102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5251

 

Introduced 1/31/2022, by Rep. Keith R. Wheeler

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-55  from Ch. 120, par. 439.3-55
35 ILCS 110/3-45  from Ch. 120, par. 439.33-45
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois who will temporarily store the property in Illinois (i) for the purpose of subsequently transporting it outside this State for use or consumption solely outside this State or (ii) for the purpose of being processed, fabricated, or manufactured into, attached to, or incorporated into other tangible personal property to be transported outside this State and used or consumed solely outside this State sunsets on June 30, 2023 (currently, June 30, 2016). Effective immediately.


LRB102 25155 HLH 34418 b

 

 

A BILL FOR

 

HB5251LRB102 25155 HLH 34418 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 Section
53-55 as follows:
 
6    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
7    Sec. 3-55. Multistate exemption. To prevent actual or
8likely multistate taxation, the tax imposed by this Act does
9not apply to the use of tangible personal property in this
10State under the following circumstances:
11    (a) The use, in this State, of tangible personal property
12acquired outside this State by a nonresident individual and
13brought into this State by the individual for his or her own
14use while temporarily within this State or while passing
15through this State.
16    (b) (Blank).
17    (c) The use, in this State, by owners, lessors, or
18shippers of tangible personal property that is utilized by
19interstate carriers for hire for use as rolling stock moving
20in interstate commerce as long as so used by the interstate
21carriers for hire, and equipment operated by a
22telecommunications provider, licensed as a common carrier by
23the Federal Communications Commission, which is permanently

 

 

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1installed in or affixed to aircraft moving in interstate
2commerce.
3    (d) The use, in this State, of tangible personal property
4that is acquired outside this State and caused to be brought
5into this State by a person who has already paid a tax in
6another State in respect to the sale, purchase, or use of that
7property, to the extent of the amount of the tax properly due
8and paid in the other State.
9    (e) The temporary storage, in this State, of tangible
10personal property that is acquired outside this State and
11that, after being brought into this State and stored here
12temporarily, is used solely outside this State or is
13physically attached to or incorporated into other tangible
14personal property that is used solely outside this State, or
15is altered by converting, fabricating, manufacturing,
16printing, processing, or shaping, and, as altered, is used
17solely outside this State.
18    (f) The temporary storage in this State of building
19materials and fixtures that are acquired either in this State
20or outside this State by an Illinois registered combination
21retailer and construction contractor, and that the purchaser
22thereafter uses outside this State by incorporating that
23property into real estate located outside this State.
24    (g) The use or purchase of tangible personal property by a
25common carrier by rail or motor that receives the physical
26possession of the property in Illinois, and that transports

 

 

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1the property, or shares with another common carrier in the
2transportation of the property, out of Illinois on a standard
3uniform bill of lading showing the seller of the property as
4the shipper or consignor of the property to a destination
5outside Illinois, for use outside Illinois.
6    (h) Except as provided in subsection (h-1), the use, in
7this State, of a motor vehicle that was sold in this State to a
8nonresident, even though the motor vehicle is delivered to the
9nonresident in this State, if the motor vehicle is not to be
10titled in this State, and if a drive-away permit is issued to
11the motor vehicle as provided in Section 3-603 of the Illinois
12Vehicle Code or if the nonresident purchaser has vehicle
13registration plates to transfer to the motor vehicle upon
14returning to his or her home state. The issuance of the
15drive-away permit or having the out-of-state registration
16plates to be transferred shall be prima facie evidence that
17the motor vehicle will not be titled in this State.
18    (h-1) The exemption under subsection (h) does not apply if
19the state in which the motor vehicle will be titled does not
20allow a reciprocal exemption for the use in that state of a
21motor vehicle sold and delivered in that state to an Illinois
22resident but titled in Illinois. The tax collected under this
23Act on the sale of a motor vehicle in this State to a resident
24of another state that does not allow a reciprocal exemption
25shall be imposed at a rate equal to the state's rate of tax on
26taxable property in the state in which the purchaser is a

 

 

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1resident, except that the tax shall not exceed the tax that
2would otherwise be imposed under this Act. At the time of the
3sale, the purchaser shall execute a statement, signed under
4penalty of perjury, of his or her intent to title the vehicle
5in the state in which the purchaser is a resident within 30
6days after the sale and of the fact of the payment to the State
7of Illinois of tax in an amount equivalent to the state's rate
8of tax on taxable property in his or her state of residence and
9shall submit the statement to the appropriate tax collection
10agency in his or her state of residence. In addition, the
11retailer must retain a signed copy of the statement in his or
12her records. Nothing in this subsection shall be construed to
13require the removal of the vehicle from this state following
14the filing of an intent to title the vehicle in the purchaser's
15state of residence if the purchaser titles the vehicle in his
16or her state of residence within 30 days after the date of
17sale. The tax collected under this Act in accordance with this
18subsection (h-1) shall be proportionately distributed as if
19the tax were collected at the 6.25% general rate imposed under
20this Act.
21    (h-2) The following exemptions apply with respect to
22certain aircraft:
23        (1) Beginning on July 1, 2007, no tax is imposed under
24    this Act on the purchase of an aircraft, as defined in
25    Section 3 of the Illinois Aeronautics Act, if all of the
26    following conditions are met:

 

 

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

 

 

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

 

 

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1        this item (3) are met. The certificate must also
2        include the name and address of the purchaser, the
3        address of the location where the aircraft is to be
4        titled or registered, the address of the primary
5        physical location of the aircraft, and other
6        information that the Department may reasonably
7        require.
8    If tax becomes due under this subsection (h-2) because of
9the purchaser's use of the aircraft in this State, the
10purchaser shall file a return with the Department and pay the
11tax on the fair market value of the aircraft. This return and
12payment of the tax must be made no later than 30 days after the
13aircraft is used in a taxable manner in this State. The tax is
14based on the fair market value of the aircraft on the date that
15it is first used in a taxable manner in this State.
16    For purposes of this subsection (h-2):
17    "Based in this State" means hangared, stored, or otherwise
18used, excluding post-sale customizations as defined in this
19Section, for 10 or more days in each 12-month period
20immediately following the date of the sale of the aircraft.
21    "Post-sale customization" means any improvement,
22maintenance, or repair that is performed on an aircraft
23following a transfer of ownership of the aircraft.
24    "Prepurchase evaluation" means an examination of an
25aircraft to provide a potential purchaser with information
26relevant to the potential purchase.

 

 

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1    "Registered in this State" means an aircraft registered
2with the Department of Transportation, Aeronautics Division,
3or titled or registered with the Federal Aviation
4Administration to an address located in this State.
5    This subsection (h-2) is exempt from the provisions of
6Section 3-90.
7    (i) Beginning July 1, 1999, the use, in this State, of fuel
8acquired outside this State and brought into this State in the
9fuel supply tanks of locomotives engaged in freight hauling
10and passenger service for interstate commerce. This subsection
11is exempt from the provisions of Section 3-90.
12    (j) Beginning on January 1, 2002 and through June 30, 2023
13June 30, 2016, the use of tangible personal property purchased
14from an Illinois retailer by a taxpayer engaged in centralized
15purchasing activities in Illinois who will, upon receipt of
16the property in Illinois, temporarily store the property in
17Illinois (i) for the purpose of subsequently transporting it
18outside this State for use or consumption thereafter solely
19outside this State or (ii) for the purpose of being processed,
20fabricated, or manufactured into, attached to, or incorporated
21into other tangible personal property to be transported
22outside this State and thereafter used or consumed solely
23outside this State. The Director of Revenue shall, pursuant to
24rules adopted in accordance with the Illinois Administrative
25Procedure Act, issue a permit to any taxpayer in good standing
26with the Department who is eligible for the exemption under

 

 

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1this subsection (j). The permit issued under this subsection
2(j) shall authorize the holder, to the extent and in the manner
3specified in the rules adopted under this Act, to purchase
4tangible personal property from a retailer exempt from the
5taxes imposed by this Act. Taxpayers shall maintain all
6necessary books and records to substantiate the use and
7consumption of all such tangible personal property outside of
8the State of Illinois.
9(Source: P.A. 100-321, eff. 8-24-17.)
 
10    Section 10. The Service Use Tax Act is amended by changing
11Section 3-45 as follows:
 
12    (35 ILCS 110/3-45)  (from Ch. 120, par. 439.33-45)
13    Sec. 3-45. Multistate exemption. To prevent actual or
14likely multistate taxation, the tax imposed by this Act does
15not apply to the use of tangible personal property in this
16State under the following circumstances:
17    (a) The use, in this State, of property acquired outside
18this State by a nonresident individual and brought into this
19State by the individual for his or her own use while
20temporarily within this State or while passing through this
21State.
22    (b) The use, in this State, of property that is acquired
23outside this State and that is moved into this State for use as
24rolling stock moving in interstate commerce.

 

 

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1    (c) The use, in this State, of property that is acquired
2outside this State and caused to be brought into this State by
3a person who has already paid a tax in another state in respect
4to the sale, purchase, or use of that property, to the extent
5of the amount of the tax properly due and paid in the other
6state.
7    (d) The temporary storage, in this State, of property that
8is acquired outside this State and that after being brought
9into this State and stored here temporarily, is used solely
10outside this State or is physically attached to or
11incorporated into other property that is used solely outside
12this State, or is altered by converting, fabricating,
13manufacturing, printing, processing, or shaping, and, as
14altered, is used solely outside this State.
15    (e) Beginning July 1, 1999, the use, in this State, of fuel
16acquired outside this State and brought into this State in the
17fuel supply tanks of locomotives engaged in freight hauling
18and passenger service for interstate commerce. This subsection
19is exempt from the provisions of Section 3-75.
20    (f) Beginning on January 1, 2002 and through June 30, 2023
21June 30, 2016, the use of tangible personal property purchased
22from an Illinois retailer by a taxpayer engaged in centralized
23purchasing activities in Illinois who will, upon receipt of
24the property in Illinois, temporarily store the property in
25Illinois (i) for the purpose of subsequently transporting it
26outside this State for use or consumption thereafter solely

 

 

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1outside this State or (ii) for the purpose of being processed,
2fabricated, or manufactured into, attached to, or incorporated
3into other tangible personal property to be transported
4outside this State and thereafter used or consumed solely
5outside this State. The Director of Revenue shall, pursuant to
6rules adopted 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 subsection (f). The permit issued under this subsection
10(f) shall authorize the holder, to the extent and in the manner
11specified in the rules adopted under this Act, to purchase
12tangible personal property from a retailer exempt from the
13taxes imposed by this Act. Taxpayers shall maintain all
14necessary books and records to substantiate the use and
15consumption of all such tangible personal property outside of
16the State of Illinois.
17(Source: P.A. 97-73, eff. 6-30-11.)
 
18    Section 15. The Service Occupation Tax Act is amended by
19changing Section 3-5 as follows:
 
20    (35 ILCS 115/3-5)
21    Sec. 3-5. Exemptions. The following tangible personal
22property is exempt from the tax imposed by this Act:
23    (1) Personal property sold by a corporation, society,
24association, foundation, institution, or organization, other

 

 

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1than a limited liability company, that is organized and
2operated as a not-for-profit service enterprise for the
3benefit of persons 65 years of age or older if the personal
4property was not purchased by the enterprise for the purpose
5of resale by the enterprise.
6    (2) Personal property purchased by a not-for-profit
7Illinois county fair association for use in conducting,
8operating, or promoting the county fair.
9    (3) Personal property purchased by any not-for-profit arts
10or cultural organization that establishes, by proof required
11by the Department by rule, that it has received an exemption
12under Section 501(c)(3) of the Internal Revenue Code and that
13is organized and operated primarily for the presentation or
14support of arts or cultural programming, activities, or
15services. These organizations include, but are not limited to,
16music and dramatic arts organizations such as symphony
17orchestras and theatrical groups, arts and cultural service
18organizations, local arts councils, visual arts organizations,
19and media arts organizations. On and after July 1, 2001 (the
20effective date of Public Act 92-35), however, an entity
21otherwise eligible for this exemption shall not make tax-free
22purchases unless it has an active identification number issued
23by the Department.
24    (4) Legal tender, currency, medallions, or gold or silver
25coinage issued by the State of Illinois, the government of the
26United States of America, or the government of any foreign

 

 

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1country, and bullion.
2    (5) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order or
6purchased for lease, certified by the purchaser to be used
7primarily for graphic arts production. Equipment includes
8chemicals or chemicals acting as catalysts but only if the
9chemicals or chemicals acting as catalysts effect a direct and
10immediate change upon a graphic arts product. Beginning on
11July 1, 2017, graphic arts machinery and equipment is included
12in the manufacturing and assembling machinery and equipment
13exemption under Section 2 of this Act.
14    (6) Personal property sold by a teacher-sponsored student
15organization affiliated with an elementary or secondary school
16located in Illinois.
17    (7) Farm machinery and equipment, both new and used,
18including that manufactured on special order, certified by the
19purchaser to be used primarily for production agriculture or
20State or federal agricultural programs, including individual
21replacement parts for the machinery and equipment, including
22machinery and equipment purchased for lease, and including
23implements of husbandry defined in Section 1-130 of the
24Illinois Vehicle Code, farm machinery and agricultural
25chemical and fertilizer spreaders, and nurse wagons required
26to be registered under Section 3-809 of the Illinois Vehicle

 

 

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

 

 

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

 

 

HB5251- 16 -LRB102 25155 HLH 34418 b

1rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
2pipe and tubular goods, including casing and drill strings,
3(iii) pumps and pump-jack units, (iv) storage tanks and flow
4lines, (v) any individual replacement part for oil field
5exploration, drilling, and production equipment, and (vi)
6machinery and equipment purchased for lease; but excluding
7motor vehicles required to be registered under the Illinois
8Vehicle Code.
9    (11) Photoprocessing machinery and equipment, including
10repair and replacement parts, both new and used, including
11that manufactured on special order, certified by the purchaser
12to be used primarily for photoprocessing, and including
13photoprocessing machinery and equipment purchased for lease.
14    (12) Until July 1, 2023, coal and aggregate exploration,
15mining, off-highway hauling, processing, maintenance, and
16reclamation equipment, including replacement parts and
17equipment, and including equipment purchased for lease, but
18excluding motor vehicles required to be registered under the
19Illinois Vehicle Code. The changes made to this Section by
20Public Act 97-767 apply on and after July 1, 2003, but no claim
21for credit or refund is allowed on or after August 16, 2013
22(the effective date of Public Act 98-456) for such taxes paid
23during the period beginning July 1, 2003 and ending on August
2416, 2013 (the effective date of Public Act 98-456).
25    (13) Beginning January 1, 1992 and through June 30, 2016,
26food for human consumption that is to be consumed off the

 

 

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1premises where it is sold (other than alcoholic beverages,
2soft drinks and food that has been prepared for immediate
3consumption) and prescription and non-prescription medicines,
4drugs, medical appliances, and insulin, urine testing
5materials, syringes, and needles used by diabetics, for human
6use, when purchased for use by a person receiving medical
7assistance under Article V of the Illinois Public Aid Code who
8resides in a licensed long-term care facility, as defined in
9the Nursing Home Care Act, or in a licensed facility as defined
10in the ID/DD Community Care Act, the MC/DD Act, or the
11Specialized Mental Health Rehabilitation Act of 2013.
12    (14) Semen used for artificial insemination of livestock
13for direct agricultural production.
14    (15) Horses, or interests in horses, registered with and
15meeting the requirements of any of the Arabian Horse Club
16Registry of America, Appaloosa Horse Club, American Quarter
17Horse Association, United States Trotting Association, or
18Jockey Club, as appropriate, used for purposes of breeding or
19racing for prizes. This item (15) is exempt from the
20provisions of Section 3-55, and the exemption provided for
21under this item (15) applies for all periods beginning May 30,
221995, but no claim for credit or refund is allowed on or after
23January 1, 2008 (the effective date of Public Act 95-88) for
24such taxes paid during the period beginning May 30, 2000 and
25ending on January 1, 2008 (the effective date of Public Act
2695-88).

 

 

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

 

 

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1before December 31, 2004, personal property that is used in
2the performance of infrastructure repairs in this State,
3including but not limited to municipal roads and streets,
4access roads, bridges, sidewalks, waste disposal systems,
5water and sewer line extensions, water distribution and
6purification facilities, storm water drainage and retention
7facilities, and sewage treatment facilities, resulting from a
8State or federally declared disaster in Illinois or bordering
9Illinois when such repairs are initiated on facilities located
10in the declared disaster area within 6 months after the
11disaster.
12    (20) Beginning July 1, 1999, game or game birds sold at a
13"game breeding and hunting preserve area" as that term is used
14in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 3-55.
16    (21) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the
20Department to be organized and operated exclusively for
21educational purposes. For purposes of this exemption, "a
22corporation, limited liability company, society, association,
23foundation, or institution organized and operated exclusively
24for educational purposes" means all tax-supported public
25schools, private schools that offer systematic instruction in
26useful branches of learning by methods common to public

 

 

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1schools and that compare favorably in their scope and
2intensity with the course of study presented in tax-supported
3schools, and vocational or technical schools or institutes
4organized and operated exclusively to provide a course of
5study of not less than 6 weeks duration and designed to prepare
6individuals to follow a trade or to pursue a manual,
7technical, mechanical, industrial, business, or commercial
8occupation.
9    (22) Beginning January 1, 2000, personal property,
10including food, purchased through fundraising events for the
11benefit of a public or private elementary or secondary school,
12a group of those schools, or one or more school districts if
13the events are sponsored by an entity recognized by the school
14district that consists primarily of volunteers and includes
15parents and teachers of the school children. This paragraph
16does not apply to fundraising events (i) for the benefit of
17private home instruction or (ii) for which the fundraising
18entity purchases the personal property sold at the events from
19another individual or entity that sold the property for the
20purpose of resale by the fundraising entity and that profits
21from the sale to the fundraising entity. This paragraph is
22exempt from the provisions of Section 3-55.
23    (23) Beginning January 1, 2000 and through December 31,
242001, new or used automatic vending machines that prepare and
25serve hot food and beverages, including coffee, soup, and
26other items, and replacement parts for these machines.

 

 

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1Beginning January 1, 2002 and through June 30, 2003, machines
2and parts for machines used in commercial, coin-operated
3amusement and vending business if a use or occupation tax is
4paid on the gross receipts derived from the use of the
5commercial, coin-operated amusement and vending machines. This
6paragraph is exempt from the provisions of Section 3-55.
7    (24) Beginning on August 2, 2001 (the effective date of
8Public Act 92-227), computers and communications equipment
9utilized for any hospital purpose and equipment used in the
10diagnosis, analysis, or treatment of hospital patients sold to
11a lessor who leases the equipment, under a lease of one year or
12longer executed or in effect at the time of the purchase, to a
13hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of
15the Retailers' Occupation Tax Act. This paragraph is exempt
16from the provisions of Section 3-55.
17    (25) Beginning on August 2, 2001 (the effective date of
18Public Act 92-227), personal property sold to a lessor who
19leases the property, under a lease of one year or longer
20executed or in effect at the time of the purchase, to a
21governmental body that has been issued an active tax exemption
22identification number by the Department under Section 1g of
23the Retailers' Occupation Tax Act. This paragraph is exempt
24from the provisions of Section 3-55.
25    (26) Beginning on January 1, 2002 and through June 30,
262023 June 30, 2016, tangible personal property purchased from

 

 

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

 

 

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1under Title IV of the Environmental Protection Act. This
2paragraph is exempt from the provisions of Section 3-55.
3    (28) Tangible personal property sold to a
4public-facilities corporation, as described in Section
511-65-10 of the Illinois Municipal Code, for purposes of
6constructing or furnishing a municipal convention hall, but
7only if the legal title to the municipal convention hall is
8transferred to the municipality without any further
9consideration by or on behalf of the municipality at the time
10of the completion of the municipal convention hall or upon the
11retirement or redemption of any bonds or other debt
12instruments issued by the public-facilities corporation in
13connection with the development of the municipal convention
14hall. This exemption includes existing public-facilities
15corporations as provided in Section 11-65-25 of the Illinois
16Municipal Code. This paragraph is exempt from the provisions
17of Section 3-55.
18    (29) Beginning January 1, 2010 and continuing through
19December 31, 2024, materials, parts, equipment, components,
20and furnishings incorporated into or upon an aircraft as part
21of the modification, refurbishment, completion, replacement,
22repair, or maintenance of the aircraft. This exemption
23includes consumable supplies used in the modification,
24refurbishment, completion, replacement, repair, and
25maintenance of aircraft, but excludes any materials, parts,
26equipment, components, and consumable supplies used in the

 

 

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

 

 

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1    (30) Beginning January 1, 2017 and through December 31,
22026, menstrual pads, tampons, and menstrual cups.
3    (31) Tangible personal property transferred to a purchaser
4who is exempt from tax by operation of federal law. This
5paragraph is exempt from the provisions of Section 3-55.
6    (32) Qualified tangible personal property used in the
7construction or operation of a data center that has been
8granted a certificate of exemption by the Department of
9Commerce and Economic Opportunity, whether that tangible
10personal property is purchased by the owner, operator, or
11tenant of the data center or by a contractor or subcontractor
12of the owner, operator, or tenant. Data centers that would
13have qualified for a certificate of exemption prior to January
141, 2020 had this amendatory Act of the 101st General Assembly
15been in effect, may apply for and obtain an exemption for
16subsequent purchases of computer equipment or enabling
17software purchased or leased to upgrade, supplement, or
18replace computer equipment or enabling software purchased or
19leased in the original investment that would have qualified.
20    The Department of Commerce and Economic Opportunity shall
21grant a certificate of exemption under this item (32) to
22qualified data centers as defined by Section 605-1025 of the
23Department of Commerce and Economic Opportunity Law of the
24Civil Administrative Code of Illinois.
25    For the purposes of this item (32):
26        "Data center" means a building or a series of

 

 

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

 

 

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1    the exemption allowed under this Section, the retailer
2    must obtain from the purchaser a copy of the certificate
3    of eligibility issued by the Department of Commerce and
4    Economic Opportunity.
5    This item (32) is exempt from the provisions of Section
63-55.
7(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
8101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
9    Section 20. The Retailers' Occupation Tax Act is amended
10by changing Section 2-5 as follows:
 
11    (35 ILCS 120/2-5)
12    Sec. 2-5. Exemptions. Gross receipts from proceeds from
13the sale of the following tangible personal property are
14exempt from the tax imposed by this Act:
15        (1) Farm chemicals.
16        (2) Farm machinery and equipment, both new and used,
17    including that manufactured on special order, certified by
18    the purchaser to be used primarily for production
19    agriculture or State or federal agricultural programs,
20    including individual replacement parts for the machinery
21    and equipment, including machinery and equipment purchased
22    for lease, and including implements of husbandry defined
23    in Section 1-130 of the Illinois Vehicle Code, farm
24    machinery and agricultural chemical and fertilizer

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

HB5251- 35 -LRB102 25155 HLH 34418 b

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

 

 

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

 

 

HB5251- 37 -LRB102 25155 HLH 34418 b

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

 

 

HB5251- 38 -LRB102 25155 HLH 34418 b

1    the payment to the State of Illinois of tax in an amount
2    equivalent to the state's rate of tax on taxable property
3    in his or her state of residence and shall submit the
4    statement to the appropriate tax collection agency in his
5    or her state of residence. In addition, the retailer must
6    retain a signed copy of the statement in his or her
7    records. Nothing in this item shall be construed to
8    require the removal of the vehicle from this state
9    following the filing of an intent to title the vehicle in
10    the purchaser's state of residence if the purchaser titles
11    the vehicle in his or her state of residence within 30 days
12    after the date of sale. The tax collected under this Act in
13    accordance with this item (25-5) shall be proportionately
14    distributed as if the tax were collected at the 6.25%
15    general rate imposed under this Act.
16        (25-7) Beginning on July 1, 2007, no tax is imposed
17    under this Act on the sale of an aircraft, as defined in
18    Section 3 of the Illinois Aeronautics Act, if all of the
19    following conditions are met:
20            (1) the aircraft leaves this State within 15 days
21        after the later of either the issuance of the final
22        billing for the sale of the aircraft, or the
23        authorized approval for return to service, completion
24        of the maintenance record entry, and completion of the
25        test flight and ground test for inspection, as
26        required by 14 C.F.R. 91.407;

 

 

HB5251- 39 -LRB102 25155 HLH 34418 b

1            (2) the aircraft is not based or registered in
2        this State after the sale of the aircraft; and
3            (3) the seller retains in his or her books and
4        records and provides to the Department a signed and
5        dated certification from the purchaser, on a form
6        prescribed by the Department, certifying that the
7        requirements of this item (25-7) are met. The
8        certificate must also include the name and address of
9        the purchaser, the address of the location where the
10        aircraft is to be titled or registered, the address of
11        the primary physical location of the aircraft, and
12        other information that the Department may reasonably
13        require.
14        For purposes of this item (25-7):
15        "Based in this State" means hangared, stored, or
16    otherwise used, excluding post-sale customizations as
17    defined in this Section, for 10 or more days in each
18    12-month period immediately following the date of the sale
19    of the aircraft.
20        "Registered in this State" means an aircraft
21    registered with the Department of Transportation,
22    Aeronautics Division, or titled or registered with the
23    Federal Aviation Administration to an address located in
24    this State.
25        This paragraph (25-7) is exempt from the provisions of
26    Section 2-70.

 

 

HB5251- 40 -LRB102 25155 HLH 34418 b

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    year or longer executed or in effect at the time of the
2    purchase, to a governmental body that has been issued an
3    active tax exemption identification number by the
4    Department under Section 1g of this Act. This paragraph is
5    exempt from the provisions of Section 2-70.
6        (38) Beginning on January 1, 2002 and through June 30,
7    2023 June 30, 2016, tangible personal property purchased
8    from an Illinois retailer by a taxpayer engaged in
9    centralized purchasing activities in Illinois who will,
10    upon receipt of the property in Illinois, temporarily
11    store the property in Illinois (i) for the purpose of
12    subsequently transporting it outside this State for use or
13    consumption thereafter solely outside this State or (ii)
14    for the purpose of being processed, fabricated, or
15    manufactured into, attached to, or incorporated into other
16    tangible personal property to be transported outside this
17    State and thereafter used or consumed solely outside this
18    State. The Director of Revenue shall, pursuant to rules
19    adopted in accordance with the Illinois Administrative
20    Procedure Act, issue a permit to any taxpayer in good
21    standing with the Department who is eligible for the
22    exemption under this paragraph (38). The permit issued
23    under this paragraph (38) shall authorize the holder, to
24    the extent and in the manner specified in the rules
25    adopted under this Act, to purchase tangible personal
26    property from a retailer exempt from the taxes imposed by

 

 

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

 

 

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1    sandpaper, general purpose lubricants, cleaning solution,
2    latex gloves, and protective films. This exemption applies
3    only to the sale of qualifying tangible personal property
4    to persons who modify, refurbish, complete, replace, or
5    maintain an aircraft and who (i) hold an Air Agency
6    Certificate and are empowered to operate an approved
7    repair station by the Federal Aviation Administration,
8    (ii) have a Class IV Rating, and (iii) conduct operations
9    in accordance with Part 145 of the Federal Aviation
10    Regulations. The exemption does not include aircraft
11    operated by a commercial air carrier providing scheduled
12    passenger air service pursuant to authority issued under
13    Part 121 or Part 129 of the Federal Aviation Regulations.
14    The changes made to this paragraph (40) by Public Act
15    98-534 are declarative of existing law. It is the intent
16    of the General Assembly that the exemption under this
17    paragraph (40) applies continuously from January 1, 2010
18    through December 31, 2024; however, no claim for credit or
19    refund is allowed for taxes paid as a result of the
20    disallowance of this exemption on or after January 1, 2015
21    and prior to the effective date of this amendatory Act of
22    the 101st General Assembly.
23        (41) Tangible personal property sold to a
24    public-facilities corporation, as described in Section
25    11-65-10 of the Illinois Municipal Code, for purposes of
26    constructing or furnishing a municipal convention hall,

 

 

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1    but only if the legal title to the municipal convention
2    hall is transferred to the municipality without any
3    further consideration by or on behalf of the municipality
4    at the time of the completion of the municipal convention
5    hall or upon the retirement or redemption of any bonds or
6    other debt instruments issued by the public-facilities
7    corporation in connection with the development of the
8    municipal convention hall. This exemption includes
9    existing public-facilities corporations as provided in
10    Section 11-65-25 of the Illinois Municipal Code. This
11    paragraph is exempt from the provisions of Section 2-70.
12        (42) Beginning January 1, 2017 and through December
13    31, 2026, menstrual pads, tampons, and menstrual cups.
14        (43) Merchandise that is subject to the Rental
15    Purchase Agreement Occupation and Use Tax. The purchaser
16    must certify that the item is purchased to be rented
17    subject to a rental purchase agreement, as defined in the
18    Rental Purchase Agreement Act, and provide proof of
19    registration under the Rental Purchase Agreement
20    Occupation and Use Tax Act. This paragraph is exempt from
21    the provisions of Section 2-70.
22        (44) Qualified tangible personal property used in the
23    construction or operation of a data center that has been
24    granted a certificate of exemption by the Department of
25    Commerce and Economic Opportunity, whether that tangible
26    personal property is purchased by the owner, operator, or

 

 

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

 

 

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1        devices; network connectivity equipment; racks;
2        cabinets; telecommunications cabling infrastructure;
3        raised floor systems; peripheral components or
4        systems; software; mechanical, electrical, or plumbing
5        systems; battery systems; cooling systems and towers;
6        temperature control systems; other cabling; and other
7        data center infrastructure equipment and systems
8        necessary to operate qualified tangible personal
9        property, including fixtures; and component parts of
10        any of the foregoing, including installation,
11        maintenance, repair, refurbishment, and replacement of
12        qualified tangible personal property to generate,
13        transform, transmit, distribute, or manage electricity
14        necessary to operate qualified tangible personal
15        property; and all other tangible personal property
16        that is essential to the operations of a computer data
17        center. The term "qualified tangible personal
18        property" also includes building materials physically
19        incorporated into in to the qualifying data center. To
20        document the exemption allowed under this Section, the
21        retailer must obtain from the purchaser a copy of the
22        certificate of eligibility issued by the Department of
23        Commerce and Economic Opportunity.
24        This item (44) is exempt from the provisions of
25    Section 2-70.
26        (45) Beginning January 1, 2020 and through December

 

 

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1    31, 2020, sales of tangible personal property made by a
2    marketplace seller over a marketplace for which tax is due
3    under this Act but for which use tax has been collected and
4    remitted to the Department by a marketplace facilitator
5    under Section 2d of the Use Tax Act are exempt from tax
6    under this Act. A marketplace seller claiming this
7    exemption shall maintain books and records demonstrating
8    that the use tax on such sales has been collected and
9    remitted by a marketplace facilitator. Marketplace sellers
10    that have properly remitted tax under this Act on such
11    sales may file a claim for credit as provided in Section 6
12    of this Act. No claim is allowed, however, for such taxes
13    for which a credit or refund has been issued to the
14    marketplace facilitator under the Use Tax Act, or for
15    which the marketplace facilitator has filed a claim for
16    credit or refund under the Use Tax Act.
17(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
18101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
198-27-21; revised 11-9-21.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.