99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2786

 

Introduced 2/17/2016, by Sen. Terry Link

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 605/605-333 new
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 640/2-4

    Amends the Use Tax Act, the Service Use Tax, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on July 1, 2016, tangible personal property used in the construction or operation of a new or existing data center that has been granted a certificate of exemption by the Department of Commerce and Economic Opportunity is exempt from the taxes imposed under those Acts. Amends the Electricity Excise Tax Law. Provides that, beginning on July 1, 2016, business enterprises that are certified as qualifying Illinois data centers by the Department of Commerce and Economic Opportunity are exempt from the taxes imposed under the Act. Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois to provide for certification of qualified data centers. Effective immediately.


LRB099 17730 HLH 42090 b

 

 

A BILL FOR

 

SB2786LRB099 17730 HLH 42090 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 Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois is
6amended by adding Section 605-333 as follows:
 
7    (20 ILCS 605/605-333 new)
8    Sec. 605-333. Data center investment.
9    (a) The Department shall issue certificates of exemption
10from the Retailers' Occupation Tax Act, the Use Tax Act, the
11Service Use Tax Act, the Service Occupation Tax Act, and the
12Electricity Excise Tax Act to qualifying Illinois data centers.
13    (b) Definitions:
14    For purposes of this Section:
15        "Data center" means a building or a series of buildings
16    rehabilitated or constructed to house a group of networked
17    server computers in one physical location or several sites
18    in order to centralize the storage, management, and
19    dissemination of data and information.
20        "Full-time equivalent job" means a job in which the new
21    employee works for the owner, operator, or tenant of a data
22    center or for a corporation under contract with the owner,
23    operator, or tenant of a data center at a rate of at least

 

 

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1    35 hours per week. An owner, operator, or tenant who
2    employs labor or services at a specific site or facility
3    under contract with another may declare one full-time,
4    permanent job for every 1,820 man hours worked per year
5    under that contract. Vacations, paid holidays, and sick
6    time are included in this computation. Overtime is not
7    considered a part of regular hours.
8        "Qualifying Illinois data center" means a data center
9    that:
10            (1) is located in Illinois;
11            (2)results in a new capital investment on or after
12        July 1, 2016 of at least $25,000,000, collectively, by
13        the data center operator and the tenants of the data
14        center over a period of 48 months; and
15            (3) results in the creation on or after July 1,
16        2016 and over a period of 48 months of at last 10
17        full-time or full-time equivalent new jobs by the data
18        center operator and the tenants of the data center,
19        collectively, associated with the operation or
20        maintenance of the data center.
21    (c) Data centers seeking qualification for a new or
22expanding facility shall apply to the Department in the manner
23specified by the Department. The Department and any qualifying
24person seeking to claim the exemption, including a data center
25operator on behalf of itself and its tenants, must enter into a
26memorandum of understanding that, at a minimum, provides the

 

 

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1details for determining the amount of capital investment made
2and the number of new jobs created, the timeline for achieving
3the capital investment and new job goals, the repayment
4obligation should those goals not be achieved, and any
5conditions under which repayment by the qualifying data center
6or data center tenant claiming the exemption may be required.
7    (d) In addition, the exemption shall apply to any such
8computer equipment or enabling equipment, software purchased
9or leased to upgrade, supplement, or replace computer equipment
10or enabling software purchased or leased in the initial
11investment. Data centers that would have qualified under
12subsection (b) above prior to July 1, 2016, may apply for and
13obtain an exemption for subsequent purchases of computer
14equipment or enabling software purchased or leased to upgrade,
15supplement, or replace computer equipment or enabling software
16purchased or leased in the original investment that would have
17qualified under subsection (b) above.
18    (e) Beginning July 15, 2016, and by July 15 of each year
19thereafter, the Department shall compile an annual report on
20the outcomes and effectiveness of this Act.
 
21    Section 10. The Use Tax Act is amended by changing Section
223-5 as follows:
 
23    (35 ILCS 105/3-5)
24    Sec. 3-5. Exemptions. Use of the following tangible

 

 

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

 

 

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1    (4) Personal property purchased by a governmental body, by
2a corporation, society, association, foundation, or
3institution organized and operated exclusively for charitable,
4religious, or educational purposes, or by a not-for-profit
5corporation, society, association, foundation, institution, or
6organization that has no compensated officers or employees and
7that is organized and operated primarily for the recreation of
8persons 55 years of age or older. A limited liability company
9may qualify for the exemption under this paragraph only if the
10limited liability company is organized and operated
11exclusively for educational purposes. On and after July 1,
121987, however, no entity otherwise eligible for this exemption
13shall make tax-free purchases unless it has an active exemption
14identification number issued by the Department.
15    (5) Until July 1, 2003, a passenger car that is a
16replacement vehicle to the extent that the purchase price of
17the car is subject to the Replacement Vehicle Tax.
18    (6) Until July 1, 2003 and beginning again on September 1,
192004 through August 30, 2014, graphic arts machinery and
20equipment, including repair and replacement parts, both new and
21used, and including that manufactured on special order,
22certified by the purchaser to be used primarily for graphic
23arts production, and including machinery and equipment
24purchased for lease. Equipment includes chemicals or chemicals
25acting as catalysts but only if the chemicals or chemicals
26acting as catalysts effect a direct and immediate change upon a

 

 

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1graphic arts product.
2    (7) Farm chemicals.
3    (8) Legal tender, currency, medallions, or gold or silver
4coinage issued by the State of Illinois, the government of the
5United States of America, or the government of any foreign
6country, and bullion.
7    (9) Personal property purchased from a teacher-sponsored
8student organization affiliated with an elementary or
9secondary school located in Illinois.
10    (10) A motor vehicle that is used for automobile renting,
11as defined in the Automobile Renting Occupation and Use Tax
12Act.
13    (11) Farm machinery and equipment, both new and used,
14including that manufactured on special order, certified by the
15purchaser to be used primarily for production agriculture or
16State or federal agricultural programs, including individual
17replacement parts for the machinery and equipment, including
18machinery and equipment purchased for lease, and including
19implements of husbandry defined in Section 1-130 of the
20Illinois Vehicle Code, farm machinery and agricultural
21chemical and fertilizer spreaders, and nurse wagons required to
22be registered under Section 3-809 of the Illinois Vehicle Code,
23but excluding other motor vehicles required to be registered
24under the Illinois Vehicle Code. Horticultural polyhouses or
25hoop houses used for propagating, growing, or overwintering
26plants shall be considered farm machinery and equipment under

 

 

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1this item (11). Agricultural chemical tender tanks and dry
2boxes shall include units sold separately from a motor vehicle
3required to be licensed and units sold mounted on a motor
4vehicle required to be licensed if the selling price of the
5tender is separately stated.
6    Farm machinery and equipment shall include precision
7farming equipment that is installed or purchased to be
8installed on farm machinery and equipment including, but not
9limited to, tractors, harvesters, sprayers, planters, seeders,
10or spreaders. Precision farming equipment includes, but is not
11limited to, soil testing sensors, computers, monitors,
12software, global positioning and mapping systems, and other
13such equipment.
14    Farm machinery and equipment also includes computers,
15sensors, software, and related equipment used primarily in the
16computer-assisted operation of production agriculture
17facilities, equipment, and activities such as, but not limited
18to, the collection, monitoring, and correlation of animal and
19crop data for the purpose of formulating animal diets and
20agricultural chemicals. This item (11) is exempt from the
21provisions of Section 3-90.
22    (12) Until June 30, 2013, fuel and petroleum products sold
23to or used by an air common carrier, certified by the carrier
24to be used for consumption, shipment, or storage in the conduct
25of its business as an air common carrier, for a flight destined
26for or returning from a location or locations outside the

 

 

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

 

 

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1drilling, and production equipment, and (vi) machinery and
2equipment purchased for lease; but excluding motor vehicles
3required to be registered under the Illinois Vehicle Code.
4    (15) Photoprocessing machinery and equipment, including
5repair and replacement parts, both new and used, including that
6manufactured on special order, certified by the purchaser to be
7used primarily for photoprocessing, and including
8photoprocessing machinery and equipment purchased for lease.
9    (16) Coal and aggregate exploration, mining, off-highway
10hauling, processing, maintenance, and reclamation equipment,
11including replacement parts and equipment, and including
12equipment purchased for lease, but excluding motor vehicles
13required to be registered under the Illinois Vehicle Code. The
14changes made to this Section by Public Act 97-767 apply on and
15after July 1, 2003, but no claim for credit or refund is
16allowed on or after August 16, 2013 (the effective date of
17Public Act 98-456) for such taxes paid during the period
18beginning July 1, 2003 and ending on August 16, 2013 (the
19effective date of Public Act 98-456).
20    (17) Until July 1, 2003, distillation machinery and
21equipment, sold as a unit or kit, assembled or installed by the
22retailer, certified by the user to be used only for the
23production of ethyl alcohol that will be used for consumption
24as motor fuel or as a component of motor fuel for the personal
25use of the user, and not subject to sale or resale.
26    (18) Manufacturing and assembling machinery and equipment

 

 

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1used primarily in the process of manufacturing or assembling
2tangible personal property for wholesale or retail sale or
3lease, whether that sale or lease is made directly by the
4manufacturer or by some other person, whether the materials
5used in the process are owned by the manufacturer or some other
6person, or whether that sale or lease is made apart from or as
7an incident to the seller's engaging in the service occupation
8of producing machines, tools, dies, jigs, patterns, gauges, or
9other similar items of no commercial value on special order for
10a particular purchaser. The exemption provided by this
11paragraph (18) does not include machinery and equipment used in
12(i) the generation of electricity for wholesale or retail sale;
13(ii) the generation or treatment of natural or artificial gas
14for wholesale or retail sale that is delivered to customers
15through pipes, pipelines, or mains; or (iii) the treatment of
16water for wholesale or retail sale that is delivered to
17customers through pipes, pipelines, or mains. The provisions of
18Public Act 98-583 are declaratory of existing law as to the
19meaning and scope of this exemption.
20    (19) Personal property delivered to a purchaser or
21purchaser's donee inside Illinois when the purchase order for
22that personal property was received by a florist located
23outside Illinois who has a florist located inside Illinois
24deliver the personal property.
25    (20) Semen used for artificial insemination of livestock
26for direct agricultural production.

 

 

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1    (21) Horses, or interests in horses, registered with and
2meeting the requirements of any of the Arabian Horse Club
3Registry of America, Appaloosa Horse Club, American Quarter
4Horse Association, United States Trotting Association, or
5Jockey Club, as appropriate, used for purposes of breeding or
6racing for prizes. This item (21) is exempt from the provisions
7of Section 3-90, and the exemption provided for under this item
8(21) applies for all periods beginning May 30, 1995, but no
9claim for credit or refund is allowed on or after January 1,
102008 for such taxes paid during the period beginning May 30,
112000 and ending on January 1, 2008.
12    (22) Computers and communications equipment utilized for
13any hospital purpose and equipment used in the diagnosis,
14analysis, or treatment of hospital patients purchased by a
15lessor who leases the equipment, under a lease of one year or
16longer executed or in effect at the time the lessor would
17otherwise be subject to the tax imposed by this Act, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of the
20Retailers' Occupation Tax Act. If the equipment is leased in a
21manner that does not qualify for this exemption or is used in
22any other non-exempt manner, the lessor shall be liable for the
23tax imposed under this Act or the Service Use Tax Act, as the
24case may be, based on the fair market value of the property at
25the time the non-qualifying use occurs. No lessor shall collect
26or attempt to collect an amount (however designated) that

 

 

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

 

 

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1that amount is not refunded to the lessee for any reason, the
2lessor is liable to pay that amount to the Department.
3    (24) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is donated for
6disaster relief to be used in a State or federally declared
7disaster area in Illinois or bordering Illinois by a
8manufacturer or retailer that is registered in this State to a
9corporation, society, association, foundation, or institution
10that has been issued a sales tax exemption identification
11number by the Department that assists victims of the disaster
12who reside within the declared disaster area.
13    (25) 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 used in the
16performance of infrastructure repairs in this State, including
17but not limited to municipal roads and streets, access roads,
18bridges, sidewalks, waste disposal systems, water and sewer
19line extensions, water distribution and purification
20facilities, storm water drainage and retention facilities, and
21sewage treatment facilities, resulting from a State or
22federally declared disaster in Illinois or bordering Illinois
23when such repairs are initiated on facilities located in the
24declared disaster area within 6 months after the disaster.
25    (26) Beginning July 1, 1999, game or game birds purchased
26at a "game breeding and hunting preserve area" as that term is

 

 

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1used in the Wildlife Code. This paragraph is exempt from the
2provisions of Section 3-90.
3    (27) A motor vehicle, as that term is defined in Section
41-146 of the Illinois Vehicle Code, that is donated to a
5corporation, limited liability company, society, association,
6foundation, or institution that is determined by the Department
7to be organized and operated exclusively for educational
8purposes. For purposes of this exemption, "a corporation,
9limited liability company, society, association, foundation,
10or institution organized and operated exclusively for
11educational purposes" means all tax-supported public schools,
12private schools that offer systematic instruction in useful
13branches of learning by methods common to public schools and
14that compare favorably in their scope and intensity with the
15course of study presented in tax-supported schools, and
16vocational or technical schools or institutes organized and
17operated exclusively to provide a course of study of not less
18than 6 weeks duration and designed to prepare individuals to
19follow a trade or to pursue a manual, technical, mechanical,
20industrial, business, or commercial occupation.
21    (28) Beginning January 1, 2000, personal property,
22including food, purchased through fundraising events for the
23benefit of a public or private elementary or secondary school,
24a group of those schools, or one or more school districts if
25the events are sponsored by an entity recognized by the school
26district that consists primarily of volunteers and includes

 

 

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1parents and teachers of the school children. This paragraph
2does not apply to fundraising events (i) for the benefit of
3private home instruction or (ii) for which the fundraising
4entity purchases the personal property sold at the events from
5another individual or entity that sold the property for the
6purpose of resale by the fundraising entity and that profits
7from the sale to the fundraising entity. This paragraph is
8exempt from the provisions of Section 3-90.
9    (29) Beginning January 1, 2000 and through December 31,
102001, new or used automatic vending machines that prepare and
11serve hot food and beverages, including coffee, soup, and other
12items, and replacement parts for these machines. Beginning
13January 1, 2002 and through June 30, 2003, machines and parts
14for machines used in commercial, coin-operated amusement and
15vending business if a use or occupation tax is paid on the
16gross receipts derived from the use of the commercial,
17coin-operated amusement and vending machines. This paragraph
18is exempt from the provisions of Section 3-90.
19    (30) Beginning January 1, 2001 and through June 30, 2016,
20food for human consumption that is to be consumed off the
21premises where it is sold (other than alcoholic beverages, soft
22drinks, and food that has been prepared for immediate
23consumption) and prescription and nonprescription medicines,
24drugs, medical appliances, and insulin, urine testing
25materials, syringes, and needles used by diabetics, for human
26use, when purchased for use by a person receiving medical

 

 

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1assistance under Article V of the Illinois Public Aid Code who
2resides in a licensed long-term care facility, as defined in
3the Nursing Home Care Act, or in a licensed facility as defined
4in the ID/DD Community Care Act, the MC/DD Act, or the
5Specialized Mental Health Rehabilitation Act of 2013.
6    (31) Beginning on the effective date of this amendatory Act
7of the 92nd General Assembly, computers and communications
8equipment utilized for any hospital purpose and equipment used
9in the diagnosis, analysis, or treatment of hospital patients
10purchased by a lessor who leases the equipment, under a lease
11of one year or longer executed or in effect at the time the
12lessor would otherwise be subject to the tax imposed by this
13Act, to a hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of the
15Retailers' Occupation Tax Act. If the equipment is leased in a
16manner that does not qualify for this exemption or is used in
17any other nonexempt manner, the lessor shall be liable for the
18tax imposed under this Act or the Service Use Tax Act, as the
19case may be, based on the fair market value of the property at
20the time the nonqualifying use occurs. No lessor shall collect
21or attempt to collect an amount (however designated) that
22purports to reimburse that lessor for the tax imposed by this
23Act or the Service Use Tax Act, as the case may be, if the tax
24has not been paid by the lessor. If a lessor improperly
25collects any such amount from the lessee, the lessee shall have
26a legal right to claim a refund of that amount from the lessor.

 

 

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

 

 

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1from the provisions of Section 3-90.
2    (33) On and after July 1, 2003 and through June 30, 2004,
3the use in this State of motor vehicles of the second division
4with a gross vehicle weight in excess of 8,000 pounds and that
5are subject to the commercial distribution fee imposed under
6Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
71, 2004 and through June 30, 2005, the use in this State of
8motor vehicles of the second division: (i) with a gross vehicle
9weight rating in excess of 8,000 pounds; (ii) that are subject
10to the commercial distribution fee imposed under Section
113-815.1 of the Illinois Vehicle Code; and (iii) that are
12primarily used for commercial purposes. Through June 30, 2005,
13this exemption applies to repair and replacement parts added
14after the initial purchase of such a motor vehicle if that
15motor vehicle is used in a manner that would qualify for the
16rolling stock exemption otherwise provided for in this Act. For
17purposes of this paragraph, the term "used for commercial
18purposes" means the transportation of persons or property in
19furtherance of any commercial or industrial enterprise,
20whether for-hire or not.
21    (34) Beginning January 1, 2008, tangible personal property
22used in the construction or maintenance of a community water
23supply, as defined under Section 3.145 of the Environmental
24Protection Act, that is operated by a not-for-profit
25corporation that holds a valid water supply permit issued under
26Title IV of the Environmental Protection Act. This paragraph is

 

 

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1exempt from the provisions of Section 3-90.
2    (35) Beginning January 1, 2010, materials, parts,
3equipment, components, and furnishings incorporated into or
4upon an aircraft as part of the modification, refurbishment,
5completion, replacement, repair, or maintenance of the
6aircraft. This exemption includes consumable supplies used in
7the modification, refurbishment, completion, replacement,
8repair, and maintenance of aircraft, but excludes any
9materials, parts, equipment, components, and consumable
10supplies used in the modification, replacement, repair, and
11maintenance of aircraft engines or power plants, whether such
12engines or power plants are installed or uninstalled upon any
13such aircraft. "Consumable supplies" include, but are not
14limited to, adhesive, tape, sandpaper, general purpose
15lubricants, cleaning solution, latex gloves, and protective
16films. This exemption applies only to the use of qualifying
17tangible personal property by persons who modify, refurbish,
18complete, repair, replace, or maintain aircraft and who (i)
19hold an Air Agency Certificate and are empowered to operate an
20approved repair station by the Federal Aviation
21Administration, (ii) have a Class IV Rating, and (iii) conduct
22operations in accordance with Part 145 of the Federal Aviation
23Regulations. The exemption does not include aircraft operated
24by a commercial air carrier providing scheduled passenger air
25service pursuant to authority issued under Part 121 or Part 129
26of the Federal Aviation Regulations. The changes made to this

 

 

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1paragraph (35) by Public Act 98-534 are declarative of existing
2law.
3    (36) Tangible personal property purchased by a
4public-facilities corporation, as described in Section
511-65-10 of the Illinois Municipal Code, for purposes of
6constructing or furnishing a municipal convention hall, but
7only if the legal title to the municipal convention hall is
8transferred to the municipality without any further
9consideration by or on behalf of the municipality at the time
10of the completion of the municipal convention hall or upon the
11retirement or redemption of any bonds or other debt instruments
12issued by the public-facilities corporation in connection with
13the development of the municipal convention hall. This
14exemption includes existing public-facilities corporations as
15provided in Section 11-65-25 of the Illinois Municipal Code.
16This paragraph is exempt from the provisions of Section 3-90.
17    (37) Beginning on July 1, 2016, qualified tangible personal
18property used in the construction or operation of a data center
19that has been granted a certificate of exemption by the
20Department of Commerce and Economic Opportunity under Section
21605-333 of the Department of Commerce and Economic Opportunity
22Law of the Civil Administrative Code of Illinois, whether that
23tangible personal property is purchased by the owner of the
24data center or by a contractor, subcontractor, or tenant of the
25owner.
26    For the purposes of this item (37):

 

 

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1        "Data center" has the meaning given to that term in
2    Section 605-333 of the Department of Commerce and Economic
3    Opportunity Law of the Civil Administrative Code of
4    Illinois.
5        "Qualified tangible personal property" means
6    electrical systems and equipment; mechanical systems and
7    equipment; emergency generators; hardware of distributed
8    computers or servers; data storage devices; network
9    connectivity equipment; racks; cabinets; raised floor
10    systems; peripheral components or systems; software;
11    mechanical, electrical, or plumbing systems necessary to
12    operate other items of tangible personal property,
13    including fixtures; and component parts of any of the
14    foregoing, including installation, maintenance, repair,
15    refurbishment, and replacement of qualified tangible
16    personal property. The term "qualified tangible personal
17    property" also includes building materials physically
18    incorporated into the qualifying data center. To document
19    the exemption allowed under this Section, the retailer must
20    obtain from the purchaser a copy of the certificate of
21    eligibility issued by the Department of Commerce and
22    Economic Opportunity.
23    This item (37) is exempt from the provisions of Section
243-90.
25(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2698-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.

 

 

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11-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
27-29-15.)
 
3    Section 15. The Service Use Tax Act is amended by changing
4Section 3-5 as follows:
 
5    (35 ILCS 110/3-5)
6    Sec. 3-5. Exemptions. Use of the following tangible
7personal property is exempt from the tax imposed by this Act:
8    (1) Personal property purchased from a corporation,
9society, association, foundation, institution, or
10organization, other than a limited liability company, that is
11organized and operated as a not-for-profit service enterprise
12for the benefit of persons 65 years of age or older if the
13personal property was not purchased by the enterprise for the
14purpose of resale by the enterprise.
15    (2) Personal property purchased by a non-profit Illinois
16county fair association for use in conducting, operating, or
17promoting the county fair.
18    (3) Personal property purchased by a not-for-profit arts or
19cultural organization that establishes, by proof required by
20the Department by rule, that it has received an exemption under
21Section 501(c)(3) of the Internal Revenue Code and that is
22organized and operated primarily for the presentation or
23support of arts or cultural programming, activities, or
24services. These organizations include, but are not limited to,

 

 

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1music and dramatic arts organizations such as symphony
2orchestras and theatrical groups, arts and cultural service
3organizations, local arts councils, visual arts organizations,
4and media arts organizations. On and after the effective date
5of this amendatory Act of the 92nd General Assembly, however,
6an entity otherwise eligible for this exemption shall not make
7tax-free purchases unless it has an active identification
8number issued by the Department.
9    (4) Legal tender, currency, medallions, or gold or silver
10coinage issued by the State of Illinois, the government of the
11United States of America, or the government of any foreign
12country, and bullion.
13    (5) Until July 1, 2003 and beginning again on September 1,
142004 through August 30, 2014, graphic arts machinery and
15equipment, including repair and replacement parts, both new and
16used, and including that manufactured on special order or
17purchased for lease, certified by the purchaser to be used
18primarily for graphic arts production. Equipment includes
19chemicals or chemicals acting as catalysts but only if the
20chemicals or chemicals acting as catalysts effect a direct and
21immediate change upon a graphic arts product.
22    (6) Personal property purchased from a teacher-sponsored
23student organization affiliated with an elementary or
24secondary school located in Illinois.
25    (7) Farm machinery and equipment, both new and used,
26including that manufactured on special order, certified by the

 

 

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

 

 

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1sensors, software, and related equipment used primarily in the
2computer-assisted operation of production agriculture
3facilities, equipment, and activities such as, but not limited
4to, the collection, monitoring, and correlation of animal and
5crop data for the purpose of formulating animal diets and
6agricultural chemicals. This item (7) is exempt from the
7provisions of Section 3-75.
8    (8) Until June 30, 2013, fuel and petroleum products sold
9to or used by an air common carrier, certified by the carrier
10to be used for consumption, shipment, or storage in the conduct
11of its business as an air common carrier, for a flight destined
12for or returning from a location or locations outside the
13United States without regard to previous or subsequent domestic
14stopovers.
15    Beginning July 1, 2013, fuel and petroleum products sold to
16or used by an air carrier, certified by the carrier to be used
17for consumption, shipment, or storage in the conduct of its
18business as an air common carrier, for a flight that (i) is
19engaged in foreign trade or is engaged in trade between the
20United States and any of its possessions and (ii) transports at
21least one individual or package for hire from the city of
22origination to the city of final destination on the same
23aircraft, without regard to a change in the flight number of
24that aircraft.
25    (9) Proceeds of mandatory service charges separately
26stated on customers' bills for the purchase and consumption of

 

 

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1food and beverages acquired as an incident to the purchase of a
2service from a serviceman, to the extent that the proceeds of
3the service charge are in fact turned over as tips or as a
4substitute for tips to the employees who participate directly
5in preparing, serving, hosting or cleaning up the food or
6beverage function with respect to which the service charge is
7imposed.
8    (10) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of rigs,
10rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
11tubular goods, including casing and drill strings, (iii) pumps
12and pump-jack units, (iv) storage tanks and flow lines, (v) any
13individual replacement part for oil field exploration,
14drilling, and production equipment, and (vi) machinery and
15equipment purchased for lease; but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code.
17    (11) Proceeds from the sale of photoprocessing machinery
18and equipment, including repair and replacement parts, both new
19and used, including that manufactured on special order,
20certified by the purchaser to be used primarily for
21photoprocessing, and including photoprocessing machinery and
22equipment purchased for lease.
23    (12) Coal and aggregate exploration, mining, off-highway
24hauling, processing, maintenance, and reclamation equipment,
25including replacement parts and equipment, and including
26equipment purchased for lease, but excluding motor vehicles

 

 

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1required to be registered under the Illinois Vehicle Code. The
2changes made to this Section by Public Act 97-767 apply on and
3after July 1, 2003, but no claim for credit or refund is
4allowed on or after August 16, 2013 (the effective date of
5Public Act 98-456) for such taxes paid during the period
6beginning July 1, 2003 and ending on August 16, 2013 (the
7effective date of Public Act 98-456).
8    (13) Semen used for artificial insemination of livestock
9for direct agricultural production.
10    (14) Horses, or interests in horses, registered with and
11meeting the requirements of any of the Arabian Horse Club
12Registry of America, Appaloosa Horse Club, American Quarter
13Horse Association, United States Trotting Association, or
14Jockey Club, as appropriate, used for purposes of breeding or
15racing for prizes. This item (14) is exempt from the provisions
16of Section 3-75, and the exemption provided for under this item
17(14) applies for all periods beginning May 30, 1995, but no
18claim for credit or refund is allowed on or after the effective
19date of this amendatory Act of the 95th General Assembly for
20such taxes paid during the period beginning May 30, 2000 and
21ending on the effective date of this amendatory Act of the 95th
22General Assembly.
23    (15) 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 Use Tax Act, as the case may
9be, based on the fair market value of the property at the time
10the non-qualifying use occurs. No lessor shall collect or
11attempt to collect an amount (however designated) that purports
12to reimburse that lessor for the tax imposed by this Act or the
13Use Tax Act, as the case may be, if the tax has not been paid by
14the lessor. If a lessor improperly collects any such amount
15from the lessee, the lessee shall have a legal right to claim a
16refund of that amount from the lessor. If, however, that amount
17is not refunded to the lessee for any reason, the lessor is
18liable to pay that amount to the Department.
19    (16) Personal property purchased by a lessor who leases the
20property, under a lease of one year or longer executed or in
21effect at the time the lessor would otherwise be subject to the
22tax imposed by this Act, to a governmental body that has been
23issued an active tax exemption identification number by the
24Department under Section 1g of the Retailers' Occupation Tax
25Act. If the property is leased in a manner that does not
26qualify for this exemption or is used in any other non-exempt

 

 

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1manner, the lessor shall be liable for the tax imposed under
2this Act or the Use Tax Act, as the case may be, based on the
3fair market value of the property at the time the
4non-qualifying use occurs. No lessor shall collect or attempt
5to collect an amount (however designated) that purports to
6reimburse that lessor for the tax imposed by this Act or the
7Use Tax Act, as the case may be, if the tax has not been paid by
8the lessor. If a lessor improperly collects any such amount
9from the lessee, the lessee shall have a legal right to claim a
10refund of that amount from the lessor. If, however, that amount
11is not refunded to the lessee for any reason, the lessor is
12liable to pay that amount to the Department.
13    (17) 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    (18) 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    (19) Beginning July 1, 1999, game or game birds purchased
10at a "game breeding and hunting preserve area" as that term is
11used in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-75.
13    (20) 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    (21) 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 3-75.
19    (22) 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 3-75.
3    (23) Beginning August 23, 2001 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages, soft
6drinks, and food that has been prepared for immediate
7consumption) and prescription and nonprescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16    (24) Beginning on the effective date of this amendatory Act
17of the 92nd General Assembly, computers and communications
18equipment utilized for any hospital purpose and equipment used
19in the diagnosis, analysis, or treatment of hospital patients
20purchased by a lessor who leases the equipment, under a lease
21of one year or longer executed or in effect at the time the
22lessor would otherwise be subject to the tax imposed by this
23Act, to a hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act. If the equipment is leased in a
26manner that does not qualify for this exemption or is used in

 

 

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

 

 

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1attempt to collect an amount (however designated) that purports
2to reimburse that lessor for the tax imposed by this Act or the
3Use Tax Act, as the case may be, if the tax has not been paid by
4the lessor. If a lessor improperly collects any such amount
5from the lessee, the lessee shall have a legal right to claim a
6refund of that amount from the lessor. If, however, that amount
7is not refunded to the lessee for any reason, the lessor is
8liable to pay that amount to the Department. This paragraph is
9exempt from the provisions of Section 3-75.
10    (26) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 3-75.
17    (27) Beginning January 1, 2010, materials, parts,
18equipment, components, and furnishings incorporated into or
19upon an aircraft as part of the modification, refurbishment,
20completion, replacement, repair, or maintenance of the
21aircraft. This exemption includes consumable supplies used in
22the modification, refurbishment, completion, replacement,
23repair, and maintenance of aircraft, but excludes any
24materials, parts, equipment, components, and consumable
25supplies used in the modification, replacement, repair, and
26maintenance of aircraft engines or power plants, whether such

 

 

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1engines or power plants are installed or uninstalled upon any
2such aircraft. "Consumable supplies" include, but are not
3limited to, adhesive, tape, sandpaper, general purpose
4lubricants, cleaning solution, latex gloves, and protective
5films. This exemption applies only to the use of qualifying
6tangible personal property transferred incident to the
7modification, refurbishment, completion, replacement, repair,
8or maintenance of aircraft by persons who (i) hold an Air
9Agency Certificate and are empowered to operate an approved
10repair station by the Federal Aviation Administration, (ii)
11have a Class IV Rating, and (iii) conduct operations in
12accordance with Part 145 of the Federal Aviation Regulations.
13The exemption does not include aircraft operated by a
14commercial air carrier providing scheduled passenger air
15service pursuant to authority issued under Part 121 or Part 129
16of the Federal Aviation Regulations. The changes made to this
17paragraph (27) by Public Act 98-534 are declarative of existing
18law.
19    (28) Tangible personal property purchased by a
20public-facilities corporation, as described in Section
2111-65-10 of the Illinois Municipal Code, for purposes of
22constructing or furnishing a municipal convention hall, but
23only if the legal title to the municipal convention hall is
24transferred to the municipality without any further
25consideration by or on behalf of the municipality at the time
26of the completion of the municipal convention hall or upon the

 

 

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1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 3-75.
7    (29) Beginning on July 1, 2016, qualified tangible personal
8property used in the construction or operation of a data center
9that has been granted a certificate of exemption by the
10Department of Commerce and Economic Opportunity under Section
11605-333 of the Department of Commerce and Economic Opportunity
12Law of the Civil Administrative Code of Illinois, whether that
13tangible personal property is purchased by the owner of the
14data center or by a contractor, subcontractor, or tenant of the
15owner.
16    For the purposes of this item (29):
17        "Data center" has the meaning given to that term in
18    Section 605-333 of the Department of Commerce and Economic
19    Opportunity Law of the Civil Administrative Code of
20    Illinois.
21        "Qualified tangible personal property" means
22    electrical systems and equipment; mechanical systems and
23    equipment; emergency generators; hardware of distributed
24    computers or servers; data storage devices; network
25    connectivity equipment; racks; cabinets; raised floor
26    systems; peripheral components or systems; software;

 

 

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1    mechanical, electrical, or plumbing systems necessary to
2    operate other items of tangible personal property,
3    including fixtures; and component parts of any of the
4    foregoing, including installation, maintenance, repair,
5    refurbishment, and replacement of qualified tangible
6    personal property. The term "qualified tangible personal
7    property" also includes building materials physically
8    incorporated into the qualifying data center. To document
9    the exemption allowed under this Section, the retailer must
10    obtain from the purchaser a copy of the certificate of
11    eligibility issued by the Department of Commerce and
12    Economic Opportunity.
13    This item (29) is exempt from the provisions of Section
143-75.
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 Service Occupation Tax Act is amended by
19changing Section 3-5 as follows:
 
20    (35 ILCS 115/3-5)
21    Sec. 3-5. Exemptions. The following tangible personal
22property is exempt from the tax imposed by this Act:
23    (1) Personal property sold by a corporation, society,
24association, foundation, institution, or organization, other

 

 

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

 

 

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1country, and bullion.
2    (5) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new and
5used, and including that manufactured on special order or
6purchased for lease, certified by the purchaser to be used
7primarily for graphic arts production. Equipment includes
8chemicals or chemicals acting as catalysts but only if the
9chemicals or chemicals acting as catalysts effect a direct and
10immediate change upon a graphic arts product.
11    (6) Personal property sold by a teacher-sponsored student
12organization affiliated with an elementary or secondary school
13located in Illinois.
14    (7) Farm machinery and equipment, both new and used,
15including that manufactured on special order, certified by the
16purchaser to be used primarily for production agriculture or
17State or federal agricultural programs, including individual
18replacement parts for the machinery and equipment, including
19machinery and equipment purchased for lease, and including
20implements of husbandry defined in Section 1-130 of the
21Illinois Vehicle Code, farm machinery and agricultural
22chemical and fertilizer spreaders, and nurse wagons required to
23be registered under Section 3-809 of the Illinois Vehicle Code,
24but excluding other motor vehicles required to be registered
25under the Illinois Vehicle Code. Horticultural polyhouses or
26hoop houses used for propagating, growing, or overwintering

 

 

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

 

 

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1for or returning from a location or locations outside the
2United States without regard to previous or subsequent domestic
3stopovers.
4    Beginning July 1, 2013, fuel and petroleum products sold to
5or used by an air carrier, certified by the carrier to be used
6for consumption, shipment, or storage in the conduct of its
7business as an air common carrier, for a flight that (i) is
8engaged in foreign trade or is engaged in trade between the
9United States and any of its possessions and (ii) transports at
10least one individual or package for hire from the city of
11origination to the city of final destination on the same
12aircraft, without regard to a change in the flight number of
13that aircraft.
14    (9) Proceeds of mandatory service charges separately
15stated on customers' bills for the purchase and consumption of
16food and beverages, to the extent that the proceeds of the
17service charge are in fact turned over as tips or as a
18substitute for tips to the employees who participate directly
19in preparing, serving, hosting or cleaning up the food or
20beverage function with respect to which the service charge is
21imposed.
22    (10) 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    (11) 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    (12) 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    (13) Beginning January 1, 1992 and through June 30, 2016,
22food for human consumption that is to be consumed off the
23premises where it is sold (other than alcoholic beverages, soft
24drinks and food that has been prepared for immediate
25consumption) and prescription and non-prescription medicines,
26drugs, medical appliances, and insulin, urine testing

 

 

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1materials, syringes, and needles used by diabetics, for human
2use, when purchased for use by a person receiving medical
3assistance under Article V of the Illinois Public Aid Code who
4resides in a licensed long-term care facility, as defined in
5the Nursing Home Care Act, or in a licensed facility as defined
6in the ID/DD Community Care Act, the MC/DD Act, or the
7Specialized Mental Health Rehabilitation Act of 2013.
8    (14) Semen used for artificial insemination of livestock
9for direct agricultural production.
10    (15) Horses, or interests in horses, registered with and
11meeting the requirements of any of the Arabian Horse Club
12Registry of America, Appaloosa Horse Club, American Quarter
13Horse Association, United States Trotting Association, or
14Jockey Club, as appropriate, used for purposes of breeding or
15racing for prizes. This item (15) is exempt from the provisions
16of Section 3-55, and the exemption provided for under this item
17(15) applies for all periods beginning May 30, 1995, but no
18claim for credit or refund is allowed on or after January 1,
192008 (the effective date of Public Act 95-88) for such taxes
20paid during the period beginning May 30, 2000 and ending on
21January 1, 2008 (the effective date of Public Act 95-88).
22    (16) Computers and communications equipment utilized for
23any hospital purpose and equipment used in the diagnosis,
24analysis, or treatment of hospital patients sold to a lessor
25who leases the equipment, under a lease of one year or longer
26executed or in effect at the time of the purchase, to a

 

 

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1hospital that has been issued an active tax exemption
2identification number by the Department under Section 1g of the
3Retailers' Occupation Tax Act.
4    (17) Personal property sold to a lessor who leases the
5property, under a lease of one year or longer executed or in
6effect at the time of the purchase, to a governmental body that
7has been issued an active tax exemption identification number
8by the Department under Section 1g of the Retailers' Occupation
9Tax Act.
10    (18) Beginning with taxable years ending on or after
11December 31, 1995 and ending with taxable years ending on or
12before December 31, 2004, personal property that is donated for
13disaster relief to be used in a State or federally declared
14disaster area in Illinois or bordering Illinois by a
15manufacturer or retailer that is registered in this State to a
16corporation, society, association, foundation, or institution
17that has been issued a sales tax exemption identification
18number by the Department that assists victims of the disaster
19who reside within the declared disaster area.
20    (19) 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 used in the
23performance of infrastructure repairs in this State, including
24but not limited to municipal roads and streets, access roads,
25bridges, sidewalks, waste disposal systems, water and sewer
26line extensions, water distribution and purification

 

 

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1facilities, storm water drainage and retention facilities, and
2sewage treatment facilities, resulting from a State or
3federally declared disaster in Illinois or bordering Illinois
4when such repairs are initiated on facilities located in the
5declared disaster area within 6 months after the disaster.
6    (20) Beginning July 1, 1999, game or game birds sold at a
7"game breeding and hunting preserve area" as that term is used
8in the Wildlife Code. This paragraph is exempt from the
9provisions of Section 3-55.
10    (21) A motor vehicle, as that term is defined in Section
111-146 of the Illinois Vehicle Code, that is donated to a
12corporation, limited liability company, society, association,
13foundation, or institution that is determined by the Department
14to be organized and operated exclusively for educational
15purposes. For purposes of this exemption, "a corporation,
16limited liability company, society, association, foundation,
17or institution organized and operated exclusively for
18educational purposes" means all tax-supported public schools,
19private schools that offer systematic instruction in useful
20branches of learning by methods common to public schools and
21that compare favorably in their scope and intensity with the
22course of study presented in tax-supported schools, and
23vocational or technical schools or institutes organized and
24operated exclusively to provide a course of study of not less
25than 6 weeks duration and designed to prepare individuals to
26follow a trade or to pursue a manual, technical, mechanical,

 

 

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1industrial, business, or commercial occupation.
2    (22) Beginning January 1, 2000, personal property,
3including food, purchased through fundraising events for the
4benefit of a public or private elementary or secondary school,
5a group of those schools, or one or more school districts if
6the events are sponsored by an entity recognized by the school
7district that consists primarily of volunteers and includes
8parents and teachers of the school children. This paragraph
9does not apply to fundraising events (i) for the benefit of
10private home instruction or (ii) for which the fundraising
11entity purchases the personal property sold at the events from
12another individual or entity that sold the property for the
13purpose of resale by the fundraising entity and that profits
14from the sale to the fundraising entity. This paragraph is
15exempt from the provisions of Section 3-55.
16    (23) Beginning January 1, 2000 and through December 31,
172001, new or used automatic vending machines that prepare and
18serve hot food and beverages, including coffee, soup, and other
19items, and replacement parts for these machines. Beginning
20January 1, 2002 and through June 30, 2003, machines and parts
21for machines used in commercial, coin-operated amusement and
22vending business if a use or occupation tax is paid on the
23gross receipts derived from the use of the commercial,
24coin-operated amusement and vending machines. This paragraph
25is exempt from the provisions of Section 3-55.
26    (24) Beginning on the effective date of this amendatory Act

 

 

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1of the 92nd General Assembly, computers and communications
2equipment utilized for any hospital purpose and equipment used
3in the diagnosis, analysis, or treatment of hospital patients
4sold to a lessor who leases the equipment, under a lease of one
5year or longer executed or in effect at the time of the
6purchase, to a hospital that has been issued an active tax
7exemption identification number by the Department under
8Section 1g of the Retailers' Occupation Tax Act. This paragraph
9is exempt from the provisions of Section 3-55.
10    (25) Beginning on the effective date of this amendatory Act
11of the 92nd General Assembly, personal property sold to a
12lessor who leases the property, under a lease of one year or
13longer executed or in effect at the time of the purchase, to a
14governmental body that has been issued an active tax exemption
15identification number by the Department under Section 1g of the
16Retailers' Occupation Tax Act. This paragraph is exempt from
17the provisions of Section 3-55.
18    (26) Beginning on January 1, 2002 and through June 30,
192016, tangible personal property purchased from an Illinois
20retailer by a taxpayer engaged in centralized purchasing
21activities in Illinois who will, upon receipt of the property
22in Illinois, temporarily store the property in Illinois (i) for
23the purpose of subsequently transporting it outside this State
24for use or consumption thereafter solely outside this State or
25(ii) for the purpose of being processed, fabricated, or
26manufactured into, attached to, or incorporated into other

 

 

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1tangible personal property to be transported outside this State
2and thereafter used or consumed solely outside this State. The
3Director of Revenue shall, pursuant to rules adopted in
4accordance with the Illinois Administrative Procedure Act,
5issue a permit to any taxpayer in good standing with the
6Department who is eligible for the exemption under this
7paragraph (26). The permit issued under this paragraph (26)
8shall authorize the holder, to the extent and in the manner
9specified in the rules adopted under this Act, to purchase
10tangible personal property from a retailer exempt from the
11taxes imposed by this Act. Taxpayers shall maintain all
12necessary books and records to substantiate the use and
13consumption of all such tangible personal property outside of
14the State of Illinois.
15    (27) Beginning January 1, 2008, tangible personal property
16used in the construction or maintenance of a community water
17supply, as defined under Section 3.145 of the Environmental
18Protection Act, that is operated by a not-for-profit
19corporation that holds a valid water supply permit issued under
20Title IV of the Environmental Protection Act. This paragraph is
21exempt from the provisions of Section 3-55.
22    (28) Tangible personal property sold to a
23public-facilities corporation, as described in Section
2411-65-10 of the Illinois Municipal Code, for purposes of
25constructing or furnishing a municipal convention hall, but
26only if the legal title to the municipal convention hall is

 

 

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

 

 

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1or maintenance of an aircraft by persons who (i) hold an Air
2Agency Certificate and are empowered to operate an approved
3repair station by the Federal Aviation Administration, (ii)
4have a Class IV Rating, and (iii) conduct operations in
5accordance with Part 145 of the Federal Aviation Regulations.
6The exemption does not include aircraft operated by a
7commercial air carrier providing scheduled passenger air
8service pursuant to authority issued under Part 121 or Part 129
9of the Federal Aviation Regulations. The changes made to this
10paragraph (29) by Public Act 98-534 are declarative of existing
11law.
12    (30) Beginning on July 1, 2016, qualified tangible personal
13property used in the construction or operation of a data center
14that has been granted a certificate of exemption by the
15Department of Commerce and Economic Opportunity under Section
16605-333 of the Department of Commerce and Economic Opportunity
17Law of the Civil Administrative Code of Illinois, whether that
18tangible personal property is purchased by the owner of the
19data center or by a contractor, subcontractor, or tenant of the
20owner.
21    For the purposes of this item (30):
22        "Data center" has the meaning given to that term in
23    Section 605-333 of the Department of Commerce and Economic
24    Opportunity Law of the Civil Administrative Code of
25    Illinois.
26        "Qualified tangible personal property" means

 

 

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1    electrical systems and equipment; mechanical systems and
2    equipment; emergency generators; hardware of distributed
3    computers or servers; data storage devices; network
4    connectivity equipment; racks; cabinets; raised floor
5    systems; peripheral components or systems; software;
6    mechanical, electrical, or plumbing systems necessary to
7    operate other items of tangible personal property,
8    including fixtures; and component parts of any of the
9    foregoing, including installation, maintenance, repair,
10    refurbishment, and replacement of qualified tangible
11    personal property. The term "qualified tangible personal
12    property" also includes building materials physically
13    incorporated into the qualifying data center. To document
14    the exemption allowed under this Section, the retailer must
15    obtain from the purchaser a copy of the certificate of
16    eligibility issued by the Department of Commerce and
17    Economic Opportunity.
18    This item (30) is exempt from the provisions of Section
193-55.
20(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2198-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
227-16-14; 99-180, eff. 7-29-15.)
 
23    Section 25. The Retailers' Occupation Tax Act is amended by
24changing Section 2-5 as follows:
 

 

 

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1    (35 ILCS 120/2-5)
2    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
3sale of the following tangible personal property are exempt
4from the tax imposed by this Act:
5    (1) Farm chemicals.
6    (2) 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 (2). 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

 

 

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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 (2) is exempt from the
14provisions of Section 2-70.
15    (3) Until July 1, 2003, distillation machinery and
16equipment, sold as a unit or kit, assembled or installed by the
17retailer, certified by the user to be used only for the
18production of ethyl alcohol that will be used for consumption
19as motor fuel or as a component of motor fuel for the personal
20use of the user, and not subject to sale or resale.
21    (4) Until July 1, 2003 and beginning again September 1,
222004 through August 30, 2014, graphic arts machinery and
23equipment, including repair and replacement parts, both new and
24used, and including that manufactured on special order or
25purchased for lease, certified by the purchaser to be used
26primarily for graphic arts production. Equipment includes

 

 

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

 

 

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1of this amendatory Act of the 92nd General Assembly, however,
2an entity otherwise eligible for this exemption shall not make
3tax-free purchases unless it has an active identification
4number issued by the Department.
5    (10) Personal property sold by a corporation, society,
6association, foundation, institution, or organization, other
7than a limited liability company, that is organized and
8operated as a not-for-profit service enterprise for the benefit
9of persons 65 years of age or older if the personal property
10was not purchased by the enterprise for the purpose of resale
11by the enterprise.
12    (11) Personal property sold to a governmental body, to a
13corporation, society, association, foundation, or institution
14organized and operated exclusively for charitable, religious,
15or educational purposes, or to a not-for-profit corporation,
16society, association, foundation, institution, or organization
17that has no compensated officers or employees and that is
18organized and operated primarily for the recreation of persons
1955 years of age or older. A limited liability company may
20qualify for the exemption under this paragraph only if the
21limited liability company is organized and operated
22exclusively for educational purposes. On and after July 1,
231987, however, no entity otherwise eligible for this exemption
24shall make tax-free purchases unless it has an active
25identification number issued by the Department.
26    (12) Tangible personal property sold to interstate

 

 

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

 

 

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

 

 

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1are declaratory of existing law as to the meaning and scope of
2this exemption.
3    (15) Proceeds of mandatory service charges separately
4stated on customers' bills for purchase and consumption of food
5and beverages, to the extent that the proceeds of the service
6charge are in fact turned over as tips or as a substitute for
7tips to the employees who participate directly in preparing,
8serving, hosting or cleaning up the food or beverage function
9with respect to which the service charge is imposed.
10    (16) Petroleum products sold to a purchaser if the seller
11is prohibited by federal law from charging tax to the
12purchaser.
13    (17) Tangible personal property sold to a common carrier by
14rail or motor that receives the physical possession of the
15property in Illinois and that transports the property, or
16shares with another common carrier in the transportation of the
17property, out of Illinois on a standard uniform bill of lading
18showing the seller of the property as the shipper or consignor
19of the property to a destination outside Illinois, for use
20outside Illinois.
21    (18) Legal tender, currency, medallions, or gold or silver
22coinage issued by the State of Illinois, the government of the
23United States of America, or the government of any foreign
24country, and bullion.
25    (19) 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    (20) 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    (21) 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    (22) Until June 30, 2013, fuel and petroleum products sold
25to or used by an air carrier, certified by the carrier to be
26used for consumption, shipment, or storage in the conduct of

 

 

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1its business as an air common carrier, for a flight destined
2for or returning from a location or locations outside the
3United States without regard to previous or subsequent domestic
4stopovers.
5    Beginning July 1, 2013, fuel and petroleum products sold to
6or used by an air carrier, certified by the carrier to be used
7for consumption, shipment, or storage in the conduct of its
8business as an air common carrier, for a flight that (i) is
9engaged in foreign trade or is engaged in trade between the
10United States and any of its possessions and (ii) transports at
11least one individual or package for hire from the city of
12origination to the city of final destination on the same
13aircraft, without regard to a change in the flight number of
14that aircraft.
15    (23) A transaction in which the purchase order is received
16by a florist who is located outside Illinois, but who has a
17florist located in Illinois deliver the property to the
18purchaser or the purchaser's donee in Illinois.
19    (24) Fuel consumed or used in the operation of ships,
20barges, or vessels that are used primarily in or for the
21transportation of property or the conveyance of persons for
22hire on rivers bordering on this State if the fuel is delivered
23by the seller to the purchaser's barge, ship, or vessel while
24it is afloat upon that bordering river.
25    (25) Except as provided in item (25-5) of this Section, a
26motor vehicle sold in this State to a nonresident even though

 

 

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

 

 

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

 

 

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1    certification from the purchaser, on a form prescribed by
2    the Department, certifying that the requirements of this
3    item (25-7) are met. The certificate must also include the
4    name and address of the purchaser, the address of the
5    location where the aircraft is to be titled or registered,
6    the address of the primary physical location of the
7    aircraft, and other information that the Department may
8    reasonably require.
9    For purposes of this item (25-7):
10    "Based in this State" means hangared, stored, or otherwise
11used, excluding post-sale customizations as defined in this
12Section, for 10 or more days in each 12-month period
13immediately following the date of the sale of the aircraft.
14    "Registered in this State" means an aircraft registered
15with the Department of Transportation, Aeronautics Division,
16or titled or registered with the Federal Aviation
17Administration to an address located in this State.
18    This paragraph (25-7) is exempt from the provisions of
19Section 2-70.
20    (26) Semen used for artificial insemination of livestock
21for direct agricultural production.
22    (27) Horses, or interests in horses, registered with and
23meeting the requirements of any of the Arabian Horse Club
24Registry of America, Appaloosa Horse Club, American Quarter
25Horse Association, United States Trotting Association, or
26Jockey Club, as appropriate, used for purposes of breeding or

 

 

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1racing for prizes. This item (27) is exempt from the provisions
2of Section 2-70, and the exemption provided for under this item
3(27) applies for all periods beginning May 30, 1995, but no
4claim for credit or refund is allowed on or after January 1,
52008 (the effective date of Public Act 95-88) for such taxes
6paid during the period beginning May 30, 2000 and ending on
7January 1, 2008 (the effective date of Public Act 95-88).
8    (28) Computers and communications equipment utilized for
9any hospital purpose and equipment used in the diagnosis,
10analysis, or treatment of hospital patients sold to a lessor
11who leases the equipment, under a lease of one year or longer
12executed or in effect at the time of the purchase, to a
13hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of
15this Act.
16    (29) Personal property sold to a lessor who leases the
17property, under a lease of one year or longer executed or in
18effect at the time of the purchase, to a governmental body that
19has been issued an active tax exemption identification number
20by the Department under Section 1g of this Act.
21    (30) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is donated for
24disaster relief to be used in a State or federally declared
25disaster area in Illinois or bordering Illinois by a
26manufacturer or retailer that is registered in this State to a

 

 

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1corporation, society, association, foundation, or institution
2that has been issued a sales tax exemption identification
3number by the Department that assists victims of the disaster
4who reside within the declared disaster area.
5    (31) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is used in the
8performance of infrastructure repairs in this State, including
9but not limited to municipal roads and streets, access roads,
10bridges, sidewalks, waste disposal systems, water and sewer
11line extensions, water distribution and purification
12facilities, storm water drainage and retention facilities, and
13sewage treatment facilities, resulting from a State or
14federally declared disaster in Illinois or bordering Illinois
15when such repairs are initiated on facilities located in the
16declared disaster area within 6 months after the disaster.
17    (32) Beginning July 1, 1999, game or game birds sold at a
18"game breeding and hunting preserve area" as that term is used
19in the Wildlife Code. This paragraph is exempt from the
20provisions of Section 2-70.
21    (33) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the Department
25to be organized and operated exclusively for educational
26purposes. For purposes of this exemption, "a corporation,

 

 

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1limited liability company, society, association, foundation,
2or institution organized and operated exclusively for
3educational purposes" means all tax-supported public schools,
4private schools that offer systematic instruction in useful
5branches of learning by methods common to public schools and
6that compare favorably in their scope and intensity with the
7course of study presented in tax-supported schools, and
8vocational or technical schools or institutes organized and
9operated exclusively to provide a course of study of not less
10than 6 weeks duration and designed to prepare individuals to
11follow a trade or to pursue a manual, technical, mechanical,
12industrial, business, or commercial occupation.
13    (34) Beginning January 1, 2000, personal property,
14including food, purchased through fundraising events for the
15benefit of a public or private elementary or secondary school,
16a group of those schools, or one or more school districts if
17the events are sponsored by an entity recognized by the school
18district that consists primarily of volunteers and includes
19parents and teachers of the school children. This paragraph
20does not apply to fundraising events (i) for the benefit of
21private home instruction or (ii) for which the fundraising
22entity purchases the personal property sold at the events from
23another individual or entity that sold the property for the
24purpose of resale by the fundraising entity and that profits
25from the sale to the fundraising entity. This paragraph is
26exempt from the provisions of Section 2-70.

 

 

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1    (35) Beginning January 1, 2000 and through December 31,
22001, new or used automatic vending machines that prepare and
3serve hot food and beverages, including coffee, soup, and other
4items, and replacement parts for these machines. Beginning
5January 1, 2002 and through June 30, 2003, machines and parts
6for machines used in commercial, coin-operated amusement and
7vending business if a use or occupation tax is paid on the
8gross receipts derived from the use of the commercial,
9coin-operated amusement and vending machines. This paragraph
10is exempt from the provisions of Section 2-70.
11    (35-5) Beginning August 23, 2001 and through June 30, 2016,
12food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages, soft
14drinks, and food that has been prepared for immediate
15consumption) and prescription and nonprescription medicines,
16drugs, medical appliances, and insulin, urine testing
17materials, syringes, and needles used by diabetics, for human
18use, when purchased for use by a person receiving medical
19assistance under Article V of the Illinois Public Aid Code who
20resides in a licensed long-term care facility, as defined in
21the Nursing Home Care Act, or a licensed facility as defined in
22the ID/DD Community Care Act, the MC/DD Act, or the Specialized
23Mental Health Rehabilitation Act of 2013.
24    (36) Beginning August 2, 2001, computers and
25communications equipment utilized for any hospital purpose and
26equipment used in the diagnosis, analysis, or treatment of

 

 

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1hospital patients sold to a lessor who leases the equipment,
2under a lease of one year or longer executed or in effect at
3the time of the purchase, to a hospital that has been issued an
4active tax exemption identification number by the Department
5under Section 1g of this Act. This paragraph is exempt from the
6provisions of Section 2-70.
7    (37) Beginning August 2, 2001, personal property sold to a
8lessor who leases the property, under a lease of one year or
9longer executed or in effect at the time of the purchase, to a
10governmental body that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12this Act. This paragraph is exempt from the provisions of
13Section 2-70.
14    (38) Beginning on January 1, 2002 and through June 30,
152016, tangible personal property purchased from an Illinois
16retailer by a taxpayer engaged in centralized purchasing
17activities in Illinois who will, upon receipt of the property
18in Illinois, temporarily store the property in Illinois (i) for
19the purpose of subsequently transporting it outside this State
20for use or consumption thereafter solely outside this State or
21(ii) for the purpose of being processed, fabricated, or
22manufactured into, attached to, or incorporated into other
23tangible personal property to be transported outside this State
24and thereafter used or consumed solely outside this State. The
25Director of Revenue shall, pursuant to rules adopted in
26accordance with the Illinois Administrative Procedure Act,

 

 

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1issue a permit to any taxpayer in good standing with the
2Department who is eligible for the exemption under this
3paragraph (38). The permit issued under this paragraph (38)
4shall authorize the holder, to the extent and in the manner
5specified in the rules adopted under this Act, to purchase
6tangible personal property from a retailer exempt from the
7taxes imposed by this Act. Taxpayers shall maintain all
8necessary books and records to substantiate the use and
9consumption of all such tangible personal property outside of
10the State of Illinois.
11    (39) Beginning January 1, 2008, tangible personal property
12used in the construction or maintenance of a community water
13supply, as defined under Section 3.145 of the Environmental
14Protection Act, that is operated by a not-for-profit
15corporation that holds a valid water supply permit issued under
16Title IV of the Environmental Protection Act. This paragraph is
17exempt from the provisions of Section 2-70.
18    (40) Beginning January 1, 2010, materials, parts,
19equipment, components, and furnishings incorporated into or
20upon an aircraft as part of the modification, refurbishment,
21completion, replacement, repair, or maintenance of the
22aircraft. This exemption includes consumable supplies used in
23the modification, refurbishment, completion, replacement,
24repair, and maintenance of aircraft, but excludes any
25materials, parts, equipment, components, and consumable
26supplies used in the modification, replacement, repair, and

 

 

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1maintenance of aircraft engines or power plants, whether such
2engines or power plants are installed or uninstalled upon any
3such aircraft. "Consumable supplies" include, but are not
4limited to, adhesive, tape, sandpaper, general purpose
5lubricants, cleaning solution, latex gloves, and protective
6films. This exemption applies only to the sale of qualifying
7tangible personal property to persons who modify, refurbish,
8complete, replace, or maintain an aircraft and who (i) hold an
9Air Agency Certificate and are empowered to operate an approved
10repair station by the Federal Aviation Administration, (ii)
11have a Class IV Rating, and (iii) conduct operations in
12accordance with Part 145 of the Federal Aviation Regulations.
13The exemption does not include aircraft operated by a
14commercial air carrier providing scheduled passenger air
15service pursuant to authority issued under Part 121 or Part 129
16of the Federal Aviation Regulations. The changes made to this
17paragraph (40) by Public Act 98-534 are declarative of existing
18law.
19    (41) Tangible personal property sold to a
20public-facilities corporation, as described in Section
2111-65-10 of the Illinois Municipal Code, for purposes of
22constructing or furnishing a municipal convention hall, but
23only if the legal title to the municipal convention hall is
24transferred to the municipality without any further
25consideration by or on behalf of the municipality at the time
26of the completion of the municipal convention hall or upon the

 

 

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1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 2-70.
7    (42) Beginning on July 1, 2016, qualified tangible personal
8property used in the construction or operation of a data center
9that has been granted a certificate of exemption by the
10Department of Commerce and Economic Opportunity under Section
11605-333 of the Department of Commerce and Economic Opportunity
12Law of the Civil Administrative Code of Illinois, whether that
13tangible personal property is purchased by the owner of the
14data center or by a contractor, subcontractor, or tenant of the
15owner.
16    For the purposes of this item (42):
17        "Data center" has the meaning given to that term in
18    Section 605-333 of the Department of Commerce and Economic
19    Opportunity Law of the Civil Administrative Code of
20    Illinois.
21        "Qualified tangible personal property" means
22    electrical systems and equipment; mechanical systems and
23    equipment; emergency generators; hardware of distributed
24    computers or servers; data storage devices; network
25    connectivity equipment; racks; cabinets; raised floor
26    systems; peripheral components or systems; software;

 

 

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1    mechanical, electrical, or plumbing systems necessary to
2    operate other items of tangible personal property,
3    including fixtures; and component parts of any of the
4    foregoing, including installation, maintenance, repair,
5    refurbishment, and replacement of qualified tangible
6    personal property. The term "qualified tangible personal
7    property" also includes building materials physically
8    incorporated into the qualifying data center. To document
9    the exemption allowed under this Section, the retailer must
10    obtain from the purchaser a copy of the certificate of
11    eligibility issued by the Department of Commerce and
12    Economic Opportunity.
13    This item (42) is exempt from the provisions of Section
142-70.
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; 98-574, eff.
171-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
187-29-15.)
 
19    Section 30. The Electricity Excise Tax Law is amended by
20changing Section 2-4 as follows:
 
21    (35 ILCS 640/2-4)
22    Sec. 2-4. Tax imposed.
23    (a) Except as provided in subsection (b), a tax is imposed
24on the privilege of using in this State electricity purchased

 

 

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1for use or consumption and not for resale, other than by
2municipal corporations owning and operating a local
3transportation system for public service, at the following
4rates per kilowatt-hour delivered to the purchaser:
5        (i) For the first 2000 kilowatt-hours used or consumed
6    in a month: 0.330 cents per kilowatt-hour;
7        (ii) For the next 48,000 kilowatt-hours used or
8    consumed in a month: 0.319 cents per kilowatt-hour;
9        (iii) For the next 50,000 kilowatt-hours used or
10    consumed in a month: 0.303 cents per kilowatt-hour;
11        (iv) For the next 400,000 kilowatt-hours used or
12    consumed in a month: 0.297 cents per kilowatt-hour;
13        (v) For the next 500,000 kilowatt-hours used or
14    consumed in a month: 0.286 cents per kilowatt-hour;
15        (vi) For the next 2,000,000 kilowatt-hours used or
16    consumed in a month: 0.270 cents per kilowatt-hour;
17        (vii) For the next 2,000,000 kilowatt-hours used or
18    consumed in a month: 0.254 cents per kilowatt-hour;
19        (viii) For the next 5,000,000 kilowatt-hours used or
20    consumed in a month: 0.233 cents per kilowatt-hour;
21        (ix) For the next 10,000,000 kilowatt-hours used or
22    consumed in a month: 0.207 cents per kilowatt-hour;
23        (x) For all electricity in excess of 20,000,000
24    kilowatt-hours used or consumed in a month: 0.202 cents per
25    kilowatt-hour.
26    Provided, that in lieu of the foregoing rates, the tax is

 

 

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1imposed on a self-assessing purchaser at the rate of 5.1% of
2the self-assessing purchaser's purchase price for all
3electricity distributed, supplied, furnished, sold,
4transmitted and delivered to the self-assessing purchaser in a
5month.
6    (b) A tax is imposed on the privilege of using in this
7State electricity purchased from a municipal system or electric
8cooperative, as defined in Article XVII of the Public Utilities
9Act, which has not made an election as permitted by either
10Section 17-200 or Section 17-300 of such Act, at the lesser of
110.32 cents per kilowatt hour of all electricity distributed,
12supplied, furnished, sold, transmitted, and delivered by such
13municipal system or electric cooperative to the purchaser or 5%
14of each such purchaser's purchase price for all electricity
15distributed, supplied, furnished, sold, transmitted, and
16delivered by such municipal system or electric cooperative to
17the purchaser, whichever is the lower rate as applied to each
18purchaser in each billing period.
19    (c) The tax imposed by this Section 2-4 is not imposed with
20respect to any use of electricity by business enterprises
21certified under Section 9-222.1 or 9-222.1A of the Public
22Utilities Act, as amended, to the extent of such exemption and
23during the time specified by the Department of Commerce and
24Economic Opportunity; or with respect to any transaction in
25interstate commerce, or otherwise, to the extent to which such
26transaction may not, under the Constitution and statutes of the

 

 

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1United States, be made the subject of taxation by this State.
2    (d) Beginning July 1, 2016, a business enterprise that is
3certified as a qualified data center by the Department of
4Commerce and Economic Opportunity under Section 605-333 of the
5Department of Commerce and Economic Opportunity Law of the
6Civil Administrative Code of Illinois is exempt from the tax
7imposed under this Section. The Department of commerce and
8Economic Opportunity may adopt rules to carry out the
9provisions of this subsection, including procedures for
10applying for the exemption. The Department of Commerce and
11Economic Opportunity shall notify the Department of Revenue of
12the certification. The Department of Revenue shall then notify
13the public utility of the exemption status of the business
14enterprise. The exemption shall take effect upon certification
15of the qualifying data center.
16(Source: P.A. 94-793, eff. 5-19-06.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.