103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1705

 

Introduced 2/8/2023, by Sen. Mike Porfirio

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 110/3-5
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. Creates an exemption for property that is sold to an active duty member of the armed forces of the United States who presents valid military identification and purchases the property using a form of payment where the federal government is the payor.


LRB103 00134 HLH 45138 b

 

 

A BILL FOR

 

SB1705LRB103 00134 HLH 45138 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
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Except as otherwise provided in this Act, personal
12Personal property purchased by a governmental body, by a
13corporation, society, association, foundation, or institution
14organized and operated exclusively for charitable, religious,
15or educational purposes, or by a not-for-profit corporation,
16society, association, foundation, institution, or organization
17that has no compensated officers or employees and that is
18organized and operated primarily for the recreation of persons
1955 years of age or older. A limited liability company may
20qualify for the exemption under this paragraph only if the
21limited liability company is organized and operated
22exclusively for educational purposes. On and after July 1,
231987, however, no entity otherwise eligible for this exemption
24shall make tax-free purchases unless it has an active
25exemption identification number issued by the Department.
26    (5) Until July 1, 2003, a passenger car that is a

 

 

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1replacement vehicle to the extent that the purchase price of
2the car is subject to the Replacement Vehicle Tax.
3    (6) Until July 1, 2003 and beginning again on September 1,
42004 through August 30, 2014, graphic arts machinery and
5equipment, including repair and replacement parts, both new
6and used, and including that manufactured on special order,
7certified by the purchaser to be used primarily for graphic
8arts production, and including machinery and equipment
9purchased for lease. Equipment includes chemicals or chemicals
10acting as catalysts but only if the chemicals or chemicals
11acting as catalysts effect a direct and immediate change upon
12a graphic arts product. Beginning on July 1, 2017, graphic
13arts machinery and equipment is included in the manufacturing
14and assembling machinery and equipment exemption under
15paragraph (18).
16    (7) Farm chemicals.
17    (8) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21    (9) Personal property purchased from a teacher-sponsored
22student organization affiliated with an elementary or
23secondary school located in Illinois.
24    (10) A motor vehicle that is used for automobile renting,
25as defined in the Automobile Renting Occupation and Use Tax
26Act.

 

 

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

 

 

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

 

 

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1    (13) Proceeds of mandatory service charges separately
2stated on customers' bills for the purchase and consumption of
3food and beverages purchased at retail from a retailer, to the
4extent that the proceeds of the service charge are in fact
5turned over as tips or as a substitute for tips to the
6employees who participate directly in preparing, serving,
7hosting or cleaning up the food or beverage function with
8respect to which the service charge is imposed.
9    (14) Until July 1, 2003, oil field exploration, drilling,
10and production equipment, including (i) rigs and parts of
11rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
12pipe and tubular goods, including casing and drill strings,
13(iii) pumps and pump-jack units, (iv) storage tanks and flow
14lines, (v) any individual replacement part for oil field
15exploration, drilling, and production equipment, and (vi)
16machinery and equipment purchased for lease; but excluding
17motor vehicles required to be registered under the Illinois
18Vehicle Code.
19    (15) Photoprocessing machinery and equipment, including
20repair and replacement parts, both new and used, including
21that manufactured on special order, certified by the purchaser
22to be used primarily for photoprocessing, and including
23photoprocessing machinery and equipment purchased for lease.
24    (16) Until July 1, 2028, coal and aggregate exploration,
25mining, off-highway hauling, processing, maintenance, and
26reclamation equipment, including replacement parts and

 

 

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1equipment, and including equipment purchased for lease, but
2excluding motor vehicles required to be registered under the
3Illinois Vehicle Code. The changes made to this Section by
4Public Act 97-767 apply on and after July 1, 2003, but no claim
5for credit or refund is allowed on or after August 16, 2013
6(the effective date of Public Act 98-456) for such taxes paid
7during the period beginning July 1, 2003 and ending on August
816, 2013 (the effective date of Public Act 98-456).
9    (17) Until July 1, 2003, distillation machinery and
10equipment, sold as a unit or kit, assembled or installed by the
11retailer, certified by the user to be used only for the
12production of ethyl alcohol that will be used for consumption
13as motor fuel or as a component of motor fuel for the personal
14use of the user, and not subject to sale or resale.
15    (18) Manufacturing and assembling machinery and equipment
16used primarily in the process of manufacturing or assembling
17tangible personal property for wholesale or retail sale or
18lease, whether that sale or lease is made directly by the
19manufacturer or by some other person, whether the materials
20used in the process are owned by the manufacturer or some other
21person, or whether that sale or lease is made apart from or as
22an incident to the seller's engaging in the service occupation
23of producing machines, tools, dies, jigs, patterns, gauges, or
24other similar items of no commercial value on special order
25for a particular purchaser. The exemption provided by this
26paragraph (18) includes production related tangible personal

 

 

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1property, as defined in Section 3-50, purchased on or after
2July 1, 2019. The exemption provided by this paragraph (18)
3does not include machinery and equipment used in (i) the
4generation of electricity for wholesale or retail sale; (ii)
5the generation or treatment of natural or artificial gas for
6wholesale or retail sale that is delivered to customers
7through pipes, pipelines, or mains; or (iii) the treatment of
8water for wholesale or retail sale that is delivered to
9customers through pipes, pipelines, or mains. The provisions
10of Public Act 98-583 are declaratory of existing law as to the
11meaning and scope of this exemption. Beginning on July 1,
122017, the exemption provided by this paragraph (18) includes,
13but is not limited to, graphic arts machinery and equipment,
14as defined in paragraph (6) of this Section.
15    (19) Personal property delivered to a purchaser or
16purchaser's donee inside Illinois when the purchase order for
17that personal property was received by a florist located
18outside Illinois who has a florist located inside Illinois
19deliver the personal property.
20    (20) Semen used for artificial insemination of livestock
21for direct agricultural production.
22    (21) Horses, or interests in horses, registered with and
23meeting the requirements of any of the Arabian Horse Club
24Registry of America, Appaloosa Horse Club, American Quarter
25Horse Association, United States Trotting Association, or
26Jockey Club, as appropriate, used for purposes of breeding or

 

 

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1racing for prizes. This item (21) is exempt from the
2provisions of Section 3-90, and the exemption provided for
3under this item (21) applies for all periods beginning May 30,
41995, but no claim for credit or refund is allowed on or after
5January 1, 2008 for such taxes paid during the period
6beginning May 30, 2000 and ending on January 1, 2008.
7    (22) Computers and communications equipment utilized for
8any hospital purpose and equipment used in the diagnosis,
9analysis, or treatment of hospital patients purchased by a
10lessor who leases the equipment, under a lease of one year or
11longer executed or in effect at the time the lessor would
12otherwise be subject to the tax imposed by this Act, 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. If the equipment is leased
16in a manner that does not qualify for this exemption or is used
17in any other non-exempt manner, the lessor shall be liable for
18the tax imposed under this Act or the Service Use Tax Act, as
19the case may be, based on the fair market value of the property
20at the time the non-qualifying use occurs. No lessor shall
21collect or attempt to collect an amount (however designated)
22that purports to reimburse that lessor for the tax imposed by
23this Act or the Service Use Tax Act, as the case may be, if the
24tax has not been paid by the lessor. If a lessor improperly
25collects any such amount from the lessee, the lessee shall
26have a legal right to claim a refund of that amount from the

 

 

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1lessor. If, however, that amount is not refunded to the lessee
2for any reason, the lessor is liable to pay that amount to the
3Department.
4    (23) Personal property purchased by a lessor who leases
5the property, under a lease of one year or longer executed or
6in effect at the time the lessor would otherwise be subject to
7the tax imposed by this Act, to a governmental body that has
8been issued an active sales tax exemption identification
9number by the Department under Section 1g of the Retailers'
10Occupation Tax Act. If the property is leased in a manner that
11does not qualify for this exemption or used in any other
12non-exempt manner, the lessor shall be liable for the tax
13imposed under this Act or the Service Use Tax Act, as the case
14may be, based on the fair market value of the property at the
15time the non-qualifying use occurs. No lessor shall collect or
16attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall
21have a legal right to claim a refund of that amount from the
22lessor. If, however, that amount is not refunded to the lessee
23for any reason, the lessor is liable to pay that amount to the
24Department.
25    (24) 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 donated
2for disaster relief to be used in a State or federally declared
3disaster area in Illinois or bordering Illinois by a
4manufacturer or retailer that is registered in this State to a
5corporation, society, association, foundation, or institution
6that has been issued a sales tax exemption identification
7number by the Department that assists victims of the disaster
8who reside within the declared disaster area.
9    (25) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is used in
12the performance of infrastructure repairs in this State,
13including but not limited to municipal roads and streets,
14access roads, bridges, sidewalks, waste disposal systems,
15water and sewer line extensions, water distribution and
16purification facilities, storm water drainage and retention
17facilities, and sewage treatment facilities, resulting from a
18State or federally declared disaster in Illinois or bordering
19Illinois when such repairs are initiated on facilities located
20in the declared disaster area within 6 months after the
21disaster.
22    (26) Beginning July 1, 1999, game or game birds purchased
23at a "game breeding and hunting preserve area" as that term is
24used in the Wildlife Code. This paragraph is exempt from the
25provisions of Section 3-90.
26    (27) A motor vehicle, as that term is defined in Section

 

 

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11-146 of the Illinois Vehicle Code, that is donated to a
2corporation, limited liability company, society, association,
3foundation, or institution that is determined by the
4Department to be organized and operated exclusively for
5educational purposes. For purposes of this exemption, "a
6corporation, limited liability company, society, association,
7foundation, or institution organized and operated exclusively
8for educational purposes" means all tax-supported public
9schools, private schools that offer systematic instruction in
10useful branches of learning by methods common to public
11schools and that compare favorably in their scope and
12intensity with the course of study presented in tax-supported
13schools, and vocational or technical schools or institutes
14organized and operated exclusively to provide a course of
15study of not less than 6 weeks duration and designed to prepare
16individuals to follow a trade or to pursue a manual,
17technical, mechanical, industrial, business, or commercial
18occupation.
19    (28) Beginning January 1, 2000, personal property,
20including food, purchased through fundraising events for the
21benefit of a public or private elementary or secondary school,
22a group of those schools, or one or more school districts if
23the events are sponsored by an entity recognized by the school
24district that consists primarily of volunteers and includes
25parents and teachers of the school children. This paragraph
26does not apply to fundraising events (i) for the benefit of

 

 

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1private home instruction or (ii) for which the fundraising
2entity purchases the personal property sold at the events from
3another individual or entity that sold the property for the
4purpose of resale by the fundraising entity and that profits
5from the sale to the fundraising entity. This paragraph is
6exempt from the provisions of Section 3-90.
7    (29) Beginning January 1, 2000 and through December 31,
82001, new or used automatic vending machines that prepare and
9serve hot food and beverages, including coffee, soup, and
10other items, and replacement parts for these machines.
11Beginning January 1, 2002 and through June 30, 2003, machines
12and parts for machines used in commercial, coin-operated
13amusement and vending business if a use or occupation tax is
14paid on the gross receipts derived from the use of the
15commercial, coin-operated amusement and vending machines. This
16paragraph is exempt from the provisions of Section 3-90.
17    (30) Beginning January 1, 2001 and through June 30, 2016,
18food for human consumption that is to be consumed off the
19premises where it is sold (other than alcoholic beverages,
20soft drinks, and food that has been prepared for immediate
21consumption) and prescription and nonprescription medicines,
22drugs, medical appliances, and insulin, urine testing
23materials, syringes, and needles used by diabetics, for human
24use, when purchased for use by a person receiving medical
25assistance under Article V of the Illinois Public Aid Code who
26resides in a licensed long-term care facility, as defined in

 

 

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

 

 

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1Department. This paragraph is exempt from the provisions of
2Section 3-90.
3    (32) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), personal property purchased by a lessor
5who leases the property, under a lease of one year or longer
6executed or in effect at the time the lessor would otherwise be
7subject to the tax imposed by this Act, to a governmental body
8that has been issued an active sales tax exemption
9identification number by the Department under Section 1g of
10the Retailers' Occupation Tax Act. If the property is leased
11in a manner that does not qualify for this exemption or used in
12any other nonexempt manner, the lessor shall be liable for the
13tax imposed under this Act or the Service Use Tax Act, as the
14case may be, based on the fair market value of the property at
15the time the nonqualifying use occurs. No lessor shall collect
16or attempt to collect an amount (however designated) that
17purports to reimburse that lessor for the tax imposed by this
18Act or the Service Use Tax Act, as the case may be, if the tax
19has not been paid by the lessor. If a lessor improperly
20collects any such amount from the lessee, the lessee shall
21have a legal right to claim a refund of that amount from the
22lessor. If, however, that amount is not refunded to the lessee
23for any reason, the lessor is liable to pay that amount to the
24Department. This paragraph is exempt from the provisions of
25Section 3-90.
26    (33) On and after July 1, 2003 and through June 30, 2004,

 

 

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1the use in this State of motor vehicles of the second division
2with a gross vehicle weight in excess of 8,000 pounds and that
3are subject to the commercial distribution fee imposed under
4Section 3-815.1 of the Illinois Vehicle Code. Beginning on
5July 1, 2004 and through June 30, 2005, the use in this State
6of motor vehicles of the second division: (i) with a gross
7vehicle weight rating in excess of 8,000 pounds; (ii) that are
8subject to the commercial distribution fee imposed under
9Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
10are primarily used for commercial purposes. Through June 30,
112005, this exemption applies to repair and replacement parts
12added after the initial purchase of such a motor vehicle if
13that motor vehicle is used in a manner that would qualify for
14the rolling stock exemption otherwise provided for in this
15Act. For purposes of this paragraph, the term "used for
16commercial purposes" means the transportation of persons or
17property in furtherance of any commercial or industrial
18enterprise, whether for-hire or not.
19    (34) Beginning January 1, 2008, tangible personal property
20used in the construction or maintenance of a community water
21supply, as defined under Section 3.145 of the Environmental
22Protection Act, that is operated by a not-for-profit
23corporation that holds a valid water supply permit issued
24under Title IV of the Environmental Protection Act. This
25paragraph is exempt from the provisions of Section 3-90.
26    (35) Beginning January 1, 2010 and continuing through

 

 

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1December 31, 2024, materials, parts, equipment, components,
2and furnishings incorporated into or upon an aircraft as part
3of the modification, refurbishment, completion, replacement,
4repair, or maintenance of the aircraft. This exemption
5includes consumable supplies used in the modification,
6refurbishment, completion, replacement, repair, and
7maintenance of aircraft, but excludes any materials, parts,
8equipment, components, and consumable supplies used in the
9modification, replacement, repair, and maintenance of aircraft
10engines or power plants, whether such engines or power plants
11are installed or uninstalled upon any such aircraft.
12"Consumable supplies" include, but are not limited to,
13adhesive, tape, sandpaper, general purpose lubricants,
14cleaning solution, latex gloves, and protective films. This
15exemption applies only to the use of qualifying tangible
16personal property by persons who modify, refurbish, complete,
17repair, replace, or maintain aircraft and who (i) hold an Air
18Agency Certificate and are empowered to operate an approved
19repair station by the Federal Aviation Administration, (ii)
20have a Class IV Rating, and (iii) conduct operations in
21accordance with Part 145 of the Federal Aviation Regulations.
22The exemption does not include aircraft operated by a
23commercial air carrier providing scheduled passenger air
24service pursuant to authority issued under Part 121 or Part
25129 of the Federal Aviation Regulations. The changes made to
26this paragraph (35) by Public Act 98-534 are declarative of

 

 

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1existing law. It is the intent of the General Assembly that the
2exemption under this paragraph (35) applies continuously from
3January 1, 2010 through December 31, 2024; however, no claim
4for credit or refund is allowed for taxes paid as a result of
5the disallowance of this exemption on or after January 1, 2015
6and prior to February 5, 2020 (the effective date of Public Act
7101-629) this amendatory Act of the 101st General Assembly.
8    (36) Tangible personal property purchased by a
9public-facilities corporation, as described in Section
1011-65-10 of the Illinois Municipal Code, for purposes of
11constructing or furnishing a municipal convention hall, but
12only if the legal title to the municipal convention hall is
13transferred to the municipality without any further
14consideration by or on behalf of the municipality at the time
15of the completion of the municipal convention hall or upon the
16retirement or redemption of any bonds or other debt
17instruments issued by the public-facilities corporation in
18connection with the development of the municipal convention
19hall. This exemption includes existing public-facilities
20corporations as provided in Section 11-65-25 of the Illinois
21Municipal Code. This paragraph is exempt from the provisions
22of Section 3-90.
23    (37) Beginning January 1, 2017 and through December 31,
242026, menstrual pads, tampons, and menstrual cups.
25    (38) Merchandise that is subject to the Rental Purchase
26Agreement Occupation and Use Tax. The purchaser must certify

 

 

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1that the item is purchased to be rented subject to a rental
2purchase agreement, as defined in the Rental Purchase
3Agreement Act, and provide proof of registration under the
4Rental Purchase Agreement Occupation and Use Tax Act. This
5paragraph is exempt from the provisions of Section 3-90.
6    (39) Tangible personal property purchased by a purchaser
7who is exempt from the tax imposed by this Act by operation of
8federal law. This paragraph is exempt from the provisions of
9Section 3-90.
10    (40) Qualified tangible personal property used in the
11construction or operation of a data center that has been
12granted a certificate of exemption by the Department of
13Commerce and Economic Opportunity, whether that tangible
14personal property is purchased by the owner, operator, or
15tenant of the data center or by a contractor or subcontractor
16of the owner, operator, or tenant. Data centers that would
17have qualified for a certificate of exemption prior to January
181, 2020 had Public Act 101-31 been in effect may apply for and
19obtain an exemption for subsequent purchases of computer
20equipment or enabling software purchased or leased to upgrade,
21supplement, or replace computer equipment or enabling software
22purchased or leased in the original investment that would have
23qualified.
24    The Department of Commerce and Economic Opportunity shall
25grant a certificate of exemption under this item (40) to
26qualified data centers as defined by Section 605-1025 of the

 

 

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

 

 

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1    property that is essential to the operations of a computer
2    data center. The term "qualified tangible personal
3    property" also includes building materials physically
4    incorporated in to the qualifying data center. To document
5    the exemption allowed under this Section, the retailer
6    must obtain from the purchaser a copy of the certificate
7    of eligibility issued by the Department of Commerce and
8    Economic Opportunity.
9    This item (40) is exempt from the provisions of Section
103-90.
11    (41) Beginning July 1, 2022, breast pumps, breast pump
12collection and storage supplies, and breast pump kits. This
13item (41) is exempt from the provisions of Section 3-90. As
14used in this item (41):
15        "Breast pump" means an electrically controlled or
16    manually controlled pump device designed or marketed to be
17    used to express milk from a human breast during lactation,
18    including the pump device and any battery, AC adapter, or
19    other power supply unit that is used to power the pump
20    device and is packaged and sold with the pump device at the
21    time of sale.
22        "Breast pump collection and storage supplies" means
23    items of tangible personal property designed or marketed
24    to be used in conjunction with a breast pump to collect
25    milk expressed from a human breast and to store collected
26    milk until it is ready for consumption.

 

 

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1        "Breast pump collection and storage supplies"
2    includes, but is not limited to: breast shields and breast
3    shield connectors; breast pump tubes and tubing adapters;
4    breast pump valves and membranes; backflow protectors and
5    backflow protector adaptors; bottles and bottle caps
6    specific to the operation of the breast pump; and breast
7    milk storage bags.
8        "Breast pump collection and storage supplies" does not
9    include: (1) bottles and bottle caps not specific to the
10    operation of the breast pump; (2) breast pump travel bags
11    and other similar carrying accessories, including ice
12    packs, labels, and other similar products; (3) breast pump
13    cleaning supplies; (4) nursing bras, bra pads, breast
14    shells, and other similar products; and (5) creams,
15    ointments, and other similar products that relieve
16    breastfeeding-related symptoms or conditions of the
17    breasts or nipples, unless sold as part of a breast pump
18    kit that is pre-packaged by the breast pump manufacturer
19    or distributor.
20        "Breast pump kit" means a kit that: (1) contains no
21    more than a breast pump, breast pump collection and
22    storage supplies, a rechargeable battery for operating the
23    breast pump, a breastmilk cooler, bottle stands, ice
24    packs, and a breast pump carrying case; and (2) is
25    pre-packaged as a breast pump kit by the breast pump
26    manufacturer or distributor.

 

 

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1    (42) (41) Tangible personal property sold by or on behalf
2of the State Treasurer pursuant to the Revised Uniform
3Unclaimed Property Act. This item (42) (41) is exempt from the
4provisions of Section 3-90.
5    (43) Beginning on January 1, 2024, tangible personal
6property purchased by an active duty member of the armed
7forces of the United States who presents valid military
8identification and purchases the property using a form of
9payment where the federal government is the payor. The member
10of the armed forces must complete, at the point of sale, a form
11prescribed by the Department of Revenue documenting that the
12transaction is eligible for the exemption under this
13paragraph. Retailers must keep the form as documentation of
14the exemption in their records for a period of not less than 6
15years. "Armed forces of the United States" means the United
16States Army, Navy, Air Force, Marine Corps, or Coast Guard.
17This paragraph is exempt from the provisions of Section 3-90.
18(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
19101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
206-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;
21102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,
22eff. 5-27-22; revised 8-1-22.)
 
23    Section 10. The Service Use Tax Act is amended by changing
24Section 3-5 as follows:
 

 

 

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1    (35 ILCS 110/3-5)
2    Sec. 3-5. Exemptions. Use of the following tangible
3personal property is exempt from the tax imposed by this Act:
4    (1) Personal property purchased from a corporation,
5society, association, foundation, institution, or
6organization, other than a limited liability company, that is
7organized and operated as a not-for-profit service enterprise
8for the benefit of persons 65 years of age or older if the
9personal property was not purchased by the enterprise for the
10purpose of resale by the enterprise.
11    (2) Personal property purchased by a non-profit Illinois
12county fair association for use in conducting, operating, or
13promoting the county fair.
14    (3) Personal property purchased by a not-for-profit arts
15or cultural organization that establishes, by proof required
16by the Department by rule, that it has received an exemption
17under Section 501(c)(3) of the Internal Revenue Code and that
18is organized and operated primarily for the presentation or
19support of arts or cultural programming, activities, or
20services. These organizations include, but are not limited to,
21music and dramatic arts organizations such as symphony
22orchestras and theatrical groups, arts and cultural service
23organizations, local arts councils, visual arts organizations,
24and media arts organizations. On and after July 1, 2001 (the
25effective date of Public Act 92-35), however, an entity
26otherwise eligible for this exemption shall not make tax-free

 

 

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1purchases unless it has an active identification number issued
2by the Department.
3    (4) Legal tender, currency, medallions, or gold or silver
4coinage issued by the State of Illinois, the government of the
5United States of America, or the government of any foreign
6country, and bullion.
7    (5) Until July 1, 2003 and beginning again on September 1,
82004 through August 30, 2014, graphic arts machinery and
9equipment, including repair and replacement parts, both new
10and used, and including that manufactured on special order or
11purchased for lease, certified by the purchaser to be used
12primarily for graphic arts production. Equipment includes
13chemicals or chemicals acting as catalysts but only if the
14chemicals or chemicals acting as catalysts effect a direct and
15immediate change upon a graphic arts product. Beginning on
16July 1, 2017, graphic arts machinery and equipment is included
17in the manufacturing and assembling machinery and equipment
18exemption under Section 2 of this Act.
19    (6) Personal property purchased from a teacher-sponsored
20student organization affiliated with an elementary or
21secondary school located in Illinois.
22    (7) Farm machinery and equipment, both new and used,
23including that manufactured on special order, certified by the
24purchaser to be used primarily for production agriculture or
25State or federal agricultural programs, including individual
26replacement parts for the machinery and equipment, including

 

 

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

 

 

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1to, the collection, monitoring, and correlation of animal and
2crop data for the purpose of formulating animal diets and
3agricultural chemicals. This item (7) is exempt from the
4provisions of Section 3-75.
5    (8) Until June 30, 2013, fuel and petroleum products sold
6to or used by an air common carrier, certified by the carrier
7to be used for consumption, shipment, or storage in the
8conduct of its business as an air common carrier, for a flight
9destined for or returning from a location or locations outside
10the United States without regard to previous or subsequent
11domestic stopovers.
12    Beginning July 1, 2013, fuel and petroleum products sold
13to or used by an air carrier, certified by the carrier to be
14used for consumption, shipment, or storage in the conduct of
15its business as an air common carrier, for a flight that (i) is
16engaged in foreign trade or is engaged in trade between the
17United States and any of its possessions and (ii) transports
18at least one individual or package for hire from the city of
19origination to the city of final destination on the same
20aircraft, without regard to a change in the flight number of
21that aircraft.
22    (9) Proceeds of mandatory service charges separately
23stated on customers' bills for the purchase and consumption of
24food and beverages acquired as an incident to the purchase of a
25service from a serviceman, to the extent that the proceeds of
26the service charge are in fact turned over as tips or as a

 

 

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1substitute for tips to the employees who participate directly
2in preparing, serving, hosting or cleaning up the food or
3beverage function with respect to which the service charge is
4imposed.
5    (10) Until July 1, 2003, oil field exploration, drilling,
6and production equipment, including (i) rigs and parts of
7rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
8pipe and tubular goods, including casing and drill strings,
9(iii) pumps and pump-jack units, (iv) storage tanks and flow
10lines, (v) any individual replacement part for oil field
11exploration, drilling, and production equipment, and (vi)
12machinery and equipment purchased for lease; but excluding
13motor vehicles required to be registered under the Illinois
14Vehicle Code.
15    (11) Proceeds from the sale of photoprocessing machinery
16and equipment, including repair and replacement parts, both
17new and used, including that manufactured on special order,
18certified by the purchaser to be used primarily for
19photoprocessing, and including photoprocessing machinery and
20equipment purchased for lease.
21    (12) Until July 1, 2028, coal and aggregate exploration,
22mining, off-highway hauling, processing, maintenance, and
23reclamation equipment, including replacement parts and
24equipment, and including equipment purchased for lease, but
25excluding motor vehicles required to be registered under the
26Illinois Vehicle Code. The changes made to this Section by

 

 

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1Public Act 97-767 apply on and after July 1, 2003, but no claim
2for credit or refund is allowed on or after August 16, 2013
3(the effective date of Public Act 98-456) for such taxes paid
4during the period beginning July 1, 2003 and ending on August
516, 2013 (the effective date of Public Act 98-456).
6    (13) Semen used for artificial insemination of livestock
7for direct agricultural production.
8    (14) Horses, or interests in horses, registered with and
9meeting the requirements of any of the Arabian Horse Club
10Registry of America, Appaloosa Horse Club, American Quarter
11Horse Association, United States Trotting Association, or
12Jockey Club, as appropriate, used for purposes of breeding or
13racing for prizes. This item (14) is exempt from the
14provisions of Section 3-75, and the exemption provided for
15under this item (14) applies for all periods beginning May 30,
161995, but no claim for credit or refund is allowed on or after
17January 1, 2008 (the effective date of Public Act 95-88) for
18such taxes paid during the period beginning May 30, 2000 and
19ending on January 1, 2008 (the effective date of Public Act
2095-88).
21    (15) Computers and communications equipment utilized for
22any hospital purpose and equipment used in the diagnosis,
23analysis, or treatment of hospital patients purchased by a
24lessor who leases the equipment, under a lease of one year or
25longer executed or in effect at the time the lessor would
26otherwise be subject to the tax imposed by this Act, to a

 

 

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

 

 

SB1705- 31 -LRB103 00134 HLH 45138 b

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

 

 

SB1705- 32 -LRB103 00134 HLH 45138 b

1access roads, bridges, sidewalks, waste disposal systems,
2water and sewer line extensions, water distribution and
3purification facilities, storm water drainage and retention
4facilities, and sewage treatment facilities, resulting from a
5State or federally declared disaster in Illinois or bordering
6Illinois when such repairs are initiated on facilities located
7in the declared disaster area within 6 months after the
8disaster.
9    (19) Beginning July 1, 1999, game or game birds purchased
10at a "game breeding and hunting preserve area" as that term is
11used in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-75.
13    (20) A motor vehicle, as that term is defined in Section
141-146 of the Illinois Vehicle Code, that is donated to a
15corporation, limited liability company, society, association,
16foundation, or institution that is determined by the
17Department to be organized and operated exclusively for
18educational purposes. For purposes of this exemption, "a
19corporation, limited liability company, society, association,
20foundation, or institution organized and operated exclusively
21for educational purposes" means all tax-supported public
22schools, private schools that offer systematic instruction in
23useful branches of learning by methods common to public
24schools and that compare favorably in their scope and
25intensity with the course of study presented in tax-supported
26schools, and vocational or technical schools or institutes

 

 

SB1705- 33 -LRB103 00134 HLH 45138 b

1organized and operated exclusively to provide a course of
2study of not less than 6 weeks duration and designed to prepare
3individuals to follow a trade or to pursue a manual,
4technical, mechanical, industrial, business, or commercial
5occupation.
6    (21) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 3-75.
20    (22) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and
23other items, and replacement parts for these machines.
24Beginning January 1, 2002 and through June 30, 2003, machines
25and parts for machines used in commercial, coin-operated
26amusement and vending business if a use or occupation tax is

 

 

SB1705- 34 -LRB103 00134 HLH 45138 b

1paid on the gross receipts derived from the use of the
2commercial, coin-operated amusement and vending machines. This
3paragraph is exempt from the provisions of Section 3-75.
4    (23) Beginning August 23, 2001 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages,
7soft drinks, and food that has been prepared for immediate
8consumption) and prescription and nonprescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or in a licensed facility as defined
15in the ID/DD Community Care Act, the MC/DD Act, or the
16Specialized Mental Health Rehabilitation Act of 2013.
17    (24) Beginning on August 2, 2001 (the effective date of
18Public Act 92-227), computers and communications equipment
19utilized for any hospital purpose and equipment used in the
20diagnosis, analysis, or treatment of hospital patients
21purchased by a lessor who leases the equipment, under a lease
22of one year or longer executed or in effect at the time the
23lessor would otherwise be subject to the tax imposed by this
24Act, to a hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of
26the Retailers' Occupation Tax Act. If the equipment is leased

 

 

SB1705- 35 -LRB103 00134 HLH 45138 b

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

 

 

SB1705- 36 -LRB103 00134 HLH 45138 b

1based on the fair market value of the property at the time the
2nonqualifying use occurs. No lessor shall collect or attempt
3to collect an amount (however designated) that purports to
4reimburse that lessor for the tax imposed by this Act or the
5Use Tax Act, as the case may be, if the tax has not been paid
6by the lessor. If a lessor improperly collects any such amount
7from the lessee, the lessee shall have a legal right to claim a
8refund of that amount from the lessor. If, however, that
9amount is not refunded to the lessee for any reason, the lessor
10is liable to pay that amount to the Department. This paragraph
11is exempt from the provisions of Section 3-75.
12    (26) Beginning January 1, 2008, tangible personal property
13used in the construction or maintenance of a community water
14supply, as defined under Section 3.145 of the Environmental
15Protection Act, that is operated by a not-for-profit
16corporation that holds a valid water supply permit issued
17under Title IV of the Environmental Protection Act. This
18paragraph is exempt from the provisions of Section 3-75.
19    (27) Beginning January 1, 2010 and continuing through
20December 31, 2024, materials, parts, equipment, components,
21and furnishings incorporated into or upon an aircraft as part
22of the modification, refurbishment, completion, replacement,
23repair, or maintenance of the aircraft. This exemption
24includes consumable supplies used in the modification,
25refurbishment, completion, replacement, repair, and
26maintenance of aircraft, but excludes any materials, parts,

 

 

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1equipment, components, and consumable supplies used in the
2modification, replacement, repair, and maintenance of aircraft
3engines or power plants, whether such engines or power plants
4are installed or uninstalled upon any such aircraft.
5"Consumable supplies" include, but are not limited to,
6adhesive, tape, sandpaper, general purpose lubricants,
7cleaning solution, latex gloves, and protective films. This
8exemption applies only to the use of qualifying tangible
9personal property transferred incident to the modification,
10refurbishment, completion, replacement, repair, or maintenance
11of aircraft by persons who (i) hold an Air Agency Certificate
12and are empowered to operate an approved repair station by the
13Federal Aviation Administration, (ii) have a Class IV Rating,
14and (iii) conduct operations in accordance with Part 145 of
15the Federal Aviation Regulations. The exemption does not
16include aircraft operated by a commercial air carrier
17providing scheduled passenger air service pursuant to
18authority issued under Part 121 or Part 129 of the Federal
19Aviation Regulations. The changes made to this paragraph (27)
20by Public Act 98-534 are declarative of existing law. It is the
21intent of the General Assembly that the exemption under this
22paragraph (27) applies continuously from January 1, 2010
23through December 31, 2024; however, no claim for credit or
24refund is allowed for taxes paid as a result of the
25disallowance of this exemption on or after January 1, 2015 and
26prior to February 5, 2020 (the effective date of Public Act

 

 

SB1705- 38 -LRB103 00134 HLH 45138 b

1101-629) this amendatory Act of the 101st General Assembly.
2    (28) Tangible personal property purchased by a
3public-facilities corporation, as described in Section
411-65-10 of the Illinois Municipal Code, for purposes of
5constructing or furnishing a municipal convention hall, but
6only if the legal title to the municipal convention hall is
7transferred to the municipality without any further
8consideration by or on behalf of the municipality at the time
9of the completion of the municipal convention hall or upon the
10retirement or redemption of any bonds or other debt
11instruments issued by the public-facilities corporation in
12connection with the development of the municipal convention
13hall. This exemption includes existing public-facilities
14corporations as provided in Section 11-65-25 of the Illinois
15Municipal Code. This paragraph is exempt from the provisions
16of Section 3-75.
17    (29) Beginning January 1, 2017 and through December 31,
182026, menstrual pads, tampons, and menstrual cups.
19    (30) Tangible personal property transferred to a purchaser
20who is exempt from the tax imposed by this Act by operation of
21federal law. This paragraph is exempt from the provisions of
22Section 3-75.
23    (31) Qualified tangible personal property used in the
24construction or operation of a data center that has been
25granted a certificate of exemption by the Department of
26Commerce and Economic Opportunity, whether that tangible

 

 

SB1705- 39 -LRB103 00134 HLH 45138 b

1personal property is purchased by the owner, operator, or
2tenant of the data center or by a contractor or subcontractor
3of the owner, operator, or tenant. Data centers that would
4have qualified for a certificate of exemption prior to January
51, 2020 had Public Act 101-31 this amendatory Act of the 101st
6General Assembly been in effect, may apply for and obtain an
7exemption for subsequent purchases of computer equipment or
8enabling software purchased or leased to upgrade, supplement,
9or replace computer equipment or enabling software purchased
10or leased in the original investment that would have
11qualified.
12    The Department of Commerce and Economic Opportunity shall
13grant a certificate of exemption under this item (31) to
14qualified data centers as defined by Section 605-1025 of the
15Department of Commerce and Economic Opportunity Law of the
16Civil Administrative Code of Illinois.
17    For the purposes of this item (31):
18        "Data center" means a building or a series of
19    buildings rehabilitated or constructed to house working
20    servers in one physical location or multiple sites within
21    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

 

 

SB1705- 40 -LRB103 00134 HLH 45138 b

1    devices; network connectivity equipment; racks; cabinets;
2    telecommunications cabling infrastructure; raised floor
3    systems; peripheral components or systems; software;
4    mechanical, electrical, or plumbing systems; battery
5    systems; cooling systems and towers; temperature control
6    systems; other cabling; and other data center
7    infrastructure equipment and systems necessary to operate
8    qualified tangible personal property, including fixtures;
9    and component parts of any of the foregoing, including
10    installation, maintenance, repair, refurbishment, and
11    replacement of qualified tangible personal property to
12    generate, transform, transmit, distribute, or manage
13    electricity necessary to operate qualified tangible
14    personal property; and all other tangible personal
15    property that is essential to the operations of a computer
16    data center. The term "qualified tangible personal
17    property" also includes building materials physically
18    incorporated in to the qualifying data center. To document
19    the exemption allowed under this Section, the retailer
20    must obtain from the purchaser a copy of the certificate
21    of eligibility issued by the Department of Commerce and
22    Economic Opportunity.
23    This item (31) is exempt from the provisions of Section
243-75.
25    (32) Beginning July 1, 2022, breast pumps, breast pump
26collection and storage supplies, and breast pump kits. This

 

 

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1item (32) is exempt from the provisions of Section 3-75. As
2used in this item (32):
3        "Breast pump" means an electrically controlled or
4    manually controlled pump device designed or marketed to be
5    used to express milk from a human breast during lactation,
6    including the pump device and any battery, AC adapter, or
7    other power supply unit that is used to power the pump
8    device and is packaged and sold with the pump device at the
9    time of sale.
10        "Breast pump collection and storage supplies" means
11    items of tangible personal property designed or marketed
12    to be used in conjunction with a breast pump to collect
13    milk expressed from a human breast and to store collected
14    milk until it is ready for consumption.
15        "Breast pump collection and storage supplies"
16    includes, but is not limited to: breast shields and breast
17    shield connectors; breast pump tubes and tubing adapters;
18    breast pump valves and membranes; backflow protectors and
19    backflow protector adaptors; bottles and bottle caps
20    specific to the operation of the breast pump; and breast
21    milk storage bags.
22        "Breast pump collection and storage supplies" does not
23    include: (1) bottles and bottle caps not specific to the
24    operation of the breast pump; (2) breast pump travel bags
25    and other similar carrying accessories, including ice
26    packs, labels, and other similar products; (3) breast pump

 

 

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1    cleaning supplies; (4) nursing bras, bra pads, breast
2    shells, and other similar products; and (5) creams,
3    ointments, and other similar products that relieve
4    breastfeeding-related symptoms or conditions of the
5    breasts or nipples, unless sold as part of a breast pump
6    kit that is pre-packaged by the breast pump manufacturer
7    or distributor.
8        "Breast pump kit" means a kit that: (1) contains no
9    more than a breast pump, breast pump collection and
10    storage supplies, a rechargeable battery for operating the
11    breast pump, a breastmilk cooler, bottle stands, ice
12    packs, and a breast pump carrying case; and (2) is
13    pre-packaged as a breast pump kit by the breast pump
14    manufacturer or distributor.
15    (33) (32) Tangible personal property sold by or on behalf
16of the State Treasurer pursuant to the Revised Uniform
17Unclaimed Property Act. This item (33) (32) is exempt from the
18provisions of Section 3-75.
19    (34) Beginning on January 1, 2024, tangible personal
20property purchased by an active duty member of the armed
21forces of the United States who presents valid military
22identification and purchases the property using a form of
23payment where the federal government is the payor. The member
24of the armed forces must complete, at the point of sale, a form
25prescribed by the Department of Revenue documenting that the
26transaction is eligible for the exemption under this

 

 

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1paragraph. Retailers must keep the form as documentation of
2the exemption in their records for a period of not less than 6
3years. "Armed forces of the United States" means the United
4States Army, Navy, Air Force, Marine Corps, or Coast Guard.
5This paragraph is exempt from the provisions of Section 3-75.
6(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
7101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
870, Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
975-10, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-3-22.)
 
10    Section 15. The Service Occupation Tax Act is amended by
11changing Section 3-5 as follows:
 
12    (35 ILCS 115/3-5)
13    Sec. 3-5. Exemptions. The following tangible personal
14property is exempt from the tax imposed by this Act:
15    (1) Personal property sold by a corporation, society,
16association, foundation, institution, or organization, other
17than a limited liability company, that is organized and
18operated as a not-for-profit service enterprise for the
19benefit of persons 65 years of age or older if the personal
20property was not purchased by the enterprise for the purpose
21of resale by the enterprise.
22    (2) Personal property purchased by a not-for-profit
23Illinois county fair association for use in conducting,
24operating, or promoting the county fair.

 

 

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1    (3) Personal property purchased by any not-for-profit arts
2or cultural organization that establishes, by proof required
3by the Department by rule, that it has received an exemption
4under Section 501(c)(3) of the Internal Revenue Code and that
5is organized and operated primarily for the presentation or
6support of arts or cultural programming, activities, or
7services. These organizations include, but are not limited to,
8music and dramatic arts organizations such as symphony
9orchestras and theatrical groups, arts and cultural service
10organizations, local arts councils, visual arts organizations,
11and media arts organizations. On and after July 1, 2001 (the
12effective date of Public Act 92-35), however, an entity
13otherwise eligible for this exemption shall not make tax-free
14purchases unless it has an active identification number issued
15by the Department.
16    (4) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (5) Until July 1, 2003 and beginning again on September 1,
212004 through August 30, 2014, graphic arts machinery and
22equipment, including repair and replacement parts, both new
23and used, and including that manufactured on special order or
24purchased for lease, certified by the purchaser to be used
25primarily for graphic arts production. Equipment includes
26chemicals or chemicals acting as catalysts but only if the

 

 

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

 

 

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

 

 

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

 

 

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1    (11) Photoprocessing machinery and equipment, including
2repair and replacement parts, both new and used, including
3that manufactured on special order, certified by the purchaser
4to be used primarily for photoprocessing, and including
5photoprocessing machinery and equipment purchased for lease.
6    (12) Until July 1, 2028, coal and aggregate exploration,
7mining, off-highway hauling, processing, maintenance, and
8reclamation equipment, including replacement parts and
9equipment, and including equipment purchased for lease, but
10excluding motor vehicles required to be registered under the
11Illinois Vehicle Code. The changes made to this Section by
12Public Act 97-767 apply on and after July 1, 2003, but no claim
13for credit or refund is allowed on or after August 16, 2013
14(the effective date of Public Act 98-456) for such taxes paid
15during the period beginning July 1, 2003 and ending on August
1616, 2013 (the effective date of Public Act 98-456).
17    (13) Beginning January 1, 1992 and through June 30, 2016,
18food for human consumption that is to be consumed off the
19premises where it is sold (other than alcoholic beverages,
20soft drinks and food that has been prepared for immediate
21consumption) and prescription and non-prescription medicines,
22drugs, medical appliances, and insulin, urine testing
23materials, syringes, and needles used by diabetics, for human
24use, when purchased for use by a person receiving medical
25assistance under Article V of the Illinois Public Aid Code who
26resides in a licensed long-term care facility, as defined in

 

 

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1the Nursing Home Care Act, or in a licensed facility as defined
2in the ID/DD Community Care Act, the MC/DD Act, or the
3Specialized Mental Health Rehabilitation Act of 2013.
4    (14) Semen used for artificial insemination of livestock
5for direct agricultural production.
6    (15) Horses, or interests in horses, registered with and
7meeting the requirements of any of the Arabian Horse Club
8Registry of America, Appaloosa Horse Club, American Quarter
9Horse Association, United States Trotting Association, or
10Jockey Club, as appropriate, used for purposes of breeding or
11racing for prizes. This item (15) is exempt from the
12provisions of Section 3-55, and the exemption provided for
13under this item (15) applies for all periods beginning May 30,
141995, but no claim for credit or refund is allowed on or after
15January 1, 2008 (the effective date of Public Act 95-88) for
16such taxes paid during the period beginning May 30, 2000 and
17ending on January 1, 2008 (the effective date of Public Act
1895-88).
19    (16) Computers and communications equipment utilized for
20any hospital purpose and equipment used in the diagnosis,
21analysis, or treatment of hospital patients sold to a lessor
22who leases the equipment, under a lease of one year or longer
23executed or in effect at the time of the purchase, to a
24hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of
26the Retailers' Occupation Tax Act.

 

 

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

 

 

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1Illinois when such repairs are initiated on facilities located
2in the declared disaster area within 6 months after the
3disaster.
4    (20) Beginning July 1, 1999, game or game birds sold at a
5"game breeding and hunting preserve area" as that term is used
6in the Wildlife Code. This paragraph is exempt from the
7provisions of Section 3-55.
8    (21) A motor vehicle, as that term is defined in Section
91-146 of the Illinois Vehicle Code, that is donated to a
10corporation, limited liability company, society, association,
11foundation, or institution that is determined by the
12Department to be organized and operated exclusively for
13educational purposes. For purposes of this exemption, "a
14corporation, limited liability company, society, association,
15foundation, or institution organized and operated exclusively
16for educational purposes" means all tax-supported public
17schools, private schools that offer systematic instruction in
18useful branches of learning by methods common to public
19schools and that compare favorably in their scope and
20intensity with the course of study presented in tax-supported
21schools, and vocational or technical schools or institutes
22organized and operated exclusively to provide a course of
23study of not less than 6 weeks duration and designed to prepare
24individuals to follow a trade or to pursue a manual,
25technical, mechanical, industrial, business, or commercial
26occupation.

 

 

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1    (22) Beginning January 1, 2000, personal property,
2including food, purchased through fundraising events for the
3benefit of a public or private elementary or secondary school,
4a group of those schools, or one or more school districts if
5the events are sponsored by an entity recognized by the school
6district that consists primarily of volunteers and includes
7parents and teachers of the school children. This paragraph
8does not apply to fundraising events (i) for the benefit of
9private home instruction or (ii) for which the fundraising
10entity purchases the personal property sold at the events from
11another individual or entity that sold the property for the
12purpose of resale by the fundraising entity and that profits
13from the sale to the fundraising entity. This paragraph is
14exempt from the provisions of Section 3-55.
15    (23) Beginning January 1, 2000 and through December 31,
162001, new or used automatic vending machines that prepare and
17serve hot food and beverages, including coffee, soup, and
18other items, and replacement parts for these machines.
19Beginning January 1, 2002 and through June 30, 2003, machines
20and parts for machines used in commercial, coin-operated
21amusement and vending business if a use or occupation tax is
22paid on the gross receipts derived from the use of the
23commercial, coin-operated amusement and vending machines. This
24paragraph is exempt from the provisions of Section 3-55.
25    (24) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227), computers and communications equipment

 

 

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1utilized for any hospital purpose and equipment used in the
2diagnosis, analysis, or treatment of hospital patients sold to
3a lessor who leases the equipment, under a lease of one year or
4longer executed or in effect at the time of the purchase, to a
5hospital that has been issued an active tax exemption
6identification number by the Department under Section 1g of
7the Retailers' Occupation Tax Act. This paragraph is exempt
8from the provisions of Section 3-55.
9    (25) Beginning on August 2, 2001 (the effective date of
10Public Act 92-227), personal property sold to a lessor who
11leases the property, under a lease of one year or longer
12executed or in effect at the time of the purchase, to a
13governmental body 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    (26) Beginning on January 1, 2002 and through June 30,
182016, tangible personal property purchased from an Illinois
19retailer by a taxpayer engaged in centralized purchasing
20activities in Illinois who will, upon receipt of the property
21in Illinois, temporarily store the property in Illinois (i)
22for the purpose of subsequently transporting it outside this
23State for use or consumption thereafter solely outside this
24State or (ii) for the purpose of being processed, fabricated,
25or manufactured into, attached to, or incorporated into other
26tangible personal property to be transported outside this

 

 

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1State and thereafter used or consumed solely outside this
2State. The Director of Revenue shall, pursuant to rules
3adopted in accordance with the Illinois Administrative
4Procedure Act, issue a permit to any taxpayer in good standing
5with the Department who is eligible for the exemption under
6this paragraph (26). The permit issued under this paragraph
7(26) shall authorize the holder, to the extent and in the
8manner specified in the rules adopted under this Act, to
9purchase tangible personal property from a retailer exempt
10from the taxes imposed by this Act. Taxpayers shall maintain
11all necessary books and records to substantiate the use and
12consumption of all such tangible personal property outside of
13the State of Illinois.
14    (27) Beginning January 1, 2008, tangible personal property
15used in the construction or maintenance of a community water
16supply, as defined under Section 3.145 of the Environmental
17Protection Act, that is operated by a not-for-profit
18corporation that holds a valid water supply permit issued
19under Title IV of the Environmental Protection Act. This
20paragraph is exempt from the provisions of Section 3-55.
21    (28) Tangible personal property sold to a
22public-facilities corporation, as described in Section
2311-65-10 of the Illinois Municipal Code, for purposes of
24constructing or furnishing a municipal convention hall, but
25only if the legal title to the municipal convention hall is
26transferred to the municipality without any further

 

 

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1consideration by or on behalf of the municipality at the time
2of the completion of the municipal convention hall or upon the
3retirement or redemption of any bonds or other debt
4instruments issued by the public-facilities corporation in
5connection with the development of the municipal convention
6hall. This exemption includes existing public-facilities
7corporations as provided in Section 11-65-25 of the Illinois
8Municipal Code. This paragraph is exempt from the provisions
9of Section 3-55.
10    (29) Beginning January 1, 2010 and continuing through
11December 31, 2024, materials, parts, equipment, components,
12and furnishings incorporated into or upon an aircraft as part
13of the modification, refurbishment, completion, replacement,
14repair, or maintenance of the aircraft. This exemption
15includes consumable supplies used in the modification,
16refurbishment, completion, replacement, repair, and
17maintenance of aircraft, but excludes any materials, parts,
18equipment, components, and consumable supplies used in the
19modification, replacement, repair, and maintenance of aircraft
20engines or power plants, whether such engines or power plants
21are installed or uninstalled upon any such aircraft.
22"Consumable supplies" include, but are not limited to,
23adhesive, tape, sandpaper, general purpose lubricants,
24cleaning solution, latex gloves, and protective films. This
25exemption applies only to the transfer of qualifying tangible
26personal property incident to the modification, refurbishment,

 

 

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1completion, replacement, repair, or maintenance of an aircraft
2by persons who (i) hold an Air Agency Certificate and are
3empowered to operate an approved repair station by the Federal
4Aviation Administration, (ii) have a Class IV Rating, and
5(iii) conduct operations in accordance with Part 145 of the
6Federal Aviation Regulations. The exemption does not include
7aircraft operated by a commercial air carrier providing
8scheduled passenger air service pursuant to authority issued
9under Part 121 or Part 129 of the Federal Aviation
10Regulations. The changes made to this paragraph (29) by Public
11Act 98-534 are declarative of existing law. It is the intent of
12the General Assembly that the exemption under this paragraph
13(29) applies continuously from January 1, 2010 through
14December 31, 2024; however, no claim for credit or refund is
15allowed for taxes paid as a result of the disallowance of this
16exemption on or after January 1, 2015 and prior to February 5,
172020 (the effective date of Public Act 101-629) this
18amendatory Act of the 101st General Assembly.
19    (30) Beginning January 1, 2017 and through December 31,
202026, menstrual pads, tampons, and menstrual cups.
21    (31) Tangible personal property transferred to a purchaser
22who is exempt from tax by operation of federal law. This
23paragraph is exempt from the provisions of Section 3-55.
24    (32) Qualified tangible personal property used in the
25construction or operation of a data center that has been
26granted a certificate of exemption by the Department of

 

 

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1Commerce and Economic Opportunity, whether that tangible
2personal property is purchased by the owner, operator, or
3tenant of the data center or by a contractor or subcontractor
4of the owner, operator, or tenant. Data centers that would
5have qualified for a certificate of exemption prior to January
61, 2020 had Public Act 101-31 this amendatory Act of the 101st
7General Assembly been in effect, may apply for and obtain an
8exemption for subsequent purchases of computer equipment or
9enabling software purchased or leased to upgrade, supplement,
10or replace computer equipment or enabling software purchased
11or leased in the original investment that would have
12qualified.
13    The Department of Commerce and Economic Opportunity shall
14grant a certificate of exemption under this item (32) to
15qualified data centers as defined by Section 605-1025 of the
16Department of Commerce and Economic Opportunity Law of the
17Civil Administrative Code of Illinois.
18    For the purposes of this item (32):
19        "Data center" means a building or a series of
20    buildings rehabilitated or constructed to house working
21    servers in one physical location or multiple sites within
22    the State of Illinois.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency

 

 

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1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. The term "qualified tangible personal
18    property" also includes building materials physically
19    incorporated in to the qualifying data center. To document
20    the exemption allowed under this Section, the retailer
21    must obtain from the purchaser a copy of the certificate
22    of eligibility issued by the Department of Commerce and
23    Economic Opportunity.
24    This item (32) is exempt from the provisions of Section
253-55.
26    (33) Beginning July 1, 2022, breast pumps, breast pump

 

 

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1collection and storage supplies, and breast pump kits. This
2item (33) is exempt from the provisions of Section 3-55. As
3used in this item (33):
4        "Breast pump" means an electrically controlled or
5    manually controlled pump device designed or marketed to be
6    used to express milk from a human breast during lactation,
7    including the pump device and any battery, AC adapter, or
8    other power supply unit that is used to power the pump
9    device and is packaged and sold with the pump device at the
10    time of sale.
11        "Breast pump collection and storage supplies" means
12    items of tangible personal property designed or marketed
13    to be used in conjunction with a breast pump to collect
14    milk expressed from a human breast and to store collected
15    milk until it is ready for consumption.
16        "Breast pump collection and storage supplies"
17    includes, but is not limited to: breast shields and breast
18    shield connectors; breast pump tubes and tubing adapters;
19    breast pump valves and membranes; backflow protectors and
20    backflow protector adaptors; bottles and bottle caps
21    specific to the operation of the breast pump; and breast
22    milk storage bags.
23        "Breast pump collection and storage supplies" does not
24    include: (1) bottles and bottle caps not specific to the
25    operation of the breast pump; (2) breast pump travel bags
26    and other similar carrying accessories, including ice

 

 

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1    packs, labels, and other similar products; (3) breast pump
2    cleaning supplies; (4) nursing bras, bra pads, breast
3    shells, and other similar products; and (5) creams,
4    ointments, and other similar products that relieve
5    breastfeeding-related symptoms or conditions of the
6    breasts or nipples, unless sold as part of a breast pump
7    kit that is pre-packaged by the breast pump manufacturer
8    or distributor.
9        "Breast pump kit" means a kit that: (1) contains no
10    more than a breast pump, breast pump collection and
11    storage supplies, a rechargeable battery for operating the
12    breast pump, a breastmilk cooler, bottle stands, ice
13    packs, and a breast pump carrying case; and (2) is
14    pre-packaged as a breast pump kit by the breast pump
15    manufacturer or distributor.
16    (34) (33) Tangible personal property sold by or on behalf
17of the State Treasurer pursuant to the Revised Uniform
18Unclaimed Property Act. This item (34) (33) is exempt from the
19provisions of Section 3-55.
20    (35) Beginning on January 1, 2024, tangible personal
21property purchased by an active duty member of the armed
22forces of the United States who presents valid military
23identification and purchases the property using a form of
24payment where the federal government is the payor. The member
25of the armed forces must complete, at the point of sale, a form
26prescribed by the Department of Revenue documenting that the

 

 

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1transaction is eligible for the exemption under this
2paragraph. Retailers must keep the form as documentation of
3the exemption in their records for a period of not less than 6
4years. "Armed forces of the United States" means the United
5States Army, Navy, Air Force, Marine Corps, or Coast Guard.
6This paragraph is exempt from the provisions of Section 3-55.
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; 102-700, Article
970, Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
1075-15, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-9-22.)
 
11    Section 20. The Retailers' Occupation Tax Act is amended
12by changing Section 2-5 as follows:
 
13    (35 ILCS 120/2-5)
14    Sec. 2-5. Exemptions. Gross receipts from proceeds from
15the sale of the following tangible personal property are
16exempt from the tax imposed by this Act:
17        (1) Farm chemicals.
18        (2) Farm machinery and equipment, both new and used,
19    including that manufactured on special order, certified by
20    the purchaser to be used primarily for production
21    agriculture or State or federal agricultural programs,
22    including individual replacement parts for the machinery
23    and equipment, including machinery and equipment purchased
24    for lease, and including implements of husbandry defined

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    parts of rigs, rotary rigs, cable tool rigs, and workover
2    rigs, (ii) pipe and tubular goods, including casing and
3    drill strings, (iii) pumps and pump-jack units, (iv)
4    storage tanks and flow lines, (v) any individual
5    replacement part for oil field exploration, drilling, and
6    production equipment, and (vi) machinery and equipment
7    purchased for lease; but excluding motor vehicles required
8    to be registered under the Illinois Vehicle Code.
9        (20) Photoprocessing machinery and equipment,
10    including repair and replacement parts, both new and used,
11    including that manufactured on special order, certified by
12    the purchaser to be used primarily for photoprocessing,
13    and including photoprocessing machinery and equipment
14    purchased for lease.
15        (21) Until July 1, 2028, coal and aggregate
16    exploration, mining, off-highway hauling, processing,
17    maintenance, and reclamation equipment, including
18    replacement parts and equipment, and including equipment
19    purchased for lease, but excluding motor vehicles required
20    to be registered under the Illinois Vehicle Code. The
21    changes made to this Section by Public Act 97-767 apply on
22    and after July 1, 2003, but no claim for credit or refund
23    is allowed on or after August 16, 2013 (the effective date
24    of Public Act 98-456) for such taxes paid during the
25    period beginning July 1, 2003 and ending on August 16,
26    2013 (the effective date of Public Act 98-456).

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    or uninstalled upon any such aircraft. "Consumable
2    supplies" include, but are not limited to, adhesive, tape,
3    sandpaper, general purpose lubricants, cleaning solution,
4    latex gloves, and protective films. This exemption applies
5    only to the sale of qualifying tangible personal property
6    to persons who modify, refurbish, complete, replace, or
7    maintain an aircraft and who (i) hold an Air Agency
8    Certificate and are empowered to operate an approved
9    repair station by the Federal Aviation Administration,
10    (ii) have a Class IV Rating, and (iii) conduct operations
11    in accordance with Part 145 of the Federal Aviation
12    Regulations. The exemption does not include aircraft
13    operated by a commercial air carrier providing scheduled
14    passenger air service pursuant to authority issued under
15    Part 121 or Part 129 of the Federal Aviation Regulations.
16    The changes made to this paragraph (40) by Public Act
17    98-534 are declarative of existing law. It is the intent
18    of the General Assembly that the exemption under this
19    paragraph (40) applies continuously from January 1, 2010
20    through December 31, 2024; however, no claim for credit or
21    refund is allowed for taxes paid as a result of the
22    disallowance of this exemption on or after January 1, 2015
23    and prior to February 5, 2020 (the effective date of
24    Public Act 101-629) this amendatory Act of the 101st
25    General Assembly.
26        (41) Tangible personal property sold to a

 

 

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

 

 

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1    granted a certificate of exemption by the Department of
2    Commerce and Economic Opportunity, whether that tangible
3    personal property is purchased by the owner, operator, or
4    tenant of the data center or by a contractor or
5    subcontractor of the owner, operator, or tenant. Data
6    centers that would have qualified for a certificate of
7    exemption prior to January 1, 2020 had Public Act 101-31
8    this amendatory Act of the 101st General Assembly been in
9    effect, may apply for and obtain an exemption for
10    subsequent purchases of computer equipment or enabling
11    software purchased or leased to upgrade, supplement, or
12    replace computer equipment or enabling software purchased
13    or leased in the original investment that would have
14    qualified.
15        The Department of Commerce and Economic Opportunity
16    shall grant a certificate of exemption under this item
17    (44) to qualified data centers as defined by Section
18    605-1025 of the Department of Commerce and Economic
19    Opportunity Law of the Civil Administrative Code of
20    Illinois.
21        For the purposes of this item (44):
22            "Data center" means a building or a series of
23        buildings rehabilitated or constructed to house
24        working servers in one physical location or multiple
25        sites within the State of Illinois.
26            "Qualified tangible personal property" means:

 

 

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

 

 

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1        Commerce and Economic Opportunity.
2        This item (44) is exempt from the provisions of
3    Section 2-70.
4        (45) Beginning January 1, 2020 and through December
5    31, 2020, sales of tangible personal property made by a
6    marketplace seller over a marketplace for which tax is due
7    under this Act but for which use tax has been collected and
8    remitted to the Department by a marketplace facilitator
9    under Section 2d of the Use Tax Act are exempt from tax
10    under this Act. A marketplace seller claiming this
11    exemption shall maintain books and records demonstrating
12    that the use tax on such sales has been collected and
13    remitted by a marketplace facilitator. Marketplace sellers
14    that have properly remitted tax under this Act on such
15    sales may file a claim for credit as provided in Section 6
16    of this Act. No claim is allowed, however, for such taxes
17    for which a credit or refund has been issued to the
18    marketplace facilitator under the Use Tax Act, or for
19    which the marketplace facilitator has filed a claim for
20    credit or refund under the Use Tax Act.
21        (46) Beginning July 1, 2022, breast pumps, breast pump
22    collection and storage supplies, and breast pump kits.
23    This item (46) is exempt from the provisions of Section
24    2-70. As used in this item (46):
25        "Breast pump" means an electrically controlled or
26    manually controlled pump device designed or marketed to be

 

 

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1    used to express milk from a human breast during lactation,
2    including the pump device and any battery, AC adapter, or
3    other power supply unit that is used to power the pump
4    device and is packaged and sold with the pump device at the
5    time of sale.
6        "Breast pump collection and storage supplies" means
7    items of tangible personal property designed or marketed
8    to be used in conjunction with a breast pump to collect
9    milk expressed from a human breast and to store collected
10    milk until it is ready for consumption.
11        "Breast pump collection and storage supplies"
12    includes, but is not limited to: breast shields and breast
13    shield connectors; breast pump tubes and tubing adapters;
14    breast pump valves and membranes; backflow protectors and
15    backflow protector adaptors; bottles and bottle caps
16    specific to the operation of the breast pump; and breast
17    milk storage bags.
18        "Breast pump collection and storage supplies" does not
19    include: (1) bottles and bottle caps not specific to the
20    operation of the breast pump; (2) breast pump travel bags
21    and other similar carrying accessories, including ice
22    packs, labels, and other similar products; (3) breast pump
23    cleaning supplies; (4) nursing bras, bra pads, breast
24    shells, and other similar products; and (5) creams,
25    ointments, and other similar products that relieve
26    breastfeeding-related symptoms or conditions of the

 

 

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1    breasts or nipples, unless sold as part of a breast pump
2    kit that is pre-packaged by the breast pump manufacturer
3    or distributor.
4        "Breast pump kit" means a kit that: (1) contains no
5    more than a breast pump, breast pump collection and
6    storage supplies, a rechargeable battery for operating the
7    breast pump, a breastmilk cooler, bottle stands, ice
8    packs, and a breast pump carrying case; and (2) is
9    pre-packaged as a breast pump kit by the breast pump
10    manufacturer or distributor.
11        (47) (46) Tangible personal property sold by or on
12    behalf of the State Treasurer pursuant to the Revised
13    Uniform Unclaimed Property Act. This item (47) (46) is
14    exempt from the provisions of Section 2-70.
15        (48) Beginning on January 1, 2024, tangible personal
16    property purchased by an active duty member of the armed
17    forces of the United States who presents valid military
18    identification and purchases the property using a form of
19    payment where the federal government is the payor. The
20    member of the armed forces must complete, at the point of
21    sale, a form prescribed by the Department of Revenue
22    documenting that the transaction is eligible for the
23    exemption under this paragraph. Retailers must keep the
24    form as documentation of the exemption in their records
25    for a period of not less than 6 years. "Armed forces of the
26    United States" means the United States Army, Navy, Air

 

 

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1    Force, Marine Corps, or Coast Guard. This paragraph is
2    exempt from the provisions of Section 2-70.
3(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
4101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
58-27-21; 102-700, Article 70, Section 70-20, eff. 4-19-22;
6102-700, Article 75, Section 75-20, eff. 4-19-22; 102-813,
7eff. 5-13-22; 102-1026, eff. 5-27-22; revised 8-15-22.)