101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3266

 

Introduced , by Rep. Dave Severin

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that if an in-State retailer or serviceman bids on a purchase order or contract to provide materials, equipment, or supplies to a municipality with a population under 1,000,000, and that purchase order or contract involves an amount in excess of $25,000, then the municipality may apply to the Department of Revenue for a certificate of exemption from the taxes imposed under specified local provisions of the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act for the in-State retailer or serviceman, or a third-party supplier of the retailer or serviceman, with respect to the materials, equipment, or supplies covered by the bid if: at least one other bid is received from an out-of-State retailer or serviceman; the in-State retailer or serviceman demonstrates the necessity of the exemption in order to submit the lowest responsible bid, including substantive proof furnished by the retailer or serviceman to the municipality or the Department of Revenue; and the in-State retailer provides an itemized estimate of cost to the corporate authorities of the municipality. Defines terms. Makes confirming changes in the following Acts and Codes: the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Counties Code, the Illinois Municipal Code, the Salem Civic Center Law of 1997 of the Civic Center Code, the Metropolitan Pier and Exposition Authority Act, the Flood Prevention District Act, the Metro-East Park and Recreation District Act, the Local Mass Transit District Act, the Regional Transportation Authority Act, and the Water Commission Act of 1985. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3266LRB101 05875 HLH 50895 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by adding Section
62505-805 as follows:
 
7    (20 ILCS 2505/2505-805 new)
8    Sec. 2505-805. Exemption for materials, equipment, or
9supplies of a bid.
10    (a) As used in this Section:
11    "In-State retailer or serviceman" means a retailer or
12serviceman with a principal place of business located in the
13State.
14    "Local provisions of the Use Tax Act, the Service Use Tax
15Act, the Service Occupation Tax Act, and the Retailers'
16Occupation Tax Act" means use taxes or occupation taxes imposed
17under the Counties Code, the Illinois Municipal Code, the Salem
18Civic Center Law of 1997 of the Civic Center Code, the
19Metropolitan Pier and Exposition Authority Act, the Flood
20Prevention District Act, the Metro-East Park and Recreation
21District Act, the Local Mass Transit District Act, the Regional
22Transportation Authority Act, and the Water Commission Act of
231985.

 

 

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1    "Out-of-State retailer or serviceman" means a retailer or
2serviceman with a principal place of business located outside
3of the State.
4    (b) If an in-State retailer or serviceman bids on a
5purchase order or contract to provide materials, equipment, or
6supplies to a municipality with a population of less than
71,000,000, and that purchase order or contract involves an
8amount in excess of $25,000, then the municipality may apply to
9the Department of Revenue for a certificate of exemption from
10the taxes imposed under local provisions of the Use Tax Act,
11the Service Use Tax Act, the Service Occupation Tax Act, and
12the Retailers' Occupation Tax Act for the in-State retailer or
13serviceman, or a third-party supplier of the in-State retailer
14or serviceman, with respect to the materials, equipment, or
15supplies covered by the bid if all of the following conditions
16apply:
17        (1) at least one other bid is received from an
18    out-of-State retailer or serviceman;
19        (2) the in-State retailer or serviceman demonstrates
20    the necessity of the exemption in order to submit the
21    lowest responsible bid under the guidelines provided under
22    Section 8-9-1, including substantive proof furnished by
23    the retailer or serviceman to the municipality or the
24    Department of Revenue; and
25        (3) the in-State retailer provides an itemized
26    estimate of cost to the corporate authorities of the

 

 

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1    municipality.
 
2    Section 10. The Use Tax Act is amended by changing Section
33-5 as follows:
 
4    (35 ILCS 105/3-5)
5    Sec. 3-5. Exemptions. Use of the following tangible
6personal property is exempt from the tax imposed by this Act:
7    (1) Personal property purchased from a corporation,
8society, association, foundation, institution, or
9organization, other than a limited liability company, that is
10organized and operated as a not-for-profit service enterprise
11for the benefit of persons 65 years of age or older if the
12personal property was not purchased by the enterprise for the
13purpose of resale by the enterprise.
14    (2) Personal property purchased by a not-for-profit
15Illinois county fair association for use in conducting,
16operating, or promoting the county fair.
17    (3) Personal property purchased by a not-for-profit arts or
18cultural organization that establishes, by proof required by
19the Department by rule, that it has received an exemption under
20Section 501(c)(3) of the Internal Revenue Code and that is
21organized and operated primarily for the presentation or
22support of arts or cultural programming, activities, or
23services. These organizations include, but are not limited to,
24music and dramatic arts organizations such as symphony

 

 

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1orchestras and theatrical groups, arts and cultural service
2organizations, local arts councils, visual arts organizations,
3and media arts organizations. On and after July 1, 2001 (the
4effective date of Public Act 92-35), however, an entity
5otherwise eligible for this exemption shall not make tax-free
6purchases unless it has an active identification number issued
7by the Department.
8    (4) Personal property purchased by a governmental body, by
9a corporation, society, association, foundation, or
10institution organized and operated exclusively for charitable,
11religious, or educational purposes, or by a not-for-profit
12corporation, society, association, foundation, institution, or
13organization that has no compensated officers or employees and
14that is organized and operated primarily for the recreation of
15persons 55 years of age or older. A limited liability company
16may qualify for the exemption under this paragraph only if the
17limited liability company is organized and operated
18exclusively for educational purposes. On and after July 1,
191987, however, no entity otherwise eligible for this exemption
20shall make tax-free purchases unless it has an active exemption
21identification number issued by the Department.
22    (5) Until July 1, 2003, a passenger car that is a
23replacement vehicle to the extent that the purchase price of
24the car is subject to the Replacement Vehicle Tax.
25    (6) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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1equipment, including repair and replacement parts, both new and
2used, and including that manufactured on special order,
3certified by the purchaser to be used primarily for graphic
4arts production, and including machinery and equipment
5purchased for lease. Equipment includes chemicals or chemicals
6acting as catalysts but only if the chemicals or chemicals
7acting as catalysts effect a direct and immediate change upon a
8graphic arts product. Beginning on July 1, 2017, graphic arts
9machinery and equipment is included in the manufacturing and
10assembling machinery and equipment exemption under paragraph
11(18).
12    (7) Farm chemicals.
13    (8) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (9) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (10) A motor vehicle that is used for automobile renting,
21as defined in the Automobile Renting Occupation and Use Tax
22Act.
23    (11) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the
25purchaser to be used primarily for production agriculture or
26State or federal agricultural programs, including individual

 

 

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

 

 

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

 

 

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1turned over as tips or as a substitute for tips to the
2employees who participate directly in preparing, serving,
3hosting or cleaning up the food or beverage function with
4respect to which the service charge is imposed.
5    (14) Until July 1, 2003, oil field exploration, drilling,
6and production equipment, including (i) rigs and parts of rigs,
7rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
8tubular goods, including casing and drill strings, (iii) pumps
9and pump-jack units, (iv) storage tanks and flow lines, (v) any
10individual replacement part for oil field exploration,
11drilling, and production equipment, and (vi) machinery and
12equipment purchased for lease; but excluding motor vehicles
13required to be registered under the Illinois Vehicle Code.
14    (15) Photoprocessing machinery and equipment, including
15repair and replacement parts, both new and used, including that
16manufactured on special order, certified by the purchaser to be
17used primarily for photoprocessing, and including
18photoprocessing machinery and equipment purchased for lease.
19    (16) Until July 1, 2023, coal and aggregate exploration,
20mining, off-highway hauling, processing, maintenance, and
21reclamation equipment, including replacement parts and
22equipment, and including equipment purchased for lease, but
23excluding motor vehicles required to be registered under the
24Illinois Vehicle Code. The changes made to this Section by
25Public Act 97-767 apply on and after July 1, 2003, but no claim
26for credit or refund is allowed on or after August 16, 2013

 

 

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1(the effective date of Public Act 98-456) for such taxes paid
2during the period beginning July 1, 2003 and ending on August
316, 2013 (the effective date of Public Act 98-456).
4    (17) Until July 1, 2003, distillation machinery and
5equipment, sold as a unit or kit, assembled or installed by the
6retailer, certified by the user to be used only for the
7production of ethyl alcohol that will be used for consumption
8as motor fuel or as a component of motor fuel for the personal
9use of the user, and not subject to sale or resale.
10    (18) Manufacturing and assembling machinery and equipment
11used primarily in the process of manufacturing or assembling
12tangible personal property for wholesale or retail sale or
13lease, whether that sale or lease is made directly by the
14manufacturer or by some other person, whether the materials
15used in the process are owned by the manufacturer or some other
16person, or whether that sale or lease is made apart from or as
17an incident to the seller's engaging in the service occupation
18of producing machines, tools, dies, jigs, patterns, gauges, or
19other similar items of no commercial value on special order for
20a particular purchaser. The exemption provided by this
21paragraph (18) does not include machinery and equipment used in
22(i) the generation of electricity for wholesale or retail sale;
23(ii) the generation or treatment of natural or artificial gas
24for wholesale or retail sale that is delivered to customers
25through pipes, pipelines, or mains; or (iii) the treatment of
26water for wholesale or retail sale that is delivered to

 

 

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1customers through pipes, pipelines, or mains. The provisions of
2Public Act 98-583 are declaratory of existing law as to the
3meaning and scope of this exemption. Beginning on July 1, 2017,
4the exemption provided by this paragraph (18) includes, but is
5not limited to, graphic arts machinery and equipment, as
6defined in paragraph (6) of this Section.
7    (19) Personal property delivered to a purchaser or
8purchaser's donee inside Illinois when the purchase order for
9that personal property was received by a florist located
10outside Illinois who has a florist located inside Illinois
11deliver the personal property.
12    (20) Semen used for artificial insemination of livestock
13for direct agricultural production.
14    (21) Horses, or interests in horses, registered with and
15meeting the requirements of any of the Arabian Horse Club
16Registry of America, Appaloosa Horse Club, American Quarter
17Horse Association, United States Trotting Association, or
18Jockey Club, as appropriate, used for purposes of breeding or
19racing for prizes. This item (21) is exempt from the provisions
20of Section 3-90, and the exemption provided for under this item
21(21) applies for all periods beginning May 30, 1995, but no
22claim for credit or refund is allowed on or after January 1,
232008 for such taxes paid during the period beginning May 30,
242000 and ending on January 1, 2008.
25    (22) Computers and communications equipment utilized for
26any hospital purpose and equipment used in the diagnosis,

 

 

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

 

 

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

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in the
3performance of infrastructure repairs in this State, including
4but not limited to municipal roads and streets, access roads,
5bridges, sidewalks, waste disposal systems, water and sewer
6line extensions, water distribution and purification
7facilities, storm water drainage and retention facilities, and
8sewage treatment facilities, resulting from a State or
9federally declared disaster in Illinois or bordering Illinois
10when such repairs are initiated on facilities located in the
11declared disaster area within 6 months after the disaster.
12    (26) Beginning July 1, 1999, game or game birds purchased
13at a "game breeding and hunting preserve area" as that term is
14used in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 3-90.
16    (27) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the Department
20to be organized and operated exclusively for educational
21purposes. For purposes of this exemption, "a corporation,
22limited liability company, society, association, foundation,
23or institution organized and operated exclusively for
24educational purposes" means all tax-supported public schools,
25private schools that offer systematic instruction in useful
26branches of learning by methods common to public schools and

 

 

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1that compare favorably in their scope and intensity with the
2course of study presented in tax-supported schools, and
3vocational or technical schools or institutes organized and
4operated exclusively to provide a course of study of not less
5than 6 weeks duration and designed to prepare individuals to
6follow a trade or to pursue a manual, technical, mechanical,
7industrial, business, or commercial occupation.
8    (28) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 3-90.
22    (29) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and other
25items, and replacement parts for these machines. Beginning
26January 1, 2002 and through June 30, 2003, machines and parts

 

 

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1for machines used in commercial, coin-operated amusement and
2vending business if a use or occupation tax is paid on the
3gross receipts derived from the use of the commercial,
4coin-operated amusement and vending machines. This paragraph
5is exempt from the provisions of Section 3-90.
6    (30) Beginning January 1, 2001 and through June 30, 2016,
7food for human consumption that is to be consumed off the
8premises where it is sold (other than alcoholic beverages, soft
9drinks, and food that has been prepared for immediate
10consumption) and prescription and nonprescription medicines,
11drugs, medical appliances, and insulin, urine testing
12materials, syringes, and needles used by diabetics, for human
13use, when purchased for use by a person receiving medical
14assistance under Article V of the Illinois Public Aid Code who
15resides in a licensed long-term care facility, as defined in
16the Nursing Home Care Act, or in a licensed facility as defined
17in the ID/DD Community Care Act, the MC/DD Act, or the
18Specialized Mental Health Rehabilitation Act of 2013.
19    (31) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227), computers and communications equipment
21utilized for any hospital purpose and equipment used in the
22diagnosis, analysis, or treatment of hospital patients
23purchased by a lessor who leases the equipment, under a lease
24of one year or longer executed or in effect at the time the
25lessor would otherwise be subject to the tax imposed by this
26Act, to a hospital that has been issued an active tax exemption

 

 

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1identification number by the Department under Section 1g of the
2Retailers' Occupation Tax Act. If the equipment is leased in a
3manner that does not qualify for this exemption or is used in
4any other nonexempt manner, the lessor shall be liable for the
5tax imposed under this Act or the Service Use Tax Act, as the
6case may be, based on the fair market value of the property at
7the time the nonqualifying use occurs. No lessor shall collect
8or attempt to collect an amount (however designated) that
9purports to reimburse that lessor for the tax imposed by this
10Act or the Service Use Tax Act, as the case may be, if the tax
11has not been paid by the lessor. If a lessor improperly
12collects any such amount from the lessee, the lessee shall have
13a legal right to claim a refund of that amount from the lessor.
14If, however, that amount is not refunded to the lessee for any
15reason, the lessor is liable to pay that amount to the
16Department. This paragraph is exempt from the provisions of
17Section 3-90.
18    (32) Beginning on August 2, 2001 (the effective date of
19Public Act 92-227), personal property purchased by a lessor who
20leases the property, under a lease of one year or longer
21executed or in effect at the time the lessor would otherwise be
22subject to the tax imposed by this Act, to a governmental body
23that has been issued an active sales tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act. If the property is leased in a
26manner that does not qualify for this exemption or used in any

 

 

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1other nonexempt manner, the lessor shall be liable for the tax
2imposed under this Act or the Service Use Tax Act, as the case
3may be, based on the fair market value of the property at the
4time the 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
7Service Use Tax Act, as the case may be, if the tax has not been
8paid by the lessor. If a lessor improperly collects any such
9amount from the lessee, the lessee shall have a legal right to
10claim a refund of that amount from the lessor. If, however,
11that amount is not refunded to the lessee for any reason, the
12lessor is liable to pay that amount to the Department. This
13paragraph is exempt from the provisions of Section 3-90.
14    (33) On and after July 1, 2003 and through June 30, 2004,
15the use in this State of motor vehicles of the second division
16with a gross vehicle weight in excess of 8,000 pounds and that
17are subject to the commercial distribution fee imposed under
18Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
191, 2004 and through June 30, 2005, the use in this State of
20motor vehicles of the second division: (i) with a gross vehicle
21weight rating in excess of 8,000 pounds; (ii) that are subject
22to the commercial distribution fee imposed under Section
233-815.1 of the Illinois Vehicle Code; and (iii) that are
24primarily used for commercial purposes. Through June 30, 2005,
25this exemption applies to repair and replacement parts added
26after the initial purchase of such a motor vehicle if that

 

 

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

 

 

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1lubricants, cleaning solution, latex gloves, and protective
2films. This exemption applies only to the use of qualifying
3tangible personal property by persons who modify, refurbish,
4complete, repair, replace, or maintain aircraft and who (i)
5hold an Air Agency Certificate and are empowered to operate an
6approved repair station by the Federal Aviation
7Administration, (ii) have a Class IV Rating, and (iii) conduct
8operations in accordance with Part 145 of the Federal Aviation
9Regulations. The exemption does not include aircraft operated
10by a commercial air carrier providing scheduled passenger air
11service pursuant to authority issued under Part 121 or Part 129
12of the Federal Aviation Regulations. The changes made to this
13paragraph (35) by Public Act 98-534 are declarative of existing
14law.
15    (36) Tangible personal property purchased by a
16public-facilities corporation, as described in Section
1711-65-10 of the Illinois Municipal Code, for purposes of
18constructing or furnishing a municipal convention hall, but
19only if the legal title to the municipal convention hall is
20transferred to the municipality without any further
21consideration by or on behalf of the municipality at the time
22of the completion of the municipal convention hall or upon the
23retirement or redemption of any bonds or other debt instruments
24issued by the public-facilities corporation in connection with
25the development of the municipal convention hall. This
26exemption includes existing public-facilities corporations as

 

 

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1provided in Section 11-65-25 of the Illinois Municipal Code.
2This paragraph is exempt from the provisions of Section 3-90.
3    (37) Beginning January 1, 2017, menstrual pads, tampons,
4and menstrual cups.
5    (38) Merchandise that is subject to the Rental Purchase
6Agreement Occupation and Use Tax. The purchaser must certify
7that the item is purchased to be rented subject to a rental
8purchase agreement, as defined in the Rental Purchase Agreement
9Act, and provide proof of registration under the Rental
10Purchase Agreement Occupation and Use Tax Act. This paragraph
11is exempt from the provisions of Section 3-90.
12    (39) Tangible personal property purchased by a purchaser
13who is exempt from the tax imposed by this Act by operation of
14federal law. This paragraph is exempt from the provisions of
15Section 3-90.
16    (40) Tangible personal property for which a certificate of
17exemption has been issued under Section 2505-805 of the
18Department of Revenue Law of the Civil Administrative Code of
19Illinois. This paragraph is exempt from the provisions of
20Section 3-90.
21(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
22100-22, eff. 7-6-17; 100-437, eff. 1-1-18; 100-594, eff.
236-29-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; revised
241-8-19.)
 
25    Section 15. The Service Use Tax Act is amended by changing

 

 

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1Section 3-5 as follows:
 
2    (35 ILCS 110/3-5)
3    Sec. 3-5. Exemptions. Use of the following tangible
4personal property is exempt from the tax imposed by this Act:
5    (1) Personal property purchased from a corporation,
6society, association, foundation, institution, or
7organization, other than a limited liability company, that is
8organized and operated as a not-for-profit service enterprise
9for the benefit of persons 65 years of age or older if the
10personal property was not purchased by the enterprise for the
11purpose of resale by the enterprise.
12    (2) Personal property purchased by a non-profit Illinois
13county fair association for use in conducting, operating, or
14promoting the county fair.
15    (3) Personal property purchased by a not-for-profit arts or
16cultural organization that establishes, by proof required by
17the Department by rule, that it has received an exemption under
18Section 501(c)(3) of the Internal Revenue Code and that is
19organized and operated primarily for the presentation or
20support of arts or cultural programming, activities, or
21services. These organizations include, but are not limited to,
22music and dramatic arts organizations such as symphony
23orchestras and theatrical groups, arts and cultural service
24organizations, local arts councils, visual arts organizations,
25and media arts organizations. On and after July 1, 2001 (the

 

 

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1effective date of Public Act 92-35) this amendatory Act of the
292nd General Assembly, however, an entity otherwise eligible
3for this exemption shall not make tax-free purchases unless it
4has an active identification number issued by the Department.
5    (4) Legal tender, currency, medallions, or gold or silver
6coinage issued by the State of Illinois, the government of the
7United States of America, or the government of any foreign
8country, and bullion.
9    (5) Until July 1, 2003 and beginning again on September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new and
12used, and including that manufactured on special order or
13purchased for lease, certified by the purchaser to be used
14primarily for graphic arts production. Equipment includes
15chemicals or chemicals acting as catalysts but only if the
16chemicals or chemicals acting as catalysts effect a direct and
17immediate change upon a graphic arts product. Beginning on July
181, 2017, graphic arts machinery and equipment is included in
19the manufacturing and assembling machinery and equipment
20exemption under Section 2 of this Act.
21    (6) Personal property purchased from a teacher-sponsored
22student organization affiliated with an elementary or
23secondary school located in Illinois.
24    (7) Farm machinery and equipment, both new and used,
25including that manufactured on special order, certified by the
26purchaser to be used primarily for production agriculture or

 

 

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

 

 

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

 

 

HB3266- 25 -LRB101 05875 HLH 50895 b

1service from a serviceman, to the extent that the proceeds of
2the service charge are in fact turned over as tips or as a
3substitute for tips to the employees who participate directly
4in preparing, serving, hosting or cleaning up the food or
5beverage function with respect to which the service charge is
6imposed.
7    (10) Until July 1, 2003, oil field exploration, drilling,
8and production equipment, including (i) rigs and parts of rigs,
9rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
10tubular goods, including casing and drill strings, (iii) pumps
11and pump-jack units, (iv) storage tanks and flow lines, (v) any
12individual replacement part for oil field exploration,
13drilling, and production equipment, and (vi) machinery and
14equipment purchased for lease; but excluding motor vehicles
15required to be registered under the Illinois Vehicle Code.
16    (11) Proceeds from the sale of photoprocessing machinery
17and equipment, including repair and replacement parts, both new
18and used, including that manufactured on special order,
19certified by the purchaser to be used primarily for
20photoprocessing, and including photoprocessing machinery and
21equipment purchased for lease.
22    (12) Until July 1, 2023, coal and aggregate exploration,
23mining, off-highway hauling, processing, maintenance, and
24reclamation equipment, including replacement parts and
25equipment, and including equipment purchased for lease, but
26excluding motor vehicles required to be registered under the

 

 

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1Illinois Vehicle Code. The changes made to this Section by
2Public Act 97-767 apply on and after July 1, 2003, but no claim
3for credit or refund is allowed on or after August 16, 2013
4(the effective date of Public Act 98-456) for such taxes paid
5during the period beginning July 1, 2003 and ending on August
616, 2013 (the effective date of Public Act 98-456).
7    (13) Semen used for artificial insemination of livestock
8for direct agricultural production.
9    (14) Horses, or interests in horses, registered with and
10meeting the requirements of any of the Arabian Horse Club
11Registry of America, Appaloosa Horse Club, American Quarter
12Horse Association, United States Trotting Association, or
13Jockey Club, as appropriate, used for purposes of breeding or
14racing for prizes. This item (14) is exempt from the provisions
15of Section 3-75, and the exemption provided for under this item
16(14) applies for all periods beginning May 30, 1995, but no
17claim for credit or refund is allowed on or after January 1,
182008 (the effective date of Public Act 95-88) this amendatory
19Act of the 95th General Assembly for such taxes paid during the
20period beginning May 30, 2000 and ending on January 1, 2008
21(the effective date of Public Act 95-88) this amendatory Act of
22the 95th General 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

 

 

HB3266- 27 -LRB101 05875 HLH 50895 b

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

 

 

HB3266- 29 -LRB101 05875 HLH 50895 b

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

 

 

HB3266- 30 -LRB101 05875 HLH 50895 b

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,

 

 

HB3266- 31 -LRB101 05875 HLH 50895 b

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 August 2, 2001 (the effective date of
17Public Act 92-227) this amendatory Act of the 92nd General
18Assembly, computers and communications equipment utilized for
19any hospital purpose and equipment used in the diagnosis,
20analysis, or treatment of hospital patients purchased by a
21lessor who leases the equipment, under a lease of one year or
22longer executed or in effect at the time the lessor would
23otherwise be subject to the tax imposed by this Act, to a
24hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of the
26Retailers' Occupation Tax Act. If the equipment is leased in a

 

 

HB3266- 32 -LRB101 05875 HLH 50895 b

1manner that does not qualify for this exemption or is used in
2any other nonexempt manner, the lessor shall be liable for the
3tax imposed under this Act or the Use Tax Act, as the case may
4be, based on the fair market value of the property at the time
5the nonqualifying use occurs. No lessor shall collect or
6attempt to collect an amount (however designated) that purports
7to reimburse that lessor for the tax imposed by this Act or the
8Use Tax Act, as the case may be, if the tax has not been paid by
9the lessor. If a lessor improperly collects any such amount
10from the lessee, the lessee shall have a legal right to claim a
11refund of that amount from the lessor. If, however, that amount
12is not refunded to the lessee for any reason, the lessor is
13liable to pay that amount to the Department. This paragraph is
14exempt from the provisions of Section 3-75.
15    (25) Beginning on August 2, 2001 (the effective date of
16Public Act 92-227) this amendatory Act of the 92nd General
17Assembly, personal property purchased by a lessor who leases
18the property, under a lease of one year or longer executed or
19in effect at the time the lessor would otherwise be subject to
20the tax imposed by this Act, to a governmental body that has
21been issued an active tax exemption identification number by
22the Department under Section 1g of the Retailers' Occupation
23Tax Act. If the property is leased in a manner that does not
24qualify for this exemption or is used in any other nonexempt
25manner, the lessor shall be liable for the tax imposed under
26this Act or the Use Tax Act, as the case may be, based on the

 

 

HB3266- 33 -LRB101 05875 HLH 50895 b

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

 

 

HB3266- 34 -LRB101 05875 HLH 50895 b

1supplies used in the modification, replacement, repair, and
2maintenance of aircraft engines or power plants, whether such
3engines or power plants are installed or uninstalled upon any
4such aircraft. "Consumable supplies" include, but are not
5limited to, adhesive, tape, sandpaper, general purpose
6lubricants, cleaning solution, latex gloves, and protective
7films. This exemption applies only to the use of qualifying
8tangible personal property transferred incident to the
9modification, refurbishment, completion, replacement, repair,
10or maintenance of aircraft by persons who (i) hold an Air
11Agency Certificate and are empowered to operate an approved
12repair station by the Federal Aviation Administration, (ii)
13have a Class IV Rating, and (iii) conduct operations in
14accordance with Part 145 of the Federal Aviation Regulations.
15The exemption does not include aircraft operated by a
16commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part 129
18of the Federal Aviation Regulations. The changes made to this
19paragraph (27) by Public Act 98-534 are declarative of existing
20law.
21    (28) Tangible personal property purchased by a
22public-facilities corporation, as described in Section
2311-65-10 of the Illinois Municipal Code, for purposes of
24constructing or furnishing a municipal convention hall, but
25only if the legal title to the municipal convention hall is
26transferred to the municipality without any further

 

 

HB3266- 35 -LRB101 05875 HLH 50895 b

1consideration by or on behalf of the municipality at the time
2of the completion of the municipal convention hall or upon the
3retirement or redemption of any bonds or other debt instruments
4issued by the public-facilities corporation in connection with
5the development of the municipal convention hall. This
6exemption includes existing public-facilities corporations as
7provided in Section 11-65-25 of the Illinois Municipal Code.
8This paragraph is exempt from the provisions of Section 3-75.
9    (29) Beginning January 1, 2017, menstrual pads, tampons,
10and menstrual cups.
11    (30) Tangible personal property transferred to a purchaser
12who is exempt from the tax imposed by this Act by operation of
13federal law. This paragraph is exempt from the provisions of
14Section 3-75.
15    (30) Tangible personal property for which a certificate of
16exemption has been issued under Section 2505-805 of the
17Department of Revenue Law of the Civil Administrative Code of
18Illinois. This paragraph is exempt from the provisions of
19Section 3-75.
20(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
21100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
221-4-19; revised 1-8-19.)
 
23    Section 20. The Service Occupation Tax Act is amended by
24changing Section 3-5 as follows:
 

 

 

HB3266- 36 -LRB101 05875 HLH 50895 b

1    (35 ILCS 115/3-5)
2    Sec. 3-5. Exemptions. The following tangible personal
3property is exempt from the tax imposed by this Act:
4    (1) Personal property sold by a corporation, society,
5association, foundation, institution, or organization, other
6than a limited liability company, that is organized and
7operated as a not-for-profit service enterprise for the benefit
8of persons 65 years of age or older if the personal property
9was not purchased by the enterprise for the purpose of resale
10by the enterprise.
11    (2) Personal property purchased by a not-for-profit
12Illinois county fair association for use in conducting,
13operating, or promoting the county fair.
14    (3) Personal property purchased by any not-for-profit arts
15or cultural organization that establishes, by proof required by
16the Department by rule, that it has received an exemption under
17Section 501(c)(3) of the Internal Revenue Code and that is
18organized and operated primarily for the presentation or
19support of arts or cultural programming, activities, or
20services. These organizations include, but are not limited to,
21music and dramatic arts organizations such as symphony
22orchestras and theatrical groups, arts and cultural service
23organizations, local arts councils, visual arts organizations,
24and media arts organizations. On and after July 1, 2001 (the
25effective date of Public Act 92-35) this amendatory Act of the
2692nd General Assembly, however, an entity otherwise eligible

 

 

HB3266- 37 -LRB101 05875 HLH 50895 b

1for this exemption shall not make tax-free purchases unless it
2has an active identification number issued by the Department.
3    (4) 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    (5) Until July 1, 2003 and beginning again on September 1,
82004 through August 30, 2014, graphic arts machinery and
9equipment, including repair and replacement parts, both new and
10used, and including that manufactured on special order or
11purchased for lease, certified by the purchaser to be used
12primarily for graphic arts production. Equipment includes
13chemicals or chemicals acting as catalysts but only if the
14chemicals or chemicals acting as catalysts effect a direct and
15immediate change upon a graphic arts product. Beginning on July
161, 2017, graphic arts machinery and equipment is included in
17the manufacturing and assembling machinery and equipment
18exemption under Section 2 of this Act.
19    (6) Personal property sold by a teacher-sponsored student
20organization affiliated with an elementary or secondary school
21located in Illinois.
22    (7) Farm machinery and equipment, both new and used,
23including that manufactured on special order, certified by the
24purchaser to be used primarily for production agriculture or
25State or federal agricultural programs, including individual
26replacement parts for the machinery and equipment, including

 

 

HB3266- 38 -LRB101 05875 HLH 50895 b

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

 

 

HB3266- 39 -LRB101 05875 HLH 50895 b

1to, the collection, monitoring, and correlation of animal and
2crop data for the purpose of formulating animal diets and
3agricultural chemicals. This item (7) is exempt from the
4provisions of Section 3-55.
5    (8) Until June 30, 2013, fuel and petroleum products sold
6to or used by an air common carrier, certified by the carrier
7to be used for consumption, shipment, or storage in the conduct
8of its business as an air common carrier, for a flight destined
9for or returning from a location or locations outside the
10United States without regard to previous or subsequent domestic
11stopovers.
12    Beginning July 1, 2013, fuel and petroleum products sold to
13or used by an air carrier, certified by the carrier to be used
14for consumption, shipment, or storage in the conduct of its
15business as an air common carrier, for a flight that (i) is
16engaged in foreign trade or is engaged in trade between the
17United States and any of its possessions and (ii) transports at
18least one individual or package for hire from the city of
19origination to the city of final destination on the same
20aircraft, without regard to a change in the flight number of
21that aircraft.
22    (9) Proceeds of mandatory service charges separately
23stated on customers' bills for the purchase and consumption of
24food and beverages, to the extent that the proceeds of the
25service charge are in fact turned over as tips or as a
26substitute for tips to the employees who participate directly

 

 

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1in preparing, serving, hosting or cleaning up the food or
2beverage function with respect to which the service charge is
3imposed.
4    (10) Until July 1, 2003, oil field exploration, drilling,
5and production equipment, including (i) rigs and parts of rigs,
6rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
7tubular goods, including casing and drill strings, (iii) pumps
8and pump-jack units, (iv) storage tanks and flow lines, (v) any
9individual replacement part for oil field exploration,
10drilling, and production equipment, and (vi) machinery and
11equipment purchased for lease; but excluding motor vehicles
12required to be registered under the Illinois Vehicle Code.
13    (11) Photoprocessing machinery and equipment, including
14repair and replacement parts, both new and used, including that
15manufactured on special order, certified by the purchaser to be
16used primarily for photoprocessing, and including
17photoprocessing machinery and equipment purchased for lease.
18    (12) Until July 1, 2023, coal and aggregate exploration,
19mining, off-highway hauling, processing, maintenance, and
20reclamation equipment, including replacement parts and
21equipment, and including equipment purchased for lease, but
22excluding motor vehicles required to be registered under the
23Illinois Vehicle Code. The changes made to this Section by
24Public Act 97-767 apply on and after July 1, 2003, but no claim
25for credit or refund is allowed on or after August 16, 2013
26(the effective date of Public Act 98-456) for such taxes paid

 

 

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1during the period beginning July 1, 2003 and ending on August
216, 2013 (the effective date of Public Act 98-456).
3    (13) Beginning January 1, 1992 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 non-prescription 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    (14) Semen used for artificial insemination of livestock
17for direct agricultural production.
18    (15) Horses, or interests in horses, registered with and
19meeting the requirements of any of the Arabian Horse Club
20Registry of America, Appaloosa Horse Club, American Quarter
21Horse Association, United States Trotting Association, or
22Jockey Club, as appropriate, used for purposes of breeding or
23racing for prizes. This item (15) is exempt from the provisions
24of Section 3-55, and the exemption provided for under this item
25(15) applies for all periods beginning May 30, 1995, but no
26claim for credit or refund is allowed on or after January 1,

 

 

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12008 (the effective date of Public Act 95-88) for such taxes
2paid during the period beginning May 30, 2000 and ending on
3January 1, 2008 (the effective date of Public Act 95-88).
4    (16) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients sold to a lessor
7who leases the equipment, under a lease of one year or longer
8executed or in effect at the time of the purchase, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act.
12    (17) Personal property sold to a lessor who leases the
13property, under a lease of one year or longer executed or in
14effect at the time of the purchase, to a governmental body that
15has been issued an active tax exemption identification number
16by the Department under Section 1g of the Retailers' Occupation
17Tax Act.
18    (18) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is donated for
21disaster relief to be used in a State or federally declared
22disaster area in Illinois or bordering Illinois by a
23manufacturer or retailer that is registered in this State to a
24corporation, society, association, foundation, or institution
25that has been issued a sales tax exemption identification
26number by the Department that assists victims of the disaster

 

 

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1who reside within the declared disaster area.
2    (19) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is used in the
5performance of infrastructure repairs in this State, including
6but not limited to municipal roads and streets, access roads,
7bridges, sidewalks, waste disposal systems, water and sewer
8line extensions, water distribution and purification
9facilities, storm water drainage and retention facilities, and
10sewage treatment facilities, resulting from a State or
11federally declared disaster in Illinois or bordering Illinois
12when such repairs are initiated on facilities located in the
13declared disaster area within 6 months after the disaster.
14    (20) Beginning July 1, 1999, game or game birds sold at a
15"game breeding and hunting preserve area" as that term is used
16in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-55.
18    (21) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the Department
22to be organized and operated exclusively for educational
23purposes. For purposes of this exemption, "a corporation,
24limited liability company, society, association, foundation,
25or institution organized and operated exclusively for
26educational purposes" means all tax-supported public schools,

 

 

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1private schools that offer systematic instruction in useful
2branches of learning by methods common to public schools and
3that compare favorably in their scope and intensity with the
4course of study presented in tax-supported schools, and
5vocational or technical schools or institutes organized and
6operated exclusively to provide a course of study of not less
7than 6 weeks duration and designed to prepare individuals to
8follow a trade or to pursue a manual, technical, mechanical,
9industrial, business, or commercial occupation.
10    (22) Beginning January 1, 2000, personal property,
11including food, purchased through fundraising events for the
12benefit of a public or private elementary or secondary school,
13a group of those schools, or one or more school districts if
14the events are sponsored by an entity recognized by the school
15district that consists primarily of volunteers and includes
16parents and teachers of the school children. This paragraph
17does not apply to fundraising events (i) for the benefit of
18private home instruction or (ii) for which the fundraising
19entity purchases the personal property sold at the events from
20another individual or entity that sold the property for the
21purpose of resale by the fundraising entity and that profits
22from the sale to the fundraising entity. This paragraph is
23exempt from the provisions of Section 3-55.
24    (23) Beginning January 1, 2000 and through December 31,
252001, new or used automatic vending machines that prepare and
26serve hot food and beverages, including coffee, soup, and other

 

 

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1items, and replacement parts for these machines. Beginning
2January 1, 2002 and through June 30, 2003, machines and parts
3for machines used in commercial, coin-operated amusement and
4vending business if a use or occupation tax is paid on the
5gross receipts derived from the use of the commercial,
6coin-operated amusement and vending machines. This paragraph
7is exempt from the provisions of Section 3-55.
8    (24) Beginning on August 2, 2001 (the effective date of
9Public Act 92-227) this amendatory Act of the 92nd General
10Assembly, computers and communications equipment utilized for
11any hospital purpose and equipment used in the diagnosis,
12analysis, or treatment of hospital patients sold to a lessor
13who leases the equipment, under a lease of one year or longer
14executed or in effect at the time of the purchase, to a
15hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act. This paragraph is exempt from
18the provisions of Section 3-55.
19    (25) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227) this amendatory Act of the 92nd General
21Assembly, personal property sold to a lessor who leases the
22property, under a lease of one year or longer executed or in
23effect at the time of the purchase, to a governmental body that
24has been issued an active tax exemption identification number
25by the Department under Section 1g of the Retailers' Occupation
26Tax Act. This paragraph is exempt from the provisions of

 

 

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1Section 3-55.
2    (26) Beginning on January 1, 2002 and through June 30,
32016, tangible personal property purchased from an Illinois
4retailer by a taxpayer engaged in centralized purchasing
5activities in Illinois who will, upon receipt of the property
6in Illinois, temporarily store the property in Illinois (i) for
7the purpose of subsequently transporting it outside this State
8for use or consumption thereafter solely outside this State or
9(ii) for the purpose of being processed, fabricated, or
10manufactured into, attached to, or incorporated into other
11tangible personal property to be transported outside this State
12and thereafter used or consumed solely outside this State. The
13Director of Revenue shall, pursuant to rules adopted in
14accordance with the Illinois Administrative Procedure Act,
15issue a permit to any taxpayer in good standing with the
16Department who is eligible for the exemption under this
17paragraph (26). The permit issued under this paragraph (26)
18shall authorize the holder, to the extent and in the manner
19specified in the rules adopted under this Act, to purchase
20tangible personal property from a retailer exempt from the
21taxes imposed by this Act. Taxpayers shall maintain all
22necessary books and records to substantiate the use and
23consumption of all such tangible personal property outside of
24the State of Illinois.
25    (27) Beginning January 1, 2008, tangible personal property
26used in the construction or maintenance of a community water

 

 

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1supply, as defined under Section 3.145 of the Environmental
2Protection Act, that is operated by a not-for-profit
3corporation that holds a valid water supply permit issued under
4Title IV of the Environmental Protection Act. This paragraph is
5exempt from the provisions of Section 3-55.
6    (28) Tangible personal property sold to a
7public-facilities corporation, as described in Section
811-65-10 of the Illinois Municipal Code, for purposes of
9constructing or furnishing a municipal convention hall, but
10only if the legal title to the municipal convention hall is
11transferred to the municipality without any further
12consideration by or on behalf of the municipality at the time
13of the completion of the municipal convention hall or upon the
14retirement or redemption of any bonds or other debt instruments
15issued by the public-facilities corporation in connection with
16the development of the municipal convention hall. This
17exemption includes existing public-facilities corporations as
18provided in Section 11-65-25 of the Illinois Municipal Code.
19This paragraph is exempt from the provisions of Section 3-55.
20    (29) Beginning January 1, 2010, materials, parts,
21equipment, components, and furnishings incorporated into or
22upon an aircraft as part of the modification, refurbishment,
23completion, replacement, repair, or maintenance of the
24aircraft. This exemption includes consumable supplies used in
25the modification, refurbishment, completion, replacement,
26repair, and maintenance of aircraft, but excludes any

 

 

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1materials, parts, equipment, components, and consumable
2supplies used in the modification, replacement, repair, and
3maintenance of aircraft engines or power plants, whether such
4engines or power plants are installed or uninstalled upon any
5such aircraft. "Consumable supplies" include, but are not
6limited to, adhesive, tape, sandpaper, general purpose
7lubricants, cleaning solution, latex gloves, and protective
8films. This exemption applies only to the transfer of
9qualifying tangible personal property incident to the
10modification, refurbishment, completion, replacement, repair,
11or maintenance of an aircraft by persons who (i) hold an Air
12Agency Certificate and are empowered to operate an approved
13repair station by the Federal Aviation Administration, (ii)
14have a Class IV Rating, and (iii) conduct operations in
15accordance with Part 145 of the Federal Aviation Regulations.
16The exemption does not include aircraft operated by a
17commercial air carrier providing scheduled passenger air
18service pursuant to authority issued under Part 121 or Part 129
19of the Federal Aviation Regulations. The changes made to this
20paragraph (29) by Public Act 98-534 are declarative of existing
21law.
22    (30) Beginning January 1, 2017, menstrual pads, tampons,
23and menstrual cups.
24    (31) Tangible personal property transferred to a purchaser
25who is exempt from tax by operation of federal law. This
26paragraph is exempt from the provisions of Section 3-55.

 

 

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1    (32) Tangible personal property for which a certificate of
2exemption has been issued under Section 2505-805 of the
3Department of Revenue Law of the Civil Administrative Code of
4Illinois. This paragraph is exempt from the provisions of
5Section 3-55.
6(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
7100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
81-4-19; revised 1-8-19.)
 
9    Section 25. The Retailers' Occupation Tax Act is amended by
10changing Section 2-5 as follows:
 
11    (35 ILCS 120/2-5)
12    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
13sale of the following tangible personal property are exempt
14from the tax imposed by this Act:
15        (1) Farm chemicals.
16        (2) Farm machinery and equipment, both new and used,
17    including that manufactured on special order, certified by
18    the purchaser to be used primarily for production
19    agriculture or State or federal agricultural programs,
20    including individual replacement parts for the machinery
21    and equipment, including machinery and equipment purchased
22    for lease, and including implements of husbandry defined in
23    Section 1-130 of the Illinois Vehicle Code, farm machinery
24    and agricultural chemical and fertilizer spreaders, and

 

 

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1    nurse wagons required to be registered under Section 3-809
2    of the Illinois Vehicle Code, but excluding other motor
3    vehicles required to be registered under the Illinois
4    Vehicle Code. Horticultural polyhouses or hoop houses used
5    for propagating, growing, or overwintering plants shall be
6    considered farm machinery and equipment under this item
7    (2). Agricultural chemical tender tanks and dry boxes shall
8    include units sold separately from a motor vehicle required
9    to be licensed and units sold mounted on a motor vehicle
10    required to be licensed, if the selling price of the tender
11    is separately stated.
12        Farm machinery and equipment shall include precision
13    farming equipment that is installed or purchased to be
14    installed on farm machinery and equipment including, but
15    not limited to, tractors, harvesters, sprayers, planters,
16    seeders, or spreaders. Precision farming equipment
17    includes, but is not limited to, soil testing sensors,
18    computers, monitors, software, global positioning and
19    mapping systems, and other such equipment.
20        Farm machinery and equipment also includes computers,
21    sensors, software, and related equipment used primarily in
22    the computer-assisted operation of production agriculture
23    facilities, equipment, and activities such as, but not
24    limited to, the collection, monitoring, and correlation of
25    animal and crop data for the purpose of formulating animal
26    diets and agricultural chemicals. This item (2) is exempt

 

 

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1    from the provisions of Section 2-70.
2        (3) Until July 1, 2003, distillation machinery and
3    equipment, sold as a unit or kit, assembled or installed by
4    the retailer, certified by the user to be used only for the
5    production of ethyl alcohol that will be used for
6    consumption as motor fuel or as a component of motor fuel
7    for the personal use of the user, and not subject to sale
8    or resale.
9        (4) Until July 1, 2003 and beginning again September 1,
10    2004 through August 30, 2014, graphic arts machinery and
11    equipment, including repair and replacement parts, both
12    new and used, and including that manufactured on special
13    order or purchased for lease, certified by the purchaser to
14    be used primarily for graphic arts production. Equipment
15    includes chemicals or chemicals acting as catalysts but
16    only if the chemicals or chemicals acting as catalysts
17    effect a direct and immediate change upon a graphic arts
18    product. Beginning on July 1, 2017, graphic arts machinery
19    and equipment is included in the manufacturing and
20    assembling machinery and equipment exemption under
21    paragraph (14).
22        (5) A motor vehicle that is used for automobile
23    renting, as defined in the Automobile Renting Occupation
24    and Use Tax Act. This paragraph is exempt from the
25    provisions of Section 2-70.
26        (6) Personal property sold by a teacher-sponsored

 

 

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1    student organization affiliated with an elementary or
2    secondary school located in Illinois.
3        (7) Until July 1, 2003, proceeds of that portion of the
4    selling price of a passenger car the sale of which is
5    subject to the Replacement Vehicle Tax.
6        (8) Personal property sold to an Illinois county fair
7    association for use in conducting, operating, or promoting
8    the county fair.
9        (9) Personal property sold to a not-for-profit arts or
10    cultural organization that establishes, by proof required
11    by the Department by rule, that it has received an
12    exemption under Section 501(c)(3) of the Internal Revenue
13    Code and that is organized and operated primarily for the
14    presentation or support of arts or cultural programming,
15    activities, or services. These organizations include, but
16    are not limited to, music and dramatic arts organizations
17    such as symphony orchestras and theatrical groups, arts and
18    cultural service organizations, local arts councils,
19    visual arts organizations, and media arts organizations.
20    On and after July 1, 2001 (the effective date of Public Act
21    92-35), however, an entity otherwise eligible for this
22    exemption shall not make tax-free purchases unless it has
23    an active identification number issued by the Department.
24        (10) Personal property sold by a corporation, society,
25    association, foundation, institution, or organization,
26    other than a limited liability company, that is organized

 

 

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1    and operated as a not-for-profit service enterprise for the
2    benefit of persons 65 years of age or older if the personal
3    property was not purchased by the enterprise for the
4    purpose of resale by the enterprise.
5        (11) Personal property sold to a governmental body, to
6    a corporation, society, association, foundation, or
7    institution organized and operated exclusively for
8    charitable, religious, or educational purposes, or to a
9    not-for-profit corporation, society, association,
10    foundation, institution, or organization that has no
11    compensated officers or employees and that is organized and
12    operated primarily for the recreation of persons 55 years
13    of age or older. A limited liability company may qualify
14    for the exemption under this paragraph only if the limited
15    liability company is organized and operated exclusively
16    for educational purposes. On and after July 1, 1987,
17    however, no entity otherwise eligible for this exemption
18    shall make tax-free purchases unless it has an active
19    identification number issued by the Department.
20        (12) (Blank).
21        (12-5) On and after July 1, 2003 and through June 30,
22    2004, motor vehicles of the second division with a gross
23    vehicle weight in excess of 8,000 pounds that are subject
24    to the commercial distribution fee imposed under Section
25    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
26    2004 and through June 30, 2005, the use in this State of

 

 

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

 

 

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1    sale or lease is made directly by the manufacturer or by
2    some other person, whether the materials used in the
3    process are owned by the manufacturer or some other person,
4    or whether the sale or lease is made apart from or as an
5    incident to the seller's engaging in the service occupation
6    of producing machines, tools, dies, jigs, patterns,
7    gauges, or other similar items of no commercial value on
8    special order for a particular purchaser. The exemption
9    provided by this paragraph (14) does not include machinery
10    and equipment used in (i) the generation of electricity for
11    wholesale or retail sale; (ii) the generation or treatment
12    of natural or artificial gas for wholesale or retail sale
13    that is delivered to customers through pipes, pipelines, or
14    mains; or (iii) the treatment of water for wholesale or
15    retail sale that is delivered to customers through pipes,
16    pipelines, or mains. The provisions of Public Act 98-583
17    are declaratory of existing law as to the meaning and scope
18    of this exemption. Beginning on July 1, 2017, the exemption
19    provided by this paragraph (14) includes, but is not
20    limited to, graphic arts machinery and equipment, as
21    defined in paragraph (4) of this Section.
22        (15) Proceeds of mandatory service charges separately
23    stated on customers' bills for purchase and consumption of
24    food and beverages, to the extent that the proceeds of the
25    service charge are in fact turned over as tips or as a
26    substitute for tips to the employees who participate

 

 

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1    directly in preparing, serving, hosting or cleaning up the
2    food or beverage function with respect to which the service
3    charge is imposed.
4        (16) Tangible personal property sold to a purchaser if
5    the purchaser is exempt from use tax by operation of
6    federal law. This paragraph is exempt from the provisions
7    of Section 2-70.
8        (17) Tangible personal property sold to a common
9    carrier by rail or motor that receives the physical
10    possession of the property in Illinois and that transports
11    the property, or shares with another common carrier in the
12    transportation of the property, out of Illinois on a
13    standard uniform bill of lading showing the seller of the
14    property as the shipper or consignor of the property to a
15    destination outside Illinois, for use outside Illinois.
16        (18) Legal tender, currency, medallions, or gold or
17    silver coinage issued by the State of Illinois, the
18    government of the United States of America, or the
19    government of any foreign country, and bullion.
20        (19) Until July 1, 2003, oil field exploration,
21    drilling, and production equipment, including (i) rigs and
22    parts of rigs, rotary rigs, cable tool rigs, and workover
23    rigs, (ii) pipe and tubular goods, including casing and
24    drill strings, (iii) pumps and pump-jack units, (iv)
25    storage tanks and flow lines, (v) any individual
26    replacement part for oil field exploration, drilling, and

 

 

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1    production equipment, and (vi) machinery and equipment
2    purchased for lease; but excluding motor vehicles required
3    to be registered under the Illinois Vehicle Code.
4        (20) Photoprocessing machinery and equipment,
5    including repair and replacement parts, both new and used,
6    including that manufactured on special order, certified by
7    the purchaser to be used primarily for photoprocessing, and
8    including photoprocessing machinery and equipment
9    purchased for lease.
10        (21) Until July 1, 2023, coal and aggregate
11    exploration, mining, off-highway hauling, processing,
12    maintenance, and reclamation equipment, including
13    replacement parts and equipment, and including equipment
14    purchased for lease, but excluding motor vehicles required
15    to be registered under the Illinois Vehicle Code. The
16    changes made to this Section by Public Act 97-767 apply on
17    and after July 1, 2003, but no claim for credit or refund
18    is allowed on or after August 16, 2013 (the effective date
19    of Public Act 98-456) for such taxes paid during the period
20    beginning July 1, 2003 and ending on August 16, 2013 (the
21    effective date of Public Act 98-456).
22        (22) Until June 30, 2013, fuel and petroleum products
23    sold to or used by an air carrier, certified by the carrier
24    to be used for consumption, shipment, or storage in the
25    conduct of its business as an air common carrier, for a
26    flight destined for or returning from a location or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    and meeting the requirements of any of the Arabian Horse
2    Club Registry of America, Appaloosa Horse Club, American
3    Quarter Horse Association, United States Trotting
4    Association, or Jockey Club, as appropriate, used for
5    purposes of breeding or racing for prizes. This item (27)
6    is exempt from the provisions of Section 2-70, and the
7    exemption provided for under this item (27) applies for all
8    periods beginning May 30, 1995, but no claim for credit or
9    refund is allowed on or after January 1, 2008 (the
10    effective date of Public Act 95-88) for such taxes paid
11    during the period beginning May 30, 2000 and ending on
12    January 1, 2008 (the effective date of Public Act 95-88).
13        (28) Computers and communications equipment utilized
14    for any hospital purpose and equipment used in the
15    diagnosis, analysis, or treatment of hospital patients
16    sold to a lessor who leases the equipment, under a lease of
17    one year or longer executed or in effect at the time of the
18    purchase, to a hospital that has been issued an active tax
19    exemption identification number by the Department under
20    Section 1g of this Act.
21        (29) Personal property sold to a lessor who leases the
22    property, under a lease of one year or longer executed or
23    in effect at the time of the purchase, to a governmental
24    body that has been issued an active tax exemption
25    identification number by the Department under Section 1g of
26    this Act.

 

 

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

 

 

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1    used in the Wildlife Code. This paragraph is exempt from
2    the provisions of Section 2-70.
3        (33) A motor vehicle, as that term is defined in
4    Section 1-146 of the Illinois Vehicle Code, that is donated
5    to a corporation, limited liability company, society,
6    association, foundation, or institution that is determined
7    by the Department to be organized and operated exclusively
8    for educational purposes. For purposes of this exemption,
9    "a corporation, limited liability company, society,
10    association, foundation, or institution organized and
11    operated exclusively for educational purposes" means all
12    tax-supported public schools, private schools that offer
13    systematic instruction in useful branches of learning by
14    methods common to public schools and that compare favorably
15    in their scope and intensity with the course of study
16    presented in tax-supported schools, and vocational or
17    technical schools or institutes organized and operated
18    exclusively to provide a course of study of not less than 6
19    weeks duration and designed to prepare individuals to
20    follow a trade or to pursue a manual, technical,
21    mechanical, industrial, business, or commercial
22    occupation.
23        (34) Beginning January 1, 2000, personal property,
24    including food, purchased through fundraising events for
25    the benefit of a public or private elementary or secondary
26    school, a group of those schools, or one or more school

 

 

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1    districts if the events are sponsored by an entity
2    recognized by the school district that consists primarily
3    of volunteers and includes parents and teachers of the
4    school children. This paragraph does not apply to
5    fundraising events (i) for the benefit of private home
6    instruction or (ii) for which the fundraising entity
7    purchases the personal property sold at the events from
8    another individual or entity that sold the property for the
9    purpose of resale by the fundraising entity and that
10    profits from the sale to the fundraising entity. This
11    paragraph is exempt from the provisions of Section 2-70.
12        (35) Beginning January 1, 2000 and through December 31,
13    2001, new or used automatic vending machines that prepare
14    and serve hot food and beverages, including coffee, soup,
15    and other items, and replacement parts for these machines.
16    Beginning January 1, 2002 and through June 30, 2003,
17    machines and parts for machines used in commercial,
18    coin-operated amusement and vending business if a use or
19    occupation tax is paid on the gross receipts derived from
20    the use of the commercial, coin-operated amusement and
21    vending machines. This paragraph is exempt from the
22    provisions of Section 2-70.
23        (35-5) Beginning August 23, 2001 and through June 30,
24    2016, food for human consumption that is to be consumed off
25    the premises where it is sold (other than alcoholic
26    beverages, soft drinks, and food that has been prepared for

 

 

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1    immediate consumption) and prescription and
2    nonprescription medicines, drugs, medical appliances, and
3    insulin, urine testing materials, syringes, and needles
4    used by diabetics, for human use, when purchased for use by
5    a person receiving medical assistance under Article V of
6    the Illinois Public Aid Code who resides in a licensed
7    long-term care facility, as defined in the Nursing Home
8    Care Act, or a licensed facility as defined in the ID/DD
9    Community Care Act, the MC/DD Act, or the Specialized
10    Mental Health Rehabilitation Act of 2013.
11        (36) Beginning August 2, 2001, computers and
12    communications equipment utilized for any hospital purpose
13    and equipment used in the diagnosis, analysis, or treatment
14    of hospital patients sold to a lessor who leases the
15    equipment, under a lease of one year or longer executed or
16    in effect at the time of the purchase, to a hospital that
17    has been issued an active tax exemption identification
18    number by the Department under Section 1g of this Act. This
19    paragraph is exempt from the provisions of Section 2-70.
20        (37) Beginning August 2, 2001, personal property sold
21    to a lessor who leases the property, under a lease of one
22    year or longer executed or in effect at the time of the
23    purchase, to a governmental body that has been issued an
24    active tax exemption identification number by the
25    Department under Section 1g of this Act. This paragraph is
26    exempt from the provisions of Section 2-70.

 

 

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1        (38) Beginning on January 1, 2002 and through June 30,
2    2016, tangible personal property purchased from an
3    Illinois retailer by a taxpayer engaged in centralized
4    purchasing activities in Illinois who will, upon receipt of
5    the property in Illinois, temporarily store the property in
6    Illinois (i) for the purpose of subsequently transporting
7    it outside this State for use or consumption thereafter
8    solely outside this State or (ii) for the purpose of being
9    processed, fabricated, or manufactured into, attached to,
10    or incorporated into other tangible personal property to be
11    transported outside this State and thereafter used or
12    consumed solely outside this State. The Director of Revenue
13    shall, pursuant to rules adopted in accordance with the
14    Illinois Administrative Procedure Act, issue a permit to
15    any taxpayer in good standing with the Department who is
16    eligible for the exemption under this paragraph (38). The
17    permit issued under this paragraph (38) shall authorize the
18    holder, to the extent and in the manner specified in the
19    rules adopted under this Act, to purchase tangible personal
20    property from a retailer exempt from the taxes imposed by
21    this Act. Taxpayers shall maintain all necessary books and
22    records to substantiate the use and consumption of all such
23    tangible personal property outside of the State of
24    Illinois.
25        (39) Beginning January 1, 2008, tangible personal
26    property used in the construction or maintenance of a

 

 

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1    community water supply, as defined under Section 3.145 of
2    the Environmental Protection Act, that is operated by a
3    not-for-profit corporation that holds a valid water supply
4    permit issued under Title IV of the Environmental
5    Protection Act. This paragraph is exempt from the
6    provisions of Section 2-70.
7        (40) Beginning January 1, 2010, materials, parts,
8    equipment, components, and furnishings incorporated into
9    or upon an aircraft as part of the modification,
10    refurbishment, completion, replacement, repair, or
11    maintenance of the aircraft. This exemption includes
12    consumable supplies used in the modification,
13    refurbishment, completion, replacement, repair, and
14    maintenance of aircraft, but excludes any materials,
15    parts, equipment, components, and consumable supplies used
16    in the modification, replacement, repair, and maintenance
17    of aircraft engines or power plants, whether such engines
18    or power plants are installed or uninstalled upon any such
19    aircraft. "Consumable supplies" include, but are not
20    limited to, adhesive, tape, sandpaper, general purpose
21    lubricants, cleaning solution, latex gloves, and
22    protective films. This exemption applies only to the sale
23    of qualifying tangible personal property to persons who
24    modify, refurbish, complete, replace, or maintain an
25    aircraft and who (i) hold an Air Agency Certificate and are
26    empowered to operate an approved repair station by the

 

 

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1    Federal Aviation Administration, (ii) have a Class IV
2    Rating, and (iii) conduct operations in accordance with
3    Part 145 of the Federal Aviation Regulations. The exemption
4    does not include aircraft operated by a commercial air
5    carrier providing scheduled passenger air service pursuant
6    to authority issued under Part 121 or Part 129 of the
7    Federal Aviation Regulations. The changes made to this
8    paragraph (40) by Public Act 98-534 are declarative of
9    existing law.
10        (41) Tangible personal property sold to a
11    public-facilities corporation, as described in Section
12    11-65-10 of the Illinois Municipal Code, for purposes of
13    constructing or furnishing a municipal convention hall,
14    but only if the legal title to the municipal convention
15    hall is transferred to the municipality without any further
16    consideration by or on behalf of the municipality at the
17    time of the completion of the municipal convention hall or
18    upon the retirement or redemption of any bonds or other
19    debt instruments issued by the public-facilities
20    corporation in connection with the development of the
21    municipal convention hall. This exemption includes
22    existing public-facilities corporations as provided in
23    Section 11-65-25 of the Illinois Municipal Code. This
24    paragraph is exempt from the provisions of Section 2-70.
25        (42) Beginning January 1, 2017, menstrual pads,
26    tampons, and menstrual cups.

 

 

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1        (43) Merchandise that is subject to the Rental Purchase
2    Agreement Occupation and Use Tax. The purchaser must
3    certify that the item is purchased to be rented subject to
4    a rental purchase agreement, as defined in the Rental
5    Purchase Agreement Act, and provide proof of registration
6    under the Rental Purchase Agreement Occupation and Use Tax
7    Act. This paragraph is exempt from the provisions of
8    Section 2-70.
9        (44) Tangible personal property for which a
10    certificate of exemption has been issued under Section
11    2505-805 of the Department of Revenue Law of the Civil
12    Administrative Code of Illinois. This paragraph is exempt
13    from the provisions of Section 2-70.
14(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
15100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
161-1-18; 100-594, eff. 6-29-18; 100-863, eff. 8-14-18;
17100-1171, eff. 1-4-19; revised 1-8-19.)
 
18    Section 30. The Counties Code is amended by adding Section
195-1184 as follows:
 
20    (55 ILCS 5/5-1184 new)
21    Sec. 5-1184. Exemption for materials, equipment, or
22supplies of a bid. Tangible personal property for which a
23certificate of exemption has been issued under Section 2505-805
24of the Department of Revenue Law of the Civil Administrative

 

 

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1Code of Illinois is exempt from any use or occupation tax
2imposed by a county under this Code.
 
3    Section 35. The Illinois Municipal Code is amended by
4adding Section 8-1-19 as follows:
 
5    (65 ILCS 5/8-1-19 new)
6    Sec. 8-1-19. Exemption for materials, equipment, or
7supplies of a bid. Tangible personal property for which a
8certificate of exemption has been issued under Section 2505-805
9of the Department of Revenue Law of the Civil Administrative
10Code of Illinois is exempt from any use or occupation tax
11imposed by a municipality under this Code.
 
12    Section 40. The Civic Center Code is amended by adding
13Section 245-13 as follows:
 
14    (70 ILCS 200/245-13 new)
15    Sec. 245-13. Exemption for materials, equipment, or
16supplies of a bid. Tangible personal property for which a
17certificate of exemption has been issued under Section 2505-805
18of the Department of Revenue Law of the Civil Administrative
19Code of Illinois is exempt from any use or occupation tax
20imposed under this Article.
 
21    Section 45. The Metropolitan Pier and Exposition Authority

 

 

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1Act is amended by adding Section 13.4 as follows:
 
2    (70 ILCS 210/13.4 new)
3    Sec. 13.4. Exemption for materials, equipment, or supplies
4of a bid. Tangible personal property for which a certificate of
5exemption has been issued under Section 2505-805 of the
6Department of Revenue Law of the Civil Administrative Code of
7Illinois is exempt from any use or occupation tax imposed under
8this Act.
 
9    Section 50. The Flood Prevention District Act is amended by
10adding Section 27 as follows:
 
11    (70 ILCS 750/27 new)
12    Sec. 27. Exemption for materials, equipment, or supplies of
13a bid. Tangible personal property for which a certificate of
14exemption has been issued under Section 2505-805 of the
15Department of Revenue Law of the Civil Administrative Code of
16Illinois is exempt from any use or occupation tax imposed under
17this Act.
 
18    Section 55. The Metro-East Park and Recreation District Act
19is amended by adding Section 32 as follows:
 
20    (70 ILCS 1605/32 new)
21    Sec. 32. Exemption for materials, equipment, or supplies of

 

 

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1a bid. Tangible personal property for which a certificate of
2exemption has been issued under Section 2505-805 of the
3Department of Revenue Law of the Civil Administrative Code of
4Illinois is exempt from any use or occupation tax imposed under
5this Act.
 
6    Section 60. The Local Mass Transit District Act is amended
7by adding Section 5.7 as follows:
 
8    (70 ILCS 3610/5.7 new)
9    Sec. 5.7. Exemption for materials, equipment, or supplies
10of a bid. Tangible personal property for which a certificate of
11exemption has been issued under Section 2505-805 of the
12Department of Revenue Law of the Civil Administrative Code of
13Illinois is exempt from any use or occupation tax imposed under
14this Act.
 
15    Section 65. The Regional Transportation Authority Act is
16amended by adding Section 4.17 as follows:
 
17    (70 ILCS 3615/4.17 new)
18    Sec. 4.17. Exemption for materials, equipment, or supplies
19of a bid. Tangible personal property for which a certificate of
20exemption has been issued under Section 2505-805 of the
21Department of Revenue Law of the Civil Administrative Code of
22Illinois is exempt from any use or occupation tax imposed under

 

 

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1this Act.
 
2    Section 70. The Water Commission Act of 1985 is amended by
3adding Section 4.5 as follows:
 
4    (70 ILCS 3720/4.5 new)
5    Sec. 4.5. Exemption for materials, equipment, or supplies
6of a bid. Tangible personal property for which a certificate of
7exemption has been issued under Section 2505-805 of the
8Department of Revenue Law of the Civil Administrative Code of
9Illinois is exempt from any use or occupation tax imposed under
10this Act.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 2505/2505-805 new
4    35 ILCS 105/3-5
5    35 ILCS 110/3-5
6    35 ILCS 115/3-5
7    35 ILCS 120/2-5
8    55 ILCS 5/5-1184 new
9    65 ILCS 5/8-1-19 new
10    70 ILCS 200/245-13 new
11    70 ILCS 210/13.4 new
12    70 ILCS 750/27 new
13    70 ILCS 1605/32 new
14    70 ILCS 3610/5.7 new
15    70 ILCS 3615/4.17 new
16    70 ILCS 3720/4.5 new