbers) which is intended by the
9		retailer to be broadcast by cable television or other means
10		of broadcasting, to consumers located in this State;
11		3. pursuant to a contract with a broadcaster or
12		publisher located in this State, soliciting orders for
13		tangible personal property by means of advertising which is
14		disseminated primarily to consumers located in this State
15		and only secondarily to bordering jurisdictions;
16		4. soliciting orders for tangible personal property by
17		mail if the solicitations are substantial and recurring and
18		if the retailer benefits from any banking, financing, debt
19		collection, telecommunication, or marketing activities
20		occurring in this State or benefits from the location in
21		this State of authorized installation, servicing, or
22		repair facilities;
23		5. being owned or controlled by the same interests
24		which own or control any retailer engaging in business in
25		the same or similar line of business in this State;
26		6. having a franchisee or licensee operating under its
27		trade name if the franchisee or licensee is required to
28		collect the tax under this Section;
29		7. pursuant to a contract with a cable television
30		operator located in this State, soliciting orders for
31		tangible personal property by means of advertising which is
32		transmitted or distributed over a cable television system
33		in this State; or
34		8. engaging in activities in Illinois, which
35		activities in the state in which the supply business
36		engaging in such activities is located would constitute

1		maintaining a place of business in that state.
2		(Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
3		eff. 6-20-03; revised 8-21-03.)
4		(35 ILCS 110/2a) (from Ch. 120, par. 439.32a)
5		Sec. 2a. "Pollution control facilities" means any system,
6		method, construction, device or appliance appurtenant thereto
7		used in this State acquired as an incident to the purchase of a
8		service from a serviceman for the primary purpose of
9		eliminating, preventing, or reducing air and water pollution as
10		the term "air pollution" or "water pollution" is defined in the
11		"Environmental Protection Act", enacted by the 76th General
12		Assembly, or for the primary purpose of treating, pretreating,
13		modifying or disposing of any potential solid, liquid or
14		gaseous pollutant which if released without such treatment,
15		pretreatment, modification or disposal might be harmful,
16		detrimental or offensive to human, plant or animal life, or to
17		property.
18		Until July 1, 2003 and beginning again on July 1, 2004, the
19		purchase, employment or transfer of such tangible personal
20		property as pollution control facilities is not a purchase, use
21		or sale of service or of tangible personal property within the
22		meaning of this Act.
23		(Source: P.A. 93-24, eff. 6-20-03.)
24		(35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
25		Sec. 3-5. Exemptions. Use of the following tangible
26		personal property is exempt from the tax imposed by this Act:
27		(1) Personal property purchased from a corporation,
28		society, association, foundation, institution, or
29		organization, other than a limited liability company, that is
30		organized and operated as a not-for-profit service enterprise
31		for the benefit of persons 65 years of age or older if the
32		personal property was not purchased by the enterprise for the
33		purpose of resale by the enterprise.
34		(2) Personal property purchased by a non-profit Illinois

1		county fair association for use in conducting, operating, or
2		promoting the county fair.
3		(3) Personal property purchased by a not-for-profit arts or
4		cultural organization that establishes, by proof required by
5		the Department by rule, that it has received an exemption under
6		Section 501(c)(3) of the Internal Revenue Code and that is
7		organized and operated primarily for the presentation or
8		support of arts or cultural programming, activities, or
9		services. These organizations include, but are not limited to,
10		music and dramatic arts organizations such as symphony
11		orchestras and theatrical groups, arts and cultural service
12		organizations, local arts councils, visual arts organizations,
13		and media arts organizations. On and after the effective date
14		of this amendatory Act of the 92nd General Assembly, however,
15		an entity otherwise eligible for this exemption shall not make
16		tax-free purchases unless it has an active identification
17		number issued by the Department.
18		(4) Legal tender, currency, medallions, or gold or silver
19		coinage issued by the State of Illinois, the government of the
20		United States of America, or the government of any foreign
21		country, and bullion.
22		(5) Until July 1, 2003 and beginning again on July 1, 2004,
23		graphic arts machinery and equipment, including repair and
24		replacement parts, both new and used, and including that
25		manufactured on special order or purchased for lease, certified
26		by the purchaser to be used primarily for graphic arts
27		production. Equipment includes chemicals or chemicals acting
28		as catalysts but only if the chemicals or chemicals acting as
29		catalysts effect a direct and immediate change upon a graphic
30		arts product.
31		(6) Personal property purchased from a teacher-sponsored
32		student organization affiliated with an elementary or
33		secondary school located in Illinois.
34		(7) Farm machinery and equipment, both new and used,
35		including that manufactured on special order, certified by the
36		purchaser to be used primarily for production agriculture or

1		State or federal agricultural programs, including individual
2		replacement parts for the machinery and equipment, including
3		machinery and equipment purchased for lease, and including
4		implements of husbandry defined in Section 1-130 of the
5		Illinois Vehicle Code, farm machinery and agricultural
6		chemical and fertilizer spreaders, and nurse wagons required to
7		be registered under Section 3-809 of the Illinois Vehicle Code,
8		but excluding other motor vehicles required to be registered
9		under the Illinois Vehicle Code. Horticultural polyhouses or
10		hoop houses used for propagating, growing, or overwintering
11		plants shall be considered farm machinery and equipment under
12		this item (7). Agricultural chemical tender tanks and dry boxes
13		shall include units sold separately from a motor vehicle
14		required to be licensed and units sold mounted on a motor
15		vehicle required to be licensed if the selling price of the
16		tender is separately stated.
17		Farm machinery and equipment shall include precision
18		farming equipment that is installed or purchased to be
19		installed on farm machinery and equipment including, but not
20		limited to, tractors, harvesters, sprayers, planters, seeders,
21		or spreaders. Precision farming equipment includes, but is not
22		limited to, soil testing sensors, computers, monitors,
23		software, global positioning and mapping systems, and other
24		such equipment.
25		Farm machinery and equipment also includes computers,
26		sensors, software, and related equipment used primarily in the
27		computer-assisted operation of production agriculture
28		facilities, equipment, and activities such as, but not limited
29		to, the collection, monitoring, and correlation of animal and
30		crop data for the purpose of formulating animal diets and
31		agricultural chemicals. This item (7) is exempt from the
32		provisions of Section 3-75.
33		(8) Fuel and petroleum products sold to or used by an air
34		common carrier, certified by the carrier to be used for
35		consumption, shipment, or storage in the conduct of its
36		business as an air common carrier, for a flight destined for or

1		returning from a location or locations outside the United
2		States without regard to previous or subsequent domestic
3		stopovers.
4		(9) Proceeds of mandatory service charges separately
5		stated on customers' bills for the purchase and consumption of
6		food and beverages acquired as an incident to the purchase of a
7		service from a serviceman, to the extent that the proceeds of
8		the service charge are in fact turned over as tips or as a
9		substitute for tips to the employees who participate directly
10		in preparing, serving, hosting or cleaning up the food or
11		beverage function with respect to which the service charge is
12		imposed.
13		(10) Until July 1, 2003 and beginning again on July 1,
14		2004, oil field exploration, drilling, and production
15		equipment, including (i) rigs and parts of rigs, rotary rigs,
16		cable tool rigs, and workover rigs, (ii) pipe and tubular
17		goods, including casing and drill strings, (iii) pumps and
18		pump-jack units, (iv) storage tanks and flow lines, (v) any
19		individual replacement part for oil field exploration,
20		drilling, and production equipment, and (vi) machinery and
21		equipment purchased for lease; but excluding motor vehicles
22		required to be registered under the Illinois Vehicle Code.
23		(11) Proceeds from the sale of photoprocessing machinery
24		and equipment, including repair and replacement parts, both new
25		and used, including that manufactured on special order,
26		certified by the purchaser to be used primarily for
27		photoprocessing, and including photoprocessing machinery and
28		equipment purchased for lease.
29		(12) Until July 1, 2003 and beginning again on July 1,
30		2004, coal exploration, mining, offhighway hauling,
31		processing, maintenance, and reclamation equipment, including
32		replacement parts and equipment, and including equipment
33		purchased for lease, but excluding motor vehicles required to
34		be registered under the Illinois Vehicle Code.
35		(13) Semen used for artificial insemination of livestock
36		for direct agricultural production.

1		(14) Horses, or interests in horses, registered with and
2		meeting the requirements of any of the Arabian Horse Club
3		Registry of America, Appaloosa Horse Club, American Quarter
4		Horse Association, United States Trotting Association, or
5		Jockey Club, as appropriate, used for purposes of breeding or
6		racing for prizes.
7		(15) Computers and communications equipment utilized for
8		any hospital purpose and equipment used in the diagnosis,
9		analysis, or treatment of hospital patients purchased by a
10		lessor who leases the equipment, under a lease of one year or
11		longer executed or in effect at the time the lessor would
12		otherwise be subject to the tax imposed by this Act, to a
13		hospital that has been issued an active tax exemption
14		identification number by the Department under Section 1g of the
15		Retailers' Occupation Tax Act. If the equipment is leased in a
16		manner that does not qualify for this exemption or is used in
17		any other non-exempt manner, the lessor shall be liable for the
18		tax imposed under this Act or the Use Tax Act, as the case may
19		be, based on the fair market value of the property at the time
20		the non-qualifying use occurs. No lessor shall collect or
21		attempt to collect an amount (however designated) that purports
22		to reimburse that lessor for the tax imposed by this Act or the
23		Use Tax Act, as the case may be, if the tax has not been paid by
24		the lessor. If a lessor improperly collects any such amount
25		from the lessee, the lessee shall have a legal right to claim a
26		refund of that amount from the lessor. If, however, that amount
27		is not refunded to the lessee for any reason, the lessor is
28		liable to pay that amount to the Department.
29		(16) Personal property purchased by a lessor who leases the
30		property, under a lease of one year or longer executed or in
31		effect at the time the lessor would otherwise be subject to the
32		tax imposed by this Act, to a governmental body that has been
33		issued an active tax exemption identification number by the
34		Department under Section 1g of the Retailers' Occupation Tax
35		Act. If the property is leased in a manner that does not
36		qualify for this exemption or is used in any other non-exempt

1		manner, the lessor shall be liable for the tax imposed under
2		this Act or the Use Tax Act, as the case may be, based on the
3		fair market value of the property at the time the
4		non-qualifying use occurs. No lessor shall collect or attempt
5		to collect an amount (however designated) that purports to
6		reimburse that lessor for the tax imposed by this Act or the
7		Use Tax Act, as the case may be, if the tax has not been paid by
8		the lessor. If a lessor improperly collects any such amount
9		from the lessee, the lessee shall have a legal right to claim a
10		refund of that amount from the lessor. If, however, that amount
11		is not refunded to the lessee for any reason, the lessor is
12		liable to pay that amount to the Department.
13		(17) Beginning with taxable years ending on or after
14		December 31, 1995 and ending with taxable years ending on or
15		before December 31, 2004, personal property that is donated for
16		disaster relief to be used in a State or federally declared
17		disaster area in Illinois or bordering Illinois by a
18		manufacturer or retailer that is registered in this State to a
19		corporation, society, association, foundation, or institution
20		that has been issued a sales tax exemption identification
21		number by the Department that assists victims of the disaster
22		who reside within the declared disaster area.
23		(18) Beginning with taxable years ending on or after
24		December 31, 1995 and ending with taxable years ending on or
25		before December 31, 2004, personal property that is used in the
26		performance of infrastructure repairs in this State, including
27		but not limited to municipal roads and streets, access roads,
28		bridges, sidewalks, waste disposal systems, water and sewer
29		line extensions, water distribution and purification
30		facilities, storm water drainage and retention facilities, and
31		sewage treatment facilities, resulting from a State or
32		federally declared disaster in Illinois or bordering Illinois
33		when such repairs are initiated on facilities located in the
34		declared disaster area within 6 months after the disaster.
35		(19) Beginning July 1, 1999, game or game birds purchased
36		at a "game breeding and hunting preserve area" or an "exotic

1		game hunting area" as those terms are used in the Wildlife Code
2		or at a hunting enclosure approved through rules adopted by the
3		Department of Natural Resources. This paragraph is exempt from
4		the provisions of Section 3-75.
5		(20) A motor vehicle, as that term is defined in Section
6		1-146 of the Illinois Vehicle Code, that is donated to a
7		corporation, limited liability company, society, association,
8		foundation, or institution that is determined by the Department
9		to be organized and operated exclusively for educational
10		purposes. For purposes of this exemption, "a corporation,
11		limited liability company, society, association, foundation,
12		or institution organized and operated exclusively for
13		educational purposes" means all tax-supported public schools,
14		private schools that offer systematic instruction in useful
15		branches of learning by methods common to public schools and
16		that compare favorably in their scope and intensity with the
17		course of study presented in tax-supported schools, and
18		vocational or technical schools or institutes organized and
19		operated exclusively to provide a course of study of not less
20		than 6 weeks duration and designed to prepare individuals to
21		follow a trade or to pursue a manual, technical, mechanical,
22		industrial, business, or commercial occupation.
23		(21) Beginning January 1, 2000, personal property,
24		including food, purchased through fundraising events for the
25		benefit of a public or private elementary or secondary school,
26		a group of those schools, or one or more school districts if
27		the events are sponsored by an entity recognized by the school
28		district that consists primarily of volunteers and includes
29		parents and teachers of the school children. This paragraph
30		does not apply to fundraising events (i) for the benefit of
31		private home instruction or (ii) for which the fundraising
32		entity purchases the personal property sold at the events from
33		another individual or entity that sold the property for the
34		purpose of resale by the fundraising entity and that profits
35		from the sale to the fundraising entity. This paragraph is
36		exempt from the provisions of Section 3-75.

1		(22) Beginning January 1, 2000 and through December 31,
2		2001, new or used automatic vending machines that prepare and
3		serve hot food and beverages, including coffee, soup, and other
4		items, and replacement parts for these machines. Beginning
5		January 1, 2002 and through June 30, 2003, and beginning again
6		on July 1, 2004, machines and parts for machines used in
7		commercial, coin-operated amusement and vending business if a
8		use or occupation tax is paid on the gross receipts derived
9		from the use of the commercial, coin-operated amusement and
10		vending machines. This paragraph is exempt from the provisions
11		of Section 3-75.
12		(23) Food for human consumption that is to be consumed off
13		the premises where it is sold (other than alcoholic beverages,
14		soft drinks, and food that has been prepared for immediate
15		consumption) and prescription and nonprescription medicines,
16		drugs, medical appliances, and insulin, urine testing
17		materials, syringes, and needles used by diabetics, for human
18		use, when purchased for use by a person receiving medical
19		assistance under Article 5 of the Illinois Public Aid Code who
20		resides in a licensed long-term care facility, as defined in
21		the Nursing Home Care Act.
22		(24) Beginning on the effective date of this amendatory Act
23		of the 92nd General Assembly, computers and communications
24		equipment utilized for any hospital purpose and equipment used
25		in the diagnosis, analysis, or treatment of hospital patients
26		purchased by a lessor who leases the equipment, under a lease
27		of one year or longer executed or in effect at the time the
28		lessor would otherwise be subject to the tax imposed by this
29		Act, to a hospital that has been issued an active tax exemption
30		identification number by the Department under Section 1g of the
31		Retailers' Occupation Tax Act. If the equipment is leased in a
32		manner that does not qualify for this exemption or is used in
33		any other nonexempt manner, the lessor shall be liable for the
34		tax imposed under this Act or the Use Tax Act, as the case may
35		be, based on the fair market value of the property at the time
36		the nonqualifying use occurs. No lessor shall collect or

1		attempt to collect an amount (however designated) that purports
2		to reimburse that lessor for the tax imposed by this Act or the
3		Use Tax Act, as the case may be, if the tax has not been paid by
4		the lessor. If a lessor improperly collects any such amount
5		from the lessee, the lessee shall have a legal right to claim a
6		refund of that amount from the lessor. If, however, that amount
7		is not refunded to the lessee for any reason, the lessor is
8		liable to pay that amount to the Department. This paragraph is
9		exempt from the provisions of Section 3-75.
10		(25) Beginning on the effective date of this amendatory Act
11		of the 92nd General Assembly, personal property purchased by a
12		lessor who leases the property, under a lease of one year or
13		longer executed or in effect at the time the lessor would
14		otherwise be subject to the tax imposed by this Act, to a
15		governmental body that has been issued an active tax exemption
16		identification number by the Department under Section 1g of the
17		Retailers' Occupation Tax Act. If the property is leased in a
18		manner that does not qualify for this exemption or is used in
19		any other nonexempt manner, the lessor shall be liable for the
20		tax imposed under this Act or the Use Tax Act, as the case may
21		be, based on the fair market value of the property at the time
22		the nonqualifying use occurs. No lessor shall collect or
23		attempt to collect an amount (however designated) that purports
24		to reimburse that lessor for the tax imposed by this Act or the
25		Use Tax Act, as the case may be, if the tax has not been paid by
26		the lessor. If a lessor improperly collects any such amount
27		from the lessee, the lessee shall have a legal right to claim a
28		refund of that amount from the lessor. If, however, that amount
29		is not refunded to the lessee for any reason, the lessor is
30		liable to pay that amount to the Department. This paragraph is
31		exempt from the provisions of Section 3-75.
32		(Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
33		eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
34		92-651, eff. 7-11-02; 93-24, eff. 6-20-03.)
35		(35 ILCS 110/3-7)

1		Sec. 3-7. Aggregate manufacturing exemption. Through June
2		30, 2003 and beginning again on July 1, 2004, the use of
3		aggregate exploration, mining, offhighway hauling, processing,
4		maintenance, and reclamation equipment, including replacement
5		parts and equipment, and including equipment purchased for
6		lease, but excluding motor vehicles required to be registered
7		under the Illinois Vehicle Code, is exempt from the tax imposed
8		by this Act.
9		(Source: P.A. 92-603, eff. 6-28-02; 93-24, eff. 6-20-03.)
10		(35 ILCS 110/3-70)
11		Sec. 3-70. Manufacturer's Purchase Credit. For purchases
12		of machinery and equipment made on and after January 1, 1995
13		and through June 30, 2003, or made on or after July 1, 2004, a
14		purchaser of manufacturing machinery and equipment that
15		qualifies for the exemption provided by Section 2 of this Act
16		earns a credit in an amount equal to a fixed percentage of the
17		tax which would have been incurred under this Act on those
18		purchases. For purchases of graphic arts machinery and
19		equipment made on or after July 1, 1996 and through June 30,
20		2003, or made on or after July 1, 2004, a purchase of graphic
21		arts machinery and equipment that qualifies for the exemption
22		provided by paragraph (5) of Section 3-5 of this Act earns a
23		credit in an amount equal to a fixed percentage of the tax that
24		would have been incurred under this Act on those purchases. The
25		credit earned for the purchase of manufacturing machinery and
26		equipment and graphic arts machinery and equipment shall be
27		referred to as the Manufacturer's Purchase Credit. A graphic
28		arts producer is a person engaged in graphic arts production as
29		defined in Section 3-30 of the Service Occupation Tax Act.
30		Beginning July 1, 1996, all references in this Section to
31		manufacturers or manufacturing shall also refer to graphic arts
32		producers or graphic arts production.
33		The amount of credit shall be a percentage of the tax that
34		would have been incurred on the purchase of the manufacturing
35		machinery and equipment or graphic arts machinery and equipment

1		if the exemptions provided by Section 2 or paragraph (5) of
2		Section 3-5 of this Act had not been applicable.
3		All purchases prior to October 1, 2003 of manufacturing
4		machinery and equipment and graphic arts machinery and
5		equipment that qualify for the exemptions provided by paragraph
6		(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
7		qualify for the credit without regard to whether the serviceman
8		elected, or could have elected, under paragraph (7) of Section
9		2 of this Act to exclude the transaction from this Act. If the
10		serviceman's billing to the service customer separately states
11		a selling price for the exempt manufacturing machinery or
12		equipment or the exempt graphic arts machinery and equipment,
13		the credit shall be calculated, as otherwise provided herein,
14		based on that selling price. If the serviceman's billing does
15		not separately state a selling price for the exempt
16		manufacturing machinery and equipment or the exempt graphic
17		arts machinery and equipment, the credit shall be calculated,
18		as otherwise provided herein, based on 50% of the entire
19		billing. If the serviceman contracts to design, develop, and
20		produce special order manufacturing machinery and equipment or
21		special order graphic arts machinery and equipment, and the
22		billing does not separately state a selling price for such
23		special order machinery and equipment, the credit shall be
24		calculated, as otherwise provided herein, based on 50% of the
25		entire billing. The provisions of this paragraph are effective
26		for purchases made on or after January 1, 1995.
27		The percentage shall be as follows:
28		(1) 15% for purchases made on or before June 30, 1995.
29		(2) 25% for purchases made after June 30, 1995, and on
30		or before June 30, 1996.
31		(3) 40% for purchases made after June 30, 1996, and on
32		or before June 30, 1997.
33		(4) 50% for purchases made on or after July 1, 1997.
34		A purchaser of production related tangible personal
35		property desiring to use the Manufacturer's Purchase Credit
36		shall certify to the seller prior to October 1, 2003 that the

1		purchaser is satisfying all or part of the liability under the
2		Use Tax Act or the Service Use Tax Act that is due on the
3		purchase of the production related tangible personal property
4		by use of a Manufacturer's Purchase Credit. The Manufacturer's
5		Purchase Credit certification must be dated and shall include
6		the name and address of the purchaser, the purchaser's
7		registration number, if registered, the credit being applied,
8		and a statement that the State Use Tax or Service Use Tax
9		liability is being satisfied with the manufacturer's or graphic
10		arts producer's accumulated purchase credit. Certification may
11		be incorporated into the manufacturer's or graphic arts
12		producer's purchase order. Manufacturer's Purchase Credit
13		certification provided by the manufacturer or graphic arts
14		producer prior to October 1, 2003 may be used to satisfy the
15		retailer's or serviceman's liability under the Retailers'
16		Occupation Tax Act or Service Occupation Tax Act for the credit
17		claimed, not to exceed 6.25% of the receipts subject to tax
18		from a qualifying purchase, but only if the retailer or
19		serviceman reports the Manufacturer's Purchase Credit claimed
20		as required by the Department. A Manufacturer's Purchase Credit
21		reported on any original or amended return filed under this Act
22		after October 20, 2003 shall be disallowed. The Manufacturer's
23		Purchase Credit earned by purchase of exempt manufacturing
24		machinery and equipment or graphic arts machinery and equipment
25		is a non-transferable credit. A manufacturer or graphic arts
26		producer that enters into a contract involving the installation
27		of tangible personal property into real estate within a
28		manufacturing or graphic arts production facility, prior to
29		October 1, 2003, may authorize a construction contractor to
30		utilize credit accumulated by the manufacturer or graphic arts
31		producer to purchase the tangible personal property. A
32		manufacturer or graphic arts producer intending to use
33		accumulated credit to purchase such tangible personal property
34		shall execute a written contract authorizing the contractor to
35		utilize a specified dollar amount of credit. The contractor
36		shall furnish, prior to October 1, 2003, the supplier with the

1		manufacturer's or graphic arts producer's name, registration
2		or resale number, and a statement that a specific amount of the
3		Use Tax or Service Use Tax liability, not to exceed 6.25% of
4		the selling price, is being satisfied with the credit. The
5		manufacturer or graphic arts producer shall remain liable to
6		timely report all information required by the annual Report of
7		Manufacturer's Purchase Credit Used for credit utilized by a
8		construction contractor.
9		The Manufacturer's Purchase Credit may be used to satisfy
10		liability under the Use Tax Act or the Service Use Tax Act due
11		on the purchase of production related tangible personal
12		property (including purchases by a manufacturer, by a graphic
13		arts producer, or a lessor who rents or leases the use of the
14		property to a manufacturer or graphic arts producer) that does
15		not otherwise qualify for the manufacturing machinery and
16		equipment exemption or the graphic arts machinery and equipment
17		exemption. "Production related tangible personal property"
18		means (i) all tangible personal property used or consumed by
19		the purchaser in a manufacturing facility in which a
20		manufacturing process described in Section 2-45 of the
21		Retailers' Occupation Tax Act takes place, including tangible
22		personal property purchased for incorporation into real estate
23		within a manufacturing facility and including, but not limited
24		to, tangible personal property used or consumed in activities
25		such as pre-production material handling, receiving, quality
26		control, inventory control, storage, staging, and packaging
27		for shipping and transportation purposes; (ii) all tangible
28		personal property used or consumed by the purchaser in a
29		graphic arts facility in which graphic arts production as
30		described in Section 2-30 of the Retailers' Occupation Tax Act
31		takes place, including tangible personal property purchased
32		for incorporation into real estate within a graphic arts
33		facility and including, but not limited to, all tangible
34		personal property used or consumed in activities such as
35		graphic arts preliminary or pre-press production,
36		pre-production material handling, receiving, quality control,

1		inventory control, storage, staging, sorting, labeling,
2		mailing, tying, wrapping, and packaging; and (iii) all tangible
3		personal property used or consumed by the purchaser for
4		research and development. "Production related tangible
5		personal property" does not include (i) tangible personal
6		property used, within or without a manufacturing or graphic
7		arts facility, in sales, purchasing, accounting, fiscal
8		management, marketing, personnel recruitment or selection, or
9		landscaping or (ii) tangible personal property required to be
10		titled or registered with a department, agency, or unit of
11		federal, state, or local government. The Manufacturer's
12		Purchase Credit may be used, prior to October 1, 2003, to
13		satisfy the tax arising either from the purchase of machinery
14		and equipment on or after January 1, 1995 for which the
15		manufacturing machinery and equipment exemption provided by
16		Section 2 of this Act was erroneously claimed, or the purchase
17		of machinery and equipment on or after July 1, 1996 for which
18		the exemption provided by paragraph (5) of Section 3-5 of this
19		Act was erroneously claimed, but not in satisfaction of
20		penalty, if any, and interest for failure to pay the tax when
21		due. A purchaser of production related tangible personal
22		property who is required to pay Illinois Use Tax or Service Use
23		Tax on the purchase directly to the Department may, prior to
24		October 1, 2003, utilize the Manufacturer's Purchase Credit in
25		satisfaction of the tax arising from that purchase, but not in
26		satisfaction of penalty and interest. A purchaser who uses the
27		Manufacturer's Purchase Credit to purchase property which is
28		later determined not to be production related tangible personal
29		property may be liable for tax, penalty, and interest on the
30		purchase of that property as of the date of purchase but shall
31		be entitled to use the disallowed Manufacturer's Purchase
32		Credit, so long as it has not expired and is used prior to
33		October 1, 2003, on qualifying purchases of production related
34		tangible personal property not previously subject to credit
35		usage. The Manufacturer's Purchase Credit earned by a
36		manufacturer or graphic arts producer expires the last day of

1		the second calendar year following the calendar year in which
2		the credit arose. No Manufacturer's Purchase Credit may be used
3		after September 30, 2003 regardless of when that credit was
4		earned.
5		A purchaser earning Manufacturer's Purchase Credit shall
6		sign and file an annual Report of Manufacturer's Purchase
7		Credit Earned for each calendar year no later than the last day
8		of the sixth month following the calendar year in which a
9		Manufacturer's Purchase Credit is earned. A Report of
10		Manufacturer's Purchase Credit Earned shall be filed on forms
11		as prescribed or approved by the Department and shall state,
12		for each month of the calendar year: (i) the total purchase
13		price of all purchases of exempt manufacturing or graphic arts
14		machinery on which the credit was earned; (ii) the total State
15		Use Tax or Service Use Tax which would have been due on those
16		items; (iii) the percentage used to calculate the amount of
17		credit earned; (iv) the amount of credit earned; and (v) such
18		other information as the Department may reasonably require. A
19		purchaser earning Manufacturer's Purchase Credit shall
20		maintain records which identify, as to each purchase of
21		manufacturing or graphic arts machinery and equipment on which
22		the purchaser earned Manufacturer's Purchase Credit, the
23		vendor (including, if applicable, either the vendor's
24		registration number or Federal Employer Identification
25		Number), the purchase price, and the amount of Manufacturer's
26		Purchase Credit earned on each purchase.
27		A purchaser using Manufacturer's Purchase Credit shall
28		sign and file an annual Report of Manufacturer's Purchase
29		Credit Used for each calendar year no later than the last day
30		of the sixth month following the calendar year in which a
31		Manufacturer's Purchase Credit is used. A Report of
32		Manufacturer's Purchase Credit Used shall be filed on forms as
33		prescribed or approved by the Department and shall state, for
34		each month of the calendar year: (i) the total purchase price
35		of production related tangible personal property purchased
36		from Illinois suppliers; (ii) the total purchase price of

1		production related tangible personal property purchased from
2		out-of-state suppliers; (iii) the total amount of credit used
3		during such month; and (iv) such other information as the
4		Department may reasonably require. A purchaser using
5		Manufacturer's Purchase Credit shall maintain records that
6		identify, as to each purchase of production related tangible
7		personal property on which the purchaser used Manufacturer's
8		Purchase Credit, the vendor (including, if applicable, either
9		the vendor's registration number or Federal Employer
10		Identification Number), the purchase price, and the amount of
11		Manufacturer's Purchase Credit used on each purchase.
12		No annual report shall be filed before May 1, 1996 or after
13		June 30, 2004. A purchaser that fails to file an annual Report
14		of Manufacturer's Purchase Credit Earned or an annual Report of
15		Manufacturer's Purchase Credit Used by the last day of the
16		sixth month following the end of the calendar year shall
17		forfeit all Manufacturer's Purchase Credit for that calendar
18		year unless it establishes that its failure to file was due to
19		reasonable cause. Manufacturer's Purchase Credit reports may
20		be amended to report and claim credit on qualifying purchases
21		not previously reported at any time before the credit would
22		have expired, unless both the Department and the purchaser have
23		agreed to an extension of the statute of limitations for the
24		issuance of a notice of tax liability as provided in Section 4
25		of the Retailers' Occupation Tax Act. If the time for
26		assessment or refund has been extended, then amended reports
27		for a calendar year may be filed at any time prior to the date
28		to which the statute of limitations for the calendar year or
29		portion thereof has been extended. No Manufacturer's Purchase
30		Credit report filed with the Department for periods prior to
31		January 1, 1995 shall be approved. Manufacturer's Purchase
32		Credit claimed on an amended report may be used, prior to
33		October 1, 2003, to satisfy tax liability under the Use Tax Act
34		or the Service Use Tax Act (i) on qualifying purchases of
35		production related tangible personal property made after the
36		date the amended report is filed or (ii) assessed by the

1		Department on qualifying purchases of production related
2		tangible personal property made in the case of manufacturers on
3		or after January 1, 1995, or in the case of graphic arts
4		producers on or after July 1, 1996.
5		If the purchaser is not the manufacturer or a graphic arts
6		producer, but rents or leases the use of the property to a
7		manufacturer or a graphic arts producer, the purchaser may
8		earn, report, and use Manufacturer's Purchase Credit in the
9		same manner as a manufacturer or graphic arts producer.
10		A purchaser shall not be entitled to any Manufacturer's
11		Purchase Credit for a purchase that is required to be reported
12		and is not timely reported as provided in this Section. A
13		purchaser remains liable for (i) any tax that was satisfied by
14		use of a Manufacturer's Purchase Credit, as of the date of
15		purchase, if that use is not timely reported as required in
16		this Section and (ii) for any applicable penalties and interest
17		for failing to pay the tax when due. No Manufacturer's Purchase
18		Credit may be used after September 30, 2003 to satisfy any tax
19		liability imposed under this Act, including any audit
20		liability.
21		(Source: P.A. 93-24, eff. 6-20-03.)

22		Section 15. The Service Occupation Tax Act is amended by
23		changing Sections 2, 2a, 3-5, 3-7, and 9 as follows:
24		(35 ILCS 115/2) (from Ch. 120, par. 439.102)
25		Sec. 2. "Transfer" means any transfer of the title to
26		property or of the ownership of property whether or not the
27		transferor retains title as security for the payment of amounts
28		due him from the transferee.
29		"Cost Price" means the consideration paid by the serviceman
30		for a purchase valued in money, whether paid in money or
31		otherwise, including cash, credits and services, and shall be
32		determined without any deduction on account of the supplier's
33		cost of the property sold or on account of any other expense
34		incurred by the supplier. When a serviceman contracts out part

1		or all of the services required in his sale of service, it
2		shall be presumed that the cost price to the serviceman of the
3		property transferred to him by his or her subcontractor is
4		equal to 50% of the subcontractor's charges to the serviceman
5		in the absence of proof of the consideration paid by the
6		subcontractor for the purchase of such property.
7		"Department" means the Department of Revenue.
8		"Person" means any natural individual, firm, partnership,
9		association, joint stock company, joint venture, public or
10		private corporation, limited liability company, and any
11		receiver, executor, trustee, guardian or other representative
12		appointed by order of any court.
13		"Sale of Service" means any transaction except:
14		(a) A retail sale of tangible personal property taxable
15		under the Retailers' Occupation Tax Act or under the Use Tax
16		Act.
17		(b) A sale of tangible personal property for the purpose of
18		resale made in compliance with Section 2c of the Retailers'
19		Occupation Tax Act.
20		(c) Except as hereinafter provided, a sale or transfer of
21		tangible personal property as an incident to the rendering of
22		service for or by any governmental body or for or by any
23		corporation, society, association, foundation or institution
24		organized and operated exclusively for charitable, religious
25		or educational purposes or any not-for-profit corporation,
26		society, association, foundation, institution or organization
27		which has no compensated officers or employees and which is
28		organized and operated primarily for the recreation of persons
29		55 years of age or older. A limited liability company may
30		qualify for the exemption under this paragraph only if the
31		limited liability company is organized and operated
32		exclusively for educational purposes.
33		(d) A sale or transfer of tangible personal property as an
34		incident to the rendering of service for interstate carriers
35		for hire for use as rolling stock moving in interstate commerce
36		or lessors under leases of one year or longer, executed or in

1		effect at the time of purchase, to interstate carriers for hire
2		for use as rolling stock moving in interstate commerce, and
3		equipment operated by a telecommunications provider, licensed
4		as a common carrier by the Federal Communications Commission,
5		which is permanently installed in or affixed to aircraft moving
6		in interstate commerce.
7		(d-1) A sale or transfer of tangible personal property as
8		an incident to the rendering of service for owners, lessors or
9		shippers of tangible personal property which is utilized by
10		interstate carriers for hire for use as rolling stock moving in
11		interstate commerce, and equipment operated by a
12		telecommunications provider, licensed as a common carrier by
13		the Federal Communications Commission, which is permanently
14		installed in or affixed to aircraft moving in interstate
15		commerce.
16		(d-1.1) On and after July 1, 2003, a sale or transfer of a
17		motor vehicle of the second division with a gross vehicle
18		weight in excess of 8,000 pounds as an incident to the
19		rendering of service if that motor vehicle is subject to the
20		commercial distribution fee imposed under Section 3-815.1 of
21		the Illinois Vehicle Code. This exemption applies to repair and
22		replacement parts added after the initial purchase of such a
23		motor vehicle if that motor vehicle is used in a manner that
24		would qualify for the rolling stock exemption otherwise
25		provided for in this Act.
26		(d-2) The repairing, reconditioning or remodeling, for a
27		common carrier by rail, of tangible personal property which
28		belongs to such carrier for hire, and as to which such carrier
29		receives the physical possession of the repaired,
30		reconditioned or remodeled item of tangible personal property
31		in Illinois, and which such carrier transports, or shares with
32		another common carrier in the transportation of such property,
33		out of Illinois on a standard uniform bill of lading showing
34		the person who repaired, reconditioned or remodeled the
35		property as the shipper or consignor of such property to a
36		destination outside Illinois, for use outside Illinois.

1		(d-3) A sale or transfer of tangible personal property
2		which is produced by the seller thereof on special order in
3		such a way as to have made the applicable tax the Service
4		Occupation Tax or the Service Use Tax, rather than the
5		Retailers' Occupation Tax or the Use Tax, for an interstate
6		carrier by rail which receives the physical possession of such
7		property in Illinois, and which transports such property, or
8		shares with another common carrier in the transportation of
9		such property, out of Illinois on a standard uniform bill of
10		lading showing the seller of the property as the shipper or
11		consignor of such property to a destination outside Illinois,
12		for use outside Illinois.
13		(d-4) Until January 1, 1997, a sale, by a registered
14		serviceman paying tax under this Act to the Department, of
15		special order printed materials delivered outside Illinois and
16		which are not returned to this State, if delivery is made by
17		the seller or agent of the seller, including an agent who
18		causes the product to be delivered outside Illinois by a common
19		carrier or the U.S. postal service.
20		(e) A sale or transfer of machinery and equipment used
21		primarily in the process of the manufacturing or assembling,
22		either in an existing, an expanded or a new manufacturing
23		facility, of tangible personal property for wholesale or retail
24		sale or lease, whether such sale or lease is made directly by
25		the manufacturer or by some other person, whether the materials
26		used in the process are owned by the manufacturer or some other
27		person, or whether such sale or lease is made apart from or as
28		an incident to the seller's engaging in a service occupation
29		and the applicable tax is a Service Occupation Tax or Service
30		Use Tax, rather than Retailers' Occupation Tax or Use Tax.
31		(f) Until July 1, 2003 and beginning again on July 1, 2004,
32		the sale or transfer of distillation machinery and equipment,
33		sold as a unit or kit and assembled or installed by the
34		retailer, which machinery and equipment is certified by the
35		user to be used only for the production of ethyl alcohol that
36		will be used for consumption as motor fuel or as a component of

1		motor fuel for the personal use of such user and not subject to
2		sale or resale.
3		(g) At the election of any serviceman not required to be
4		otherwise registered as a retailer under Section 2a of the
5		Retailers' Occupation Tax Act, made for each fiscal year sales
6		of service in which the aggregate annual cost price of tangible
7		personal property transferred as an incident to the sales of
8		service is less than 35% (75% in the case of servicemen
9		transferring prescription drugs or servicemen engaged in
10		graphic arts production) of the aggregate annual total gross
11		receipts from all sales of service. The purchase of such
12		tangible personal property by the serviceman shall be subject
13		to tax under the Retailers' Occupation Tax Act and the Use Tax
14		Act. However, if a primary serviceman who has made the election
15		described in this paragraph subcontracts service work to a
16		secondary serviceman who has also made the election described
17		in this paragraph, the primary serviceman does not incur a Use
18		Tax liability if the secondary serviceman (i) has paid or will
19		pay Use Tax on his or her cost price of any tangible personal
20		property transferred to the primary serviceman and (ii)
21		certifies that fact in writing to the primary serviceman.
22		Tangible personal property transferred incident to the
23		completion of a maintenance agreement is exempt from the tax
24		imposed pursuant to this Act.
25		Exemption (e) also includes machinery and equipment used in
26		the general maintenance or repair of such exempt machinery and
27		equipment or for in-house manufacture of exempt machinery and
28		equipment. For the purposes of exemption (e), each of these
29		terms shall have the following meanings: (1) "manufacturing
30		process" shall mean the production of any article of tangible
31		personal property, whether such article is a finished product
32		or an article for use in the process of manufacturing or
33		assembling a different article of tangible personal property,
34		by procedures commonly regarded as manufacturing, processing,
35		fabricating, or refining which changes some existing material
36		or materials into a material with a different form, use or

1		name. In relation to a recognized integrated business composed
2		of a series of operations which collectively constitute
3		manufacturing, or individually constitute manufacturing
4		operations, the manufacturing process shall be deemed to
5		commence with the first operation or stage of production in the
6		series, and shall not be deemed to end until the completion of
7		the final product in the last operation or stage of production
8		in the series; and further for purposes of exemption (e),
9		photoprocessing is deemed to be a manufacturing process of
10		tangible personal property for wholesale or retail sale; (2)
11		"assembling process" shall mean the production of any article
12		of tangible personal property, whether such article is a
13		finished product or an article for use in the process of
14		manufacturing or assembling a different article of tangible
15		personal property, by the combination of existing materials in
16		a manner commonly regarded as assembling which results in a
17		material of a different form, use or name; (3) "machinery"
18		shall mean major mechanical machines or major components of
19		such machines contributing to a manufacturing or assembling
20		process; and (4) "equipment" shall include any independent
21		device or tool separate from any machinery but essential to an
22		integrated manufacturing or assembly process; including
23		computers used primarily in a manufacturer's computer assisted
24		design, computer assisted manufacturing (CAD/CAM) system; or
25		any subunit or assembly comprising a component of any machinery
26		or auxiliary, adjunct or attachment parts of machinery, such as
27		tools, dies, jigs, fixtures, patterns and molds; or any parts
28		which require periodic replacement in the course of normal
29		operation; but shall not include hand tools. Equipment includes
30		chemicals or chemicals acting as catalysts but only if the
31		chemicals or chemicals acting as catalysts effect a direct and
32		immediate change upon a product being manufactured or assembled
33		for wholesale or retail sale or lease. The purchaser of such
34		machinery and equipment who has an active resale registration
35		number shall furnish such number to the seller at the time of
36		purchase. The purchaser of such machinery and equipment and

1		tools without an active resale registration number shall
2		furnish to the seller a certificate of exemption for each
3		transaction stating facts establishing the exemption for that
4		transaction, which certificate shall be available to the
5		Department for inspection or audit.
6		Except as provided in Section 2d of this Act, the rolling
7		stock exemption applies to rolling stock used by an interstate
8		carrier for hire, even just between points in Illinois, if such
9		rolling stock transports, for hire, persons whose journeys or
10		property whose shipments originate or terminate outside
11		Illinois.
12		Any informal rulings, opinions or letters issued by the
13		Department in response to an inquiry or request for any opinion
14		from any person regarding the coverage and applicability of
15		exemption (e) to specific devices shall be published,
16		maintained as a public record, and made available for public
17		inspection and copying. If the informal ruling, opinion or
18		letter contains trade secrets or other confidential
19		information, where possible the Department shall delete such
20		information prior to publication. Whenever such informal
21		rulings, opinions, or letters contain any policy of general
22		applicability, the Department shall formulate and adopt such
23		policy as a rule in accordance with the provisions of the
24		Illinois Administrative Procedure Act.
25		On and after July 1, 1987, no entity otherwise eligible
26		under exemption (c) of this Section shall make tax free
27		purchases unless it has an active exemption identification
28		number issued by the Department.
29		"Serviceman" means any person who is engaged in the
30		occupation of making sales of service.
31		"Sale at Retail" means "sale at retail" as defined in the
32		Retailers' Occupation Tax Act.
33		"Supplier" means any person who makes sales of tangible
34		personal property to servicemen for the purpose of resale as an
35		incident to a sale of service.
36		(Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,

1		eff. 6-20-03; revised 8-21-03.)
2		(35 ILCS 115/2a) (from Ch. 120, par. 439.102a)
3		Sec. 2a. "Pollution control facilities" means any system,
4		method, construction, device or appliance appurtenant thereto
5		transferred by a serviceman for the primary purpose of
6		eliminating, preventing, or reducing air and water pollution as
7		the term "air pollution" or "water pollution" is defined in the
8		"Environmental Protection Act", enacted by the 76th General
9		Assembly, or for the primary purpose of treating, pretreating,
10		modifying or disposing of any potential solid, liquid or
11		gaseous pollutant which if released without such treatment,
12		pretreatment, modification or disposal might be harmful,
13		detrimental or offensive to human, plant or animal life, or to
14		property.
15		Until July 1, 2003 and beginning again on July 1, 2004, the
16		purchase, employment and transfer of such tangible personal
17		property as pollution control facilities shall not be deemed to
18		be a purchase, use or sale of service or of tangible personal
19		property, but shall be deemed to be intangible personal
20		property.
21		(Source: P.A. 93-24, eff. 6-20-03.)
22		(35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
23		Sec. 3-5. Exemptions. The following tangible personal
24		property is exempt from the tax imposed by this Act:
25		(1) Personal property sold by a corporation, society,
26		association, foundation, institution, or organization, other
27		than a limited liability company, that is organized and
28		operated as a not-for-profit service enterprise for the benefit
29		of persons 65 years of age or older if the personal property
30		was not purchased by the enterprise for the purpose of resale
31		by the enterprise.
32		(2) Personal property purchased by a not-for-profit
33		Illinois county fair association for use in conducting,
34		operating, or promoting the county fair.

1		(3) Personal property purchased by any not-for-profit arts
2		or cultural organization that establishes, by proof required by
3		the Department by rule, that it has received an exemption under
4		Section 501(c)(3) of the Internal Revenue Code and that is
5		organized and operated primarily for the presentation or
6		support of arts or cultural programming, activities, or
7		services. These organizations include, but are not limited to,
8		music and dramatic arts organizations such as symphony
9		orchestras and theatrical groups, arts and cultural service
10		organizations, local arts councils, visual arts organizations,
11		and media arts organizations. On and after the effective date
12		of this amendatory Act of the 92nd General Assembly, however,
13		an entity otherwise eligible for this exemption shall not make
14		tax-free purchases unless it has an active identification
15		number issued by the Department.
16		(4) Legal tender, currency, medallions, or gold or silver
17		coinage issued by the State of Illinois, the government of the
18		United States of America, or the government of any foreign
19		country, and bullion.
20		(5) Until July 1, 2003 and beginning again on July 1, 2004,
21		graphic arts machinery and equipment, including repair and
22		replacement parts, both new and used, and including that
23		manufactured on special order or purchased for lease, certified
24		by the purchaser to be used primarily for graphic arts
25		production. Equipment includes chemicals or chemicals acting
26		as catalysts but only if the chemicals or chemicals acting as
27		catalysts effect a direct and immediate change upon a graphic
28		arts product.
29		(6) Personal property sold by a teacher-sponsored student
30		organization affiliated with an elementary or secondary school
31		located in Illinois.
32		(7) Farm machinery and equipment, both new and used,
33		including that manufactured on special order, certified by the
34		purchaser to be used primarily for production agriculture or
35		State or federal agricultural programs, including individual
36		replacement parts for the machinery and equipment, including

1		machinery and equipment purchased for lease, and including
2		implements of husbandry defined in Section 1-130 of the
3		Illinois Vehicle Code, farm machinery and agricultural
4		chemical and fertilizer spreaders, and nurse wagons required to
5		be registered under Section 3-809 of the Illinois Vehicle Code,
6		but excluding other motor vehicles required to be registered
7		under the Illinois Vehicle Code. Horticultural polyhouses or
8		hoop houses used for propagating, growing, or overwintering
9		plants shall be considered farm machinery and equipment under
10		this item (7). Agricultural chemical tender tanks and dry boxes
11		shall include units sold separately from a motor vehicle
12		required to be licensed and units sold mounted on a motor
13		vehicle required to be licensed if the selling price of the
14		tender is separately stated.
15		Farm machinery and equipment shall include precision
16		farming equipment that is installed or purchased to be
17		installed on farm machinery and equipment including, but not
18		limited to, tractors, harvesters, sprayers, planters, seeders,
19		or spreaders. Precision farming equipment includes, but is not
20		limited to, soil testing sensors, computers, monitors,
21		software, global positioning and mapping systems, and other
22		such equipment.
23		Farm machinery and equipment also includes computers,
24		sensors, software, and related equipment used primarily in the
25		computer-assisted operation of production agriculture
26		facilities, equipment, and activities such as, but not limited
27		to, the collection, monitoring, and correlation of animal and
28		crop data for the purpose of formulating animal diets and
29		agricultural chemicals. This item (7) is exempt from the
30		provisions of Section 3-55.
31		(8) Fuel and petroleum products sold to or used by an air
32		common carrier, certified by the carrier to be used for
33		consumption, shipment, or storage in the conduct of its
34		business as an air common carrier, for a flight destined for or
35		returning from a location or locations outside the United
36		States without regard to previous or subsequent domestic

1		stopovers.
2		(9) Proceeds of mandatory service charges separately
3		stated on customers' bills for the purchase and consumption of
4		food and beverages, to the extent that the proceeds of the
5		service charge are in fact turned over as tips or as a
6		substitute for tips to the employees who participate directly
7		in preparing, serving, hosting or cleaning up the food or
8		beverage function with respect to which the service charge is
9		imposed.
10		(10) Until July 1, 2003 and beginning again on July 1,
11		2004, oil field exploration, drilling, and production
12		equipment, including (i) rigs and parts of rigs, rotary rigs,
13		cable tool rigs, and workover rigs, (ii) pipe and tubular
14		goods, including casing and drill strings, (iii) pumps and
15		pump-jack units, (iv) storage tanks and flow lines, (v) any
16		individual replacement part for oil field exploration,
17		drilling, and production equipment, and (vi) machinery and
18		equipment purchased for lease; but excluding motor vehicles
19		required to be registered under the Illinois Vehicle Code.
20		(11) Photoprocessing machinery and equipment, including
21		repair and replacement parts, both new and used, including that
22		manufactured on special order, certified by the purchaser to be
23		used primarily for photoprocessing, and including
24		photoprocessing machinery and equipment purchased for lease.
25		(12) Until July 1, 2003 and beginning again on July 1,
26		2004, coal exploration, mining, offhighway hauling,
27		processing, maintenance, and reclamation equipment, including
28		replacement parts and equipment, and including equipment
29		purchased for lease, but excluding motor vehicles required to
30		be registered under the Illinois Vehicle Code.
31		(13) Food for human consumption that is to be consumed off
32		the premises where it is sold (other than alcoholic beverages,
33		soft drinks and food that has been prepared for immediate
34		consumption) and prescription and non-prescription medicines,
35		drugs, medical appliances, and insulin, urine testing
36		materials, syringes, and needles used by diabetics, for human

1		use, when purchased for use by a person receiving medical
2		assistance under Article 5 of the Illinois Public Aid Code who
3		resides in a licensed long-term care facility, as defined in
4		the Nursing Home Care Act.
5		(14) Semen used for artificial insemination of livestock
6		for direct agricultural production.
7		(15) Horses, or interests in horses, registered with and
8		meeting the requirements of any of the Arabian Horse Club
9		Registry of America, Appaloosa Horse Club, American Quarter
10		Horse Association, United States Trotting Association, or
11		Jockey Club, as appropriate, used for purposes of breeding or
12		racing for prizes.
13		(16) Computers and communications equipment utilized for
14		any hospital purpose and equipment used in the diagnosis,
15		analysis, or treatment of hospital patients sold to a lessor
16		who leases the equipment, under a lease of one year or longer
17		executed or in effect at the time of the purchase, to a
18		hospital that has been issued an active tax exemption
19		identification number by the Department under Section 1g of the
20		Retailers' Occupation Tax Act.
21		(17) Personal property sold to a lessor who leases the
22		property, under a lease of one year or longer executed or in
23		effect at the time of the purchase, to a governmental body that
24		has been issued an active tax exemption identification number
25		by the Department under Section 1g of the Retailers' Occupation
26		Tax Act.
27		(18) Beginning with taxable years ending on or after
28		December 31, 1995 and ending with taxable years ending on or
29		before December 31, 2004, personal property that is donated for
30		disaster relief to be used in a State or federally declared
31		disaster area in Illinois or bordering Illinois by a
32		manufacturer or retailer that is registered in this State to a
33		corporation, society, association, foundation, or institution
34		that has been issued a sales tax exemption identification
35		number by the Department that assists victims of the disaster
36		who reside within the declared disaster area.

1		(19) Beginning with taxable years ending on or after
2		December 31, 1995 and ending with taxable years ending on or
3		before December 31, 2004, personal property that is used in the
4		performance of infrastructure repairs in this State, including
5		but not limited to municipal roads and streets, access roads,
6		bridges, sidewalks, waste disposal systems, water and sewer
7		line extensions, water distribution and purification
8		facilities, storm water drainage and retention facilities, and
9		sewage treatment facilities, resulting from a State or
10		federally declared disaster in Illinois or bordering Illinois
11		when such repairs are initiated on facilities located in the
12		declared disaster area within 6 months after the disaster.
13		(20) Beginning July 1, 1999, game or game birds sold at a
14		"game breeding and hunting preserve area" or an "exotic game
15		hunting area" as those terms are used in the Wildlife Code or
16		at a hunting enclosure approved through rules adopted by the
17		Department of Natural Resources. This paragraph is exempt from
18		the provisions of Section 3-55.
19		(21) A motor vehicle, as that term is defined in Section
20		1-146 of the Illinois Vehicle Code, that is donated to a
21		corporation, limited liability company, society, association,
22		foundation, or institution that is determined by the Department
23		to be organized and operated exclusively for educational
24		purposes. For purposes of this exemption, "a corporation,
25		limited liability company, society, association, foundation,
26		or institution organized and operated exclusively for
27		educational purposes" means all tax-supported public schools,
28		private schools that offer systematic instruction in useful
29		branches of learning by methods common to public schools and
30		that compare favorably in their scope and intensity with the
31		course of study presented in tax-supported schools, and
32		vocational or technical schools or institutes organized and
33		operated exclusively to provide a course of study of not less
34		than 6 weeks duration and designed to prepare individuals to
35		follow a trade or to pursue a manual, technical, mechanical,
36		industrial, business, or commercial occupation.

1		(22) Beginning January 1, 2000, personal property,
2		including food, purchased through fundraising events for the
3		benefit of a public or private elementary or secondary school,
4		a group of those schools, or one or more school districts if
5		the events are sponsored by an entity recognized by the school
6		district that consists primarily of volunteers and includes
7		parents and teachers of the school children. This paragraph
8		does not apply to fundraising events (i) for the benefit of
9		private home instruction or (ii) for which the fundraising
10		entity purchases the personal property sold at the events from
11		another individual or entity that sold the property for the
12		purpose of resale by the fundraising entity and that profits
13		from the sale to the fundraising entity. This paragraph is
14		exempt from the provisions of Section 3-55.
15		(23) Beginning January 1, 2000 and through December 31,
16		2001, new or used automatic vending machines that prepare and
17		serve hot food and beverages, including coffee, soup, and other
18		items, and replacement parts for these machines. Beginning
19		January 1, 2002 and through June 30, 2003, and beginning again
20		on July 1, 2004, machines and parts for machines used in
21		commercial, coin-operated amusement and vending business if a
22		use or occupation tax is paid on the gross receipts derived
23		from the use of the commercial, coin-operated amusement and
24		vending machines. This paragraph is exempt from the provisions
25		of Section 3-55.
26		(24) Beginning on the effective date of this amendatory Act
27		of the 92nd General Assembly, computers and communications
28		equipment utilized for any hospital purpose and equipment used
29		in the diagnosis, analysis, or treatment of hospital patients
30		sold to a lessor who leases the equipment, under a lease of one
31		year or longer executed or in effect at the time of the
32		purchase, to a hospital that has been issued an active tax
33		exemption identification number by the Department under
34		Section 1g of the Retailers' Occupation Tax Act. This paragraph
35		is exempt from the provisions of Section 3-55.
36		(25) Beginning on the effective date of this amendatory Act

1		of the 92nd General Assembly, personal property sold to a
2		lessor who leases the property, under a lease of one year or
3		longer executed or in effect at the time of the purchase, to a
4		governmental body that has been issued an active tax exemption
5		identification number by the Department under Section 1g of the
6		Retailers' Occupation Tax Act. This paragraph is exempt from
7		the provisions of Section 3-55.
8		(26) Beginning on January 1, 2002, tangible personal
9		property purchased from an Illinois retailer by a taxpayer
10		engaged in centralized purchasing activities in Illinois who
11		will, upon receipt of the property in Illinois, temporarily
12		store the property in Illinois (i) for the purpose of
13		subsequently transporting it outside this State for use or
14		consumption thereafter solely outside this State or (ii) for
15		the purpose of being processed, fabricated, or manufactured
16		into, attached to, or incorporated into other tangible personal
17		property to be transported outside this State and thereafter
18		used or consumed solely outside this State. The Director of
19		Revenue shall, pursuant to rules adopted in accordance with the
20		Illinois Administrative Procedure Act, issue a permit to any
21		taxpayer in good standing with the Department who is eligible
22		for the exemption under this paragraph (26). The permit issued
23		under this paragraph (26) shall authorize the holder, to the
24		extent and in the manner specified in the rules adopted under
25		this Act, to purchase tangible personal property from a
26		retailer exempt from the taxes imposed by this Act. Taxpayers
27		shall maintain all necessary books and records to substantiate
28		the use and consumption of all such tangible personal property
29		outside of the State of Illinois.
30		(Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
31		eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
32		92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 93-24, eff.
33		6-20-03.)
34		(35 ILCS 115/3-7)
35		Sec. 3-7. Aggregate manufacturing exemption. Through June

1		30, 2003 and beginning again on July 1, 2004, aggregate
2		exploration, mining, offhighway hauling, processing,
3		maintenance, and reclamation equipment, including replacement
4		parts and equipment, and including equipment purchased for
5		lease, but excluding motor vehicles required to be registered
6		under the Illinois Vehicle Code, is exempt from the tax imposed
7		by this Act.
8		(Source: P.A. 92-603, eff. 6-28-02; 93-24, eff. 6-20-03.)
9		(35 ILCS 115/9) (from Ch. 120, par. 439.109)
10		Sec. 9. Each serviceman required or authorized to collect
11		the tax herein imposed shall pay to the Department the amount
12		of such tax at the time when he is required to file his return
13		for the period during which such tax was collectible, less a
14		discount of 2.1% prior to January 1, 1990, and 1.75% on and
15		after January 1, 1990, or $5 per calendar year, whichever is
16		greater, which is allowed to reimburse the serviceman for
17		expenses incurred in collecting the tax, keeping records,
18		preparing and filing returns, remitting the tax and supplying
19		data to the Department on request.
20		Where such tangible personal property is sold under a
21		conditional sales contract, or under any other form of sale
22		wherein the payment of the principal sum, or a part thereof, is
23		extended beyond the close of the period for which the return is
24		filed, the serviceman, in collecting the tax may collect, for
25		each tax return period, only the tax applicable to the part of
26		the selling price actually received during such tax return
27		period.
28		Except as provided hereinafter in this Section, on or
29		before the twentieth day of each calendar month, such
30		serviceman shall file a return for the preceding calendar month
31		in accordance with reasonable rules and regulations to be
32		promulgated by the Department of Revenue. Such return shall be
33		filed on a form prescribed by the Department and shall contain
34		such information as the Department may reasonably require.
35		The Department may require returns to be filed on a

1		quarterly basis. If so required, a return for each calendar
2		quarter shall be filed on or before the twentieth day of the
3		calendar month following the end of such calendar quarter. The
4		taxpayer shall also file a return with the Department for each
5		of the first two months of each calendar quarter, on or before
6		the twentieth day of the following calendar month, stating:
7		1. The name of the seller;
8		2. The address of the principal place of business from
9		which he engages in business as a serviceman in this State;
10		3. The total amount of taxable receipts received by him
11		during the preceding calendar month, including receipts
12		from charge and time sales, but less all deductions allowed
13		by law;
14		4. The amount of credit provided in Section 2d of this
15		Act;
16		5. The amount of tax due;
17		5-5. The signature of the taxpayer; and
18		6. Such other reasonable information as the Department
19		may require.
20		If a taxpayer fails to sign a return within 30 days after
21		the proper notice and demand for signature by the Department,
22		the return shall be considered valid and any amount shown to be
23		due on the return shall be deemed assessed.
24		A Prior to October 1, 2003, a serviceman may accept a
25		Manufacturer's Purchase Credit certification from a purchaser
26		in satisfaction of Service Use Tax as provided in Section 3-70
27		of the Service Use Tax Act if the purchaser provides the
28		appropriate documentation as required by Section 3-70 of the
29		Service Use Tax Act. A Manufacturer's Purchase Credit
30		certification, accepted prior to October 1, 2003 by a
31		serviceman as provided in Section 3-70 of the Service Use Tax
32		Act, may be used by that serviceman to satisfy Service
33		Occupation Tax liability in the amount claimed in the
34		certification, not to exceed 6.25% of the receipts subject to
35		tax from a qualifying purchase. A Manufacturer's Purchase
36		Credit reported on any original or amended return filed under

1		this Act after October 20, 2003 shall be disallowed. No
2		Manufacturer's Purchase Credit may be used after September 30,
3		2003 to satisfy any tax liability imposed under this Act,
4		including any audit liability.
5		If the serviceman's average monthly tax liability to the
6		Department does not exceed $200, the Department may authorize
7		his returns to be filed on a quarter annual basis, with the
8		return for January, February and March of a given year being
9		due by April 20 of such year; with the return for April, May
10		and June of a given year being due by July 20 of such year; with
11		the return for July, August and September of a given year being
12		due by October 20 of such year, and with the return for
13		October, November and December of a given year being due by
14		January 20 of the following year.
15		If the serviceman's average monthly tax liability to the
16		Department does not exceed $50, the Department may authorize
17		his returns to be filed on an annual basis, with the return for
18		a given year being due by January 20 of the following year.
19		Such quarter annual and annual returns, as to form and
20		substance, shall be subject to the same requirements as monthly
21		returns.
22		Notwithstanding any other provision in this Act concerning
23		the time within which a serviceman may file his return, in the
24		case of any serviceman who ceases to engage in a kind of
25		business which makes him responsible for filing returns under
26		this Act, such serviceman shall file a final return under this
27		Act with the Department not more than 1 month after
28		discontinuing such business.
29		Beginning October 1, 1993, a taxpayer who has an average
30		monthly tax liability of $150,000 or more shall make all
31		payments required by rules of the Department by electronic
32		funds transfer. Beginning October 1, 1994, a taxpayer who has
33		an average monthly tax liability of $100,000 or more shall make
34		all payments required by rules of the Department by electronic
35		funds transfer. Beginning October 1, 1995, a taxpayer who has
36		an average monthly tax liability of $50,000 or more shall make

1		all payments required by rules of the Department by electronic
2		funds transfer. Beginning October 1, 2000, a taxpayer who has
3		an annual tax liability of $200,000 or more shall make all
4		payments required by rules of the Department by electronic
5		funds transfer. The term "annual tax liability" shall be the
6		sum of the taxpayer's liabilities under this Act, and under all
7		other State and local occupation and use tax laws administered
8		by the Department, for the immediately preceding calendar year.
9		The term "average monthly tax liability" means the sum of the
10		taxpayer's liabilities under this Act, and under all other
11		State and local occupation and use tax laws administered by the
12		Department, for the immediately preceding calendar year
13		divided by 12. Beginning on October 1, 2002, a taxpayer who has
14		a tax liability in the amount set forth in subsection (b) of
15		Section 2505-210 of the Department of Revenue Law shall make
16		all payments required by rules of the Department by electronic
17		funds transfer.
18		Before August 1 of each year beginning in 1993, the
19		Department shall notify all taxpayers required to make payments
20		by electronic funds transfer. All taxpayers required to make
21		payments by electronic funds transfer shall make those payments
22		for a minimum of one year beginning on October 1.
23		Any taxpayer not required to make payments by electronic
24		funds transfer may make payments by electronic funds transfer
25		with the permission of the Department.
26		All taxpayers required to make payment by electronic funds
27		transfer and any taxpayers authorized to voluntarily make
28		payments by electronic funds transfer shall make those payments
29		in the manner authorized by the Department.
30		The Department shall adopt such rules as are necessary to
31		effectuate a program of electronic funds transfer and the
32		requirements of this Section.
33		Where a serviceman collects the tax with respect to the
34		selling price of tangible personal property which he sells and
35		the purchaser thereafter returns such tangible personal
36		property and the serviceman refunds the selling price thereof

1		to the purchaser, such serviceman shall also refund, to the
2		purchaser, the tax so collected from the purchaser. When filing
3		his return for the period in which he refunds such tax to the
4		purchaser, the serviceman may deduct the amount of the tax so
5		refunded by him to the purchaser from any other Service
6		Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
7		Use Tax which such serviceman may be required to pay or remit
8		to the Department, as shown by such return, provided that the
9		amount of the tax to be deducted shall previously have been
10		remitted to the Department by such serviceman. If the
11		serviceman shall not previously have remitted the amount of
12		such tax to the Department, he shall be entitled to no
13		deduction hereunder upon refunding such tax to the purchaser.
14		If experience indicates such action to be practicable, the
15		Department may prescribe and furnish a combination or joint
16		return which will enable servicemen, who are required to file
17		returns hereunder and also under the Retailers' Occupation Tax
18		Act, the Use Tax Act or the Service Use Tax Act, to furnish all
19		the return information required by all said Acts on the one
20		form.
21		Where the serviceman has more than one business registered
22		with the Department under separate registrations hereunder,
23		such serviceman shall file separate returns for each registered
24		business.
25		Beginning January 1, 1990, each month the Department shall
26		pay into the Local Government Tax Fund the revenue realized for
27		the preceding month from the 1% tax on sales of food for human
28		consumption which is to be consumed off the premises where it
29		is sold (other than alcoholic beverages, soft drinks and food
30		which has been prepared for immediate consumption) and
31		prescription and nonprescription medicines, drugs, medical
32		appliances and insulin, urine testing materials, syringes and
33		needles used by diabetics.
34		Beginning January 1, 1990, each month the Department shall
35		pay into the County and Mass Transit District Fund 4% of the
36		revenue realized for the preceding month from the 6.25% general

1		rate.
2		Beginning August 1, 2000, each month the Department shall
3		pay into the County and Mass Transit District Fund 20% of the
4		net revenue realized for the preceding month from the 1.25%
5		rate on the selling price of motor fuel and gasohol.
6		Beginning January 1, 1990, each month the Department shall
7		pay into the Local Government Tax Fund 16% of the revenue
8		realized for the preceding month from the 6.25% general rate on
9		transfers of tangible personal property.
10		Beginning August 1, 2000, each month the Department shall
11		pay into the Local Government Tax Fund 80% of the net revenue
12		realized for the preceding month from the 1.25% rate on the
13		selling price of motor fuel and gasohol.
14		Of the remainder of the moneys received by the Department
15		pursuant to this Act, (a) 1.75% thereof shall be paid into the
16		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
17		and after July 1, 1989, 3.8% thereof shall be paid into the
18		Build Illinois Fund; provided, however, that if in any fiscal
19		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
20		may be, of the moneys received by the Department and required
21		to be paid into the Build Illinois Fund pursuant to Section 3
22		of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
23		Act, Section 9 of the Service Use Tax Act, and Section 9 of the
24		Service Occupation Tax Act, such Acts being hereinafter called
25		the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
26		may be, of moneys being hereinafter called the "Tax Act
27		Amount", and (2) the amount transferred to the Build Illinois
28		Fund from the State and Local Sales Tax Reform Fund shall be
29		less than the Annual Specified Amount (as defined in Section 3
30		of the Retailers' Occupation Tax Act), an amount equal to the
31		difference shall be immediately paid into the Build Illinois
32		Fund from other moneys received by the Department pursuant to
33		the Tax Acts; and further provided, that if on the last
34		business day of any month the sum of (1) the Tax Act Amount
35		required to be deposited into the Build Illinois Account in the
36		Build Illinois Fund during such month and (2) the amount

1		transferred during such month to the Build Illinois Fund from
2		the State and Local Sales Tax Reform Fund shall have been less
3		than 1/12 of the Annual Specified Amount, an amount equal to
4		the difference shall be immediately paid into the Build
5		Illinois Fund from other moneys received by the Department
6		pursuant to the Tax Acts; and, further provided, that in no
7		event shall the payments required under the preceding proviso
8		result in aggregate payments into the Build Illinois Fund
9		pursuant to this clause (b) for any fiscal year in excess of
10		the greater of (i) the Tax Act Amount or (ii) the Annual
11		Specified Amount for such fiscal year; and, further provided,
12		that the amounts payable into the Build Illinois Fund under
13		this clause (b) shall be payable only until such time as the
14		aggregate amount on deposit under each trust indenture securing
15		Bonds issued and outstanding pursuant to the Build Illinois
16		Bond Act is sufficient, taking into account any future
17		investment income, to fully provide, in accordance with such
18		indenture, for the defeasance of or the payment of the
19		principal of, premium, if any, and interest on the Bonds
20		secured by such indenture and on any Bonds expected to be
21		issued thereafter and all fees and costs payable with respect
22		thereto, all as certified by the Director of the Bureau of the
23		Budget (now Governor's Office of Management and Budget). If on
24		the last business day of any month in which Bonds are
25		outstanding pursuant to the Build Illinois Bond Act, the
26		aggregate of the moneys deposited in the Build Illinois Bond
27		Account in the Build Illinois Fund in such month shall be less
28		than the amount required to be transferred in such month from
29		the Build Illinois Bond Account to the Build Illinois Bond
30		Retirement and Interest Fund pursuant to Section 13 of the
31		Build Illinois Bond Act, an amount equal to such deficiency
32		shall be immediately paid from other moneys received by the
33		Department pursuant to the Tax Acts to the Build Illinois Fund;
34		provided, however, that any amounts paid to the Build Illinois
35		Fund in any fiscal year pursuant to this sentence shall be
36		deemed to constitute payments pursuant to clause (b) of the

1		preceding sentence and shall reduce the amount otherwise
2		payable for such fiscal year pursuant to clause (b) of the
3		preceding sentence. The moneys received by the Department
4		pursuant to this Act and required to be deposited into the
5		Build Illinois Fund are subject to the pledge, claim and charge
6		set forth in Section 12 of the Build Illinois Bond Act.
7		Subject to payment of amounts into the Build Illinois Fund
8		as provided in the preceding paragraph or in any amendment
9		thereto hereafter enacted, the following specified monthly
10		installment of the amount requested in the certificate of the
11		Chairman of the Metropolitan Pier and Exposition Authority
12		provided under Section 8.25f of the State Finance Act, but not
13		in excess of the sums designated as "Total Deposit", shall be
14		deposited in the aggregate from collections under Section 9 of
15		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
16		9 of the Service Occupation Tax Act, and Section 3 of the
17		Retailers' Occupation Tax Act into the McCormick Place
18		Expansion Project Fund in the specified fiscal years.

23		Beginning July 20, 1993 and in each month of each fiscal
24		year thereafter, one-eighth of the amount requested in the
25		certificate of the Chairman of the Metropolitan Pier and
26		Exposition Authority for that fiscal year, less the amount
27		deposited into the McCormick Place Expansion Project Fund by
28		the State Treasurer in the respective month under subsection
29		(g) of Section 13 of the Metropolitan Pier and Exposition
30		Authority Act, plus cumulative deficiencies in the deposits
31		required under this Section for previous months and years,
32		shall be deposited into the McCormick Place Expansion Project
33		Fund, until the full amount requested for the fiscal year, but
34		not in excess of the amount specified above as "Total Deposit",
35		has been deposited.
36		Subject to payment of amounts into the Build Illinois Fund

1		and the McCormick Place Expansion Project Fund pursuant to the
2		preceding paragraphs or in any amendments thereto hereafter
3		enacted, beginning July 1, 1993, the Department shall each
4		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
5		the net revenue realized for the preceding month from the 6.25%
6		general rate on the selling price of tangible personal
7		property.
8		Subject to payment of amounts into the Build Illinois Fund
9		and the McCormick Place Expansion Project Fund pursuant to the
10		preceding paragraphs or in any amendments thereto hereafter
11		enacted, beginning with the receipt of the first report of
12		taxes paid by an eligible business and continuing for a 25-year
13		period, the Department shall each month pay into the Energy
14		Infrastructure Fund 80% of the net revenue realized from the
15		6.25% general rate on the selling price of Illinois-mined coal
16		that was sold to an eligible business. For purposes of this
17		paragraph, the term "eligible business" means a new electric
18		generating facility certified pursuant to Section 605-332 of
19		the Department of Commerce and Economic Opportunity Community
20		Affairs Law of the Civil Administrative Code of Illinois.
21		Remaining moneys received by the Department pursuant to
22		this Act shall be paid into the General Revenue Fund of the
23		State Treasury.
24		The Department may, upon separate written notice to a
25		taxpayer, require the taxpayer to prepare and file with the
26		Department on a form prescribed by the Department within not
27		less than 60 days after receipt of the notice an annual
28		information return for the tax year specified in the notice.
29		Such annual return to the Department shall include a statement
30		of gross receipts as shown by the taxpayer's last Federal
31		income tax return. If the total receipts of the business as
32		reported in the Federal income tax return do not agree with the
33		gross receipts reported to the Department of Revenue for the
34		same period, the taxpayer shall attach to his annual return a
35		schedule showing a reconciliation of the 2 amounts and the
36		reasons for the difference. The taxpayer's annual return to the

1		Department shall also disclose the cost of goods sold by the
2		taxpayer during the year covered by such return, opening and
3		closing inventories of such goods for such year, cost of goods
4		used from stock or taken from stock and given away by the
5		taxpayer during such year, pay roll information of the
6		taxpayer's business during such year and any additional
7		reasonable information which the Department deems would be
8		helpful in determining the accuracy of the monthly, quarterly
9		or annual returns filed by such taxpayer as hereinbefore
10		provided for in this Section.
11		If the annual information return required by this Section
12		is not filed when and as required, the taxpayer shall be liable
13		as follows:
14		(i) Until January 1, 1994, the taxpayer shall be liable
15		for a penalty equal to 1/6 of 1% of the tax due from such
16		taxpayer under this Act during the period to be covered by
17		the annual return for each month or fraction of a month
18		until such return is filed as required, the penalty to be
19		assessed and collected in the same manner as any other
20		penalty provided for in this Act.
21		(ii) On and after January 1, 1994, the taxpayer shall
22		be liable for a penalty as described in Section 3-4 of the
23		Uniform Penalty and Interest Act.
24		The chief executive officer, proprietor, owner or highest
25		ranking manager shall sign the annual return to certify the
26		accuracy of the information contained therein. Any person who
27		willfully signs the annual return containing false or
28		inaccurate information shall be guilty of perjury and punished
29		accordingly. The annual return form prescribed by the
30		Department shall include a warning that the person signing the
31		return may be liable for perjury.
32		The foregoing portion of this Section concerning the filing
33		of an annual information return shall not apply to a serviceman
34		who is not required to file an income tax return with the
35		United States Government.
36		As soon as possible after the first day of each month, upon

1		certification of the Department of Revenue, the Comptroller
2		shall order transferred and the Treasurer shall transfer from
3		the General Revenue Fund to the Motor Fuel Tax Fund an amount
4		equal to 1.7% of 80% of the net revenue realized under this Act
5		for the second preceding month. Beginning April 1, 2000, this
6		transfer is no longer required and shall not be made.
7		Net revenue realized for a month shall be the revenue
8		collected by the State pursuant to this Act, less the amount
9		paid out during that month as refunds to taxpayers for
10		overpayment of liability.
11		For greater simplicity of administration, it shall be
12		permissible for manufacturers, importers and wholesalers whose
13		products are sold by numerous servicemen in Illinois, and who
14		wish to do so, to assume the responsibility for accounting and
15		paying to the Department all tax accruing under this Act with
16		respect to such sales, if the servicemen who are affected do
17		not make written objection to the Department to this
18		arrangement.
19		(Source: P.A. 92-12, eff. 7-1-01; 92-208, eff. 8-2-01; 92-492,
20		eff. 1-1-02; 92-600, eff. 6-28-02; 92-651, eff. 7-11-02; 93-24,
21		eff. 6-20-03; revised 10-15-03.)

22		Section 20. The Retailers' Occupation Tax Act is amended by
23		changing Sections 1a, 2-5, 2-7, and 3 as follows:
24		(35 ILCS 120/1a) (from Ch. 120, par. 440a)
25		Sec. 1a. "Pollution control facilities" means any system,
26		method, construction, device or appliance appurtenant thereto
27		sold or used or intended for the primary purpose of
28		eliminating, preventing, or reducing air and water pollution as
29		the term "air pollution" or "water pollution" is defined in the
30		"Environmental Protection Act", enacted by the 76th General
31		Assembly, or for the primary purpose of treating, pretreating,
32		modifying or disposing of any potential solid, liquid or
33		gaseous pollutant which if released without such treatment,
34		pretreatment, modification or disposal might be harmful,

1		detrimental or offensive to human, plant or animal life, or to
2		property.
3		Until July 1, 2003 and beginning again on July 1, 2004, the
4		purchase, employment and transfer of such tangible personal
5		property as pollution control facilities is not a purchase, use
6		or sale of tangible personal property.
7		(Source: P.A. 93-24, eff. 6-20-03.)
8		(35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
9		Sec. 2-5. Exemptions. Gross receipts from proceeds from the
10		sale of the following tangible personal property are exempt
11		from the tax imposed by this Act:
12		(1) Farm chemicals.
13		(2) Farm machinery and equipment, both new and used,
14		including that manufactured on special order, certified by the
15		purchaser to be used primarily for production agriculture or
16		State or federal agricultural programs, including individual
17		replacement parts for the machinery and equipment, including
18		machinery and equipment purchased for lease, and including
19		implements of husbandry defined in Section 1-130 of the
20		Illinois Vehicle Code, farm machinery and agricultural
21		chemical and fertilizer spreaders, and nurse wagons required to
22		be registered under Section 3-809 of the Illinois Vehicle Code,
23		but excluding other motor vehicles required to be registered
24		under the Illinois Vehicle Code. Horticultural polyhouses or
25		hoop houses used for propagating, growing, or overwintering
26		plants shall be considered farm machinery and equipment under
27		this item (2). Agricultural chemical tender tanks and dry boxes
28		shall include units sold separately from a motor vehicle
29		required to be licensed and units sold mounted on a motor
30		vehicle required to be licensed, if the selling price of the
31		tender is separately stated.
32		Farm machinery and equipment shall include precision
33		farming equipment that is installed or purchased to be
34		installed on farm machinery and equipment including, but not
35		limited to, tractors, harvesters, sprayers, planters, seeders,

1		or spreaders. Precision farming equipment includes, but is not
2		limited to, soil testing sensors, computers, monitors,
3		software, global positioning and mapping systems, and other
4		such equipment.
5		Farm machinery and equipment also includes computers,
6		sensors, software, and related equipment used primarily in the
7		computer-assisted operation of production agriculture
8		facilities, equipment, and activities such as, but not limited
9		to, the collection, monitoring, and correlation of animal and
10		crop data for the purpose of formulating animal diets and
11		agricultural chemicals. This item (7) is exempt from the
12		provisions of Section 2-70.
13		(3) Until July 1, 2003 and beginning again on July 1, 2004,
14		distillation machinery and equipment, sold as a unit or kit,
15		assembled or installed by the retailer, certified by the user
16		to be used only for the production of ethyl alcohol that will
17		be used for consumption as motor fuel or as a component of
18		motor fuel for the personal use of the user, and not subject to
19		sale or resale.
20		(4) Until July 1, 2003 and beginning again on July 1, 2004,
21		graphic arts machinery and equipment, including repair and
22		replacement parts, both new and used, and including that
23		manufactured on special order or purchased for lease, certified
24		by the purchaser to be used primarily for graphic arts
25		production. Equipment includes chemicals or chemicals acting
26		as catalysts but only if the chemicals or chemicals acting as
27		catalysts effect a direct and immediate change upon a graphic
28		arts product.
29		(5) A motor vehicle of the first division, a motor vehicle
30		of the second division that is a self-contained motor vehicle
31		designed or permanently converted to provide living quarters
32		for recreational, camping, or travel use, with direct walk
33		through access to the living quarters from the driver's seat,
34		or a motor vehicle of the second division that is of the van
35		configuration designed for the transportation of not less than
36		7 nor more than 16 passengers, as defined in Section 1-146 of

1		the Illinois Vehicle Code, that is used for automobile renting,
2		as defined in the Automobile Renting Occupation and Use Tax
3		Act.
4		(6) Personal property sold by a teacher-sponsored student
5		organization affiliated with an elementary or secondary school
6		located in Illinois.
7		(7) Until July 1, 2003 and beginning again on July 1, 2004,
8		proceeds of that portion of the selling price of a passenger
9		car the sale of which is subject to the Replacement Vehicle
10		Tax.
11		(8) Personal property sold to an Illinois county fair
12		association for use in conducting, operating, or promoting the
13		county fair.
14		(9) Personal property sold to a not-for-profit arts or
15		cultural organization that establishes, by proof required by
16		the Department by rule, that it has received an exemption under
17		Section 501(c)(3) of the Internal Revenue Code and that is
18		organized and operated primarily for the presentation or
19		support of arts or cultural programming, activities, or
20		services. These organizations include, but are not limited to,
21		music and dramatic arts organizations such as symphony
22		orchestras and theatrical groups, arts and cultural service
23		organizations, local arts councils, visual arts organizations,
24		and media arts organizations. On and after the effective date
25		of this amendatory Act of the 92nd General Assembly, however,
26		an entity otherwise eligible for this exemption shall not make
27		tax-free purchases unless it has an active identification
28		number issued by the Department.
29		(10) Personal property sold by a corporation, society,
30		association, foundation, institution, or organization, other
31		than a limited liability company, that is organized and
32		operated as a not-for-profit service enterprise for the benefit
33		of persons 65 years of age or older if the personal property
34		was not purchased by the enterprise for the purpose of resale
35		by the enterprise.
36		(11) Personal property sold to a governmental body, to a

1		corporation, society, association, foundation, or institution
2		organized and operated exclusively for charitable, religious,
3		or educational purposes, or to a not-for-profit corporation,
4		society, association, foundation, institution, or organization
5		that has no compensated officers or employees and that is
6		organized and operated primarily for the recreation of persons
7		55 years of age or older. A limited liability company may
8		qualify for the exemption under this paragraph only if the
9		limited liability company is organized and operated
10		exclusively for educational purposes. On and after July 1,
11		1987, however, no entity otherwise eligible for this exemption
12		shall make tax-free purchases unless it has an active
13		identification number issued by the Department.
14		(12) Tangible personal property sold to interstate
15		carriers for hire for use as rolling stock moving in interstate
16		commerce or to lessors under leases of one year or longer
17		executed or in effect at the time of purchase by interstate
18		carriers for hire for use as rolling stock moving in interstate
19		commerce and equipment operated by a telecommunications
20		provider, licensed as a common carrier by the Federal
21		Communications Commission, which is permanently installed in
22		or affixed to aircraft moving in interstate commerce.
23		(12-5) On and after July 1, 2003, motor vehicles of the
24		second division with a gross vehicle weight in excess of 8,000
25		pounds that are subject to the commercial distribution fee
26		imposed under Section 3-815.1 of the Illinois Vehicle Code.
27		This exemption applies to repair and replacement parts added
28		after the initial purchase of such a motor vehicle if that
29		motor vehicle is used in a manner that would qualify for the
30		rolling stock exemption otherwise provided for in this Act.
31		(13) Proceeds from sales to owners, lessors, or shippers of
32		tangible personal property that is utilized by interstate
33		carriers for hire for use as rolling stock moving in interstate
34		commerce and equipment operated by a telecommunications
35		provider, licensed as a common carrier by the Federal
36		Communications Commission, which is permanently installed in

1		or affixed to aircraft moving in interstate commerce.
2		(14) Machinery and equipment that will be used by the
3		purchaser, or a lessee of the purchaser, primarily in the
4		process of manufacturing or assembling tangible personal
5		property for wholesale or retail sale or lease, whether the
6		sale or lease is made directly by the manufacturer or by some
7		other person, whether the materials used in the process are
8		owned by the manufacturer or some other person, or whether the
9		sale or lease is made apart from or as an incident to the
10		seller's engaging in the service occupation of producing
11		machines, tools, dies, jigs, patterns, gauges, or other similar
12		items of no commercial value on special order for a particular
13		purchaser.
14		(15) Proceeds of mandatory service charges separately
15		stated on customers' bills for purchase and consumption of food
16		and beverages, to the extent that the proceeds of the service
17		charge are in fact turned over as tips or as a substitute for
18		tips to the employees who participate directly in preparing,
19		serving, hosting or cleaning up the food or beverage function
20		with respect to which the service charge is imposed.
21		(16) Petroleum products sold to a purchaser if the seller
22		is prohibited by federal law from charging tax to the
23		purchaser.
24		(17) Tangible personal property sold to a common carrier by
25		rail or motor that receives the physical possession of the
26		property in Illinois and that transports the property, or
27		shares with another common carrier in the transportation of the
28		property, out of Illinois on a standard uniform bill of lading
29		showing the seller of the property as the shipper or consignor
30		of the property to a destination outside Illinois, for use
31		outside Illinois.
32		(18) Legal tender, currency, medallions, or gold or silver
33		coinage issued by the State of Illinois, the government of the
34		United States of America, or the government of any foreign
35		country, and bullion.
36		(19) Until July 1 2003 and beginning again on July 1, 2004,

1		oil field exploration, drilling, and production equipment,
2		including (i) rigs and parts of rigs, rotary rigs, cable tool
3		rigs, and workover rigs, (ii) pipe and tubular goods, including
4		casing and drill strings, (iii) pumps and pump-jack units, (iv)
5		storage tanks and flow lines, (v) any individual replacement
6		part for oil field exploration, drilling, and production
7		equipment, and (vi) machinery and equipment purchased for
8		lease; but excluding motor vehicles required to be registered
9		under the Illinois Vehicle Code.
10		(20) Photoprocessing machinery and equipment, including
11		repair and replacement parts, both new and used, including that
12		manufactured on special order, certified by the purchaser to be
13		used primarily for photoprocessing, and including
14		photoprocessing machinery and equipment purchased for lease.
15		(21) Until July 1, 2003 and beginning again on July 1,
16		2004, coal exploration, mining, offhighway hauling,
17		processing, maintenance, and reclamation equipment, including
18		replacement parts and equipment, and including equipment
19		purchased for lease, but excluding motor vehicles required to
20		be registered under the Illinois Vehicle Code.
21		(22) Fuel and petroleum products sold to or used by an air
22		carrier, certified by the carrier to be used for consumption,
23		shipment, or storage in the conduct of its business as an air
24		common carrier, for a flight destined for or returning from a
25		location or locations outside the United States without regard
26		to previous or subsequent domestic stopovers.
27		(23) A transaction in which the purchase order is received
28		by a florist who is located outside Illinois, but who has a
29		florist located in Illinois deliver the property to the
30		purchaser or the purchaser's donee in Illinois.
31		(24) Fuel consumed or used in the operation of ships,
32		barges, or vessels that are used primarily in or for the
33		transportation of property or the conveyance of persons for
34		hire on rivers bordering on this State if the fuel is delivered
35		by the seller to the purchaser's barge, ship, or vessel while
36		it is afloat upon that bordering river.

1		(25) A motor vehicle sold in this State to a nonresident
2		even though the motor vehicle is delivered to the nonresident
3		in this State, if the motor vehicle is not to be titled in this
4		State, and if a drive-away permit is issued to the motor
5		vehicle as provided in Section 3-603 of the Illinois Vehicle
6		Code or if the nonresident purchaser has vehicle registration
7		plates to transfer to the motor vehicle upon returning to his
8		or her home state. The issuance of the drive-away permit or
9		having the out-of-state registration plates to be transferred
10		is prima facie evidence that the motor vehicle will not be
11		titled in this State.
12		(26) Semen used for artificial insemination of livestock
13		for direct agricultural production.
14		(27) Horses, or interests in horses, registered with and
15		meeting the requirements of any of the Arabian Horse Club
16		Registry of America, Appaloosa Horse Club, American Quarter
17		Horse Association, United States Trotting Association, or
18		Jockey Club, as appropriate, used for purposes of breeding or
19		racing for prizes.
20		(28) Computers and communications equipment utilized for
21		any hospital purpose and equipment used in the diagnosis,
22		analysis, or treatment of hospital patients sold to a lessor
23		who leases the equipment, under a lease of one year or longer
24		executed or in effect at the time of the purchase, to a
25		hospital that has been issued an active tax exemption
26		identification number by the Department under Section 1g of
27		this Act.
28		(29) Personal property sold to a lessor who leases the
29		property, under a lease of one year or longer executed or in
30		effect at the time of the purchase, to a governmental body that
31		has been issued an active tax exemption identification number
32		by the Department under Section 1g of this Act.
33		(30) Beginning with taxable years ending on or after
34		December 31, 1995 and ending with taxable years ending on or
35		before December 31, 2004, personal property that is donated for
36		disaster relief to be used in a State or federally declared

1		disaster area in Illinois or bordering Illinois by a
2		manufacturer or retailer that is registered in this State to a
3		corporation, society, association, foundation, or institution
4		that has been issued a sales tax exemption identification
5		number by the Department that assists victims of the disaster
6		who reside within the declared disaster area.
7		(31) Beginning with taxable years ending on or after
8		December 31, 1995 and ending with taxable years ending on or
9		before December 31, 2004, personal property that is used in the
10		performance of infrastructure repairs in this State, including
11		but not limited to municipal roads and streets, access roads,
12		bridges, sidewalks, waste disposal systems, water and sewer
13		line extensions, water distribution and purification
14		facilities, storm water drainage and retention facilities, and
15		sewage treatment facilities, resulting from a State or
16		federally declared disaster in Illinois or bordering Illinois
17		when such repairs are initiated on facilities located in the
18		declared disaster area within 6 months after the disaster.
19		(32) Beginning July 1, 1999, game or game birds sold at a
20		"game breeding and hunting preserve area" or an "exotic game
21		hunting area" as those terms are used in the Wildlife Code or
22		at a hunting enclosure approved through rules adopted by the
23		Department of Natural Resources. This paragraph is exempt from
24		the provisions of Section 2-70.
25		(33) A motor vehicle, as that term is defined in Section
26		1-146 of the Illinois Vehicle Code, that is donated to a
27		corporation, limited liability company, society, association,
28		foundation, or institution that is determined by the Department
29		to be organized and operated exclusively for educational
30		purposes. For purposes of this exemption, "a corporation,
31		limited liability company, society, association, foundation,
32		or institution organized and operated exclusively for
33		educational purposes" means all tax-supported public schools,
34		private schools that offer systematic instruction in useful
35		branches of learning by methods common to public schools and
36		that compare favorably in their scope and intensity with the

1		course of study presented in tax-supported schools, and
2		vocational or technical schools or institutes organized and
3		operated exclusively to provide a course of study of not less
4		than 6 weeks duration and designed to prepare individuals to
5		follow a trade or to pursue a manual, technical, mechanical,
6		industrial, business, or commercial occupation.
7		(34) Beginning January 1, 2000, personal property,
8		including food, purchased through fundraising events for the
9		benefit of a public or private elementary or secondary school,
10		a group of those schools, or one or more school districts if
11		the events are sponsored by an entity recognized by the school
12		district that consists primarily of volunteers and includes
13		parents and teachers of the school children. This paragraph
14		does not apply to fundraising events (i) for the benefit of
15		private home instruction or (ii) for which the fundraising
16		entity purchases the personal property sold at the events from
17		another individual or entity that sold the property for the
18		purpose of resale by the fundraising entity and that profits
19		from the sale to the fundraising entity. This paragraph is
20		exempt from the provisions of Section 2-70.
21		(35) Beginning January 1, 2000 and through December 31,
22		2001, new or used automatic vending machines that prepare and
23		serve hot food and beverages, including coffee, soup, and other
24		items, and replacement parts for these machines. Beginning
25		January 1, 2002 and through June 30, 2003, and beginning again
26		on July 1, 2004, machines and parts for machines used in
27		commercial, coin-operated amusement and vending business if a
28		use or occupation tax is paid on the gross receipts derived
29		from the use of the commercial, coin-operated amusement and
30		vending machines. This paragraph is exempt from the provisions
31		of Section 2-70.
32		(35-5) Food for human consumption that is to be consumed
33		off the premises where it is sold (other than alcoholic
34		beverages, soft drinks, and food that has been prepared for
35		immediate consumption) and prescription and nonprescription
36		medicines, drugs, medical appliances, and insulin, urine

1		testing materials, syringes, and needles used by diabetics, for
2		human use, when purchased for use by a person receiving medical
3		assistance under Article 5 of the Illinois Public Aid Code who
4		resides in a licensed long-term care facility, as defined in
5		the Nursing Home Care Act.
6		(36) Beginning August 2, 2001, computers and
7		communications equipment utilized for any hospital purpose and
8		equipment used in the diagnosis, analysis, or treatment of
9		hospital patients sold to a lessor who leases the equipment,
10		under a lease of one year or longer executed or in effect at
11		the time of the purchase, to a hospital that has been issued an
12		active tax exemption identification number by the Department
13		under Section 1g of this Act. This paragraph is exempt from the
14		provisions of Section 2-70.
15		(37) Beginning August 2, 2001, personal property sold to a
16		lessor who leases the property, under a lease of one year or
17		longer executed or in effect at the time of the purchase, to a
18		governmental body that has been issued an active tax exemption
19		identification number by the Department under Section 1g of
20		this Act. This paragraph is exempt from the provisions of
21		Section 2-70.
22		(38) Beginning on January 1, 2002, tangible personal
23		property purchased from an Illinois retailer by a taxpayer
24		engaged in centralized purchasing activities in Illinois who
25		will, upon receipt of the property in Illinois, temporarily
26		store the property in Illinois (i) for the purpose of
27		subsequently transporting it outside this State for use or
28		consumption thereafter solely outside this State or (ii) for
29		the purpose of being processed, fabricated, or manufactured
30		into, attached to, or incorporated into other tangible personal
31		property to be transported outside this State and thereafter
32		used or consumed solely outside this State. The Director of
33		Revenue shall, pursuant to rules adopted in accordance with the
34		Illinois Administrative Procedure Act, issue a permit to any
35		taxpayer in good standing with the Department who is eligible
36		for the exemption under this paragraph (38). The permit issued

1		under this paragraph (38) shall authorize the holder, to the
2		extent and in the manner specified in the rules adopted under
3		this Act, to purchase tangible personal property from a
4		retailer exempt from the taxes imposed by this Act. Taxpayers
5		shall maintain all necessary books and records to substantiate
6		the use and consumption of all such tangible personal property
7		outside of the State of Illinois.
8		(Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
9		eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
10		92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 92-680, eff.
11		7-16-02; 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; revised
12		9-11-03.)
13		(35 ILCS 120/2-7)
14		Sec. 2-7. Aggregate manufacturing exemption. Through June
15		30, 2003 and beginning again on July 1, 2004, gross receipts
16		from proceeds from the sale of aggregate exploration, mining,
17		offhighway hauling, processing, maintenance, and reclamation
18		equipment, including replacement parts and equipment, and
19		including equipment purchased for lease, but excluding motor
20		vehicles required to be registered under the Illinois Vehicle
21		Code, are exempt from the tax imposed by this Act.
22		(Source: P.A. 92-603, eff. 6-28-02; 93-24, eff. 6-20-03.)
23		(35 ILCS 120/3) (from Ch. 120, par. 442)
24		Sec. 3. Except as provided in this Section, on or before
25		the twentieth day of each calendar month, every person engaged
26		in the business of selling tangible personal property at retail
27		in this State during the preceding calendar month shall file a
28		return with the Department, stating:
29		1. The name of the seller;
30		2. His residence address and the address of his
31		principal place of business and the address of the
32		principal place of business (if that is a different
33		address) from which he engages in the business of selling
34		tangible personal property at retail in this State;

1		3. Total amount of receipts received by him during the
2		preceding calendar month or quarter, as the case may be,
3		from sales of tangible personal property, and from services
4		furnished, by him during such preceding calendar month or
5		quarter;
6		4. Total amount received by him during the preceding
7		calendar month or quarter on charge and time sales of
8		tangible personal property, and from services furnished,
9		by him prior to the month or quarter for which the return
10		is filed;
11		5. Deductions allowed by law;
12		6. Gross receipts which were received by him during the
13		preceding calendar month or quarter and upon the basis of
14		which the tax is imposed;
15		7. The amount of credit provided in Section 2d of this
16		Act;
17		8. The amount of tax due;
18		9. The signature of the taxpayer; and
19		10. Such other reasonable information as the
20		Department may require.
21		If a taxpayer fails to sign a return within 30 days after
22		the proper notice and demand for signature by the Department,
23		the return shall be considered valid and any amount shown to be
24		due on the return shall be deemed assessed.
25		Each return shall be accompanied by the statement of
26		prepaid tax issued pursuant to Section 2e for which credit is
27		claimed.
28		A Prior to October 1, 2003, a retailer may accept a
29		Manufacturer's Purchase Credit certification from a purchaser
30		in satisfaction of Use Tax as provided in Section 3-85 of the
31		Use Tax Act if the purchaser provides the appropriate
32		documentation as required by Section 3-85 of the Use Tax Act. A
33		Manufacturer's Purchase Credit certification, accepted by a
34		retailer prior to October 1, 2003 as provided in Section 3-85
35		of the Use Tax Act, may be used by that retailer to satisfy
36		Retailers' Occupation Tax liability in the amount claimed in

1		the certification, not to exceed 6.25% of the receipts subject
2		to tax from a qualifying purchase. A Manufacturer's Purchase
3		Credit reported on any original or amended return filed under
4		this Act after October 20, 2003 shall be disallowed. No
5		Manufacturer's Purchase Credit may be used after September 30,
6		2003 to satisfy any tax liability imposed under this Act,
7		including any audit liability.
8		The Department may require returns to be filed on a
9		quarterly basis. If so required, a return for each calendar
10		quarter shall be filed on or before the twentieth day of the
11		calendar month following the end of such calendar quarter. The
12		taxpayer shall also file a return with the Department for each
13		of the first two months of each calendar quarter, on or before
14		the twentieth day of the following calendar month, stating:
15		1. The name of the seller;
16		2. The address of the principal place of business from
17		which he engages in the business of selling tangible
18		personal property at retail in this State;
19		3. The total amount of taxable receipts received by him
20		during the preceding calendar month from sales of tangible
21		personal property by him during such preceding calendar
22		month, including receipts from charge and time sales, but
23		less all deductions allowed by law;
24		4. The amount of credit provided in Section 2d of this
25		Act;
26		5. The amount of tax due; and
27		6. Such other reasonable information as the Department
28		may require.
29		Beginning on October 1, 2003, any person who is not a
30		licensed distributor, importing distributor, or manufacturer,
31		as defined in the Liquor Control Act of 1934, but is engaged in
32		the business of selling, at retail, alcoholic liquor shall file
33		a statement with the Department of Revenue, in a format and at
34		a time prescribed by the Department, showing the total amount
35		paid for alcoholic liquor purchased during the preceding month
36		and such other information as is reasonably required by the

1		Department. The Department may adopt rules to require that this
2		statement be filed in an electronic or telephonic format. Such
3		rules may provide for exceptions from the filing requirements
4		of this paragraph. For the purposes of this paragraph, the term
5		"alcoholic liquor" shall have the meaning prescribed in the
6		Liquor Control Act of 1934.
7		Beginning on October 1, 2003, every distributor, importing
8		distributor, and manufacturer of alcoholic liquor as defined in
9		the Liquor Control Act of 1934, shall file a statement with the
10		Department of Revenue, no later than the 10th day of the month
11		for the preceding month during which transactions occurred, by
12		electronic means, showing the total amount of gross receipts
13		from the sale of alcoholic liquor sold or distributed during
14		the preceding month to purchasers; identifying the purchaser to
15		whom it was sold or distributed; the purchaser's tax
16		registration number; and such other information reasonably
17		required by the Department. A copy of the monthly statement
18		shall be sent to the retailer no later than the 10th day of the
19		month for the preceding month during which transactions
20		occurred.
21		If a total amount of less than $1 is payable, refundable or
22		creditable, such amount shall be disregarded if it is less than
23		50 cents and shall be increased to $1 if it is 50 cents or more.
24		Beginning October 1, 1993, a taxpayer who has an average
25		monthly tax liability of $150,000 or more shall make all
26		payments required by rules of the Department by electronic
27		funds transfer. Beginning October 1, 1994, a taxpayer who has
28		an average monthly tax liability of $100,000 or more shall make
29		all payments required by rules of the Department by electronic
30		funds transfer. Beginning October 1, 1995, a taxpayer who has
31		an average monthly tax liability of $50,000 or more shall make
32		all payments required by rules of the Department by electronic
33		funds transfer. Beginning October 1, 2000, a taxpayer who has
34		an annual tax liability of $200,000 or more shall make all
35		payments required by rules of the Department by electronic
36		funds transfer. The term "annual tax liability" shall be the

1		sum of the taxpayer's liabilities under this Act, and under all
2		other State and local occupation and use tax laws administered
3		by the Department, for the immediately preceding calendar year.
4		The term "average monthly tax liability" shall be the sum of
5		the taxpayer's liabilities under this Act, and under all other
6		State and local occupation and use tax laws administered by the
7		Department, for the immediately preceding calendar year
8		divided by 12. Beginning on October 1, 2002, a taxpayer who has
9		a tax liability in the amount set forth in subsection (b) of
10		Section 2505-210 of the Department of Revenue Law shall make
11		all payments required by rules of the Department by electronic
12		funds transfer.
13		Before August 1 of each year beginning in 1993, the
14		Department shall notify all taxpayers required to make payments
15		by electronic funds transfer. All taxpayers required to make
16		payments by electronic funds transfer shall make those payments
17		for a minimum of one year beginning on October 1.
18		Any taxpayer not required to make payments by electronic
19		funds transfer may make payments by electronic funds transfer
20		with the permission of the Department.
21		All taxpayers required to make payment by electronic funds
22		transfer and any taxpayers authorized to voluntarily make
23		payments by electronic funds transfer shall make those payments
24		in the manner authorized by the Department.
25		The Department shall adopt such rules as are necessary to
26		effectuate a program of electronic funds transfer and the
27		requirements of this Section.
28		Any amount which is required to be shown or reported on any
29		return or other document under this Act shall, if such amount
30		is not a whole-dollar amount, be increased to the nearest
31		whole-dollar amount in any case where the fractional part of a
32		dollar is 50 cents or more, and decreased to the nearest
33		whole-dollar amount where the fractional part of a dollar is
34		less than 50 cents.
35		If the retailer is otherwise required to file a monthly
36		return and if the retailer's average monthly tax liability to

1		the Department does not exceed $200, the Department may
2		authorize his returns to be filed on a quarter annual basis,
3		with the return for January, February and March of a given year
4		being due by April 20 of such year; with the return for April,
5		May and June of a given year being due by July 20 of such year;
6		with the return for July, August and September of a given year
7		being due by October 20 of such year, and with the return for
8		October, November and December of a given year being due by
9		January 20 of the following year.
10		If the retailer is otherwise required to file a monthly or
11		quarterly return and if the retailer's average monthly tax
12		liability with the Department does not exceed $50, the
13		Department may authorize his returns to be filed on an annual
14		basis, with the return for a given year being due by January 20
15		of the following year.
16		Such quarter annual and annual returns, as to form and
17		substance, shall be subject to the same requirements as monthly
18		returns.
19		Notwithstanding any other provision in this Act concerning
20		the time within which a retailer may file his return, in the
21		case of any retailer who ceases to engage in a kind of business
22		which makes him responsible for filing returns under this Act,
23		such retailer shall file a final return under this Act with the
24		Department not more than one month after discontinuing such
25		business.
26		Where the same person has more than one business registered
27		with the Department under separate registrations under this
28		Act, such person may not file each return that is due as a
29		single return covering all such registered businesses, but
30		shall file separate returns for each such registered business.
31		In addition, with respect to motor vehicles, watercraft,
32		aircraft, and trailers that are required to be registered with
33		an agency of this State, every retailer selling this kind of
34		tangible personal property shall file, with the Department,
35		upon a form to be prescribed and supplied by the Department, a
36		separate return for each such item of tangible personal

1		property which the retailer sells, except that if, in the same
2		transaction, (i) a retailer of aircraft, watercraft, motor
3		vehicles or trailers transfers more than one aircraft,
4		watercraft, motor vehicle or trailer to another aircraft,
5		watercraft, motor vehicle retailer or trailer retailer for the
6		purpose of resale or (ii) a retailer of aircraft, watercraft,
7		motor vehicles, or trailers transfers more than one aircraft,
8		watercraft, motor vehicle, or trailer to a purchaser for use as
9		a qualifying rolling stock as provided in Section 2-5 of this
10		Act, then that seller may report the transfer of all aircraft,
11		watercraft, motor vehicles or trailers involved in that
12		transaction to the Department on the same uniform
13		invoice-transaction reporting return form. For purposes of
14		this Section, "watercraft" means a Class 2, Class 3, or Class 4
15		watercraft as defined in Section 3-2 of the Boat Registration
16		and Safety Act, a personal watercraft, or any boat equipped
17		with an inboard motor.
18		Any retailer who sells only motor vehicles, watercraft,
19		aircraft, or trailers that are required to be registered with
20		an agency of this State, so that all retailers' occupation tax
21		liability is required to be reported, and is reported, on such
22		transaction reporting returns and who is not otherwise required
23		to file monthly or quarterly returns, need not file monthly or
24		quarterly returns. However, those retailers shall be required
25		to file returns on an annual basis.
26		The transaction reporting return, in the case of motor
27		vehicles or trailers that are required to be registered with an
28		agency of this State, shall be the same document as the Uniform
29		Invoice referred to in Section 5-402 of The Illinois Vehicle
30		Code and must show the name and address of the seller; the name
31		and address of the purchaser; the amount of the selling price
32		including the amount allowed by the retailer for traded-in
33		property, if any; the amount allowed by the retailer for the
34		traded-in tangible personal property, if any, to the extent to
35		which Section 1 of this Act allows an exemption for the value
36		of traded-in property; the balance payable after deducting such

1		trade-in allowance from the total selling price; the amount of
2		tax due from the retailer with respect to such transaction; the
3		amount of tax collected from the purchaser by the retailer on
4		such transaction (or satisfactory evidence that such tax is not
5		due in that particular instance, if that is claimed to be the
6		fact); the place and date of the sale; a sufficient
7		identification of the property sold; such other information as
8		is required in Section 5-402 of The Illinois Vehicle Code, and
9		such other information as the Department may reasonably
10		require.
11		The transaction reporting return in the case of watercraft
12		or aircraft must show the name and address of the seller; the
13		name and address of the purchaser; the amount of the selling
14		price including the amount allowed by the retailer for
15		traded-in property, if any; the amount allowed by the retailer
16		for the traded-in tangible personal property, if any, to the
17		extent to which Section 1 of this Act allows an exemption for
18		the value of traded-in property; the balance payable after
19		deducting such trade-in allowance from the total selling price;
20		the amount of tax due from the retailer with respect to such
21		transaction; the amount of tax collected from the purchaser by
22		the retailer on such transaction (or satisfactory evidence that
23		such tax is not due in that particular instance, if that is
24		claimed to be the fact); the place and date of the sale, a
25		sufficient identification of the property sold, and such other
26		information as the Department may reasonably require.
27		Such transaction reporting return shall be filed not later
28		than 20 days after the day of delivery of the item that is
29		being sold, but may be filed by the retailer at any time sooner
30		than that if he chooses to do so. The transaction reporting
31		return and tax remittance or proof of exemption from the
32		Illinois use tax may be transmitted to the Department by way of
33		the State agency with which, or State officer with whom the
34		tangible personal property must be titled or registered (if
35		titling or registration is required) if the Department and such
36		agency or State officer determine that this procedure will

1		expedite the processing of applications for title or
2		registration.
3		With each such transaction reporting return, the retailer
4		shall remit the proper amount of tax due (or shall submit
5		satisfactory evidence that the sale is not taxable if that is
6		the case), to the Department or its agents, whereupon the
7		Department shall issue, in the purchaser's name, a use tax
8		receipt (or a certificate of exemption if the Department is
9		satisfied that the particular sale is tax exempt) which such
10		purchaser may submit to the agency with which, or State officer
11		with whom, he must title or register the tangible personal
12		property that is involved (if titling or registration is
13		required) in support of such purchaser's application for an
14		Illinois certificate or other evidence of title or registration
15		to such tangible personal property.
16		No retailer's failure or refusal to remit tax under this
17		Act precludes a user, who has paid the proper tax to the
18		retailer, from obtaining his certificate of title or other
19		evidence of title or registration (if titling or registration
20		is required) upon satisfying the Department that such user has
21		paid the proper tax (if tax is due) to the retailer. The
22		Department shall adopt appropriate rules to carry out the
23		mandate of this paragraph.
24		If the user who would otherwise pay tax to the retailer
25		wants the transaction reporting return filed and the payment of
26		the tax or proof of exemption made to the Department before the
27		retailer is willing to take these actions and such user has not
28		paid the tax to the retailer, such user may certify to the fact
29		of such delay by the retailer and may (upon the Department
30		being satisfied of the truth of such certification) transmit
31		the information required by the transaction reporting return
32		and the remittance for tax or proof of exemption directly to
33		the Department and obtain his tax receipt or exemption
34		determination, in which event the transaction reporting return
35		and tax remittance (if a tax payment was required) shall be
36		credited by the Department to the proper retailer's account

1		with the Department, but without the 2.1% or 1.75% discount
2		provided for in this Section being allowed. When the user pays
3		the tax directly to the Department, he shall pay the tax in the
4		same amount and in the same form in which it would be remitted
5		if the tax had been remitted to the Department by the retailer.
6		Refunds made by the seller during the preceding return
7		period to purchasers, on account of tangible personal property
8		returned to the seller, shall be allowed as a deduction under
9		subdivision 5 of his monthly or quarterly return, as the case
10		may be, in case the seller had theretofore included the
11		receipts from the sale of such tangible personal property in a
12		return filed by him and had paid the tax imposed by this Act
13		with respect to such receipts.
14		Where the seller is a corporation, the return filed on
15		behalf of such corporation shall be signed by the president,
16		vice-president, secretary or treasurer or by the properly
17		accredited agent of such corporation.
18		Where the seller is a limited liability company, the return
19		filed on behalf of the limited liability company shall be
20		signed by a manager, member, or properly accredited agent of
21		the limited liability company.
22		Except as provided in this Section, the retailer filing the
23		return under this Section shall, at the time of filing such
24		return, pay to the Department the amount of tax imposed by this
25		Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
26		on and after January 1, 1990, or $5 per calendar year,
27		whichever is greater, which is allowed to reimburse the
28		retailer for the expenses incurred in keeping records,
29		preparing and filing returns, remitting the tax and supplying
30		data to the Department on request. Any prepayment made pursuant
31		to Section 2d of this Act shall be included in the amount on
32		which such 2.1% or 1.75% discount is computed. In the case of
33		retailers who report and pay the tax on a transaction by
34		transaction basis, as provided in this Section, such discount
35		shall be taken with each such tax remittance instead of when
36		such retailer files his periodic return.

1		Before October 1, 2000, if the taxpayer's average monthly
2		tax liability to the Department under this Act, the Use Tax
3		Act, the Service Occupation Tax Act, and the Service Use Tax
4		Act, excluding any liability for prepaid sales tax to be
5		remitted in accordance with Section 2d of this Act, was $10,000
6		or more during the preceding 4 complete calendar quarters, he
7		shall file a return with the Department each month by the 20th
8		day of the month next following the month during which such tax
9		liability is incurred and shall make payments to the Department
10		on or before the 7th, 15th, 22nd and last day of the month
11		during which such liability is incurred. On and after October
12		1, 2000, if the taxpayer's average monthly tax liability to the
13		Department under this Act, the Use Tax Act, the Service
14		Occupation Tax Act, and the Service Use Tax Act, excluding any
15		liability for prepaid sales tax to be remitted in accordance
16		with Section 2d of this Act, was $20,000 or more during the
17		preceding 4 complete calendar quarters, he shall file a return
18		with the Department each month by the 20th day of the month
19		next following the month during which such tax liability is
20		incurred and shall make payment to the Department on or before
21		the 7th, 15th, 22nd and last day of the month during which such
22		liability is incurred. If the month during which such tax
23		liability is incurred began prior to January 1, 1985, each
24		payment shall be in an amount equal to 1/4 of the taxpayer's
25		actual liability for the month or an amount set by the
26		Department not to exceed 1/4 of the average monthly liability
27		of the taxpayer to the Department for the preceding 4 complete
28		calendar quarters (excluding the month of highest liability and
29		the month of lowest liability in such 4 quarter period). If the
30		month during which such tax liability is incurred begins on or
31		after January 1, 1985 and prior to January 1, 1987, each
32		payment shall be in an amount equal to 22.5% of the taxpayer's
33		actual liability for the month or 27.5% of the taxpayer's
34		liability for the same calendar month of the preceding year. If
35		the month during which such tax liability is incurred begins on
36		or after January 1, 1987 and prior to January 1, 1988, each

1		payment shall be in an amount equal to 22.5% of the taxpayer's
2		actual liability for the month or 26.25% of the taxpayer's
3		liability for the same calendar month of the preceding year. If
4		the month during which such tax liability is incurred begins on
5		or after January 1, 1988, and prior to January 1, 1989, or
6		begins on or after January 1, 1996, each payment shall be in an
7		amount equal to 22.5% of the taxpayer's actual liability for
8		the month or 25% of the taxpayer's liability for the same
9		calendar month of the preceding year. If the month during which
10		such tax liability is incurred begins on or after January 1,
11		1989, and prior to January 1, 1996, each payment shall be in an
12		amount equal to 22.5% of the taxpayer's actual liability for
13		the month or 25% of the taxpayer's liability for the same
14		calendar month of the preceding year or 100% of the taxpayer's
15		actual liability for the quarter monthly reporting period. The
16		amount of such quarter monthly payments shall be credited
17		against the final tax liability of the taxpayer's return for
18		that month. Before October 1, 2000, once applicable, the
19		requirement of the making of quarter monthly payments to the
20		Department by taxpayers having an average monthly tax liability
21		of $10,000 or more as determined in the manner provided above
22		shall continue until such taxpayer's average monthly liability
23		to the Department during the preceding 4 complete calendar
24		quarters (excluding the month of highest liability and the
25		month of lowest liability) is less than $9,000, or until such
26		taxpayer's average monthly liability to the Department as
27		computed for each calendar quarter of the 4 preceding complete
28		calendar quarter period is less than $10,000. However, if a
29		taxpayer can show the Department that a substantial change in
30		the taxpayer's business has occurred which causes the taxpayer
31		to anticipate that his average monthly tax liability for the
32		reasonably foreseeable future will fall below the $10,000
33		threshold stated above, then such taxpayer may petition the
34		Department for a change in such taxpayer's reporting status. On
35		and after October 1, 2000, once applicable, the requirement of
36		the making of quarter monthly payments to the Department by

1		taxpayers having an average monthly tax liability of $20,000 or
2		more as determined in the manner provided above shall continue
3		until such taxpayer's average monthly liability to the
4		Department during the preceding 4 complete calendar quarters
5		(excluding the month of highest liability and the month of
6		lowest liability) is less than $19,000 or until such taxpayer's
7		average monthly liability to the Department as computed for
8		each calendar quarter of the 4 preceding complete calendar
9		quarter period is less than $20,000. However, if a taxpayer can
10		show the Department that a substantial change in the taxpayer's
11		business has occurred which causes the taxpayer to anticipate
12		that his average monthly tax liability for the reasonably
13		foreseeable future will fall below the $20,000 threshold stated
14		above, then such taxpayer may petition the Department for a
15		change in such taxpayer's reporting status. The Department
16		shall change such taxpayer's reporting status unless it finds
17		that such change is seasonal in nature and not likely to be
18		long term. If any such quarter monthly payment is not paid at
19		the time or in the amount required by this Section, then the
20		taxpayer shall be liable for penalties and interest on the
21		difference between the minimum amount due as a payment and the
22		amount of such quarter monthly payment actually and timely
23		paid, except insofar as the taxpayer has previously made
24		payments for that month to the Department in excess of the
25		minimum payments previously due as provided in this Section.
26		The Department shall make reasonable rules and regulations to
27		govern the quarter monthly payment amount and quarter monthly
28		payment dates for taxpayers who file on other than a calendar
29		monthly basis.
30		The provisions of this paragraph apply before October 1,
31		2001. Without regard to whether a taxpayer is required to make
32		quarter monthly payments as specified above, any taxpayer who
33		is required by Section 2d of this Act to collect and remit
34		prepaid taxes and has collected prepaid taxes which average in
35		excess of $25,000 per month during the preceding 2 complete
36		calendar quarters, shall file a return with the Department as

1		required by Section 2f and shall make payments to the
2		Department on or before the 7th, 15th, 22nd and last day of the
3		month during which such liability is incurred. If the month
4		during which such tax liability is incurred began prior to the
5		effective date of this amendatory Act of 1985, each payment
6		shall be in an amount not less than 22.5% of the taxpayer's
7		actual liability under Section 2d. If the month during which
8		such tax liability is incurred begins on or after January 1,
9		1986, each payment shall be in an amount equal to 22.5% of the
10		taxpayer's actual liability for the month or 27.5% of the
11		taxpayer's liability for the same calendar month of the
12		preceding calendar year. If the month during which such tax
13		liability is incurred begins on or after January 1, 1987, each
14		payment shall be in an amount equal to 22.5% of the taxpayer's
15		actual liability for the month or 26.25% of the taxpayer's
16		liability for the same calendar month of the preceding year.
17		The amount of such quarter monthly payments shall be credited
18		against the final tax liability of the taxpayer's return for
19		that month filed under this Section or Section 2f, as the case
20		may be. Once applicable, the requirement of the making of
21		quarter monthly payments to the Department pursuant to this
22		paragraph shall continue until such taxpayer's average monthly
23		prepaid tax collections during the preceding 2 complete
24		calendar quarters is $25,000 or less. If any such quarter
25		monthly payment is not paid at the time or in the amount
26		required, the taxpayer shall be liable for penalties and
27		interest on such difference, except insofar as the taxpayer has
28		previously made payments for that month in excess of the
29		minimum payments previously due.
30		The provisions of this paragraph apply on and after October
31		1, 2001. Without regard to whether a taxpayer is required to
32		make quarter monthly payments as specified above, any taxpayer
33		who is required by Section 2d of this Act to collect and remit
34		prepaid taxes and has collected prepaid taxes that average in
35		excess of $20,000 per month during the preceding 4 complete
36		calendar quarters shall file a return with the Department as

1		required by Section 2f and shall make payments to the
2		Department on or before the 7th, 15th, 22nd and last day of the
3		month during which the liability is incurred. Each payment
4		shall be in an amount equal to 22.5% of the taxpayer's actual
5		liability for the month or 25% of the taxpayer's liability for
6		the same calendar month of the preceding year. The amount of
7		the quarter monthly payments shall be credited against the
8		final tax liability of the taxpayer's return for that month
9		filed under this Section or Section 2f, as the case may be.
10		Once applicable, the requirement of the making of quarter
11		monthly payments to the Department pursuant to this paragraph
12		shall continue until the taxpayer's average monthly prepaid tax
13		collections during the preceding 4 complete calendar quarters
14		(excluding the month of highest liability and the month of
15		lowest liability) is less than $19,000 or until such taxpayer's
16		average monthly liability to the Department as computed for
17		each calendar quarter of the 4 preceding complete calendar
18		quarters is less than $20,000. If any such quarter monthly
19		payment is not paid at the time or in the amount required, the
20		taxpayer shall be liable for penalties and interest on such
21		difference, except insofar as the taxpayer has previously made
22		payments for that month in excess of the minimum payments
23		previously due.
24		If any payment provided for in this Section exceeds the
25		taxpayer's liabilities under this Act, the Use Tax Act, the
26		Service Occupation Tax Act and the Service Use Tax Act, as
27		shown on an original monthly return, the Department shall, if
28		requested by the taxpayer, issue to the taxpayer a credit
29		memorandum no later than 30 days after the date of payment. The
30		credit evidenced by such credit memorandum may be assigned by
31		the taxpayer to a similar taxpayer under this Act, the Use Tax
32		Act, the Service Occupation Tax Act or the Service Use Tax Act,
33		in accordance with reasonable rules and regulations to be
34		prescribed by the Department. If no such request is made, the
35		taxpayer may credit such excess payment against tax liability
36		subsequently to be remitted to the Department under this Act,

1		the Use Tax Act, the Service Occupation Tax Act or the Service
2		Use Tax Act, in accordance with reasonable rules and
3		regulations prescribed by the Department. If the Department
4		subsequently determined that all or any part of the credit
5		taken was not actually due to the taxpayer, the taxpayer's 2.1%
6		and 1.75% vendor's discount shall be reduced by 2.1% or 1.75%
7		of the difference between the credit taken and that actually
8		due, and that taxpayer shall be liable for penalties and
9		interest on such difference.
10		If a retailer of motor fuel is entitled to a credit under
11		Section 2d of this Act which exceeds the taxpayer's liability
12		to the Department under this Act for the month which the
13		taxpayer is filing a return, the Department shall issue the
14		taxpayer a credit memorandum for the excess.
15		Beginning January 1, 1990, each month the Department shall
16		pay into the Local Government Tax Fund, a special fund in the
17		State treasury which is hereby created, the net revenue
18		realized for the preceding month from the 1% tax on sales of
19		food for human consumption which is to be consumed off the
20		premises where it is sold (other than alcoholic beverages, soft
21		drinks and food which has been prepared for immediate
22		consumption) and prescription and nonprescription medicines,
23		drugs, medical appliances and insulin, urine testing
24		materials, syringes and needles used by diabetics.
25		Beginning January 1, 1990, each month the Department shall
26		pay into the County and Mass Transit District Fund, a special
27		fund in the State treasury which is hereby created, 4% of the
28		net revenue realized for the preceding month from the 6.25%
29		general rate.
30		Beginning August 1, 2000, each month the Department shall
31		pay into the County and Mass Transit District Fund 20% of the
32		net revenue realized for the preceding month from the 1.25%
33		rate on the selling price of motor fuel and gasohol.
34		Beginning January 1, 1990, each month the Department shall
35		pay into the Local Government Tax Fund 16% of the net revenue
36		realized for the preceding month from the 6.25% general rate on

1		the selling price of tangible personal property.
2		Beginning August 1, 2000, each month the Department shall
3		pay into the Local Government Tax Fund 80% of the net revenue
4		realized for the preceding month from the 1.25% rate on the
5		selling price of motor fuel and gasohol.
6		Of the remainder of the moneys received by the Department
7		pursuant to this Act, (a) 1.75% thereof shall be paid into the
8		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
9		and after July 1, 1989, 3.8% thereof shall be paid into the
10		Build Illinois Fund; provided, however, that if in any fiscal
11		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
12		may be, of the moneys received by the Department and required
13		to be paid into the Build Illinois Fund pursuant to this Act,
14		Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
15		Act, and Section 9 of the Service Occupation Tax Act, such Acts
16		being hereinafter called the "Tax Acts" and such aggregate of
17		2.2% or 3.8%, as the case may be, of moneys being hereinafter
18		called the "Tax Act Amount", and (2) the amount transferred to
19		the Build Illinois Fund from the State and Local Sales Tax
20		Reform Fund shall be less than the Annual Specified Amount (as
21		hereinafter defined), an amount equal to the difference shall
22		be immediately paid into the Build Illinois Fund from other
23		moneys received by the Department pursuant to the Tax Acts; the
24		"Annual Specified Amount" means the amounts specified below for
25		fiscal years 1986 through 1993:
35		and means the Certified Annual Debt Service Requirement (as
36		defined in Section 13 of the Build Illinois Bond Act) or the

1		Tax Act Amount, whichever is greater, for fiscal year 1994 and
2		each fiscal year thereafter; and further provided, that if on
3		the last business day of any month the sum of (1) the Tax Act
4		Amount required to be deposited into the Build Illinois Bond
5		Account in the Build Illinois Fund during such month and (2)
6		the amount transferred to the Build Illinois Fund from the
7		State and Local Sales Tax Reform Fund shall have been less than
8		1/12 of the Annual Specified Amount, an amount equal to the
9		difference shall be immediately paid into the Build Illinois
10		Fund from other moneys received by the Department pursuant to
11		the Tax Acts; and, further provided, that in no event shall the
12		payments required under the preceding proviso result in
13		aggregate payments into the Build Illinois Fund pursuant to
14		this clause (b) for any fiscal year in excess of the greater of
15		(i) the Tax Act Amount or (ii) the Annual Specified Amount for
16		such fiscal year. The amounts payable into the Build Illinois
17		Fund under clause (b) of the first sentence in this paragraph
18		shall be payable only until such time as the aggregate amount
19		on deposit under each trust indenture securing Bonds issued and
20		outstanding pursuant to the Build Illinois Bond Act is
21		sufficient, taking into account any future investment income,
22		to fully provide, in accordance with such indenture, for the
23		defeasance of or the payment of the principal of, premium, if
24		any, and interest on the Bonds secured by such indenture and on
25		any Bonds expected to be issued thereafter and all fees and
26		costs payable with respect thereto, all as certified by the
27		Director of the Bureau of the Budget (now Governor's Office of
28		Management and Budget). If on the last business day of any
29		month in which Bonds are outstanding pursuant to the Build
30		Illinois Bond Act, the aggregate of moneys deposited in the
31		Build Illinois Bond Account in the Build Illinois Fund in such
32		month shall be less than the amount required to be transferred
33		in such month from the Build Illinois Bond Account to the Build
34		Illinois Bond Retirement and Interest Fund pursuant to Section
35		13 of the Build Illinois Bond Act, an amount equal to such
36		deficiency shall be immediately paid from other moneys received

1		by the Department pursuant to the Tax Acts to the Build
2		Illinois Fund; provided, however, that any amounts paid to the
3		Build Illinois Fund in any fiscal year pursuant to this
4		sentence shall be deemed to constitute payments pursuant to
5		clause (b) of the first sentence of this paragraph and shall
6		reduce the amount otherwise payable for such fiscal year
7		pursuant to that clause (b). The moneys received by the
8		Department pursuant to this Act and required to be deposited
9		into the Build Illinois Fund are subject to the pledge, claim
10		and charge set forth in Section 12 of the Build Illinois Bond
11		Act.
12		Subject to payment of amounts into the Build Illinois Fund
13		as provided in the preceding paragraph or in any amendment
14		thereto hereafter enacted, the following specified monthly
15		installment of the amount requested in the certificate of the
16		Chairman of the Metropolitan Pier and Exposition Authority
17		provided under Section 8.25f of the State Finance Act, but not
18		in excess of sums designated as "Total Deposit", shall be
19		deposited in the aggregate from collections under Section 9 of
20		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
21		9 of the Service Occupation Tax Act, and Section 3 of the
22		Retailers' Occupation Tax Act into the McCormick Place
23		Expansion Project Fund in the specified fiscal years.

28		Beginning July 20, 1993 and in each month of each fiscal
29		year thereafter, one-eighth of the amount requested in the
30		certificate of the Chairman of the Metropolitan Pier and
31		Exposition Authority for that fiscal year, less the amount
32		deposited into the McCormick Place Expansion Project Fund by
33		the State Treasurer in the respective month under subsection
34		(g) of Section 13 of the Metropolitan Pier and Exposition
35		Authority Act, plus cumulative deficiencies in the deposits
36		required under this Section for previous months and years,

1		shall be deposited into the McCormick Place Expansion Project
2		Fund, until the full amount requested for the fiscal year, but
3		not in excess of the amount specified above as "Total Deposit",
4		has been deposited.
5		Subject to payment of amounts into the Build Illinois Fund
6		and the McCormick Place Expansion Project Fund pursuant to the
7		preceding paragraphs or in any amendments thereto hereafter
8		enacted, beginning July 1, 1993, the Department shall each
9		month pay into the Illinois Tax Increment Fund 0.27% of 80% of
10		the net revenue realized for the preceding month from the 6.25%
11		general rate on the selling price of tangible personal
12		property.
13		Subject to payment of amounts into the Build Illinois Fund
14		and the McCormick Place Expansion Project Fund pursuant to the
15		preceding paragraphs or in any amendments thereto hereafter
16		enacted, beginning with the receipt of the first report of
17		taxes paid by an eligible business and continuing for a 25-year
18		period, the Department shall each month pay into the Energy
19		Infrastructure Fund 80% of the net revenue realized from the
20		6.25% general rate on the selling price of Illinois-mined coal
21		that was sold to an eligible business. For purposes of this
22		paragraph, the term "eligible business" means a new electric
23		generating facility certified pursuant to Section 605-332 of
24		the Department of Commerce and Economic Opportunity Community
25		Affairs Law of the Civil Administrative Code of Illinois.
26		Of the remainder of the moneys received by the Department
27		pursuant to this Act, 75% thereof shall be paid into the State
28		Treasury and 25% shall be reserved in a special account and
29		used only for the transfer to the Common School Fund as part of
30		the monthly transfer from the General Revenue Fund in
31		accordance with Section 8a of the State Finance Act.
32		The Department may, upon separate written notice to a
33		taxpayer, require the taxpayer to prepare and file with the
34		Department on a form prescribed by the Department within not
35		less than 60 days after receipt of the notice an annual
36		information return for the tax year specified in the notice.

1		Such annual return to the Department shall include a statement
2		of gross receipts as shown by the retailer's last Federal
3		income tax return. If the total receipts of the business as
4		reported in the Federal income tax return do not agree with the
5		gross receipts reported to the Department of Revenue for the
6		same period, the retailer shall attach to his annual return a
7		schedule showing a reconciliation of the 2 amounts and the
8		reasons for the difference. The retailer's annual return to the
9		Department shall also disclose the cost of goods sold by the
10		retailer during the year covered by such return, opening and
11		closing inventories of such goods for such year, costs of goods
12		used from stock or taken from stock and given away by the
13		retailer during such year, payroll information of the
14		retailer's business during such year and any additional
15		reasonable information which the Department deems would be
16		helpful in determining the accuracy of the monthly, quarterly
17		or annual returns filed by such retailer as provided for in
18		this Section.
19		If the annual information return required by this Section
20		is not filed when and as required, the taxpayer shall be liable
21		as follows:
22		(i) Until January 1, 1994, the taxpayer shall be liable
23		for a penalty equal to 1/6 of 1% of the tax due from such
24		taxpayer under this Act during the period to be covered by
25		the annual return for each month or fraction of a month
26		until such return is filed as required, the penalty to be
27		assessed and collected in the same manner as any other
28		penalty provided for in this Act.
29		(ii) On and after January 1, 1994, the taxpayer shall
30		be liable for a penalty as described in Section 3-4 of the
31		Uniform Penalty and Interest Act.
32		The chief executive officer, proprietor, owner or highest
33		ranking manager shall sign the annual return to certify the
34		accuracy of the information contained therein. Any person who
35		willfully signs the annual return containing false or
36		inaccurate information shall be guilty of perjury and punished

1		accordingly. The annual return form prescribed by the
2		Department shall include a warning that the person signing the
3		return may be liable for perjury.
4		The provisions of this Section concerning the filing of an
5		annual information return do not apply to a retailer who is not
6		required to file an income tax return with the United States
7		Government.
8		As soon as possible after the first day of each month, upon
9		certification of the Department of Revenue, the Comptroller
10		shall order transferred and the Treasurer shall transfer from
11		the General Revenue Fund to the Motor Fuel Tax Fund an amount
12		equal to 1.7% of 80% of the net revenue realized under this Act
13		for the second preceding month. Beginning April 1, 2000, this
14		transfer is no longer required and shall not be made.
15		Net revenue realized for a month shall be the revenue
16		collected by the State pursuant to this Act, less the amount
17		paid out during that month as refunds to taxpayers for
18		overpayment of liability.
19		For greater simplicity of administration, manufacturers,
20		importers and wholesalers whose products are sold at retail in
21		Illinois by numerous retailers, and who wish to do so, may
22		assume the responsibility for accounting and paying to the
23		Department all tax accruing under this Act with respect to such
24		sales, if the retailers who are affected do not make written
25		objection to the Department to this arrangement.
26		Any person who promotes, organizes, provides retail
27		selling space for concessionaires or other types of sellers at
28		the Illinois State Fair, DuQuoin State Fair, county fairs,
29		local fairs, art shows, flea markets and similar exhibitions or
30		events, including any transient merchant as defined by Section
31		2 of the Transient Merchant Act of 1987, is required to file a
32		report with the Department providing the name of the merchant's
33		business, the name of the person or persons engaged in
34		merchant's business, the permanent address and Illinois
35		Retailers Occupation Tax Registration Number of the merchant,
36		the dates and location of the event and other reasonable

1		information that the Department may require. The report must be
2		filed not later than the 20th day of the month next following
3		the month during which the event with retail sales was held.
4		Any person who fails to file a report required by this Section
5		commits a business offense and is subject to a fine not to
6		exceed $250.
7		Any person engaged in the business of selling tangible
8		personal property at retail as a concessionaire or other type
9		of seller at the Illinois State Fair, county fairs, art shows,
10		flea markets and similar exhibitions or events, or any
11		transient merchants, as defined by Section 2 of the Transient
12		Merchant Act of 1987, may be required to make a daily report of
13		the amount of such sales to the Department and to make a daily
14		payment of the full amount of tax due. The Department shall
15		impose this requirement when it finds that there is a
16		significant risk of loss of revenue to the State at such an
17		exhibition or event. Such a finding shall be based on evidence
18		that a substantial number of concessionaires or other sellers
19		who are not residents of Illinois will be engaging in the
20		business of selling tangible personal property at retail at the
21		exhibition or event, or other evidence of a significant risk of
22		loss of revenue to the State. The Department shall notify
23		concessionaires and other sellers affected by the imposition of
24		this requirement. In the absence of notification by the
25		Department, the concessionaires and other sellers shall file
26		their returns as otherwise required in this Section.
27		(Source: P.A. 92-12, eff. 7-1-01; 92-16, eff. 6-28-01; 92-208,
28		eff. 8-2-01; 92-484, eff. 8-23-01; 92-492, eff. 1-1-02; 92-600,
29		eff. 6-28-02; 92-651, eff. 7-11-02; 93-22, eff. 6-20-03; 93-24,
30		eff. 6-20-03; revised 10-15-03.)

31		Section 25. The Illinois Vehicle Code is amended by
32		changing Section 3-2001 as follows:
33		(625 ILCS 5/3-2001) (from Ch. 95 1/2, par. 3-2001)
34		Sec. 3-2001. Until July 1, 2003 and beginning again on July

1		1, 2004, a tax of $200 is hereby imposed on the purchase of any
2		passenger car as defined in Section 1-157 of this Code,
3		purchased in Illinois by or on behalf of an insurance company
4		to replace a passenger car of an insured person in settlement
5		of a total loss claim. The tax imposed by this Section shall
6		apply only to that portion of the purchase price of the
7		replacement vehicle paid by the insurance company in settlement
8		of the total loss claim, but not including any portion of such
9		insurance payment which exceeds the market value of the total
10		loss vehicle.
11		(Source: P.A. 93-24, eff. 6-20-03.)

Section 99. Effective date. This Act takes effect on July 1, 2004.