102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2432

 

Introduced 2/26/2021, by Sen. Bill Cunningham

 

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

    Amends the Service Use Tax Act and the Service Occupation Tax Act. Extends the 1% rate of tax to food prepared for immediate consumption and transferred incident to a sale of service at a facility subject to the Assisted Living and Shared Housing Act or the Life Care Facilities Act.


LRB102 16457 HLH 21849 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2432LRB102 16457 HLH 21849 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 Service Use Tax Act is amended by changing
5Section 3-10 as follows:
 
6    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9the selling price of tangible personal property transferred as
10an incident to the sale of service, but, for the purpose of
11computing this tax, in no event shall the selling price be less
12than the cost price of the property to the serviceman.
13    Beginning on July 1, 2000 and through December 31, 2000,
14with respect to motor fuel, as defined in Section 1.1 of the
15Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
16the Use Tax Act, the tax is imposed at the rate of 1.25%.
17    With respect to gasohol, as defined in the Use Tax Act, the
18tax imposed by this Act applies to (i) 70% of the selling price
19of property transferred as an incident to the sale of service
20on or after January 1, 1990, and before July 1, 2003, (ii) 80%
21of the selling price of property transferred as an incident to
22the sale of service on or after July 1, 2003 and on or before
23July 1, 2017, and (iii) 100% of the selling price thereafter.

 

 

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1If, at any time, however, the tax under this Act on sales of
2gasohol, as defined in the Use Tax Act, is imposed at the rate
3of 1.25%, then the tax imposed by this Act applies to 100% of
4the proceeds of sales of gasohol made during that time.
5    With respect to majority blended ethanol fuel, as defined
6in the Use Tax Act, the tax imposed by this Act does not apply
7to the selling price of property transferred as an incident to
8the sale of service on or after July 1, 2003 and on or before
9December 31, 2023 but applies to 100% of the selling price
10thereafter.
11    With respect to biodiesel blends, as defined in the Use
12Tax Act, with no less than 1% and no more than 10% biodiesel,
13the tax imposed by this Act applies to (i) 80% of the selling
14price of property transferred as an incident to the sale of
15service on or after July 1, 2003 and on or before December 31,
162018 and (ii) 100% of the proceeds of the selling price
17thereafter. If, at any time, however, the tax under this Act on
18sales of biodiesel blends, as defined in the Use Tax Act, with
19no less than 1% and no more than 10% biodiesel is imposed at
20the rate of 1.25%, then the tax imposed by this Act applies to
21100% of the proceeds of sales of biodiesel blends with no less
22than 1% and no more than 10% biodiesel made during that time.
23    With respect to 100% biodiesel, as defined in the Use Tax
24Act, and biodiesel blends, as defined in the Use Tax Act, with
25more than 10% but no more than 99% biodiesel, the tax imposed
26by this Act does not apply to the proceeds of the selling price

 

 

SB2432- 3 -LRB102 16457 HLH 21849 b

1of property transferred as an incident to the sale of service
2on or after July 1, 2003 and on or before December 31, 2023 but
3applies to 100% of the selling price thereafter.
4    At the election of any registered serviceman made for each
5fiscal year, sales of service in which the aggregate annual
6cost price of tangible personal property transferred as an
7incident to the sales of service is less than 35%, or 75% in
8the case of servicemen transferring prescription drugs or
9servicemen engaged in graphic arts production, of the
10aggregate annual total gross receipts from all sales of
11service, the tax imposed by this Act shall be based on the
12serviceman's cost price of the tangible personal property
13transferred as an incident to the sale of those services.
14    The tax shall be imposed at the rate of 1% on food prepared
15for immediate consumption and transferred incident to a sale
16of service subject to this Act or the Service Occupation Tax
17Act by an entity licensed under the Hospital Licensing Act,
18the Nursing Home Care Act, the Assisted Living and Shared
19Housing Act, the ID/DD Community Care Act, the MC/DD Act, the
20Specialized Mental Health Rehabilitation Act of 2013, or the
21Child Care Act of 1969, or an entity that holds a permit issued
22pursuant to the Life Care Facilities Act. The tax shall also be
23imposed at the rate of 1% on food for human consumption that is
24to be consumed off the premises where it is sold (other than
25alcoholic beverages, food consisting of or infused with adult
26use cannabis, soft drinks, and food that has been prepared for

 

 

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1immediate consumption and is not otherwise included in this
2paragraph) and prescription and nonprescription medicines,
3drugs, medical appliances, products classified as Class III
4medical 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. For the purposes
11of this Section, until September 1, 2009: the term "soft
12drinks" means any complete, finished, ready-to-use,
13non-alcoholic drink, whether carbonated or not, including but
14not limited to soda water, cola, fruit juice, vegetable juice,
15carbonated water, and all other preparations commonly known as
16soft drinks of whatever kind or description that are contained
17in any closed or sealed bottle, can, carton, or container,
18regardless of size; but "soft drinks" does not include coffee,
19tea, non-carbonated water, infant formula, milk or milk
20products as defined in the Grade A Pasteurized Milk and Milk
21Products Act, or drinks containing 50% or more natural fruit
22or 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

 

 

SB2432- 5 -LRB102 16457 HLH 21849 b

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

 

 

SB2432- 6 -LRB102 16457 HLH 21849 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 January 1, 2014 (the effective date of Public
16Act 98-122), "prescription and nonprescription medicines and
17drugs" includes medical cannabis purchased from a registered
18dispensing organization under the Compassionate Use of Medical
19Cannabis 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 acquired from a serviceman is
26acquired outside Illinois and used outside Illinois before

 

 

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1being brought to Illinois for use here and is taxable under
2this Act, the "selling price" on which the tax is computed
3shall be reduced by an amount that represents a reasonable
4allowance 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 Occupation Tax Act is amended by
9changing Section 3-10 as follows:
 
10    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
11    Sec. 3-10. Rate of tax. Unless otherwise provided in this
12Section, the tax imposed by this Act is at the rate of 6.25% of
13the "selling price", as defined in Section 2 of the Service Use
14Tax Act, of the tangible personal property. For the purpose of
15computing this tax, in no event shall the "selling price" be
16less than the cost price to the serviceman of the tangible
17personal property transferred. The selling price of each item
18of tangible personal property transferred as an incident of a
19sale of service may be shown as a distinct and separate item on
20the serviceman's billing to the service customer. If the
21selling price is not so shown, the selling price of the
22tangible personal property is deemed to be 50% of the
23serviceman's entire billing to the service customer. When,
24however, a serviceman contracts to design, develop, and

 

 

SB2432- 8 -LRB102 16457 HLH 21849 b

1produce special order machinery or equipment, the tax imposed
2by this Act shall be based on the serviceman's cost price of
3the tangible personal property transferred incident to the
4completion of the contract.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    With respect to gasohol, as defined in the Use Tax Act, the
10tax imposed by this Act shall apply to (i) 70% of the cost
11price of property transferred as an incident to the sale of
12service on or after January 1, 1990, and before July 1, 2003,
13(ii) 80% of the selling price of property transferred as an
14incident to the sale of service on or after July 1, 2003 and on
15or before July 1, 2017, and (iii) 100% of the cost price
16thereafter. If, at any time, however, the tax under this Act on
17sales of gasohol, as defined in the Use Tax Act, is imposed at
18the rate of 1.25%, then the tax imposed by this Act applies to
19100% of the proceeds of sales of gasohol made during that time.
20    With respect to majority blended ethanol fuel, as defined
21in the Use Tax Act, the tax imposed by this Act does not apply
22to the selling price of property transferred as an incident to
23the sale of service on or after July 1, 2003 and on or before
24December 31, 2023 but applies to 100% of the selling price
25thereafter.
26    With respect to biodiesel blends, as defined in the Use

 

 

SB2432- 9 -LRB102 16457 HLH 21849 b

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 selling
3price of property transferred as an incident to the sale of
4service on or after July 1, 2003 and on or before December 31,
52018 and (ii) 100% of the proceeds of the selling price
6thereafter. If, at any time, however, the tax under this Act on
7sales of biodiesel blends, as defined in the Use Tax Act, with
8no less than 1% and no more than 10% biodiesel is imposed at
9the rate of 1.25%, then the tax imposed by this Act applies to
10100% of the proceeds of sales of biodiesel blends with no less
11than 1% and no more than 10% biodiesel made during that time.
12    With respect to 100% biodiesel, as defined in the Use Tax
13Act, and biodiesel blends, as defined in the Use Tax Act, with
14more than 10% but no more than 99% biodiesel material, the tax
15imposed by this Act does not apply to the proceeds of the
16selling price of property transferred as an incident to the
17sale of service on or after July 1, 2003 and on or before
18December 31, 2023 but applies to 100% of the selling price
19thereafter.
20    At the election of any registered serviceman made for each
21fiscal year, sales of service in which the aggregate annual
22cost price of tangible personal property transferred as an
23incident to the sales of service is less than 35%, or 75% in
24the case of servicemen transferring prescription drugs or
25servicemen engaged in graphic arts production, of the
26aggregate annual total gross receipts from all sales of

 

 

SB2432- 10 -LRB102 16457 HLH 21849 b

1service, the tax imposed by this Act shall be based on the
2serviceman's cost price of the tangible personal property
3transferred incident to the sale of those services.
4    The tax shall be imposed at the rate of 1% on food prepared
5for immediate consumption and transferred incident to a sale
6of service subject to this Act or the Service Occupation Tax
7Act by an entity licensed under the Hospital Licensing Act,
8the Nursing Home Care Act, the Assisted Living and Shared
9Housing Act, the ID/DD Community Care Act, the MC/DD Act, the
10Specialized Mental Health Rehabilitation Act of 2013, or the
11Child Care Act of 1969, or an entity that holds a permit issued
12pursuant to the Life Care Facilities Act. The tax shall also be
13imposed at the rate of 1% on food for human consumption that is
14to be consumed off the premises where it is sold (other than
15alcoholic beverages, food consisting of or infused with adult
16use cannabis, soft drinks, and food that has been prepared for
17immediate consumption and is not otherwise included in this
18paragraph) and prescription and nonprescription medicines,
19drugs, medical appliances, products classified as Class III
20medical devices by the United States Food and Drug
21Administration that are used for cancer treatment pursuant to
22a prescription, as well as any accessories and components
23related to those devices, modifications to a motor vehicle for
24the purpose of rendering it usable by a person with a
25disability, and insulin, urine testing materials, syringes,
26and needles used by diabetics, for human use. For the purposes

 

 

SB2432- 11 -LRB102 16457 HLH 21849 b

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

 

 

SB2432- 12 -LRB102 16457 HLH 21849 b

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

 

 

SB2432- 13 -LRB102 16457 HLH 21849 b

1        (A) A "Drug Facts" panel; or
2        (B) A statement of the "active ingredient(s)" with a
3    list of those ingredients contained in the compound,
4    substance or preparation.
5    Beginning on January 1, 2014 (the effective date of Public
6Act 98-122), "prescription and nonprescription medicines and
7drugs" includes medical cannabis purchased from a registered
8dispensing organization under the Compassionate Use of Medical
9Cannabis Program Act.
10    As used in this Section, "adult use cannabis" means
11cannabis subject to tax under the Cannabis Cultivation
12Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
13and does not include cannabis subject to tax under the
14Compassionate Use of Medical Cannabis Program Act.
15(Source: P.A. 100-22, eff. 7-6-17; 101-363, eff. 8-9-19;
16101-593, eff. 12-4-19.)