99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB6242

 

Introduced 2/11/2016, by Rep. John M. Cabello

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 105/3-85
35 ILCS 110/3-5
35 ILCS 110/3-70
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reinstates the graphic arts machinery and equipment exemption and the corresponding Manufacturer's Purchase Credit on and after January 1, 2017. Provides that those credits are exempt from the Acts' automatic sunset provisions. Effective immediately.


LRB099 18629 HLH 43011 b

 

 

A BILL FOR

 

HB6242LRB099 18629 HLH 43011 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Sections
53-5 and 3-85 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

 

 

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

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003, and beginning again on September 1,
32004 through August 30, 2014, and beginning again on January 1,
42017, graphic arts machinery and equipment, including repair
5and replacement parts, both new and used, and including that
6manufactured on special order, certified by the purchaser to be
7used primarily for graphic arts production, and including
8machinery and equipment purchased for lease. Equipment
9includes chemicals or chemicals acting as catalysts but only if
10the chemicals or chemicals acting as catalysts effect a direct
11and immediate change upon a graphic arts product. This item (6)
12is exempt from the provisions of Section 3-90.
13    (7) Farm chemicals.
14    (8) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (9) Personal property purchased from a teacher-sponsored
19student organization affiliated with an elementary or
20secondary school located in Illinois.
21    (10) A motor vehicle that is used for automobile renting,
22as defined in the Automobile Renting Occupation and Use Tax
23Act.
24    (11) Farm machinery and equipment, both new and used,
25including that manufactured on special order, certified by the
26purchaser to be used primarily for production agriculture or

 

 

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

 

 

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1computer-assisted operation of production agriculture
2facilities, equipment, and activities such as, but not limited
3to, the collection, monitoring, and correlation of animal and
4crop data for the purpose of formulating animal diets and
5agricultural chemicals. This item (11) is exempt from the
6provisions of Section 3-90.
7    (12) Until June 30, 2013, fuel and petroleum products sold
8to or used by an air common carrier, certified by the carrier
9to be used for consumption, shipment, or storage in the conduct
10of its business as an air common carrier, for a flight destined
11for or returning from a location or locations outside the
12United States without regard to previous or subsequent domestic
13stopovers.
14    Beginning July 1, 2013, fuel and petroleum products sold to
15or used by an air carrier, certified by the carrier to be used
16for consumption, shipment, or storage in the conduct of its
17business as an air common carrier, for a flight that (i) is
18engaged in foreign trade or is engaged in trade between the
19United States and any of its possessions and (ii) transports at
20least one individual or package for hire from the city of
21origination to the city of final destination on the same
22aircraft, without regard to a change in the flight number of
23that aircraft.
24    (13) Proceeds of mandatory service charges separately
25stated on customers' bills for the purchase and consumption of
26food and beverages purchased at retail from a retailer, to the

 

 

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1extent that the proceeds of the service charge are in fact
2turned over as tips or as a substitute for tips to the
3employees who participate directly in preparing, serving,
4hosting or cleaning up the food or beverage function with
5respect to which the service charge is imposed.
6    (14) Until July 1, 2003, oil field exploration, drilling,
7and production equipment, including (i) rigs and parts of rigs,
8rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
9tubular goods, including casing and drill strings, (iii) pumps
10and pump-jack units, (iv) storage tanks and flow lines, (v) any
11individual replacement part for oil field exploration,
12drilling, and production equipment, and (vi) machinery and
13equipment purchased for lease; but excluding motor vehicles
14required to be registered under the Illinois Vehicle Code.
15    (15) Photoprocessing machinery and equipment, including
16repair and replacement parts, both new and used, including that
17manufactured on special order, certified by the purchaser to be
18used primarily for photoprocessing, and including
19photoprocessing machinery and equipment purchased for lease.
20    (16) Coal and aggregate exploration, mining, off-highway
21hauling, processing, maintenance, and reclamation equipment,
22including replacement parts and equipment, and including
23equipment purchased for lease, but excluding motor vehicles
24required to be registered under the Illinois Vehicle Code. The
25changes made to this Section by Public Act 97-767 apply on and
26after July 1, 2003, but no claim for credit or refund is

 

 

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1allowed on or after August 16, 2013 (the effective date of
2Public Act 98-456) for such taxes paid during the period
3beginning July 1, 2003 and ending on August 16, 2013 (the
4effective date of Public Act 98-456).
5    (17) Until July 1, 2003, distillation machinery and
6equipment, sold as a unit or kit, assembled or installed by the
7retailer, certified by the user to be used only for the
8production of ethyl alcohol that will be used for consumption
9as motor fuel or as a component of motor fuel for the personal
10use of the user, and not subject to sale or resale.
11    (18) Manufacturing and assembling machinery and equipment
12used primarily in the process of manufacturing or assembling
13tangible personal property for wholesale or retail sale or
14lease, whether that sale or lease is made directly by the
15manufacturer or by some other person, whether the materials
16used in the process are owned by the manufacturer or some other
17person, or whether that sale or lease is made apart from or as
18an incident to the seller's engaging in the service occupation
19of producing machines, tools, dies, jigs, patterns, gauges, or
20other similar items of no commercial value on special order for
21a particular purchaser. The exemption provided by this
22paragraph (18) does not include machinery and equipment used in
23(i) the generation of electricity for wholesale or retail sale;
24(ii) the generation or treatment of natural or artificial gas
25for wholesale or retail sale that is delivered to customers
26through pipes, pipelines, or mains; or (iii) the treatment of

 

 

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1water for wholesale or retail sale that is delivered to
2customers through pipes, pipelines, or mains. The provisions of
3Public Act 98-583 are declaratory of existing law as to the
4meaning and scope of this exemption.
5    (19) Personal property delivered to a purchaser or
6purchaser's donee inside Illinois when the purchase order for
7that personal property was received by a florist located
8outside Illinois who has a florist located inside Illinois
9deliver the personal property.
10    (20) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (21) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (21) is exempt from the provisions
18of Section 3-90, and the exemption provided for under this item
19(21) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 for such taxes paid during the period beginning May 30,
222000 and ending on January 1, 2008.
23    (22) Computers and communications equipment utilized for
24any hospital purpose and equipment used in the diagnosis,
25analysis, or treatment of hospital patients purchased by a
26lessor who leases the equipment, under a lease of one year or

 

 

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

 

 

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

 

 

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1performance of infrastructure repairs in this State, including
2but not limited to municipal roads and streets, access roads,
3bridges, sidewalks, waste disposal systems, water and sewer
4line extensions, water distribution and purification
5facilities, storm water drainage and retention facilities, and
6sewage treatment facilities, resulting from a State or
7federally declared disaster in Illinois or bordering Illinois
8when such repairs are initiated on facilities located in the
9declared disaster area within 6 months after the disaster.
10    (26) Beginning July 1, 1999, game or game birds purchased
11at a "game breeding and hunting preserve area" as that term is
12used in the Wildlife Code. This paragraph is exempt from the
13provisions of Section 3-90.
14    (27) A motor vehicle, as that term is defined in Section
151-146 of the Illinois Vehicle Code, that is donated to a
16corporation, limited liability company, society, association,
17foundation, or institution that is determined by the Department
18to be organized and operated exclusively for educational
19purposes. For purposes of this exemption, "a corporation,
20limited liability company, society, association, foundation,
21or institution organized and operated exclusively for
22educational purposes" means all tax-supported public schools,
23private schools that offer systematic instruction in useful
24branches of learning by methods common to public schools and
25that compare favorably in their scope and intensity with the
26course of study presented in tax-supported schools, and

 

 

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1vocational or technical schools or institutes organized and
2operated exclusively to provide a course of study of not less
3than 6 weeks duration and designed to prepare individuals to
4follow a trade or to pursue a manual, technical, mechanical,
5industrial, business, or commercial occupation.
6    (28) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 3-90.
20    (29) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and other
23items, and replacement parts for these machines. Beginning
24January 1, 2002 and through June 30, 2003, machines and parts
25for machines used in commercial, coin-operated amusement and
26vending business if a use or occupation tax is paid on the

 

 

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1gross receipts derived from the use of the commercial,
2coin-operated amusement and vending machines. This paragraph
3is exempt from the provisions of Section 3-90.
4    (30) Beginning January 1, 2001 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages, soft
7drinks, and food that has been prepared for immediate
8consumption) and prescription and nonprescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or in a licensed facility as defined
15in the ID/DD Community Care Act, the MC/DD Act, or the
16Specialized Mental Health Rehabilitation Act of 2013.
17    (31) Beginning on the effective date of this amendatory Act
18of the 92nd General Assembly, computers and communications
19equipment utilized for any hospital purpose and equipment used
20in the diagnosis, analysis, or treatment of hospital patients
21purchased by a lessor who leases the equipment, under a lease
22of one year or longer executed or in effect at the time the
23lessor would otherwise be subject to the tax imposed by this
24Act, to a hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of the
26Retailers' Occupation Tax Act. If the equipment is leased in a

 

 

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

 

 

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1Service Use Tax Act, as the case may be, based on the fair
2market value of the property at the time the nonqualifying use
3occurs. No lessor shall collect or attempt to collect an amount
4(however designated) that purports to reimburse that lessor for
5the tax imposed by this Act or the Service Use Tax Act, as the
6case may be, if the tax has not been paid by the lessor. If a
7lessor improperly collects any such amount from the lessee, the
8lessee shall have a legal right to claim a refund of that
9amount from the lessor. If, however, that amount is not
10refunded to the lessee for any reason, the lessor is liable to
11pay that amount to the Department. This paragraph is exempt
12from the provisions of Section 3-90.
13    (33) On and after July 1, 2003 and through June 30, 2004,
14the use in this State of motor vehicles of the second division
15with a gross vehicle weight in excess of 8,000 pounds and that
16are subject to the commercial distribution fee imposed under
17Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
181, 2004 and through June 30, 2005, the use in this State of
19motor vehicles of the second division: (i) with a gross vehicle
20weight rating in excess of 8,000 pounds; (ii) that are subject
21to the commercial distribution fee imposed under Section
223-815.1 of the Illinois Vehicle Code; and (iii) that are
23primarily used for commercial purposes. Through June 30, 2005,
24this exemption applies to repair and replacement parts added
25after the initial purchase of such a motor vehicle if that
26motor vehicle is used in a manner that would qualify for the

 

 

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1rolling stock exemption otherwise provided for in this Act. For
2purposes of this paragraph, the term "used for commercial
3purposes" means the transportation of persons or property in
4furtherance of any commercial or industrial enterprise,
5whether for-hire or not.
6    (34) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 3-90.
13    (35) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

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1films. This exemption applies only to the use of qualifying
2tangible personal property by persons who modify, refurbish,
3complete, repair, replace, or maintain aircraft and who (i)
4hold an Air Agency Certificate and are empowered to operate an
5approved repair station by the Federal Aviation
6Administration, (ii) have a Class IV Rating, and (iii) conduct
7operations in accordance with Part 145 of the Federal Aviation
8Regulations. The exemption does not include aircraft operated
9by a commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (35) by Public Act 98-534 are declarative of existing
13law.
14    (36) Tangible personal property purchased by a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

 

 

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1This paragraph is exempt from the provisions of Section 3-90.
2(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
398-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
41-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
57-29-15.)
 
6    (35 ILCS 105/3-85)
7    Sec. 3-85. Manufacturer's Purchase Credit. For purchases
8of machinery and equipment made on and after January 1, 1995
9through June 30, 2003, and on and after September 1, 2004
10through August 30, 2014, and on and after January 1, 2017, a
11purchaser of manufacturing machinery and equipment that
12qualifies for the exemption provided by paragraph (18) of
13Section 3-5 of this Act earns a credit in an amount equal to a
14fixed percentage of the tax which would have been incurred
15under this Act on those purchases. For purchases of graphic
16arts machinery and equipment made on or after July 1, 1996 and
17through June 30, 2003, and on and after September 1, 2004
18through August 30, 2014, and on and after January 1, 2017, a
19purchaser of graphic arts machinery and equipment that
20qualifies for the exemption provided by paragraph (6) of
21Section 3-5 of this Act earns a credit in an amount equal to a
22fixed percentage of the tax that would have been incurred under
23this Act on those purchases. The credit earned for purchases of
24manufacturing machinery and equipment or graphic arts
25machinery and equipment shall be referred to as the

 

 

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1Manufacturer's Purchase Credit. A graphic arts producer is a
2person engaged in graphic arts production as defined in Section
32-30 of the Retailers' Occupation Tax Act. Beginning July 1,
41996, all references in this Section to manufacturers or
5manufacturing shall also be deemed to refer to graphic arts
6producers or graphic arts production.
7    The amount of credit shall be a percentage of the tax that
8would have been incurred on the purchase of manufacturing
9machinery and equipment or graphic arts machinery and equipment
10if the exemptions provided by paragraph (6) or paragraph (18)
11of Section 3-5 of this Act had not been applicable. The
12percentage shall be as follows:
13        (1) 15% for purchases made on or before June 30, 1995.
14        (2) 25% for purchases made after June 30, 1995, and on
15    or before June 30, 1996.
16        (3) 40% for purchases made after June 30, 1996, and on
17    or before June 30, 1997.
18        (4) 50% for purchases made on or after July 1, 1997.
19    (a) Manufacturer's Purchase Credit earned prior to July 1,
202003. This subsection (a) applies to Manufacturer's Purchase
21Credit earned prior to July 1, 2003. A purchaser of production
22related tangible personal property desiring to use the
23Manufacturer's Purchase Credit shall certify to the seller
24prior to October 1, 2003 that the purchaser is satisfying all
25or part of the liability under the Use Tax Act or the Service
26Use Tax Act that is due on the purchase of the production

 

 

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1related tangible personal property by use of Manufacturer's
2Purchase Credit. The Manufacturer's Purchase Credit
3certification must be dated and shall include the name and
4address of the purchaser, the purchaser's registration number,
5if registered, the credit being applied, and a statement that
6the State Use Tax or Service Use Tax liability is being
7satisfied with the manufacturer's or graphic arts producer's
8accumulated purchase credit. Certification may be incorporated
9into the manufacturer's or graphic arts producer's purchase
10order. Manufacturer's Purchase Credit certification provided
11by the manufacturer or graphic arts producer prior to October
121, 2003 may be used to satisfy the retailer's or serviceman's
13liability under the Retailers' Occupation Tax Act or Service
14Occupation Tax Act for the credit claimed, not to exceed 6.25%
15of the receipts subject to tax from a qualifying purchase, but
16only if the retailer or serviceman reports the Manufacturer's
17Purchase Credit claimed as required by the Department. A
18Manufacturer's Purchase Credit reported on any original or
19amended return filed under this Act after October 20, 2003
20shall be disallowed. The Manufacturer's Purchase Credit earned
21by purchase of exempt manufacturing machinery and equipment or
22graphic arts machinery and equipment is a non-transferable
23credit. A manufacturer or graphic arts producer that enters
24into a contract involving the installation of tangible personal
25property into real estate within a manufacturing or graphic
26arts production facility may, prior to October 1, 2003,

 

 

HB6242- 21 -LRB099 18629 HLH 43011 b

1authorize a construction contractor to utilize credit
2accumulated by the manufacturer or graphic arts producer to
3purchase the tangible personal property. A manufacturer or
4graphic arts producer intending to use accumulated credit to
5purchase such tangible personal property shall execute a
6written contract authorizing the contractor to utilize a
7specified dollar amount of credit. The contractor shall
8furnish, prior to October 1, 2003, the supplier with the
9manufacturer's or graphic arts producer's name, registration
10or resale number, and a statement that a specific amount of the
11Use Tax or Service Use Tax liability, not to exceed 6.25% of
12the selling price, is being satisfied with the credit. The
13manufacturer or graphic arts producer shall remain liable to
14timely report all information required by the annual Report of
15Manufacturer's Purchase Credit Used for all credit utilized by
16a construction contractor.
17    No Manufacturer's Purchase Credit earned prior to July 1,
182003 may be used after October 1, 2003. The Manufacturer's
19Purchase Credit may be used to satisfy liability under the Use
20Tax Act or the Service Use Tax Act due on the purchase of
21production related tangible personal property (including
22purchases by a manufacturer, by a graphic arts producer, or by
23a lessor who rents or leases the use of the property to a
24manufacturer or graphic arts producer) that does not otherwise
25qualify for the manufacturing machinery and equipment
26exemption or the graphic arts machinery and equipment

 

 

HB6242- 22 -LRB099 18629 HLH 43011 b

1exemption. "Production related tangible personal property"
2means (i) all tangible personal property used or consumed by
3the purchaser in a manufacturing facility in which a
4manufacturing process described in Section 2-45 of the
5Retailers' Occupation Tax Act takes place, including tangible
6personal property purchased for incorporation into real estate
7within a manufacturing facility and including, but not limited
8to, tangible personal property used or consumed in activities
9such as preproduction material handling, receiving, quality
10control, inventory control, storage, staging, and packaging
11for shipping and transportation purposes; (ii) all tangible
12personal property used or consumed by the purchaser in a
13graphic arts facility in which graphic arts production as
14described in Section 2-30 of the Retailers' Occupation Tax Act
15takes place, including tangible personal property purchased
16for incorporation into real estate within a graphic arts
17facility and including, but not limited to, all tangible
18personal property used or consumed in activities such as
19graphic arts preliminary or pre-press production,
20pre-production material handling, receiving, quality control,
21inventory control, storage, staging, sorting, labeling,
22mailing, tying, wrapping, and packaging; and (iii) all tangible
23personal property used or consumed by the purchaser for
24research and development. "Production related tangible
25personal property" does not include (i) tangible personal
26property used, within or without a manufacturing facility, in

 

 

HB6242- 23 -LRB099 18629 HLH 43011 b

1sales, purchasing, accounting, fiscal management, marketing,
2personnel recruitment or selection, or landscaping or (ii)
3tangible personal property required to be titled or registered
4with a department, agency, or unit of federal, state, or local
5government. The Manufacturer's Purchase Credit may be used,
6prior to October 1, 2003, to satisfy the tax arising either
7from the purchase of machinery and equipment on or after
8January 1, 1995 for which the exemption provided by paragraph
9(18) of Section 3-5 of this Act was erroneously claimed, or the
10purchase of machinery and equipment on or after July 1, 1996
11for which the exemption provided by paragraph (6) of Section
123-5 of this Act was erroneously claimed, but not in
13satisfaction of penalty, if any, and interest for failure to
14pay the tax when due. A purchaser of production related
15tangible personal property who is required to pay Illinois Use
16Tax or Service Use Tax on the purchase directly to the
17Department may, prior to October 1, 2003, utilize the
18Manufacturer's Purchase Credit in satisfaction of the tax
19arising from that purchase, but not in satisfaction of penalty
20and interest. A purchaser who uses the Manufacturer's Purchase
21Credit to purchase property which is later determined not to be
22production related tangible personal property may be liable for
23tax, penalty, and interest on the purchase of that property as
24of the date of purchase but shall be entitled to use the
25disallowed Manufacturer's Purchase Credit, so long as it has
26not expired and is used prior to October 1, 2003, on qualifying

 

 

HB6242- 24 -LRB099 18629 HLH 43011 b

1purchases of production related tangible personal property not
2previously subject to credit usage. The Manufacturer's
3Purchase Credit earned by a manufacturer or graphic arts
4producer expires the last day of the second calendar year
5following the calendar year in which the credit arose. No
6Manufacturer's Purchase Credit may be used after September 30,
72003 regardless of when that credit was earned.
8    A purchaser earning Manufacturer's Purchase Credit shall
9sign and file an annual Report of Manufacturer's Purchase
10Credit Earned for each calendar year no later than the last day
11of the sixth month following the calendar year in which a
12Manufacturer's Purchase Credit is earned. A Report of
13Manufacturer's Purchase Credit Earned shall be filed on forms
14as prescribed or approved by the Department and shall state,
15for each month of the calendar year: (i) the total purchase
16price of all purchases of exempt manufacturing or graphic arts
17machinery on which the credit was earned; (ii) the total State
18Use Tax or Service Use Tax which would have been due on those
19items; (iii) the percentage used to calculate the amount of
20credit earned; (iv) the amount of credit earned; and (v) such
21other information as the Department may reasonably require. A
22purchaser earning Manufacturer's Purchase Credit shall
23maintain records which identify, as to each purchase of
24manufacturing or graphic arts machinery and equipment on which
25the purchaser earned Manufacturer's Purchase Credit, the
26vendor (including, if applicable, either the vendor's

 

 

HB6242- 25 -LRB099 18629 HLH 43011 b

1registration number or Federal Employer Identification
2Number), the purchase price, and the amount of Manufacturer's
3Purchase Credit earned on each purchase.
4    A purchaser using Manufacturer's Purchase Credit shall
5sign and file an annual Report of Manufacturer's Purchase
6Credit Used for each calendar year no later than the last day
7of the sixth month following the calendar year in which a
8Manufacturer's Purchase Credit is used. A Report of
9Manufacturer's Purchase Credit Used shall be filed on forms as
10prescribed or approved by the Department and shall state, for
11each month of the calendar year: (i) the total purchase price
12of production related tangible personal property purchased
13from Illinois suppliers; (ii) the total purchase price of
14production related tangible personal property purchased from
15out-of-state suppliers; (iii) the total amount of credit used
16during such month; and (iv) such other information as the
17Department may reasonably require. A purchaser using
18Manufacturer's Purchase Credit shall maintain records that
19identify, as to each purchase of production related tangible
20personal property on which the purchaser used Manufacturer's
21Purchase Credit, the vendor (including, if applicable, either
22the vendor's registration number or Federal Employer
23Identification Number), the purchase price, and the amount of
24Manufacturer's Purchase Credit used on each purchase.
25    No annual report shall be filed before May 1, 1996 or after
26June 30, 2004. A purchaser that fails to file an annual Report

 

 

HB6242- 26 -LRB099 18629 HLH 43011 b

1of Manufacturer's Purchase Credit Earned or an annual Report of
2Manufacturer's Purchase Credit Used by the last day of the
3sixth month following the end of the calendar year shall
4forfeit all Manufacturer's Purchase Credit for that calendar
5year unless it establishes that its failure to file was due to
6reasonable cause. Manufacturer's Purchase Credit reports may
7be amended to report and claim credit on qualifying purchases
8not previously reported at any time before the credit would
9have expired, unless both the Department and the purchaser have
10agreed to an extension of the statute of limitations for the
11issuance of a notice of tax liability as provided in Section 4
12of the Retailers' Occupation Tax Act. If the time for
13assessment or refund has been extended, then amended reports
14for a calendar year may be filed at any time prior to the date
15to which the statute of limitations for the calendar year or
16portion thereof has been extended. No Manufacturer's Purchase
17Credit report filed with the Department for periods prior to
18January 1, 1995 shall be approved. Manufacturer's Purchase
19Credit claimed on an amended report may be used, until October
201, 2003, to satisfy tax liability under the Use Tax Act or the
21Service Use Tax Act (i) on qualifying purchases of production
22related tangible personal property made after the date the
23amended report is filed or (ii) assessed by the Department on
24qualifying purchases of production related tangible personal
25property made in the case of manufacturers on or after January
261, 1995, or in the case of graphic arts producers on or after

 

 

HB6242- 27 -LRB099 18629 HLH 43011 b

1July 1, 1996.
2    If the purchaser is not the manufacturer or a graphic arts
3producer, but rents or leases the use of the property to a
4manufacturer or graphic arts producer, the purchaser may earn,
5report, and use Manufacturer's Purchase Credit in the same
6manner as a manufacturer or graphic arts producer.
7    A purchaser shall not be entitled to any Manufacturer's
8Purchase Credit for a purchase that is required to be reported
9and is not timely reported as provided in this Section. A
10purchaser remains liable for (i) any tax that was satisfied by
11use of a Manufacturer's Purchase Credit, as of the date of
12purchase, if that use is not timely reported as required in
13this Section and (ii) for any applicable penalties and interest
14for failing to pay the tax when due. No Manufacturer's Purchase
15Credit may be used after September 30, 2003 to satisfy any tax
16liability imposed under this Act, including any audit
17liability.
18    (b) Manufacturer's Purchase Credit earned on and after
19September 1, 2004. This subsection (b) applies to
20Manufacturer's Purchase Credit earned on and after September 1,
212004. Manufacturer's Purchase Credit earned on or after
22September 1, 2004 may only be used to satisfy the Use Tax or
23Service Use Tax liability incurred on production related
24tangible personal property purchased on or after September 1,
252004. A purchaser of production related tangible personal
26property desiring to use the Manufacturer's Purchase Credit

 

 

HB6242- 28 -LRB099 18629 HLH 43011 b

1shall certify to the seller that the purchaser is satisfying
2all or part of the liability under the Use Tax Act or the
3Service Use Tax Act that is due on the purchase of the
4production related tangible personal property by use of
5Manufacturer's Purchase Credit. The Manufacturer's Purchase
6Credit certification must be dated and shall include the name
7and address of the purchaser, the purchaser's registration
8number, if registered, the credit being applied, and a
9statement that the State Use Tax or Service Use Tax liability
10is being satisfied with the manufacturer's or graphic arts
11producer's accumulated purchase credit. Certification may be
12incorporated into the manufacturer's or graphic arts
13producer's purchase order. Manufacturer's Purchase Credit
14certification provided by the manufacturer or graphic arts
15producer may be used to satisfy the retailer's or serviceman's
16liability under the Retailers' Occupation Tax Act or Service
17Occupation Tax Act for the credit claimed, not to exceed 6.25%
18of the receipts subject to tax from a qualifying purchase, but
19only if the retailer or serviceman reports the Manufacturer's
20Purchase Credit claimed as required by the Department. The
21Manufacturer's Purchase Credit earned by purchase of exempt
22manufacturing machinery and equipment or graphic arts
23machinery and equipment is a non-transferable credit. A
24manufacturer or graphic arts producer that enters into a
25contract involving the installation of tangible personal
26property into real estate within a manufacturing or graphic

 

 

HB6242- 29 -LRB099 18629 HLH 43011 b

1arts production facility may, on or after September 1, 2004,
2authorize a construction contractor to utilize credit
3accumulated by the manufacturer or graphic arts producer to
4purchase the tangible personal property. A manufacturer or
5graphic arts producer intending to use accumulated credit to
6purchase such tangible personal property shall execute a
7written contract authorizing the contractor to utilize a
8specified dollar amount of credit. The contractor shall furnish
9the supplier with the manufacturer's or graphic arts producer's
10name, registration or resale number, and a statement that a
11specific amount of the Use Tax or Service Use Tax liability,
12not to exceed 6.25% of the selling price, is being satisfied
13with the credit. The manufacturer or graphic arts producer
14shall remain liable to timely report all information required
15by the annual Report of Manufacturer's Purchase Credit Used for
16all credit utilized by a construction contractor.
17    The Manufacturer's Purchase Credit may be used to satisfy
18liability under the Use Tax Act or the Service Use Tax Act due
19on the purchase, made on or after September 1, 2004, of
20production related tangible personal property (including
21purchases by a manufacturer, by a graphic arts producer, or by
22a lessor who rents or leases the use of the property to a
23manufacturer or graphic arts producer) that does not otherwise
24qualify for the manufacturing machinery and equipment
25exemption or the graphic arts machinery and equipment
26exemption. "Production related tangible personal property"

 

 

HB6242- 30 -LRB099 18629 HLH 43011 b

1means (i) all tangible personal property used or consumed by
2the purchaser in a manufacturing facility in which a
3manufacturing process described in Section 2-45 of the
4Retailers' Occupation Tax Act takes place, including tangible
5personal property purchased for incorporation into real estate
6within a manufacturing facility and including, but not limited
7to, tangible personal property used or consumed in activities
8such as preproduction material handling, receiving, quality
9control, inventory control, storage, staging, and packaging
10for shipping and transportation purposes; (ii) all tangible
11personal property used or consumed by the purchaser in a
12graphic arts facility in which graphic arts production as
13described in Section 2-30 of the Retailers' Occupation Tax Act
14takes place, including tangible personal property purchased
15for incorporation into real estate within a graphic arts
16facility and including, but not limited to, all tangible
17personal property used or consumed in activities such as
18graphic arts preliminary or pre-press production,
19pre-production material handling, receiving, quality control,
20inventory control, storage, staging, sorting, labeling,
21mailing, tying, wrapping, and packaging; and (iii) all tangible
22personal property used or consumed by the purchaser for
23research and development. "Production related tangible
24personal property" does not include (i) tangible personal
25property used, within or without a manufacturing facility, in
26sales, purchasing, accounting, fiscal management, marketing,

 

 

HB6242- 31 -LRB099 18629 HLH 43011 b

1personnel recruitment or selection, or landscaping or (ii)
2tangible personal property required to be titled or registered
3with a department, agency, or unit of federal, state, or local
4government. The Manufacturer's Purchase Credit may be used to
5satisfy the tax arising either from the purchase of machinery
6and equipment on or after September 1, 2004 for which the
7exemption provided by paragraph (18) of Section 3-5 of this Act
8was erroneously claimed, or the purchase of machinery and
9equipment on or after September 1, 2004 for which the exemption
10provided by paragraph (6) of Section 3-5 of this Act was
11erroneously claimed, but not in satisfaction of penalty, if
12any, and interest for failure to pay the tax when due. A
13purchaser of production related tangible personal property
14that is purchased on or after September 1, 2004 who is required
15to pay Illinois Use Tax or Service Use Tax on the purchase
16directly to the Department may utilize the Manufacturer's
17Purchase Credit in satisfaction of the tax arising from that
18purchase, but not in satisfaction of penalty and interest. A
19purchaser who uses the Manufacturer's Purchase Credit to
20purchase property on and after September 1, 2004 which is later
21determined not to be production related tangible personal
22property may be liable for tax, penalty, and interest on the
23purchase of that property as of the date of purchase but shall
24be entitled to use the disallowed Manufacturer's Purchase
25Credit, so long as it has not expired and is used on qualifying
26purchases of production related tangible personal property not

 

 

HB6242- 32 -LRB099 18629 HLH 43011 b

1previously subject to credit usage. The Manufacturer's
2Purchase Credit earned by a manufacturer or graphic arts
3producer expires the last day of the second calendar year
4following the calendar year in which the credit arose. A
5purchaser earning Manufacturer's Purchase Credit shall sign
6and file an annual Report of Manufacturer's Purchase Credit
7Earned for each calendar year no later than the last day of the
8sixth month following the calendar year in which a
9Manufacturer's Purchase Credit is earned. A Report of
10Manufacturer's Purchase Credit Earned shall be filed on forms
11as prescribed or approved by the Department and shall state,
12for each month of the calendar year: (i) the total purchase
13price of all purchases of exempt manufacturing or graphic arts
14machinery on which the credit was earned; (ii) the total State
15Use Tax or Service Use Tax which would have been due on those
16items; (iii) the percentage used to calculate the amount of
17credit earned; (iv) the amount of credit earned; and (v) such
18other information as the Department may reasonably require. A
19purchaser earning Manufacturer's Purchase Credit shall
20maintain records which identify, as to each purchase of
21manufacturing or graphic arts machinery and equipment on which
22the purchaser earned Manufacturer's Purchase Credit, the
23vendor (including, if applicable, either the vendor's
24registration number or Federal Employer Identification
25Number), the purchase price, and the amount of Manufacturer's
26Purchase Credit earned on each purchase. A purchaser using

 

 

HB6242- 33 -LRB099 18629 HLH 43011 b

1Manufacturer's Purchase Credit shall sign and file an annual
2Report of Manufacturer's Purchase Credit Used for each calendar
3year no later than the last day of the sixth month following
4the calendar year in which a Manufacturer's Purchase Credit is
5used. A Report of Manufacturer's Purchase Credit Used shall be
6filed on forms as prescribed or approved by the Department and
7shall state, for each month of the calendar year: (i) the total
8purchase price of production related tangible personal
9property purchased from Illinois suppliers; (ii) the total
10purchase price of production related tangible personal
11property purchased from out-of-state suppliers; (iii) the
12total amount of credit used during such month; and (iv) such
13other information as the Department may reasonably require. A
14purchaser using Manufacturer's Purchase Credit shall maintain
15records that identify, as to each purchase of production
16related tangible personal property on which the purchaser used
17Manufacturer's Purchase Credit, the vendor (including, if
18applicable, either the vendor's registration number or Federal
19Employer Identification Number), the purchase price, and the
20amount of Manufacturer's Purchase Credit used on each purchase.
21    A purchaser that fails to file an annual Report of
22Manufacturer's Purchase Credit Earned or an annual Report of
23Manufacturer's Purchase Credit Used by the last day of the
24sixth month following the end of the calendar year shall
25forfeit all Manufacturer's Purchase Credit for that calendar
26year unless it establishes that its failure to file was due to

 

 

HB6242- 34 -LRB099 18629 HLH 43011 b

1reasonable cause. Manufacturer's Purchase Credit reports may
2be amended to report and claim credit on qualifying purchases
3not previously reported at any time before the credit would
4have expired, unless both the Department and the purchaser have
5agreed to an extension of the statute of limitations for the
6issuance of a notice of tax liability as provided in Section 4
7of the Retailers' Occupation Tax Act. If the time for
8assessment or refund has been extended, then amended reports
9for a calendar year may be filed at any time prior to the date
10to which the statute of limitations for the calendar year or
11portion thereof has been extended. Manufacturer's Purchase
12Credit claimed on an amended report may be used to satisfy tax
13liability under the Use Tax Act or the Service Use Tax Act (i)
14on qualifying purchases of production related tangible
15personal property made after the date the amended report is
16filed or (ii) assessed by the Department on qualifying
17production related tangible personal property purchased on or
18after September 1, 2004. If the purchaser is not the
19manufacturer or a graphic arts producer, but rents or leases
20the use of the property to a manufacturer or graphic arts
21producer, the purchaser may earn, report, and use
22Manufacturer's Purchase Credit in the same manner as a
23manufacturer or graphic arts producer. A purchaser shall not be
24entitled to any Manufacturer's Purchase Credit for a purchase
25that is required to be reported and is not timely reported as
26provided in this Section. A purchaser remains liable for (i)

 

 

HB6242- 35 -LRB099 18629 HLH 43011 b

1any tax that was satisfied by use of a Manufacturer's Purchase
2Credit, as of the date of purchase, if that use is not timely
3reported as required in this Section and (ii) for any
4applicable penalties and interest for failing to pay the tax
5when due.
6    This Section is exempt from the provisions of Section 3-90.
7(Source: P.A. 96-116, eff. 7-31-09.)
 
8    Section 10. The Service Use Tax Act is amended by changing
9Sections 3-5 and 3-70 as follows:
 
10    (35 ILCS 110/3-5)
11    Sec. 3-5. Exemptions. Use of the following tangible
12personal property is exempt from the tax imposed by this Act:
13    (1) Personal property purchased from a corporation,
14society, association, foundation, institution, or
15organization, other than a limited liability company, that is
16organized and operated as a not-for-profit service enterprise
17for the benefit of persons 65 years of age or older if the
18personal property was not purchased by the enterprise for the
19purpose of resale by the enterprise.
20    (2) Personal property purchased by a non-profit Illinois
21county fair association for use in conducting, operating, or
22promoting the county fair.
23    (3) Personal property purchased by a not-for-profit arts or
24cultural organization that establishes, by proof required by

 

 

HB6242- 36 -LRB099 18629 HLH 43011 b

1the Department by rule, that it has received an exemption under
2Section 501(c)(3) of the Internal Revenue Code and that is
3organized and operated primarily for the presentation or
4support of arts or cultural programming, activities, or
5services. These organizations include, but are not limited to,
6music and dramatic arts organizations such as symphony
7orchestras and theatrical groups, arts and cultural service
8organizations, local arts councils, visual arts organizations,
9and media arts organizations. On and after the effective date
10of this amendatory Act of the 92nd General Assembly, however,
11an entity otherwise eligible for this exemption shall not make
12tax-free purchases unless it has an active identification
13number issued by the Department.
14    (4) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (5) Until July 1, 2003, and beginning again on September 1,
192004 through August 30, 2014, and beginning again on January 1,
202017, graphic arts machinery and equipment, including repair
21and replacement parts, both new and used, and including that
22manufactured on special order or purchased for lease, certified
23by the purchaser to be used primarily for graphic arts
24production. Equipment includes chemicals or chemicals acting
25as catalysts but only if the chemicals or chemicals acting as
26catalysts effect a direct and immediate change upon a graphic

 

 

HB6242- 37 -LRB099 18629 HLH 43011 b

1arts product. This item (5) is exempt from the provisions of
2Section 3-75.
3    (6) Personal property purchased from a teacher-sponsored
4student organization affiliated with an elementary or
5secondary school located in Illinois.
6    (7) Farm machinery and equipment, both new and used,
7including that manufactured on special order, certified by the
8purchaser to be used primarily for production agriculture or
9State or federal agricultural programs, including individual
10replacement parts for the machinery and equipment, including
11machinery and equipment purchased for lease, and including
12implements of husbandry defined in Section 1-130 of the
13Illinois Vehicle Code, farm machinery and agricultural
14chemical and fertilizer spreaders, and nurse wagons required to
15be registered under Section 3-809 of the Illinois Vehicle Code,
16but excluding other motor vehicles required to be registered
17under the Illinois Vehicle Code. Horticultural polyhouses or
18hoop houses used for propagating, growing, or overwintering
19plants shall be considered farm machinery and equipment under
20this item (7). Agricultural chemical tender tanks and dry boxes
21shall include units sold separately from a motor vehicle
22required to be licensed and units sold mounted on a motor
23vehicle required to be licensed if the selling price of the
24tender is separately stated.
25    Farm machinery and equipment shall include precision
26farming equipment that is installed or purchased to be

 

 

HB6242- 38 -LRB099 18629 HLH 43011 b

1installed on farm machinery and equipment including, but not
2limited to, tractors, harvesters, sprayers, planters, seeders,
3or spreaders. Precision farming equipment includes, but is not
4limited to, soil testing sensors, computers, monitors,
5software, global positioning and mapping systems, and other
6such equipment.
7    Farm machinery and equipment also includes computers,
8sensors, software, and related equipment used primarily in the
9computer-assisted operation of production agriculture
10facilities, equipment, and activities such as, but not limited
11to, the collection, monitoring, and correlation of animal and
12crop data for the purpose of formulating animal diets and
13agricultural chemicals. This item (7) is exempt from the
14provisions of Section 3-75.
15    (8) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the conduct
18of its business as an air common carrier, for a flight destined
19for or returning from a location or locations outside the
20United States without regard to previous or subsequent domestic
21stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold to
23or used by an air carrier, certified by the carrier to be used
24for consumption, shipment, or storage in the conduct of its
25business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

 

 

HB6242- 39 -LRB099 18629 HLH 43011 b

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

 

 

HB6242- 40 -LRB099 18629 HLH 43011 b

1certified by the purchaser to be used primarily for
2photoprocessing, and including photoprocessing machinery and
3equipment purchased for lease.
4    (12) Coal and aggregate exploration, mining, off-highway
5hauling, processing, maintenance, and reclamation equipment,
6including replacement parts and equipment, and including
7equipment purchased for lease, but excluding motor vehicles
8required to be registered under the Illinois Vehicle Code. The
9changes made to this Section by Public Act 97-767 apply on and
10after July 1, 2003, but no claim for credit or refund is
11allowed on or after August 16, 2013 (the effective date of
12Public Act 98-456) for such taxes paid during the period
13beginning July 1, 2003 and ending on August 16, 2013 (the
14effective date of Public Act 98-456).
15    (13) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (14) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (14) is exempt from the provisions
23of Section 3-75, and the exemption provided for under this item
24(14) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after the effective
26date of this amendatory Act of the 95th General Assembly for

 

 

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1such taxes paid during the period beginning May 30, 2000 and
2ending on the effective date of this amendatory Act of the 95th
3General Assembly.
4    (15) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients purchased by a
7lessor who leases the equipment, under a lease of one year or
8longer executed or in effect at the time the lessor would
9otherwise be subject to the tax imposed by this Act, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of the
12Retailers' Occupation Tax Act. If the equipment is leased in a
13manner that does not qualify for this exemption or is used in
14any other non-exempt manner, the lessor shall be liable for the
15tax imposed under this Act or the Use Tax Act, as the case may
16be, based on the fair market value of the property at the time
17the non-qualifying use occurs. No lessor shall collect or
18attempt to collect an amount (however designated) that purports
19to reimburse that lessor for the tax imposed by this Act or the
20Use Tax Act, as the case may be, if the tax has not been paid by
21the lessor. If a lessor improperly collects any such amount
22from the lessee, the lessee shall have a legal right to claim a
23refund of that amount from the lessor. If, however, that amount
24is not refunded to the lessee for any reason, the lessor is
25liable to pay that amount to the Department.
26    (16) Personal property purchased by a lessor who leases the

 

 

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

 

 

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1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (18) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in the
7performance of infrastructure repairs in this State, including
8but not limited to municipal roads and streets, access roads,
9bridges, sidewalks, waste disposal systems, water and sewer
10line extensions, water distribution and purification
11facilities, storm water drainage and retention facilities, and
12sewage treatment facilities, resulting from a State or
13federally declared disaster in Illinois or bordering Illinois
14when such repairs are initiated on facilities located in the
15declared disaster area within 6 months after the disaster.
16    (19) Beginning July 1, 1999, game or game birds purchased
17at a "game breeding and hunting preserve area" as that term is
18used in the Wildlife Code. This paragraph is exempt from the
19provisions of Section 3-75.
20    (20) A motor vehicle, as that term is defined in Section
211-146 of the Illinois Vehicle Code, that is donated to a
22corporation, limited liability company, society, association,
23foundation, or institution that is determined by the Department
24to be organized and operated exclusively for educational
25purposes. For purposes of this exemption, "a corporation,
26limited liability company, society, association, foundation,

 

 

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1or institution organized and operated exclusively for
2educational purposes" means all tax-supported public schools,
3private schools that offer systematic instruction in useful
4branches of learning by methods common to public schools and
5that compare favorably in their scope and intensity with the
6course of study presented in tax-supported schools, and
7vocational or technical schools or institutes organized and
8operated exclusively to provide a course of study of not less
9than 6 weeks duration and designed to prepare individuals to
10follow a trade or to pursue a manual, technical, mechanical,
11industrial, business, or commercial occupation.
12    (21) Beginning January 1, 2000, personal property,
13including food, purchased through fundraising events for the
14benefit of a public or private elementary or secondary school,
15a group of those schools, or one or more school districts if
16the events are sponsored by an entity recognized by the school
17district that consists primarily of volunteers and includes
18parents and teachers of the school children. This paragraph
19does not apply to fundraising events (i) for the benefit of
20private home instruction or (ii) for which the fundraising
21entity purchases the personal property sold at the events from
22another individual or entity that sold the property for the
23purpose of resale by the fundraising entity and that profits
24from the sale to the fundraising entity. This paragraph is
25exempt from the provisions of Section 3-75.
26    (22) Beginning January 1, 2000 and through December 31,

 

 

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12001, new or used automatic vending machines that prepare and
2serve hot food and beverages, including coffee, soup, and other
3items, and replacement parts for these machines. Beginning
4January 1, 2002 and through June 30, 2003, machines and parts
5for machines used in commercial, coin-operated amusement and
6vending business if a use or occupation tax is paid on the
7gross receipts derived from the use of the commercial,
8coin-operated amusement and vending machines. This paragraph
9is exempt from the provisions of Section 3-75.
10    (23) Beginning August 23, 2001 and through June 30, 2016,
11food for human consumption that is to be consumed off the
12premises where it is sold (other than alcoholic beverages, soft
13drinks, and food that has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, and insulin, urine testing
16materials, syringes, and needles used by diabetics, for human
17use, when purchased for use by a person receiving medical
18assistance under Article V of the Illinois Public Aid Code who
19resides in a licensed long-term care facility, as defined in
20the Nursing Home Care Act, or in a licensed facility as defined
21in the ID/DD Community Care Act, the MC/DD Act, or the
22Specialized Mental Health Rehabilitation Act of 2013.
23    (24) Beginning on the effective date of this amendatory Act
24of the 92nd General Assembly, computers and communications
25equipment utilized for any hospital purpose and equipment used
26in the diagnosis, analysis, or treatment of hospital patients

 

 

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

 

 

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

 

 

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1completion, replacement, repair, or maintenance of the
2aircraft. This exemption includes consumable supplies used in
3the modification, refurbishment, completion, replacement,
4repair, and maintenance of aircraft, but excludes any
5materials, parts, equipment, components, and consumable
6supplies used in the modification, replacement, repair, and
7maintenance of aircraft engines or power plants, whether such
8engines or power plants are installed or uninstalled upon any
9such aircraft. "Consumable supplies" include, but are not
10limited to, adhesive, tape, sandpaper, general purpose
11lubricants, cleaning solution, latex gloves, and protective
12films. This exemption applies only to the use of qualifying
13tangible personal property transferred incident to the
14modification, refurbishment, completion, replacement, repair,
15or maintenance of aircraft by persons who (i) hold an Air
16Agency Certificate and are empowered to operate an approved
17repair station by the Federal Aviation Administration, (ii)
18have a Class IV Rating, and (iii) conduct operations in
19accordance with Part 145 of the Federal Aviation Regulations.
20The exemption does not include aircraft operated by a
21commercial air carrier providing scheduled passenger air
22service pursuant to authority issued under Part 121 or Part 129
23of the Federal Aviation Regulations. The changes made to this
24paragraph (27) by Public Act 98-534 are declarative of existing
25law.
26    (28) Tangible personal property purchased by a

 

 

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1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt instruments
9issued by the public-facilities corporation in connection with
10the development of the municipal convention hall. This
11exemption includes existing public-facilities corporations as
12provided in Section 11-65-25 of the Illinois Municipal Code.
13This paragraph is exempt from the provisions of Section 3-75.
14(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
167-16-14; 99-180, eff. 7-29-15.)
 
17    (35 ILCS 110/3-70)
18    Sec. 3-70. Manufacturer's Purchase Credit. For purchases
19of machinery and equipment made on and after January 1, 1995
20and through June 30, 2003, and on and after September 1, 2004
21through August 30, 2014, and on and after January 1, 2017, a
22purchaser of manufacturing machinery and equipment that
23qualifies for the exemption provided by Section 2 of this Act
24earns a credit in an amount equal to a fixed percentage of the
25tax which would have been incurred under this Act on those

 

 

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1purchases. For purchases of graphic arts machinery and
2equipment made on or after July 1, 1996 through June 30, 2003,
3and on and after September 1, 2004 through August 30, 2014, and
4on and after January 1, 2017, a purchase of graphic arts
5machinery and equipment that qualifies for the exemption
6provided by paragraph (5) of Section 3-5 of this Act earns a
7credit in an amount equal to a fixed percentage of the tax that
8would have been incurred under this Act on those purchases. The
9credit earned for the purchase of manufacturing machinery and
10equipment and graphic arts machinery and equipment shall be
11referred to as the Manufacturer's Purchase Credit. A graphic
12arts producer is a person engaged in graphic arts production as
13defined in Section 3-30 of the Service Occupation Tax Act.
14Beginning July 1, 1996, all references in this Section to
15manufacturers or manufacturing shall also refer to graphic arts
16producers or graphic arts production.
17    The amount of credit shall be a percentage of the tax that
18would have been incurred on the purchase of the manufacturing
19machinery and equipment or graphic arts machinery and equipment
20if the exemptions provided by Section 2 or paragraph (5) of
21Section 3-5 of this Act had not been applicable.
22    All purchases prior to October 1, 2003 of manufacturing
23machinery and equipment and graphic arts machinery and
24equipment that qualify for the exemptions provided by paragraph
25(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
26qualify for the credit without regard to whether the serviceman

 

 

HB6242- 51 -LRB099 18629 HLH 43011 b

1elected, or could have elected, under paragraph (7) of Section
22 of this Act to exclude the transaction from this Act. If the
3serviceman's billing to the service customer separately states
4a selling price for the exempt manufacturing machinery or
5equipment or the exempt graphic arts machinery and equipment,
6the credit shall be calculated, as otherwise provided herein,
7based on that selling price. If the serviceman's billing does
8not separately state a selling price for the exempt
9manufacturing machinery and equipment or the exempt graphic
10arts machinery and equipment, the credit shall be calculated,
11as otherwise provided herein, based on 50% of the entire
12billing. If the serviceman contracts to design, develop, and
13produce special order manufacturing machinery and equipment or
14special order graphic arts machinery and equipment, and the
15billing does not separately state a selling price for such
16special order machinery and equipment, the credit shall be
17calculated, as otherwise provided herein, based on 50% of the
18entire billing. The provisions of this paragraph are effective
19for purchases made on or after January 1, 1995.
20    The percentage shall be as follows:
21        (1) 15% for purchases made on or before June 30, 1995.
22        (2) 25% for purchases made after June 30, 1995, and on
23    or before June 30, 1996.
24        (3) 40% for purchases made after June 30, 1996, and on
25    or before June 30, 1997.
26        (4) 50% for purchases made on or after July 1, 1997.

 

 

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1    (a) Manufacturer's Purchase Credit earned prior to July 1,
22003. This subsection (a) applies to Manufacturer's Purchase
3Credit earned prior to July 1, 2003. A purchaser of production
4related tangible personal property desiring to use the
5Manufacturer's Purchase Credit shall certify to the seller
6prior to October 1, 2003 that the purchaser is satisfying all
7or part of the liability under the Use Tax Act or the Service
8Use Tax Act that is due on the purchase of the production
9related tangible personal property by use of a Manufacturer's
10Purchase Credit. The Manufacturer's Purchase Credit
11certification must be dated and shall include the name and
12address of the purchaser, the purchaser's registration number,
13if registered, the credit being applied, and a statement that
14the State Use Tax or Service Use Tax liability is being
15satisfied with the manufacturer's or graphic arts producer's
16accumulated purchase credit. Certification may be incorporated
17into the manufacturer's or graphic arts producer's purchase
18order. Manufacturer's Purchase Credit certification provided
19by the manufacturer or graphic arts producer prior to October
201, 2003 may be used to satisfy the retailer's or serviceman's
21liability under the Retailers' Occupation Tax Act or Service
22Occupation Tax Act for the credit claimed, not to exceed 6.25%
23of the receipts subject to tax from a qualifying purchase, but
24only if the retailer or serviceman reports the Manufacturer's
25Purchase Credit claimed as required by the Department. A
26Manufacturer's Purchase Credit reported on any original or

 

 

HB6242- 53 -LRB099 18629 HLH 43011 b

1amended return filed under this Act after October 20, 2003
2shall be disallowed. The Manufacturer's Purchase Credit earned
3by purchase of exempt manufacturing machinery and equipment or
4graphic arts machinery and equipment is a non-transferable
5credit. A manufacturer or graphic arts producer that enters
6into a contract involving the installation of tangible personal
7property into real estate within a manufacturing or graphic
8arts production facility, prior to October 1, 2003, may
9authorize a construction contractor to utilize credit
10accumulated by the manufacturer or graphic arts producer to
11purchase the tangible personal property. A manufacturer or
12graphic arts producer intending to use accumulated credit to
13purchase such tangible personal property shall execute a
14written contract authorizing the contractor to utilize a
15specified dollar amount of credit. The contractor shall
16furnish, prior to October 1, 2003, the supplier with the
17manufacturer's or graphic arts producer's name, registration
18or resale number, and a statement that a specific amount of the
19Use Tax or Service Use Tax liability, not to exceed 6.25% of
20the selling price, is being satisfied with the credit. The
21manufacturer or graphic arts producer shall remain liable to
22timely report all information required by the annual Report of
23Manufacturer's Purchase Credit Used for credit utilized by a
24construction contractor.
25    No Manufacturer's Purchase Credit earned prior to July 1,
262003 may be used after October 1, 2003. The Manufacturer's

 

 

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1Purchase Credit may be used to satisfy liability under the Use
2Tax Act or the Service Use Tax Act due on the purchase of
3production related tangible personal property (including
4purchases by a manufacturer, by a graphic arts producer, or a
5lessor who rents or leases the use of the property to a
6manufacturer or graphic arts producer) that does not otherwise
7qualify for the manufacturing machinery and equipment
8exemption or the graphic arts machinery and equipment
9exemption. "Production related tangible personal property"
10means (i) all tangible personal property used or consumed by
11the purchaser in a manufacturing facility in which a
12manufacturing process described in Section 2-45 of the
13Retailers' Occupation Tax Act takes place, including tangible
14personal property purchased for incorporation into real estate
15within a manufacturing facility and including, but not limited
16to, tangible personal property used or consumed in activities
17such as pre-production material handling, receiving, quality
18control, inventory control, storage, staging, and packaging
19for shipping and transportation purposes; (ii) all tangible
20personal property used or consumed by the purchaser in a
21graphic arts facility in which graphic arts production as
22described in Section 2-30 of the Retailers' Occupation Tax Act
23takes place, including tangible personal property purchased
24for incorporation into real estate within a graphic arts
25facility and including, but not limited to, all tangible
26personal property used or consumed in activities such as

 

 

HB6242- 55 -LRB099 18629 HLH 43011 b

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

 

 

HB6242- 56 -LRB099 18629 HLH 43011 b

1satisfaction of the tax arising from that purchase, but not in
2satisfaction of penalty and interest. A purchaser who uses the
3Manufacturer's Purchase Credit to purchase property which is
4later determined not to be production related tangible personal
5property may be liable for tax, penalty, and interest on the
6purchase of that property as of the date of purchase but shall
7be entitled to use the disallowed Manufacturer's Purchase
8Credit, so long as it has not expired and is used prior to
9October 1, 2003, on qualifying purchases of production related
10tangible personal property not previously subject to credit
11usage. The Manufacturer's Purchase Credit earned by a
12manufacturer or graphic arts producer expires the last day of
13the second calendar year following the calendar year in which
14the credit arose. No Manufacturer's Purchase Credit may be used
15after September 30, 2003 regardless of when that credit was
16earned.
17    A purchaser earning Manufacturer's Purchase Credit shall
18sign and file an annual Report of Manufacturer's Purchase
19Credit Earned for each calendar year no later than the last day
20of the sixth month following the calendar year in which a
21Manufacturer's Purchase Credit is earned. A Report of
22Manufacturer's Purchase Credit Earned shall be filed on forms
23as prescribed or approved by the Department and shall state,
24for each month of the calendar year: (i) the total purchase
25price of all purchases of exempt manufacturing or graphic arts
26machinery on which the credit was earned; (ii) the total State

 

 

HB6242- 57 -LRB099 18629 HLH 43011 b

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

 

 

HB6242- 58 -LRB099 18629 HLH 43011 b

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

 

 

HB6242- 59 -LRB099 18629 HLH 43011 b

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

 

 

HB6242- 60 -LRB099 18629 HLH 43011 b

1    (b) Manufacturer's Purchase Credit earned on and after
2September 1, 2004. This subsection (b) applies to
3Manufacturer's Purchase Credit earned on or after September 1,
42004. Manufacturer's Purchase Credit earned on or after
5September 1, 2004 may only be used to satisfy the Use Tax or
6Service Use Tax liability incurred on production related
7tangible personal property purchased on or after September 1,
82004. A purchaser of production related tangible personal
9property desiring to use the Manufacturer's Purchase Credit
10shall certify to the seller that the purchaser is satisfying
11all or part of the liability under the Use Tax Act or the
12Service Use Tax Act that is due on the purchase of the
13production related tangible personal property by use of a
14Manufacturer's Purchase Credit. The Manufacturer's Purchase
15Credit certification must be dated and shall include the name
16and address of the purchaser, the purchaser's registration
17number, if registered, the credit being applied, and a
18statement that the State Use Tax or Service Use Tax liability
19is being satisfied with the manufacturer's or graphic arts
20producer's accumulated purchase credit. Certification may be
21incorporated into the manufacturer's or graphic arts
22producer's purchase order. Manufacturer's Purchase Credit
23certification provided by the manufacturer or graphic arts
24producer may be used to satisfy the retailer's or serviceman's
25liability under the Retailers' Occupation Tax Act or Service
26Occupation Tax Act for the credit claimed, not to exceed 6.25%

 

 

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1of the receipts subject to tax from a qualifying purchase, but
2only if the retailer or serviceman reports the Manufacturer's
3Purchase Credit claimed as required by the Department. The
4Manufacturer's Purchase Credit earned by purchase of exempt
5manufacturing machinery and equipment or graphic arts
6machinery and equipment is a non-transferable credit. A
7manufacturer or graphic arts producer that enters into a
8contract involving the installation of tangible personal
9property into real estate within a manufacturing or graphic
10arts production facility may, on or after September 1, 2004,
11authorize a construction contractor to utilize credit
12accumulated by the manufacturer or graphic arts producer to
13purchase the tangible personal property. A manufacturer or
14graphic arts producer intending to use accumulated credit to
15purchase such tangible personal property shall execute a
16written contract authorizing the contractor to utilize a
17specified dollar amount of credit. The contractor shall furnish
18the supplier with the manufacturer's or graphic arts producer's
19name, registration or resale number, and a statement that a
20specific amount of the Use Tax or Service Use Tax liability,
21not to exceed 6.25% of the selling price, is being satisfied
22with the credit. The manufacturer or graphic arts producer
23shall remain liable to timely report all information required
24by the annual Report of Manufacturer's Purchase Credit Used for
25credit utilized by a construction contractor.
26    The Manufacturer's Purchase Credit may be used to satisfy

 

 

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1liability under the Use Tax Act or the Service Use Tax Act due
2on the purchase, made on or after September 1, 2004, of
3production related tangible personal property (including
4purchases by a manufacturer, by a graphic arts producer, or a
5lessor who rents or leases the use of the property to a
6manufacturer or graphic arts producer) that does not otherwise
7qualify for the manufacturing machinery and equipment
8exemption or the graphic arts machinery and equipment
9exemption. "Production related tangible personal property"
10means (i) all tangible personal property used or consumed by
11the purchaser in a manufacturing facility in which a
12manufacturing process described in Section 2-45 of the
13Retailers' Occupation Tax Act takes place, including tangible
14personal property purchased for incorporation into real estate
15within a manufacturing facility and including, but not limited
16to, tangible personal property used or consumed in activities
17such as pre-production material handling, receiving, quality
18control, inventory control, storage, staging, and packaging
19for shipping and transportation purposes; (ii) all tangible
20personal property used or consumed by the purchaser in a
21graphic arts facility in which graphic arts production as
22described in Section 2-30 of the Retailers' Occupation Tax Act
23takes place, including tangible personal property purchased
24for incorporation into real estate within a graphic arts
25facility and including, but not limited to, all tangible
26personal property used or consumed in activities such as

 

 

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1graphic arts preliminary or pre-press production,
2pre-production material handling, receiving, quality control,
3inventory control, storage, staging, sorting, labeling,
4mailing, tying, wrapping, and packaging; and (iii) all tangible
5personal property used or consumed by the purchaser for
6research and development. "Production related tangible
7personal property" does not include (i) tangible personal
8property used, within or without a manufacturing or graphic
9arts facility, in sales, purchasing, accounting, fiscal
10management, marketing, personnel recruitment or selection, or
11landscaping or (ii) tangible personal property required to be
12titled or registered with a department, agency, or unit of
13federal, state, or local government. The Manufacturer's
14Purchase Credit may be used to satisfy the tax arising either
15from the purchase of machinery and equipment on or after
16September 1, 2004 for which the manufacturing machinery and
17equipment exemption provided by Section 2 of this Act was
18erroneously claimed, or the purchase of machinery and equipment
19on or after September 1, 2004 for which the exemption provided
20by paragraph (5) of Section 3-5 of this Act was erroneously
21claimed, but not in satisfaction of penalty, if any, and
22interest for failure to pay the tax when due. A purchaser of
23production related tangible personal property that is
24purchased on or after September 1, 2004 who is required to pay
25Illinois Use Tax or Service Use Tax on the purchase directly to
26the Department may utilize the Manufacturer's Purchase Credit

 

 

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1in satisfaction of the tax arising from that purchase, but not
2in satisfaction of penalty and interest. A purchaser who uses
3the Manufacturer's Purchase Credit to purchase property on and
4after September 1, 2004 which is later determined not to be
5production related tangible personal property may be liable for
6tax, penalty, and interest on the purchase of that property as
7of the date of purchase but shall be entitled to use the
8disallowed Manufacturer's Purchase Credit, so long as it has
9not expired, on qualifying purchases of production related
10tangible personal property not previously subject to credit
11usage. The Manufacturer's Purchase Credit earned by a
12manufacturer or graphic arts producer expires the last day of
13the second calendar year following the calendar year in which
14the credit arose.
15    A purchaser earning Manufacturer's Purchase Credit shall
16sign and file an annual Report of Manufacturer's Purchase
17Credit Earned for each calendar year no later than the last day
18of the sixth month following the calendar year in which a
19Manufacturer's Purchase Credit is earned. A Report of
20Manufacturer's Purchase Credit Earned shall be filed on forms
21as prescribed or approved by the Department and shall state,
22for each month of the calendar year: (i) the total purchase
23price of all purchases of exempt manufacturing or graphic arts
24machinery on which the credit was earned; (ii) the total State
25Use Tax or Service Use Tax which would have been due on those
26items; (iii) the percentage used to calculate the amount of

 

 

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1credit earned; (iv) the amount of credit earned; and (v) such
2other information as the Department may reasonably require. A
3purchaser earning Manufacturer's Purchase Credit shall
4maintain records which identify, as to each purchase of
5manufacturing or graphic arts machinery and equipment on which
6the purchaser earned Manufacturer's Purchase Credit, the
7vendor (including, if applicable, either the vendor's
8registration number or Federal Employer Identification
9Number), the purchase price, and the amount of Manufacturer's
10Purchase Credit earned on each purchase.
11    A purchaser using Manufacturer's Purchase Credit shall
12sign and file an annual Report of Manufacturer's Purchase
13Credit Used for each calendar year no later than the last day
14of the sixth month following the calendar year in which a
15Manufacturer's Purchase Credit is used. A Report of
16Manufacturer's Purchase Credit Used shall be filed on forms as
17prescribed or approved by the Department and shall state, for
18each month of the calendar year: (i) the total purchase price
19of production related tangible personal property purchased
20from Illinois suppliers; (ii) the total purchase price of
21production related tangible personal property purchased from
22out-of-state suppliers; (iii) the total amount of credit used
23during such month; and (iv) such other information as the
24Department may reasonably require. A purchaser using
25Manufacturer's Purchase Credit shall maintain records that
26identify, as to each purchase of production related tangible

 

 

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1personal property on which the purchaser used Manufacturer's
2Purchase Credit, the vendor (including, if applicable, either
3the vendor's registration number or Federal Employer
4Identification Number), the purchase price, and the amount of
5Manufacturer's Purchase Credit used on each purchase.
6    A purchaser that fails to file an annual Report of
7Manufacturer's Purchase Credit Earned or an annual Report of
8Manufacturer's Purchase Credit Used by the last day of the
9sixth month following the end of the calendar year shall
10forfeit all Manufacturer's Purchase Credit for that calendar
11year unless it establishes that its failure to file was due to
12reasonable cause. Manufacturer's Purchase Credit reports may
13be amended to report and claim credit on qualifying purchases
14not previously reported at any time before the credit would
15have expired, unless both the Department and the purchaser have
16agreed to an extension of the statute of limitations for the
17issuance of a notice of tax liability as provided in Section 4
18of the Retailers' Occupation Tax Act. If the time for
19assessment or refund has been extended, then amended reports
20for a calendar year may be filed at any time prior to the date
21to which the statute of limitations for the calendar year or
22portion thereof has been extended. Manufacturer's Purchase
23Credit claimed on an amended report may be used to satisfy tax
24liability under the Use Tax Act or the Service Use Tax Act (i)
25on qualifying purchases of production related tangible
26personal property made after the date the amended report is

 

 

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1filed or (ii) assessed by the Department on qualifying
2production related tangible personal property purchased on or
3after September 1, 2004.
4    If the purchaser is not the manufacturer or a graphic arts
5producer, but rents or leases the use of the property to a
6manufacturer or a graphic arts producer, the purchaser may
7earn, report, and use Manufacturer's Purchase Credit in the
8same manner as a manufacturer or graphic arts producer. A
9purchaser shall not be entitled to any Manufacturer's Purchase
10Credit for a purchase that is required to be reported and is
11not timely reported as provided in this Section. A purchaser
12remains liable for (i) any tax that was satisfied by use of a
13Manufacturer's Purchase Credit, as of the date of purchase, if
14that use is not timely reported as required in this Section and
15(ii) for any applicable penalties and interest for failing to
16pay the tax when due.
17    This Section is exempt from the provisions of Section 3-75.
18(Source: P.A. 96-116, eff. 7-31-09.)
 
19    Section 15. The Service Occupation Tax Act is amended by
20changing Section 3-5 as follows:
 
21    (35 ILCS 115/3-5)
22    Sec. 3-5. Exemptions. The following tangible personal
23property is exempt from the tax imposed by this Act:
24    (1) Personal property sold by a corporation, society,

 

 

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

 

 

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1United States of America, or the government of any foreign
2country, and bullion.
3    (5) Until July 1, 2003, and beginning again on September 1,
42004 through August 30, 2014, and beginning again on January 1,
52017, graphic arts machinery and equipment, including repair
6and replacement parts, both new and used, and including that
7manufactured on special order or purchased for lease, certified
8by the purchaser to be used primarily for graphic arts
9production. Equipment includes chemicals or chemicals acting
10as catalysts but only if the chemicals or chemicals acting as
11catalysts effect a direct and immediate change upon a graphic
12arts product. This item (5) is exempt from the provisions of
13Section 3-55.
14    (6) Personal property sold by a teacher-sponsored student
15organization affiliated with an elementary or secondary school
16located in Illinois.
17    (7) Farm machinery and equipment, both new and used,
18including that manufactured on special order, certified by the
19purchaser to be used primarily for production agriculture or
20State or federal agricultural programs, including individual
21replacement parts for the machinery and equipment, including
22machinery and equipment purchased for lease, and including
23implements of husbandry defined in Section 1-130 of the
24Illinois Vehicle Code, farm machinery and agricultural
25chemical and fertilizer spreaders, and nurse wagons required to
26be registered under Section 3-809 of the Illinois Vehicle Code,

 

 

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1but excluding other motor vehicles required to be registered
2under the Illinois Vehicle Code. Horticultural polyhouses or
3hoop houses used for propagating, growing, or overwintering
4plants shall be considered farm machinery and equipment under
5this item (7). Agricultural chemical tender tanks and dry boxes
6shall include units sold separately from a motor vehicle
7required to be licensed and units sold mounted on a motor
8vehicle required to be licensed if the selling price of the
9tender is separately stated.
10    Farm machinery and equipment shall include precision
11farming equipment that is installed or purchased to be
12installed on farm machinery and equipment including, but not
13limited to, tractors, harvesters, sprayers, planters, seeders,
14or spreaders. Precision farming equipment includes, but is not
15limited to, soil testing sensors, computers, monitors,
16software, global positioning and mapping systems, and other
17such equipment.
18    Farm machinery and equipment also includes computers,
19sensors, software, and related equipment used primarily in the
20computer-assisted operation of production agriculture
21facilities, equipment, and activities such as, but not limited
22to, the collection, monitoring, and correlation of animal and
23crop data for the purpose of formulating animal diets and
24agricultural chemicals. This item (7) is exempt from the
25provisions of Section 3-55.
26    (8) Until June 30, 2013, fuel and petroleum products sold

 

 

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1to or used by an air common carrier, certified by the carrier
2to be used for consumption, shipment, or storage in the conduct
3of its business as an air common carrier, for a flight destined
4for or returning from a location or locations outside the
5United States without regard to previous or subsequent domestic
6stopovers.
7    Beginning July 1, 2013, fuel and petroleum products sold to
8or used by an air carrier, certified by the carrier to be used
9for consumption, shipment, or storage in the conduct of its
10business as an air common carrier, for a flight that (i) is
11engaged in foreign trade or is engaged in trade between the
12United States and any of its possessions and (ii) transports at
13least one individual or package for hire from the city of
14origination to the city of final destination on the same
15aircraft, without regard to a change in the flight number of
16that aircraft.
17    (9) Proceeds of mandatory service charges separately
18stated on customers' bills for the purchase and consumption of
19food and beverages, to the extent that the proceeds of the
20service charge are in fact turned over as tips or as a
21substitute for tips to the employees who participate directly
22in preparing, serving, hosting or cleaning up the food or
23beverage function with respect to which the service charge is
24imposed.
25    (10) Until July 1, 2003, oil field exploration, drilling,
26and production equipment, including (i) rigs and parts of rigs,

 

 

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1rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
2tubular goods, including casing and drill strings, (iii) pumps
3and pump-jack units, (iv) storage tanks and flow lines, (v) any
4individual replacement part for oil field exploration,
5drilling, and production equipment, and (vi) machinery and
6equipment purchased for lease; but excluding motor vehicles
7required to be registered under the Illinois Vehicle Code.
8    (11) Photoprocessing machinery and equipment, including
9repair and replacement parts, both new and used, including that
10manufactured on special order, certified by the purchaser to be
11used primarily for photoprocessing, and including
12photoprocessing machinery and equipment purchased for lease.
13    (12) Coal and aggregate exploration, mining, off-highway
14hauling, processing, maintenance, and reclamation equipment,
15including replacement parts and equipment, and including
16equipment purchased for lease, but excluding motor vehicles
17required to be registered under the Illinois Vehicle Code. The
18changes made to this Section by Public Act 97-767 apply on and
19after July 1, 2003, but no claim for credit or refund is
20allowed on or after August 16, 2013 (the effective date of
21Public Act 98-456) for such taxes paid during the period
22beginning July 1, 2003 and ending on August 16, 2013 (the
23effective date of Public Act 98-456).
24    (13) Beginning January 1, 1992 and through June 30, 2016,
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages, soft

 

 

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1drinks and food that has been prepared for immediate
2consumption) and prescription and non-prescription medicines,
3drugs, medical appliances, and insulin, urine testing
4materials, syringes, and needles used by diabetics, for human
5use, when purchased for use by a person receiving medical
6assistance under Article V of the Illinois Public Aid Code who
7resides in a licensed long-term care facility, as defined in
8the Nursing Home Care Act, or in a licensed facility as defined
9in the ID/DD Community Care Act, the MC/DD Act, or the
10Specialized Mental Health Rehabilitation Act of 2013.
11    (14) Semen used for artificial insemination of livestock
12for direct agricultural production.
13    (15) Horses, or interests in horses, registered with and
14meeting the requirements of any of the Arabian Horse Club
15Registry of America, Appaloosa Horse Club, American Quarter
16Horse Association, United States Trotting Association, or
17Jockey Club, as appropriate, used for purposes of breeding or
18racing for prizes. This item (15) is exempt from the provisions
19of Section 3-55, and the exemption provided for under this item
20(15) applies for all periods beginning May 30, 1995, but no
21claim for credit or refund is allowed on or after January 1,
222008 (the effective date of Public Act 95-88) for such taxes
23paid during the period beginning May 30, 2000 and ending on
24January 1, 2008 (the effective date of Public Act 95-88).
25    (16) Computers and communications equipment utilized for
26any hospital purpose and equipment used in the diagnosis,

 

 

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1analysis, or treatment of hospital patients sold to a lessor
2who leases the equipment, under a lease of one year or longer
3executed or in effect at the time of the purchase, to a
4hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of the
6Retailers' Occupation Tax Act.
7    (17) Personal property sold to a lessor who leases the
8property, under a lease of one year or longer executed or in
9effect at the time of the purchase, to a governmental body that
10has been issued an active tax exemption identification number
11by the Department under Section 1g of the Retailers' Occupation
12Tax Act.
13    (18) Beginning with taxable years ending on or after
14December 31, 1995 and ending with taxable years ending on or
15before December 31, 2004, personal property that is donated for
16disaster relief to be used in a State or federally declared
17disaster area in Illinois or bordering Illinois by a
18manufacturer or retailer that is registered in this State to a
19corporation, society, association, foundation, or institution
20that has been issued a sales tax exemption identification
21number by the Department that assists victims of the disaster
22who reside within the declared disaster area.
23    (19) Beginning with taxable years ending on or after
24December 31, 1995 and ending with taxable years ending on or
25before December 31, 2004, personal property that is used in the
26performance of infrastructure repairs in this State, including

 

 

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1but not limited to municipal roads and streets, access roads,
2bridges, sidewalks, waste disposal systems, water and sewer
3line extensions, water distribution and purification
4facilities, storm water drainage and retention facilities, and
5sewage treatment facilities, resulting from a State or
6federally declared disaster in Illinois or bordering Illinois
7when such repairs are initiated on facilities located in the
8declared disaster area within 6 months after the disaster.
9    (20) Beginning July 1, 1999, game or game birds sold at a
10"game breeding and hunting preserve area" as that term is used
11in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-55.
13    (21) A motor vehicle, as that term is defined in Section
141-146 of the Illinois Vehicle Code, that is donated to a
15corporation, limited liability company, society, association,
16foundation, or institution that is determined by the Department
17to be organized and operated exclusively for educational
18purposes. For purposes of this exemption, "a corporation,
19limited liability company, society, association, foundation,
20or institution organized and operated exclusively for
21educational purposes" means all tax-supported public schools,
22private schools that offer systematic instruction in useful
23branches of learning by methods common to public schools and
24that compare favorably in their scope and intensity with the
25course of study presented in tax-supported schools, and
26vocational or technical schools or institutes organized and

 

 

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1operated exclusively to provide a course of study of not less
2than 6 weeks duration and designed to prepare individuals to
3follow a trade or to pursue a manual, technical, mechanical,
4industrial, business, or commercial occupation.
5    (22) Beginning January 1, 2000, personal property,
6including food, purchased through fundraising events for the
7benefit of a public or private elementary or secondary school,
8a group of those schools, or one or more school districts if
9the events are sponsored by an entity recognized by the school
10district that consists primarily of volunteers and includes
11parents and teachers of the school children. This paragraph
12does not apply to fundraising events (i) for the benefit of
13private home instruction or (ii) for which the fundraising
14entity purchases the personal property sold at the events from
15another individual or entity that sold the property for the
16purpose of resale by the fundraising entity and that profits
17from the sale to the fundraising entity. This paragraph is
18exempt from the provisions of Section 3-55.
19    (23) Beginning January 1, 2000 and through December 31,
202001, new or used automatic vending machines that prepare and
21serve hot food and beverages, including coffee, soup, and other
22items, and replacement parts for these machines. Beginning
23January 1, 2002 and through June 30, 2003, machines and parts
24for machines used in commercial, coin-operated amusement and
25vending business if a use or occupation tax is paid on the
26gross receipts derived from the use of the commercial,

 

 

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1coin-operated amusement and vending machines. This paragraph
2is exempt from the provisions of Section 3-55.
3    (24) Beginning on the effective date of this amendatory Act
4of the 92nd General Assembly, computers and communications
5equipment utilized for any hospital purpose and equipment used
6in the diagnosis, analysis, or treatment of hospital patients
7sold to a lessor who leases the equipment, under a lease of one
8year or longer executed or in effect at the time of the
9purchase, to a hospital that has been issued an active tax
10exemption identification number by the Department under
11Section 1g of the Retailers' Occupation Tax Act. This paragraph
12is exempt from the provisions of Section 3-55.
13    (25) Beginning on the effective date of this amendatory Act
14of the 92nd General Assembly, personal property sold to a
15lessor who leases the property, under a lease of one year or
16longer executed or in effect at the time of the purchase, to a
17governmental body that has been issued an active tax exemption
18identification number by the Department under Section 1g of the
19Retailers' Occupation Tax Act. This paragraph is exempt from
20the provisions of Section 3-55.
21    (26) Beginning on January 1, 2002 and through June 30,
222016, tangible personal property purchased from an Illinois
23retailer by a taxpayer engaged in centralized purchasing
24activities in Illinois who will, upon receipt of the property
25in Illinois, temporarily store the property in Illinois (i) for
26the purpose of subsequently transporting it outside this State

 

 

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1for use or consumption thereafter solely outside this State or
2(ii) for the purpose of being processed, fabricated, or
3manufactured into, attached to, or incorporated into other
4tangible personal property to be transported outside this State
5and thereafter used or consumed solely outside this State. The
6Director of Revenue shall, pursuant to rules adopted in
7accordance with the Illinois Administrative Procedure Act,
8issue a permit to any taxpayer in good standing with the
9Department who is eligible for the exemption under this
10paragraph (26). The permit issued under this paragraph (26)
11shall authorize the holder, to the extent and in the manner
12specified in the rules adopted under this Act, to purchase
13tangible personal property from a retailer exempt from the
14taxes imposed by this Act. Taxpayers shall maintain all
15necessary books and records to substantiate the use and
16consumption of all such tangible personal property outside of
17the State of Illinois.
18    (27) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued under
23Title IV of the Environmental Protection Act. This paragraph is
24exempt from the provisions of Section 3-55.
25    (28) Tangible personal property sold to a
26public-facilities corporation, as described in Section

 

 

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111-65-10 of the Illinois Municipal Code, for purposes of
2constructing or furnishing a municipal convention hall, but
3only if the legal title to the municipal convention hall is
4transferred to the municipality without any further
5consideration by or on behalf of the municipality at the time
6of the completion of the municipal convention hall or upon the
7retirement or redemption of any bonds or other debt instruments
8issued by the public-facilities corporation in connection with
9the development of the municipal convention hall. This
10exemption includes existing public-facilities corporations as
11provided in Section 11-65-25 of the Illinois Municipal Code.
12This paragraph is exempt from the provisions of Section 3-55.
13    (29) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

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1films. This exemption applies only to the transfer of
2qualifying tangible personal property incident to the
3modification, refurbishment, completion, replacement, repair,
4or maintenance of an aircraft by persons who (i) hold an Air
5Agency Certificate and are empowered to operate an approved
6repair station by the Federal Aviation Administration, (ii)
7have a Class IV Rating, and (iii) conduct operations in
8accordance with Part 145 of the Federal Aviation Regulations.
9The exemption does not include aircraft operated by a
10commercial air carrier providing scheduled passenger air
11service pursuant to authority issued under Part 121 or Part 129
12of the Federal Aviation Regulations. The changes made to this
13paragraph (29) by Public Act 98-534 are declarative of existing
14law.
15(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1698-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
177-16-14; 99-180, eff. 7-29-15.)
 
18    Section 20. The Retailers' Occupation Tax Act is amended by
19changing Section 2-5 as follows:
 
20    (35 ILCS 120/2-5)
21    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
22sale of the following tangible personal property are exempt
23from the tax imposed by this Act:
24    (1) Farm chemicals.

 

 

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

 

 

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1such equipment.
2    Farm machinery and equipment also includes computers,
3sensors, software, and related equipment used primarily in the
4computer-assisted operation of production agriculture
5facilities, equipment, and activities such as, but not limited
6to, the collection, monitoring, and correlation of animal and
7crop data for the purpose of formulating animal diets and
8agricultural chemicals. This item (2) is exempt from the
9provisions of Section 2-70.
10    (3) Until July 1, 2003, distillation machinery and
11equipment, sold as a unit or kit, assembled or installed by the
12retailer, certified by the user to be used only for the
13production of ethyl alcohol that will be used for consumption
14as motor fuel or as a component of motor fuel for the personal
15use of the user, and not subject to sale or resale.
16    (4) Until July 1, 2003, and beginning again September 1,
172004 through August 30, 2014, and beginning again on January 1,
182017, graphic arts machinery and equipment, including repair
19and replacement parts, both new and used, and including that
20manufactured on special order or purchased for lease, certified
21by the purchaser to be used primarily for graphic arts
22production. Equipment includes chemicals or chemicals acting
23as catalysts but only if the chemicals or chemicals acting as
24catalysts effect a direct and immediate change upon a graphic
25arts product. This item (4) is exempt from the provisions of
26Section 2-70.

 

 

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1    (5) A motor vehicle that is used for automobile renting, as
2defined in the Automobile Renting Occupation and Use Tax Act.
3This paragraph is exempt from the provisions of Section 2-70.
4    (6) Personal property sold by a teacher-sponsored student
5organization affiliated with an elementary or secondary school
6located in Illinois.
7    (7) Until July 1, 2003, proceeds of that portion of the
8selling price of a passenger car the sale of which is subject
9to the Replacement Vehicle Tax.
10    (8) Personal property sold to an Illinois county fair
11association for use in conducting, operating, or promoting the
12county fair.
13    (9) Personal property sold to a not-for-profit arts or
14cultural organization that establishes, by proof required by
15the Department by rule, that it has received an exemption under
16Section 501(c)(3) of the Internal Revenue Code and that is
17organized and operated primarily for the presentation or
18support of arts or cultural programming, activities, or
19services. These organizations include, but are not limited to,
20music and dramatic arts organizations such as symphony
21orchestras and theatrical groups, arts and cultural service
22organizations, local arts councils, visual arts organizations,
23and media arts organizations. On and after the effective date
24of this amendatory Act of the 92nd General Assembly, however,
25an entity otherwise eligible for this exemption shall not make
26tax-free purchases unless it has an active identification

 

 

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1number issued by the Department.
2    (10) Personal property sold by a corporation, society,
3association, foundation, institution, or organization, other
4than a limited liability company, that is organized and
5operated as a not-for-profit service enterprise for the benefit
6of persons 65 years of age or older if the personal property
7was not purchased by the enterprise for the purpose of resale
8by the enterprise.
9    (11) Personal property sold to a governmental body, to a
10corporation, society, association, foundation, or institution
11organized and operated exclusively for charitable, religious,
12or educational purposes, or to a not-for-profit corporation,
13society, association, foundation, institution, or organization
14that has no compensated officers or employees and that is
15organized and operated primarily for the recreation of persons
1655 years of age or older. A limited liability company may
17qualify for the exemption under this paragraph only if the
18limited liability company is organized and operated
19exclusively for educational purposes. On and after July 1,
201987, however, no entity otherwise eligible for this exemption
21shall make tax-free purchases unless it has an active
22identification number issued by the Department.
23    (12) Tangible personal property sold to interstate
24carriers for hire for use as rolling stock moving in interstate
25commerce or to lessors under leases of one year or longer
26executed or in effect at the time of purchase by interstate

 

 

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

 

 

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

 

 

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1stated on customers' bills for purchase and consumption of food
2and beverages, to the extent that the proceeds of the service
3charge are in fact turned over as tips or as a substitute for
4tips to the employees who participate directly in preparing,
5serving, hosting or cleaning up the food or beverage function
6with respect to which the service charge is imposed.
7    (16) Petroleum products sold to a purchaser if the seller
8is prohibited by federal law from charging tax to the
9purchaser.
10    (17) Tangible personal property sold to a common carrier by
11rail or motor that receives the physical possession of the
12property in Illinois and that transports the property, or
13shares with another common carrier in the transportation of the
14property, out of Illinois on a standard uniform bill of lading
15showing the seller of the property as the shipper or consignor
16of the property to a destination outside Illinois, for use
17outside Illinois.
18    (18) Legal tender, currency, medallions, or gold or silver
19coinage issued by the State of Illinois, the government of the
20United States of America, or the government of any foreign
21country, and bullion.
22    (19) Until July 1 2003, oil field exploration, drilling,
23and production equipment, including (i) rigs and parts of rigs,
24rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
25tubular goods, including casing and drill strings, (iii) pumps
26and pump-jack units, (iv) storage tanks and flow lines, (v) any

 

 

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1individual replacement part for oil field exploration,
2drilling, and production equipment, and (vi) machinery and
3equipment purchased for lease; but excluding motor vehicles
4required to be registered under the Illinois Vehicle Code.
5    (20) Photoprocessing machinery and equipment, including
6repair and replacement parts, both new and used, including that
7manufactured on special order, certified by the purchaser to be
8used primarily for photoprocessing, and including
9photoprocessing machinery and equipment purchased for lease.
10    (21) Coal and aggregate exploration, mining, off-highway
11hauling, processing, maintenance, and reclamation equipment,
12including replacement parts and equipment, and including
13equipment purchased for lease, but excluding motor vehicles
14required to be registered under the Illinois Vehicle Code. The
15changes made to this Section by Public Act 97-767 apply on and
16after July 1, 2003, but no claim for credit or refund is
17allowed on or after August 16, 2013 (the effective date of
18Public Act 98-456) for such taxes paid during the period
19beginning July 1, 2003 and ending on August 16, 2013 (the
20effective date of Public Act 98-456).
21    (22) Until June 30, 2013, fuel and petroleum products sold
22to or used by an air carrier, certified by the carrier to be
23used for consumption, shipment, or storage in the conduct of
24its business as an air common carrier, for a flight destined
25for or returning from a location or locations outside the
26United States without regard to previous or subsequent domestic

 

 

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1stopovers.
2    Beginning July 1, 2013, fuel and petroleum products sold to
3or used by an air carrier, certified by the carrier to be used
4for consumption, shipment, or storage in the conduct of its
5business as an air common carrier, for a flight that (i) is
6engaged in foreign trade or is engaged in trade between the
7United States and any of its possessions and (ii) transports at
8least one individual or package for hire from the city of
9origination to the city of final destination on the same
10aircraft, without regard to a change in the flight number of
11that aircraft.
12    (23) A transaction in which the purchase order is received
13by a florist who is located outside Illinois, but who has a
14florist located in Illinois deliver the property to the
15purchaser or the purchaser's donee in Illinois.
16    (24) Fuel consumed or used in the operation of ships,
17barges, or vessels that are used primarily in or for the
18transportation of property or the conveyance of persons for
19hire on rivers bordering on this State if the fuel is delivered
20by the seller to the purchaser's barge, ship, or vessel while
21it is afloat upon that bordering river.
22    (25) Except as provided in item (25-5) of this Section, a
23motor vehicle sold in this State to a nonresident even though
24the motor vehicle is delivered to the nonresident in this
25State, if the motor vehicle is not to be titled in this State,
26and if a drive-away permit is issued to the motor vehicle as

 

 

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1provided in Section 3-603 of the Illinois Vehicle Code or if
2the nonresident purchaser has vehicle registration plates to
3transfer to the motor vehicle upon returning to his or her home
4state. The issuance of the drive-away permit or having the
5out-of-state registration plates to be transferred is prima
6facie evidence that the motor vehicle will not be titled in
7this State.
8    (25-5) The exemption under item (25) does not apply if the
9state in which the motor vehicle will be titled does not allow
10a reciprocal exemption for a motor vehicle sold and delivered
11in that state to an Illinois resident but titled in Illinois.
12The tax collected under this Act on the sale of a motor vehicle
13in this State to a resident of another state that does not
14allow a reciprocal exemption shall be imposed at a rate equal
15to the state's rate of tax on taxable property in the state in
16which the purchaser is a resident, except that the tax shall
17not exceed the tax that would otherwise be imposed under this
18Act. At the time of the sale, the purchaser shall execute a
19statement, signed under penalty of perjury, of his or her
20intent to title the vehicle in the state in which the purchaser
21is a resident within 30 days after the sale and of the fact of
22the payment to the State of Illinois of tax in an amount
23equivalent to the state's rate of tax on taxable property in
24his or her state of residence and shall submit the statement to
25the appropriate tax collection agency in his or her state of
26residence. In addition, the retailer must retain a signed copy

 

 

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1of the statement in his or her records. Nothing in this item
2shall be construed to require the removal of the vehicle from
3this state following the filing of an intent to title the
4vehicle in the purchaser's state of residence if the purchaser
5titles the vehicle in his or her state of residence within 30
6days after the date of sale. The tax collected under this Act
7in accordance with this item (25-5) shall be proportionately
8distributed as if the tax were collected at the 6.25% general
9rate imposed under this Act.
10    (25-7) Beginning on July 1, 2007, no tax is imposed under
11this Act on the sale of an aircraft, as defined in Section 3 of
12the Illinois Aeronautics Act, if all of the following
13conditions are met:
14        (1) the aircraft leaves this State within 15 days after
15    the later of either the issuance of the final billing for
16    the sale of the aircraft, or the authorized approval for
17    return to service, completion of the maintenance record
18    entry, and completion of the test flight and ground test
19    for inspection, as required by 14 C.F.R. 91.407;
20        (2) the aircraft is not based or registered in this
21    State after the sale of the aircraft; and
22        (3) the seller retains in his or her books and records
23    and provides to the Department a signed and dated
24    certification from the purchaser, on a form prescribed by
25    the Department, certifying that the requirements of this
26    item (25-7) are met. The certificate must also include the

 

 

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1    name and address of the purchaser, the address of the
2    location where the aircraft is to be titled or registered,
3    the address of the primary physical location of the
4    aircraft, and other information that the Department may
5    reasonably require.
6    For purposes of this item (25-7):
7    "Based in this State" means hangared, stored, or otherwise
8used, excluding post-sale customizations as defined in this
9Section, for 10 or more days in each 12-month period
10immediately following the date of the sale of the aircraft.
11    "Registered in this State" means an aircraft registered
12with the Department of Transportation, Aeronautics Division,
13or titled or registered with the Federal Aviation
14Administration to an address located in this State.
15    This paragraph (25-7) is exempt from the provisions of
16Section 2-70.
17    (26) Semen used for artificial insemination of livestock
18for direct agricultural production.
19    (27) Horses, or interests in horses, registered with and
20meeting the requirements of any of the Arabian Horse Club
21Registry of America, Appaloosa Horse Club, American Quarter
22Horse Association, United States Trotting Association, or
23Jockey Club, as appropriate, used for purposes of breeding or
24racing for prizes. This item (27) is exempt from the provisions
25of Section 2-70, and the exemption provided for under this item
26(27) applies for all periods beginning May 30, 1995, but no

 

 

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1claim for credit or refund is allowed on or after January 1,
22008 (the effective date of Public Act 95-88) for such taxes
3paid during the period beginning May 30, 2000 and ending on
4January 1, 2008 (the effective date of Public Act 95-88).
5    (28) Computers and communications equipment utilized for
6any hospital purpose and equipment used in the diagnosis,
7analysis, or treatment of hospital patients sold to a lessor
8who leases the equipment, under a lease of one year or longer
9executed or in effect at the time of the purchase, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12this Act.
13    (29) Personal property sold to a lessor who leases the
14property, under a lease of one year or longer executed or in
15effect at the time of the purchase, to a governmental body that
16has been issued an active tax exemption identification number
17by the Department under Section 1g of this Act.
18    (30) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is donated for
21disaster relief to be used in a State or federally declared
22disaster area in Illinois or bordering Illinois by a
23manufacturer or retailer that is registered in this State to a
24corporation, society, association, foundation, or institution
25that has been issued a sales tax exemption identification
26number by the Department that assists victims of the disaster

 

 

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1who reside within the declared disaster area.
2    (31) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is used in the
5performance of infrastructure repairs in this State, including
6but not limited to municipal roads and streets, access roads,
7bridges, sidewalks, waste disposal systems, water and sewer
8line extensions, water distribution and purification
9facilities, storm water drainage and retention facilities, and
10sewage treatment facilities, resulting from a State or
11federally declared disaster in Illinois or bordering Illinois
12when such repairs are initiated on facilities located in the
13declared disaster area within 6 months after the disaster.
14    (32) Beginning July 1, 1999, game or game birds sold at a
15"game breeding and hunting preserve area" as that term is used
16in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 2-70.
18    (33) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the Department
22to be organized and operated exclusively for educational
23purposes. For purposes of this exemption, "a corporation,
24limited liability company, society, association, foundation,
25or institution organized and operated exclusively for
26educational purposes" means all tax-supported public schools,

 

 

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1private schools that offer systematic instruction in useful
2branches of learning by methods common to public schools and
3that compare favorably in their scope and intensity with the
4course of study presented in tax-supported schools, and
5vocational or technical schools or institutes organized and
6operated exclusively to provide a course of study of not less
7than 6 weeks duration and designed to prepare individuals to
8follow a trade or to pursue a manual, technical, mechanical,
9industrial, business, or commercial occupation.
10    (34) Beginning January 1, 2000, personal property,
11including food, purchased through fundraising events for the
12benefit of a public or private elementary or secondary school,
13a group of those schools, or one or more school districts if
14the events are sponsored by an entity recognized by the school
15district that consists primarily of volunteers and includes
16parents and teachers of the school children. This paragraph
17does not apply to fundraising events (i) for the benefit of
18private home instruction or (ii) for which the fundraising
19entity purchases the personal property sold at the events from
20another individual or entity that sold the property for the
21purpose of resale by the fundraising entity and that profits
22from the sale to the fundraising entity. This paragraph is
23exempt from the provisions of Section 2-70.
24    (35) Beginning January 1, 2000 and through December 31,
252001, new or used automatic vending machines that prepare and
26serve hot food and beverages, including coffee, soup, and other

 

 

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1items, and replacement parts for these machines. Beginning
2January 1, 2002 and through June 30, 2003, machines and parts
3for machines used in commercial, coin-operated amusement and
4vending business if a use or occupation tax is paid on the
5gross receipts derived from the use of the commercial,
6coin-operated amusement and vending machines. This paragraph
7is exempt from the provisions of Section 2-70.
8    (35-5) Beginning August 23, 2001 and through June 30, 2016,
9food for human consumption that is to be consumed off the
10premises where it is sold (other than alcoholic beverages, soft
11drinks, and food that has been prepared for immediate
12consumption) and prescription and nonprescription medicines,
13drugs, medical appliances, and insulin, urine testing
14materials, syringes, and needles used by diabetics, for human
15use, when purchased for use by a person receiving medical
16assistance under Article V of the Illinois Public Aid Code who
17resides in a licensed long-term care facility, as defined in
18the Nursing Home Care Act, or a licensed facility as defined in
19the ID/DD Community Care Act, the MC/DD Act, or the Specialized
20Mental Health Rehabilitation Act of 2013.
21    (36) Beginning August 2, 2001, computers and
22communications equipment utilized for any hospital purpose and
23equipment used in the diagnosis, analysis, or treatment of
24hospital patients sold to a lessor who leases the equipment,
25under a lease of one year or longer executed or in effect at
26the time of the purchase, to a hospital that has been issued an

 

 

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1active tax exemption identification number by the Department
2under Section 1g of this Act. This paragraph is exempt from the
3provisions of Section 2-70.
4    (37) Beginning August 2, 2001, personal property sold to a
5lessor who leases the property, under a lease of one year or
6longer executed or in effect at the time of the purchase, to a
7governmental body that has been issued an active tax exemption
8identification number by the Department under Section 1g of
9this Act. This paragraph is exempt from the provisions of
10Section 2-70.
11    (38) Beginning on January 1, 2002 and through June 30,
122016, tangible personal property purchased from an Illinois
13retailer by a taxpayer engaged in centralized purchasing
14activities in Illinois who will, upon receipt of the property
15in Illinois, temporarily store the property in Illinois (i) for
16the purpose of subsequently transporting it outside this State
17for use or consumption thereafter solely outside this State or
18(ii) for the purpose of being processed, fabricated, or
19manufactured into, attached to, or incorporated into other
20tangible personal property to be transported outside this State
21and thereafter used or consumed solely outside this State. The
22Director of Revenue shall, pursuant to rules adopted in
23accordance with the Illinois Administrative Procedure Act,
24issue a permit to any taxpayer in good standing with the
25Department who is eligible for the exemption under this
26paragraph (38). The permit issued under this paragraph (38)

 

 

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

 

 

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1limited to, adhesive, tape, sandpaper, general purpose
2lubricants, cleaning solution, latex gloves, and protective
3films. This exemption applies only to the sale of qualifying
4tangible personal property to persons who modify, refurbish,
5complete, replace, or maintain an aircraft and who (i) hold an
6Air Agency Certificate and are empowered to operate an approved
7repair station by the Federal Aviation Administration, (ii)
8have a Class IV Rating, and (iii) conduct operations in
9accordance with Part 145 of the Federal Aviation Regulations.
10The exemption does not include aircraft operated by a
11commercial air carrier providing scheduled passenger air
12service pursuant to authority issued under Part 121 or Part 129
13of the Federal Aviation Regulations. The changes made to this
14paragraph (40) by Public Act 98-534 are declarative of existing
15law.
16    (41) Tangible personal property sold to a
17public-facilities corporation, as described in Section
1811-65-10 of the Illinois Municipal Code, for purposes of
19constructing or furnishing a municipal convention hall, but
20only if the legal title to the municipal convention hall is
21transferred to the municipality without any further
22consideration by or on behalf of the municipality at the time
23of the completion of the municipal convention hall or upon the
24retirement or redemption of any bonds or other debt instruments
25issued by the public-facilities corporation in connection with
26the development of the municipal convention hall. This

 

 

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1exemption includes existing public-facilities corporations as
2provided in Section 11-65-25 of the Illinois Municipal Code.
3This paragraph is exempt from the provisions of Section 2-70.
4(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
61-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
77-29-15.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.