102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3017

 

Introduced 2/19/2021, by Rep. Joe Sosnowski

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that prescription medicines and drugs are exempt from the tax under the Acts. Effective January 1, 2022.


LRB102 12124 HLH 17461 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3017LRB102 12124 HLH 17461 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Sections
53-5 and 3-10 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
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active
24exemption identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon
11a graphic arts product. Beginning on July 1, 2017, graphic
12arts machinery and equipment is included in the manufacturing
13and assembling machinery and equipment exemption under
14paragraph (18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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

 

 

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

 

 

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

 

 

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1excluding motor vehicles required to be registered under the
2Illinois Vehicle Code. The changes made to this Section by
3Public Act 97-767 apply on and after July 1, 2003, but no claim
4for credit or refund is allowed on or after August 16, 2013
5(the effective date of Public Act 98-456) for such taxes paid
6during the period beginning July 1, 2003 and ending on August
716, 2013 (the effective date of Public Act 98-456).
8    (17) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (18) Manufacturing and assembling machinery and equipment
15used primarily in the process of manufacturing or assembling
16tangible personal property for wholesale or retail sale or
17lease, whether that sale or lease is made directly by the
18manufacturer or by some other person, whether the materials
19used in the process are owned by the manufacturer or some other
20person, or whether that sale or lease is made apart from or as
21an incident to the seller's engaging in the service occupation
22of producing machines, tools, dies, jigs, patterns, gauges, or
23other similar items of no commercial value on special order
24for a particular purchaser. The exemption provided by this
25paragraph (18) includes production related tangible personal
26property, as defined in Section 3-50, purchased on or after

 

 

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1July 1, 2019. The exemption provided by this paragraph (18)
2does not include machinery and equipment used in (i) the
3generation of electricity for wholesale or retail sale; (ii)
4the generation or treatment of natural or artificial gas for
5wholesale or retail sale that is delivered to customers
6through pipes, pipelines, or mains; or (iii) the treatment of
7water for wholesale or retail sale that is delivered to
8customers through pipes, pipelines, or mains. The provisions
9of Public Act 98-583 are declaratory of existing law as to the
10meaning and scope of this exemption. Beginning on July 1,
112017, the exemption provided by this paragraph (18) includes,
12but is not limited to, graphic arts machinery and equipment,
13as defined in paragraph (6) of this Section.
14    (19) Personal property delivered to a purchaser or
15purchaser's donee inside Illinois when the purchase order for
16that personal property was received by a florist located
17outside Illinois who has a florist located inside Illinois
18deliver the personal property.
19    (20) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (21) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (21) is exempt from the

 

 

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1provisions of Section 3-90, and the exemption provided for
2under this item (21) applies for all periods beginning May 30,
31995, but no claim for credit or refund is allowed on or after
4January 1, 2008 for such taxes paid during the period
5beginning May 30, 2000 and ending on January 1, 2008.
6    (22) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Service Use Tax Act, as
18the case may be, based on the fair market value of the property
19at the time the non-qualifying use occurs. No lessor shall
20collect or attempt to collect an amount (however designated)
21that purports to reimburse that lessor for the tax imposed by
22this Act or the Service Use Tax Act, as the case may be, if the
23tax has not been paid by the lessor. If a lessor improperly
24collects any such amount from the lessee, the lessee shall
25have a legal right to claim a refund of that amount from the
26lessor. If, however, that amount is not refunded to the lessee

 

 

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

 

 

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1for disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (25) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in
11the performance of infrastructure repairs in this State,
12including but not limited to municipal roads and streets,
13access roads, bridges, sidewalks, waste disposal systems,
14water and sewer line extensions, water distribution and
15purification facilities, storm water drainage and retention
16facilities, and sewage treatment facilities, resulting from a
17State or federally declared disaster in Illinois or bordering
18Illinois when such repairs are initiated on facilities located
19in the declared disaster area within 6 months after the
20disaster.
21    (26) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-90.
6    (29) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and
9other items, and replacement parts for these machines.
10Beginning January 1, 2002 and through June 30, 2003, machines
11and parts for machines used in commercial, coin-operated
12amusement and vending business if a use or occupation tax is
13paid on the gross receipts derived from the use of the
14commercial, coin-operated amusement and vending machines. This
15paragraph is exempt from the provisions of Section 3-90.
16    (30) Beginning January 1, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19soft drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (31) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), computers and communications equipment
5utilized for any hospital purpose and equipment used in the
6diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other nonexempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Service Use Tax Act, as
16the case may be, based on the fair market value of the property
17at the time the nonqualifying use occurs. No lessor shall
18collect or attempt to collect an amount (however designated)
19that purports to reimburse that lessor for the tax imposed by
20this Act or the Service Use Tax Act, as the case may be, if the
21tax has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall
23have a legal right to claim a refund of that amount from the
24lessor. If, however, that amount is not refunded to the lessee
25for any reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

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1Section 3-90.
2    (32) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), personal property purchased by a lessor
4who leases the property, under a lease of one year or longer
5executed or in effect at the time the lessor would otherwise be
6subject to the tax imposed by this Act, to a governmental body
7that has been issued an active sales tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act. If the property is leased
10in a manner that does not qualify for this exemption or used in
11any other nonexempt 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 nonqualifying 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
20have a legal right to claim a refund of that amount from the
21lessor. If, however, that amount is not refunded to the lessee
22for any reason, the lessor is liable to pay that amount to the
23Department. This paragraph is exempt from the provisions of
24Section 3-90.
25    (33) On and after July 1, 2003 and through June 30, 2004,
26the use in this State of motor vehicles of the second division

 

 

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1with a gross vehicle weight in excess of 8,000 pounds and that
2are subject to the commercial distribution fee imposed under
3Section 3-815.1 of the Illinois Vehicle Code. Beginning on
4July 1, 2004 and through June 30, 2005, the use in this State
5of motor vehicles of the second division: (i) with a gross
6vehicle weight rating in excess of 8,000 pounds; (ii) that are
7subject to the commercial distribution fee imposed under
8Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
9are primarily used for commercial purposes. Through June 30,
102005, this exemption applies to repair and replacement parts
11added after the initial purchase of such a motor vehicle if
12that motor vehicle is used in a manner that would qualify for
13the rolling stock exemption otherwise provided for in this
14Act. For purposes of this paragraph, the term "used for
15commercial purposes" means the transportation of persons or
16property in furtherance of any commercial or industrial
17enterprise, whether for-hire or not.
18    (34) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued
23under Title IV of the Environmental Protection Act. This
24paragraph is exempt from the provisions of Section 3-90.
25    (35) Beginning January 1, 2010 and continuing through
26December 31, 2024, materials, parts, equipment, components,

 

 

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1and furnishings incorporated into or upon an aircraft as part
2of the modification, refurbishment, completion, replacement,
3repair, or maintenance of the aircraft. This exemption
4includes consumable supplies used in the modification,
5refurbishment, completion, replacement, repair, and
6maintenance of aircraft, but excludes any materials, parts,
7equipment, components, and consumable supplies used in the
8modification, replacement, repair, and maintenance of aircraft
9engines or power plants, whether such engines or power plants
10are installed or uninstalled upon any such aircraft.
11"Consumable supplies" include, but are not limited to,
12adhesive, tape, sandpaper, general purpose lubricants,
13cleaning solution, latex gloves, and protective films. This
14exemption applies only to the use of qualifying tangible
15personal property by persons who modify, refurbish, complete,
16repair, replace, or maintain aircraft and who (i) hold an Air
17Agency Certificate and are empowered to operate an approved
18repair station by the Federal Aviation Administration, (ii)
19have a Class IV Rating, and (iii) conduct operations in
20accordance with Part 145 of the Federal Aviation Regulations.
21The exemption does not include aircraft operated by a
22commercial air carrier providing scheduled passenger air
23service pursuant to authority issued under Part 121 or Part
24129 of the Federal Aviation Regulations. The changes made to
25this paragraph (35) by Public Act 98-534 are declarative of
26existing law. It is the intent of the General Assembly that the

 

 

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1exemption under this paragraph (35) applies continuously from
2January 1, 2010 through December 31, 2024; however, no claim
3for credit or refund is allowed for taxes paid as a result of
4the disallowance of this exemption on or after January 1, 2015
5and prior to the effective date of this amendatory Act of the
6101st General Assembly.
7    (36) Tangible personal property purchased by a
8public-facilities corporation, as described in Section
911-65-10 of the Illinois Municipal Code, for purposes of
10constructing or furnishing a municipal convention hall, but
11only if the legal title to the municipal convention hall is
12transferred to the municipality without any further
13consideration by or on behalf of the municipality at the time
14of the completion of the municipal convention hall or upon the
15retirement or redemption of any bonds or other debt
16instruments issued by the public-facilities corporation in
17connection with the development of the municipal convention
18hall. This exemption includes existing public-facilities
19corporations as provided in Section 11-65-25 of the Illinois
20Municipal Code. This paragraph is exempt from the provisions
21of Section 3-90.
22    (37) Beginning January 1, 2017, menstrual pads, tampons,
23and menstrual cups.
24    (38) Merchandise that is subject to the Rental Purchase
25Agreement Occupation and Use Tax. The purchaser must certify
26that the item is purchased to be rented subject to a rental

 

 

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1purchase agreement, as defined in the Rental Purchase
2Agreement Act, and provide proof of registration under the
3Rental Purchase Agreement Occupation and Use Tax Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (39) Tangible personal property purchased by a purchaser
6who is exempt from the tax imposed by this Act by operation of
7federal law. This paragraph is exempt from the provisions of
8Section 3-90.
9    (40) Qualified tangible personal property used in the
10construction or operation of a data center that has been
11granted a certificate of exemption by the Department of
12Commerce and Economic Opportunity, whether that tangible
13personal property is purchased by the owner, operator, or
14tenant of the data center or by a contractor or subcontractor
15of the owner, operator, or tenant. Data centers that would
16have qualified for a certificate of exemption prior to January
171, 2020 had Public Act 101-31 been in effect may apply for and
18obtain an exemption for subsequent purchases of computer
19equipment or enabling software purchased or leased to upgrade,
20supplement, or replace computer equipment or enabling software
21purchased or leased in the original investment that would have
22qualified.
23    The Department of Commerce and Economic Opportunity shall
24grant a certificate of exemption under this item (40) to
25qualified data centers as defined by Section 605-1025 of the
26Department of Commerce and Economic Opportunity Law of the

 

 

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1Civil Administrative Code of Illinois.
2    For the purposes of this item (40):
3        "Data center" means a building or a series of
4    buildings rehabilitated or constructed to house working
5    servers in one physical location or multiple sites within
6    the State of Illinois.
7        "Qualified tangible personal property" means:
8    electrical systems and equipment; climate control and
9    chilling equipment and systems; mechanical systems and
10    equipment; monitoring and secure systems; emergency
11    generators; hardware; computers; servers; data storage
12    devices; network connectivity equipment; racks; cabinets;
13    telecommunications cabling infrastructure; raised floor
14    systems; peripheral components or systems; software;
15    mechanical, electrical, or plumbing systems; battery
16    systems; cooling systems and towers; temperature control
17    systems; other cabling; and other data center
18    infrastructure equipment and systems necessary to operate
19    qualified tangible personal property, including fixtures;
20    and component parts of any of the foregoing, including
21    installation, maintenance, repair, refurbishment, and
22    replacement of qualified tangible personal property to
23    generate, transform, transmit, distribute, or manage
24    electricity necessary to operate qualified tangible
25    personal property; and all other tangible personal
26    property that is essential to the operations of a computer

 

 

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1    data center. The term "qualified tangible personal
2    property" also includes building materials physically
3    incorporated in to the qualifying data center. To document
4    the exemption allowed under this Section, the retailer
5    must obtain from the purchaser a copy of the certificate
6    of eligibility issued by the Department of Commerce and
7    Economic Opportunity.
8    This item (40) is exempt from the provisions of Section
93-90.
10    (41) Beginning January 1, 2022, prescription medicines and
11drugs. This item (41) is exempt from the provisions of Section
123-90.
13(Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18;
14100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff.
151-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff.
167-12-19; 101-629, eff. 2-5-20.)
 
17    (35 ILCS 105/3-10)
18    Sec. 3-10. Rate of tax. Unless otherwise provided in this
19Section, the tax imposed by this Act is at the rate of 6.25% of
20either the selling price or the fair market value, if any, of
21the tangible personal property. In all cases where property
22functionally used or consumed is the same as the property that
23was purchased at retail, then the tax is imposed on the selling
24price of the property. In all cases where property
25functionally used or consumed is a by-product or waste product

 

 

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1that has been refined, manufactured, or produced from property
2purchased at retail, then the tax is imposed on the lower of
3the fair market value, if any, of the specific property so used
4in this State or on the selling price of the property purchased
5at retail. For purposes of this Section "fair market value"
6means the price at which property would change hands between a
7willing buyer and a willing seller, neither being under any
8compulsion to buy or sell and both having reasonable knowledge
9of the relevant facts. The fair market value shall be
10established by Illinois sales by the taxpayer of the same
11property as that functionally used or consumed, or if there
12are no such sales by the taxpayer, then comparable sales or
13purchases of property of like kind and character in Illinois.
14    Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18    Beginning on August 6, 2010 through August 15, 2010, with
19respect to sales tax holiday items as defined in Section 3-6 of
20this Act, the tax is imposed at the rate of 1.25%.
21    With respect to gasohol, the tax imposed by this Act
22applies to (i) 70% of the proceeds of sales made on or after
23January 1, 1990, and before July 1, 2003, (ii) 80% of the
24proceeds of sales made on or after July 1, 2003 and on or
25before July 1, 2017, and (iii) 100% of the proceeds of sales
26made thereafter. If, at any time, however, the tax under this

 

 

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1Act on sales of gasohol is imposed at the rate of 1.25%, then
2the tax imposed by this Act applies to 100% of the proceeds of
3sales of gasohol made during that time.
4    With respect to majority blended ethanol fuel, the tax
5imposed by this Act does not apply to the proceeds of sales
6made on or after July 1, 2003 and on or before December 31,
72023 but applies to 100% of the proceeds of sales made
8thereafter.
9    With respect to biodiesel blends with no less than 1% and
10no more than 10% biodiesel, the tax imposed by this Act applies
11to (i) 80% of the proceeds of sales made on or after July 1,
122003 and on or before December 31, 2018 and (ii) 100% of the
13proceeds of sales made thereafter. If, at any time, however,
14the tax under this Act on sales of biodiesel blends with no
15less than 1% and no more than 10% biodiesel is imposed at the
16rate of 1.25%, then the tax imposed by this Act applies to 100%
17of the proceeds of sales of biodiesel blends with no less than
181% and no more than 10% biodiesel made during that time.
19    With respect to 100% biodiesel and biodiesel blends with
20more than 10% but no more than 99% biodiesel, the tax imposed
21by this Act does not apply to the proceeds of sales made on or
22after July 1, 2003 and on or before December 31, 2023 but
23applies to 100% of the proceeds of sales made thereafter.
24    With respect to food for human consumption that is to be
25consumed off the premises where it is sold (other than
26alcoholic beverages, food consisting of or infused with adult

 

 

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1use cannabis, soft drinks, and food that has been prepared for
2immediate consumption) and prescription and nonprescription
3medicines, drugs, medical appliances, products classified as
4Class III medical devices by the United States Food and Drug
5Administration that are used for cancer treatment pursuant to
6a prescription, as well as any accessories and components
7related to those devices, modifications to a motor vehicle for
8the purpose of rendering it usable by a person with a
9disability, and insulin, urine testing materials, syringes,
10and needles used by diabetics, for human use, the tax is
11imposed at the rate of 1%. For the purposes of this Section,
12until September 1, 2009: the term "soft drinks" means any
13complete, finished, ready-to-use, non-alcoholic drink, whether
14carbonated or not, including but not limited to soda water,
15cola, fruit juice, vegetable juice, carbonated water, and all
16other preparations commonly known as soft drinks of whatever
17kind or description that are contained in any closed or sealed
18bottle, can, carton, or container, regardless of size; but
19"soft drinks" does not include coffee, tea, non-carbonated
20water, infant formula, milk or milk products as defined in the
21Grade A Pasteurized Milk and Milk Products Act, or drinks
22containing 50% or more natural fruit or vegetable juice.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "soft drinks" means non-alcoholic
25beverages that contain natural or artificial sweeteners. "Soft
26drinks" do not include beverages that contain milk or milk

 

 

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1products, soy, rice or similar milk substitutes, or greater
2than 50% of vegetable or fruit juice by volume.
3    Until August 1, 2009, and notwithstanding any other
4provisions of this Act, "food for human consumption that is to
5be consumed off the premises where it is sold" includes all
6food sold through a vending machine, except soft drinks and
7food products that are dispensed hot from a vending machine,
8regardless of the location of the vending machine. Beginning
9August 1, 2009, and notwithstanding any other provisions of
10this Act, "food for human consumption that is to be consumed
11off the premises where it is sold" includes all food sold
12through a vending machine, except soft drinks, candy, and food
13products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "food for human consumption that
17is to be consumed off the premises where it is sold" does not
18include candy. For purposes of this Section, "candy" means a
19preparation of sugar, honey, or other natural or artificial
20sweeteners in combination with chocolate, fruits, nuts or
21other ingredients or flavorings in the form of bars, drops, or
22pieces. "Candy" does not include any preparation that contains
23flour or requires refrigeration.
24    Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "nonprescription medicines and
26drugs" does not include grooming and hygiene products. For

 

 

HB3017- 26 -LRB102 12124 HLH 17461 b

1purposes of this Section, "grooming and hygiene products"
2includes, but is not limited to, soaps and cleaning solutions,
3shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
4lotions and screens, unless those products are available by
5prescription only, regardless of whether the products meet the
6definition of "over-the-counter-drugs". For the purposes of
7this paragraph, "over-the-counter-drug" means a drug for human
8use that contains a label that identifies the product as a drug
9as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
10label includes:
11        (A) A "Drug Facts" panel; or
12        (B) A statement of the "active ingredient(s)" with a
13    list of those ingredients contained in the compound,
14    substance or preparation.
15    Beginning on the effective date of this amendatory Act of
16the 98th General Assembly, "prescription and nonprescription
17medicines and drugs" includes medical cannabis purchased from
18a registered dispensing organization under the Compassionate
19Use of Medical Cannabis Program Act.
20    As used in this Section, "adult use cannabis" means
21cannabis subject to tax under the Cannabis Cultivation
22Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
23and does not include cannabis subject to tax under the
24Compassionate Use of Medical Cannabis Program Act.
25    If the property that is purchased at retail from a
26retailer is acquired outside Illinois and used outside

 

 

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1Illinois before being brought to Illinois for use here and is
2taxable under this Act, the "selling price" on which the tax is
3computed shall be reduced by an amount that represents a
4reasonable allowance for depreciation for the period of prior
5out-of-state use.
6(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
7101-593, eff. 12-4-19.)
 
8    Section 10. The Service Use Tax Act is amended by changing
9Sections 3-5 and 3-10 as follows:
 
10    (35 ILCS 110/3-5)
11    Sec. 3-5. Exemptions. Use of the following tangible
12personal property is exempt from the tax imposed by this Act:
13    (1) Personal property purchased from a corporation,
14society, association, foundation, institution, or
15organization, other than a limited liability company, that is
16organized and operated as a not-for-profit service enterprise
17for the benefit of persons 65 years of age or older if the
18personal property was not purchased by the enterprise for the
19purpose of resale by the enterprise.
20    (2) Personal property purchased by a non-profit Illinois
21county fair association for use in conducting, operating, or
22promoting the county fair.
23    (3) Personal property purchased by a not-for-profit arts
24or cultural organization that establishes, by proof required

 

 

HB3017- 28 -LRB102 12124 HLH 17461 b

1by the Department by rule, that it has received an exemption
2under Section 501(c)(3) of the Internal Revenue Code and that
3is organized and operated primarily for the presentation or
4support of arts or cultural programming, activities, or
5services. These organizations include, but are not limited to,
6music and dramatic arts organizations such as symphony
7orchestras and theatrical groups, arts and cultural service
8organizations, local arts councils, visual arts organizations,
9and media arts organizations. On and after July 1, 2001 (the
10effective date of Public Act 92-35), however, an entity
11otherwise eligible for this exemption shall not make tax-free
12purchases unless it has an active identification number issued
13by the Department.
14    (4) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (5) Until July 1, 2003 and beginning again on September 1,
192004 through August 30, 2014, graphic arts machinery and
20equipment, including repair and replacement parts, both new
21and used, and including that manufactured on special order or
22purchased for lease, certified by the purchaser to be used
23primarily for graphic arts production. Equipment includes
24chemicals or chemicals acting as catalysts but only if the
25chemicals or chemicals acting as catalysts effect a direct and
26immediate change upon a graphic arts product. Beginning on

 

 

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1July 1, 2017, graphic arts machinery and equipment is included
2in the manufacturing and assembling machinery and equipment
3exemption under Section 2 of this Act.
4    (6) Personal property purchased from a teacher-sponsored
5student organization affiliated with an elementary or
6secondary school located in Illinois.
7    (7) Farm machinery and equipment, both new and used,
8including that manufactured on special order, certified by the
9purchaser to be used primarily for production agriculture or
10State or federal agricultural programs, including individual
11replacement parts for the machinery and equipment, including
12machinery and equipment purchased for lease, and including
13implements of husbandry defined in Section 1-130 of the
14Illinois Vehicle Code, farm machinery and agricultural
15chemical and fertilizer spreaders, and nurse wagons required
16to be registered under Section 3-809 of the Illinois Vehicle
17Code, but excluding other motor vehicles required to be
18registered under the Illinois Vehicle Code. Horticultural
19polyhouses or hoop houses used for propagating, growing, or
20overwintering plants shall be considered farm machinery and
21equipment under this item (7). Agricultural chemical tender
22tanks and dry boxes shall include units sold separately from a
23motor vehicle required to be licensed and units sold mounted
24on a motor vehicle required to be licensed if the selling price
25of the tender is separately stated.
26    Farm machinery and equipment shall include precision

 

 

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

 

 

HB3017- 31 -LRB102 12124 HLH 17461 b

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

 

 

HB3017- 32 -LRB102 12124 HLH 17461 b

1and equipment, including repair and replacement parts, both
2new and used, including that manufactured on special order,
3certified by the purchaser to be used primarily for
4photoprocessing, and including photoprocessing machinery and
5equipment purchased for lease.
6    (12) Until July 1, 2023, coal and aggregate exploration,
7mining, off-highway hauling, processing, maintenance, and
8reclamation equipment, including replacement parts and
9equipment, and including equipment purchased for lease, but
10excluding motor vehicles required to be registered under the
11Illinois Vehicle Code. The changes made to this Section by
12Public Act 97-767 apply on and after July 1, 2003, but no claim
13for credit or refund is allowed on or after August 16, 2013
14(the effective date of Public Act 98-456) for such taxes paid
15during the period beginning July 1, 2003 and ending on August
1616, 2013 (the effective date of Public Act 98-456).
17    (13) Semen used for artificial insemination of livestock
18for direct agricultural production.
19    (14) Horses, or interests in horses, registered with and
20meeting the requirements of any of the Arabian Horse Club
21Registry of America, Appaloosa Horse Club, American Quarter
22Horse Association, United States Trotting Association, or
23Jockey Club, as appropriate, used for purposes of breeding or
24racing for prizes. This item (14) is exempt from the
25provisions of Section 3-75, and the exemption provided for
26under this item (14) applies for all periods beginning May 30,

 

 

HB3017- 33 -LRB102 12124 HLH 17461 b

11995, but no claim for credit or refund is allowed on or after
2January 1, 2008 (the effective date of Public Act 95-88) for
3such taxes paid during the period beginning May 30, 2000 and
4ending on January 1, 2008 (the effective date of Public Act
595-88).
6    (15) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Use Tax Act, as the case
18may be, based on the fair market value of the property at the
19time the non-qualifying use occurs. No lessor shall collect or
20attempt to collect an amount (however designated) that
21purports to reimburse that lessor for the tax imposed by this
22Act or the Use Tax Act, as the case may be, if the tax has not
23been paid by the lessor. If a lessor improperly collects any
24such amount from the lessee, the lessee shall have a legal
25right to claim a refund of that amount from the lessor. If,
26however, that amount is not refunded to the lessee for any

 

 

HB3017- 34 -LRB102 12124 HLH 17461 b

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

 

 

HB3017- 35 -LRB102 12124 HLH 17461 b

1disaster area in Illinois or bordering Illinois by a
2manufacturer or retailer that is registered in this State to a
3corporation, society, association, foundation, or institution
4that has been issued a sales tax exemption identification
5number by the Department that assists victims of the disaster
6who reside within the declared disaster area.
7    (18) Beginning with taxable years ending on or after
8December 31, 1995 and ending with taxable years ending on or
9before December 31, 2004, personal property that is used in
10the performance of infrastructure repairs in this State,
11including but not limited to municipal roads and streets,
12access roads, bridges, sidewalks, waste disposal systems,
13water and sewer line extensions, water distribution and
14purification facilities, storm water drainage and retention
15facilities, and sewage treatment facilities, resulting from a
16State or federally declared disaster in Illinois or bordering
17Illinois when such repairs are initiated on facilities located
18in the declared disaster area within 6 months after the
19disaster.
20    (19) Beginning July 1, 1999, game or game birds purchased
21at a "game breeding and hunting preserve area" as that term is
22used in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 3-75.
24    (20) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

HB3017- 36 -LRB102 12124 HLH 17461 b

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

 

 

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1another individual or entity that sold the property for the
2purpose of resale by the fundraising entity and that profits
3from the sale to the fundraising entity. This paragraph is
4exempt from the provisions of Section 3-75.
5    (22) Beginning January 1, 2000 and through December 31,
62001, new or used automatic vending machines that prepare and
7serve hot food and beverages, including coffee, soup, and
8other items, and replacement parts for these machines.
9Beginning January 1, 2002 and through June 30, 2003, machines
10and parts for machines used in commercial, coin-operated
11amusement and vending business if a use or occupation tax is
12paid on the gross receipts derived from the use of the
13commercial, coin-operated amusement and vending machines. This
14paragraph is exempt from the provisions of Section 3-75.
15    (23) Beginning August 23, 2001 and through June 30, 2016,
16food for human consumption that is to be consumed off the
17premises where it is sold (other than alcoholic beverages,
18soft drinks, and food that has been prepared for immediate
19consumption) and prescription and nonprescription medicines,
20drugs, medical appliances, and insulin, urine testing
21materials, syringes, and needles used by diabetics, for human
22use, when purchased for use by a person receiving medical
23assistance under Article V of the Illinois Public Aid Code who
24resides in a licensed long-term care facility, as defined in
25the Nursing Home Care Act, or in a licensed facility as defined
26in the ID/DD Community Care Act, the MC/DD Act, or the

 

 

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1Specialized Mental Health Rehabilitation Act of 2013.
2    (24) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), computers and communications equipment
4utilized for any hospital purpose and equipment used in the
5diagnosis, analysis, or treatment of hospital patients
6purchased by a lessor who leases the equipment, under a lease
7of one year or longer executed or in effect at the time the
8lessor would otherwise be subject to the tax imposed by this
9Act, to a hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of
11the Retailers' Occupation Tax Act. If the equipment is leased
12in a manner that does not qualify for this exemption or is used
13in any other nonexempt manner, the lessor shall be liable for
14the tax imposed under this Act or the Use Tax Act, as the case
15may be, based on the fair market value of the property at the
16time the nonqualifying use occurs. No lessor shall collect or
17attempt to collect an amount (however designated) that
18purports to reimburse that lessor for the tax imposed by this
19Act or the Use Tax Act, as the case may be, if the tax has not
20been paid by the lessor. If a lessor improperly collects any
21such amount from the lessee, the lessee shall have a legal
22right to claim a refund of that amount from the lessor. If,
23however, that amount is not refunded to the lessee for any
24reason, the lessor is liable to pay that amount to the
25Department. This paragraph is exempt from the provisions of
26Section 3-75.

 

 

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1    (25) Beginning on August 2, 2001 (the effective date of
2Public Act 92-227), personal property purchased by a lessor
3who leases the property, under a lease of one year or longer
4executed or in effect at the time the lessor would otherwise be
5subject to the tax imposed by this Act, to a governmental body
6that has been issued an active tax exemption identification
7number by the Department under Section 1g of the Retailers'
8Occupation Tax Act. If the property is leased in a manner that
9does not qualify for this exemption or is used in any other
10nonexempt manner, the lessor shall be liable for the tax
11imposed under this Act or the Use Tax Act, as the case may be,
12based on the fair market value of the property at the time the
13nonqualifying use occurs. No lessor shall collect or attempt
14to collect an amount (however designated) that purports to
15reimburse that lessor for the tax imposed by this Act or the
16Use Tax Act, as the case may be, if the tax has not been paid
17by the lessor. If a lessor improperly collects any such amount
18from the lessee, the lessee shall have a legal right to claim a
19refund of that amount from the lessor. If, however, that
20amount is not refunded to the lessee for any reason, the lessor
21is liable to pay that amount to the Department. This paragraph
22is exempt from the provisions of Section 3-75.
23    (26) Beginning January 1, 2008, tangible personal property
24used in the construction or maintenance of a community water
25supply, as defined under Section 3.145 of the Environmental
26Protection Act, that is operated by a not-for-profit

 

 

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1corporation that holds a valid water supply permit issued
2under Title IV of the Environmental Protection Act. This
3paragraph is exempt from the provisions of Section 3-75.
4    (27) Beginning January 1, 2010 and continuing through
5December 31, 2024, materials, parts, equipment, components,
6and furnishings incorporated into or upon an aircraft as part
7of the modification, refurbishment, completion, replacement,
8repair, or maintenance of the aircraft. This exemption
9includes consumable supplies used in the modification,
10refurbishment, completion, replacement, repair, and
11maintenance of aircraft, but excludes any materials, parts,
12equipment, components, and consumable supplies used in the
13modification, replacement, repair, and maintenance of aircraft
14engines or power plants, whether such engines or power plants
15are installed or uninstalled upon any such aircraft.
16"Consumable supplies" include, but are not limited to,
17adhesive, tape, sandpaper, general purpose lubricants,
18cleaning solution, latex gloves, and protective films. This
19exemption applies only to the use of qualifying tangible
20personal property transferred incident to the modification,
21refurbishment, completion, replacement, repair, or maintenance
22of aircraft by persons who (i) hold an Air Agency Certificate
23and are empowered to operate an approved repair station by the
24Federal Aviation Administration, (ii) have a Class IV Rating,
25and (iii) conduct operations in accordance with Part 145 of
26the Federal Aviation Regulations. The exemption does not

 

 

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1include aircraft operated by a commercial air carrier
2providing scheduled passenger air service pursuant to
3authority issued under Part 121 or Part 129 of the Federal
4Aviation Regulations. The changes made to this paragraph (27)
5by Public Act 98-534 are declarative of existing law. It is the
6intent of the General Assembly that the exemption under this
7paragraph (27) applies continuously from January 1, 2010
8through December 31, 2024; however, no claim for credit or
9refund is allowed for taxes paid as a result of the
10disallowance of this exemption on or after January 1, 2015 and
11prior to the effective date of this amendatory Act of the 101st
12General Assembly.
13    (28) Tangible personal property purchased by a
14public-facilities corporation, as described in Section
1511-65-10 of the Illinois Municipal Code, for purposes of
16constructing or furnishing a municipal convention hall, but
17only if the legal title to the municipal convention hall is
18transferred to the municipality without any further
19consideration by or on behalf of the municipality at the time
20of the completion of the municipal convention hall or upon the
21retirement or redemption of any bonds or other debt
22instruments issued by the public-facilities corporation in
23connection with the development of the municipal convention
24hall. This exemption includes existing public-facilities
25corporations as provided in Section 11-65-25 of the Illinois
26Municipal Code. This paragraph is exempt from the provisions

 

 

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1of Section 3-75.
2    (29) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4    (30) Tangible personal property transferred to a purchaser
5who is exempt from the tax imposed by this Act by operation of
6federal law. This paragraph is exempt from the provisions of
7Section 3-75.
8    (31) Qualified tangible personal property used in the
9construction or operation of a data center that has been
10granted a certificate of exemption by the Department of
11Commerce and Economic Opportunity, whether that tangible
12personal property is purchased by the owner, operator, or
13tenant of the data center or by a contractor or subcontractor
14of the owner, operator, or tenant. Data centers that would
15have qualified for a certificate of exemption prior to January
161, 2020 had this amendatory Act of the 101st General Assembly
17been in effect, may apply for and obtain an exemption for
18subsequent purchases of computer equipment or enabling
19software purchased or leased to upgrade, supplement, or
20replace computer equipment or enabling software purchased or
21leased in the original investment that would have qualified.
22    The Department of Commerce and Economic Opportunity shall
23grant a certificate of exemption under this item (31) to
24qualified data centers as defined by Section 605-1025 of the
25Department of Commerce and Economic Opportunity Law of the
26Civil Administrative Code of Illinois.

 

 

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1    For the purposes of this item (31):
2        "Data center" means a building or a series of
3    buildings rehabilitated or constructed to house working
4    servers in one physical location or multiple sites within
5    the State of Illinois.
6        "Qualified tangible personal property" means:
7    electrical systems and equipment; climate control and
8    chilling equipment and systems; mechanical systems and
9    equipment; monitoring and secure systems; emergency
10    generators; hardware; computers; servers; data storage
11    devices; network connectivity equipment; racks; cabinets;
12    telecommunications cabling infrastructure; raised floor
13    systems; peripheral components or systems; software;
14    mechanical, electrical, or plumbing systems; battery
15    systems; cooling systems and towers; temperature control
16    systems; other cabling; and other data center
17    infrastructure equipment and systems necessary to operate
18    qualified tangible personal property, including fixtures;
19    and component parts of any of the foregoing, including
20    installation, maintenance, repair, refurbishment, and
21    replacement of qualified tangible personal property to
22    generate, transform, transmit, distribute, or manage
23    electricity necessary to operate qualified tangible
24    personal property; and all other tangible personal
25    property that is essential to the operations of a computer
26    data center. The term "qualified tangible personal

 

 

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1    property" also includes building materials physically
2    incorporated in to the qualifying data center. To document
3    the exemption allowed under this Section, the retailer
4    must obtain from the purchaser a copy of the certificate
5    of eligibility issued by the Department of Commerce and
6    Economic Opportunity.
7    This item (31) is exempt from the provisions of Section
83-75.
9    (32) Beginning January 1, 2022, prescription medicines and
10drugs. This item (32) is exempt from the provisions of Section
113-75.
12(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
13100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
147-12-19; 101-629, eff. 2-5-20.)
 
15    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
16    Sec. 3-10. Rate of tax. Unless otherwise provided in this
17Section, the tax imposed by this Act is at the rate of 6.25% of
18the selling price of tangible personal property transferred as
19an incident to the sale of service, but, for the purpose of
20computing this tax, in no event shall the selling price be less
21than the cost price of the property to the serviceman.
22    Beginning on July 1, 2000 and through December 31, 2000,
23with respect to motor fuel, as defined in Section 1.1 of the
24Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
25the Use Tax Act, the tax is imposed at the rate of 1.25%.

 

 

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1    With respect to gasohol, as defined in the Use Tax Act, the
2tax imposed by this Act applies to (i) 70% of the selling price
3of property transferred as an incident to the sale of service
4on or after January 1, 1990, and before July 1, 2003, (ii) 80%
5of the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7July 1, 2017, and (iii) 100% of the selling price thereafter.
8If, at any time, however, the tax under this Act on sales of
9gasohol, as defined in the Use Tax Act, is imposed at the rate
10of 1.25%, then the tax imposed by this Act applies to 100% of
11the proceeds of sales of gasohol made during that time.
12    With respect to majority blended ethanol fuel, as defined
13in the Use Tax Act, the tax imposed by this Act does not apply
14to the selling price of property transferred as an incident to
15the sale of service on or after July 1, 2003 and on or before
16December 31, 2023 but applies to 100% of the selling price
17thereafter.
18    With respect to biodiesel blends, as defined in the Use
19Tax Act, with no less than 1% and no more than 10% biodiesel,
20the tax imposed by this Act applies to (i) 80% of the selling
21price of property transferred as an incident to the sale of
22service on or after July 1, 2003 and on or before December 31,
232018 and (ii) 100% of the proceeds of the selling price
24thereafter. If, at any time, however, the tax under this Act on
25sales of biodiesel blends, as defined in the Use Tax Act, with
26no less than 1% and no more than 10% biodiesel is imposed at

 

 

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1the rate of 1.25%, then the tax imposed by this Act applies to
2100% of the proceeds of sales of biodiesel blends with no less
3than 1% and no more than 10% biodiesel made during that time.
4    With respect to 100% biodiesel, as defined in the Use Tax
5Act, and biodiesel blends, as defined in the Use Tax Act, with
6more than 10% but no more than 99% biodiesel, the tax imposed
7by this Act does not apply to the proceeds of the selling price
8of property transferred as an incident to the sale of service
9on or after July 1, 2003 and on or before December 31, 2023 but
10applies to 100% of the selling price thereafter.
11    At the election of any registered serviceman made for each
12fiscal year, sales of service in which the aggregate annual
13cost price of tangible personal property transferred as an
14incident to the sales of service is less than 35%, or 75% in
15the case of servicemen transferring prescription drugs or
16servicemen engaged in graphic arts production, of the
17aggregate annual total gross receipts from all sales of
18service, the tax imposed by this Act shall be based on the
19serviceman's cost price of the tangible personal property
20transferred as an incident to the sale of those services.
21    The tax shall be imposed at the rate of 1% on food prepared
22for immediate consumption and transferred incident to a sale
23of service subject to this Act or the Service Occupation Tax
24Act by an entity licensed under the Hospital Licensing Act,
25the Nursing Home Care Act, the ID/DD Community Care Act, the
26MC/DD Act, the Specialized Mental Health Rehabilitation Act of

 

 

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12013, or the Child Care Act of 1969. The tax shall also be
2imposed at the rate of 1% on food for human consumption that is
3to be consumed off the premises where it is sold (other than
4alcoholic beverages, food consisting of or infused with adult
5use cannabis, soft drinks, and food that has been prepared for
6immediate consumption and is not otherwise included in this
7paragraph) and prescription and nonprescription medicines,
8drugs, medical appliances, products classified as Class III
9medical devices by the United States Food and Drug
10Administration that are used for cancer treatment pursuant to
11a prescription, as well as any accessories and components
12related to those devices, modifications to a motor vehicle for
13the purpose of rendering it usable by a person with a
14disability, and insulin, urine testing materials, syringes,
15and needles used by diabetics, for human use. For the purposes
16of this Section, until September 1, 2009: the term "soft
17drinks" means any complete, finished, ready-to-use,
18non-alcoholic drink, whether carbonated or not, including but
19not limited to soda water, cola, fruit juice, vegetable juice,
20carbonated water, and all other preparations commonly known as
21soft drinks of whatever kind or description that are contained
22in any closed or sealed bottle, can, carton, or container,
23regardless of size; but "soft drinks" does not include coffee,
24tea, non-carbonated water, infant formula, milk or milk
25products as defined in the Grade A Pasteurized Milk and Milk
26Products Act, or drinks containing 50% or more natural fruit

 

 

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1or vegetable juice.
2    Notwithstanding any other provisions of this Act,
3beginning September 1, 2009, "soft drinks" means non-alcoholic
4beverages that contain natural or artificial sweeteners. "Soft
5drinks" do not include beverages that contain milk or milk
6products, soy, rice or similar milk substitutes, or greater
7than 50% of vegetable or fruit juice by volume.
8    Until August 1, 2009, and notwithstanding any other
9provisions of this Act, "food for human consumption that is to
10be consumed off the premises where it is sold" includes all
11food sold through a vending machine, except soft drinks and
12food products that are dispensed hot from a vending machine,
13regardless of the location of the vending machine. Beginning
14August 1, 2009, and notwithstanding any other provisions of
15this Act, "food for human consumption that is to be consumed
16off the premises where it is sold" includes all food sold
17through a vending machine, except soft drinks, candy, and food
18products that are dispensed hot from a vending machine,
19regardless of the location of the vending machine.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "food for human consumption that
22is to be consumed off the premises where it is sold" does not
23include candy. For purposes of this Section, "candy" means a
24preparation of sugar, honey, or other natural or artificial
25sweeteners in combination with chocolate, fruits, nuts or
26other ingredients or flavorings in the form of bars, drops, or

 

 

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1pieces. "Candy" does not include any preparation that contains
2flour or requires refrigeration.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "nonprescription medicines and
5drugs" does not include grooming and hygiene products. For
6purposes of this Section, "grooming and hygiene products"
7includes, but is not limited to, soaps and cleaning solutions,
8shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
9lotions and screens, unless those products are available by
10prescription only, regardless of whether the products meet the
11definition of "over-the-counter-drugs". For the purposes of
12this paragraph, "over-the-counter-drug" means a drug for human
13use that contains a label that identifies the product as a drug
14as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
15label includes:
16        (A) A "Drug Facts" panel; or
17        (B) A statement of the "active ingredient(s)" with a
18    list of those ingredients contained in the compound,
19    substance or preparation.
20    Beginning on January 1, 2014 (the effective date of Public
21Act 98-122), "prescription and nonprescription medicines and
22drugs" includes medical cannabis purchased from a registered
23dispensing organization under the Compassionate Use of Medical
24Cannabis Program Act.
25    As used in this Section, "adult use cannabis" means
26cannabis subject to tax under the Cannabis Cultivation

 

 

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1Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
2and does not include cannabis subject to tax under the
3Compassionate Use of Medical Cannabis Program Act.
4    If the property that is acquired from a serviceman is
5acquired outside Illinois and used outside Illinois before
6being brought to Illinois for use here and is taxable under
7this Act, the "selling price" on which the tax is computed
8shall be reduced by an amount that represents a reasonable
9allowance for depreciation for the period of prior
10out-of-state use.
11(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
12101-593, eff. 12-4-19.)
 
13    Section 15. The Service Occupation Tax Act is amended by
14changing Sections 3-5 and 3-10 as follows:
 
15    (35 ILCS 115/3-5)
16    Sec. 3-5. Exemptions. The following tangible personal
17property is exempt from the tax imposed by this Act:
18    (1) Personal property sold by a corporation, society,
19association, foundation, institution, or organization, other
20than a limited liability company, that is organized and
21operated as a not-for-profit service enterprise for the
22benefit of persons 65 years of age or older if the personal
23property was not purchased by the enterprise for the purpose
24of resale by the enterprise.

 

 

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1    (2) Personal property purchased by a not-for-profit
2Illinois county fair association for use in conducting,
3operating, or promoting the county fair.
4    (3) Personal property purchased by any not-for-profit arts
5or cultural organization that establishes, by proof required
6by the Department by rule, that it has received an exemption
7under Section 501(c)(3) of the Internal Revenue Code and that
8is organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after July 1, 2001 (the
15effective date of Public Act 92-35), however, an entity
16otherwise eligible for this exemption shall not make tax-free
17purchases unless it has an active identification number issued
18by the Department.
19    (4) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (5) Until July 1, 2003 and beginning again on September 1,
242004 through August 30, 2014, graphic arts machinery and
25equipment, including repair and replacement parts, both new
26and used, and including that manufactured on special order or

 

 

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1purchased for lease, certified by the purchaser to be used
2primarily for graphic arts production. Equipment includes
3chemicals or chemicals acting as catalysts but only if the
4chemicals or chemicals acting as catalysts effect a direct and
5immediate change upon a graphic arts product. Beginning on
6July 1, 2017, graphic arts machinery and equipment is included
7in the manufacturing and assembling machinery and equipment
8exemption under Section 2 of this Act.
9    (6) Personal property sold by a teacher-sponsored student
10organization affiliated with an elementary or secondary school
11located in Illinois.
12    (7) Farm machinery and equipment, both new and used,
13including that manufactured on special order, certified by the
14purchaser to be used primarily for production agriculture or
15State or federal agricultural programs, including individual
16replacement parts for the machinery and equipment, including
17machinery and equipment purchased for lease, and including
18implements of husbandry defined in Section 1-130 of the
19Illinois Vehicle Code, farm machinery and agricultural
20chemical and fertilizer spreaders, and nurse wagons required
21to be registered under Section 3-809 of the Illinois Vehicle
22Code, but excluding other motor vehicles required to be
23registered under the Illinois Vehicle Code. Horticultural
24polyhouses or hoop houses used for propagating, growing, or
25overwintering plants shall be considered farm machinery and
26equipment under this item (7). Agricultural chemical tender

 

 

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1tanks and dry boxes shall include units sold separately from a
2motor vehicle required to be licensed and units sold mounted
3on a motor vehicle required to be licensed if the selling price
4of the tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals. This item (7) is exempt from the
20provisions of Section 3-55.
21    (8) Until June 30, 2013, fuel and petroleum products sold
22to or used by an air common carrier, certified by the carrier
23to be used for consumption, shipment, or storage in the
24conduct of its business as an air common carrier, for a flight
25destined for or returning from a location or locations outside
26the United States without regard to previous or subsequent

 

 

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

 

 

HB3017- 55 -LRB102 12124 HLH 17461 b

1machinery and equipment purchased for lease; but excluding
2motor vehicles required to be registered under the Illinois
3Vehicle Code.
4    (11) Photoprocessing machinery and equipment, including
5repair and replacement parts, both new and used, including
6that manufactured on special order, certified by the purchaser
7to be used primarily for photoprocessing, and including
8photoprocessing machinery and equipment purchased for lease.
9    (12) Until July 1, 2023, coal and aggregate exploration,
10mining, off-highway hauling, processing, maintenance, and
11reclamation equipment, including replacement parts and
12equipment, and including equipment purchased for lease, but
13excluding motor vehicles required to be registered under the
14Illinois Vehicle Code. The changes made to this Section by
15Public Act 97-767 apply on and after July 1, 2003, but no claim
16for credit or refund is allowed on or after August 16, 2013
17(the effective date of Public Act 98-456) for such taxes paid
18during the period beginning July 1, 2003 and ending on August
1916, 2013 (the effective date of Public Act 98-456).
20    (13) Beginning January 1, 1992 and through June 30, 2016,
21food for human consumption that is to be consumed off the
22premises where it is sold (other than alcoholic beverages,
23soft drinks and food that has been prepared for immediate
24consumption) and prescription and non-prescription medicines,
25drugs, medical appliances, and insulin, urine testing
26materials, syringes, and needles used by diabetics, for human

 

 

HB3017- 56 -LRB102 12124 HLH 17461 b

1use, when purchased for use by a person receiving medical
2assistance under Article V of the Illinois Public Aid Code who
3resides in a licensed long-term care facility, as defined in
4the Nursing Home Care Act, or in a licensed facility as defined
5in the ID/DD Community Care Act, the MC/DD Act, or the
6Specialized Mental Health Rehabilitation Act of 2013.
7    (14) Semen used for artificial insemination of livestock
8for direct agricultural production.
9    (15) Horses, or interests in horses, registered with and
10meeting the requirements of any of the Arabian Horse Club
11Registry of America, Appaloosa Horse Club, American Quarter
12Horse Association, United States Trotting Association, or
13Jockey Club, as appropriate, used for purposes of breeding or
14racing for prizes. This item (15) is exempt from the
15provisions of Section 3-55, and the exemption provided for
16under this item (15) applies for all periods beginning May 30,
171995, but no claim for credit or refund is allowed on or after
18January 1, 2008 (the effective date of Public Act 95-88) for
19such taxes paid during the period beginning May 30, 2000 and
20ending on January 1, 2008 (the effective date of Public Act
2195-88).
22    (16) Computers and communications equipment utilized for
23any hospital purpose and equipment used in the diagnosis,
24analysis, or treatment of hospital patients sold to a lessor
25who leases the equipment, under a lease of one year or longer
26executed or in effect at the time of the purchase, to a

 

 

HB3017- 57 -LRB102 12124 HLH 17461 b

1hospital that has been issued an active tax exemption
2identification number by the Department under Section 1g of
3the Retailers' Occupation Tax Act.
4    (17) Personal property sold to a lessor who leases the
5property, under a lease of one year or longer executed or in
6effect at the time of the purchase, to a governmental body that
7has been issued an active tax exemption identification number
8by the Department under Section 1g of the Retailers'
9Occupation Tax Act.
10    (18) Beginning with taxable years ending on or after
11December 31, 1995 and ending with taxable years ending on or
12before December 31, 2004, personal property that is donated
13for disaster relief to be used in a State or federally declared
14disaster area in Illinois or bordering Illinois by a
15manufacturer or retailer that is registered in this State to a
16corporation, society, association, foundation, or institution
17that has been issued a sales tax exemption identification
18number by the Department that assists victims of the disaster
19who reside within the declared disaster area.
20    (19) Beginning with taxable years ending on or after
21December 31, 1995 and ending with taxable years ending on or
22before December 31, 2004, personal property that is used in
23the performance of infrastructure repairs in this State,
24including but not limited to municipal roads and streets,
25access roads, bridges, sidewalks, waste disposal systems,
26water and sewer line extensions, water distribution and

 

 

HB3017- 58 -LRB102 12124 HLH 17461 b

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

 

 

HB3017- 59 -LRB102 12124 HLH 17461 b

1individuals to follow a trade or to pursue a manual,
2technical, mechanical, industrial, business, or commercial
3occupation.
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
21other items, and replacement parts for these machines.
22Beginning January 1, 2002 and through June 30, 2003, machines
23and parts for machines used in commercial, coin-operated
24amusement and vending business if a use or occupation tax is
25paid on the gross receipts derived from the use of the
26commercial, coin-operated amusement and vending machines. This

 

 

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1paragraph is exempt from the provisions of Section 3-55.
2    (24) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), computers and communications equipment
4utilized for any hospital purpose and equipment used in the
5diagnosis, analysis, or treatment of hospital patients sold to
6a lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time of the purchase, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10the Retailers' Occupation Tax Act. This paragraph is exempt
11from the provisions of Section 3-55.
12    (25) Beginning on August 2, 2001 (the effective date of
13Public Act 92-227), personal property sold to a lessor who
14leases the property, under a lease of one year or longer
15executed or in effect at the time of the purchase, to a
16governmental body that has been issued an active tax exemption
17identification number by the Department under Section 1g of
18the Retailers' Occupation Tax Act. This paragraph is exempt
19from the provisions of Section 3-55.
20    (26) Beginning on January 1, 2002 and through June 30,
212016, tangible personal property purchased from an Illinois
22retailer by a taxpayer engaged in centralized purchasing
23activities in Illinois who will, upon receipt of the property
24in Illinois, temporarily store the property in Illinois (i)
25for the purpose of subsequently transporting it outside this
26State for use or consumption thereafter solely outside this

 

 

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1State or (ii) for the purpose of being processed, fabricated,
2or manufactured into, attached to, or incorporated into other
3tangible personal property to be transported outside this
4State and thereafter used or consumed solely outside this
5State. The Director of Revenue shall, pursuant to rules
6adopted in accordance with the Illinois Administrative
7Procedure Act, issue a permit to any taxpayer in good standing
8with the Department who is eligible for the exemption under
9this paragraph (26). The permit issued under this paragraph
10(26) shall authorize the holder, to the extent and in the
11manner specified in the rules adopted under this Act, to
12purchase tangible personal property from a retailer exempt
13from the taxes imposed by this Act. Taxpayers shall maintain
14all necessary books and records to substantiate the use and
15consumption of all such tangible personal property outside of
16the State of Illinois.
17    (27) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued
22under Title IV of the Environmental Protection Act. This
23paragraph is exempt from the provisions of Section 3-55.
24    (28) Tangible personal property sold to a
25public-facilities corporation, as described in Section
2611-65-10 of the Illinois Municipal Code, for purposes of

 

 

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1constructing or furnishing a municipal convention hall, but
2only if the legal title to the municipal convention hall is
3transferred to the municipality without any further
4consideration by or on behalf of the municipality at the time
5of the completion of the municipal convention hall or upon the
6retirement or redemption of any bonds or other debt
7instruments issued by the public-facilities corporation in
8connection with the development of the municipal convention
9hall. This exemption includes existing public-facilities
10corporations as provided in Section 11-65-25 of the Illinois
11Municipal Code. This paragraph is exempt from the provisions
12of Section 3-55.
13    (29) Beginning January 1, 2010 and continuing through
14December 31, 2024, materials, parts, equipment, components,
15and furnishings incorporated into or upon an aircraft as part
16of the modification, refurbishment, completion, replacement,
17repair, or maintenance of the aircraft. This exemption
18includes consumable supplies used in the modification,
19refurbishment, completion, replacement, repair, and
20maintenance of aircraft, but excludes any materials, parts,
21equipment, components, and consumable supplies used in the
22modification, replacement, repair, and maintenance of aircraft
23engines or power plants, whether such engines or power plants
24are installed or uninstalled upon any such aircraft.
25"Consumable supplies" include, but are not limited to,
26adhesive, tape, sandpaper, general purpose lubricants,

 

 

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1cleaning solution, latex gloves, and protective films. This
2exemption applies only to the transfer of qualifying tangible
3personal property incident to the modification, refurbishment,
4completion, replacement, repair, or maintenance of an aircraft
5by persons who (i) hold an Air Agency Certificate and are
6empowered to operate an approved repair station by the Federal
7Aviation Administration, (ii) have a Class IV Rating, and
8(iii) conduct operations in accordance with Part 145 of the
9Federal Aviation Regulations. The exemption does not include
10aircraft operated by a commercial air carrier providing
11scheduled passenger air service pursuant to authority issued
12under Part 121 or Part 129 of the Federal Aviation
13Regulations. The changes made to this paragraph (29) by Public
14Act 98-534 are declarative of existing law. It is the intent of
15the General Assembly that the exemption under this paragraph
16(29) applies continuously from January 1, 2010 through
17December 31, 2024; however, no claim for credit or refund is
18allowed for taxes paid as a result of the disallowance of this
19exemption on or after January 1, 2015 and prior to the
20effective date of this amendatory Act of the 101st General
21Assembly.
22    (30) Beginning January 1, 2017, menstrual pads, tampons,
23and menstrual cups.
24    (31) Tangible personal property transferred to a purchaser
25who is exempt from tax by operation of federal law. This
26paragraph is exempt from the provisions of Section 3-55.

 

 

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1    (32) Qualified tangible personal property used in the
2construction or operation of a data center that has been
3granted a certificate of exemption by the Department of
4Commerce and Economic Opportunity, whether that tangible
5personal property is purchased by the owner, operator, or
6tenant of the data center or by a contractor or subcontractor
7of the owner, operator, or tenant. Data centers that would
8have qualified for a certificate of exemption prior to January
91, 2020 had this amendatory Act of the 101st General Assembly
10been in effect, may apply for and obtain an exemption for
11subsequent purchases of computer equipment or enabling
12software purchased or leased to upgrade, supplement, or
13replace computer equipment or enabling software purchased or
14leased in the original investment that would have qualified.
15    The Department of Commerce and Economic Opportunity shall
16grant a certificate of exemption under this item (32) to
17qualified data centers as defined by Section 605-1025 of the
18Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois.
20    For the purposes of this item (32):
21        "Data center" means a building or a series of
22    buildings rehabilitated or constructed to house working
23    servers in one physical location or multiple sites within
24    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; cabinets;
5    telecommunications cabling infrastructure; raised floor
6    systems; peripheral components or systems; software;
7    mechanical, electrical, or plumbing systems; battery
8    systems; cooling systems and towers; temperature control
9    systems; other cabling; and other data center
10    infrastructure equipment and systems necessary to operate
11    qualified tangible personal property, including fixtures;
12    and component parts of any of the foregoing, including
13    installation, maintenance, repair, refurbishment, and
14    replacement of qualified tangible personal property to
15    generate, transform, transmit, distribute, or manage
16    electricity necessary to operate qualified tangible
17    personal property; and all other tangible personal
18    property that is essential to the operations of a computer
19    data center. The term "qualified tangible personal
20    property" also includes building materials physically
21    incorporated in to the qualifying data center. To document
22    the exemption allowed under this Section, the retailer
23    must obtain from the purchaser a copy of the certificate
24    of eligibility issued by the Department of Commerce and
25    Economic Opportunity.
26    This item (32) is exempt from the provisions of Section

 

 

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13-55.
2    (33) Beginning January 1, 2022, prescription medicines and
3drugs. This item (33) is exempt from the provisions of Section
43-55.
5(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
6100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
77-12-19; 101-629, eff. 2-5-20.)
 
8    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
9    Sec. 3-10. Rate of tax. Unless otherwise provided in this
10Section, the tax imposed by this Act is at the rate of 6.25% of
11the "selling price", as defined in Section 2 of the Service Use
12Tax Act, of the tangible personal property. For the purpose of
13computing this tax, in no event shall the "selling price" be
14less than the cost price to the serviceman of the tangible
15personal property transferred. The selling price of each item
16of tangible personal property transferred as an incident of a
17sale of service may be shown as a distinct and separate item on
18the serviceman's billing to the service customer. If the
19selling price is not so shown, the selling price of the
20tangible personal property is deemed to be 50% of the
21serviceman's entire billing to the service customer. When,
22however, a serviceman contracts to design, develop, and
23produce special order machinery or equipment, the tax imposed
24by this Act shall be based on the serviceman's cost price of
25the tangible personal property transferred incident to the

 

 

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1completion of the contract.
2    Beginning on July 1, 2000 and through December 31, 2000,
3with respect to motor fuel, as defined in Section 1.1 of the
4Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
5the Use Tax Act, the tax is imposed at the rate of 1.25%.
6    With respect to gasohol, as defined in the Use Tax Act, the
7tax imposed by this Act shall apply to (i) 70% of the cost
8price of property transferred as an incident to the sale of
9service on or after January 1, 1990, and before July 1, 2003,
10(ii) 80% of the selling price of property transferred as an
11incident to the sale of service on or after July 1, 2003 and on
12or before July 1, 2017, and (iii) 100% of the cost price
13thereafter. If, at any time, however, the tax under this Act on
14sales of gasohol, as defined in the Use Tax Act, is imposed at
15the rate of 1.25%, then the tax imposed by this Act applies to
16100% of the proceeds of sales of gasohol made during that time.
17    With respect to majority blended ethanol fuel, as defined
18in the Use Tax Act, the tax imposed by this Act does not apply
19to the selling price of property transferred as an incident to
20the sale of service on or after July 1, 2003 and on or before
21December 31, 2023 but applies to 100% of the selling price
22thereafter.
23    With respect to biodiesel blends, as defined in the Use
24Tax Act, with no less than 1% and no more than 10% biodiesel,
25the tax imposed by this Act applies to (i) 80% of the selling
26price of property transferred as an incident to the sale of

 

 

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1service on or after July 1, 2003 and on or before December 31,
22018 and (ii) 100% of the proceeds of the selling price
3thereafter. If, at any time, however, the tax under this Act on
4sales of biodiesel blends, as defined in the Use Tax Act, with
5no less than 1% and no more than 10% biodiesel is imposed at
6the rate of 1.25%, then the tax imposed by this Act applies to
7100% of the proceeds of sales of biodiesel blends with no less
8than 1% and no more than 10% biodiesel made during that time.
9    With respect to 100% biodiesel, as defined in the Use Tax
10Act, and biodiesel blends, as defined in the Use Tax Act, with
11more than 10% but no more than 99% biodiesel material, the tax
12imposed by this Act does not apply to the proceeds of the
13selling price of property transferred as an incident to the
14sale of service on or after July 1, 2003 and on or before
15December 31, 2023 but applies to 100% of the selling price
16thereafter.
17    At the election of any registered serviceman made for each
18fiscal year, sales of service in which the aggregate annual
19cost price of tangible personal property transferred as an
20incident to the sales of service is less than 35%, or 75% in
21the case of servicemen transferring prescription drugs or
22servicemen engaged in graphic arts production, of the
23aggregate annual total gross receipts from all sales of
24service, the tax imposed by this Act shall be based on the
25serviceman's cost price of the tangible personal property
26transferred incident to the sale of those services.

 

 

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1    The tax shall be imposed at the rate of 1% on food prepared
2for immediate consumption and transferred incident to a sale
3of service subject to this Act or the Service Occupation Tax
4Act by an entity licensed under the Hospital Licensing Act,
5the Nursing Home Care Act, the ID/DD Community Care Act, the
6MC/DD Act, the Specialized Mental Health Rehabilitation Act of
72013, or the Child Care Act of 1969. The tax shall also be
8imposed at the rate of 1% on food for human consumption that is
9to be consumed off the premises where it is sold (other than
10alcoholic beverages, food consisting of or infused with adult
11use cannabis, soft drinks, and food that has been prepared for
12immediate consumption and is not otherwise included in this
13paragraph) and prescription and nonprescription medicines,
14drugs, medical appliances, products classified as Class III
15medical devices by the United States Food and Drug
16Administration that are used for cancer treatment pursuant to
17a prescription, as well as any accessories and components
18related to those devices, modifications to a motor vehicle for
19the purpose of rendering it usable by a person with a
20disability, and insulin, urine testing materials, syringes,
21and needles used by diabetics, for human use. For the purposes
22of this Section, until September 1, 2009: the term "soft
23drinks" means any complete, finished, ready-to-use,
24non-alcoholic drink, whether carbonated or not, including but
25not limited to soda water, cola, fruit juice, vegetable juice,
26carbonated water, and all other preparations commonly known as

 

 

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1soft drinks of whatever kind or description that are contained
2in any closed or sealed can, carton, or container, regardless
3of size; but "soft drinks" does not include coffee, tea,
4non-carbonated water, infant formula, milk or milk products as
5defined in the Grade A Pasteurized Milk and Milk Products Act,
6or drinks containing 50% or more natural fruit or vegetable
7juice.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "soft drinks" means non-alcoholic
10beverages that contain natural or artificial sweeteners. "Soft
11drinks" do not include beverages that contain milk or milk
12products, soy, rice or similar milk substitutes, or greater
13than 50% of vegetable or fruit juice by volume.
14    Until August 1, 2009, and notwithstanding any other
15provisions of this Act, "food for human consumption that is to
16be consumed off the premises where it is sold" includes all
17food sold through a vending machine, except soft drinks and
18food products that are dispensed hot from a vending machine,
19regardless of the location of the vending machine. Beginning
20August 1, 2009, and notwithstanding any other provisions of
21this Act, "food for human consumption that is to be consumed
22off the premises where it is sold" includes all food sold
23through a vending machine, except soft drinks, candy, and food
24products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine.
26    Notwithstanding any other provisions of this Act,

 

 

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1beginning September 1, 2009, "food for human consumption that
2is to be consumed off the premises where it is sold" does not
3include candy. For purposes of this Section, "candy" means a
4preparation of sugar, honey, or other natural or artificial
5sweeteners in combination with chocolate, fruits, nuts or
6other ingredients or flavorings in the form of bars, drops, or
7pieces. "Candy" does not include any preparation that contains
8flour or requires refrigeration.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "nonprescription medicines and
11drugs" does not include grooming and hygiene products. For
12purposes of this Section, "grooming and hygiene products"
13includes, but is not limited to, soaps and cleaning solutions,
14shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
15lotions and screens, unless those products are available by
16prescription only, regardless of whether the products meet the
17definition of "over-the-counter-drugs". For the purposes of
18this paragraph, "over-the-counter-drug" means a drug for human
19use that contains a label that identifies the product as a drug
20as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
21label includes:
22        (A) A "Drug Facts" panel; or
23        (B) A statement of the "active ingredient(s)" with a
24    list of those ingredients contained in the compound,
25    substance or preparation.
26    Beginning on January 1, 2014 (the effective date of Public

 

 

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1Act 98-122), "prescription and nonprescription medicines and
2drugs" includes medical cannabis purchased from a registered
3dispensing organization under the Compassionate Use of Medical
4Cannabis Program Act.
5    As used in this Section, "adult use cannabis" means
6cannabis subject to tax under the Cannabis Cultivation
7Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
8and does not include cannabis subject to tax under the
9Compassionate Use of Medical Cannabis Program Act.
10(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
11101-593, eff. 12-4-19.)
 
12    Section 20. The Retailers' Occupation Tax Act is amended
13by changing Sections 2-5 and 2-10 as follows:
 
14    (35 ILCS 120/2-5)
15    Sec. 2-5. Exemptions. Gross receipts from proceeds from
16the sale of the following tangible personal property are
17exempt from the tax imposed by this Act:
18        (1) Farm chemicals.
19        (2) Farm machinery and equipment, both new and used,
20    including that manufactured on special order, certified by
21    the purchaser to be used primarily for production
22    agriculture or State or federal agricultural programs,
23    including individual replacement parts for the machinery
24    and equipment, including machinery and equipment purchased

 

 

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

 

 

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

 

 

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1    renting, as defined in the Automobile Renting Occupation
2    and Use Tax Act. This paragraph is exempt from the
3    provisions of Section 2-70.
4        (6) Personal property sold by a teacher-sponsored
5    student organization affiliated with an elementary or
6    secondary school located in Illinois.
7        (7) Until July 1, 2003, proceeds of that portion of
8    the selling price of a passenger car the sale of which is
9    subject to the Replacement Vehicle Tax.
10        (8) Personal property sold to an Illinois county fair
11    association for use in conducting, operating, or promoting
12    the county fair.
13        (9) Personal property sold to a not-for-profit arts or
14    cultural organization that establishes, by proof required
15    by the Department by rule, that it has received an
16    exemption under Section 501(c)(3) of the Internal Revenue
17    Code and that is organized and operated primarily for the
18    presentation or support of arts or cultural programming,
19    activities, or services. These organizations include, but
20    are not limited to, music and dramatic arts organizations
21    such as symphony orchestras and theatrical groups, arts
22    and cultural service organizations, local arts councils,
23    visual arts organizations, and media arts organizations.
24    On and after July 1, 2001 (the effective date of Public Act
25    92-35), however, an entity otherwise eligible for this
26    exemption shall not make tax-free purchases unless it has

 

 

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

 

 

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

 

 

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

 

 

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1        (15) Proceeds of mandatory service charges separately
2    stated on customers' bills for purchase and consumption of
3    food and beverages, to the extent that the proceeds of the
4    service charge are in fact turned over as tips or as a
5    substitute for tips to the employees who participate
6    directly in preparing, serving, hosting or cleaning up the
7    food or beverage function with respect to which the
8    service charge is imposed.
9        (16) Tangible personal property sold to a purchaser if
10    the purchaser is exempt from use tax by operation of
11    federal law. This paragraph is exempt from the provisions
12    of Section 2-70.
13        (17) Tangible personal property sold to a common
14    carrier by rail or motor that receives the physical
15    possession of the property in Illinois and that transports
16    the property, or shares with another common carrier in the
17    transportation of the property, out of Illinois on a
18    standard uniform bill of lading showing the seller of the
19    property as the shipper or consignor of the property to a
20    destination outside Illinois, for use outside Illinois.
21        (18) Legal tender, currency, medallions, or gold or
22    silver coinage issued by the State of Illinois, the
23    government of the United States of America, or the
24    government of any foreign country, and bullion.
25        (19) Until July 1, 2003, oil field exploration,
26    drilling, and production equipment, including (i) rigs and

 

 

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

 

 

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1        (22) Until June 30, 2013, fuel and petroleum products
2    sold to or used by an air carrier, certified by the carrier
3    to be used for consumption, shipment, or storage in the
4    conduct of its business as an air common carrier, for a
5    flight destined for or returning from a location or
6    locations outside the United States without regard to
7    previous or subsequent domestic stopovers.
8        Beginning July 1, 2013, fuel and petroleum products
9    sold to or used by an air carrier, certified by the carrier
10    to be used for consumption, shipment, or storage in the
11    conduct of its business as an air common carrier, for a
12    flight that (i) is engaged in foreign trade or is engaged
13    in trade between the United States and any of its
14    possessions and (ii) transports at least one individual or
15    package for hire from the city of origination to the city
16    of final destination on the same aircraft, without regard
17    to a change in the flight number of that aircraft.
18        (23) A transaction in which the purchase order is
19    received by a florist who is located outside Illinois, but
20    who has a florist located in Illinois deliver the property
21    to the purchaser or the purchaser's donee in Illinois.
22        (24) Fuel consumed or used in the operation of ships,
23    barges, or vessels that are used primarily in or for the
24    transportation of property or the conveyance of persons
25    for hire on rivers bordering on this State if the fuel is
26    delivered by the seller to the purchaser's barge, ship, or

 

 

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

 

 

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1    signed under penalty of perjury, of his or her intent to
2    title the vehicle in the state in which the purchaser is a
3    resident within 30 days after the sale and of the fact of
4    the payment to the State of Illinois of tax in an amount
5    equivalent to the state's rate of tax on taxable property
6    in his or her state of residence and shall submit the
7    statement to the appropriate tax collection agency in his
8    or her state of residence. In addition, the retailer must
9    retain a signed copy of the statement in his or her
10    records. Nothing in this item shall be construed to
11    require the removal of the vehicle from this state
12    following the filing of an intent to title the vehicle in
13    the purchaser's state of residence if the purchaser titles
14    the vehicle in his or her state of residence within 30 days
15    after the date of sale. The tax collected under this Act in
16    accordance with this item (25-5) shall be proportionately
17    distributed as if the tax were collected at the 6.25%
18    general rate imposed under this Act.
19        (25-7) Beginning on July 1, 2007, no tax is imposed
20    under this Act on the sale of an aircraft, as defined in
21    Section 3 of the Illinois Aeronautics Act, if all of the
22    following conditions are met:
23            (1) the aircraft leaves this State within 15 days
24        after the later of either the issuance of the final
25        billing for the sale of the aircraft, or the
26        authorized approval for return to service, completion

 

 

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1        of the maintenance record entry, and completion of the
2        test flight and ground test for inspection, as
3        required by 14 C.F.R. 91.407;
4            (2) the aircraft is not based or registered in
5        this State after the sale of the aircraft; and
6            (3) the seller retains in his or her books and
7        records and provides to the Department a signed and
8        dated certification from the purchaser, on a form
9        prescribed by the Department, certifying that the
10        requirements of this item (25-7) are met. The
11        certificate must also include the name and address of
12        the purchaser, the address of the location where the
13        aircraft is to be titled or registered, the address of
14        the primary physical location of the aircraft, and
15        other information that the Department may reasonably
16        require.
17        For purposes of this item (25-7):
18        "Based in this State" means hangared, stored, or
19    otherwise used, excluding post-sale customizations as
20    defined in this Section, for 10 or more days in each
21    12-month period immediately following the date of the sale
22    of the aircraft.
23        "Registered in this State" means an aircraft
24    registered with the Department of Transportation,
25    Aeronautics Division, or titled or registered with the
26    Federal Aviation Administration to an address located in

 

 

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

 

 

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

 

 

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1    drainage and retention facilities, and sewage treatment
2    facilities, resulting from a State or federally declared
3    disaster in Illinois or bordering Illinois when such
4    repairs are initiated on facilities located in the
5    declared disaster area within 6 months after the disaster.
6        (32) Beginning July 1, 1999, game or game birds sold
7    at a "game breeding and hunting preserve area" as that
8    term is used in the Wildlife Code. This paragraph is
9    exempt from the provisions of Section 2-70.
10        (33) A motor vehicle, as that term is defined in
11    Section 1-146 of the Illinois Vehicle Code, that is
12    donated to a corporation, limited liability company,
13    society, association, foundation, or institution that is
14    determined by the Department to be organized and operated
15    exclusively for educational purposes. For purposes of this
16    exemption, "a corporation, limited liability company,
17    society, association, foundation, or institution organized
18    and operated exclusively for educational purposes" means
19    all tax-supported public schools, private schools that
20    offer systematic instruction in useful branches of
21    learning by methods common to public schools and that
22    compare favorably in their scope and intensity with the
23    course of study presented in tax-supported schools, and
24    vocational or technical schools or institutes organized
25    and operated exclusively to provide a course of study of
26    not less than 6 weeks duration and designed to prepare

 

 

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1    individuals to follow a trade or to pursue a manual,
2    technical, mechanical, industrial, business, or commercial
3    occupation.
4        (34) Beginning January 1, 2000, personal property,
5    including food, purchased through fundraising events for
6    the benefit of a public or private elementary or secondary
7    school, a group of those schools, or one or more school
8    districts if the events are sponsored by an entity
9    recognized by the school district that consists primarily
10    of volunteers and includes parents and teachers of the
11    school children. This paragraph does not apply to
12    fundraising events (i) for the benefit of private home
13    instruction or (ii) for which the fundraising entity
14    purchases the personal property sold at the events from
15    another individual or entity that sold the property for
16    the purpose of resale by the fundraising entity and that
17    profits from the sale to the fundraising entity. This
18    paragraph is exempt from the provisions of Section 2-70.
19        (35) Beginning January 1, 2000 and through December
20    31, 2001, new or used automatic vending machines that
21    prepare and serve hot food and beverages, including
22    coffee, soup, and other items, and replacement parts for
23    these machines. Beginning January 1, 2002 and through June
24    30, 2003, machines and parts for machines used in
25    commercial, coin-operated amusement and vending business
26    if a use or occupation tax is paid on the gross receipts

 

 

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

 

 

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

 

 

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1    manner specified in the rules adopted under this Act, to
2    purchase tangible personal property from a retailer exempt
3    from the taxes imposed by this Act. Taxpayers shall
4    maintain all necessary books and records to substantiate
5    the use and consumption of all such tangible personal
6    property outside of the State of Illinois.
7        (39) Beginning January 1, 2008, tangible personal
8    property used in the construction or maintenance of a
9    community water supply, as defined under Section 3.145 of
10    the Environmental Protection Act, that is operated by a
11    not-for-profit corporation that holds a valid water supply
12    permit issued under Title IV of the Environmental
13    Protection Act. This paragraph is exempt from the
14    provisions of Section 2-70.
15        (40) Beginning January 1, 2010 and continuing through
16    December 31, 2024, materials, parts, equipment,
17    components, and furnishings incorporated into or upon an
18    aircraft as part of the modification, refurbishment,
19    completion, replacement, repair, or maintenance of the
20    aircraft. This exemption includes consumable supplies used
21    in the modification, refurbishment, completion,
22    replacement, repair, and maintenance of aircraft, but
23    excludes any materials, parts, equipment, components, and
24    consumable supplies used in the modification, replacement,
25    repair, and maintenance of aircraft engines or power
26    plants, whether such engines or power plants are installed

 

 

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1    or uninstalled upon any such aircraft. "Consumable
2    supplies" include, but are not limited to, adhesive, tape,
3    sandpaper, general purpose lubricants, cleaning solution,
4    latex gloves, and protective films. This exemption applies
5    only to the sale of qualifying tangible personal property
6    to persons who modify, refurbish, complete, replace, or
7    maintain an aircraft and who (i) hold an Air Agency
8    Certificate and are empowered to operate an approved
9    repair station by the Federal Aviation Administration,
10    (ii) have a Class IV Rating, and (iii) conduct operations
11    in accordance with Part 145 of the Federal Aviation
12    Regulations. The exemption does not include aircraft
13    operated by a commercial air carrier providing scheduled
14    passenger air service pursuant to authority issued under
15    Part 121 or Part 129 of the Federal Aviation Regulations.
16    The changes made to this paragraph (40) by Public Act
17    98-534 are declarative of existing law. It is the intent
18    of the General Assembly that the exemption under this
19    paragraph (40) applies continuously from January 1, 2010
20    through December 31, 2024; however, no claim for credit or
21    refund is allowed for taxes paid as a result of the
22    disallowance of this exemption on or after January 1, 2015
23    and prior to the effective date of this amendatory Act of
24    the 101st General Assembly.
25        (41) Tangible personal property sold to a
26    public-facilities corporation, as described in Section

 

 

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

 

 

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

 

 

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1        equipment; monitoring and secure systems; emergency
2        generators; hardware; computers; servers; data storage
3        devices; network connectivity equipment; racks;
4        cabinets; telecommunications cabling infrastructure;
5        raised floor systems; peripheral components or
6        systems; software; mechanical, electrical, or plumbing
7        systems; battery systems; cooling systems and towers;
8        temperature control systems; other cabling; and other
9        data center infrastructure equipment and systems
10        necessary to operate qualified tangible personal
11        property, including fixtures; and component parts of
12        any of the foregoing, including installation,
13        maintenance, repair, refurbishment, and replacement of
14        qualified tangible personal property to generate,
15        transform, transmit, distribute, or manage electricity
16        necessary to operate qualified tangible personal
17        property; and all other tangible personal property
18        that is essential to the operations of a computer data
19        center. The term "qualified tangible personal
20        property" also includes building materials physically
21        incorporated in to the qualifying data center. To
22        document the exemption allowed under this Section, the
23        retailer must obtain from the purchaser a copy of the
24        certificate of eligibility issued by the Department of
25        Commerce and Economic Opportunity.
26        This item (44) is exempt from the provisions of

 

 

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1    Section 2-70.
2        (45) Beginning January 1, 2022, prescription medicines
3    and drugs. This item (45) is exempt from the provisions of
4    Section 2-70.
5(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
6100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.
78-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
8eff. 7-12-19; 101-629, eff. 2-5-20.)
 
9    (35 ILCS 120/2-10)
10    Sec. 2-10. Rate of tax. Unless otherwise provided in this
11Section, the tax imposed by this Act is at the rate of 6.25% of
12gross receipts from sales of tangible personal property made
13in the course of business.
14    Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18    Beginning on August 6, 2010 through August 15, 2010, with
19respect to sales tax holiday items as defined in Section 2-8 of
20this Act, the tax is imposed at the rate of 1.25%.
21    Within 14 days after the effective date of this amendatory
22Act of the 91st General Assembly, each retailer of motor fuel
23and gasohol shall cause the following notice to be posted in a
24prominently visible place on each retail dispensing device
25that is used to dispense motor fuel or gasohol in the State of

 

 

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1Illinois: "As of July 1, 2000, the State of Illinois has
2eliminated the State's share of sales tax on motor fuel and
3gasohol through December 31, 2000. The price on this pump
4should reflect the elimination of the tax." The notice shall
5be printed in bold print on a sign that is no smaller than 4
6inches by 8 inches. The sign shall be clearly visible to
7customers. Any retailer who fails to post or maintain a
8required sign through December 31, 2000 is guilty of a petty
9offense for which the fine shall be $500 per day per each
10retail premises where a violation occurs.
11    With respect to gasohol, as defined in the Use Tax Act, the
12tax imposed by this Act applies to (i) 70% of the proceeds of
13sales made on or after January 1, 1990, and before July 1,
142003, (ii) 80% of the proceeds of sales made on or after July
151, 2003 and on or before July 1, 2017, and (iii) 100% of the
16proceeds of sales made thereafter. If, at any time, however,
17the tax under this Act on sales of gasohol, as defined in the
18Use Tax Act, is imposed at the rate of 1.25%, then the tax
19imposed by this Act applies to 100% of the proceeds of sales of
20gasohol made during that time.
21    With respect to majority blended ethanol fuel, as defined
22in the Use Tax Act, the tax imposed by this Act does not apply
23to the proceeds of sales made on or after July 1, 2003 and on
24or before December 31, 2023 but applies to 100% of the proceeds
25of sales made thereafter.
26    With respect to biodiesel blends, as defined in the Use

 

 

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1Tax Act, with no less than 1% and no more than 10% biodiesel,
2the tax imposed by this Act applies to (i) 80% of the proceeds
3of sales made on or after July 1, 2003 and on or before
4December 31, 2018 and (ii) 100% of the proceeds of sales made
5thereafter. If, at any time, however, the tax under this Act on
6sales of biodiesel blends, as defined in the Use Tax Act, with
7no less than 1% and no more than 10% biodiesel is imposed at
8the rate of 1.25%, then the tax imposed by this Act applies to
9100% of the proceeds of sales of biodiesel blends with no less
10than 1% and no more than 10% biodiesel made during that time.
11    With respect to 100% biodiesel, as defined in the Use Tax
12Act, and biodiesel blends, as defined in the Use Tax Act, with
13more than 10% but no more than 99% biodiesel, the tax imposed
14by this Act does not apply to the proceeds of sales made on or
15after July 1, 2003 and on or before December 31, 2023 but
16applies to 100% of the proceeds of sales made thereafter.
17    With respect to food for human consumption that is to be
18consumed off the premises where it is sold (other than
19alcoholic beverages, food consisting of or infused with adult
20use cannabis, soft drinks, and food that has been prepared for
21immediate consumption) and prescription and nonprescription
22medicines, drugs, medical appliances, products classified as
23Class III medical devices by the United States Food and Drug
24Administration that are used for cancer treatment pursuant to
25a prescription, as well as any accessories and components
26related to those devices, modifications to a motor vehicle for

 

 

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1the purpose of rendering it usable by a person with a
2disability, and insulin, urine testing materials, syringes,
3and needles used by diabetics, for human use, the tax is
4imposed at the rate of 1%. For the purposes of this Section,
5until September 1, 2009: the term "soft drinks" means any
6complete, finished, ready-to-use, non-alcoholic drink, whether
7carbonated or not, including but not limited to soda water,
8cola, fruit juice, vegetable juice, carbonated water, and all
9other preparations commonly known as soft drinks of whatever
10kind or description that are contained in any closed or sealed
11bottle, can, carton, or container, regardless of size; but
12"soft drinks" does not include coffee, tea, non-carbonated
13water, infant formula, milk or milk products as defined in the
14Grade A Pasteurized Milk and Milk Products Act, or drinks
15containing 50% or more natural fruit or vegetable juice.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "soft drinks" means non-alcoholic
18beverages that contain natural or artificial sweeteners. "Soft
19drinks" do not include beverages that contain milk or milk
20products, soy, rice or similar milk substitutes, or greater
21than 50% of vegetable or fruit juice by volume.
22    Until August 1, 2009, and notwithstanding any other
23provisions of this Act, "food for human consumption that is to
24be consumed off the premises where it is sold" includes all
25food sold through a vending machine, except soft drinks and
26food products that are dispensed hot from a vending machine,

 

 

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1regardless of the location of the vending machine. Beginning
2August 1, 2009, and notwithstanding any other provisions of
3this Act, "food for human consumption that is to be consumed
4off the premises where it is sold" includes all food sold
5through a vending machine, except soft drinks, candy, and food
6products that are dispensed hot from a vending machine,
7regardless of the location of the vending machine.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "food for human consumption that
10is to be consumed off the premises where it is sold" does not
11include candy. For purposes of this Section, "candy" means a
12preparation of sugar, honey, or other natural or artificial
13sweeteners in combination with chocolate, fruits, nuts or
14other ingredients or flavorings in the form of bars, drops, or
15pieces. "Candy" does not include any preparation that contains
16flour or requires refrigeration.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "nonprescription medicines and
19drugs" does not include grooming and hygiene products. For
20purposes of this Section, "grooming and hygiene products"
21includes, but is not limited to, soaps and cleaning solutions,
22shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
23lotions and screens, unless those products are available by
24prescription only, regardless of whether the products meet the
25definition of "over-the-counter-drugs". For the purposes of
26this paragraph, "over-the-counter-drug" means a drug for human

 

 

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1use that contains a label that identifies the product as a drug
2as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
3label includes:
4        (A) A "Drug Facts" panel; or
5        (B) A statement of the "active ingredient(s)" with a
6    list of those ingredients contained in the compound,
7    substance or preparation.
8    Beginning on the effective date of this amendatory Act of
9the 98th General Assembly, "prescription and nonprescription
10medicines and drugs" includes medical cannabis purchased from
11a registered dispensing organization under the Compassionate
12Use of Medical Cannabis Program Act.
13    As used in this Section, "adult use cannabis" means
14cannabis subject to tax under the Cannabis Cultivation
15Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
16and does not include cannabis subject to tax under the
17Compassionate Use of Medical Cannabis Program Act.
18(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
19101-593, eff. 12-4-19.)
 
20    Section 99. Effective date. This Act takes effect January
211, 2022.