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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 3. The Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois is
6amended by adding Section 605-1025 as follows:
 
7    (20 ILCS 605/605-1025 new)
8    Sec. 605-1025. Data center investment.
9    (a) The Department shall issue certificates of exemption
10from the Retailers' Occupation Tax Act, the Use Tax Act, the
11Service Use Tax Act, and the Service Occupation Tax Act, all
12locally-imposed retailers' occupation taxes administered and
13collected by the Department, the Chicago non-titled Use Tax,
14the Electricity Excise Tax Act, and a credit certification
15against the taxes imposed under subsections (a) and (b) of
16Section 201 of the Illinois Income Tax Act to qualifying
17Illinois data centers.
18    (b) For taxable years beginning on or after January 1,
192019, the Department shall award credits against the taxes
20imposed under subsections (a) and (b) of Section 201 of the
21Illinois Income Tax Act as provided in Section 229 of the
22Illinois Income Tax Act.
23    (c) For purposes of this Section:

 

 

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1        "Data center" means a building or a series of buildings
2    that is rehabilitated or constructed to house working
3    servers in one physical location or several sites.
4        "Qualifying Illinois data center" means a new or
5    existing data center that:
6            (1) is located in the State of Illinois;
7            (2) in the case of an existing data center, made a
8        capital investment of at least $250,000,000
9        collectively by the data center operator and the
10        tenants of all of its data centers over the 60-month
11        period immediately prior to January 1, 2020 or
12        committed to make a capital investment of at least
13        $250,000,000 over a 60-month period commencing before
14        January 1, 2020 and ending after January 1, 2020; or
15            (3) in the case of a new data center, makes a
16        capital investment of at least $250,000,000 over a
17        60-month period; and
18            (4) in the case of both existing and new data
19        centers, results in the creation of at least 20
20        full-time or full-time equivalent new jobs over a
21        period of 60 months by the data center operator and the
22        tenants of the data center, collectively, associated
23        with the operation or maintenance of the data center;
24        those jobs must have a total compensation equal to or
25        greater than 120% of the median wage paid to full-time
26        employees in the county where the data center is

 

 

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1        located, as determined by the U.S. Bureau of Labor
2        Statistics; and
3            (5) is carbon neutral or attains certification
4        under one or more of the following green building
5        standards:
6                (A) BREEAM for New Construction or BREEAM
7            In-Use;
8                (B) ENERGY STAR;
9                (C) Envision;
10                (D) ISO 50001-energy management;
11                (E) LEED for Building Design and Construction
12            or LEED for Operations and Maintenance;
13                (F) Green Globes for New Construction or Green
14            Globes for Existing Buildings;
15                (G) UL 3223; or
16                (H) an equivalent program approved by the
17            Department of Commerce and Economic Opportunity.
18        "Full-time equivalent job" means a job in which the new
19    employee works for the owner, operator, contractor, or
20    tenant of a data center or for a corporation under contract
21    with the owner, operator or tenant of a data center at a
22    rate of at least 35 hours per week. An owner, operator or
23    tenant who employs labor or services at a specific site or
24    facility under contract with another may declare one
25    full-time, permanent job for every 1,820 man hours worked
26    per year under that contract. Vacations, paid holidays, and

 

 

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1    sick time are included in this computation. Overtime is not
2    considered a part of regular hours.
3        "Qualified tangible personal property" means:
4    electrical systems and equipment; climate control and
5    chilling equipment and systems; mechanical systems and
6    equipment; monitoring and secure systems; emergency
7    generators; hardware; computers; servers; data storage
8    devices; network connectivity equipment; racks; cabinets;
9    telecommunications cabling infrastructure; raised floor
10    systems; peripheral components or systems; software;
11    mechanical, electrical, or plumbing systems; battery
12    systems; cooling systems and towers; temperature control
13    systems; other cabling; and other data center
14    infrastructure equipment and systems necessary to operate
15    qualified tangible personal property, including fixtures;
16    and component parts of any of the foregoing, including
17    installation, maintenance, repair, refurbishment, and
18    replacement of qualified tangible personal property to
19    generate, transform, transmit, distribute, or manage
20    electricity necessary to operate qualified tangible
21    personal property; and all other tangible personal
22    property that is essential to the operations of a computer
23    data center. "Qualified tangible personal property" also
24    includes building materials physically incorporated in to
25    the qualifying data center.
26    To document the exemption allowed under this Section, the

 

 

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1retailer must obtain from the purchaser a copy of the
2certificate of eligibility issued by the Department.
3    (d) New and existing data centers seeking a certificate of
4exemption for new or existing facilities shall apply to the
5Department in the manner specified by the Department. The
6Department and any data center seeking the exemption, including
7a data center operator on behalf of itself and its tenants,
8must enter into a memorandum of understanding that at a minimum
9provides:
10        (1) the details for determining the amount of capital
11    investment to be made;
12        (2) the number of new jobs created;
13        (3) the timeline for achieving the capital investment
14    and new job goals;
15        (4) the repayment obligation should those goals not be
16    achieved and any conditions under which repayment by the
17    qualifying data center or data center tenant claiming the
18    exemption will be required; and
19        (5) other provisions as deemed necessary by the
20    Department.
21    (e) Beginning July 1, 2021, and each year thereafter, the
22Department shall annually report to the Governor and the
23General Assembly on the outcomes and effectiveness of this
24amendatory Act of the 101st General Assembly that shall include
25the following:
26        (1) the name of each recipient business;

 

 

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1        (2) the location of the project;
2        (3) the estimated value of the credit;
3        (4) the number of new jobs and, if applicable, retained
4    jobs pledged as a result of the project; and
5        (5) whether or not the project is located in an
6    underserved area.
7    (f) New and existing data centers seeking a certificate of
8exemption related to the rehabilitation or construction of data
9centers in the State shall require the contractor and all
10subcontractors to comply with the requirements of Section 30-22
11of the Illinois Procurement Code as they apply to responsible
12bidders and to present satisfactory evidence of that compliance
13to the Department.
14    (g) New and existing data centers seeking a certificate of
15exemption for the rehabilitation or construction of data
16centers in the State shall require the contractor to enter into
17a project labor agreement approved by the Department.
 
18    Section 4. The Illinois Income Tax Act is amended by adding
19Section 229 as follows:
 
20    (35 ILCS 5/229 new)
21    Sec. 229. Data center construction employment tax credit.
22    (a) For tax years beginning on or after January 1, 2019, a
23taxpayer who has been awarded a credit by the Department of
24Commerce and Economic Opportunity under Section 605-1025 of the

 

 

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1Department of Commerce and Economic Opportunity Law of the
2Civil Administrative Code of Illinois is entitled to a credit
3against the taxes imposed under subsections (a) and (b) of
4Section 201 of this Act. The amount of the credit shall be 20%
5of the wages paid during the taxable year to a full-time or
6part-time employee of a construction contractor employed by a
7certified data center if those wages are paid for the
8construction of a new data center in a geographic area that
9meets any one of the following criteria:
10        (1) the area has a poverty rate of at least 20%,
11    according to the latest federal decennial census;
12        (2) 75% or more of the children in the area participate
13    in the federal free lunch program, according to reported
14    statistics from the State Board of Education;
15        (3) 20% or more of the households in the area receive
16    assistance under the Supplemental Nutrition Assistance
17    Program (SNAP); or
18        (4) the area has an average unemployment rate, as
19    determined by the Department of Employment Security, that
20    is more than 120% of the national unemployment average, as
21    determined by the U.S. Department of Labor, for a period of
22    at least 2 consecutive calendar years preceding the date of
23    the application.
24    If the taxpayer is a partnership, a Subchapter S
25corporation, or a limited liability company that has elected
26partnership tax treatment, the credit shall be allowed to the

 

 

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1partners, shareholders, or members in accordance with the
2determination of income and distributive share of income under
3Sections 702 and 704 and subchapter S of the Internal Revenue
4Code, as applicable. The Department, in cooperation with the
5Department of Commerce and Economic Opportunity, shall adopt
6rules to enforce and administer this Section. This Section is
7exempt from the provisions of Section 250 of this Act.
8    (b) In no event shall a credit under this Section reduce
9the taxpayer's liability to less than zero. If the amount of
10the credit exceeds the tax liability for the year, the excess
11may be carried forward and applied to the tax liability of the
125 taxable years following the excess credit year. The tax
13credit shall be applied to the earliest year for which there is
14a tax liability. If there are credits for more than one year
15that are available to offset a liability, the earlier credit
16shall be applied first.
17    (c) No credit shall be allowed with respect to any
18certification for any taxable year ending after the revocation
19of the certification by the Department of Commerce and Economic
20Opportunity. Upon receiving notification by the Department of
21Commerce and Economic Opportunity of the revocation of
22certification, the Department shall notify the taxpayer that no
23credit is allowed for any taxable year ending after the
24revocation date, as stated in such notification. If any credit
25has been allowed with respect to a certification for a taxable
26year ending after the revocation date, any refund paid to the

 

 

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1taxpayer for that taxable year shall, to the extent of that
2credit allowed, be an erroneous refund within the meaning of
3Section 912 of this Act.
 
4    Section 5. The Use Tax Act is amended by changing Section
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or
24support of arts or cultural programming, activities, or

 

 

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1services. These organizations include, but are not limited to,
2music and dramatic arts organizations such as symphony
3orchestras and theatrical groups, arts and cultural service
4organizations, local arts councils, visual arts organizations,
5and media arts organizations. On and after July 1, 2001 (the
6effective date of Public Act 92-35), however, an entity
7otherwise eligible for this exemption shall not make tax-free
8purchases unless it has an active identification number issued
9by the Department.
10    (4) Personal property purchased by a governmental body, by
11a corporation, society, association, foundation, or
12institution organized and operated exclusively for charitable,
13religious, or educational purposes, or by a not-for-profit
14corporation, society, association, foundation, institution, or
15organization that has no compensated officers or employees and
16that is organized and operated primarily for the recreation of
17persons 55 years of age or older. A limited liability company
18may qualify for the exemption under this paragraph only if the
19limited liability company is organized and operated
20exclusively for educational purposes. On and after July 1,
211987, however, no entity otherwise eligible for this exemption
22shall make tax-free purchases unless it has an active exemption
23identification number issued by the Department.
24    (5) Until July 1, 2003, a passenger car that is a
25replacement vehicle to the extent that the purchase price of
26the car is subject to the Replacement Vehicle Tax.

 

 

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1    (6) Until July 1, 2003 and beginning again on September 1,
22004 through August 30, 2014, graphic arts machinery and
3equipment, including repair and replacement parts, both new and
4used, and including that manufactured on special order,
5certified by the purchaser to be used primarily for graphic
6arts production, and including machinery and equipment
7purchased for lease. Equipment includes chemicals or chemicals
8acting as catalysts but only if the chemicals or chemicals
9acting as catalysts effect a direct and immediate change upon a
10graphic arts product. Beginning on July 1, 2017, graphic arts
11machinery and equipment is included in the manufacturing and
12assembling machinery and equipment exemption under paragraph
13(18).
14    (7) Farm chemicals.
15    (8) Legal tender, currency, medallions, or gold or silver
16coinage issued by the State of Illinois, the government of the
17United States of America, or the government of any foreign
18country, and bullion.
19    (9) Personal property purchased from a teacher-sponsored
20student organization affiliated with an elementary or
21secondary school located in Illinois.
22    (10) A motor vehicle that is used for automobile renting,
23as defined in the Automobile Renting Occupation and Use Tax
24Act.
25    (11) Farm machinery and equipment, both new and used,
26including that manufactured on special order, certified by the

 

 

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

 

 

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

 

 

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1food and beverages purchased at retail from a retailer, to the
2extent that the proceeds of the service charge are in fact
3turned over as tips or as a substitute for tips to the
4employees who participate directly in preparing, serving,
5hosting or cleaning up the food or beverage function with
6respect to which the service charge is imposed.
7    (14) 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    (15) Photoprocessing machinery and equipment, including
17repair and replacement parts, both new and used, including that
18manufactured on special order, certified by the purchaser to be
19used primarily for photoprocessing, and including
20photoprocessing machinery and equipment purchased for lease.
21    (16) Until July 1, 2023, coal and aggregate exploration,
22mining, off-highway hauling, processing, maintenance, and
23reclamation equipment, including replacement parts and
24equipment, and including equipment purchased for lease, but
25excluding motor vehicles required to be registered under the
26Illinois Vehicle Code. The changes made to this Section by

 

 

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1Public Act 97-767 apply on and after July 1, 2003, but no claim
2for credit or refund is allowed on or after August 16, 2013
3(the effective date of Public Act 98-456) for such taxes paid
4during the period beginning July 1, 2003 and ending on August
516, 2013 (the effective date of Public Act 98-456).
6    (17) Until July 1, 2003, distillation machinery and
7equipment, sold as a unit or kit, assembled or installed by the
8retailer, certified by the user to be used only for the
9production of ethyl alcohol that will be used for consumption
10as motor fuel or as a component of motor fuel for the personal
11use of the user, and not subject to sale or resale.
12    (18) Manufacturing and assembling machinery and equipment
13used primarily in the process of manufacturing or assembling
14tangible personal property for wholesale or retail sale or
15lease, whether that sale or lease is made directly by the
16manufacturer or by some other person, whether the materials
17used in the process are owned by the manufacturer or some other
18person, or whether that sale or lease is made apart from or as
19an incident to the seller's engaging in the service occupation
20of producing machines, tools, dies, jigs, patterns, gauges, or
21other similar items of no commercial value on special order for
22a particular purchaser. The exemption provided by this
23paragraph (18) does not include machinery and equipment used in
24(i) the generation of electricity for wholesale or retail sale;
25(ii) the generation or treatment of natural or artificial gas
26for wholesale or retail sale that is delivered to customers

 

 

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1through pipes, pipelines, or mains; or (iii) the treatment of
2water for wholesale or retail sale that is delivered to
3customers through pipes, pipelines, or mains. The provisions of
4Public Act 98-583 are declaratory of existing law as to the
5meaning and scope of this exemption. Beginning on July 1, 2017,
6the exemption provided by this paragraph (18) includes, but is
7not limited to, graphic arts machinery and equipment, as
8defined in paragraph (6) of this Section.
9    (19) Personal property delivered to a purchaser or
10purchaser's donee inside Illinois when the purchase order for
11that personal property was received by a florist located
12outside Illinois who has a florist located inside Illinois
13deliver the personal property.
14    (20) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (21) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (21) is exempt from the provisions
22of Section 3-90, and the exemption provided for under this item
23(21) applies for all periods beginning May 30, 1995, but no
24claim for credit or refund is allowed on or after January 1,
252008 for such taxes paid during the period beginning May 30,
262000 and ending on January 1, 2008.

 

 

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

 

 

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1tax imposed by this Act, to a governmental body that has been
2issued an active sales tax exemption identification number by
3the Department under Section 1g of the Retailers' Occupation
4Tax Act. If the property is leased in a manner that does not
5qualify for this exemption or used in any other non-exempt
6manner, the lessor shall be liable for the tax imposed under
7this Act or the Service Use Tax Act, as the case may be, based
8on the fair market value of the property at the time the
9non-qualifying use occurs. No lessor shall collect or attempt
10to collect an amount (however designated) that purports to
11reimburse that lessor for the tax imposed by this Act or the
12Service Use Tax Act, as the case may be, if the tax has not been
13paid by the lessor. If a lessor improperly collects any such
14amount from the lessee, the lessee shall have a legal right to
15claim a refund of that amount from the lessor. If, however,
16that amount is not refunded to the lessee for any reason, the
17lessor is liable to pay that amount to the Department.
18    (24) 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    (25) 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    (26) Beginning July 1, 1999, game or game birds purchased
15at a "game breeding and hunting preserve area" as that term is
16used in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-90.
18    (27) 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    (28) 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 3-90.
24    (29) 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 3-90.
8    (30) Beginning January 1, 2001 and through June 30, 2016,
9food for human consumption that is to be consumed off the
10premises where it is sold (other than alcoholic beverages, soft
11drinks, and food that has been prepared for immediate
12consumption) and prescription and nonprescription medicines,
13drugs, medical appliances, and insulin, urine testing
14materials, syringes, and needles used by diabetics, for human
15use, when purchased for use by a person receiving medical
16assistance under Article V of the Illinois Public Aid Code who
17resides in a licensed long-term care facility, as defined in
18the Nursing Home Care Act, or in a licensed facility as defined
19in the ID/DD Community Care Act, the MC/DD Act, or the
20Specialized Mental Health Rehabilitation Act of 2013.
21    (31) Beginning on August 2, 2001 (the effective date of
22Public Act 92-227), computers and communications equipment
23utilized for any hospital purpose and equipment used in the
24diagnosis, analysis, or treatment of hospital patients
25purchased by a lessor who leases the equipment, under a lease
26of one year or longer executed or in effect at the time the

 

 

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

 

 

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1Retailers' Occupation Tax Act. If the property is leased in a
2manner that does not qualify for this exemption or used in any
3other nonexempt manner, the lessor shall be liable for the tax
4imposed under this Act or the Service Use Tax Act, as the case
5may be, based on the fair market value of the property at the
6time the nonqualifying use occurs. No lessor shall collect or
7attempt to collect an amount (however designated) that purports
8to reimburse that lessor for the tax imposed by this Act or the
9Service Use Tax Act, as the case may be, if the tax has not been
10paid by the lessor. If a lessor improperly collects any such
11amount from the lessee, the lessee shall have a legal right to
12claim a refund of that amount from the lessor. If, however,
13that amount is not refunded to the lessee for any reason, the
14lessor is liable to pay that amount to the Department. This
15paragraph is exempt from the provisions of Section 3-90.
16    (33) On and after July 1, 2003 and through June 30, 2004,
17the use in this State of motor vehicles of the second division
18with a gross vehicle weight in excess of 8,000 pounds and that
19are subject to the commercial distribution fee imposed under
20Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
211, 2004 and through June 30, 2005, the use in this State of
22motor vehicles of the second division: (i) with a gross vehicle
23weight rating in excess of 8,000 pounds; (ii) that are subject
24to the commercial distribution fee imposed under Section
253-815.1 of the Illinois Vehicle Code; and (iii) that are
26primarily used for commercial purposes. Through June 30, 2005,

 

 

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

 

 

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1such aircraft. "Consumable supplies" include, but are not
2limited to, adhesive, tape, sandpaper, general purpose
3lubricants, cleaning solution, latex gloves, and protective
4films. This exemption applies only to the use of qualifying
5tangible personal property by persons who modify, refurbish,
6complete, repair, replace, or maintain aircraft and who (i)
7hold an Air Agency Certificate and are empowered to operate an
8approved repair station by the Federal Aviation
9Administration, (ii) have a Class IV Rating, and (iii) conduct
10operations in accordance with Part 145 of the Federal Aviation
11Regulations. The exemption does not include aircraft operated
12by a commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (35) by Public Act 98-534 are declarative of existing
16law.
17    (36) Tangible personal property purchased by a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

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1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 3-90.
5    (37) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7    (38) Merchandise that is subject to the Rental Purchase
8Agreement Occupation and Use Tax. The purchaser must certify
9that the item is purchased to be rented subject to a rental
10purchase agreement, as defined in the Rental Purchase Agreement
11Act, and provide proof of registration under the Rental
12Purchase Agreement Occupation and Use Tax Act. This paragraph
13is exempt from the provisions of Section 3-90.
14    (39) Tangible personal property purchased by a purchaser
15who is exempt from the tax imposed by this Act by operation of
16federal law. This paragraph is exempt from the provisions of
17Section 3-90.
18    (40) Beginning on January 1, 2020, qualified tangible
19personal property used in the construction or operation of a
20data center that has been granted a certificate of exemption by
21the Department of Commerce and Economic Opportunity, whether
22that tangible personal property is purchased by the owner,
23operator, or tenant of the data center or by a contractor or
24subcontractor of the owner, operator, or tenant. Data centers
25that would have qualified for a certificate of exemption prior
26to January 1, 2020 had this amendatory Act of the 101st General

 

 

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1Assembly been in effect, may apply for and obtain an exemption
2for subsequent purchases of computer equipment or enabling
3software purchased or leased to upgrade, supplement, or replace
4computer equipment or enabling software purchased or leased in
5the original investment that would have qualified.
6    The Department of Commerce and Economic Opportunity shall
7grant a certificate of exemption under this item (40) to
8qualified data centers as defined by Section 605-1025 of the
9Department of Commerce and Economic Opportunity Law of the
10Civil Administrative Code of Illinois.
11    For the purposes of this item (40):
12        "Data center" means a building or a series of buildings
13    rehabilitated or constructed to house working servers in
14    one physical location or multiple sites within the State of
15    Illinois.
16        "Qualified tangible personal property" means:
17    electrical systems and equipment; climate control and
18    chilling equipment and systems; mechanical systems and
19    equipment; monitoring and secure systems; emergency
20    generators; hardware; computers; servers; data storage
21    devices; network connectivity equipment; racks; cabinets;
22    telecommunications cabling infrastructure; raised floor
23    systems; peripheral components or systems; software;
24    mechanical, electrical, or plumbing systems; battery
25    systems; cooling systems and towers; temperature control
26    systems; other cabling; and other data center

 

 

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1    infrastructure equipment and systems necessary to operate
2    qualified tangible personal property, including fixtures;
3    and component parts of any of the foregoing, including
4    installation, maintenance, repair, refurbishment, and
5    replacement of qualified tangible personal property to
6    generate, transform, transmit, distribute, or manage
7    electricity necessary to operate qualified tangible
8    personal property; and all other tangible personal
9    property that is essential to the operations of a computer
10    data center. The term "qualified tangible personal
11    property" also includes building materials physically
12    incorporated in to the qualifying data center. To document
13    the exemption allowed under this Section, the retailer must
14    obtain from the purchaser a copy of the certificate of
15    eligibility issued by the Department of Commerce and
16    Economic Opportunity.
17    This item (40) is exempt from the provisions of Section
183-90.
19(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
20100-22, eff. 7-6-17; 100-437, eff. 1-1-18; 100-594, eff.
216-29-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; revised
221-8-19.)
 
23    Section 10. The Service Use Tax Act is amended by changing
24Section 3-5 as follows:
 

 

 

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1    (35 ILCS 110/3-5)
2    Sec. 3-5. Exemptions. Use of the following tangible
3personal property is exempt from the tax imposed by this Act:
4    (1) Personal property purchased from a corporation,
5society, association, foundation, institution, or
6organization, other than a limited liability company, that is
7organized and operated as a not-for-profit service enterprise
8for the benefit of persons 65 years of age or older if the
9personal property was not purchased by the enterprise for the
10purpose of resale by the enterprise.
11    (2) Personal property purchased by a non-profit Illinois
12county fair association for use in conducting, operating, or
13promoting the county fair.
14    (3) Personal property purchased by a not-for-profit arts or
15cultural 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

 

 

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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 purchased from a teacher-sponsored
20student organization affiliated with an elementary or
21secondary school located 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

 

 

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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

 

 

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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 3-75.
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 acquired as an incident to the purchase of a
25service from a serviceman, to the extent that the proceeds of
26the service charge are in fact turned over as tips or as a

 

 

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1substitute for tips to the employees who participate directly
2in preparing, serving, hosting or cleaning up the food or
3beverage function with respect to which the service charge is
4imposed.
5    (10) 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    (11) Proceeds from the sale of photoprocessing machinery
15and equipment, including repair and replacement parts, both new
16and used, including that manufactured on special order,
17certified by the purchaser to be used primarily for
18photoprocessing, and including photoprocessing machinery and
19equipment purchased for lease.
20    (12) Until July 1, 2023, coal and aggregate exploration,
21mining, off-highway hauling, processing, maintenance, and
22reclamation equipment, including replacement parts and
23equipment, and including equipment purchased for lease, but
24excluding motor vehicles required to be registered under the
25Illinois Vehicle Code. The changes made to this Section by
26Public Act 97-767 apply on and after July 1, 2003, but no claim

 

 

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1for credit or refund is allowed on or after August 16, 2013
2(the effective date of Public Act 98-456) for such taxes paid
3during the period beginning July 1, 2003 and ending on August
416, 2013 (the effective date of Public Act 98-456).
5    (13) Semen used for artificial insemination of livestock
6for direct agricultural production.
7    (14) Horses, or interests in horses, registered with and
8meeting the requirements of any of the Arabian Horse Club
9Registry of America, Appaloosa Horse Club, American Quarter
10Horse Association, United States Trotting Association, or
11Jockey Club, as appropriate, used for purposes of breeding or
12racing for prizes. This item (14) is exempt from the provisions
13of Section 3-75, and the exemption provided for under this item
14(14) applies for all periods beginning May 30, 1995, but no
15claim for credit or refund is allowed on or after January 1,
162008 (the effective date of Public Act 95-88) this amendatory
17Act of the 95th General Assembly for such taxes paid during the
18period beginning May 30, 2000 and ending on January 1, 2008
19(the effective date of Public Act 95-88) this amendatory Act of
20the 95th General Assembly.
21    (15) Computers and communications equipment utilized for
22any hospital purpose and equipment used in the diagnosis,
23analysis, or treatment of hospital patients purchased by a
24lessor who leases the equipment, under a lease of one year or
25longer executed or in effect at the time the lessor would
26otherwise be subject to the tax imposed by this Act, to a

 

 

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

 

 

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

 

 

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1line extensions, water distribution and purification
2facilities, storm water drainage and retention facilities, and
3sewage treatment facilities, resulting from a State or
4federally declared disaster in Illinois or bordering Illinois
5when such repairs are initiated on facilities located in the
6declared disaster area within 6 months after the disaster.
7    (19) Beginning July 1, 1999, game or game birds purchased
8at a "game breeding and hunting preserve area" as that term is
9used in the Wildlife Code. This paragraph is exempt from the
10provisions of Section 3-75.
11    (20) A motor vehicle, as that term is defined in Section
121-146 of the Illinois Vehicle Code, that is donated to a
13corporation, limited liability company, society, association,
14foundation, or institution that is determined by the Department
15to be organized and operated exclusively for educational
16purposes. For purposes of this exemption, "a corporation,
17limited liability company, society, association, foundation,
18or institution organized and operated exclusively for
19educational purposes" means all tax-supported public schools,
20private schools that offer systematic instruction in useful
21branches of learning by methods common to public schools and
22that compare favorably in their scope and intensity with the
23course of study presented in tax-supported schools, and
24vocational or technical schools or institutes organized and
25operated exclusively to provide a course of study of not less
26than 6 weeks duration and designed to prepare individuals to

 

 

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1follow a trade or to pursue a manual, technical, mechanical,
2industrial, business, or commercial occupation.
3    (21) Beginning January 1, 2000, personal property,
4including food, purchased through fundraising events for the
5benefit of a public or private elementary or secondary school,
6a group of those schools, or one or more school districts if
7the events are sponsored by an entity recognized by the school
8district that consists primarily of volunteers and includes
9parents and teachers of the school children. This paragraph
10does not apply to fundraising events (i) for the benefit of
11private home instruction or (ii) for which the fundraising
12entity purchases the personal property sold at the events from
13another individual or entity that sold the property for the
14purpose of resale by the fundraising entity and that profits
15from the sale to the fundraising entity. This paragraph is
16exempt from the provisions of Section 3-75.
17    (22) Beginning January 1, 2000 and through December 31,
182001, new or used automatic vending machines that prepare and
19serve hot food and beverages, including coffee, soup, and other
20items, and replacement parts for these machines. Beginning
21January 1, 2002 and through June 30, 2003, machines and parts
22for machines used in commercial, coin-operated amusement and
23vending business if a use or occupation tax is paid on the
24gross receipts derived from the use of the commercial,
25coin-operated amusement and vending machines. This paragraph
26is exempt from the provisions of Section 3-75.

 

 

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1    (23) Beginning August 23, 2001 and through June 30, 2016,
2food for human consumption that is to be consumed off the
3premises where it is sold (other than alcoholic beverages, soft
4drinks, and food that has been prepared for immediate
5consumption) and prescription and nonprescription medicines,
6drugs, medical appliances, and insulin, urine testing
7materials, syringes, and needles used by diabetics, for human
8use, when purchased for use by a person receiving medical
9assistance under Article V of the Illinois Public Aid Code who
10resides in a licensed long-term care facility, as defined in
11the Nursing Home Care Act, or in a licensed facility as defined
12in the ID/DD Community Care Act, the MC/DD Act, or the
13Specialized Mental Health Rehabilitation Act of 2013.
14    (24) Beginning on August 2, 2001 (the effective date of
15Public Act 92-227) this amendatory Act of the 92nd General
16Assembly, computers and communications equipment utilized for
17any hospital purpose and equipment used in the diagnosis,
18analysis, or treatment of hospital patients purchased by a
19lessor who leases the equipment, under a lease of one year or
20longer executed or in effect at the time the lessor would
21otherwise be subject to the tax imposed by this Act, to a
22hospital that has been issued an active tax exemption
23identification number by the Department under Section 1g of the
24Retailers' Occupation Tax Act. If the equipment is leased in a
25manner that does not qualify for this exemption or is used in
26any other nonexempt manner, the lessor shall be liable for the

 

 

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

 

 

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

 

 

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

 

 

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1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 3-75.
7    (29) Beginning January 1, 2017, menstrual pads, tampons,
8and menstrual cups.
9    (30) Tangible personal property transferred to a purchaser
10who is exempt from the tax imposed by this Act by operation of
11federal law. This paragraph is exempt from the provisions of
12Section 3-75.
13    (31) Beginning on January 1, 2020, qualified tangible
14personal property used in the construction or operation of a
15data center that has been granted a certificate of exemption by
16the Department of Commerce and Economic Opportunity, whether
17that tangible personal property is purchased by the owner,
18operator, or tenant of the data center or by a contractor or
19subcontractor of the owner, operator, or tenant. Data centers
20that would have qualified for a certificate of exemption prior
21to January 1, 2020 had this amendatory Act of the 101st General
22Assembly been in effect, may apply for and obtain an exemption
23for subsequent purchases of computer equipment or enabling
24software purchased or leased to upgrade, supplement, or replace
25computer equipment or enabling software purchased or leased in
26the original investment that would have qualified.

 

 

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1    The Department of Commerce and Economic Opportunity shall
2grant a certificate of exemption under this item (31) to
3qualified data centers as defined by Section 605-1025 of the
4Department of Commerce and Economic Opportunity Law of the
5Civil Administrative Code of Illinois.
6    For the purposes of this item (31):
7        "Data center" means a building or a series of buildings
8    rehabilitated or constructed to house working servers in
9    one physical location or multiple sites within the State of
10    Illinois.
11        "Qualified tangible personal property" means:
12    electrical systems and equipment; climate control and
13    chilling equipment and systems; mechanical systems and
14    equipment; monitoring and secure systems; emergency
15    generators; hardware; computers; servers; data storage
16    devices; network connectivity equipment; racks; cabinets;
17    telecommunications cabling infrastructure; raised floor
18    systems; peripheral components or systems; software;
19    mechanical, electrical, or plumbing systems; battery
20    systems; cooling systems and towers; temperature control
21    systems; other cabling; and other data center
22    infrastructure equipment and systems necessary to operate
23    qualified tangible personal property, including fixtures;
24    and component parts of any of the foregoing, including
25    installation, maintenance, repair, refurbishment, and
26    replacement of qualified tangible personal property to

 

 

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1    generate, transform, transmit, distribute, or manage
2    electricity necessary to operate qualified tangible
3    personal property; and all other tangible personal
4    property that is essential to the operations of a computer
5    data center. The term "qualified tangible personal
6    property" also includes building materials physically
7    incorporated in to the qualifying data center. To document
8    the exemption allowed under this Section, the retailer must
9    obtain from the purchaser a copy of the certificate of
10    eligibility issued by the Department of Commerce and
11    Economic Opportunity.
12    This item (31) is exempt from the provisions of Section
133-75.
14(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
15100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
161-4-19; revised 1-8-19.)
 
17    Section 15. The Service Occupation Tax Act is amended by
18changing Section 3-5 as follows:
 
19    (35 ILCS 115/3-5)
20    Sec. 3-5. Exemptions. The following tangible personal
21property is exempt from the tax imposed by this Act:
22    (1) Personal property sold by a corporation, society,
23association, foundation, institution, or organization, other
24than a limited liability company, that is organized and

 

 

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1operated as a not-for-profit service enterprise for the benefit
2of persons 65 years of age or older if the personal property
3was not purchased by the enterprise for the purpose of resale
4by the enterprise.
5    (2) Personal property purchased by a not-for-profit
6Illinois county fair association for use in conducting,
7operating, or promoting the county fair.
8    (3) Personal property purchased by any not-for-profit arts
9or cultural organization that establishes, by proof required by
10the Department by rule, that it has received an exemption under
11Section 501(c)(3) of the Internal Revenue Code and that is
12organized and operated primarily for the presentation or
13support of arts or cultural programming, activities, or
14services. These organizations include, but are not limited to,
15music and dramatic arts organizations such as symphony
16orchestras and theatrical groups, arts and cultural service
17organizations, local arts councils, visual arts organizations,
18and media arts organizations. On and after July 1, 2001 (the
19effective date of Public Act 92-35) this amendatory Act of the
2092nd General Assembly, however, an entity otherwise eligible
21for this exemption shall not make tax-free purchases unless it
22has an active identification number issued by the Department.
23    (4) Legal tender, currency, medallions, or gold or silver
24coinage issued by the State of Illinois, the government of the
25United States of America, or the government of any foreign
26country, and bullion.

 

 

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1    (5) Until July 1, 2003 and beginning again on September 1,
22004 through August 30, 2014, graphic arts machinery and
3equipment, including repair and replacement parts, both new and
4used, and including that manufactured on special order or
5purchased for lease, certified by the purchaser to be used
6primarily for graphic arts production. Equipment includes
7chemicals or chemicals acting as catalysts but only if the
8chemicals or chemicals acting as catalysts effect a direct and
9immediate change upon a graphic arts product. Beginning on July
101, 2017, graphic arts machinery and equipment is included in
11the manufacturing and assembling machinery and equipment
12exemption under Section 2 of this Act.
13    (6) Personal property sold by a teacher-sponsored student
14organization affiliated with an elementary or secondary school
15located in Illinois.
16    (7) Farm machinery and equipment, both new and used,
17including that manufactured on special order, certified by the
18purchaser to be used primarily for production agriculture or
19State or federal agricultural programs, including individual
20replacement parts for the machinery and equipment, including
21machinery and equipment purchased for lease, and including
22implements of husbandry defined in Section 1-130 of the
23Illinois Vehicle Code, farm machinery and agricultural
24chemical and fertilizer spreaders, and nurse wagons required to
25be registered under Section 3-809 of the Illinois Vehicle Code,
26but excluding other motor vehicles required to be registered

 

 

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

 

 

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

 

 

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1tubular goods, including casing and drill strings, (iii) pumps
2and pump-jack units, (iv) storage tanks and flow lines, (v) any
3individual replacement part for oil field exploration,
4drilling, and production equipment, and (vi) machinery and
5equipment purchased for lease; but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code.
7    (11) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including that
9manufactured on special order, certified by the purchaser to be
10used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (12) Until July 1, 2023, coal and aggregate exploration,
13mining, off-highway hauling, processing, maintenance, and
14reclamation equipment, including replacement parts and
15equipment, and including equipment purchased for lease, but
16excluding motor vehicles required to be registered under the
17Illinois Vehicle Code. The changes made to this Section by
18Public Act 97-767 apply on and after July 1, 2003, but no claim
19for credit or refund is allowed on or after August 16, 2013
20(the effective date of Public Act 98-456) for such taxes paid
21during the period beginning July 1, 2003 and ending on August
2216, 2013 (the effective date of Public Act 98-456).
23    (13) Beginning January 1, 1992 and through June 30, 2016,
24food for human consumption that is to be consumed off the
25premises where it is sold (other than alcoholic beverages, soft
26drinks and food that has been prepared for immediate

 

 

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1consumption) and prescription and non-prescription medicines,
2drugs, medical appliances, and insulin, urine testing
3materials, syringes, and needles used by diabetics, for human
4use, when purchased for use by a person receiving medical
5assistance under Article V of the Illinois Public Aid Code who
6resides in a licensed long-term care facility, as defined in
7the Nursing Home Care Act, or in a licensed facility as defined
8in the ID/DD Community Care Act, the MC/DD Act, or the
9Specialized Mental Health Rehabilitation Act of 2013.
10    (14) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (15) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (15) is exempt from the provisions
18of Section 3-55, and the exemption provided for under this item
19(15) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 (the effective date of Public Act 95-88) for such taxes
22paid during the period beginning May 30, 2000 and ending on
23January 1, 2008 (the effective date of Public Act 95-88).
24    (16) Computers and communications equipment utilized for
25any hospital purpose and equipment used in the diagnosis,
26analysis, or treatment of hospital patients sold to a lessor

 

 

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1who leases the equipment, under a lease of one year or longer
2executed or in effect at the time of the purchase, 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.
6    (17) Personal property sold to a lessor who leases the
7property, under a lease of one year or longer executed or in
8effect at the time of the purchase, to a governmental body that
9has been issued an active tax exemption identification number
10by the Department under Section 1g of the Retailers' Occupation
11Tax Act.
12    (18) Beginning with taxable years ending on or after
13December 31, 1995 and ending with taxable years ending on or
14before December 31, 2004, personal property that is donated for
15disaster relief to be used in a State or federally declared
16disaster area in Illinois or bordering Illinois by a
17manufacturer or retailer that is registered in this State to a
18corporation, society, association, foundation, or institution
19that has been issued a sales tax exemption identification
20number by the Department that assists victims of the disaster
21who reside within the declared disaster area.
22    (19) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is used in the
25performance of infrastructure repairs in this State, including
26but not limited to municipal roads and streets, access roads,

 

 

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1bridges, sidewalks, waste disposal systems, water and sewer
2line extensions, water distribution and purification
3facilities, storm water drainage and retention facilities, and
4sewage treatment facilities, resulting from a State or
5federally declared disaster in Illinois or bordering Illinois
6when such repairs are initiated on facilities located in the
7declared disaster area within 6 months after the disaster.
8    (20) Beginning July 1, 1999, game or game birds sold at a
9"game breeding and hunting preserve area" as that term is used
10in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 3-55.
12    (21) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the Department
16to be organized and operated exclusively for educational
17purposes. For purposes of this exemption, "a corporation,
18limited liability company, society, association, foundation,
19or institution organized and operated exclusively for
20educational purposes" means all tax-supported public schools,
21private schools that offer systematic instruction in useful
22branches of learning by methods common to public schools and
23that compare favorably in their scope and intensity with the
24course of study presented in tax-supported schools, and
25vocational or technical schools or institutes organized and
26operated exclusively to provide a course of study of not less

 

 

SB1591 Engrossed- 54 -LRB101 08762 HLH 53849 b

1than 6 weeks duration and designed to prepare individuals to
2follow a trade or to pursue a manual, technical, mechanical,
3industrial, business, or commercial occupation.
4    (22) Beginning January 1, 2000, personal property,
5including food, purchased through fundraising events for the
6benefit of a public or private elementary or secondary school,
7a group of those schools, or one or more school districts if
8the events are sponsored by an entity recognized by the school
9district that consists primarily of volunteers and includes
10parents and teachers of the school children. This paragraph
11does not apply to fundraising events (i) for the benefit of
12private home instruction or (ii) for which the fundraising
13entity purchases the personal property sold at the events from
14another individual or entity that sold the property for the
15purpose of resale by the fundraising entity and that profits
16from the sale to the fundraising entity. This paragraph is
17exempt from the provisions of Section 3-55.
18    (23) Beginning January 1, 2000 and through December 31,
192001, new or used automatic vending machines that prepare and
20serve hot food and beverages, including coffee, soup, and other
21items, and replacement parts for these machines. Beginning
22January 1, 2002 and through June 30, 2003, machines and parts
23for machines used in commercial, coin-operated amusement and
24vending business if a use or occupation tax is paid on the
25gross receipts derived from the use of the commercial,
26coin-operated amusement and vending machines. This paragraph

 

 

SB1591 Engrossed- 55 -LRB101 08762 HLH 53849 b

1is exempt from the provisions of Section 3-55.
2    (24) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227) this amendatory Act of the 92nd General
4Assembly, 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. This paragraph is exempt from
12the provisions of Section 3-55.
13    (25) Beginning on August 2, 2001 (the effective date of
14Public Act 92-227) this amendatory Act of the 92nd General
15Assembly, personal property sold to a lessor who leases the
16property, under a lease of one year or longer executed or in
17effect at the time of the purchase, to a governmental body that
18has been issued an active tax exemption identification number
19by the Department under Section 1g of the Retailers' Occupation
20Tax Act. This paragraph is exempt from the provisions of
21Section 3-55.
22    (26) Beginning on January 1, 2002 and through June 30,
232016, tangible personal property purchased from an Illinois
24retailer by a taxpayer engaged in centralized purchasing
25activities in Illinois who will, upon receipt of the property
26in Illinois, temporarily store the property in Illinois (i) for

 

 

SB1591 Engrossed- 56 -LRB101 08762 HLH 53849 b

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

 

 

SB1591 Engrossed- 57 -LRB101 08762 HLH 53849 b

1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt instruments
9issued by the public-facilities corporation in connection with
10the development of the municipal convention hall. This
11exemption includes existing public-facilities corporations as
12provided in Section 11-65-25 of the Illinois Municipal Code.
13This paragraph is exempt from the provisions of Section 3-55.
14    (29) 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

 

 

SB1591 Engrossed- 58 -LRB101 08762 HLH 53849 b

1lubricants, cleaning solution, latex gloves, and protective
2films. This exemption applies only to the transfer of
3qualifying tangible personal property incident to the
4modification, refurbishment, completion, replacement, repair,
5or maintenance of an aircraft by persons who (i) hold an Air
6Agency Certificate and are empowered to operate an approved
7repair station by the Federal Aviation Administration, (ii)
8have a Class IV Rating, and (iii) conduct operations in
9accordance with Part 145 of the Federal Aviation Regulations.
10The exemption does not include aircraft operated by a
11commercial air carrier providing scheduled passenger air
12service pursuant to authority issued under Part 121 or Part 129
13of the Federal Aviation Regulations. The changes made to this
14paragraph (29) by Public Act 98-534 are declarative of existing
15law.
16    (30) Beginning January 1, 2017, menstrual pads, tampons,
17and menstrual cups.
18    (31) Tangible personal property transferred to a purchaser
19who is exempt from tax by operation of federal law. This
20paragraph is exempt from the provisions of Section 3-55.
21    (32) Beginning on January 1, 2020, qualified tangible
22personal property used in the construction or operation of a
23data center that has been granted a certificate of exemption by
24the Department of Commerce and Economic Opportunity, whether
25that tangible personal property is purchased by the owner,
26operator, or tenant of the data center or by a contractor or

 

 

SB1591 Engrossed- 59 -LRB101 08762 HLH 53849 b

1subcontractor of the owner, operator, or tenant. Data centers
2that would have qualified for a certificate of exemption prior
3to January 1, 2020 had this amendatory Act of the 101st General
4Assembly been in effect, may apply for and obtain an exemption
5for subsequent purchases of computer equipment or enabling
6software purchased or leased to upgrade, supplement, or replace
7computer equipment or enabling software purchased or leased in
8the original investment that would have qualified.
9    The Department of Commerce and Economic Opportunity shall
10grant a certificate of exemption under this item (32) to
11qualified data centers as defined by Section 605-1025 of the
12Department of Commerce and Economic Opportunity Law of the
13Civil Administrative Code of Illinois.
14    For the purposes of this item (32):
15        "Data center" means a building or a series of buildings
16    rehabilitated or constructed to house working servers in
17    one physical location or multiple sites within the State of
18    Illinois.
19        "Qualified tangible personal property" means:
20    electrical systems and equipment; climate control and
21    chilling equipment and systems; mechanical systems and
22    equipment; monitoring and secure systems; emergency
23    generators; hardware; computers; servers; data storage
24    devices; network connectivity equipment; racks; cabinets;
25    telecommunications cabling infrastructure; raised floor
26    systems; peripheral components or systems; software;

 

 

SB1591 Engrossed- 60 -LRB101 08762 HLH 53849 b

1    mechanical, electrical, or plumbing systems; battery
2    systems; cooling systems and towers; temperature control
3    systems; other cabling; and other data center
4    infrastructure equipment and systems necessary to operate
5    qualified tangible personal property, including fixtures;
6    and component parts of any of the foregoing, including
7    installation, maintenance, repair, refurbishment, and
8    replacement of qualified tangible personal property to
9    generate, transform, transmit, distribute, or manage
10    electricity necessary to operate qualified tangible
11    personal property; and all other tangible personal
12    property that is essential to the operations of a computer
13    data center. The term "qualified tangible personal
14    property" also includes building materials physically
15    incorporated in to the qualifying data center. To document
16    the exemption allowed under this Section, the retailer must
17    obtain from the purchaser a copy of the certificate of
18    eligibility issued by the Department of Commerce and
19    Economic Opportunity.
20    This item (32) is exempt from the provisions of Section
213-55.
22(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
23100-22, eff. 7-6-17; 100-594, eff. 6-29-18; 100-1171, eff.
241-4-19; revised 1-8-19.)
 
25    Section 20. The Retailers' Occupation Tax Act is amended by

 

 

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1changing Section 2-5 as follows:
 
2    (35 ILCS 120/2-5)
3    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
4sale of the following tangible personal property are exempt
5from the tax imposed by this Act:
6        (1) Farm chemicals.
7        (2) Farm machinery and equipment, both new and used,
8    including that manufactured on special order, certified by
9    the purchaser to be used primarily for production
10    agriculture or State or federal agricultural programs,
11    including individual replacement parts for the machinery
12    and equipment, including machinery and equipment purchased
13    for lease, and including implements of husbandry defined in
14    Section 1-130 of the Illinois Vehicle Code, farm machinery
15    and agricultural chemical and fertilizer spreaders, and
16    nurse wagons required to be registered under Section 3-809
17    of the Illinois Vehicle Code, but excluding other motor
18    vehicles required to be registered under the Illinois
19    Vehicle Code. Horticultural polyhouses or hoop houses used
20    for propagating, growing, or overwintering plants shall be
21    considered farm machinery and equipment under this item
22    (2). Agricultural chemical tender tanks and dry boxes shall
23    include units sold separately from a motor vehicle required
24    to be licensed and units sold mounted on a motor vehicle
25    required to be licensed, if the selling price of the tender

 

 

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1    is separately stated.
2        Farm machinery and equipment shall include precision
3    farming equipment that is installed or purchased to be
4    installed on farm machinery and equipment including, but
5    not limited to, tractors, harvesters, sprayers, planters,
6    seeders, or spreaders. Precision farming equipment
7    includes, but is not limited to, soil testing sensors,
8    computers, monitors, software, global positioning and
9    mapping systems, and other such equipment.
10        Farm machinery and equipment also includes computers,
11    sensors, software, and related equipment used primarily in
12    the computer-assisted operation of production agriculture
13    facilities, equipment, and activities such as, but not
14    limited to, the collection, monitoring, and correlation of
15    animal and crop data for the purpose of formulating animal
16    diets and agricultural chemicals. This item (2) is exempt
17    from the provisions of Section 2-70.
18        (3) Until July 1, 2003, distillation machinery and
19    equipment, sold as a unit or kit, assembled or installed by
20    the retailer, certified by the user to be used only for the
21    production of ethyl alcohol that will be used for
22    consumption as motor fuel or as a component of motor fuel
23    for the personal use of the user, and not subject to sale
24    or resale.
25        (4) Until July 1, 2003 and beginning again September 1,
26    2004 through August 30, 2014, graphic arts machinery and

 

 

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1    equipment, including repair and replacement parts, both
2    new and used, and including that manufactured on special
3    order or purchased for lease, certified by the purchaser to
4    be used primarily for graphic arts production. Equipment
5    includes chemicals or chemicals acting as catalysts but
6    only if the chemicals or chemicals acting as catalysts
7    effect a direct and immediate change upon a graphic arts
8    product. Beginning on July 1, 2017, graphic arts machinery
9    and equipment is included in the manufacturing and
10    assembling machinery and equipment exemption under
11    paragraph (14).
12        (5) A motor vehicle that is used for automobile
13    renting, as defined in the Automobile Renting Occupation
14    and Use Tax Act. This paragraph is exempt from the
15    provisions of Section 2-70.
16        (6) Personal property sold by a teacher-sponsored
17    student organization affiliated with an elementary or
18    secondary school located in Illinois.
19        (7) Until July 1, 2003, proceeds of that portion of the
20    selling price of a passenger car the sale of which is
21    subject to the Replacement Vehicle Tax.
22        (8) Personal property sold to an Illinois county fair
23    association for use in conducting, operating, or promoting
24    the county fair.
25        (9) Personal property sold to a not-for-profit arts or
26    cultural organization that establishes, by proof required

 

 

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1    by the Department by rule, that it has received an
2    exemption under Section 501(c)(3) of the Internal Revenue
3    Code and that is organized and operated primarily for the
4    presentation or support of arts or cultural programming,
5    activities, or services. These organizations include, but
6    are not limited to, music and dramatic arts organizations
7    such as symphony orchestras and theatrical groups, arts and
8    cultural service organizations, local arts councils,
9    visual arts organizations, and media arts organizations.
10    On and after July 1, 2001 (the effective date of Public Act
11    92-35), however, an entity otherwise eligible for this
12    exemption shall not make tax-free purchases unless it has
13    an active identification number issued by the Department.
14        (10) Personal property sold by a corporation, society,
15    association, foundation, institution, or organization,
16    other than a limited liability company, that is organized
17    and operated as a not-for-profit service enterprise for the
18    benefit of persons 65 years of age or older if the personal
19    property was not purchased by the enterprise for the
20    purpose of resale by the enterprise.
21        (11) Personal property sold to a governmental body, to
22    a corporation, society, association, foundation, or
23    institution organized and operated exclusively for
24    charitable, religious, or educational purposes, or to a
25    not-for-profit corporation, society, association,
26    foundation, institution, or organization that has no

 

 

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1    compensated officers or employees and that is organized and
2    operated primarily for the recreation of persons 55 years
3    of age or older. A limited liability company may qualify
4    for the exemption under this paragraph only if the limited
5    liability company is organized and operated exclusively
6    for educational purposes. On and after July 1, 1987,
7    however, no entity otherwise eligible for this exemption
8    shall make tax-free purchases unless it has an active
9    identification number issued by the Department.
10        (12) (Blank).
11        (12-5) On and after July 1, 2003 and through June 30,
12    2004, motor vehicles of the second division with a gross
13    vehicle weight in excess of 8,000 pounds that are subject
14    to the commercial distribution fee imposed under Section
15    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
16    2004 and through June 30, 2005, the use in this State of
17    motor vehicles of the second division: (i) with a gross
18    vehicle weight rating in excess of 8,000 pounds; (ii) that
19    are subject to the commercial distribution fee imposed
20    under Section 3-815.1 of the Illinois Vehicle Code; and
21    (iii) that are primarily used for commercial purposes.
22    Through June 30, 2005, this exemption applies to repair and
23    replacement parts added after the initial purchase of such
24    a motor vehicle if that motor vehicle is used in a manner
25    that would qualify for the rolling stock exemption
26    otherwise provided for in this Act. For purposes of this

 

 

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

 

 

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1    wholesale or retail sale; (ii) the generation or treatment
2    of natural or artificial gas for wholesale or retail sale
3    that is delivered to customers through pipes, pipelines, or
4    mains; or (iii) the treatment of water for wholesale or
5    retail sale that is delivered to customers through pipes,
6    pipelines, or mains. The provisions of Public Act 98-583
7    are declaratory of existing law as to the meaning and scope
8    of this exemption. Beginning on July 1, 2017, the exemption
9    provided by this paragraph (14) includes, but is not
10    limited to, graphic arts machinery and equipment, as
11    defined in paragraph (4) of this Section.
12        (15) Proceeds of mandatory service charges separately
13    stated on customers' bills for purchase and consumption of
14    food and beverages, to the extent that the proceeds of the
15    service charge are in fact turned over as tips or as a
16    substitute for tips to the employees who participate
17    directly in preparing, serving, hosting or cleaning up the
18    food or beverage function with respect to which the service
19    charge is imposed.
20        (16) Tangible personal property sold to a purchaser if
21    the purchaser is exempt from use tax by operation of
22    federal law. This paragraph is exempt from the provisions
23    of Section 2-70.
24        (17) Tangible personal property sold to a common
25    carrier by rail or motor that receives the physical
26    possession of the property in Illinois and that transports

 

 

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1    the property, or shares with another common carrier in the
2    transportation of the property, out of Illinois on a
3    standard uniform bill of lading showing the seller of the
4    property as the shipper or consignor of the property to a
5    destination outside Illinois, for use outside Illinois.
6        (18) Legal tender, currency, medallions, or gold or
7    silver coinage issued by the State of Illinois, the
8    government of the United States of America, or the
9    government of any foreign country, and bullion.
10        (19) Until July 1, 2003, oil field exploration,
11    drilling, and production equipment, including (i) rigs and
12    parts of rigs, rotary rigs, cable tool rigs, and workover
13    rigs, (ii) pipe and tubular goods, including casing and
14    drill strings, (iii) pumps and pump-jack units, (iv)
15    storage tanks and flow lines, (v) any individual
16    replacement part for oil field exploration, drilling, and
17    production equipment, and (vi) machinery and equipment
18    purchased for lease; but excluding motor vehicles required
19    to be registered under the Illinois Vehicle Code.
20        (20) Photoprocessing machinery and equipment,
21    including repair and replacement parts, both new and used,
22    including that manufactured on special order, certified by
23    the purchaser to be used primarily for photoprocessing, and
24    including photoprocessing machinery and equipment
25    purchased for lease.
26        (21) Until July 1, 2023, coal and aggregate

 

 

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1    exploration, mining, off-highway hauling, processing,
2    maintenance, and reclamation equipment, including
3    replacement parts and equipment, and including equipment
4    purchased for lease, but excluding motor vehicles required
5    to be registered under the Illinois Vehicle Code. The
6    changes made to this Section by Public Act 97-767 apply on
7    and after July 1, 2003, but no claim for credit or refund
8    is allowed on or after August 16, 2013 (the effective date
9    of Public Act 98-456) for such taxes paid during the period
10    beginning July 1, 2003 and ending on August 16, 2013 (the
11    effective date of Public Act 98-456).
12        (22) Until June 30, 2013, fuel and petroleum products
13    sold to or used by an air carrier, certified by the carrier
14    to be used for consumption, shipment, or storage in the
15    conduct of its business as an air common carrier, for a
16    flight destined for or returning from a location or
17    locations outside the United States without regard to
18    previous or subsequent domestic stopovers.
19        Beginning July 1, 2013, fuel and petroleum products
20    sold to or used by an air carrier, certified by the carrier
21    to be used for consumption, shipment, or storage in the
22    conduct of its business as an air common carrier, for a
23    flight that (i) is engaged in foreign trade or is engaged
24    in trade between the United States and any of its
25    possessions and (ii) transports at least one individual or
26    package for hire from the city of origination to the city

 

 

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1    of final destination on the same aircraft, without regard
2    to a change in the flight number of that aircraft.
3        (23) A transaction in which the purchase order is
4    received by a florist who is located outside Illinois, but
5    who has a florist located in Illinois deliver the property
6    to the purchaser or the purchaser's donee in Illinois.
7        (24) Fuel consumed or used in the operation of ships,
8    barges, or vessels that are used primarily in or for the
9    transportation of property or the conveyance of persons for
10    hire on rivers bordering on this State if the fuel is
11    delivered by the seller to the purchaser's barge, ship, or
12    vessel while it is afloat upon that bordering river.
13        (25) Except as provided in item (25-5) of this Section,
14    a motor vehicle sold in this State to a nonresident even
15    though the motor vehicle is delivered to the nonresident in
16    this State, if the motor vehicle is not to be titled in
17    this State, and if a drive-away permit is issued to the
18    motor vehicle as provided in Section 3-603 of the Illinois
19    Vehicle Code or if the nonresident purchaser has vehicle
20    registration plates to transfer to the motor vehicle upon
21    returning to his or her home state. The issuance of the
22    drive-away permit or having the out-of-state registration
23    plates to be transferred is prima facie evidence that the
24    motor vehicle will not be titled in this State.
25        (25-5) The exemption under item (25) does not apply if
26    the state in which the motor vehicle will be titled does

 

 

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1    not allow a reciprocal exemption for a motor vehicle sold
2    and delivered in that state to an Illinois resident but
3    titled in Illinois. The tax collected under this Act on the
4    sale of a motor vehicle in this State to a resident of
5    another state that does not allow a reciprocal exemption
6    shall be imposed at a rate equal to the state's rate of tax
7    on taxable property in the state in which the purchaser is
8    a resident, except that the tax shall not exceed the tax
9    that would otherwise be imposed under this Act. At the time
10    of the sale, the purchaser shall execute a statement,
11    signed under penalty of perjury, of his or her intent to
12    title the vehicle in the state in which the purchaser is a
13    resident within 30 days after the sale and of the fact of
14    the payment to the State of Illinois of tax in an amount
15    equivalent to the state's rate of tax on taxable property
16    in his or her state of residence and shall submit the
17    statement to the appropriate tax collection agency in his
18    or her state of residence. In addition, the retailer must
19    retain a signed copy of the statement in his or her
20    records. Nothing in this item shall be construed to require
21    the removal of the vehicle from this state following the
22    filing of an intent to title the vehicle in the purchaser's
23    state of residence if the purchaser titles the vehicle in
24    his or her state of residence within 30 days after the date
25    of sale. The tax collected under this Act in accordance
26    with this item (25-5) shall be proportionately distributed

 

 

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1    as if the tax were collected at the 6.25% general rate
2    imposed under this Act.
3        (25-7) Beginning on July 1, 2007, no tax is imposed
4    under this Act on the sale of an aircraft, as defined in
5    Section 3 of the Illinois Aeronautics Act, if all of the
6    following conditions are met:
7            (1) the aircraft leaves this State within 15 days
8        after the later of either the issuance of the final
9        billing for the sale of the aircraft, or the authorized
10        approval for return to service, completion of the
11        maintenance record entry, and completion of the test
12        flight and ground test for inspection, as required by
13        14 C.F.R. 91.407;
14            (2) the aircraft is not based or registered in this
15        State after the sale of the aircraft; and
16            (3) the seller retains in his or her books and
17        records and provides to the Department a signed and
18        dated certification from the purchaser, on a form
19        prescribed by the Department, certifying that the
20        requirements of this item (25-7) are met. The
21        certificate must also include the name and address of
22        the purchaser, the address of the location where the
23        aircraft is to be titled or registered, the address of
24        the primary physical location of the aircraft, and
25        other information that the Department may reasonably
26        require.

 

 

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1        For purposes of this item (25-7):
2        "Based in this State" means hangared, stored, or
3    otherwise used, excluding post-sale customizations as
4    defined in this Section, for 10 or more days in each
5    12-month period immediately following the date of the sale
6    of the aircraft.
7        "Registered in this State" means an aircraft
8    registered with the Department of Transportation,
9    Aeronautics Division, or titled or registered with the
10    Federal Aviation Administration to an address located in
11    this State.
12        This paragraph (25-7) is exempt from the provisions of
13    Section 2-70.
14        (26) Semen used for artificial insemination of
15    livestock for direct agricultural production.
16        (27) Horses, or interests in horses, registered with
17    and meeting the requirements of any of the Arabian Horse
18    Club Registry of America, Appaloosa Horse Club, American
19    Quarter Horse Association, United States Trotting
20    Association, or Jockey Club, as appropriate, used for
21    purposes of breeding or racing for prizes. This item (27)
22    is exempt from the provisions of Section 2-70, and the
23    exemption provided for under this item (27) applies for all
24    periods beginning May 30, 1995, but no claim for credit or
25    refund is allowed on or after January 1, 2008 (the
26    effective date of Public Act 95-88) for such taxes paid

 

 

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

 

 

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

 

 

SB1591 Engrossed- 76 -LRB101 08762 HLH 53849 b

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

 

 

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

 

 

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1        (36) Beginning August 2, 2001, computers and
2    communications equipment utilized for any hospital purpose
3    and equipment used in the diagnosis, analysis, or treatment
4    of hospital patients sold to a lessor who leases the
5    equipment, under a lease of one year or longer executed or
6    in effect at the time of the purchase, to a hospital that
7    has been issued an active tax exemption identification
8    number by the Department under Section 1g of this Act. This
9    paragraph is exempt from the provisions of Section 2-70.
10        (37) Beginning August 2, 2001, personal property sold
11    to a lessor who leases the property, under a lease of one
12    year or longer executed or in effect at the time of the
13    purchase, to a governmental body that has been issued an
14    active tax exemption identification number by the
15    Department under Section 1g of this Act. This paragraph is
16    exempt from the provisions of Section 2-70.
17        (38) Beginning on January 1, 2002 and through June 30,
18    2016, tangible personal property purchased from an
19    Illinois retailer by a taxpayer engaged in centralized
20    purchasing activities in Illinois who will, upon receipt of
21    the property in Illinois, temporarily store the property in
22    Illinois (i) for the purpose of subsequently transporting
23    it outside this State for use or consumption thereafter
24    solely outside this State or (ii) for the purpose of being
25    processed, fabricated, or manufactured into, attached to,
26    or incorporated into other tangible personal property to be

 

 

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

 

 

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1    maintenance of the aircraft. This exemption includes
2    consumable supplies used in the modification,
3    refurbishment, completion, replacement, repair, and
4    maintenance of aircraft, but excludes any materials,
5    parts, equipment, components, and consumable supplies used
6    in the modification, replacement, repair, and maintenance
7    of aircraft engines or power plants, whether such engines
8    or power plants are installed or uninstalled upon any such
9    aircraft. "Consumable supplies" include, but are not
10    limited to, adhesive, tape, sandpaper, general purpose
11    lubricants, cleaning solution, latex gloves, and
12    protective films. This exemption applies only to the sale
13    of qualifying tangible personal property to persons who
14    modify, refurbish, complete, replace, or maintain an
15    aircraft and who (i) hold an Air Agency Certificate and are
16    empowered to operate an approved repair station by the
17    Federal Aviation Administration, (ii) have a Class IV
18    Rating, and (iii) conduct operations in accordance with
19    Part 145 of the Federal Aviation Regulations. The exemption
20    does not include aircraft operated by a commercial air
21    carrier providing scheduled passenger air service pursuant
22    to authority issued under Part 121 or Part 129 of the
23    Federal Aviation Regulations. The changes made to this
24    paragraph (40) by Public Act 98-534 are declarative of
25    existing law.
26        (41) Tangible personal property sold to a

 

 

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1    public-facilities corporation, as described in Section
2    11-65-10 of the Illinois Municipal Code, for purposes of
3    constructing or furnishing a municipal convention hall,
4    but only if the legal title to the municipal convention
5    hall is transferred to the municipality without any further
6    consideration by or on behalf of the municipality at the
7    time of the completion of the municipal convention hall or
8    upon the retirement or redemption of any bonds or other
9    debt instruments issued by the public-facilities
10    corporation in connection with the development of the
11    municipal convention hall. This exemption includes
12    existing public-facilities corporations as provided in
13    Section 11-65-25 of the Illinois Municipal Code. This
14    paragraph is exempt from the provisions of Section 2-70.
15        (42) Beginning January 1, 2017, menstrual pads,
16    tampons, and menstrual cups.
17        (43) Merchandise that is subject to the Rental Purchase
18    Agreement Occupation and Use Tax. The purchaser must
19    certify that the item is purchased to be rented subject to
20    a rental purchase agreement, as defined in the Rental
21    Purchase Agreement Act, and provide proof of registration
22    under the Rental Purchase Agreement Occupation and Use Tax
23    Act. This paragraph is exempt from the provisions of
24    Section 2-70.
25        (44) Beginning on January 1, 2020, qualified tangible
26    personal property used in the construction or operation of

 

 

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1    a data center that has been granted a certificate of
2    exemption by the Department of Commerce and Economic
3    Opportunity, whether that tangible personal property is
4    purchased by the owner, operator, or tenant of the data
5    center or by a contractor or subcontractor of the owner,
6    operator, or tenant. Data centers that would have qualified
7    for a certificate of exemption prior to January 1, 2020 had
8    this amendatory Act of the 101st General Assembly been in
9    effect, may apply for and obtain an exemption for
10    subsequent purchases of computer equipment or enabling
11    software purchased or leased to upgrade, supplement, or
12    replace computer equipment or enabling software purchased
13    or leased in the original investment that would have
14    qualified.
15        The Department of Commerce and Economic Opportunity
16    shall grant a certificate of exemption under this item (44)
17    to qualified data centers as defined by Section 605-1025 of
18    the Department of Commerce and Economic Opportunity Law of
19    the Civil Administrative Code of Illinois.
20        For the purposes of this item (44):
21            "Data center" means a building or a series of
22        buildings rehabilitated or constructed to house
23        working servers in one physical location or multiple
24        sites within the State of Illinois.
25            "Qualified tangible personal property" means:
26        electrical systems and equipment; climate control and

 

 

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1        chilling equipment and systems; mechanical systems and
2        equipment; monitoring and secure systems; emergency
3        generators; hardware; computers; servers; data storage
4        devices; network connectivity equipment; racks;
5        cabinets; telecommunications cabling infrastructure;
6        raised floor systems; peripheral components or
7        systems; software; mechanical, electrical, or plumbing
8        systems; battery systems; cooling systems and towers;
9        temperature control systems; other cabling; and other
10        data center infrastructure equipment and systems
11        necessary to operate qualified tangible personal
12        property, including fixtures; and component parts of
13        any of the foregoing, including installation,
14        maintenance, repair, refurbishment, and replacement of
15        qualified tangible personal property to generate,
16        transform, transmit, distribute, or manage electricity
17        necessary to operate qualified tangible personal
18        property; and all other tangible personal property
19        that is essential to the operations of a computer data
20        center. The term "qualified tangible personal
21        property" also includes building materials physically
22        incorporated in to the qualifying data center. To
23        document the exemption allowed under this Section, the
24        retailer must obtain from the purchaser a copy of the
25        certificate of eligibility issued by the Department of
26        Commerce and Economic Opportunity.

 

 

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1        This item (44) is exempt from the provisions of Section
2    2-70.
3(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
4100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
51-1-18; 100-594, eff. 6-29-18; 100-863, eff. 8-14-18;
6100-1171, eff. 1-4-19; revised 1-8-19.)
 
7    Section 25. The Electricity Excise Tax Law is amended by
8changing Section 2-4 as follows:
 
9    (35 ILCS 640/2-4)
10    Sec. 2-4. Tax imposed.
11    (a) Except as provided in subsection (b), a tax is imposed
12on the privilege of using in this State electricity purchased
13for use or consumption and not for resale, other than by
14municipal corporations owning and operating a local
15transportation system for public service, at the following
16rates per kilowatt-hour delivered to the purchaser:
17        (i) For the first 2000 kilowatt-hours used or consumed
18    in a month: 0.330 cents per kilowatt-hour;
19        (ii) For the next 48,000 kilowatt-hours used or
20    consumed in a month: 0.319 cents per kilowatt-hour;
21        (iii) For the next 50,000 kilowatt-hours used or
22    consumed in a month: 0.303 cents per kilowatt-hour;
23        (iv) For the next 400,000 kilowatt-hours used or
24    consumed in a month: 0.297 cents per kilowatt-hour;

 

 

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1        (v) For the next 500,000 kilowatt-hours used or
2    consumed in a month: 0.286 cents per kilowatt-hour;
3        (vi) For the next 2,000,000 kilowatt-hours used or
4    consumed in a month: 0.270 cents per kilowatt-hour;
5        (vii) For the next 2,000,000 kilowatt-hours used or
6    consumed in a month: 0.254 cents per kilowatt-hour;
7        (viii) For the next 5,000,000 kilowatt-hours used or
8    consumed in a month: 0.233 cents per kilowatt-hour;
9        (ix) For the next 10,000,000 kilowatt-hours used or
10    consumed in a month: 0.207 cents per kilowatt-hour;
11        (x) For all electricity in excess of 20,000,000
12    kilowatt-hours used or consumed in a month: 0.202 cents per
13    kilowatt-hour.
14    Provided, that in lieu of the foregoing rates, the tax is
15imposed on a self-assessing purchaser at the rate of 5.1% of
16the self-assessing purchaser's purchase price for all
17electricity distributed, supplied, furnished, sold,
18transmitted and delivered to the self-assessing purchaser in a
19month.
20    (b) A tax is imposed on the privilege of using in this
21State electricity purchased from a municipal system or electric
22cooperative, as defined in Article XVII of the Public Utilities
23Act, which has not made an election as permitted by either
24Section 17-200 or Section 17-300 of such Act, at the lesser of
250.32 cents per kilowatt hour of all electricity distributed,
26supplied, furnished, sold, transmitted, and delivered by such

 

 

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1municipal system or electric cooperative to the purchaser or 5%
2of each such purchaser's purchase price for all electricity
3distributed, supplied, furnished, sold, transmitted, and
4delivered by such municipal system or electric cooperative to
5the purchaser, whichever is the lower rate as applied to each
6purchaser in each billing period.
7    (c) The tax imposed by this Section 2-4 is not imposed with
8respect to any use of electricity by business enterprises
9certified under Section 9-222.1 or 9-222.1A of the Public
10Utilities Act, as amended, to the extent of such exemption and
11during the time specified by the Department of Commerce and
12Economic Opportunity; or with respect to any transaction in
13interstate commerce, or otherwise, to the extent to which such
14transaction may not, under the Constitution and statutes of the
15United States, be made the subject of taxation by this State.
16    (d) Beginning January 1, 2020, a business enterprise that
17is certified as a qualified data center, as defined by
18subsection (b) of the Data Center Investment Act, by the
19Department of Revenue is exempt from the tax imposed under this
20Section. The Department shall adopt rules to carry out the
21provisions of this subsection including procedures for
22applying for the exemption. The Department of Revenue shall
23notify the public utility of the exemption status of the
24business enterprise. The exemption shall take effect upon
25certification of the qualifying data center.
26(Source: P.A. 94-793, eff. 5-19-06.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.