Rep. Curtis J. Tarver, II

Filed: 5/19/2023

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1963

2    AMENDMENT NO. ______. Amend Senate Bill 1963 by replacing
3everything after the enacting clause with the following:
 
4
"ARTICLE 5. AIRCRAFT ENGINES

 
5    Section 5-5. The Use Tax Act is amended by changing
6Section 3-5 as follows:
 
7    (35 ILCS 105/3-5)
8    Sec. 3-5. Exemptions. Use of the following tangible
9personal property is exempt from the tax imposed by this Act:
10    (1) Personal property purchased from a corporation,
11society, association, foundation, institution, or
12organization, other than a limited liability company, that is
13organized and operated as a not-for-profit service enterprise
14for the benefit of persons 65 years of age or older if the
15personal property was not purchased by the enterprise for the

 

 

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

 

 

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1persons 55 years of age or older. A limited liability company
2may qualify for the exemption under this paragraph only if the
3limited liability company is organized and operated
4exclusively for educational purposes. On and after July 1,
51987, however, no entity otherwise eligible for this exemption
6shall make tax-free purchases unless it has an active
7exemption identification number issued by the Department.
8    (5) Until July 1, 2003, a passenger car that is a
9replacement vehicle to the extent that the purchase price of
10the car is subject to the Replacement Vehicle Tax.
11    (6) Until July 1, 2003 and beginning again on September 1,
122004 through August 30, 2014, graphic arts machinery and
13equipment, including repair and replacement parts, both new
14and used, and including that manufactured on special order,
15certified by the purchaser to be used primarily for graphic
16arts production, and including machinery and equipment
17purchased for lease. Equipment includes chemicals or chemicals
18acting as catalysts but only if the chemicals or chemicals
19acting as catalysts effect a direct and immediate change upon
20a graphic arts product. Beginning on July 1, 2017, graphic
21arts machinery and equipment is included in the manufacturing
22and assembling machinery and equipment exemption under
23paragraph (18).
24    (7) Farm chemicals.
25    (8) Legal tender, currency, medallions, or gold or silver
26coinage issued by the State of Illinois, the government of the

 

 

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1United States of America, or the government of any foreign
2country, and bullion.
3    (9) Personal property purchased from a teacher-sponsored
4student organization affiliated with an elementary or
5secondary school located in Illinois.
6    (10) A motor vehicle that is used for automobile renting,
7as defined in the Automobile Renting Occupation and Use Tax
8Act.
9    (11) 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 (11). 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 (11) is exempt from the
17provisions of Section 3-90.
18    (12) 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    (13) Proceeds of mandatory service charges separately
10stated on customers' bills for the purchase and consumption of
11food and beverages purchased at retail from a retailer, to the
12extent that the proceeds of the service charge are in fact
13turned over as tips or as a substitute for tips to the
14employees who participate directly in preparing, serving,
15hosting or cleaning up the food or beverage function with
16respect to which the service charge is imposed.
17    (14) 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    (15) 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    (16) 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    (17) Until July 1, 2003, distillation machinery and
18equipment, sold as a unit or kit, assembled or installed by the
19retailer, certified by the user to be used only for the
20production of ethyl alcohol that will be used for consumption
21as motor fuel or as a component of motor fuel for the personal
22use of the user, and not subject to sale or resale.
23    (18) Manufacturing and assembling machinery and equipment
24used primarily in the process of manufacturing or assembling
25tangible personal property for wholesale or retail sale or
26lease, whether that sale or lease is made directly by the

 

 

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1manufacturer or by some other person, whether the materials
2used in the process are owned by the manufacturer or some other
3person, or whether that sale or lease is made apart from or as
4an incident to the seller's engaging in the service occupation
5of producing machines, tools, dies, jigs, patterns, gauges, or
6other similar items of no commercial value on special order
7for a particular purchaser. The exemption provided by this
8paragraph (18) includes production related tangible personal
9property, as defined in Section 3-50, purchased on or after
10July 1, 2019. The exemption provided by this paragraph (18)
11does not include machinery and equipment used in (i) the
12generation of electricity for wholesale or retail sale; (ii)
13the generation or treatment of natural or artificial gas for
14wholesale or retail sale that is delivered to customers
15through pipes, pipelines, or mains; or (iii) the treatment of
16water for wholesale or retail sale that is delivered to
17customers through pipes, pipelines, or mains. The provisions
18of Public Act 98-583 are declaratory of existing law as to the
19meaning and scope of this exemption. Beginning on July 1,
202017, the exemption provided by this paragraph (18) includes,
21but is not limited to, graphic arts machinery and equipment,
22as defined in paragraph (6) of this Section.
23    (19) Personal property delivered to a purchaser or
24purchaser's donee inside Illinois when the purchase order for
25that personal property was received by a florist located
26outside Illinois who has a florist located inside Illinois

 

 

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1deliver the personal property.
2    (20) Semen used for artificial insemination of livestock
3for direct agricultural production.
4    (21) Horses, or interests in horses, registered with and
5meeting the requirements of any of the Arabian Horse Club
6Registry of America, Appaloosa Horse Club, American Quarter
7Horse Association, United States Trotting Association, or
8Jockey Club, as appropriate, used for purposes of breeding or
9racing for prizes. This item (21) is exempt from the
10provisions of Section 3-90, and the exemption provided for
11under this item (21) applies for all periods beginning May 30,
121995, but no claim for credit or refund is allowed on or after
13January 1, 2008 for such taxes paid during the period
14beginning May 30, 2000 and ending on January 1, 2008.
15    (22) Computers and communications equipment utilized for
16any hospital purpose and equipment used in the diagnosis,
17analysis, or treatment of hospital patients purchased by a
18lessor who leases the equipment, under a lease of one year or
19longer executed or in effect at the time the lessor would
20otherwise be subject to the tax imposed by this Act, to a
21hospital that has been issued an active tax exemption
22identification number by the Department under Section 1g of
23the Retailers' Occupation Tax Act. If the equipment is leased
24in a manner that does not qualify for this exemption or is used
25in any other non-exempt manner, the lessor shall be liable for
26the tax imposed under this Act or the Service Use Tax Act, as

 

 

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

 

 

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1has not been paid by the lessor. If a lessor improperly
2collects any such amount from the lessee, the lessee shall
3have a legal right to claim a refund of that amount from the
4lessor. If, however, that amount is not refunded to the lessee
5for any reason, the lessor is liable to pay that amount to the
6Department.
7    (24) 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    (25) 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    (26) Beginning July 1, 1999, game or game birds purchased
5at a "game breeding and hunting preserve area" as that term is
6used in the Wildlife Code. This paragraph is exempt from the
7provisions of Section 3-90.
8    (27) 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    (28) 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 3-90.
15    (29) 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 3-90.
25    (30) Beginning January 1, 2001 and through June 30, 2016,
26food for human consumption that is to be consumed off the

 

 

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1premises where it is sold (other than alcoholic beverages,
2soft drinks, and food that has been prepared for immediate
3consumption) and prescription and nonprescription medicines,
4drugs, medical appliances, and insulin, urine testing
5materials, syringes, and needles used by diabetics, for human
6use, when purchased for use by a person receiving medical
7assistance under Article V of the Illinois Public Aid Code who
8resides in a licensed long-term care facility, as defined in
9the Nursing Home Care Act, or in a licensed facility as defined
10in the ID/DD Community Care Act, the MC/DD Act, or the
11Specialized Mental Health Rehabilitation Act of 2013.
12    (31) Beginning on August 2, 2001 (the effective date of
13Public Act 92-227), computers and communications equipment
14utilized for any hospital purpose and equipment used in the
15diagnosis, analysis, or treatment of hospital patients
16purchased by a lessor who leases the equipment, under a lease
17of one year or longer executed or in effect at the time the
18lessor would otherwise be subject to the tax imposed by this
19Act, to a hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of
21the Retailers' Occupation Tax Act. If the equipment is leased
22in a manner that does not qualify for this exemption or is used
23in any other nonexempt manner, the lessor shall be liable for
24the tax imposed under this Act or the Service Use Tax Act, as
25the case may be, based on the fair market value of the property
26at the time the nonqualifying use occurs. No lessor shall

 

 

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

 

 

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1has not been paid by the lessor. If a lessor improperly
2collects any such amount from the lessee, the lessee shall
3have a legal right to claim a refund of that amount from the
4lessor. If, however, that amount is not refunded to the lessee
5for any reason, the lessor is liable to pay that amount to the
6Department. This paragraph is exempt from the provisions of
7Section 3-90.
8    (33) On and after July 1, 2003 and through June 30, 2004,
9the use in this State of motor vehicles of the second division
10with a gross vehicle weight in excess of 8,000 pounds and that
11are subject to the commercial distribution fee imposed under
12Section 3-815.1 of the Illinois Vehicle Code. Beginning on
13July 1, 2004 and through June 30, 2005, the use in this State
14of motor vehicles of the second division: (i) with a gross
15vehicle weight rating in excess of 8,000 pounds; (ii) that are
16subject to the commercial distribution fee imposed under
17Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
18are primarily used for commercial purposes. Through June 30,
192005, this exemption applies to repair and replacement parts
20added after the initial purchase of such a motor vehicle if
21that motor vehicle is used in a manner that would qualify for
22the rolling stock exemption otherwise provided for in this
23Act. For purposes of this paragraph, the term "used for
24commercial purposes" means the transportation of persons or
25property in furtherance of any commercial or industrial
26enterprise, whether for-hire or not.

 

 

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1    (34) Beginning January 1, 2008, tangible personal property
2used in the construction or maintenance of a community water
3supply, as defined under Section 3.145 of the Environmental
4Protection Act, that is operated by a not-for-profit
5corporation that holds a valid water supply permit issued
6under Title IV of the Environmental Protection Act. This
7paragraph is exempt from the provisions of Section 3-90.
8    (35) Beginning January 1, 2010 and continuing through
9December 31, 2029 December 31, 2024, materials, parts,
10equipment, components, and furnishings incorporated into or
11upon an aircraft as part of the modification, refurbishment,
12completion, replacement, repair, or maintenance of the
13aircraft. This exemption includes consumable supplies used in
14the modification, refurbishment, completion, replacement,
15repair, and maintenance of aircraft. However, until January 1,
162024, this exemption , but excludes any materials, parts,
17equipment, components, and consumable supplies used in the
18modification, replacement, repair, and maintenance of aircraft
19engines or power plants, whether such engines or power plants
20are installed or uninstalled upon any such aircraft.
21"Consumable supplies" include, but are not limited to,
22adhesive, tape, sandpaper, general purpose lubricants,
23cleaning solution, latex gloves, and protective films.
24    Beginning January 1, 2010 and continuing through December
2531, 2023, this This exemption applies only to the use of
26qualifying tangible personal property by persons who modify,

 

 

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1refurbish, complete, repair, replace, or maintain aircraft and
2who (i) hold an Air Agency Certificate and are empowered to
3operate an approved repair station by the Federal Aviation
4Administration, (ii) have a Class IV Rating, and (iii) conduct
5operations in accordance with Part 145 of the Federal Aviation
6Regulations. From January 1, 2024 through December 31, 2029,
7this exemption applies only to the use of qualifying tangible
8personal property by: (A) persons who modify, refurbish,
9complete, repair, replace, or maintain aircraft and who (i)
10hold an Air Agency Certificate and are empowered to operate an
11approved repair station by the Federal Aviation
12Administration, (ii) have a Class IV Rating, and (iii) conduct
13operations in accordance with Part 145 of the Federal Aviation
14Regulations; and (B) persons who engage in the modification,
15replacement, repair, and maintenance of aircraft engines or
16power plants without regard to whether or not those persons
17meet the qualifications of item (A).
18    The exemption does not include aircraft operated by a
19commercial air carrier providing scheduled passenger air
20service pursuant to authority issued under Part 121 or Part
21129 of the Federal Aviation Regulations. The changes made to
22this paragraph (35) by Public Act 98-534 are declarative of
23existing law. It is the intent of the General Assembly that the
24exemption under this paragraph (35) applies continuously from
25January 1, 2010 through December 31, 2024; however, no claim
26for credit or refund is allowed for taxes paid as a result of

 

 

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1the disallowance of this exemption on or after January 1, 2015
2and prior to February 5, 2020 (the effective date of Public Act
3101-629) this amendatory Act of the 101st General Assembly.
4    (36) Tangible personal property purchased by a
5public-facilities corporation, as described in Section
611-65-10 of the Illinois Municipal Code, for purposes of
7constructing or furnishing a municipal convention hall, but
8only if the legal title to the municipal convention hall is
9transferred to the municipality without any further
10consideration by or on behalf of the municipality at the time
11of the completion of the municipal convention hall or upon the
12retirement or redemption of any bonds or other debt
13instruments issued by the public-facilities corporation in
14connection with the development of the municipal convention
15hall. This exemption includes existing public-facilities
16corporations as provided in Section 11-65-25 of the Illinois
17Municipal Code. This paragraph is exempt from the provisions
18of Section 3-90.
19    (37) Beginning January 1, 2017 and through December 31,
202026, menstrual pads, tampons, and menstrual cups.
21    (38) Merchandise that is subject to the Rental Purchase
22Agreement Occupation and Use Tax. The purchaser must certify
23that the item is purchased to be rented subject to a rental
24purchase agreement, as defined in the Rental Purchase
25Agreement Act, and provide proof of registration under the
26Rental Purchase Agreement Occupation and Use Tax Act. This

 

 

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1paragraph is exempt from the provisions of Section 3-90.
2    (39) Tangible personal property purchased by a purchaser
3who is exempt from the tax imposed by this Act by operation of
4federal law. This paragraph is exempt from the provisions of
5Section 3-90.
6    (40) Qualified tangible personal property used in the
7construction or operation of a data center that has been
8granted a certificate of exemption by the Department of
9Commerce and Economic Opportunity, whether that tangible
10personal property is purchased by the owner, operator, or
11tenant of the data center or by a contractor or subcontractor
12of the owner, operator, or tenant. Data centers that would
13have qualified for a certificate of exemption prior to January
141, 2020 had Public Act 101-31 been in effect may apply for and
15obtain an exemption for subsequent purchases of computer
16equipment or enabling software purchased or leased to upgrade,
17supplement, or replace computer equipment or enabling software
18purchased or leased in the original investment that would have
19qualified.
20    The Department of Commerce and Economic Opportunity shall
21grant a certificate of exemption under this item (40) to
22qualified data centers as defined by Section 605-1025 of the
23Department of Commerce and Economic Opportunity Law of the
24Civil Administrative Code of Illinois.
25    For the purposes of this item (40):
26        "Data center" means a building or a series of

 

 

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

 

 

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1    the exemption allowed under this Section, the retailer
2    must obtain from the purchaser a copy of the certificate
3    of eligibility issued by the Department of Commerce and
4    Economic Opportunity.
5    This item (40) is exempt from the provisions of Section
63-90.
7    (41) Beginning July 1, 2022, breast pumps, breast pump
8collection and storage supplies, and breast pump kits. This
9item (41) is exempt from the provisions of Section 3-90. As
10used in this item (41):
11        "Breast pump" means an electrically controlled or
12    manually controlled pump device designed or marketed to be
13    used to express milk from a human breast during lactation,
14    including the pump device and any battery, AC adapter, or
15    other power supply unit that is used to power the pump
16    device and is packaged and sold with the pump device at the
17    time of sale.
18        "Breast pump collection and storage supplies" means
19    items of tangible personal property designed or marketed
20    to be used in conjunction with a breast pump to collect
21    milk expressed from a human breast and to store collected
22    milk until it is ready for consumption.
23        "Breast pump collection and storage supplies"
24    includes, but is not limited to: breast shields and breast
25    shield connectors; breast pump tubes and tubing adapters;
26    breast pump valves and membranes; backflow protectors and

 

 

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1    backflow protector adaptors; bottles and bottle caps
2    specific to the operation of the breast pump; and breast
3    milk storage bags.
4        "Breast pump collection and storage supplies" does not
5    include: (1) bottles and bottle caps not specific to the
6    operation of the breast pump; (2) breast pump travel bags
7    and other similar carrying accessories, including ice
8    packs, labels, and other similar products; (3) breast pump
9    cleaning supplies; (4) nursing bras, bra pads, breast
10    shells, and other similar products; and (5) creams,
11    ointments, and other similar products that relieve
12    breastfeeding-related symptoms or conditions of the
13    breasts or nipples, unless sold as part of a breast pump
14    kit that is pre-packaged by the breast pump manufacturer
15    or distributor.
16        "Breast pump kit" means a kit that: (1) contains no
17    more than a breast pump, breast pump collection and
18    storage supplies, a rechargeable battery for operating the
19    breast pump, a breastmilk cooler, bottle stands, ice
20    packs, and a breast pump carrying case; and (2) is
21    pre-packaged as a breast pump kit by the breast pump
22    manufacturer or distributor.
23    (42) (41) Tangible personal property sold by or on behalf
24of the State Treasurer pursuant to the Revised Uniform
25Unclaimed Property Act. This item (42) (41) is exempt from the
26provisions of Section 3-90.

 

 

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1(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
2101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
36-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;
4102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,
5eff. 5-27-22; revised 8-1-22.)
 
6    Section 5-10. The Service Use Tax Act is amended by
7changing Section 3-5 as follows:
 
8    (35 ILCS 110/3-5)
9    Sec. 3-5. Exemptions. Use of the following tangible
10personal property is exempt from the tax imposed by this Act:
11    (1) Personal property purchased from a corporation,
12society, association, foundation, institution, or
13organization, other than a limited liability company, that is
14organized and operated as a not-for-profit service enterprise
15for the benefit of persons 65 years of age or older if the
16personal property was not purchased by the enterprise for the
17purpose of resale by the enterprise.
18    (2) Personal property purchased by a non-profit Illinois
19county fair association for use in conducting, operating, or
20promoting the county fair.
21    (3) Personal property purchased by a not-for-profit arts
22or cultural organization that establishes, by proof required
23by the Department by rule, that it has received an exemption
24under Section 501(c)(3) of the Internal Revenue Code and that

 

 

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1is organized and operated primarily for the presentation or
2support of arts or cultural programming, activities, or
3services. These organizations include, but are not limited to,
4music and dramatic arts organizations such as symphony
5orchestras and theatrical groups, arts and cultural service
6organizations, local arts councils, visual arts organizations,
7and media arts organizations. On and after July 1, 2001 (the
8effective date of Public Act 92-35), however, an entity
9otherwise eligible for this exemption shall not make tax-free
10purchases unless it has an active identification number issued
11by the Department.
12    (4) Legal tender, currency, medallions, or gold or silver
13coinage issued by the State of Illinois, the government of the
14United States of America, or the government of any foreign
15country, and bullion.
16    (5) Until July 1, 2003 and beginning again on September 1,
172004 through August 30, 2014, graphic arts machinery and
18equipment, including repair and replacement parts, both new
19and used, and including that manufactured on special order or
20purchased for lease, certified by the purchaser to be used
21primarily for graphic arts production. Equipment includes
22chemicals or chemicals acting as catalysts but only if the
23chemicals or chemicals acting as catalysts effect a direct and
24immediate change upon a graphic arts product. Beginning on
25July 1, 2017, graphic arts machinery and equipment is included
26in the manufacturing and assembling machinery and equipment

 

 

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1exemption under Section 2 of this Act.
2    (6) Personal property purchased from a teacher-sponsored
3student organization affiliated with an elementary or
4secondary school located in Illinois.
5    (7) Farm machinery and equipment, both new and used,
6including that manufactured on special order, certified by the
7purchaser to be used primarily for production agriculture or
8State or federal agricultural programs, including individual
9replacement parts for the machinery and equipment, including
10machinery and equipment purchased for lease, and including
11implements of husbandry defined in Section 1-130 of the
12Illinois Vehicle Code, farm machinery and agricultural
13chemical and fertilizer spreaders, and nurse wagons required
14to be registered under Section 3-809 of the Illinois Vehicle
15Code, but excluding other motor vehicles required to be
16registered under the Illinois Vehicle Code. Horticultural
17polyhouses or hoop houses used for propagating, growing, or
18overwintering plants shall be considered farm machinery and
19equipment under this item (7). Agricultural chemical tender
20tanks and dry boxes shall include units sold separately from a
21motor vehicle required to be licensed and units sold mounted
22on a motor vehicle required to be licensed if the selling price
23of the tender is separately stated.
24    Farm machinery and equipment shall include precision
25farming equipment that is installed or purchased to be
26installed on farm machinery and equipment including, but not

 

 

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

 

 

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

 

 

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1certified by the purchaser to be used primarily for
2photoprocessing, and including photoprocessing machinery and
3equipment purchased for lease.
4    (12) Until July 1, 2028, coal and aggregate exploration,
5mining, off-highway hauling, processing, maintenance, and
6reclamation equipment, including replacement parts and
7equipment, and including equipment purchased for lease, but
8excluding motor vehicles required to be registered under the
9Illinois Vehicle Code. The changes made to this Section by
10Public Act 97-767 apply on and after July 1, 2003, but no claim
11for credit or refund is allowed on or after August 16, 2013
12(the effective date of Public Act 98-456) for such taxes paid
13during the period beginning July 1, 2003 and ending on August
1416, 2013 (the effective date of Public Act 98-456).
15    (13) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (14) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (14) is exempt from the
23provisions of Section 3-75, and the exemption provided for
24under this item (14) applies for all periods beginning May 30,
251995, but no claim for credit or refund is allowed on or after
26January 1, 2008 (the effective date of Public Act 95-88) for

 

 

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1such taxes paid during the period beginning May 30, 2000 and
2ending on January 1, 2008 (the effective date of Public Act
395-88).
4    (15) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients purchased by a
7lessor who leases the equipment, under a lease of one year or
8longer executed or in effect at the time the lessor would
9otherwise be subject to the tax imposed by this Act, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other non-exempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Use Tax Act, as the case
16may be, based on the fair market value of the property at the
17time the non-qualifying use occurs. No lessor shall collect or
18attempt to collect an amount (however designated) that
19purports to reimburse that lessor for the tax imposed by this
20Act or the Use Tax Act, as the case may be, if the tax has not
21been paid by the lessor. If a lessor improperly collects any
22such amount from the lessee, the lessee shall have a legal
23right to claim a refund of that amount from the lessor. If,
24however, that amount is not refunded to the lessee for any
25reason, the lessor is liable to pay that amount to the
26Department.

 

 

10300SB1963ham002- 31 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 32 -LRB103 25648 HLH 62334 a

1corporation, society, association, foundation, or institution
2that has been issued a sales tax exemption identification
3number by the Department that assists victims of the disaster
4who reside within the declared disaster area.
5    (18) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is used in
8the performance of infrastructure repairs in this State,
9including but not limited to municipal roads and streets,
10access roads, bridges, sidewalks, waste disposal systems,
11water and sewer line extensions, water distribution and
12purification facilities, storm water drainage and retention
13facilities, and sewage treatment facilities, resulting from a
14State or federally declared disaster in Illinois or bordering
15Illinois when such repairs are initiated on facilities located
16in the declared disaster area within 6 months after the
17disaster.
18    (19) Beginning July 1, 1999, game or game birds purchased
19at a "game breeding and hunting preserve area" as that term is
20used in the Wildlife Code. This paragraph is exempt from the
21provisions of Section 3-75.
22    (20) A motor vehicle, as that term is defined in Section
231-146 of the Illinois Vehicle Code, that is donated to a
24corporation, limited liability company, society, association,
25foundation, or institution that is determined by the
26Department to be organized and operated exclusively for

 

 

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

 

 

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1from the sale to the fundraising entity. This paragraph is
2exempt from the provisions of Section 3-75.
3    (22) Beginning January 1, 2000 and through December 31,
42001, new or used automatic vending machines that prepare and
5serve hot food and beverages, including coffee, soup, and
6other items, and replacement parts for these machines.
7Beginning January 1, 2002 and through June 30, 2003, machines
8and parts for machines used in commercial, coin-operated
9amusement and vending business if a use or occupation tax is
10paid on the gross receipts derived from the use of the
11commercial, coin-operated amusement and vending machines. This
12paragraph is exempt from the provisions of Section 3-75.
13    (23) Beginning August 23, 2001 and through June 30, 2016,
14food for human consumption that is to be consumed off the
15premises where it is sold (other than alcoholic beverages,
16soft drinks, and food that has been prepared for immediate
17consumption) and prescription and nonprescription medicines,
18drugs, medical appliances, and insulin, urine testing
19materials, syringes, and needles used by diabetics, for human
20use, when purchased for use by a person receiving medical
21assistance under Article V of the Illinois Public Aid Code who
22resides in a licensed long-term care facility, as defined in
23the Nursing Home Care Act, or in a licensed facility as defined
24in the ID/DD Community Care Act, the MC/DD Act, or the
25Specialized Mental Health Rehabilitation Act of 2013.
26    (24) Beginning on August 2, 2001 (the effective date of

 

 

10300SB1963ham002- 35 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 36 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 37 -LRB103 25648 HLH 62334 a

1paragraph is exempt from the provisions of Section 3-75.
2    (27) Beginning January 1, 2010 and continuing through
3December 31, 2029 December 31, 2024, materials, parts,
4equipment, components, and furnishings incorporated into or
5upon an aircraft as part of the modification, refurbishment,
6completion, replacement, repair, or maintenance of the
7aircraft. This exemption includes consumable supplies used in
8the modification, refurbishment, completion, replacement,
9repair, and maintenance of aircraft. However, until January 1,
102024, this exemption , but excludes any materials, parts,
11equipment, components, and consumable supplies used in the
12modification, replacement, repair, and maintenance of aircraft
13engines or power plants, whether such engines or power plants
14are installed or uninstalled upon any such aircraft.
15"Consumable supplies" include, but are not limited to,
16adhesive, tape, sandpaper, general purpose lubricants,
17cleaning solution, latex gloves, and protective films.
18    Beginning January 1, 2010 and continuing through December
1931, 2023, this This exemption applies only to the use of
20qualifying tangible personal property transferred incident to
21the modification, refurbishment, completion, replacement,
22repair, or maintenance of aircraft by persons who (i) hold an
23Air Agency Certificate and are empowered to operate an
24approved repair station by the Federal Aviation
25Administration, (ii) have a Class IV Rating, and (iii) conduct
26operations in accordance with Part 145 of the Federal Aviation

 

 

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1Regulations. From January 1, 2024 through December 31, 2029,
2this exemption applies only to the use of qualifying tangible
3personal property by: (A) persons who modify, refurbish,
4complete, repair, replace, or maintain aircraft and who (i)
5hold an Air Agency Certificate and are empowered to operate an
6approved repair station by the Federal Aviation
7Administration, (ii) have a Class IV Rating, and (iii) conduct
8operations in accordance with Part 145 of the Federal Aviation
9Regulations; and (B) persons who engage in the modification,
10replacement, repair, and maintenance of aircraft engines or
11power plants without regard to whether or not those persons
12meet the qualifications of item (A).
13    The exemption does not include aircraft operated by a
14commercial air carrier providing scheduled passenger air
15service pursuant to authority issued under Part 121 or Part
16129 of the Federal Aviation Regulations. The changes made to
17this paragraph (27) by Public Act 98-534 are declarative of
18existing law. It is the intent of the General Assembly that the
19exemption under this paragraph (27) applies continuously from
20January 1, 2010 through December 31, 2024; however, no claim
21for credit or refund is allowed for taxes paid as a result of
22the disallowance of this exemption on or after January 1, 2015
23and prior to February 5, 2020 (the effective date of Public Act
24101-629) this amendatory Act of the 101st General Assembly.
25    (28) Tangible personal property purchased by a
26public-facilities corporation, as described in Section

 

 

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111-65-10 of the Illinois Municipal Code, for purposes of
2constructing or furnishing a municipal convention hall, but
3only if the legal title to the municipal convention hall is
4transferred to the municipality without any further
5consideration by or on behalf of the municipality at the time
6of the completion of the municipal convention hall or upon the
7retirement or redemption of any bonds or other debt
8instruments issued by the public-facilities corporation in
9connection with the development of the municipal convention
10hall. This exemption includes existing public-facilities
11corporations as provided in Section 11-65-25 of the Illinois
12Municipal Code. This paragraph is exempt from the provisions
13of Section 3-75.
14    (29) Beginning January 1, 2017 and through December 31,
152026, menstrual pads, tampons, and menstrual cups.
16    (30) Tangible personal property transferred to a purchaser
17who is exempt from the tax imposed by this Act by operation of
18federal law. This paragraph is exempt from the provisions of
19Section 3-75.
20    (31) Qualified tangible personal property used in the
21construction or operation of a data center that has been
22granted a certificate of exemption by the Department of
23Commerce and Economic Opportunity, whether that tangible
24personal property is purchased by the owner, operator, or
25tenant of the data center or by a contractor or subcontractor
26of the owner, operator, or tenant. Data centers that would

 

 

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1have qualified for a certificate of exemption prior to January
21, 2020 had Public Act 101-31 this amendatory Act of the 101st
3General Assembly been in effect, may apply for and obtain an
4exemption for subsequent purchases of computer equipment or
5enabling software purchased or leased to upgrade, supplement,
6or replace computer equipment or enabling software purchased
7or leased in the original investment that would have
8qualified.
9    The Department of Commerce and Economic Opportunity shall
10grant a certificate of exemption under this item (31) to
11qualified data centers as defined by Section 605-1025 of the
12Department of Commerce and Economic Opportunity Law of the
13Civil Administrative Code of Illinois.
14    For the purposes of this item (31):
15        "Data center" means a building or a series of
16    buildings rehabilitated or constructed to house working
17    servers in one physical location or multiple sites within
18    the State of Illinois.
19        "Qualified tangible personal property" means:
20    electrical systems and equipment; climate control and
21    chilling equipment and systems; mechanical systems and
22    equipment; monitoring and secure systems; emergency
23    generators; hardware; computers; servers; data storage
24    devices; network connectivity equipment; racks; cabinets;
25    telecommunications cabling infrastructure; raised floor
26    systems; peripheral components or systems; software;

 

 

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1    mechanical, electrical, or plumbing systems; battery
2    systems; cooling systems and towers; temperature control
3    systems; other cabling; and other data center
4    infrastructure equipment and systems necessary to operate
5    qualified tangible personal property, including fixtures;
6    and component parts of any of the foregoing, including
7    installation, maintenance, repair, refurbishment, and
8    replacement of qualified tangible personal property to
9    generate, transform, transmit, distribute, or manage
10    electricity necessary to operate qualified tangible
11    personal property; and all other tangible personal
12    property that is essential to the operations of a computer
13    data center. The term "qualified tangible personal
14    property" also includes building materials physically
15    incorporated in to the qualifying data center. To document
16    the exemption allowed under this Section, the retailer
17    must obtain from the purchaser a copy of the certificate
18    of eligibility issued by the Department of Commerce and
19    Economic Opportunity.
20    This item (31) is exempt from the provisions of Section
213-75.
22    (32) Beginning July 1, 2022, breast pumps, breast pump
23collection and storage supplies, and breast pump kits. This
24item (32) is exempt from the provisions of Section 3-75. As
25used in this item (32):
26        "Breast pump" means an electrically controlled or

 

 

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

 

 

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1    breastfeeding-related symptoms or conditions of the
2    breasts or nipples, unless sold as part of a breast pump
3    kit that is pre-packaged by the breast pump manufacturer
4    or distributor.
5        "Breast pump kit" means a kit that: (1) contains no
6    more than a breast pump, breast pump collection and
7    storage supplies, a rechargeable battery for operating the
8    breast pump, a breastmilk cooler, bottle stands, ice
9    packs, and a breast pump carrying case; and (2) is
10    pre-packaged as a breast pump kit by the breast pump
11    manufacturer or distributor.
12    (33) (32) Tangible personal property sold by or on behalf
13of the State Treasurer pursuant to the Revised Uniform
14Unclaimed Property Act. This item (33) (32) is exempt from the
15provisions of Section 3-75.
16(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
17101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
1870, Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1975-10, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-3-22.)
 
20    Section 5-15. The Service Occupation Tax Act is amended by
21changing Section 3-5 as follows:
 
22    (35 ILCS 115/3-5)
23    Sec. 3-5. Exemptions. The following tangible personal
24property is exempt from the tax imposed by this Act:

 

 

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

 

 

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1coinage issued by the State of Illinois, the government of the
2United States of America, or the government of any foreign
3country, and bullion.
4    (5) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new
7and used, and including that manufactured on special order or
8purchased for lease, certified by the purchaser to be used
9primarily for graphic arts production. Equipment includes
10chemicals or chemicals acting as catalysts but only if the
11chemicals or chemicals acting as catalysts effect a direct and
12immediate change upon a graphic arts product. Beginning on
13July 1, 2017, graphic arts machinery and equipment is included
14in the manufacturing and assembling machinery and equipment
15exemption under Section 2 of this Act.
16    (6) Personal property sold by a teacher-sponsored student
17organization affiliated with an elementary or secondary school
18located in Illinois.
19    (7) Farm machinery and equipment, both new and used,
20including that manufactured on special order, certified by the
21purchaser to be used primarily for production agriculture or
22State or federal agricultural programs, including individual
23replacement parts for the machinery and equipment, including
24machinery and equipment purchased for lease, and including
25implements of husbandry defined in Section 1-130 of the
26Illinois Vehicle Code, farm machinery and agricultural

 

 

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

 

 

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1provisions of Section 3-55.
2    (8) Until June 30, 2013, fuel and petroleum products sold
3to or used by an air common carrier, certified by the carrier
4to be used for consumption, shipment, or storage in the
5conduct of its business as an air common carrier, for a flight
6destined for or returning from a location or locations outside
7the United States without regard to previous or subsequent
8domestic stopovers.
9    Beginning July 1, 2013, fuel and petroleum products sold
10to or used by an air carrier, certified by the carrier to be
11used for consumption, shipment, or storage in the conduct of
12its business as an air common carrier, for a flight that (i) is
13engaged in foreign trade or is engaged in trade between the
14United States and any of its possessions and (ii) transports
15at least one individual or package for hire from the city of
16origination to the city of final destination on the same
17aircraft, without regard to a change in the flight number of
18that aircraft.
19    (9) Proceeds of mandatory service charges separately
20stated on customers' bills for the purchase and consumption of
21food and beverages, to the extent that the proceeds of the
22service charge are in fact turned over as tips or as a
23substitute for tips to the employees who participate directly
24in preparing, serving, hosting or cleaning up the food or
25beverage function with respect to which the service charge is
26imposed.

 

 

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1    (10) Until July 1, 2003, oil field exploration, drilling,
2and production equipment, including (i) rigs and parts of
3rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
4pipe and tubular goods, including casing and drill strings,
5(iii) pumps and pump-jack units, (iv) storage tanks and flow
6lines, (v) any individual replacement part for oil field
7exploration, drilling, and production equipment, and (vi)
8machinery and equipment purchased for lease; but excluding
9motor vehicles required to be registered under the Illinois
10Vehicle Code.
11    (11) Photoprocessing machinery and equipment, including
12repair and replacement parts, both new and used, including
13that manufactured on special order, certified by the purchaser
14to be used primarily for photoprocessing, and including
15photoprocessing machinery and equipment purchased for lease.
16    (12) Until July 1, 2028, coal and aggregate exploration,
17mining, off-highway hauling, processing, maintenance, and
18reclamation equipment, including replacement parts and
19equipment, and including equipment purchased for lease, but
20excluding motor vehicles required to be registered under the
21Illinois Vehicle Code. The changes made to this Section by
22Public Act 97-767 apply on and after July 1, 2003, but no claim
23for credit or refund is allowed on or after August 16, 2013
24(the effective date of Public Act 98-456) for such taxes paid
25during the period beginning July 1, 2003 and ending on August
2616, 2013 (the effective date of Public Act 98-456).

 

 

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1    (13) Beginning January 1, 1992 and through June 30, 2016,
2food for human consumption that is to be consumed off the
3premises where it is sold (other than alcoholic beverages,
4soft drinks and food that has been prepared for immediate
5consumption) and prescription and non-prescription medicines,
6drugs, medical appliances, and insulin, urine testing
7materials, syringes, and needles used by diabetics, for human
8use, when purchased for use by a person receiving medical
9assistance under Article V of the Illinois Public Aid Code who
10resides in a licensed long-term care facility, as defined in
11the Nursing Home Care Act, or in a licensed facility as defined
12in the ID/DD Community Care Act, the MC/DD Act, or the
13Specialized Mental Health Rehabilitation Act of 2013.
14    (14) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (15) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (15) is exempt from the
22provisions of Section 3-55, and the exemption provided for
23under this item (15) applies for all periods beginning May 30,
241995, but no claim for credit or refund is allowed on or after
25January 1, 2008 (the effective date of Public Act 95-88) for
26such taxes paid during the period beginning May 30, 2000 and

 

 

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1ending on January 1, 2008 (the effective date of Public Act
295-88).
3    (16) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients sold to a lessor
6who leases the equipment, under a lease of one year or longer
7executed or in effect at the time of the purchase, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10the Retailers' Occupation Tax Act.
11    (17) Personal property sold to a lessor who leases the
12property, under a lease of one year or longer executed or in
13effect at the time of the purchase, to a governmental body that
14has been issued an active tax exemption identification number
15by the Department under Section 1g of the Retailers'
16Occupation Tax Act.
17    (18) 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 donated
20for disaster relief to be used in a State or federally declared
21disaster area in Illinois or bordering Illinois by a
22manufacturer or retailer that is registered in this State to a
23corporation, society, association, foundation, or institution
24that has been issued a sales tax exemption identification
25number by the Department that assists victims of the disaster
26who reside within the declared disaster area.

 

 

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1    (19) Beginning with taxable years ending on or after
2December 31, 1995 and ending with taxable years ending on or
3before December 31, 2004, personal property that is used in
4the performance of infrastructure repairs in this State,
5including but not limited to municipal roads and streets,
6access roads, bridges, sidewalks, waste disposal systems,
7water and sewer line extensions, water distribution and
8purification facilities, storm water drainage and retention
9facilities, and sewage treatment facilities, resulting from a
10State or federally declared disaster in Illinois or bordering
11Illinois when such repairs are initiated on facilities located
12in the declared disaster area within 6 months after the
13disaster.
14    (20) Beginning July 1, 1999, game or game birds sold at a
15"game breeding and hunting preserve area" as that term is used
16in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-55.
18    (21) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the
22Department to be organized and operated exclusively for
23educational purposes. For purposes of this exemption, "a
24corporation, limited liability company, society, association,
25foundation, or institution organized and operated exclusively
26for educational purposes" means all tax-supported public

 

 

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1schools, private schools that offer systematic instruction in
2useful branches of learning by methods common to public
3schools and that compare favorably in their scope and
4intensity with the course of study presented in tax-supported
5schools, and vocational or technical schools or institutes
6organized and operated exclusively to provide a course of
7study of not less than 6 weeks duration and designed to prepare
8individuals to follow a trade or to pursue a manual,
9technical, mechanical, industrial, business, or commercial
10occupation.
11    (22) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 3-55.
25    (23) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

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

 

 

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1    (26) Beginning on January 1, 2002 and through June 30,
22016, tangible personal property purchased from an Illinois
3retailer by a taxpayer engaged in centralized purchasing
4activities in Illinois who will, upon receipt of the property
5in Illinois, temporarily store the property in Illinois (i)
6for the purpose of subsequently transporting it outside this
7State for use or consumption thereafter solely outside this
8State or (ii) for the purpose of being processed, fabricated,
9or manufactured into, attached to, or incorporated into other
10tangible personal property to be transported outside this
11State and thereafter used or consumed solely outside this
12State. The Director of Revenue shall, pursuant to rules
13adopted in accordance with the Illinois Administrative
14Procedure Act, issue a permit to any taxpayer in good standing
15with the Department who is eligible for the exemption under
16this paragraph (26). The permit issued under this paragraph
17(26) shall authorize the holder, to the extent and in the
18manner specified in the rules adopted under this Act, to
19purchase tangible personal property from a retailer exempt
20from the taxes imposed by this Act. Taxpayers shall maintain
21all necessary books and records to substantiate the use and
22consumption of all such tangible personal property outside of
23the State of Illinois.
24    (27) Beginning January 1, 2008, tangible personal property
25used in the construction or maintenance of a community water
26supply, as defined under Section 3.145 of the Environmental

 

 

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1Protection Act, that is operated by a not-for-profit
2corporation that holds a valid water supply permit issued
3under Title IV of the Environmental Protection Act. This
4paragraph is exempt from the provisions of Section 3-55.
5    (28) Tangible personal property sold to a
6public-facilities corporation, as described in Section
711-65-10 of the Illinois Municipal Code, for purposes of
8constructing or furnishing a municipal convention hall, but
9only if the legal title to the municipal convention hall is
10transferred to the municipality without any further
11consideration by or on behalf of the municipality at the time
12of the completion of the municipal convention hall or upon the
13retirement or redemption of any bonds or other debt
14instruments issued by the public-facilities corporation in
15connection with the development of the municipal convention
16hall. This exemption includes existing public-facilities
17corporations as provided in Section 11-65-25 of the Illinois
18Municipal Code. This paragraph is exempt from the provisions
19of Section 3-55.
20    (29) Beginning January 1, 2010 and continuing through
21December 31, 2029 December 31, 2024, materials, parts,
22equipment, components, and furnishings incorporated into or
23upon an aircraft as part of the modification, refurbishment,
24completion, replacement, repair, or maintenance of the
25aircraft. This exemption includes consumable supplies used in
26the modification, refurbishment, completion, replacement,

 

 

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1repair, and maintenance of aircraft. However, until January 1,
22024, this exemption , but excludes any materials, parts,
3equipment, components, and consumable supplies used in the
4modification, replacement, repair, and maintenance of aircraft
5engines or power plants, whether such engines or power plants
6are installed or uninstalled upon any such aircraft.
7"Consumable supplies" include, but are not limited to,
8adhesive, tape, sandpaper, general purpose lubricants,
9cleaning solution, latex gloves, and protective films.
10    Beginning January 1, 2010 and continuing through December
1131, 2023, this This exemption applies only to the transfer of
12qualifying tangible personal property incident to the
13modification, refurbishment, completion, replacement, repair,
14or maintenance of an aircraft by persons who (i) hold an Air
15Agency Certificate and are empowered to operate an approved
16repair station by the Federal Aviation Administration, (ii)
17have a Class IV Rating, and (iii) conduct operations in
18accordance with Part 145 of the Federal Aviation Regulations.
19The exemption does not include aircraft operated by a
20commercial air carrier providing scheduled passenger air
21service pursuant to authority issued under Part 121 or Part
22129 of the Federal Aviation Regulations. From January 1, 2024
23through December 31, 2029, this exemption applies only to the
24use of qualifying tangible personal property by: (A) persons
25who modify, refurbish, complete, repair, replace, or maintain
26aircraft and who (i) hold an Air Agency Certificate and are

 

 

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1empowered to operate an approved repair station by the Federal
2Aviation Administration, (ii) have a Class IV Rating, and
3(iii) conduct operations in accordance with Part 145 of the
4Federal Aviation Regulations; and (B) persons who engage in
5the modification, replacement, repair, and maintenance of
6aircraft engines or power plants without regard to whether or
7not those persons meet the qualifications of item (A).
8    The changes made to this paragraph (29) by Public Act
998-534 are declarative of existing law. It is the intent of the
10General Assembly that the exemption under this paragraph (29)
11applies continuously from January 1, 2010 through December 31,
122024; however, no claim for credit or refund is allowed for
13taxes paid as a result of the disallowance of this exemption on
14or after January 1, 2015 and prior to February 5, 2020 (the
15effective date of Public Act 101-629) this amendatory Act of
16the 101st General Assembly.
17    (30) Beginning January 1, 2017 and through December 31,
182026, menstrual pads, tampons, and menstrual cups.
19    (31) Tangible personal property transferred to a purchaser
20who is exempt from tax by operation of federal law. This
21paragraph is exempt from the provisions of Section 3-55.
22    (32) Qualified tangible personal property used in the
23construction or operation of a data center that has been
24granted a certificate of exemption by the Department of
25Commerce and Economic Opportunity, whether that tangible
26personal property is purchased by the owner, operator, or

 

 

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1tenant of the data center or by a contractor or subcontractor
2of the owner, operator, or tenant. Data centers that would
3have qualified for a certificate of exemption prior to January
41, 2020 had Public Act 101-31 this amendatory Act of the 101st
5General Assembly been in effect, may apply for and obtain an
6exemption for subsequent purchases of computer equipment or
7enabling software purchased or leased to upgrade, supplement,
8or replace computer equipment or enabling software purchased
9or leased in the original investment that would have
10qualified.
11    The Department of Commerce and Economic Opportunity shall
12grant a certificate of exemption under this item (32) to
13qualified data centers as defined by Section 605-1025 of the
14Department of Commerce and Economic Opportunity Law of the
15Civil Administrative Code of Illinois.
16    For the purposes of this item (32):
17        "Data center" means a building or a series of
18    buildings rehabilitated or constructed to house working
19    servers in one physical location or multiple sites within
20    the State of Illinois.
21        "Qualified tangible personal property" means:
22    electrical systems and equipment; climate control and
23    chilling equipment and systems; mechanical systems and
24    equipment; monitoring and secure systems; emergency
25    generators; hardware; computers; servers; data storage
26    devices; network connectivity equipment; racks; cabinets;

 

 

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1    telecommunications cabling infrastructure; raised floor
2    systems; peripheral components or systems; software;
3    mechanical, electrical, or plumbing systems; battery
4    systems; cooling systems and towers; temperature control
5    systems; other cabling; and other data center
6    infrastructure equipment and systems necessary to operate
7    qualified tangible personal property, including fixtures;
8    and component parts of any of the foregoing, including
9    installation, maintenance, repair, refurbishment, and
10    replacement of qualified tangible personal property to
11    generate, transform, transmit, distribute, or manage
12    electricity necessary to operate qualified tangible
13    personal property; and all other tangible personal
14    property that is essential to the operations of a computer
15    data center. The term "qualified tangible personal
16    property" also includes building materials physically
17    incorporated in to the qualifying data center. To document
18    the exemption allowed under this Section, the retailer
19    must obtain from the purchaser a copy of the certificate
20    of eligibility issued by the Department of Commerce and
21    Economic Opportunity.
22    This item (32) is exempt from the provisions of Section
233-55.
24    (33) Beginning July 1, 2022, breast pumps, breast pump
25collection and storage supplies, and breast pump kits. This
26item (33) is exempt from the provisions of Section 3-55. As

 

 

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

 

 

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1    shells, and other similar products; and (5) creams,
2    ointments, and other similar products that relieve
3    breastfeeding-related symptoms or conditions of the
4    breasts or nipples, unless sold as part of a breast pump
5    kit that is pre-packaged by the breast pump manufacturer
6    or distributor.
7        "Breast pump kit" means a kit that: (1) contains no
8    more than a breast pump, breast pump collection and
9    storage supplies, a rechargeable battery for operating the
10    breast pump, a breastmilk cooler, bottle stands, ice
11    packs, and a breast pump carrying case; and (2) is
12    pre-packaged as a breast pump kit by the breast pump
13    manufacturer or distributor.
14    (34) (33) Tangible personal property sold by or on behalf
15of the State Treasurer pursuant to the Revised Uniform
16Unclaimed Property Act. This item (34) (33) is exempt from the
17provisions of Section 3-55.
18(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
19101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
2070, Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
2175-15, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-9-22.)
 
22    Section 5-20. The Retailers' Occupation Tax Act is amended
23by changing Section 2-5 as follows:
 
24    (35 ILCS 120/2-5)

 

 

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

 

 

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

 

 

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1    special order or purchased for lease, certified by the
2    purchaser to be used primarily for graphic arts
3    production. Equipment includes chemicals or chemicals
4    acting as catalysts but only if the chemicals or chemicals
5    acting as catalysts effect a direct and immediate change
6    upon a graphic arts product. Beginning on July 1, 2017,
7    graphic arts machinery and equipment is included in the
8    manufacturing and assembling machinery and equipment
9    exemption under paragraph (14).
10        (5) A motor vehicle that is used for automobile
11    renting, as defined in the Automobile Renting Occupation
12    and Use Tax Act. This paragraph is exempt from the
13    provisions of Section 2-70.
14        (6) Personal property sold by a teacher-sponsored
15    student organization affiliated with an elementary or
16    secondary school located in Illinois.
17        (7) Until July 1, 2003, proceeds of that portion of
18    the selling price of a passenger car the sale of which is
19    subject to the Replacement Vehicle Tax.
20        (8) Personal property sold to an Illinois county fair
21    association for use in conducting, operating, or promoting
22    the county fair.
23        (9) Personal property sold to a not-for-profit arts or
24    cultural organization that establishes, by proof required
25    by the Department by rule, that it has received an
26    exemption under Section 501(c)(3) of the Internal Revenue

 

 

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1    Code and that is organized and operated primarily for the
2    presentation or support of arts or cultural programming,
3    activities, or services. These organizations include, but
4    are not limited to, music and dramatic arts organizations
5    such as symphony orchestras and theatrical groups, arts
6    and cultural service organizations, local arts councils,
7    visual arts organizations, and media arts organizations.
8    On and after July 1, 2001 (the effective date of Public Act
9    92-35), however, an entity otherwise eligible for this
10    exemption shall not make tax-free purchases unless it has
11    an active identification number issued by the Department.
12        (10) Personal property sold by a corporation, society,
13    association, foundation, institution, or organization,
14    other than a limited liability company, that is organized
15    and operated as a not-for-profit service enterprise for
16    the benefit of persons 65 years of age or older if the
17    personal property was not purchased by the enterprise for
18    the purpose of resale by the enterprise.
19        (11) Personal property sold to a governmental body, to
20    a corporation, society, association, foundation, or
21    institution organized and operated exclusively for
22    charitable, religious, or educational purposes, or to a
23    not-for-profit corporation, society, association,
24    foundation, institution, or organization that has no
25    compensated officers or employees and that is organized
26    and operated primarily for the recreation of persons 55

 

 

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

 

 

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

 

 

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

 

 

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1    transportation of the property, out of Illinois on a
2    standard uniform bill of lading showing the seller of the
3    property as the shipper or consignor of the property to a
4    destination outside Illinois, for use outside Illinois.
5        (18) Legal tender, currency, medallions, or gold or
6    silver coinage issued by the State of Illinois, the
7    government of the United States of America, or the
8    government of any foreign country, and bullion.
9        (19) Until July 1, 2003, oil field exploration,
10    drilling, and production equipment, including (i) rigs and
11    parts of rigs, rotary rigs, cable tool rigs, and workover
12    rigs, (ii) pipe and tubular goods, including casing and
13    drill strings, (iii) pumps and pump-jack units, (iv)
14    storage tanks and flow lines, (v) any individual
15    replacement part for oil field exploration, drilling, and
16    production equipment, and (vi) machinery and equipment
17    purchased for lease; but excluding motor vehicles required
18    to be registered under the Illinois Vehicle Code.
19        (20) Photoprocessing machinery and equipment,
20    including repair and replacement parts, both new and used,
21    including that manufactured on special order, certified by
22    the purchaser to be used primarily for photoprocessing,
23    and including photoprocessing machinery and equipment
24    purchased for lease.
25        (21) Until July 1, 2028, coal and aggregate
26    exploration, mining, off-highway hauling, processing,

 

 

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

 

 

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1    to a change in the flight number of that aircraft.
2        (23) A transaction in which the purchase order is
3    received by a florist who is located outside Illinois, but
4    who has a florist located in Illinois deliver the property
5    to the purchaser or the purchaser's donee in Illinois.
6        (24) Fuel consumed or used in the operation of ships,
7    barges, or vessels that are used primarily in or for the
8    transportation of property or the conveyance of persons
9    for hire on rivers bordering on this State if the fuel is
10    delivered by the seller to the purchaser's barge, ship, or
11    vessel while it is afloat upon that bordering river.
12        (25) Except as provided in item (25-5) of this
13    Section, a motor vehicle sold in this State to a
14    nonresident even though the motor vehicle is delivered to
15    the nonresident in this State, if the motor vehicle is not
16    to be titled in this State, and if a drive-away permit is
17    issued to the motor vehicle as provided in Section 3-603
18    of the Illinois Vehicle Code or if the nonresident
19    purchaser has vehicle registration plates to transfer to
20    the motor vehicle upon returning to his or her home state.
21    The issuance of the drive-away permit or having the
22    out-of-state registration plates to be transferred is
23    prima facie evidence that the motor vehicle will not be
24    titled in this State.
25        (25-5) The exemption under item (25) does not apply if
26    the state in which the motor vehicle will be titled does

 

 

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

 

 

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

 

 

10300SB1963ham002- 74 -LRB103 25648 HLH 62334 a

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

 

 

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

 

 

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

 

 

10300SB1963ham002- 77 -LRB103 25648 HLH 62334 a

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

 

 

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

 

 

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1    Mental Health Rehabilitation Act of 2013.
2        (36) Beginning August 2, 2001, computers and
3    communications equipment utilized for any hospital purpose
4    and equipment used in the diagnosis, analysis, or
5    treatment of hospital patients sold to a lessor who leases
6    the equipment, under a lease of one year or longer
7    executed or in effect at the time of the purchase, to a
8    hospital that has been issued an active tax exemption
9    identification number by the Department under Section 1g
10    of this Act. This paragraph is exempt from the provisions
11    of Section 2-70.
12        (37) Beginning August 2, 2001, personal property sold
13    to a lessor who leases the property, under a lease of one
14    year or longer executed or in effect at the time of the
15    purchase, to a governmental body that has been issued an
16    active tax exemption identification number by the
17    Department under Section 1g of this Act. This paragraph is
18    exempt from the provisions of Section 2-70.
19        (38) Beginning on January 1, 2002 and through June 30,
20    2016, tangible personal property purchased from an
21    Illinois retailer by a taxpayer engaged in centralized
22    purchasing activities in Illinois who will, upon receipt
23    of the property in Illinois, temporarily store the
24    property in Illinois (i) for the purpose of subsequently
25    transporting it outside this State for use or consumption
26    thereafter solely outside this State or (ii) for the

 

 

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1    purpose of being processed, fabricated, or manufactured
2    into, attached to, or incorporated into other tangible
3    personal property to be transported outside this State and
4    thereafter used or consumed solely outside this State. The
5    Director of Revenue shall, pursuant to rules adopted in
6    accordance with the Illinois Administrative Procedure Act,
7    issue a permit to any taxpayer in good standing with the
8    Department who is eligible for the exemption under this
9    paragraph (38). The permit issued under this paragraph
10    (38) shall authorize the holder, to the extent and in the
11    manner specified in the rules adopted under this Act, to
12    purchase tangible personal property from a retailer exempt
13    from the taxes imposed by this Act. Taxpayers shall
14    maintain all necessary books and records to substantiate
15    the use and consumption of all such tangible personal
16    property outside of the State of Illinois.
17        (39) Beginning January 1, 2008, tangible personal
18    property used in the construction or maintenance of a
19    community water supply, as defined under Section 3.145 of
20    the Environmental Protection Act, that is operated by a
21    not-for-profit corporation that holds a valid water supply
22    permit issued under Title IV of the Environmental
23    Protection Act. This paragraph is exempt from the
24    provisions of Section 2-70.
25        (40) Beginning January 1, 2010 and continuing through
26    December 31, 2029 December 31, 2024, materials, parts,

 

 

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1    equipment, components, and furnishings incorporated into
2    or upon an aircraft as part of the modification,
3    refurbishment, completion, replacement, repair, or
4    maintenance of the aircraft. This exemption includes
5    consumable supplies used in the modification,
6    refurbishment, completion, replacement, repair, and
7    maintenance of aircraft. However, until January 1, 2024,
8    this exemption , but excludes any materials, parts,
9    equipment, components, and consumable supplies used in the
10    modification, replacement, repair, and maintenance of
11    aircraft engines or power plants, whether such engines or
12    power plants are installed or uninstalled upon any such
13    aircraft. "Consumable supplies" include, but are not
14    limited to, adhesive, tape, sandpaper, general purpose
15    lubricants, cleaning solution, latex gloves, and
16    protective films.
17        Beginning January 1, 2010 and continuing through
18    December 31, 2023, this This exemption applies only to the
19    sale of qualifying tangible personal property to persons
20    who modify, refurbish, complete, replace, or maintain an
21    aircraft and who (i) hold an Air Agency Certificate and
22    are empowered to operate an approved repair station by the
23    Federal Aviation Administration, (ii) have a Class IV
24    Rating, and (iii) conduct operations in accordance with
25    Part 145 of the Federal Aviation Regulations. The
26    exemption does not include aircraft operated by a

 

 

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1    commercial air carrier providing scheduled passenger air
2    service pursuant to authority issued under Part 121 or
3    Part 129 of the Federal Aviation Regulations. From January
4    1, 2024 through December 31, 2029, this exemption applies
5    only to the use of qualifying tangible personal property
6    by: (A) persons who modify, refurbish, complete, repair,
7    replace, or maintain aircraft and who (i) hold an Air
8    Agency Certificate and are empowered to operate an
9    approved repair station by the Federal Aviation
10    Administration, (ii) have a Class IV Rating, and (iii)
11    conduct operations in accordance with Part 145 of the
12    Federal Aviation Regulations; and (B) persons who engage
13    in the modification, replacement, repair, and maintenance
14    of aircraft engines or power plants without regard to
15    whether or not those persons meet the qualifications of
16    item (A).
17        The changes made to this paragraph (40) by Public Act
18    98-534 are declarative of existing law. It is the intent
19    of the General Assembly that the exemption under this
20    paragraph (40) applies continuously from January 1, 2010
21    through December 31, 2024; however, no claim for credit or
22    refund is allowed for taxes paid as a result of the
23    disallowance of this exemption on or after January 1, 2015
24    and prior to February 5, 2020 (the effective date of
25    Public Act 101-629) this amendatory Act of the 101st
26    General Assembly.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    breastfeeding-related symptoms or conditions of the
2    breasts or nipples, unless sold as part of a breast pump
3    kit that is pre-packaged by the breast pump manufacturer
4    or distributor.
5        "Breast pump kit" means a kit that: (1) contains no
6    more than a breast pump, breast pump collection and
7    storage supplies, a rechargeable battery for operating the
8    breast pump, a breastmilk cooler, bottle stands, ice
9    packs, and a breast pump carrying case; and (2) is
10    pre-packaged as a breast pump kit by the breast pump
11    manufacturer or distributor.
12        (47) (46) Tangible personal property sold by or on
13    behalf of the State Treasurer pursuant to the Revised
14    Uniform Unclaimed Property Act. This item (47) (46) is
15    exempt from the provisions of Section 2-70.
16(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
17101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
188-27-21; 102-700, Article 70, Section 70-20, eff. 4-19-22;
19102-700, Article 75, Section 75-20, eff. 4-19-22; 102-813,
20eff. 5-13-22; 102-1026, eff. 5-27-22; revised 8-15-22.)
 
21
ARTICLE 10. ETHANOL BLENDED FUEL

 
22    Section 10-5. The Use Tax Act is amended by changing
23Sections 3-10, 3-40, and 3-44 and by adding Section 3-44.3 as
24follows:
 

 

 

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1    (35 ILCS 105/3-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4either the selling price or the fair market value, if any, of
5the tangible personal property. In all cases where property
6functionally used or consumed is the same as the property that
7was purchased at retail, then the tax is imposed on the selling
8price of the property. In all cases where property
9functionally used or consumed is a by-product or waste product
10that has been refined, manufactured, or produced from property
11purchased at retail, then the tax is imposed on the lower of
12the fair market value, if any, of the specific property so used
13in this State or on the selling price of the property purchased
14at retail. For purposes of this Section "fair market value"
15means the price at which property would change hands between a
16willing buyer and a willing seller, neither being under any
17compulsion to buy or sell and both having reasonable knowledge
18of the relevant facts. The fair market value shall be
19established by Illinois sales by the taxpayer of the same
20property as that functionally used or consumed, or if there
21are no such sales by the taxpayer, then comparable sales or
22purchases of property of like kind and character in Illinois.
23    Beginning on July 1, 2000 and through December 31, 2000,
24with respect to motor fuel, as defined in Section 1.1 of the
25Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

 

 

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1the Use Tax Act, the tax is imposed at the rate of 1.25%.
2    Beginning on August 6, 2010 through August 15, 2010, and
3beginning again on August 5, 2022 through August 14, 2022,
4with respect to sales tax holiday items as defined in Section
53-6 of this Act, the tax is imposed at the rate of 1.25%.
6    With respect to gasohol, the tax imposed by this Act
7applies to (i) 70% of the proceeds of sales made on or after
8January 1, 1990, and before July 1, 2003, (ii) 80% of the
9proceeds of sales made on or after July 1, 2003 and on or
10before July 1, 2017, and (iii) 100% of the proceeds of sales
11made after July 1, 2017 and prior to January 1, 2024, (iv) 90%
12of the proceeds of sales made on or after January 1, 2024 and
13on or before December 31, 2028, and (v) 100% of the proceeds of
14sales made after December 31, 2028 thereafter. If, at any
15time, however, the tax under this Act on sales of gasohol is
16imposed at the rate of 1.25%, then the tax imposed by this Act
17applies to 100% of the proceeds of sales of gasohol made during
18that time.
19    With respect to mid-range ethanol blends, the tax imposed
20by this Act applies to (i) 80% of the proceeds of sales made on
21or after January 1, 2024 and on or before December 31, 2028 and
22(ii) 100% of the proceeds of sales made thereafter. If, at any
23time, however, the tax under this Act on sales of mid-range
24ethanol blends is imposed at the rate of 1.25%, then the tax
25imposed by this Act applies to 100% of the proceeds of sales of
26mid-range ethanol blends made during that time.

 

 

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1    With respect to majority blended ethanol fuel, the tax
2imposed by this Act does not apply to the proceeds of sales
3made on or after July 1, 2003 and on or before December 31,
42028 December 31, 2023 but applies to 100% of the proceeds of
5sales made thereafter.
6    With respect to biodiesel blends with no less than 1% and
7no more than 10% biodiesel, the tax imposed by this Act applies
8to (i) 80% of the proceeds of sales made on or after July 1,
92003 and on or before December 31, 2018 and (ii) 100% of the
10proceeds of sales made after December 31, 2018 and before
11January 1, 2024. On and after January 1, 2024 and on or before
12December 31, 2030, the taxation of biodiesel, renewable
13diesel, and biodiesel blends shall be as provided in Section
143-5.1. If, at any time, however, the tax under this Act on
15sales of biodiesel blends with no less than 1% and no more than
1610% biodiesel is imposed at the rate of 1.25%, then the tax
17imposed by this Act applies to 100% of the proceeds of sales of
18biodiesel blends with no less than 1% and no more than 10%
19biodiesel made during that time.
20    With respect to biodiesel and biodiesel blends with more
21than 10% but no more than 99% biodiesel, the tax imposed by
22this Act does not apply to the proceeds of sales made on or
23after July 1, 2003 and on or before December 31, 2023. On and
24after January 1, 2024 and on or before December 31, 2030, the
25taxation of biodiesel, renewable diesel, and biodiesel blends
26shall be as provided in Section 3-5.1.

 

 

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1    Until July 1, 2022 and beginning again on July 1, 2023,
2with respect to food for human consumption that is to be
3consumed off the premises where it is sold (other than
4alcoholic beverages, food consisting of or infused with adult
5use cannabis, soft drinks, and food that has been prepared for
6immediate consumption), the tax is imposed at the rate of 1%.
7Beginning on July 1, 2022 and until July 1, 2023, with respect
8to food for human consumption that is to be consumed off the
9premises where it is sold (other than alcoholic beverages,
10food consisting of or infused with adult use cannabis, soft
11drinks, and food that has been prepared for immediate
12consumption), the tax is imposed at the rate of 0%.
13    With respect to prescription and nonprescription
14medicines, drugs, medical appliances, products classified as
15Class III medical devices by the United States Food and Drug
16Administration that are used for cancer treatment pursuant to
17a prescription, as well as any accessories and components
18related to those devices, modifications to a motor vehicle for
19the purpose of rendering it usable by a person with a
20disability, and insulin, blood sugar testing materials,
21syringes, and needles used by human diabetics, the tax is
22imposed at the rate of 1%. For the purposes of this Section,
23until September 1, 2009: the term "soft drinks" means any
24complete, finished, ready-to-use, non-alcoholic drink, whether
25carbonated or not, including, but not limited to, soda water,
26cola, fruit juice, vegetable juice, carbonated water, and all

 

 

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

 

 

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

 

 

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1Act 98-122) this amendatory Act of the 98th General Assembly,
2"prescription and nonprescription medicines and drugs"
3includes medical cannabis purchased from a registered
4dispensing organization under the Compassionate Use of Medical
5Cannabis Program Act.
6    As used in this Section, "adult use cannabis" means
7cannabis subject to tax under the Cannabis Cultivation
8Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
9and does not include cannabis subject to tax under the
10Compassionate Use of Medical Cannabis Program Act.
11    If the property that is purchased at retail from a
12retailer is acquired outside Illinois and used outside
13Illinois before being brought to Illinois for use here and is
14taxable under this Act, the "selling price" on which the tax is
15computed shall be reduced by an amount that represents a
16reasonable allowance for depreciation for the period of prior
17out-of-state use.
18(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
19102-4, eff. 4-27-21; 102-700, Article 20, Section 20-5, eff.
204-19-22; 102-700, Article 60, Section 60-15, eff. 4-19-22;
21102-700, Article 65, Section 65-5, eff. 4-19-22; revised
225-27-22.)
 
23    (35 ILCS 105/3-40)  (from Ch. 120, par. 439.3-40)
24    Sec. 3-40. Gasohol. As used in this Act, "gasohol" means
25motor fuel that is a blend of denatured ethanol and gasoline

 

 

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1that contains no more than 1.25% water by weight. Prior to
2January 1, 2024, the The blend must contain 90% gasoline and
310% denatured ethanol. On and after January 1, 2024, the blend
4must contain 85% gasoline and 15% denatured ethanol. A maximum
5of one percent error factor in the amount of denatured ethanol
6used in the blend is allowable to compensate for blending
7equipment variations. Any person who knowingly sells or
8represents as gasohol any fuel that does not qualify as
9gasohol under this Act is guilty of a business offense and
10shall be fined not more than $100 for each day that the sale or
11representation takes place after notification from the
12Department of Agriculture that the fuel in question does not
13qualify as gasohol.
14(Source: P.A. 93-724, eff. 7-13-04.)
 
15    (35 ILCS 105/3-44)
16    Sec. 3-44. Majority blended ethanol fuel. Prior to January
171, 2024, "majority "Majority blended ethanol fuel" means motor
18fuel that contains not less than 70% and no more than 90%
19denatured ethanol and no less than 10% and no more than 30%
20gasoline. On and after January 1, 2024, "majority blended
21ethanol fuel" means motor fuel that is capable of being used in
22the operation of flexible fuel vehicles and contains at least
2351% and not more than 83% ethanol, by volume, as specified in
24ASTM Standard D5798-11, and no less than 17% and no more than
2549% gasoline.

 

 

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1(Source: P.A. 93-17, eff. 6-11-03.)
 
2    (35 ILCS 105/3-44.3 new)
3    Sec. 3-44.3. Mid-range ethanol blend. "Mid-range ethanol
4blend" means a blend of gasoline and denatured ethanol that
5contains at least 20% but less than 51% denatured ethanol.
 
6    Section 10-10. The Service Use Tax Act is amended by
7changing Section 3-10 as follows:
 
8    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
9    Sec. 3-10. Rate of tax. Unless otherwise provided in this
10Section, the tax imposed by this Act is at the rate of 6.25% of
11the selling price of tangible personal property transferred as
12an incident to the sale of service, but, for the purpose of
13computing this tax, in no event shall the selling price be less
14than the cost price of the property to the serviceman.
15    Beginning on July 1, 2000 and through December 31, 2000,
16with respect to motor fuel, as defined in Section 1.1 of the
17Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
18the Use Tax Act, the tax is imposed at the rate of 1.25%.
19    With respect to gasohol, as defined in the Use Tax Act, the
20tax imposed by this Act applies to (i) 70% of the selling price
21of property transferred as an incident to the sale of service
22on or after January 1, 1990, and before July 1, 2003, (ii) 80%
23of the selling price of property transferred as an incident to

 

 

10300SB1963ham002- 98 -LRB103 25648 HLH 62334 a

1the sale of service on or after July 1, 2003 and on or before
2July 1, 2017, and (iii) 100% of the selling price of property
3transferred as an incident to the sale of service after July 1,
42017 and before January 1, 2024, (iv) 90% of the selling price
5of property transferred as an incident to the sale of service
6on or after January 1, 2024 and on or before December 31, 2028,
7and (v) 100% of the selling price of property transferred as an
8incident to the sale of service after December 31, 2028
9thereafter. If, at any time, however, the tax under this Act on
10sales of gasohol, as defined in the Use Tax Act, is imposed at
11the rate of 1.25%, then the tax imposed by this Act applies to
12100% of the proceeds of sales of gasohol made during that time.
13    With respect to mid-range ethanol blends, as defined in
14Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
15applies to (i) 80% of the selling price of property
16transferred as an incident to the sale of service on or after
17January 1, 2024 and on or before December 31, 2028 and (ii)
18100% of the selling price of property transferred as an
19incident to the sale of service after December 31, 2028. If, at
20any time, however, the tax under this Act on sales of mid-range
21ethanol blends is imposed at the rate of 1.25%, then the tax
22imposed by this Act applies to 100% of the selling price of
23mid-range ethanol blends transferred as an incident to the
24sale of service during that time.
25    With respect to majority blended ethanol fuel, as defined
26in the Use Tax Act, the tax imposed by this Act does not apply

 

 

10300SB1963ham002- 99 -LRB103 25648 HLH 62334 a

1to the selling price of property transferred as an incident to
2the sale of service on or after July 1, 2003 and on or before
3December 31, 2028 December 31, 2023 but applies to 100% of the
4selling price thereafter.
5    With respect to biodiesel blends, as defined in the Use
6Tax Act, with no less than 1% and no more than 10% biodiesel,
7the tax imposed by this Act applies to (i) 80% of the selling
8price of property transferred as an incident to the sale of
9service on or after July 1, 2003 and on or before December 31,
102018 and (ii) 100% of the proceeds of the selling price after
11December 31, 2018 and before January 1, 2024. On and after
12January 1, 2024 and on or before December 31, 2030, the
13taxation of biodiesel, renewable diesel, and biodiesel blends
14shall be as provided in Section 3-5.1 of the Use Tax Act. If,
15at any time, however, the tax under this Act on sales of
16biodiesel blends, as defined in the Use Tax Act, with no less
17than 1% and no more than 10% biodiesel is imposed at the rate
18of 1.25%, then the tax imposed by this Act applies to 100% of
19the proceeds of sales of biodiesel blends with no less than 1%
20and no more than 10% biodiesel made during that time.
21    With respect to biodiesel, as defined in the Use Tax Act,
22and biodiesel blends, as defined in the Use Tax Act, with more
23than 10% but no more than 99% biodiesel, the tax imposed by
24this Act does not apply to the proceeds of the selling price of
25property transferred as an incident to the sale of service on
26or after July 1, 2003 and on or before December 31, 2023. On

 

 

10300SB1963ham002- 100 -LRB103 25648 HLH 62334 a

1and after January 1, 2024 and on or before December 31, 2030,
2the taxation of biodiesel, renewable diesel, and biodiesel
3blends shall be as provided in Section 3-5.1 of the Use Tax
4Act.
5    At the election of any registered serviceman made for each
6fiscal year, sales of service in which the aggregate annual
7cost price of tangible personal property transferred as an
8incident to the sales of service is less than 35%, or 75% in
9the case of servicemen transferring prescription drugs or
10servicemen engaged in graphic arts production, of the
11aggregate annual total gross receipts from all sales of
12service, the tax imposed by this Act shall be based on the
13serviceman's cost price of the tangible personal property
14transferred as an incident to the sale of those services.
15    Until July 1, 2022 and beginning again on July 1, 2023, the
16tax shall be imposed at the rate of 1% on food prepared for
17immediate consumption and transferred incident to a sale of
18service subject to this Act or the Service Occupation Tax Act
19by an entity licensed under the Hospital Licensing Act, the
20Nursing Home Care Act, the Assisted Living and Shared Housing
21Act, the ID/DD Community Care Act, the MC/DD Act, the
22Specialized Mental Health Rehabilitation Act of 2013, or the
23Child Care Act of 1969, or an entity that holds a permit issued
24pursuant to the Life Care Facilities Act. Until July 1, 2022
25and beginning again on July 1, 2023, the tax shall also be
26imposed at the rate of 1% on food for human consumption that is

 

 

10300SB1963ham002- 101 -LRB103 25648 HLH 62334 a

1to be consumed off the premises where it is sold (other than
2alcoholic beverages, food consisting of or infused with adult
3use cannabis, soft drinks, and food that has been prepared for
4immediate consumption and is not otherwise included in this
5paragraph).
6    Beginning on July 1, 2022 and until July 1, 2023, the tax
7shall be imposed at the rate of 0% on food prepared for
8immediate consumption and transferred incident to a sale of
9service subject to this Act or the Service Occupation Tax Act
10by an entity licensed under the Hospital Licensing Act, the
11Nursing Home Care Act, the Assisted Living and Shared Housing
12Act, the ID/DD Community Care Act, the MC/DD Act, the
13Specialized Mental Health Rehabilitation Act of 2013, or the
14Child Care Act of 1969, or an entity that holds a permit issued
15pursuant to the Life Care Facilities Act. Beginning on July 1,
162022 and until July 1, 2023, the tax shall also be imposed at
17the rate of 0% on food for human consumption that is to be
18consumed off the premises where it is sold (other than
19alcoholic beverages, food consisting of or infused with adult
20use cannabis, soft drinks, and food that has been prepared for
21immediate consumption and is not otherwise included in this
22paragraph).
23    The tax shall also be imposed at the rate of 1% on
24prescription and nonprescription medicines, drugs, medical
25appliances, products classified as Class III medical devices
26by the United States Food and Drug Administration that are

 

 

10300SB1963ham002- 102 -LRB103 25648 HLH 62334 a

1used for cancer treatment pursuant to a prescription, as well
2as any accessories and components related to those devices,
3modifications to a motor vehicle for the purpose of rendering
4it usable by a person with a disability, and insulin, blood
5sugar testing materials, syringes, and needles used by human
6diabetics. For the purposes of this Section, until September
71, 2009: the term "soft drinks" means any complete, finished,
8ready-to-use, non-alcoholic drink, whether carbonated or not,
9including, but not limited to, soda water, cola, fruit juice,
10vegetable juice, carbonated water, and all other preparations
11commonly known as soft drinks of whatever kind or description
12that are contained in any closed or sealed bottle, can,
13carton, or container, regardless of size; but "soft drinks"
14does not include coffee, tea, non-carbonated water, infant
15formula, milk or milk products as defined in the Grade A
16Pasteurized Milk and Milk Products Act, or drinks containing
1750% or more natural fruit or vegetable juice.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "soft drinks" means non-alcoholic
20beverages that contain natural or artificial sweeteners. "Soft
21drinks" does do not include beverages that contain milk or
22milk products, soy, rice or similar milk substitutes, or
23greater than 50% of vegetable or fruit juice by volume.
24    Until August 1, 2009, and notwithstanding any other
25provisions of this Act, "food for human consumption that is to
26be consumed off the premises where it is sold" includes all

 

 

10300SB1963ham002- 103 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 104 -LRB103 25648 HLH 62334 a

1definition of "over-the-counter-drugs". For the purposes of
2this paragraph, "over-the-counter-drug" means a drug for human
3use that contains a label that identifies the product as a drug
4as required by 21 CFR C.F.R. § 201.66. The
5"over-the-counter-drug" label includes:
6        (A) a A "Drug Facts" panel; or
7        (B) a A statement of the "active ingredient(s)" with a
8    list of those ingredients contained in the compound,
9    substance or preparation.
10    Beginning on January 1, 2014 (the effective date of Public
11Act 98-122), "prescription and nonprescription medicines and
12drugs" includes medical cannabis purchased from a registered
13dispensing organization under the Compassionate Use of Medical
14Cannabis Program Act.
15    As used in this Section, "adult use cannabis" means
16cannabis subject to tax under the Cannabis Cultivation
17Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
18and does not include cannabis subject to tax under the
19Compassionate Use of Medical Cannabis Program Act.
20    If the property that is acquired from a serviceman is
21acquired outside Illinois and used outside Illinois before
22being brought to Illinois for use here and is taxable under
23this Act, the "selling price" on which the tax is computed
24shall be reduced by an amount that represents a reasonable
25allowance for depreciation for the period of prior
26out-of-state use.

 

 

10300SB1963ham002- 105 -LRB103 25648 HLH 62334 a

1(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
2102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article
320, Section 20-10, eff. 4-19-22; 102-700, Article 60, Section
460-20, eff. 4-19-22; revised 6-1-22.)
 
5    Section 10-15. The Service Occupation Tax Act is amended
6by changing Section 3-10 as follows:
 
7    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
8    Sec. 3-10. Rate of tax. Unless otherwise provided in this
9Section, the tax imposed by this Act is at the rate of 6.25% of
10the "selling price", as defined in Section 2 of the Service Use
11Tax Act, of the tangible personal property. For the purpose of
12computing this tax, in no event shall the "selling price" be
13less than the cost price to the serviceman of the tangible
14personal property transferred. The selling price of each item
15of tangible personal property transferred as an incident of a
16sale of service may be shown as a distinct and separate item on
17the serviceman's billing to the service customer. If the
18selling price is not so shown, the selling price of the
19tangible personal property is deemed to be 50% of the
20serviceman's entire billing to the service customer. When,
21however, a serviceman contracts to design, develop, and
22produce special order machinery or equipment, the tax imposed
23by this Act shall be based on the serviceman's cost price of
24the tangible personal property transferred incident to the

 

 

10300SB1963ham002- 106 -LRB103 25648 HLH 62334 a

1completion of the contract.
2    Beginning on July 1, 2000 and through December 31, 2000,
3with respect to motor fuel, as defined in Section 1.1 of the
4Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
5the Use Tax Act, the tax is imposed at the rate of 1.25%.
6    With respect to gasohol, as defined in the Use Tax Act, the
7tax imposed by this Act shall apply to (i) 70% of the cost
8price of property transferred as an incident to the sale of
9service on or after January 1, 1990, and before July 1, 2003,
10(ii) 80% of the selling price of property transferred as an
11incident to the sale of service on or after July 1, 2003 and on
12or before July 1, 2017, and (iii) 100% of the selling price of
13property transferred as an incident to the sale of service
14after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
15the selling price of property transferred as an incident to
16the sale of service on or after January 1, 2024 and on or
17before December 31, 2028, and (v) 100% of the selling price of
18property transferred as an incident to the sale of service
19after December 31, 2028 cost price thereafter. If, at any
20time, however, the tax under this Act on sales of gasohol, as
21defined in the Use Tax Act, is imposed at the rate of 1.25%,
22then the tax imposed by this Act applies to 100% of the
23proceeds of sales of gasohol made during that time.
24    With respect to mid-range ethanol blends, as defined in
25Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
26applies to (i) 80% of the selling price of property

 

 

10300SB1963ham002- 107 -LRB103 25648 HLH 62334 a

1transferred as an incident to the sale of service on or after
2January 1, 2024 and on or before December 31, 2028 and (ii)
3100% of the selling price of property transferred as an
4incident to the sale of service after December 31, 2028. If, at
5any time, however, the tax under this Act on sales of mid-range
6ethanol blends is imposed at the rate of 1.25%, then the tax
7imposed by this Act applies to 100% of the selling price of
8mid-range ethanol blends transferred as an incident to the
9sale of service during that time.
10    With respect to majority blended ethanol fuel, as defined
11in the Use Tax Act, the tax imposed by this Act does not apply
12to the selling price of property transferred as an incident to
13the sale of service on or after July 1, 2003 and on or before
14December 31, 2028 December 31, 2023 but applies to 100% of the
15selling price thereafter.
16    With respect to biodiesel blends, as defined in the Use
17Tax Act, with no less than 1% and no more than 10% biodiesel,
18the tax imposed by this Act applies to (i) 80% of the selling
19price of property transferred as an incident to the sale of
20service on or after July 1, 2003 and on or before December 31,
212018 and (ii) 100% of the proceeds of the selling price after
22December 31, 2018 and before January 1, 2024. On and after
23January 1, 2024 and on or before December 31, 2030, the
24taxation of biodiesel, renewable diesel, and biodiesel blends
25shall be as provided in Section 3-5.1 of the Use Tax Act. If,
26at any time, however, the tax under this Act on sales of

 

 

10300SB1963ham002- 108 -LRB103 25648 HLH 62334 a

1biodiesel blends, as defined in the Use Tax Act, with no less
2than 1% and no more than 10% biodiesel is imposed at the rate
3of 1.25%, then the tax imposed by this Act applies to 100% of
4the proceeds of sales of biodiesel blends with no less than 1%
5and no more than 10% biodiesel made during that time.
6    With respect to biodiesel, as defined in the Use Tax Act,
7and biodiesel blends, as defined in the Use Tax Act, with more
8than 10% but no more than 99% biodiesel material, the tax
9imposed by this Act does not apply to the proceeds of the
10selling price of property transferred as an incident to the
11sale of service on or after July 1, 2003 and on or before
12December 31, 2023. On and after January 1, 2024 and on or
13before December 31, 2030, the taxation of biodiesel, renewable
14diesel, and biodiesel blends shall be as provided in Section
153-5.1 of the Use Tax Act.
16    At the election of any registered serviceman made for each
17fiscal year, sales of service in which the aggregate annual
18cost price of tangible personal property transferred as an
19incident to the sales of service is less than 35%, or 75% in
20the case of servicemen transferring prescription drugs or
21servicemen engaged in graphic arts production, of the
22aggregate annual total gross receipts from all sales of
23service, the tax imposed by this Act shall be based on the
24serviceman's cost price of the tangible personal property
25transferred incident to the sale of those services.
26    Until July 1, 2022 and beginning again on July 1, 2023, the

 

 

10300SB1963ham002- 109 -LRB103 25648 HLH 62334 a

1tax shall be imposed at the rate of 1% on food prepared for
2immediate consumption and transferred incident to a sale of
3service subject to this Act or the Service Use Tax Act by an
4entity licensed under the Hospital Licensing Act, the Nursing
5Home Care Act, the Assisted Living and Shared Housing Act, the
6ID/DD Community Care Act, the MC/DD Act, the Specialized
7Mental Health Rehabilitation Act of 2013, or the Child Care
8Act of 1969, or an entity that holds a permit issued pursuant
9to the Life Care Facilities Act. Until July 1, 2022 and
10beginning again on July 1, 2023, the tax shall also be imposed
11at the rate of 1% on food for human consumption that is to be
12consumed off the premises where it is sold (other than
13alcoholic beverages, food consisting of or infused with adult
14use cannabis, soft drinks, and food that has been prepared for
15immediate consumption and is not otherwise included in this
16paragraph).
17    Beginning on July 1, 2022 and until July 1, 2023, the tax
18shall be imposed at the rate of 0% on food prepared for
19immediate consumption and transferred incident to a sale of
20service subject to this Act or the Service Use Tax Act by an
21entity licensed under the Hospital Licensing Act, the Nursing
22Home Care Act, the Assisted Living and Shared Housing Act, the
23ID/DD Community Care Act, the MC/DD Act, the Specialized
24Mental Health Rehabilitation Act of 2013, or the Child Care
25Act of 1969, or an entity that holds a permit issued pursuant
26to the Life Care Facilities Act. Beginning July 1, 2022 and

 

 

10300SB1963ham002- 110 -LRB103 25648 HLH 62334 a

1until July 1, 2023, the tax shall also be imposed at the rate
2of 0% on food for human consumption that is to be consumed off
3the premises where it is sold (other than alcoholic beverages,
4food consisting of or infused with adult use cannabis, soft
5drinks, and food that has been prepared for immediate
6consumption and is not otherwise included in this paragraph).
7    The tax shall also be imposed at the rate of 1% on
8prescription and nonprescription medicines, drugs, medical
9appliances, products classified as Class III medical devices
10by the United States Food and Drug Administration that are
11used for cancer treatment pursuant to a prescription, as well
12as any accessories and components related to those devices,
13modifications to a motor vehicle for the purpose of rendering
14it usable by a person with a disability, and insulin, blood
15sugar testing materials, syringes, and needles used by human
16diabetics. For the purposes of this Section, until September
171, 2009: the term "soft drinks" means any complete, finished,
18ready-to-use, non-alcoholic drink, whether carbonated or not,
19including, but not limited to, soda water, cola, fruit juice,
20vegetable juice, carbonated water, and all other preparations
21commonly known as soft drinks of whatever kind or description
22that are contained in any closed or sealed can, carton, or
23container, regardless of size; but "soft drinks" does not
24include coffee, tea, non-carbonated water, infant formula,
25milk or milk products as defined in the Grade A Pasteurized
26Milk and Milk Products Act, or drinks containing 50% or more

 

 

10300SB1963ham002- 111 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 112 -LRB103 25648 HLH 62334 a

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

 

 

10300SB1963ham002- 113 -LRB103 25648 HLH 62334 a

1Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
2and does not include cannabis subject to tax under the
3Compassionate Use of Medical Cannabis Program Act.
4(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
5102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article
620, Section 20-15, eff. 4-19-22; 102-700, Article 60, Section
760-25, eff. 4-19-22; revised 6-1-22.)
 
8    Section 10-20. The Retailers' Occupation Tax Act is
9amended by changing Sections 2-10 and 2d as follows:
 
10    (35 ILCS 120/2-10)
11    Sec. 2-10. Rate of tax. Unless otherwise provided in this
12Section, the tax imposed by this Act is at the rate of 6.25% of
13gross receipts from sales of tangible personal property made
14in the course of business.
15    Beginning on July 1, 2000 and through December 31, 2000,
16with respect to motor fuel, as defined in Section 1.1 of the
17Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
18the Use Tax Act, the tax is imposed at the rate of 1.25%.
19    Beginning on August 6, 2010 through August 15, 2010, and
20beginning again on August 5, 2022 through August 14, 2022,
21with respect to sales tax holiday items as defined in Section
222-8 of this Act, the tax is imposed at the rate of 1.25%.
23    Within 14 days after July 1, 2000 (the effective date of
24Public Act 91-872) this amendatory Act of the 91st General

 

 

10300SB1963ham002- 114 -LRB103 25648 HLH 62334 a

1Assembly, each retailer of motor fuel and gasohol shall cause
2the following notice to be posted in a prominently visible
3place on each retail dispensing device that is used to
4dispense motor fuel or gasohol in the State of Illinois: "As of
5July 1, 2000, the State of Illinois has eliminated the State's
6share of sales tax on motor fuel and gasohol through December
731, 2000. The price on this pump should reflect the
8elimination of the tax." The notice shall be printed in bold
9print on a sign that is no smaller than 4 inches by 8 inches.
10The sign shall be clearly visible to customers. Any retailer
11who fails to post or maintain a required sign through December
1231, 2000 is guilty of a petty offense for which the fine shall
13be $500 per day per each retail premises where a violation
14occurs.
15    With respect to gasohol, as defined in the Use Tax Act, the
16tax imposed by this Act applies to (i) 70% of the proceeds of
17sales made on or after January 1, 1990, and before July 1,
182003, (ii) 80% of the proceeds of sales made on or after July
191, 2003 and on or before July 1, 2017, and (iii) 100% of the
20proceeds of sales made after July 1, 2017 and prior to January
211, 2024, (iv) 90% of the proceeds of sales made on or after
22January 1, 2024 and on or before December 31, 2028, and (v)
23100% of the proceeds of sales made after December 31, 2028
24thereafter. If, at any time, however, the tax under this Act on
25sales of gasohol, as defined in the Use Tax Act, is imposed at
26the rate of 1.25%, then the tax imposed by this Act applies to

 

 

10300SB1963ham002- 115 -LRB103 25648 HLH 62334 a

1100% of the proceeds of sales of gasohol made during that time.
2    With respect to mid-range ethanol blends, as defined in
3Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
4applies to (i) 80% of the proceeds of sales made on or after
5January 1, 2024 and on or before December 31, 2028 and (ii)
6100% of the proceeds of sales made after December 31, 2028. If,
7at any time, however, the tax under this Act on sales of
8mid-range ethanol blends is imposed at the rate of 1.25%, then
9the tax imposed by this Act applies to 100% of the proceeds of
10sales of mid-range ethanol blends made during that time.
11    With respect to majority blended ethanol fuel, as defined
12in the Use Tax Act, the tax imposed by this Act does not apply
13to the proceeds of sales made on or after July 1, 2003 and on
14or before December 31, 2028 December 31, 2023 but applies to
15100% of the proceeds of sales made thereafter.
16    With respect to biodiesel blends, as defined in the Use
17Tax Act, with no less than 1% and no more than 10% biodiesel,
18the tax imposed by this Act applies to (i) 80% of the proceeds
19of sales made on or after July 1, 2003 and on or before
20December 31, 2018 and (ii) 100% of the proceeds of sales made
21after December 31, 2018 and before January 1, 2024. On and
22after January 1, 2024 and on or before December 31, 2030, the
23taxation of biodiesel, renewable diesel, and biodiesel blends
24shall be as provided in Section 3-5.1 of the Use Tax Act. If,
25at any time, however, the tax under this Act on sales of
26biodiesel blends, as defined in the Use Tax Act, with no less

 

 

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1than 1% and no more than 10% biodiesel is imposed at the rate
2of 1.25%, then the tax imposed by this Act applies to 100% of
3the proceeds of sales of biodiesel blends with no less than 1%
4and no more than 10% biodiesel made during that time.
5    With respect to biodiesel, as defined in the Use Tax Act,
6and biodiesel blends, as defined in the Use Tax Act, with more
7than 10% but no more than 99% biodiesel, the tax imposed by
8this Act does not apply to the proceeds of sales made on or
9after July 1, 2003 and on or before December 31, 2023. On and
10after January 1, 2024 and on or before December 31, 2030, the
11taxation of biodiesel, renewable diesel, and biodiesel blends
12shall be as provided in Section 3-5.1 of the Use Tax Act.
13    Until July 1, 2022 and beginning again on July 1, 2023,
14with respect to food for human consumption that is to be
15consumed off the premises where it is sold (other than
16alcoholic beverages, food consisting of or infused with adult
17use cannabis, soft drinks, and food that has been prepared for
18immediate consumption), the tax is imposed at the rate of 1%.
19Beginning July 1, 2022 and until July 1, 2023, with respect to
20food for human consumption that is to be consumed off the
21premises where it is sold (other than alcoholic beverages,
22food consisting of or infused with adult use cannabis, soft
23drinks, and food that has been prepared for immediate
24consumption), the tax is imposed at the rate of 0%.
25    With respect to prescription and nonprescription
26medicines, drugs, medical appliances, products classified as

 

 

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

 

 

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

 

 

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1lotions and screens, unless those products are available by
2prescription only, regardless of whether the products meet the
3definition of "over-the-counter-drugs". For the purposes of
4this paragraph, "over-the-counter-drug" means a drug for human
5use that contains a label that identifies the product as a drug
6as required by 21 CFR C.F.R. § 201.66. The
7"over-the-counter-drug" label includes:
8        (A) a A "Drug Facts" panel; or
9        (B) a A statement of the "active ingredient(s)" with a
10    list of those ingredients contained in the compound,
11    substance or preparation.
12    Beginning on January 1, 2014 (the effective date of Public
13Act 98-122) this amendatory Act of the 98th General Assembly,
14"prescription and nonprescription medicines and drugs"
15includes medical cannabis purchased from a registered
16dispensing organization under the Compassionate Use of Medical
17Cannabis Program Act.
18    As used in this Section, "adult use cannabis" means
19cannabis subject to tax under the Cannabis Cultivation
20Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
21and does not include cannabis subject to tax under the
22Compassionate Use of Medical Cannabis Program Act.
23(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
24102-4, eff. 4-27-21; 102-700, Article 20, Section 20-20, eff.
254-19-22; 102-700, Article 60, Section 60-30, eff. 4-19-22;
26102-700, Article 65, Section 65-10, eff. 4-19-22; revised

 

 

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16-1-22.)
 
2    (35 ILCS 120/2d)  (from Ch. 120, par. 441d)
3    Sec. 2d. Tax prepayment by motor fuel retailer.
4    (a) Any person engaged in the business of selling motor
5fuel at retail, as defined in the Motor Fuel Tax Law, and who
6is not a licensed distributor or supplier, as defined in the
7Motor Fuel Tax Law, shall prepay to his or her distributor,
8supplier, or other reseller of motor fuel a portion of the tax
9imposed by this Act if the distributor, supplier, or other
10reseller of motor fuel is registered under Section 2a or
11Section 2c of this Act. The prepayment requirement provided
12for in this Section does not apply to liquid propane gas.
13    (b) Beginning on July 1, 2000 and through December 31,
142000, the Retailers' Occupation Tax paid to the distributor,
15supplier, or other reseller shall be an amount equal to $0.01
16per gallon of the motor fuel, except gasohol as defined in
17Section 2-10 of this Act which shall be an amount equal to
18$0.01 per gallon, purchased from the distributor, supplier, or
19other reseller.
20    (c) Before July 1, 2000 and then beginning on January 1,
212001 and through June 30, 2003, the Retailers' Occupation Tax
22paid to the distributor, supplier, or other reseller shall be
23an amount equal to $0.04 per gallon of the motor fuel, except
24gasohol as defined in Section 2-10 of this Act which shall be
25an amount equal to $0.03 per gallon, purchased from the

 

 

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1distributor, supplier, or other reseller.
2    (d) Beginning July 1, 2003 and through December 31, 2010,
3the Retailers' Occupation Tax paid to the distributor,
4supplier, or other reseller shall be an amount equal to $0.06
5per gallon of the motor fuel, except gasohol as defined in
6Section 2-10 of this Act which shall be an amount equal to
7$0.05 per gallon, purchased from the distributor, supplier, or
8other reseller.
9    (e) Beginning on January 1, 2011 and thereafter, the
10Retailers' Occupation Tax paid to the distributor, supplier,
11or other reseller shall be at the rate established by the
12Department under this subsection. The rate shall be
13established by the Department on January 1 and July 1 of each
14year using the average selling price, as defined in Section 1
15of this Act, per gallon of motor fuel sold in the State during
16the previous 6 months and multiplying that amount by 6.25% to
17determine the cents per gallon rate. Beginning on January 1,
182024 and through December 31, 2028, In the case of biodiesel
19blends, as defined in Section 3-42 of the Use Tax Act, with no
20less than 1% and no more than 10% biodiesel, and in the case of
21gasohol, as defined in Section 3-40 of the Use Tax Act, the
22rate shall be 90% 80% of the rate established by the Department
23under this subsection for motor fuel. Beginning on January 1,
242024 and through December 31, 2028, in the case of mid-range
25ethanol blends, as defined in Section 3-44.3 of the Use Tax
26Act, the rate shall be 80% of the rate established by the

 

 

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1Department under this subsection for motor fuel. The
2Department shall provide persons subject to this Section
3notice of the rate established under this subsection at least
420 days prior to each January 1 and July 1. Publication of the
5established rate on the Department's internet website shall
6constitute sufficient notice under this Section. The
7Department may use data derived from independent surveys
8conducted or accumulated by third parties to determine the
9average selling price per gallon of motor fuel sold in the
10State.
11    (f) Any person engaged in the business of selling motor
12fuel at retail shall be entitled to a credit against tax due
13under this Act in an amount equal to the tax paid to the
14distributor, supplier, or other reseller.
15    (g) Every distributor, supplier, or other reseller
16registered as provided in Section 2a or Section 2c of this Act
17shall remit the prepaid tax on all motor fuel that is due from
18any person engaged in the business of selling at retail motor
19fuel with the returns filed under Section 2f or Section 3 of
20this Act, but the vendors discount provided in Section 3 shall
21not apply to the amount of prepaid tax that is remitted. Any
22distributor or supplier who fails to properly collect and
23remit the tax shall be liable for the tax. For purposes of this
24Section, the prepaid tax is due on invoiced gallons sold
25during a month by the 20th day of the following month.
26(Source: P.A. 96-1384, eff. 7-29-10.)
 

 

 

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1
ARTICLE 15. ELECTRIC GENERATION EQUIPMENT

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

 

 

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1music and dramatic arts organizations such as symphony
2orchestras and theatrical groups, arts and cultural service
3organizations, local arts councils, visual arts organizations,
4and media arts organizations. On and after July 1, 2001 (the
5effective date of Public Act 92-35), however, an entity
6otherwise eligible for this exemption shall not make tax-free
7purchases unless it has an active identification number issued
8by the Department.
9    (4) Personal property purchased by a governmental body, by
10a corporation, society, association, foundation, or
11institution organized and operated exclusively for charitable,
12religious, or educational purposes, or by a not-for-profit
13corporation, society, association, foundation, institution, or
14organization that has no compensated officers or employees and
15that is organized and operated primarily for the recreation of
16persons 55 years of age or older. A limited liability company
17may qualify for the exemption under this paragraph only if the
18limited liability company is organized and operated
19exclusively for educational purposes. On and after July 1,
201987, however, no entity otherwise eligible for this exemption
21shall make tax-free purchases unless it has an active
22exemption identification number issued by the Department.
23    (5) Until July 1, 2003, a passenger car that is a
24replacement vehicle to the extent that the purchase price of
25the car is subject to the Replacement Vehicle Tax.
26    (6) Until July 1, 2003 and beginning again on September 1,

 

 

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12004 through August 30, 2014, graphic arts machinery and
2equipment, including repair and replacement parts, both new
3and used, and including that manufactured on special order,
4certified by the purchaser to be used primarily for graphic
5arts production, and including machinery and equipment
6purchased for lease. Equipment includes chemicals or chemicals
7acting as catalysts but only if the chemicals or chemicals
8acting as catalysts effect a direct and immediate change upon
9a graphic arts product. Beginning on July 1, 2017, graphic
10arts machinery and equipment is included in the manufacturing
11and assembling machinery and equipment exemption under
12paragraph (18).
13    (7) Farm chemicals.
14    (8) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (9) Personal property purchased from a teacher-sponsored
19student organization affiliated with an elementary or
20secondary school located in Illinois.
21    (10) A motor vehicle that is used for automobile renting,
22as defined in the Automobile Renting Occupation and Use Tax
23Act.
24    (11) Farm machinery and equipment, both new and used,
25including that manufactured on special order, certified by the
26purchaser to be used primarily for production agriculture or

 

 

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

 

 

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1computer-assisted operation of production agriculture
2facilities, equipment, and activities such as, but not limited
3to, the collection, monitoring, and correlation of animal and
4crop data for the purpose of formulating animal diets and
5agricultural chemicals.
6    Beginning on January 1, 2024, farm machinery and equipment
7also includes electrical power generation equipment used
8primarily for production agriculture.
9    This item (11) is exempt from the provisions of Section
103-90.
11    (12) Until June 30, 2013, fuel and petroleum products sold
12to or used by an air common carrier, certified by the carrier
13to be used for consumption, shipment, or storage in the
14conduct of its business as an air common carrier, for a flight
15destined for or returning from a location or locations outside
16the United States without regard to previous or subsequent
17domestic stopovers.
18    Beginning July 1, 2013, fuel and petroleum products sold
19to or used by an air carrier, certified by the carrier to be
20used for consumption, shipment, or storage in the conduct of
21its business as an air common carrier, for a flight that (i) is
22engaged in foreign trade or is engaged in trade between the
23United States and any of its possessions and (ii) transports
24at least one individual or package for hire from the city of
25origination to the city of final destination on the same
26aircraft, without regard to a change in the flight number of

 

 

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

 

 

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1reclamation equipment, including replacement parts and
2equipment, and including equipment purchased for lease, but
3excluding motor vehicles required to be registered under the
4Illinois Vehicle Code. The changes made to this Section by
5Public Act 97-767 apply on and after July 1, 2003, but no claim
6for credit or refund is allowed on or after August 16, 2013
7(the effective date of Public Act 98-456) for such taxes paid
8during the period beginning July 1, 2003 and ending on August
916, 2013 (the effective date of Public Act 98-456).
10    (17) Until July 1, 2003, distillation machinery and
11equipment, sold as a unit or kit, assembled or installed by the
12retailer, certified by the user to be used only for the
13production of ethyl alcohol that will be used for consumption
14as motor fuel or as a component of motor fuel for the personal
15use of the user, and not subject to sale or resale.
16    (18) Manufacturing and assembling machinery and equipment
17used primarily in the process of manufacturing or assembling
18tangible personal property for wholesale or retail sale or
19lease, whether that sale or lease is made directly by the
20manufacturer or by some other person, whether the materials
21used in the process are owned by the manufacturer or some other
22person, or whether that sale or lease is made apart from or as
23an incident to the seller's engaging in the service occupation
24of producing machines, tools, dies, jigs, patterns, gauges, or
25other similar items of no commercial value on special order
26for a particular purchaser. The exemption provided by this

 

 

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1paragraph (18) includes production related tangible personal
2property, as defined in Section 3-50, purchased on or after
3July 1, 2019. The exemption provided by this paragraph (18)
4does not include machinery and equipment used in (i) the
5generation of electricity for wholesale or retail sale; (ii)
6the generation or treatment of natural or artificial gas for
7wholesale or retail sale that is delivered to customers
8through pipes, pipelines, or mains; or (iii) the treatment of
9water for wholesale or retail sale that is delivered to
10customers through pipes, pipelines, or mains. The provisions
11of Public Act 98-583 are declaratory of existing law as to the
12meaning and scope of this exemption. Beginning on July 1,
132017, the exemption provided by this paragraph (18) includes,
14but is not limited to, graphic arts machinery and equipment,
15as defined in paragraph (6) of this Section.
16    (19) Personal property delivered to a purchaser or
17purchaser's donee inside Illinois when the purchase order for
18that personal property was received by a florist located
19outside Illinois who has a florist located inside Illinois
20deliver the personal property.
21    (20) Semen used for artificial insemination of livestock
22for direct agricultural production.
23    (21) Horses, or interests in horses, registered with and
24meeting the requirements of any of the Arabian Horse Club
25Registry of America, Appaloosa Horse Club, American Quarter
26Horse Association, United States Trotting Association, or

 

 

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1Jockey Club, as appropriate, used for purposes of breeding or
2racing for prizes. This item (21) is exempt from the
3provisions of Section 3-90, and the exemption provided for
4under this item (21) applies for all periods beginning May 30,
51995, but no claim for credit or refund is allowed on or after
6January 1, 2008 for such taxes paid during the period
7beginning May 30, 2000 and ending on January 1, 2008.
8    (22) Computers and communications equipment utilized for
9any hospital purpose and equipment used in the diagnosis,
10analysis, or treatment of hospital patients purchased by a
11lessor who leases the equipment, under a lease of one year or
12longer executed or in effect at the time the lessor would
13otherwise be subject to the tax imposed by this Act, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16the Retailers' Occupation Tax Act. If the equipment is leased
17in a manner that does not qualify for this exemption or is used
18in any other non-exempt manner, the lessor shall be liable for
19the tax imposed under this Act or the Service Use Tax Act, as
20the case may be, based on the fair market value of the property
21at the time the non-qualifying use occurs. No lessor shall
22collect or attempt to collect an amount (however designated)
23that purports to reimburse that lessor for the tax imposed by
24this Act or the Service Use Tax Act, as the case may be, if the
25tax has not been paid by the lessor. If a lessor improperly
26collects any such amount from the lessee, the lessee shall

 

 

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

 

 

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

 

 

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

 

 

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1does not apply to fundraising events (i) for the benefit of
2private home instruction or (ii) for which the fundraising
3entity purchases the personal property sold at the events from
4another individual or entity that sold the property for the
5purpose of resale by the fundraising entity and that profits
6from the sale to the fundraising entity. This paragraph is
7exempt from the provisions of Section 3-90.
8    (29) Beginning January 1, 2000 and through December 31,
92001, new or used automatic vending machines that prepare and
10serve hot food and beverages, including coffee, soup, and
11other items, and replacement parts for these machines.
12Beginning January 1, 2002 and through June 30, 2003, machines
13and parts for machines used in commercial, coin-operated
14amusement and vending business if a use or occupation tax is
15paid on the gross receipts derived from the use of the
16commercial, coin-operated amusement and vending machines. This
17paragraph is exempt from the provisions of Section 3-90.
18    (30) Beginning January 1, 2001 and through June 30, 2016,
19food for human consumption that is to be consumed off the
20premises where it is sold (other than alcoholic beverages,
21soft drinks, and food that has been prepared for immediate
22consumption) and prescription and nonprescription medicines,
23drugs, medical appliances, and insulin, urine testing
24materials, syringes, and needles used by diabetics, for human
25use, when purchased for use by a person receiving medical
26assistance under Article V of the Illinois Public Aid Code who

 

 

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

 

 

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

 

 

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1    (33) On and after July 1, 2003 and through June 30, 2004,
2the use in this State of motor vehicles of the second division
3with a gross vehicle weight in excess of 8,000 pounds and that
4are subject to the commercial distribution fee imposed under
5Section 3-815.1 of the Illinois Vehicle Code. Beginning on
6July 1, 2004 and through June 30, 2005, the use in this State
7of motor vehicles of the second division: (i) with a gross
8vehicle weight rating in excess of 8,000 pounds; (ii) that are
9subject to the commercial distribution fee imposed under
10Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
11are primarily used for commercial purposes. Through June 30,
122005, this exemption applies to repair and replacement parts
13added after the initial purchase of such a motor vehicle if
14that motor vehicle is used in a manner that would qualify for
15the rolling stock exemption otherwise provided for in this
16Act. For purposes of this paragraph, the term "used for
17commercial purposes" means the transportation of persons or
18property in furtherance of any commercial or industrial
19enterprise, whether for-hire or not.
20    (34) Beginning January 1, 2008, tangible personal property
21used in the construction or maintenance of a community water
22supply, as defined under Section 3.145 of the Environmental
23Protection Act, that is operated by a not-for-profit
24corporation that holds a valid water supply permit issued
25under Title IV of the Environmental Protection Act. This
26paragraph is exempt from the provisions of Section 3-90.

 

 

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1    (35) Beginning January 1, 2010 and continuing through
2December 31, 2024, materials, parts, equipment, components,
3and furnishings incorporated into or upon an aircraft as part
4of the modification, refurbishment, completion, replacement,
5repair, or maintenance of the aircraft. This exemption
6includes consumable supplies used in the modification,
7refurbishment, completion, replacement, repair, and
8maintenance of aircraft, but excludes any materials, parts,
9equipment, components, and consumable supplies used in the
10modification, replacement, repair, and maintenance of aircraft
11engines or power plants, whether such engines or power plants
12are installed or uninstalled upon any such aircraft.
13"Consumable supplies" include, but are not limited to,
14adhesive, tape, sandpaper, general purpose lubricants,
15cleaning solution, latex gloves, and protective films. This
16exemption applies only to the use of qualifying tangible
17personal property by persons who modify, refurbish, complete,
18repair, replace, or maintain aircraft and who (i) hold an Air
19Agency Certificate and are empowered to operate an approved
20repair station by the Federal Aviation Administration, (ii)
21have a Class IV Rating, and (iii) conduct operations in
22accordance with Part 145 of the Federal Aviation Regulations.
23The exemption does not include aircraft operated by a
24commercial air carrier providing scheduled passenger air
25service pursuant to authority issued under Part 121 or Part
26129 of the Federal Aviation Regulations. The changes made to

 

 

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1this paragraph (35) by Public Act 98-534 are declarative of
2existing law. It is the intent of the General Assembly that the
3exemption under this paragraph (35) applies continuously from
4January 1, 2010 through December 31, 2024; however, no claim
5for credit or refund is allowed for taxes paid as a result of
6the disallowance of this exemption on or after January 1, 2015
7and prior to February 5, 2020 (the effective date of Public Act
8101-629) this amendatory Act of the 101st General Assembly.
9    (36) Tangible personal property purchased by a
10public-facilities corporation, as described in Section
1111-65-10 of the Illinois Municipal Code, for purposes of
12constructing or furnishing a municipal convention hall, but
13only if the legal title to the municipal convention hall is
14transferred to the municipality without any further
15consideration by or on behalf of the municipality at the time
16of the completion of the municipal convention hall or upon the
17retirement or redemption of any bonds or other debt
18instruments issued by the public-facilities corporation in
19connection with the development of the municipal convention
20hall. This exemption includes existing public-facilities
21corporations as provided in Section 11-65-25 of the Illinois
22Municipal Code. This paragraph is exempt from the provisions
23of Section 3-90.
24    (37) Beginning January 1, 2017 and through December 31,
252026, menstrual pads, tampons, and menstrual cups.
26    (38) Merchandise that is subject to the Rental Purchase

 

 

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1Agreement Occupation and Use Tax. The purchaser must certify
2that the item is purchased to be rented subject to a rental
3purchase agreement, as defined in the Rental Purchase
4Agreement Act, and provide proof of registration under the
5Rental Purchase Agreement Occupation and Use Tax Act. This
6paragraph is exempt from the provisions of Section 3-90.
7    (39) Tangible personal property purchased by a purchaser
8who is exempt from the tax imposed by this Act by operation of
9federal law. This paragraph is exempt from the provisions of
10Section 3-90.
11    (40) Qualified tangible personal property used in the
12construction or operation of a data center that has been
13granted a certificate of exemption by the Department of
14Commerce and Economic Opportunity, whether that tangible
15personal property is purchased by the owner, operator, or
16tenant of the data center or by a contractor or subcontractor
17of the owner, operator, or tenant. Data centers that would
18have qualified for a certificate of exemption prior to January
191, 2020 had Public Act 101-31 been in effect may apply for and
20obtain an exemption for subsequent purchases of computer
21equipment or enabling software purchased or leased to upgrade,
22supplement, or replace computer equipment or enabling software
23purchased or leased in the original investment that would have
24qualified.
25    The Department of Commerce and Economic Opportunity shall
26grant a certificate of exemption under this item (40) to

 

 

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1qualified data centers as defined by Section 605-1025 of the
2Department of Commerce and Economic Opportunity Law of the
3Civil Administrative Code of Illinois.
4    For the purposes of this item (40):
5        "Data center" means a building or a series of
6    buildings rehabilitated or constructed to house working
7    servers in one physical location or multiple sites within
8    the State of Illinois.
9        "Qualified tangible personal property" means:
10    electrical systems and equipment; climate control and
11    chilling equipment and systems; mechanical systems and
12    equipment; monitoring and secure systems; emergency
13    generators; hardware; computers; servers; data storage
14    devices; network connectivity equipment; racks; cabinets;
15    telecommunications cabling infrastructure; raised floor
16    systems; peripheral components or systems; software;
17    mechanical, electrical, or plumbing systems; battery
18    systems; cooling systems and towers; temperature control
19    systems; other cabling; and other data center
20    infrastructure equipment and systems necessary to operate
21    qualified tangible personal property, including fixtures;
22    and component parts of any of the foregoing, including
23    installation, maintenance, repair, refurbishment, and
24    replacement of qualified tangible personal property to
25    generate, transform, transmit, distribute, or manage
26    electricity necessary to operate qualified tangible

 

 

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1    personal property; and all other tangible personal
2    property that is essential to the operations of a computer
3    data center. The term "qualified tangible personal
4    property" also includes building materials physically
5    incorporated in to the qualifying data center. To document
6    the exemption allowed under this Section, the retailer
7    must obtain from the purchaser a copy of the certificate
8    of eligibility issued by the Department of Commerce and
9    Economic Opportunity.
10    This item (40) is exempt from the provisions of Section
113-90.
12    (41) Beginning July 1, 2022, breast pumps, breast pump
13collection and storage supplies, and breast pump kits. This
14item (41) is exempt from the provisions of Section 3-90. As
15used in this item (41):
16        "Breast pump" means an electrically controlled or
17    manually controlled pump device designed or marketed to be
18    used to express milk from a human breast during lactation,
19    including the pump device and any battery, AC adapter, or
20    other power supply unit that is used to power the pump
21    device and is packaged and sold with the pump device at the
22    time of sale.
23        "Breast pump collection and storage supplies" means
24    items of tangible personal property designed or marketed
25    to be used in conjunction with a breast pump to collect
26    milk expressed from a human breast and to store collected

 

 

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

 

 

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1    manufacturer or distributor.
2    (42) (41) Tangible personal property sold by or on behalf
3of the State Treasurer pursuant to the Revised Uniform
4Unclaimed Property Act. This item (42) (41) is exempt from the
5provisions of Section 3-90.
6(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
7101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
86-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;
9102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,
10eff. 5-27-22; revised 8-1-22.)
 
11    Section 15-10. The Service Use Tax Act is amended by
12changing Section 3-5 as follows:
 
13    (35 ILCS 110/3-5)
14    Sec. 3-5. Exemptions. Use of the following tangible
15personal property is exempt from the tax imposed by this Act:
16    (1) Personal property purchased from a corporation,
17society, association, foundation, institution, or
18organization, other than a limited liability company, that is
19organized and operated as a not-for-profit service enterprise
20for the benefit of persons 65 years of age or older if the
21personal property was not purchased by the enterprise for the
22purpose of resale by the enterprise.
23    (2) Personal property purchased by a non-profit Illinois
24county fair association for use in conducting, operating, or

 

 

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1promoting the county fair.
2    (3) Personal property purchased by a not-for-profit arts
3or cultural organization that establishes, by proof required
4by the Department by rule, that it has received an exemption
5under Section 501(c)(3) of the Internal Revenue Code and that
6is organized and operated primarily for the presentation or
7support of arts or cultural programming, activities, or
8services. These organizations include, but are not limited to,
9music and dramatic arts organizations such as symphony
10orchestras and theatrical groups, arts and cultural service
11organizations, local arts councils, visual arts organizations,
12and media arts organizations. On and after July 1, 2001 (the
13effective date of Public Act 92-35), however, an entity
14otherwise eligible for this exemption shall not make tax-free
15purchases unless it has an active identification number issued
16by the Department.
17    (4) 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    (5) Until July 1, 2003 and beginning again on September 1,
222004 through August 30, 2014, graphic arts machinery and
23equipment, including repair and replacement parts, both new
24and used, and including that manufactured on special order or
25purchased for lease, certified by the purchaser to be used
26primarily for graphic arts production. Equipment includes

 

 

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

 

 

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1on a motor vehicle required to be licensed if the selling price
2of the tender is separately stated.
3    Farm machinery and equipment shall include precision
4farming equipment that is installed or purchased to be
5installed on farm machinery and equipment including, but not
6limited to, tractors, harvesters, sprayers, planters, seeders,
7or spreaders. Precision farming equipment includes, but is not
8limited to, soil testing sensors, computers, monitors,
9software, global positioning and mapping systems, and other
10such equipment.
11    Farm machinery and equipment also includes computers,
12sensors, software, and related equipment used primarily in the
13computer-assisted operation of production agriculture
14facilities, equipment, and activities such as, but not limited
15to, the collection, monitoring, and correlation of animal and
16crop data for the purpose of formulating animal diets and
17agricultural chemicals.
18    Beginning on January 1, 2024, farm machinery and equipment
19also includes electrical power generation equipment used
20primarily for production agriculture.
21    This item (7) is exempt from the provisions of Section
223-75.
23    (8) Until June 30, 2013, fuel and petroleum products sold
24to or used by an air common carrier, certified by the carrier
25to be used for consumption, shipment, or storage in the
26conduct of its business as an air common carrier, for a flight

 

 

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

 

 

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1(iii) pumps and pump-jack units, (iv) storage tanks and flow
2lines, (v) any individual replacement part for oil field
3exploration, drilling, and production equipment, and (vi)
4machinery and equipment purchased for lease; but excluding
5motor vehicles required to be registered under the Illinois
6Vehicle Code.
7    (11) Proceeds from the sale of photoprocessing machinery
8and equipment, including repair and replacement parts, both
9new and used, including that manufactured on special order,
10certified by the purchaser to be used primarily for
11photoprocessing, and including photoprocessing machinery and
12equipment purchased for lease.
13    (12) Until July 1, 2028, coal and aggregate exploration,
14mining, off-highway hauling, processing, maintenance, and
15reclamation equipment, including replacement parts and
16equipment, and including equipment purchased for lease, but
17excluding motor vehicles required to be registered under the
18Illinois Vehicle Code. The changes made to this Section by
19Public Act 97-767 apply on and after July 1, 2003, but no claim
20for credit or refund is allowed on or after August 16, 2013
21(the effective date of Public Act 98-456) for such taxes paid
22during the period beginning July 1, 2003 and ending on August
2316, 2013 (the effective date of Public Act 98-456).
24    (13) Semen used for artificial insemination of livestock
25for direct agricultural production.
26    (14) Horses, or interests in horses, registered with and

 

 

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1meeting the requirements of any of the Arabian Horse Club
2Registry of America, Appaloosa Horse Club, American Quarter
3Horse Association, United States Trotting Association, or
4Jockey Club, as appropriate, used for purposes of breeding or
5racing for prizes. This item (14) is exempt from the
6provisions of Section 3-75, and the exemption provided for
7under this item (14) applies for all periods beginning May 30,
81995, but no claim for credit or refund is allowed on or after
9January 1, 2008 (the effective date of Public Act 95-88) for
10such taxes paid during the period beginning May 30, 2000 and
11ending on January 1, 2008 (the effective date of Public Act
1295-88).
13    (15) Computers and communications equipment utilized for
14any hospital purpose and equipment used in the diagnosis,
15analysis, or treatment of hospital patients purchased by a
16lessor who leases the equipment, under a lease of one year or
17longer executed or in effect at the time the lessor would
18otherwise be subject to the tax imposed by this Act, to a
19hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of
21the Retailers' Occupation Tax Act. If the equipment is leased
22in a manner that does not qualify for this exemption or is used
23in any other non-exempt manner, the lessor shall be liable for
24the tax imposed under this Act or the Use Tax Act, as the case
25may be, based on the fair market value of the property at the
26time the non-qualifying use occurs. No lessor shall collect or

 

 

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

 

 

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

 

 

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1    (19) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-75.
5    (20) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the
9Department to be organized and operated exclusively for
10educational purposes. For purposes of this exemption, "a
11corporation, limited liability company, society, association,
12foundation, or institution organized and operated exclusively
13for educational purposes" means all tax-supported public
14schools, private schools that offer systematic instruction in
15useful branches of learning by methods common to public
16schools and that compare favorably in their scope and
17intensity with the course of study presented in tax-supported
18schools, and vocational or technical schools or institutes
19organized and operated exclusively to provide a course of
20study of not less than 6 weeks duration and designed to prepare
21individuals to follow a trade or to pursue a manual,
22technical, mechanical, industrial, business, or commercial
23occupation.
24    (21) Beginning January 1, 2000, personal property,
25including food, purchased through fundraising events for the
26benefit of a public or private elementary or secondary school,

 

 

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1a group of those schools, or one or more school districts if
2the events are sponsored by an entity recognized by the school
3district that consists primarily of volunteers and includes
4parents and teachers of the school children. This paragraph
5does not apply to fundraising events (i) for the benefit of
6private home instruction or (ii) for which the fundraising
7entity purchases the personal property sold at the events from
8another individual or entity that sold the property for the
9purpose of resale by the fundraising entity and that profits
10from the sale to the fundraising entity. This paragraph is
11exempt from the provisions of Section 3-75.
12    (22) Beginning January 1, 2000 and through December 31,
132001, new or used automatic vending machines that prepare and
14serve hot food and beverages, including coffee, soup, and
15other items, and replacement parts for these machines.
16Beginning January 1, 2002 and through June 30, 2003, machines
17and parts for machines used in commercial, coin-operated
18amusement and vending business if a use or occupation tax is
19paid on the gross receipts derived from the use of the
20commercial, coin-operated amusement and vending machines. This
21paragraph is exempt from the provisions of Section 3-75.
22    (23) Beginning August 23, 2001 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages,
25soft drinks, and food that has been prepared for immediate
26consumption) and prescription and nonprescription medicines,

 

 

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1drugs, medical appliances, and insulin, urine testing
2materials, syringes, and needles used by diabetics, for human
3use, when purchased for use by a person receiving medical
4assistance under Article V of the Illinois Public Aid Code who
5resides in a licensed long-term care facility, as defined in
6the Nursing Home Care Act, or in a licensed facility as defined
7in the ID/DD Community Care Act, the MC/DD Act, or the
8Specialized Mental Health Rehabilitation Act of 2013.
9    (24) Beginning on August 2, 2001 (the effective date of
10Public Act 92-227), computers and communications equipment
11utilized for any hospital purpose and equipment used in the
12diagnosis, analysis, or treatment of hospital patients
13purchased by a lessor who leases the equipment, under a lease
14of one year or longer executed or in effect at the time the
15lessor would otherwise be subject to the tax imposed by this
16Act, to a hospital that has been issued an active tax exemption
17identification number by the Department under Section 1g of
18the Retailers' Occupation Tax Act. If the equipment is leased
19in a manner that does not qualify for this exemption or is used
20in any other nonexempt manner, the lessor shall be liable for
21the tax imposed under this Act or the Use Tax Act, as the case
22may be, based on the fair market value of the property at the
23time the nonqualifying use occurs. No lessor shall collect or
24attempt to collect an amount (however designated) that
25purports to reimburse that lessor for the tax imposed by this
26Act or the Use Tax Act, as the case may be, if the tax has not

 

 

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

 

 

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1amount is not refunded to the lessee for any reason, the lessor
2is liable to pay that amount to the Department. This paragraph
3is exempt from the provisions of Section 3-75.
4    (26) Beginning January 1, 2008, tangible personal property
5used in the construction or maintenance of a community water
6supply, as defined under Section 3.145 of the Environmental
7Protection Act, that is operated by a not-for-profit
8corporation that holds a valid water supply permit issued
9under Title IV of the Environmental Protection Act. This
10paragraph is exempt from the provisions of Section 3-75.
11    (27) Beginning January 1, 2010 and continuing through
12December 31, 2024, materials, parts, equipment, components,
13and furnishings incorporated into or upon an aircraft as part
14of the modification, refurbishment, completion, replacement,
15repair, or maintenance of the aircraft. This exemption
16includes consumable supplies used in the modification,
17refurbishment, completion, replacement, repair, and
18maintenance of aircraft, but excludes any materials, parts,
19equipment, components, and consumable supplies used in the
20modification, replacement, repair, and maintenance of aircraft
21engines or power plants, whether such engines or power plants
22are installed or uninstalled upon any such aircraft.
23"Consumable supplies" include, but are not limited to,
24adhesive, tape, sandpaper, general purpose lubricants,
25cleaning solution, latex gloves, and protective films. This
26exemption applies only to the use of qualifying tangible

 

 

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1personal property transferred incident to the modification,
2refurbishment, completion, replacement, repair, or maintenance
3of aircraft by persons who (i) hold an Air Agency Certificate
4and are empowered to operate an approved repair station by the
5Federal Aviation Administration, (ii) have a Class IV Rating,
6and (iii) conduct operations in accordance with Part 145 of
7the Federal Aviation Regulations. The exemption does not
8include aircraft operated by a commercial air carrier
9providing scheduled passenger air service pursuant to
10authority issued under Part 121 or Part 129 of the Federal
11Aviation Regulations. The changes made to this paragraph (27)
12by Public Act 98-534 are declarative of existing law. It is the
13intent of the General Assembly that the exemption under this
14paragraph (27) applies continuously from January 1, 2010
15through December 31, 2024; however, no claim for credit or
16refund is allowed for taxes paid as a result of the
17disallowance of this exemption on or after January 1, 2015 and
18prior to February 5, 2020 (the effective date of Public Act
19101-629) this amendatory Act of the 101st General Assembly.
20    (28) Tangible personal property purchased by a
21public-facilities corporation, as described in Section
2211-65-10 of the Illinois Municipal Code, for purposes of
23constructing or furnishing a municipal convention hall, but
24only if the legal title to the municipal convention hall is
25transferred to the municipality without any further
26consideration by or on behalf of the municipality at the time

 

 

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1of the completion of the municipal convention hall or upon the
2retirement or redemption of any bonds or other debt
3instruments issued by the public-facilities corporation in
4connection with the development of the municipal convention
5hall. This exemption includes existing public-facilities
6corporations as provided in Section 11-65-25 of the Illinois
7Municipal Code. This paragraph is exempt from the provisions
8of Section 3-75.
9    (29) Beginning January 1, 2017 and through December 31,
102026, menstrual pads, tampons, and menstrual cups.
11    (30) Tangible personal property transferred to a purchaser
12who is exempt from the tax imposed by this Act by operation of
13federal law. This paragraph is exempt from the provisions of
14Section 3-75.
15    (31) Qualified tangible personal property used in the
16construction or operation of a data center that has been
17granted a certificate of exemption by the Department of
18Commerce and Economic Opportunity, whether that tangible
19personal property is purchased by the owner, operator, or
20tenant of the data center or by a contractor or subcontractor
21of the owner, operator, or tenant. Data centers that would
22have qualified for a certificate of exemption prior to January
231, 2020 had Public Act 101-31 this amendatory Act of the 101st
24General Assembly been in effect, may apply for and obtain an
25exemption for subsequent purchases of computer equipment or
26enabling software purchased or leased to upgrade, supplement,

 

 

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

 

 

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1    and component parts of any of the foregoing, including
2    installation, maintenance, repair, refurbishment, and
3    replacement of qualified tangible personal property to
4    generate, transform, transmit, distribute, or manage
5    electricity necessary to operate qualified tangible
6    personal property; and all other tangible personal
7    property that is essential to the operations of a computer
8    data center. The term "qualified tangible personal
9    property" also includes building materials physically
10    incorporated in to the qualifying data center. To document
11    the exemption allowed under this Section, the retailer
12    must obtain from the purchaser a copy of the certificate
13    of eligibility issued by the Department of Commerce and
14    Economic Opportunity.
15    This item (31) is exempt from the provisions of Section
163-75.
17    (32) Beginning July 1, 2022, breast pumps, breast pump
18collection and storage supplies, and breast pump kits. This
19item (32) is exempt from the provisions of Section 3-75. As
20used in this item (32):
21        "Breast pump" means an electrically controlled or
22    manually controlled pump device designed or marketed to be
23    used to express milk from a human breast during lactation,
24    including the pump device and any battery, AC adapter, or
25    other power supply unit that is used to power the pump
26    device and is packaged and sold with the pump device at the

 

 

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1    time of sale.
2        "Breast pump collection and storage supplies" means
3    items of tangible personal property designed or marketed
4    to be used in conjunction with a breast pump to collect
5    milk expressed from a human breast and to store collected
6    milk until it is ready for consumption.
7        "Breast pump collection and storage supplies"
8    includes, but is not limited to: breast shields and breast
9    shield connectors; breast pump tubes and tubing adapters;
10    breast pump valves and membranes; backflow protectors and
11    backflow protector adaptors; bottles and bottle caps
12    specific to the operation of the breast pump; and breast
13    milk storage bags.
14        "Breast pump collection and storage supplies" does not
15    include: (1) bottles and bottle caps not specific to the
16    operation of the breast pump; (2) breast pump travel bags
17    and other similar carrying accessories, including ice
18    packs, labels, and other similar products; (3) breast pump
19    cleaning supplies; (4) nursing bras, bra pads, breast
20    shells, and other similar products; and (5) creams,
21    ointments, and other similar products that relieve
22    breastfeeding-related symptoms or conditions of the
23    breasts or nipples, unless sold as part of a breast pump
24    kit that is pre-packaged by the breast pump manufacturer
25    or distributor.
26        "Breast pump kit" means a kit that: (1) contains no

 

 

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1    more than a breast pump, breast pump collection and
2    storage supplies, a rechargeable battery for operating the
3    breast pump, a breastmilk cooler, bottle stands, ice
4    packs, and a breast pump carrying case; and (2) is
5    pre-packaged as a breast pump kit by the breast pump
6    manufacturer or distributor.
7    (33) (32) Tangible personal property sold by or on behalf
8of the State Treasurer pursuant to the Revised Uniform
9Unclaimed Property Act. This item (33) (32) is exempt from the
10provisions of Section 3-75.
11(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
12101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-700, Article
1370, Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1475-10, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-3-22.)
 
15    Section 15-15. The Service Occupation Tax Act is amended
16by changing Section 3-5 as follows:
 
17    (35 ILCS 115/3-5)
18    Sec. 3-5. Exemptions. The following tangible personal
19property is exempt from the tax imposed by this Act:
20    (1) Personal property sold by a corporation, society,
21association, foundation, institution, or organization, other
22than a limited liability company, that is organized and
23operated as a not-for-profit service enterprise for the
24benefit of persons 65 years of age or older if the personal

 

 

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1property was not purchased by the enterprise for the purpose
2of resale by the enterprise.
3    (2) Personal property purchased by a not-for-profit
4Illinois county fair association for use in conducting,
5operating, or promoting the county fair.
6    (3) Personal property purchased by any not-for-profit arts
7or cultural organization that establishes, by proof required
8by the Department by rule, that it has received an exemption
9under Section 501(c)(3) of the Internal Revenue Code and that
10is organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after July 1, 2001 (the
17effective date of Public Act 92-35), however, an entity
18otherwise eligible for this exemption shall not make tax-free
19purchases unless it has an active identification number issued
20by the Department.
21    (4) Legal tender, currency, medallions, or gold or silver
22coinage issued by the State of Illinois, the government of the
23United States of America, or the government of any foreign
24country, and bullion.
25    (5) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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

 

 

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1overwintering plants shall be considered farm machinery and
2equipment under this item (7). Agricultural chemical tender
3tanks and dry boxes shall include units sold separately from a
4motor vehicle required to be licensed and units sold mounted
5on a motor vehicle required to be licensed if the selling price
6of the tender is separately stated.
7    Farm machinery and equipment shall include precision
8farming equipment that is installed or purchased to be
9installed on farm machinery and equipment including, but not
10limited to, tractors, harvesters, sprayers, planters, seeders,
11or spreaders. Precision farming equipment includes, but is not
12limited to, soil testing sensors, computers, monitors,
13software, global positioning and mapping systems, and other
14such equipment.
15    Farm machinery and equipment also includes computers,
16sensors, software, and related equipment used primarily in the
17computer-assisted operation of production agriculture
18facilities, equipment, and activities such as, but not limited
19to, the collection, monitoring, and correlation of animal and
20crop data for the purpose of formulating animal diets and
21agricultural chemicals.
22    Beginning on January 1, 2024, farm machinery and equipment
23also includes electrical power generation equipment used
24primarily for production agriculture.
25    This item (7) is exempt from the provisions of Section
263-55.

 

 

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1    (8) Until June 30, 2013, fuel and petroleum products sold
2to or used by an air common carrier, certified by the carrier
3to be used for consumption, shipment, or storage in the
4conduct of its business as an air common carrier, for a flight
5destined for or returning from a location or locations outside
6the United States without regard to previous or subsequent
7domestic stopovers.
8    Beginning July 1, 2013, fuel and petroleum products sold
9to or used by an air carrier, certified by the carrier to be
10used for consumption, shipment, or storage in the conduct of
11its business as an air common carrier, for a flight that (i) is
12engaged in foreign trade or is engaged in trade between the
13United States and any of its possessions and (ii) transports
14at least one individual or package for hire from the city of
15origination to the city of final destination on the same
16aircraft, without regard to a change in the flight number of
17that aircraft.
18    (9) Proceeds of mandatory service charges separately
19stated on customers' bills for the purchase and consumption of
20food and beverages, to the extent that the proceeds of the
21service charge are in fact turned over as tips or as a
22substitute for tips to the employees who participate directly
23in preparing, serving, hosting or cleaning up the food or
24beverage function with respect to which the service charge is
25imposed.
26    (10) Until July 1, 2003, oil field exploration, drilling,

 

 

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1and production equipment, including (i) rigs and parts of
2rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
3pipe and tubular goods, including casing and drill strings,
4(iii) pumps and pump-jack units, (iv) storage tanks and flow
5lines, (v) any individual replacement part for oil field
6exploration, drilling, and production equipment, and (vi)
7machinery and equipment purchased for lease; but excluding
8motor vehicles required to be registered under the Illinois
9Vehicle Code.
10    (11) Photoprocessing machinery and equipment, including
11repair and replacement parts, both new and used, including
12that manufactured on special order, certified by the purchaser
13to be used primarily for photoprocessing, and including
14photoprocessing machinery and equipment purchased for lease.
15    (12) Until July 1, 2028, coal and aggregate exploration,
16mining, off-highway hauling, processing, maintenance, and
17reclamation equipment, including replacement parts and
18equipment, and including equipment purchased for lease, but
19excluding motor vehicles required to be registered under the
20Illinois Vehicle Code. The changes made to this Section by
21Public Act 97-767 apply on and after July 1, 2003, but no claim
22for credit or refund is allowed on or after August 16, 2013
23(the effective date of Public Act 98-456) for such taxes paid
24during the period beginning July 1, 2003 and ending on August
2516, 2013 (the effective date of Public Act 98-456).
26    (13) Beginning January 1, 1992 and through June 30, 2016,

 

 

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1food for human consumption that is to be consumed off the
2premises where it is sold (other than alcoholic beverages,
3soft drinks and food that has been prepared for immediate
4consumption) and prescription and non-prescription medicines,
5drugs, medical appliances, and insulin, urine testing
6materials, syringes, and needles used by diabetics, for human
7use, when purchased for use by a person receiving medical
8assistance under Article V of the Illinois Public Aid Code who
9resides in a licensed long-term care facility, as defined in
10the Nursing Home Care Act, or in a licensed facility as defined
11in the ID/DD Community Care Act, the MC/DD Act, or the
12Specialized Mental Health Rehabilitation Act of 2013.
13    (14) Semen used for artificial insemination of livestock
14for direct agricultural production.
15    (15) Horses, or interests in horses, registered with and
16meeting the requirements of any of the Arabian Horse Club
17Registry of America, Appaloosa Horse Club, American Quarter
18Horse Association, United States Trotting Association, or
19Jockey Club, as appropriate, used for purposes of breeding or
20racing for prizes. This item (15) is exempt from the
21provisions of Section 3-55, and the exemption provided for
22under this item (15) applies for all periods beginning May 30,
231995, but no claim for credit or refund is allowed on or after
24January 1, 2008 (the effective date of Public Act 95-88) for
25such taxes paid during the period beginning May 30, 2000 and
26ending on January 1, 2008 (the effective date of Public Act

 

 

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195-88).
2    (16) Computers and communications equipment utilized for
3any hospital purpose and equipment used in the diagnosis,
4analysis, or treatment of hospital patients sold to a lessor
5who leases the equipment, under a lease of one year or longer
6executed or in effect at the time of the purchase, to a
7hospital that has been issued an active tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act.
10    (17) Personal property sold to a lessor who leases the
11property, under a lease of one year or longer executed or in
12effect at the time of the purchase, to a governmental body that
13has been issued an active tax exemption identification number
14by the Department under Section 1g of the Retailers'
15Occupation Tax Act.
16    (18) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is donated
19for disaster relief to be used in a State or federally declared
20disaster area in Illinois or bordering Illinois by a
21manufacturer or retailer that is registered in this State to a
22corporation, society, association, foundation, or institution
23that has been issued a sales tax exemption identification
24number by the Department that assists victims of the disaster
25who reside within the declared disaster area.
26    (19) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in
3the performance of infrastructure repairs in this State,
4including but not limited to municipal roads and streets,
5access roads, bridges, sidewalks, waste disposal systems,
6water and sewer line extensions, water distribution and
7purification facilities, storm water drainage and retention
8facilities, and sewage treatment facilities, resulting from a
9State or federally declared disaster in Illinois or bordering
10Illinois when such repairs are initiated on facilities located
11in the declared disaster area within 6 months after the
12disaster.
13    (20) Beginning July 1, 1999, game or game birds sold at a
14"game breeding and hunting preserve area" as that term is used
15in the Wildlife Code. This paragraph is exempt from the
16provisions of Section 3-55.
17    (21) A motor vehicle, as that term is defined in Section
181-146 of the Illinois Vehicle Code, that is donated to a
19corporation, limited liability company, society, association,
20foundation, or institution that is determined by the
21Department to be organized and operated exclusively for
22educational purposes. For purposes of this exemption, "a
23corporation, limited liability company, society, association,
24foundation, or institution organized and operated exclusively
25for educational purposes" means all tax-supported public
26schools, private schools that offer systematic instruction in

 

 

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1useful branches of learning by methods common to public
2schools and that compare favorably in their scope and
3intensity with the course of study presented in tax-supported
4schools, and vocational or technical schools or institutes
5organized and operated exclusively to provide a course of
6study of not less than 6 weeks duration and designed to prepare
7individuals to follow a trade or to pursue a manual,
8technical, mechanical, industrial, business, or commercial
9occupation.
10    (22) Beginning January 1, 2000, personal property,
11including food, purchased through fundraising events for the
12benefit of a public or private elementary or secondary school,
13a group of those schools, or one or more school districts if
14the events are sponsored by an entity recognized by the school
15district that consists primarily of volunteers and includes
16parents and teachers of the school children. This paragraph
17does not apply to fundraising events (i) for the benefit of
18private home instruction or (ii) for which the fundraising
19entity purchases the personal property sold at the events from
20another individual or entity that sold the property for the
21purpose of resale by the fundraising entity and that profits
22from the sale to the fundraising entity. This paragraph is
23exempt from the provisions of Section 3-55.
24    (23) Beginning January 1, 2000 and through December 31,
252001, new or used automatic vending machines that prepare and
26serve hot food and beverages, including coffee, soup, and

 

 

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

 

 

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12016, tangible personal property purchased from an Illinois
2retailer by a taxpayer engaged in centralized purchasing
3activities in Illinois who will, upon receipt of the property
4in Illinois, temporarily store the property in Illinois (i)
5for the purpose of subsequently transporting it outside this
6State for use or consumption thereafter solely outside this
7State or (ii) for the purpose of being processed, fabricated,
8or manufactured into, attached to, or incorporated into other
9tangible personal property to be transported outside this
10State and thereafter used or consumed solely outside this
11State. The Director of Revenue shall, pursuant to rules
12adopted in accordance with the Illinois Administrative
13Procedure Act, issue a permit to any taxpayer in good standing
14with the Department who is eligible for the exemption under
15this paragraph (26). The permit issued under this paragraph
16(26) shall authorize the holder, to the extent and in the
17manner specified in the rules adopted under this Act, to
18purchase tangible personal property from a retailer exempt
19from the taxes imposed by this Act. Taxpayers shall maintain
20all necessary books and records to substantiate the use and
21consumption of all such tangible personal property outside of
22the State of Illinois.
23    (27) Beginning January 1, 2008, tangible personal property
24used in the construction or maintenance of a community water
25supply, as defined under Section 3.145 of the Environmental
26Protection Act, that is operated by a not-for-profit

 

 

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1corporation that holds a valid water supply permit issued
2under Title IV of the Environmental Protection Act. This
3paragraph is exempt from the provisions of Section 3-55.
4    (28) Tangible personal property sold to a
5public-facilities corporation, as described in Section
611-65-10 of the Illinois Municipal Code, for purposes of
7constructing or furnishing a municipal convention hall, but
8only if the legal title to the municipal convention hall is
9transferred to the municipality without any further
10consideration by or on behalf of the municipality at the time
11of the completion of the municipal convention hall or upon the
12retirement or redemption of any bonds or other debt
13instruments issued by the public-facilities corporation in
14connection with the development of the municipal convention
15hall. This exemption includes existing public-facilities
16corporations as provided in Section 11-65-25 of the Illinois
17Municipal Code. This paragraph is exempt from the provisions
18of Section 3-55.
19    (29) 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 transfer of qualifying tangible
9personal property incident to the modification, refurbishment,
10completion, replacement, repair, or maintenance of an aircraft
11by persons who (i) hold an Air Agency Certificate and are
12empowered to operate an approved repair station by the Federal
13Aviation Administration, (ii) have a Class IV Rating, and
14(iii) conduct operations in accordance with Part 145 of the
15Federal Aviation Regulations. The exemption does not include
16aircraft operated by a commercial air carrier providing
17scheduled passenger air service pursuant to authority issued
18under Part 121 or Part 129 of the Federal Aviation
19Regulations. The changes made to this paragraph (29) by Public
20Act 98-534 are declarative of existing law. It is the intent of
21the General Assembly that the exemption under this paragraph
22(29) applies continuously from January 1, 2010 through
23December 31, 2024; however, no claim for credit or refund is
24allowed for taxes paid as a result of the disallowance of this
25exemption on or after January 1, 2015 and prior to February 5,
262020 (the effective date of Public Act 101-629) this

 

 

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1amendatory Act of the 101st General Assembly.
2    (30) Beginning January 1, 2017 and through December 31,
32026, menstrual pads, tampons, and menstrual cups.
4    (31) Tangible personal property transferred to a purchaser
5who is exempt from tax by operation of federal law. This
6paragraph is exempt from the provisions of Section 3-55.
7    (32) Qualified tangible personal property used in the
8construction or operation of a data center that has been
9granted a certificate of exemption by the Department of
10Commerce and Economic Opportunity, whether that tangible
11personal property is purchased by the owner, operator, or
12tenant of the data center or by a contractor or subcontractor
13of the owner, operator, or tenant. Data centers that would
14have qualified for a certificate of exemption prior to January
151, 2020 had Public Act 101-31 this amendatory Act of the 101st
16General Assembly been in effect, may apply for and obtain an
17exemption for subsequent purchases of computer equipment or
18enabling software purchased or leased to upgrade, supplement,
19or replace computer equipment or enabling software purchased
20or leased in the original investment that would have
21qualified.
22    The Department of Commerce and Economic Opportunity shall
23grant a certificate of exemption under this item (32) to
24qualified data centers as defined by Section 605-1025 of the
25Department of Commerce and Economic Opportunity Law of the
26Civil Administrative Code of Illinois.

 

 

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1    For the purposes of this item (32):
2        "Data center" means a building or a series of
3    buildings rehabilitated or constructed to house working
4    servers in one physical location or multiple sites within
5    the State of Illinois.
6        "Qualified tangible personal property" means:
7    electrical systems and equipment; climate control and
8    chilling equipment and systems; mechanical systems and
9    equipment; monitoring and secure systems; emergency
10    generators; hardware; computers; servers; data storage
11    devices; network connectivity equipment; racks; cabinets;
12    telecommunications cabling infrastructure; raised floor
13    systems; peripheral components or systems; software;
14    mechanical, electrical, or plumbing systems; battery
15    systems; cooling systems and towers; temperature control
16    systems; other cabling; and other data center
17    infrastructure equipment and systems necessary to operate
18    qualified tangible personal property, including fixtures;
19    and component parts of any of the foregoing, including
20    installation, maintenance, repair, refurbishment, and
21    replacement of qualified tangible personal property to
22    generate, transform, transmit, distribute, or manage
23    electricity necessary to operate qualified tangible
24    personal property; and all other tangible personal
25    property that is essential to the operations of a computer
26    data center. The term "qualified tangible personal

 

 

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1    property" also includes building materials physically
2    incorporated in to the qualifying data center. To document
3    the exemption allowed under this Section, the retailer
4    must obtain from the purchaser a copy of the certificate
5    of eligibility issued by the Department of Commerce and
6    Economic Opportunity.
7    This item (32) is exempt from the provisions of Section
83-55.
9    (33) Beginning July 1, 2022, breast pumps, breast pump
10collection and storage supplies, and breast pump kits. This
11item (33) is exempt from the provisions of Section 3-55. As
12used in this item (33):
13        "Breast pump" means an electrically controlled or
14    manually controlled pump device designed or marketed to be
15    used to express milk from a human breast during lactation,
16    including the pump device and any battery, AC adapter, or
17    other power supply unit that is used to power the pump
18    device and is packaged and sold with the pump device at the
19    time of sale.
20        "Breast pump collection and storage supplies" means
21    items of tangible personal property designed or marketed
22    to be used in conjunction with a breast pump to collect
23    milk expressed from a human breast and to store collected
24    milk until it is ready for consumption.
25        "Breast pump collection and storage supplies"
26    includes, but is not limited to: breast shields and breast

 

 

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1    shield connectors; breast pump tubes and tubing adapters;
2    breast pump valves and membranes; backflow protectors and
3    backflow protector adaptors; bottles and bottle caps
4    specific to the operation of the breast pump; and breast
5    milk storage bags.
6        "Breast pump collection and storage supplies" does not
7    include: (1) bottles and bottle caps not specific to the
8    operation of the breast pump; (2) breast pump travel bags
9    and other similar carrying accessories, including ice
10    packs, labels, and other similar products; (3) breast pump
11    cleaning supplies; (4) nursing bras, bra pads, breast
12    shells, and other similar products; and (5) creams,
13    ointments, and other similar products that relieve
14    breastfeeding-related symptoms or conditions of the
15    breasts or nipples, unless sold as part of a breast pump
16    kit that is pre-packaged by the breast pump manufacturer
17    or distributor.
18        "Breast pump kit" means a kit that: (1) contains no
19    more than a breast pump, breast pump collection and
20    storage supplies, a rechargeable battery for operating the
21    breast pump, a breastmilk cooler, bottle stands, ice
22    packs, and a breast pump carrying case; and (2) is
23    pre-packaged as a breast pump kit by the breast pump
24    manufacturer or distributor.
25    (34) (33) Tangible personal property sold by or on behalf
26of the State Treasurer pursuant to the Revised Uniform

 

 

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1Unclaimed Property Act. This item (34) (33) is exempt from the
2provisions of Section 3-55.
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; 102-700, Article
570, Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
675-15, eff. 4-19-22; 102-1026, eff. 5-27-22; revised 8-9-22.)
 
7    Section 15-20. The Retailers' Occupation Tax Act is
8amended by changing Section 2-5 as follows:
 
9    (35 ILCS 120/2-5)
10    Sec. 2-5. Exemptions. Gross receipts from proceeds from
11the sale of the following tangible personal property are
12exempt from the tax imposed by this Act:
13        (1) Farm chemicals.
14        (2) Farm machinery and equipment, both new and used,
15    including that manufactured on special order, certified by
16    the purchaser to be used primarily for production
17    agriculture or State or federal agricultural programs,
18    including individual replacement parts for the machinery
19    and equipment, including machinery and equipment purchased
20    for lease, and including implements of husbandry defined
21    in Section 1-130 of the Illinois Vehicle Code, farm
22    machinery and agricultural chemical and fertilizer
23    spreaders, and nurse wagons required to be registered
24    under Section 3-809 of the Illinois Vehicle Code, but

 

 

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1    excluding other motor vehicles required to be registered
2    under the Illinois Vehicle Code. Horticultural polyhouses
3    or hoop houses used for propagating, growing, or
4    overwintering plants shall be considered farm machinery
5    and equipment under this item (2). Agricultural chemical
6    tender tanks and dry boxes shall include units sold
7    separately from a motor vehicle required to be licensed
8    and units sold mounted on a motor vehicle required to be
9    licensed, if the selling price of the tender is separately
10    stated.
11        Farm machinery and equipment shall include precision
12    farming equipment that is installed or purchased to be
13    installed on farm machinery and equipment including, but
14    not limited to, tractors, harvesters, sprayers, planters,
15    seeders, or spreaders. Precision farming equipment
16    includes, but is not limited to, soil testing sensors,
17    computers, monitors, software, global positioning and
18    mapping systems, and other such equipment.
19        Farm machinery and equipment also includes computers,
20    sensors, software, and related equipment used primarily in
21    the computer-assisted operation of production agriculture
22    facilities, equipment, and activities such as, but not
23    limited to, the collection, monitoring, and correlation of
24    animal and crop data for the purpose of formulating animal
25    diets and agricultural chemicals.
26        Beginning on January 1, 2024, farm machinery and

 

 

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1    equipment also includes electrical power generation
2    equipment used primarily for production agriculture.
3        This item (2) is exempt from the provisions of Section
4    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) Personal property sold to a governmental body, to
9    a corporation, society, association, foundation, or
10    institution organized and operated exclusively for
11    charitable, religious, or educational purposes, or to a
12    not-for-profit corporation, society, association,
13    foundation, institution, or organization that has no
14    compensated officers or employees and that is organized
15    and operated primarily for the recreation of persons 55
16    years of age or older. A limited liability company may
17    qualify for the exemption under this paragraph only if the
18    limited liability company is organized and operated
19    exclusively for educational purposes. On and after July 1,
20    1987, however, no entity otherwise eligible for this
21    exemption shall make tax-free purchases unless it has an
22    active identification number issued by the Department.
23        (12) (Blank).
24        (12-5) On and after July 1, 2003 and through June 30,
25    2004, motor vehicles of the second division with a gross
26    vehicle weight in excess of 8,000 pounds that are subject

 

 

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

 

 

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

 

 

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

 

 

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1    rigs, (ii) pipe and tubular goods, including casing and
2    drill strings, (iii) pumps and pump-jack units, (iv)
3    storage tanks and flow lines, (v) any individual
4    replacement part for oil field exploration, drilling, and
5    production equipment, and (vi) machinery and equipment
6    purchased for lease; but excluding motor vehicles required
7    to be registered under the Illinois Vehicle Code.
8        (20) Photoprocessing machinery and equipment,
9    including repair and replacement parts, both new and used,
10    including that manufactured on special order, certified by
11    the purchaser to be used primarily for photoprocessing,
12    and including photoprocessing machinery and equipment
13    purchased for lease.
14        (21) Until July 1, 2028, coal and aggregate
15    exploration, mining, off-highway hauling, processing,
16    maintenance, and reclamation equipment, including
17    replacement parts and equipment, and including equipment
18    purchased for lease, but excluding motor vehicles required
19    to be registered under the Illinois Vehicle Code. The
20    changes made to this Section by Public Act 97-767 apply on
21    and after July 1, 2003, but no claim for credit or refund
22    is allowed on or after August 16, 2013 (the effective date
23    of Public Act 98-456) for such taxes paid during the
24    period beginning July 1, 2003 and ending on August 16,
25    2013 (the effective date of Public Act 98-456).
26        (22) Until June 30, 2013, fuel and petroleum products

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    kit that is pre-packaged by the breast pump manufacturer
2    or distributor.
3        "Breast pump kit" means a kit that: (1) contains no
4    more than a breast pump, breast pump collection and
5    storage supplies, a rechargeable battery for operating the
6    breast pump, a breastmilk cooler, bottle stands, ice
7    packs, and a breast pump carrying case; and (2) is
8    pre-packaged as a breast pump kit by the breast pump
9    manufacturer or distributor.
10        (47) (46) Tangible personal property sold by or on
11    behalf of the State Treasurer pursuant to the Revised
12    Uniform Unclaimed Property Act. This item (47) (46) is
13    exempt from the provisions of Section 2-70.
14(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
15101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
168-27-21; 102-700, Article 70, Section 70-20, eff. 4-19-22;
17102-700, Article 75, Section 75-20, eff. 4-19-22; 102-813,
18eff. 5-13-22; 102-1026, eff. 5-27-22; revised 8-15-22.)
 
19
ARTICLE 20. PARKING EXCISE TAX

 
20    Section 20-5. The Parking Excise Tax Act is amended by
21changing Sections 10-5, 10-10, 10-15, 10-25, 10-30, 10-35,
2210-45, and 10-50 as follows:
 
23    (35 ILCS 525/10-5)

 

 

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1    (Text of Section before amendment by P.A. 102-700)
2    Sec. 10-5. Definitions.
3    "Booking intermediary" means any person or entity that
4facilitates the processing and fulfillment of reservation
5transactions between an operator and a person or entity
6desiring parking in a parking lot or garage of that operator.
7    "Charge or fee paid for parking" means the gross amount of
8consideration for the use or privilege of parking a motor
9vehicle in or upon any parking lot or garage in the State,
10collected by an operator and valued in money, whether received
11in money or otherwise, including cash, credits, property, and
12services, determined without any deduction for costs or
13expenses, but not including charges that are added to the
14charge or fee on account of the tax imposed by this Act or on
15account of any other tax imposed on the charge or fee. "Charge
16or fee paid for parking" excludes separately stated charges
17not for the use or privilege or parking and excludes amounts
18retained by or paid to a booking intermediary for services
19provided by the booking intermediary. If any separately stated
20charge is not optional, it shall be presumed that it is part of
21the charge for the use or privilege or parking.
22    "Department" means the Department of Revenue.
23    "Operator" means any person who engages in the business of
24operating a parking area or garage, or who, directly or
25through an agreement or arrangement with another party,
26collects the consideration for parking or storage of motor

 

 

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1vehicles, recreational vehicles, or other self-propelled
2vehicles, at that parking place. This includes, but is not
3limited to, any facilitator or aggregator that collects from
4the purchaser the charge or fee paid for parking. "Operator"
5does not include a bank, credit card company, payment
6processor, booking intermediary, or person whose involvement
7is limited to performing functions that are similar to those
8performed by a bank, credit card company, payment processor,
9or booking intermediary.
10    "Parking area or garage" means any real estate, building,
11structure, premises, enclosure or other place, whether
12enclosed or not, except a public way, within the State, where
13motor vehicles, recreational vehicles, or other self-propelled
14vehicles, are stored, housed or parked for hire, charge, fee
15or other valuable consideration in a condition ready for use,
16or where rent or compensation is paid to the owner, manager,
17operator or lessee of the premises for the housing, storing,
18sheltering, keeping or maintaining motor vehicles,
19recreational vehicles, or other self-propelled vehicles.
20"Parking area or garage" includes any parking area or garage,
21whether the vehicle is parked by the owner of the vehicle or by
22the operator or an attendant.
23    "Person" means any natural individual, firm, trust,
24estate, partnership, association, joint stock company, joint
25venture, corporation, limited liability company, or a
26receiver, trustee, guardian, or other representative appointed

 

 

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1by order of any court.
2    "Purchase price" means the consideration paid for the
3purchase of a parking space in a parking area or garage, valued
4in money, whether received in money or otherwise, including
5cash, gift cards, credits, and property, and shall be
6determined without any deduction on account of the cost of
7materials used, labor or service costs, or any other expense
8whatsoever.
9    "Purchase price" includes any and all charges that the
10recipient pays related to or incidental to obtaining the use
11or privilege of using a parking space in a parking area or
12garage, including but not limited to any and all related
13markups, service fees, convenience fees, facilitation fees,
14cancellation fees, overtime fees, or other such charges,
15regardless of terminology. However, "purchase price" shall not
16include consideration paid for:
17        (1) optional, separately stated charges not for the
18    use or privilege of using a parking space in the parking
19    area or garage;
20        (2) any charge for a dishonored check;
21        (3) any finance or credit charge, penalty or charge
22    for delayed payment, or discount for prompt payment;
23        (4) any purchase by a purchaser if the operator is
24    prohibited by federal or State Constitution, treaty,
25    convention, statute or court decision from collecting the
26    tax from such purchaser;

 

 

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1        (5) the isolated or occasional sale of parking spaces
2    subject to tax under this Act by a person who does not hold
3    himself out as being engaged (or who does not habitually
4    engage) in selling of parking spaces; and
5        (6) any amounts added to a purchaser's bills because
6    of charges made pursuant to the tax imposed by this Act. If
7    credit is extended, then the amount thereof shall be
8    included only as and when payments are made.
9    "Purchaser" means any person who acquires a parking space
10in a parking area or garage for use for valuable
11consideration.
12    "Use" means the exercise by any person of any right or
13power over, or the enjoyment of, a parking space in a parking
14area or garage subject to tax under this Act.
15(Source: P.A. 101-31, eff. 6-28-19.)
 
16    (Text of Section after amendment by P.A. 102-700)
17    Sec. 10-5. Definitions. As used in this Act:
18    "Booking intermediary" means any person or entity that
19facilitates the processing and fulfillment of reservation
20transactions between an operator and a person or entity
21desiring parking in a parking lot or garage of that operator.
22    "Department" means the Department of Revenue.
23    "Operator" means any person who engages in the business of
24operating a parking area or garage, or who, directly or
25through an agreement or arrangement with another party,

 

 

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1collects the consideration for parking or storage of motor
2vehicles, recreational vehicles, or other self-propelled
3vehicles, at that parking place. This includes, but is not
4limited to, any facilitator or aggregator that collects the
5purchase price from the purchaser. "Operator" does not include
6a bank, credit card company, payment processor, booking
7intermediary (except to the extent a booking intermediary is
8required to be registered under Section 10-30 or as otherwise
9provided in this Act), or person whose involvement is limited
10to performing functions that are similar to those performed by
11a bank, credit card company, or payment processor, or booking
12intermediary.
13    "Parking area or garage" means any real estate, building,
14structure, premises, enclosure or other place, whether
15enclosed or not, except a public way, within the State, where
16motor vehicles, recreational vehicles, or other self-propelled
17vehicles, are stored, housed or parked for hire, charge, fee
18or other valuable consideration in a condition ready for use,
19or where rent or compensation is paid to the owner, manager,
20operator or lessee of the premises for the housing, storing,
21sheltering, keeping or maintaining motor vehicles,
22recreational vehicles, or other self-propelled vehicles.
23"Parking area or garage" includes any parking area or garage,
24whether the vehicle is parked by the owner of the vehicle or by
25the operator or an attendant.
26    "Person" means any natural individual, firm, trust,

 

 

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1estate, partnership, association, joint stock company, joint
2venture, corporation, limited liability company, or a
3receiver, trustee, guardian, or other representative appointed
4by order of any court.
5    "Purchase price" means the consideration paid for the
6purchase of a parking space in a parking area or garage, valued
7in money, whether received in money or otherwise, including
8cash, gift cards, credits, and property, and shall be
9determined without any deduction on account of the cost of
10materials used, labor or service costs, or any other expense
11whatsoever.
12    "Purchase price" includes any and all charges that the
13recipient pays related to or incidental to obtaining the use
14or privilege of using a parking space in a parking area or
15garage, including but not limited to any and all related
16markups, service fees, convenience fees, facilitation fees,
17cancellation fees, overtime fees, or other such charges,
18regardless of terminology. However, "purchase price" shall not
19include consideration paid for:
20        (1) optional, separately stated charges not for the
21    use or privilege of using a parking space in the parking
22    area or garage;
23        (2) any charge for a dishonored check;
24        (3) any finance or credit charge, penalty or charge
25    for delayed payment, or discount for prompt payment;
26        (4) any purchase by a purchaser if the operator is

 

 

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1    prohibited by federal or State Constitution, treaty,
2    convention, statute or court decision from collecting the
3    tax from such purchaser;
4        (5) the isolated or occasional sale of parking spaces
5    subject to tax under this Act by a person who does not hold
6    himself out as being engaged (or who does not habitually
7    engage) in selling of parking spaces; and
8        (6) any amounts added to a purchaser's bills because
9    of charges made pursuant to the tax imposed by this Act. If
10    credit is extended, then the amount thereof shall be
11    included only as and when payments are made.
12    "Purchaser" means any person who acquires a parking space
13in a parking area or garage for use for valuable
14consideration.
15    "Use" means the exercise by any person of any right or
16power over, or the enjoyment of, a parking space in a parking
17area or garage subject to tax under this Act.
18(Source: P.A. 101-31, eff. 6-28-19; 102-700, eff. 7-1-23.)
 
19    (35 ILCS 525/10-10)
20    Sec. 10-10. Imposition of tax; calculation of tax.
21    (a) Beginning on January 1, 2020, a tax is imposed on the
22privilege of using in this State a parking space in a parking
23area or garage for the use of parking one or more motor
24vehicles, recreational vehicles, or other self-propelled
25vehicles, at the rate of:

 

 

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1        (1) 6% of the purchase price for a parking space paid
2    for on an hourly, daily, or weekly basis; and
3        (2) 9% of the purchase price for a parking space paid
4    for on a monthly or annual basis.
5    (b) The tax shall be collected from the purchaser by the
6operator. Notwithstanding the provisions of this subsection,
7beginning on January 1, 2024, if a booking intermediary
8facilitates the processing and fulfillment of the reservation
9for an operator that is not registered under Section 10-30,
10then the tax shall be collected on the purchase price from the
11purchaser by the booking intermediary on behalf of the
12operator, and the tax shall be remitted to the Department by
13the booking intermediary. The booking intermediary that
14facilitates the processing and fulfillment of the reservation
15for an operator that is not registered under Section 10-30 and
16the unregistered operator are jointly and severally liable for
17payment of the tax to the Department.
18    (b-5) Booking intermediaries shall collect the tax on the
19purchase price paid by purchasers on behalf of registered
20operators. If a booking intermediary charges a separate
21service charge that is included in the purchase price, the tax
22shall be collected on that separate service charge as well,
23even if the separate service charge is retained by the booking
24intermediary. Beginning January 1, 2024, booking
25intermediaries are liable for and shall remit the tax to the
26Department on any separately stated service fee that the

 

 

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1booking intermediary charges to the customer. Operators are
2liable for the remittance of tax under this Act on the
3remainder of the purchase price for the transaction. Booking
4intermediaries and operators are subject to audit on all such
5sales.
6    (c) An operator that has paid or remitted the tax imposed
7by this Act to another operator in connection with the same
8parking transaction, or the use of the same parking space,
9that is subject to tax under this Act, shall be entitled to a
10credit for such tax paid or remitted against the amount of tax
11owed under this Act, provided that the other operator is
12registered under this Act. The operator claiming the credit
13shall have the burden of proving it is entitled to claim a
14credit.
15    (d) If any operator or booking intermediary erroneously
16collects tax or collects more from the purchaser than the
17purchaser's liability for the transaction, the purchaser shall
18have a legal right to claim a refund of such amount from the
19operator or booking intermediary. However, if such amount is
20not refunded to the purchaser for any reason, the operator or
21booking intermediary is liable to pay such amount to the
22Department.
23    (e) The tax imposed by this Section is not imposed with
24respect to any transaction in interstate commerce, to the
25extent that the transaction may not, under the Constitution
26and statutes of the United States, be made the subject of

 

 

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1taxation by this State.
2(Source: P.A. 101-31, eff. 6-28-19.)
 
3    (35 ILCS 525/10-15)
4    Sec. 10-15. Filing of returns and deposit of proceeds. On
5or before the last day of each calendar month, every operator
6engaged in the business of providing to purchasers parking
7areas and garages in this State during the preceding calendar
8month and every booking intermediary required to collect tax
9under Section 10-10 shall file a return with the Department,
10stating:
11        (1) the name of the operator or booking intermediary;
12        (2) the address of its principal place of business
13    and, if applicable, the address of the principal place of
14    business from which it provides parking areas and garages
15    in this State;
16        (3) the total amount of receipts received by the
17    operator during the preceding calendar month or quarter,
18    as the case may be, from sales of parking spaces to
19    purchasers in parking areas or garages during the
20    preceding calendar month or quarter; the total amount of
21    receipts for separately stated service fees that are
22    charged to the customer by the booking intermediary in
23    connection with the booking intermediary's facilitation of
24    parking spot reservations for an operator during the
25    preceding calendar month or quarter, as the case may be;

 

 

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1    and, if the return is filed by a booking intermediary that
2    collects the tax under this Act on behalf of an
3    unregistered operator, as provided in Section 10-10, then
4    the total amount of receipts received by the booking
5    intermediary on behalf of the unregistered operator during
6    the preceding calendar month or quarter, as the case may
7    be, from sales of parking spaces to purchasers in parking
8    areas or garages during the preceding calendar month or
9    quarter;
10        (4) deductions allowed by law;
11        (5) the total amount of receipts received by the
12    operator during the preceding calendar month or quarter
13    upon which the tax was computed; the total amount of
14    receipts for separately stated service fees that are
15    charged to the customer by a booking intermediary in
16    connection with the booking intermediary's facilitation of
17    parking spot reservations for an operator during the
18    preceding calendar month or quarter upon which the tax was
19    computed; and, if the return is filed by a booking
20    intermediary that collects the tax under this Act on
21    behalf of an unregistered operator, as provided in Section
22    10-10, then the total amount of receipts received by the
23    booking intermediary on behalf of the unregistered
24    operator during the preceding calendar month or quarter
25    upon which the tax was computed;
26        (6) the amount of tax due; and

 

 

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1        (7) such other reasonable information as the
2    Department may require.
3    If an operator or booking intermediary ceases to engage in
4the kind of business that makes it responsible for filing
5returns under this Act, then that operator or booking
6intermediary shall file a final return under this Act with the
7Department on or before the last day of the month after
8discontinuing such business.
9    All returns required to be filed and payments required to
10be made under this Act shall be by electronic means. Taxpayers
11who demonstrate hardship in filing or paying electronically
12may petition the Department to waive the electronic filing or
13payment requirement, or both. The Department may require a
14separate return for the tax under this Act or combine the
15return for the tax under this Act with the return for other
16taxes. In addition to the requirement to file all returns
17required to be filed and payments required to be made under
18this Act by electronic means, booking intermediaries shall
19file returns in the form and manner required by the
20Department.
21    If the same person has more than one business registered
22with the Department under separate registrations under this
23Act, that person shall not file each return that is due as a
24single return covering all such registered businesses but
25shall file separate returns for each such registered business.
26    If the operator or booking intermediary is a corporation,

 

 

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1the return filed on behalf of that corporation shall be signed
2by the president, vice-president, secretary, or treasurer, or
3by a properly accredited agent of such corporation.
4    The operator or booking intermediary filing the return
5under this Act shall, at the time of filing the return, pay to
6the Department the amount of tax imposed by this Act less a
7discount of 1.75%, not to exceed $1,000 per month, which is
8allowed to reimburse the operator or booking intermediary for
9the expenses incurred in keeping records, preparing and filing
10returns, remitting the tax, and supplying data to the
11Department on request.
12    If any payment provided for in this Section exceeds the
13taxpayer's liabilities under this Act, as shown on an original
14return, the Department may authorize the taxpayer to credit
15such excess payment against liability subsequently to be
16remitted to the Department under this Act, in accordance with
17reasonable rules adopted by the Department. If the Department
18subsequently determines that all or any part of the credit
19taken was not actually due to the taxpayer, the taxpayer's
20discount shall be reduced by an amount equal to the difference
21between the discount as applied to the credit taken and that
22actually due, and that taxpayer shall be liable for penalties
23and interest on such difference.
24(Source: P.A. 101-31, eff. 6-28-19.)
 
25    (35 ILCS 525/10-25)

 

 

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1    Sec. 10-25. Collection of tax.
2    (a) Beginning with bills issued or charges collected for a
3purchase of a parking space in a parking area or garage on and
4after January 1, 2020, the tax imposed by this Act shall be
5collected from the purchaser by the operator, or, beginning
6January 1, 2024 by a booking intermediary as provided in
7Section 10-10, at the rate stated in Section 10-10 and shall be
8remitted to the Department as provided in this Act. All
9charges for parking spaces in a parking area or garage are
10presumed subject to tax collection. Operators and booking
11intermediaries, as applicable, shall collect the tax from
12purchasers by adding the tax to the amount of the purchase
13price received from the purchaser. The tax imposed by the Act
14shall when collected be stated as a distinct item separate and
15apart from the purchase price of the service subject to tax
16under this Act. However, where it is not possible to state the
17tax separately the Department may by rule exempt such
18purchases from this requirement so long as purchasers are
19notified by language on the invoice or notified by a sign that
20the tax is included in the purchase price.
21    (b) Any person purchasing a parking space in a parking
22area or garage subject to tax under this Act as to which there
23has been no charge made to him of the tax imposed by Section
2410-10, shall make payment of the tax imposed by Section 10-10
25of this Act in the form and manner provided by the Department,
26such payment to be made to the Department in the manner and

 

 

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1form required by the Department not later than the 20th day of
2the month following the month of purchase of the parking
3space.
4(Source: P.A. 101-31, eff. 6-28-19.)
 
5    (35 ILCS 525/10-30)
6    Sec. 10-30. Registration of operators and booking
7intermediaries.
8    (a) A person who engages in business as an operator of a
9parking area or garage in this State, or, beginning January 1,
102024, a booking intermediary that directly charges to a
11customer a separately stated service fee pursuant to
12subsection (b-5) of Section 10-10, or, beginning January 1,
132024, a booking intermediary that facilitates the processing
14and fulfillment of a reservation for an operator that is not
15registered under Section 10-10, shall register with the
16Department. Application for a certificate of registration
17shall be made to the Department, by electronic means, in the
18form and manner prescribed by the Department and shall contain
19any reasonable information the Department may require. Upon
20receipt of the application for a certificate of registration
21in proper form and manner, the Department shall issue to the
22applicant a certificate of registration. Operators who
23demonstrate that they do not have access to the Internet or
24demonstrate hardship in applying electronically may petition
25the Department to waive the electronic application

 

 

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1requirements.
2    (b) The Department may refuse to issue or reissue a
3certificate of registration to any applicant for the reasons
4set forth in Section 2505-380 of the Department of Revenue Law
5of the Civil Administrative Code of Illinois.
6    (c) Any person aggrieved by any decision of the Department
7under this Section may, within 20 days after notice of such
8decision, protest and request a hearing, whereupon the
9Department shall give notice to such person of the time and
10place fixed for such hearing and shall hold a hearing in
11conformity with the provisions of this Act and then issue its
12final administrative decision in the matter to such person. In
13the absence of such a protest within 20 days, the Department's
14decision shall become final without any further determination
15being made or notice given.
16(Source: P.A. 101-31, eff. 6-28-19.)
 
17    (35 ILCS 525/10-35)
18    Sec. 10-35. Revocation of certificate of registration.
19    (a) The Department may, after notice and a hearing as
20provided in this Act, revoke the certificate of registration
21of any operator or booking intermediary who violates any of
22the provisions of this Act or any rule adopted pursuant to this
23Act. Before revocation of a certificate of registration, the
24Department shall, within 90 days after non-compliance and at
25least 7 days prior to the date of the hearing, give the

 

 

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1operator or booking intermediary so accused notice in writing
2of the charge against him or her, and on the date designated
3shall conduct a hearing upon this matter. The lapse of such
490-day period shall not preclude the Department from
5conducting revocation proceedings at a later date if
6necessary. Any hearing held under this Section shall be
7conducted by the Director or by any officer or employee of the
8Department designated in writing by the Director.
9    (b) The Department may revoke a certificate of
10registration for the reasons set forth in Section 2505-380 of
11the Department of Revenue Law of the Civil Administrative Code
12of Illinois.
13    (c) Upon the hearing of any such proceeding, the Director
14or any officer or employee of the Department designated in
15writing by the Director may administer oaths, and the
16Department may procure by its subpoena the attendance of
17witnesses and, by its subpoena duces tecum, the production of
18relevant books and papers. Any circuit court, upon application
19either of the operator or of the Department, may, by order duly
20entered, require the attendance of witnesses and the
21production of relevant books and papers before the Department
22in any hearing relating to the revocation of certificates of
23registration. Upon refusal or neglect to obey the order of the
24court, the court may compel obedience thereof by proceedings
25for contempt.
26    (d) The Department may, by application to any circuit

 

 

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1court, obtain an injunction requiring any person who engages
2in business as an operator or booking intermediary under this
3Act to obtain a certificate of registration. Upon refusal or
4neglect to obey the order of the court, the court may compel
5obedience by proceedings for contempt.
6(Source: P.A. 101-31, eff. 6-28-19.)
 
7    (35 ILCS 525/10-45)
8    Sec. 10-45. Tax collected as debt owed to State. The tax
9herein required to be collected by any operator, booking
10intermediary, or valet business and any such tax collected by
11that person, shall constitute a debt owed by that person to
12this State.
13(Source: P.A. 101-31, eff. 6-28-19.)
 
14    (35 ILCS 525/10-50)
15    Sec. 10-50. Incorporation by reference. All of the
16provisions of Sections 1, 2a, 2b, 3 (except provisions
17relating to transaction returns and except for provisions that
18are inconsistent with this Act), in respect to all provisions
19therein other than the State rate of tax) 4, 5, 5a, 5b, 5c, 5d,
205e, 5f, 5g, 5j, 6, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12,
21and 13 of the Retailers' Occupation Tax Act that are not
22inconsistent with this Act, and all provisions of the Uniform
23Penalty and Interest Act shall apply, as far as practicable,
24to the subject matter of this Act to the same extent as if such

 

 

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1provisions were included in this Act. The enumerated
2provisions of the Retailers' Occupation Tax Act in this
3Section and all provisions of the Uniform Penalty and Interest
4Act shall apply, as far as practicable, to booking
5intermediaries required to be registered under Section 10-30
6of this Act.
7(Source: P.A. 101-31, eff. 6-28-19.)
 
8
ARTICLE 25. HOTELS-DISASTER RELIEF

 
9    Section 25-5. The Hotel Operators' Occupation Tax Act is
10amended by changing Section 3 as follows:
 
11    (35 ILCS 145/3)  (from Ch. 120, par. 481b.33)
12    Sec. 3. Rate; exemptions.
13    (a) A tax is imposed upon persons engaged in the business
14of renting, leasing or letting rooms in a hotel at the rate of
155% of 94% of the gross rental receipts from such renting,
16leasing or letting, excluding, however, from gross rental
17receipts, the proceeds of such renting, leasing or letting to
18permanent residents of that hotel and proceeds from the tax
19imposed under subsection (c) of Section 13 of the Metropolitan
20Pier and Exposition Authority Act.
21    (b) There shall be imposed an additional tax upon persons
22engaged in the business of renting, leasing or letting rooms
23in a hotel at the rate of 1% of 94% of the gross rental

 

 

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1receipts from such renting, leasing or letting, excluding,
2however, from gross rental receipts, the proceeds of such
3renting, leasing or letting to permanent residents of that
4hotel and proceeds from the tax imposed under subsection (c)
5of Section 13 of the Metropolitan Pier and Exposition
6Authority Act.
7    (c) No funds received pursuant to this Act shall be used to
8advertise for or otherwise promote new competition in the
9hotel business.
10    (d) However, such tax is not imposed upon the privilege of
11engaging in any business in Interstate Commerce or otherwise,
12which business may not, under the Constitution and Statutes of
13the United States, be made the subject of taxation by this
14State. In addition, the tax is not imposed upon gross rental
15receipts for which the hotel operator is prohibited from
16obtaining reimbursement for the tax from the customer by
17reason of a federal treaty.
18    (d-5) On and after July 1, 2017, the tax imposed by this
19Act shall not apply to gross rental receipts received by an
20entity that is organized and operated exclusively for
21religious purposes and possesses an active Exemption
22Identification Number issued by the Department pursuant to the
23Retailers' Occupation Tax Act when acting as a hotel operator
24renting, leasing, or letting rooms:
25        (1) in furtherance of the purposes for which it is
26    organized; or

 

 

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1        (2) to entities that (i) are organized and operated
2    exclusively for religious purposes, (ii) possess an active
3    Exemption Identification Number issued by the Department
4    pursuant to the Retailers' Occupation Tax Act, and (iii)
5    rent the rooms in furtherance of the purposes for which
6    they are organized.
7    No gross rental receipts are exempt under paragraph (2) of
8this subsection (d-5) unless the hotel operator obtains the
9active Exemption Identification Number from the exclusively
10religious entity to whom it is renting and maintains that
11number in its books and records. Gross rental receipts from
12all rentals other than those described in items (1) or (2) of
13this subsection (d-5) are subject to the tax imposed by this
14Act unless otherwise exempt under this Act.
15    This subsection (d-5) is exempt from the sunset provisions
16of Section 3-5 of this Act.
17    (d-10) On and after July 1, 2023, the tax imposed by this
18Act shall not apply to gross rental receipts received from the
19renting, leasing, or letting of rooms to an entity that is
20organized and operated exclusively by an organization
21chartered by the United States Congress for the purpose of
22providing disaster relief and that possesses an active
23Exemption Identification Number issued by the Department
24pursuant to the Retailers' Occupation Tax Act if the renting,
25leasing, or letting of the rooms is in furtherance of the
26purposes for which the exempt organization is organized. This

 

 

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1subsection (d-10) is exempt from the sunset provisions of
2Section 3-5 of this Act.
3    (e) Persons subject to the tax imposed by this Act may
4reimburse themselves for their tax liability under this Act by
5separately stating such tax as an additional charge, which
6charge may be stated in combination, in a single amount, with
7any tax imposed pursuant to Sections 8-3-13 and 8-3-14 of the
8Illinois Municipal Code, and Section 25.05-10 of "An Act to
9revise the law in relation to counties".
10    (f) If any hotel operator collects an amount (however
11designated) which purports to reimburse such operator for
12hotel operators' occupation tax liability measured by receipts
13which are not subject to hotel operators' occupation tax, or
14if any hotel operator, in collecting an amount (however
15designated) which purports to reimburse such operator for
16hotel operators' occupation tax liability measured by receipts
17which are subject to tax under this Act, collects more from the
18customer than the operators' hotel operators' occupation tax
19liability in the transaction is, the customer shall have a
20legal right to claim a refund of such amount from such
21operator. However, if such amount is not refunded to the
22customer for any reason, the hotel operator is liable to pay
23such amount to the Department.
24(Source: P.A. 100-213, eff. 8-18-17.)
 
25
ARTICLE 30. MUNICIPAL CODE-UTILITIES

 

 

 

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1    Section 30-5. The Illinois Municipal Code is amended by
2changing Section 8-11-2.5 as follows:
 
3    (65 ILCS 5/8-11-2.5)
4    Sec. 8-11-2.5. Municipal tax review; requests for
5information.
6    (a) If a municipality has imposed a tax under Section
78-11-2, then the municipality, which may act through its
8designated auditor or agent, may conduct an audit of tax
9receipts collected from the public utility that is subject to
10the tax or that collects the tax from purchasers on behalf of
11the municipality to determine whether the amount of tax that
12was paid by the public utility was accurate.
13    (b) Not more than once every 2 years, a municipality that
14has imposed a tax under Section 8-11-2 of this Code Act may,
15subject to the limitations and protections stated in the Local
16Government Taxpayers' Bill of Rights Act, make a written
17request via e-mail to an e-mail address provided by the
18utility for any information from a utility in the format
19maintained by the public utility in the ordinary course of its
20business that the municipality reasonably requires in order to
21perform an audit under subsection (a). The information that
22may be requested by the municipality includes, without
23limitation:
24        (1) in an electronic format used by the public utility

 

 

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1    in the ordinary course of its business, the
2    premises-specific and other information used by the public
3    utility to determine the amount of tax due to the
4    municipality, for a time period that includes the year in
5    which the request is made and not more than 6 years
6    immediately preceding that year, as appropriate for the
7    period being audited, and which shall include for each
8    customer premises in the municipality: (i) the premises
9    address and zip code; (ii) the classification of the
10    premises as designated by the public utility, such as
11    residential, commercial, or industrial; (iii) monthly
12    usage information sufficient to calculate taxes due, in
13    therms, kilowatts, minutes, or other such other unit of
14    measurement used to calculate the taxes; (iv) the taxes
15    actually assessed, collected, and remitted to the
16    municipality; (v) the first date of service for the
17    premises, if that date occurred within the period being
18    audited; and (vi) any tax exemption claimed for the
19    premises and any additional information that supports a
20    specific tax exemption, if the municipality requests that
21    information, including the customer name and other
22    relevant data; however, a public utility that is an
23    electric utility may not provide other customer-specific
24    information to the municipality; and
25        (2) the premises address for customer accounts that
26    the public utility's records indicate are: (i) in a

 

 

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1    bordering municipality, township, or unincorporated area
2    (other than the City of Chicago), provided that the
3    municipality provides the public utility a list of such
4    bordering jurisdictions; or (ii) in any zip code with
5    boundaries that include or are adjacent to the requesting
6    municipality provided that the municipality provides the
7    public utility a list of those zip codes; this item (ii)
8    applies to requests made on or after September 1, 2022. If
9    any such customer is determined by the municipality and
10    the utility to be located within the requesting
11    municipality, then the public utility shall provide the
12    additional information provided in paragraph (1) of this
13    subsection (b)..
14    Following the municipality's receipt of the information
15provided by the public utility pursuant to paragraphs (1) or
16(2) of this subsection (b), if a question or issue arises that
17can only be addressed by accessing customer-specific or
18additional information not described in this Section, then the
19utility shall attempt to resolve the question or issue without
20disclosing any customer-specific information. If this process
21does not resolve the question or issue, then either the
22municipality or public utility can further pursue the matter
23before the Department of Revenue, which has the discretion to
24receive or share customer-specific information with the
25municipality as appropriate subject to confidentiality
26restrictions.

 

 

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1    (c) Each public utility must provide the information
2requested under subsection (b) within 45 days after the date
3of the request.
4    The time in which a public utility must provide the
5information requested under subsection (b) may be extended by
6an agreement between the municipality and the public utility.
7    (d) If an audit by the municipality or its agents finds an
8error by the public utility in the amount of taxes paid by the
9public utility, then the municipality must notify the public
10utility of the error. Any such notice must be issued pursuant
11to Section 30 of the Local Government Taxpayers' Bill of
12Rights Act or a lesser period of time from the date the tax was
13due that may be specified in the municipal ordinance imposing
14the tax. Upon such a notice, any audit shall be conducted
15pursuant to Section 35 of the Local Government Taxpayers' Bill
16of Rights Act subject to the timelines set forth in this
17subsection (d). The public utility must submit a written
18response within 60 days after the date the notice was
19postmarked stating that it has corrected the error or stating
20the reason that the error is inapplicable or inaccurate. The
21municipality then has 60 days after the receipt of the public
22utility's response to review and contest the conclusion of the
23public utility. If the parties are unable to agree on the
24disposition of the audit findings within 120 days after the
25notification of the error to the public utility, then either
26party may submit the matter for appeal as outlined in Section

 

 

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140 of the Local Government Taxpayers' Bill of Rights Act. If
2the appeals process does not produce a satisfactory result,
3then either party may pursue the alleged error in a court of
4competent jurisdiction.
5    (e) The public utility shall be liable to the municipality
6for unpaid taxes, including taxes that the public utility
7failed to properly bill to the customer subject to subsection
8paragraph (2) of subsection (e-10) of this Section. This
9subsection (e) does not limit a utility's right to an
10offsetting credit it would otherwise be entitled to, including
11that authorized by subsection (c) of Section 8-11-2 of this
12the Code. To the extent that a public utility's errors in past
13tax collections and payments relate to premises located in an
14area of the municipality that was annexed on or after March 17,
152023 (the effective date of Public Act 102-1144) this
16amendatory Act of the 102nd General Assembly, however, the
17public utility shall only be liable for such errors beginning
1860 days after the date that the municipality provided the
19public utility notice of the annexation, provided that the
20public utility provides municipalities with an email address
21to send annexation notices. A copy of the annexation ordinance
22and the map filed with the County Clerk sent to the email
23address provided by the public utility shall be deemed
24sufficient notice, but other forms of notice may also be
25sufficient.
26    (e-5) Upon mutual agreement, a utility and municipality

 

 

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1may use a web portal in lieu of email to receive notice of
2annexations and boundary changes. After December 31, 2025 for
3a gas public utility that serves more than 2,000,000 customers
4in Illinois and after December 31, 2022 for all other public
5utilities that serve more than 1,000,000 retail customers in
6Illinois, the public utilities shall provide a secure web
7portal for municipalities to use, and, thereafter, the web
8portals shall be used by all municipalities to notify the
9public utilities of annexations. The web portal must provide
10the municipality with an electronic record of all
11communications and attached documents that the municipality
12has submitted through the portal.
13    (e-10) (1) No later than August 1, 2023, the Department of
14Revenue shall develop and publish a written process to be used
15by each public utility and each municipality that imposes a
16tax under Section 8-11-2 of this the Code, which may act
17through its designated auditor or agent, under which:
18        (A) by December 31, 2024, and on a regular schedule
19    thereafter to occur approximately every 5 years, each
20    public utility shall work collaboratively with each
21    municipality to develop and file with the Department of
22    Revenue, a master list of all premises addresses in the
23    municipality (including premises addresses with inactive
24    accounts) that are subject to such tax and all accounts in
25    the municipality that are exempt from such tax, provided
26    that the final date for the first master list shall be

 

 

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1    extended, at the utility's request, to no later than
2    December 31, 2026;
3        (B) information is provided to the municipality to
4    facilitate development of the master list including
5    information described in paragraph (1) of subsection (b)
6    of this Section regarding all accounts (including premises
7    addresses with inactive accounts) that the public
8    utility's records show are in the municipality and the
9    premises addresses in (i) any bordering municipality, (ii)
10    any bordering township, or (iii) any zip code that is in
11    any part in the municipality or that borders the
12    municipality;
13        (C) any dispute between the public utility and the
14    municipality related to the master list will be resolved;
15        (D) on a semi-annual basis following the development
16    of the master list, each public utility shall provide to
17    each municipality certain information that the
18    municipality can use to nominate changes to the master
19    list, including, but not limited to: (i) a list of any
20    tax-related changes, such as the addition or removal of an
21    exemption, or to the taxing jurisdiction, to any account
22    on the master list; and (ii) new premises addresses within
23    the municipality, any bordering municipality, in any
24    bordering township, or in any zip code that is in any part
25    in the municipality or that borders the municipality;
26        (E) accounts nominated by the municipality to be added

 

 

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1    or deleted from the master list may be submitted to the
2    public utility and related disputes will be resolved;
3        (F) changes may be made to the master list; and
4        (G) the utility may file a master list based solely on
5    its records if the municipality fails to participate and
6    such a municipality may request to restart the process
7    prior to the end of the 5-year five-year cycle.
8    (2) No public utility is liable for any error in tax
9collections or payments due more than 60 days after the date
10that the first master list for the relevant municipality is
11filed with the Department of Revenue unless such error in tax
12collection or payment:
13        (A) was related to a premises address on the master
14    list at the time of the error;
15        (B) was related to an area of the municipality annexed
16    on or after March 17, 2023 (the effective date of Public
17    Act 102-1144) this amendatory Act of the 102nd General
18    Assembly, notice of which was properly provided to the
19    public utility pursuant to the procedures set forth in
20    subsection (e); or
21        (C) resulted from the public utility's failure to
22    comply with the process established in this subsection
23    (e-10).
24    (3) If the public utility uses a portal as set forth in
25subsection (e-5), all lists, changes affecting tax collection
26and remission, proposed corrections, and reports shall be

 

 

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1provided through such portal.
2    (e-15) If a customer paid a tax to a municipality that the
3customer did not owe or was in excess of the tax the customer
4owed, then the customer may, to the extent allowed by Section
59-252 of the Public Utilities Act, recover the tax or over
6payment from the public utility, and any amount so paid by the
7public utility may be deducted by that public utility from any
8taxes then or thereafter owed by the public utility to that
9municipality.
10    (e-20) (1) Any court of competent jurisdiction The
11Department of Revenue shall have the authority to resolve a
12claim by a municipality that a public utility materially
13failed to comply with the requirements of subsections (b) or
14(c) of this Section or the process developed under subsection
15(e-10) of this Section. If a court the Department of Revenue
16finds, after notice and hearing, that a public utility (i)
17caused a material delay in providing information properly
18requested under such subsections or (ii) omitted a material
19portion of information properly requested, then, if the claim
20relates to subsections (b) or (c), the court Department shall
21assess a penalty on the utility of up to $50,000 per audit, or
22up to $10,000 per audit for a utility that served less than
23100,000 retail customers on the date of the audit notice, or,
24if the claim relates to subsection (e-10), up to $50,000 per
255-year master list cycle or up to $10,000 per cycle for a
26utility that served less than 100,000 retail customers on the

 

 

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1date such master list was filed with the Department, which
2penalty shall be paid by the public utility to the
3municipality Department of Revenue for deposit into the
4Supplemental Low-Income Energy Assistance Fund.
5Notwithstanding anything to the contrary, a penalty assessed
6pursuant to this subsection shall be the exclusive remedy for
7the conduct that is the subject of the claim. A penalty
8assessed under this subsection shall bar and prohibit pursuit
9of any other penalty, fine, or recovery related to the conduct
10for which the penalty was assessed.
11    (2) No penalty shall be assessed by the Department
12pursuant to this subsection if the Department finds that a
13delay or omission was immaterial or de minimis.
14    (3) Any penalties or fines paid by a public utility
15pursuant to this subsection shall not be recoverable through
16the utility's rates.
17    (4) (Blank). If a municipality and public utility have a
18disagreement regarding the scope or conduct of an audit
19undertaken pursuant to this Section, they shall work together
20in good faith to attempt to resolve the dispute. If, after a
21period of no less than 14 days, the municipality and public
22utility are not able to reach an agreement regarding the
23dispute, either entity, or both entities jointly, may submit a
24request to the Illinois Department of Revenue seeking
25resolution of the dispute, and the Department shall have the
26authority to resolve the issue, and shall resolve such dispute

 

 

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1within 60 days. Each such request must include a statement
2showing that consultation and reasonable attempts to resolve
3the dispute have failed.
4    The time period established pursuant to this Section for
5complying with requests for information under this Section
6shall be suspended during the dispute resolution processes set
7forth in this paragraph (4) of subsection (e-20), but only for
8the issue or issues that are the subject of the dispute.
9Information requests that are undisputed shall continue to be
10subject to the time periods for compliance set forth in this
11Section.
12    (f) All account-specific account specific and
13premises-specific information provided by a public utility
14under this Section may be used only for the purpose of an audit
15of taxes conducted under this Section and the enforcement of
16any related tax claim. All such information must be held in
17strict confidence by the municipality and its agents and may
18not be disclosed to the public under the Freedom of
19Information Act or under any other similar statutes allowing
20for or requiring public disclosure.
21    (g) The provisions of this Section shall not be construed
22as diminishing or replacing any civil remedy available to a
23municipality, taxpayer, or tax collector.
24    (h) This Section does not apply to any municipality having
25a population greater than 1,000,000.
26    (i) The changes to subsection (e) and paragraph (2) of

 

 

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1subsection (e-10) of this Section made by Public Act 102-1144
2this amendatory Act of the 102nd General Assembly apply to
3taxes due on or after August 1, 2022. The remaining changes to
4this Section made by Public Act 102-1144 this amendatory Act
5of the 102nd General Assembly apply on or after March 17, 2023
6(the effective date of Public Act 102-1144) this amendatory
7Act of the 102nd General Assembly.
8    (j) As used in this Section:
9    "Customer-specific information" means the name, phone
10number, email address, and banking information of a customer.
11"Customer-specific information" includes the load-shape data
12associated with a customer account. "Customer-specific
13information" does not include the tax-exempt status of the
14premises and the name of tax-exempt tax exempt customers.
15    "Premises-specific information" means any information,
16including billing and usage data, associated with a premises
17address that is not customer-specific information.
18    "Premises address" includes the jurisdiction to which the
19address is currently coded by the public utility for municipal
20tax purposes.
21(Source: P.A. 102-1144, eff. 3-17-23; revised 4-5-23.)
 
22
ARTICLE 35. RIVER EDGE ZONES

 
23    Section 35-5. The River Edge Redevelopment Zone Act is
24amended by changing Section 10-5.3 as follows:
 

 

 

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1    (65 ILCS 115/10-5.3)
2    Sec. 10-5.3. Certification of River Edge Redevelopment
3Zones.
4    (a) Approval of designated River Edge Redevelopment Zones
5shall be made by the Department by certification of the
6designating ordinance. The Department shall promptly issue a
7certificate for each zone upon its approval. The certificate
8shall be signed by the Director of the Department, shall make
9specific reference to the designating ordinance, which shall
10be attached thereto, and shall be filed in the office of the
11Secretary of State. A certified copy of the River Edge
12Redevelopment Zone Certificate, or a duplicate original
13thereof, shall be recorded in the office of the recorder of
14deeds of the county in which the River Edge Redevelopment Zone
15lies.
16    (b) A River Edge Redevelopment Zone shall be effective
17upon its certification. The Department shall transmit a copy
18of the certification to the Department of Revenue, and to the
19designating municipality. Upon certification of a River Edge
20Redevelopment Zone, the terms and provisions of the
21designating ordinance shall be in effect, and may not be
22amended or repealed except in accordance with Section 10-5.4.
23    (c) A River Edge Redevelopment Zone shall be in effect for
24the period stated in the certificate, which shall in no event
25exceed 30 calendar years. Zones shall terminate at midnight of

 

 

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1December 31 of the final calendar year of the certified term,
2except as provided in Section 10-5.4.
3    (d) In calendar years 2006 and 2007, the Department may
4certify one pilot River Edge Redevelopment Zone in the City of
5East St. Louis, one pilot River Edge Redevelopment Zone in the
6City of Rockford, and one pilot River Edge Redevelopment Zone
7in the City of Aurora.
8    In calendar year 2009, the Department may certify one
9pilot River Edge Redevelopment Zone in the City of Elgin.
10    On or after the effective date of this amendatory Act of
11the 97th General Assembly, the Department may certify one
12additional pilot River Edge Redevelopment Zone in the City of
13Peoria.
14    On or after the effective date of this amendatory Act of
15the 103rd General Assembly, the Department may certify 2
16additional pilot River Edge Redevelopment Zones, including one
17in the City of Joliet and one in the City of Kankakee.
18    After certifying the additional pilot River Edge
19Redevelopment Zones authorized by the above paragraphs,
20Thereafter the Department may not certify any additional River
21Edge Redevelopment Zones, but it may amend and rescind
22certifications of existing River Edge Redevelopment Zones in
23accordance with Section 10-5.4, except that no River Edge
24Redevelopment Zone may be extended on or after the effective
25date of this amendatory Act of the 97th General Assembly. Each
26River Edge Redevelopment Zone in existence on the effective

 

 

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1date of this amendatory Act of the 97th General Assembly shall
2continue until its scheduled termination under this Act,
3unless the Zone is decertified sooner. At the time of its term
4expiration each River Edge Redevelopment Zone will become an
5open enterprise zone, available for the previously designated
6area or a different area to compete for designation as an
7enterprise zone. No preference for designation as a Zone will
8be given to the previously designated area.
9    (e) A municipality in which a River Edge Redevelopment
10Zone has been certified must submit to the Department, within
1160 days after the certification, a plan for encouraging the
12participation by minority persons, women, persons with
13disabilities, and veterans in the zone. The Department may
14assist the municipality in developing and implementing the
15plan. The terms "minority person", "woman", and "person with a
16disability" have the meanings set forth under Section 2 of the
17Business Enterprise for Minorities, Women, and Persons with
18Disabilities Act. "Veteran" means an Illinois resident who is
19a veteran as defined in subsection (h) of Section 1491 of Title
2010 of the United States Code.
21(Source: P.A. 100-391, eff. 8-25-17.)
 
22
ARTICLE 40. HISTORIC PRESERVATION

 
23    Section 40-5. The Illinois Income Tax Act is amended by
24changing Section 228 as follows:
 

 

 

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1    (35 ILCS 5/228)
2    Sec. 228. Historic preservation credit. For tax years
3beginning on or after January 1, 2019 and ending on or before
4December 31, 2028 December 31, 2023, a taxpayer who qualifies
5for a credit under the Historic Preservation Tax Credit Act is
6entitled to a credit against the taxes imposed under
7subsections (a) and (b) of Section 201 of this Act as provided
8in that Act. If the taxpayer is a partnership, Subchapter S
9corporation, or a limited liability company the credit shall
10be allowed to the partners, shareholders, or members in
11accordance with the determination of income and distributive
12share of income under Sections 702 and 704 and Subchapter S of
13the Internal Revenue Code provided that credits granted to a
14partnership, a limited liability company taxed as a
15partnership, or other multiple owners of property shall be
16passed through to the partners, members, or owners
17respectively on a pro rata basis or pursuant to an executed
18agreement among the partners, members, or owners documenting
19any alternate distribution method. If the amount of any tax
20credit awarded under this Section exceeds the qualified
21taxpayer's income tax liability for the year in which the
22qualified rehabilitation plan was placed in service, the
23excess amount may be carried forward as provided in the
24Historic Preservation Tax Credit Act.
25(Source: P.A. 101-81, eff. 7-12-19; 102-741, eff. 5-6-22.)
 

 

 

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1    Section 40-10. The Historic Preservation Tax Credit Act is
2amended by changing Sections 10 and 20 as follows:
 
3    (35 ILCS 31/10)
4    Sec. 10. Allowable credit.
5    (a) To the extent authorized by this Act, for taxable
6years beginning on or after January 1, 2019 and ending on or
7before December 31, 2028 December 31, 2023, there shall be
8allowed a tax credit to the qualified taxpayer against the tax
9imposed by subsections (a) and (b) of Section 201 of the
10Illinois Income Tax Act in an aggregate amount equal to 25% of
11qualified expenditures, but not to exceed $3,000,000, incurred
12undertaking a qualified rehabilitation plan, provided that the
13total amount of such expenditures must (i) equal $5,000 or
14more and (ii) exceed the adjusted basis of the structure on the
15first day the qualified rehabilitation plan commenced. If the
16qualified rehabilitation plan spans multiple years, the
17aggregate credit for the entire project shall be allowed in
18the last taxable year.
19    (b) To obtain a tax credit certificate pursuant to this
20Section, the qualified taxpayer must apply with the Division.
21The Division shall determine the amount of eligible
22rehabilitation expenditures within 45 days after receipt of a
23complete application. The taxpayer must provide to the
24Division a third-party cost certification conducted by a

 

 

10300SB1963ham002- 248 -LRB103 25648 HLH 62334 a

1certified public accountant verifying (i) the qualified and
2non-qualified rehabilitation expenses and (ii) that the
3qualified expenditures exceed the adjusted basis of the
4structure on the first day the qualified rehabilitation plan
5commenced. The accountant shall provide appropriate review and
6testing of invoices. The Division is authorized, but not
7required, to accept this third-party cost certification to
8determine the amount of qualified expenditures. The Division
9and the National Park Service shall determine whether the
10rehabilitation is consistent with the Standards of the
11Secretary of the United States Department of the Interior.
12    (c) If the amount of any tax credit awarded under this Act
13exceeds the qualified taxpayer's income tax liability for the
14year in which the qualified rehabilitation plan was placed in
15service, the excess amount may be carried forward for
16deduction from the taxpayer's income tax liability in the next
17succeeding year or years until the total amount of the credit
18has been used, except that a credit may not be carried forward
19for deduction after the tenth taxable year after the taxable
20year in which the qualified rehabilitation plan was placed in
21service. Upon completion of the project and approval of the
22complete application, the Division shall issue a single
23certificate in the amount of the eligible credits equal to 25%
24of the qualified expenditures incurred during the eligible
25taxable years, not to exceed the lesser of the allocated
26amount or $3,000,000 per single qualified rehabilitation plan.

 

 

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1Prior to the issuance of the tax credit certificate, the
2qualified taxpayer must provide to the Division verification
3that the rehabilitated structure is a qualified historic
4structure. At the time the certificate is issued, an issuance
5fee up to the maximum amount of 2% of the amount of the credits
6issued by the certificate may be collected from the qualified
7taxpayer to administer the Act. If collected, this issuance
8fee shall be directed to the Division Historic Property
9Administrative Fund or other such fund as appropriate for use
10of the Division in the administration of the Historic
11Preservation Tax Credit Program. The taxpayer must attach the
12certificate or legal documentation of her or his proportional
13share of the certificate to the tax return on which the credits
14are to be claimed. The tax credit under this Section may not
15reduce the taxpayer's liability to less than zero. If the
16amount of the credit exceeds the tax liability for the year,
17the excess credit may be carried forward and applied to the tax
18liability of the 10 taxable years following the first excess
19credit year. The taxpayer is not eligible to receive credits
20under this Section and under Section 221 of the Illinois
21Income Tax Act for the same qualified expenditures or
22qualified rehabilitation plan.
23    (d) If the taxpayer is (i) a corporation having an
24election in effect under Subchapter S of the federal Internal
25Revenue Code, (ii) a partnership, or (iii) a limited liability
26company, the credit provided under this Act may be claimed by

 

 

10300SB1963ham002- 250 -LRB103 25648 HLH 62334 a

1the shareholders of the corporation, the partners of the
2partnership, or the members of the limited liability company
3in the same manner as those shareholders, partners, or members
4account for their proportionate shares of the income or losses
5of the corporation, partnership, or limited liability company,
6or as provided in the bylaws or other executed agreement of the
7corporation, partnership, or limited liability company.
8Credits granted to a partnership, a limited liability company
9taxed as a partnership, or other multiple owners of property
10shall be passed through to the partners, members, or owners
11respectively on a pro rata basis or pursuant to an executed
12agreement among the partners, members, or owners documenting
13any alternate distribution method.
14    (e) If a recapture event occurs during the recapture
15period with respect to a qualified historic structure, then
16for any taxable year in which the credits are allowed as
17specified in this Act, the tax under the applicable Section of
18this Act shall be increased by applying the recapture
19percentage set forth below to the tax decrease resulting from
20the application of credits allowed under this Act to the
21taxable year in question.
22    For the purposes of this subsection, the recapture
23percentage shall be determined as follows:
24        (1) if the recapture event occurs within the first
25    year after commencement of the recapture period, then the
26    recapture percentage is 100%;

 

 

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1        (2) if the recapture event occurs within the second
2    year after commencement of the recapture period, then the
3    recapture percentage is 80%;
4        (3) if the recapture event occurs within the third
5    year after commencement of the recapture period, then the
6    recapture percentage is 60%;
7        (4) if the recapture event occurs within the fourth
8    year after commencement of the recapture period, then the
9    recapture percentage is 40%; and
10        (5) if the recapture event occurs within the fifth
11    year after commencement of the recapture period, then the
12    recapture percentage is 20%.
13    In the case of any recapture event, the carryforwards
14under this Act shall be adjusted by reason of such event.
15    (f) The Division may adopt rules to implement this Section
16in addition to the rules expressly authorized herein.
17(Source: P.A. 101-81, eff. 7-12-19; 102-741, eff. 5-6-22.)
 
18    (35 ILCS 31/20)
19    Sec. 20. Limitations, reporting, and monitoring.
20    (a) In each every calendar year beginning on or after
21January 1, 2019 and ending on or before December 31, 2023 that
22this program is in effect, the Division is authorized to
23allocate $15,000,000 in tax credits in addition to any
24unallocated, returned, or rescinded allocations from previous
25years, pursuant to qualified rehabilitation plans. In each

 

 

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1calendar year beginning on or after January 1, 2024 and ending
2on or before December 31, 2028, the Division is authorized to
3allocate $25,000,000 in tax credits in addition to any
4unallocated, returned, or rescinded allocations from previous
5years, pursuant to qualified rehabilitation plans. The
6Division shall not allocate or award more than $3,000,000 in
7tax credits with regard to a single qualified rehabilitation
8plan. In allocating tax credits under this Act, the Division
9must prioritize applications that meet one or more of the
10following:
11        (1) the structure is located in a county that borders
12    a State with a historic income-producing property
13    rehabilitation credit;
14        (2) the structure was previously owned by a federal,
15    state, or local governmental entity for no less than 6
16    months;
17        (3) the structure is located in a census tract that
18    has a median family income at or below the State median
19    family income; data from the most recent 5-year estimate
20    from the American Community Survey (ACS), published by the
21    U.S. Census Bureau, shall be used to determine
22    eligibility;
23        (4) the qualified rehabilitation plan includes in the
24    development partnership a Community Development Entity or
25    a low-profit (B Corporation) or not-for-profit
26    organization, as defined by Section 501(c)(3) of the

 

 

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1    Internal Revenue Code; or
2        (5) the structure is located in an area declared under
3    an Emergency Declaration or Major Disaster Declaration
4    under the federal Robert T. Stafford Disaster Relief and
5    Emergency Assistance Act. The declaration must be no older
6    than 3 years at the time of application.
7    (b) The annual aggregate authorization of $15,000,000 set
8forth in subsection (a) shall be allocated by the Division, in
9such proportion as determined by the Director twice in each
10calendar year that the program is in effect, provided that the
11amount initially allocated by the Division for the first
12calendar year application period shall not exceed 65% of the
13total amount available for allocation. Any unallocated amount
14remaining as of the end of the second application period of a
15given calendar year shall be rolled over and added to the total
16authorized amount for the next available calendar year. The
17qualified rehabilitation plan must meet a readiness test, as
18defined by the Division, in order for the application to
19qualify. In any given application period, applications that
20qualify under this Act will be prioritized as set forth in
21subsection (a) and placed in a queue based on the date and time
22the application is received. Applicants whose applications
23qualify but do not receive an allocation must reapply to be
24considered in subsequent application periods.
25    (c) Subject to appropriation to the Division, moneys in
26the Historic Property Administrative Fund shall be used, on a

 

 

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1biennial basis, beginning at the end of the second fiscal year
2after the effective date of this Act, to hire a qualified third
3party to prepare a biennial report to assess the overall
4impact of this Act from the qualified rehabilitation plans
5under this Act completed in that year and in previous years.
6Baseline data of the metrics in the report shall be collected
7at the initiation of a qualified rehabilitation plan. The
8overall economic impact shall include at least:
9        (1) the number of applications, project locations, and
10    proposed use of qualified historic structures;
11        (2) the amount of credits awarded and the number and
12    location of projects receiving credit allocations;
13        (3) the status of ongoing projects and projected
14    qualifying expenditures for ongoing projects;
15        (4) for completed projects, the total amount of
16    qualifying rehabilitation expenditures and non-qualifying
17    expenditures, the number of housing units created and the
18    number of housing units that qualify as affordable, and
19    the total square footage rehabilitated and developed;
20        (5) direct, indirect, and induced economic impacts;
21        (6) temporary, permanent, and construction jobs
22    created; and
23        (7) sales, income, and property tax generation before
24    construction, during construction, and after completion.
25    The report to the General Assembly shall be filed with the
26Clerk of the House of Representatives and the Secretary of the

 

 

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1Senate in electronic form only, in the manner that the Clerk
2and the Secretary shall direct.
3    (d) Any time prior to issuance of a tax credit
4certificate, the Director of the Division, the State Historic
5Preservation Officer, or staff of the Division may, upon
6reasonable notice of not less than 3 business days, conduct a
7site visit to the project to inspect and evaluate the project.
8    (e) Any time prior to the issuance of a tax credit
9certificate, the Director may, upon reasonable notice of not
10less than 30 calendar days, request a status report from the
11Applicant consisting of information and updates relevant to
12the status of the project. Status reports shall not be
13requested more than twice yearly.
14    (f) In order to demonstrate sufficient evidence of
15reviewable progress within 12 months after the date the
16Applicant received notification of allocation from the
17Division, the Director may require the Applicant to provide
18all of the following:
19        (1) a viable financial plan which demonstrates by way
20    of an executed agreement that all financing has been
21    secured for the project; such financing shall include, but
22    not be limited to, equity investment as demonstrated by
23    letters of commitment from the owner of the property,
24    investment partners, and equity investors;
25        (2) (blank); and
26        (3) all historic approvals, including all federal and

 

 

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1    State rehabilitation documents required by the Division.
2    The Director shall review the submitted evidence and may
3request additional documentation from the Applicant if
4necessary. The Applicant will have 30 calendar days to provide
5the information requested, otherwise the allocation may be
6rescinded at the discretion of the Director.
7    (g) In order to demonstrate sufficient evidence of
8reviewable progress within 24 months after the date the
9application received notification of approval from the
10Division, the Director may require the Applicant to provide
11detailed evidence that the Applicant has secured and closed on
12financing for the complete scope of rehabilitation for the
13project. To demonstrate evidence that the Applicant has
14secured and closed on financing, the Applicant will need to
15provide signed and processed loan agreements, bank financing
16documents or other legal and contractual evidence to
17demonstrate that adequate financing is available to complete
18the project. The Director shall review the submitted evidence
19and may request additional documentation from the Applicant if
20necessary. The Applicant will have 30 calendar days to provide
21the information requested, otherwise the allocation may be
22rescinded at the discretion of the Director.
23    If the Applicant fails to document reviewable progress
24within 24 months of approval, the Director may notify the
25Applicant that the allocation is rescinded. However, should
26financing and construction be imminent, the Director may elect

 

 

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1to grant the Applicant no more than 5 months to close on
2financing and commence construction. If the Applicant fails to
3meet these conditions in the required timeframe, the Director
4shall notify the Applicant that the allocation is rescinded.
5Any such rescinded allocation shall be added to the aggregate
6amount of credits available for allocation for the year in
7which the forfeiture occurred.
8    The amount of the qualified expenditures identified in the
9qualified taxpayer's certification of completion and reflected
10on the Historic Preservation Tax Credit certificate issued by
11the Director is subject to inspection, examination, and audit
12by the Department of Revenue.
13    The qualified taxpayer shall establish and maintain for a
14period of 4 years following the effective date on a project tax
15credit certificate such records as required by the Director.
16Such records include, but are not limited to, records
17documenting project expenditures and compliance with the U.S.
18Secretary of the Interior's Standards. The qualified taxpayer
19shall make such records available for review and verification
20by the Director, the State Historic Preservation Officer, the
21Department of Revenue, or appropriate staff, as well as other
22appropriate State agencies. In the event the Director
23determines an Applicant has submitted a status report
24containing erroneous information or data not supported by
25records established and maintained under this Act, the
26Director may, after providing notice, require the Applicant to

 

 

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1resubmit corrected reports.
2(Source: P.A. 102-741, eff. 5-6-22.)
 
3
ARTICLE 45. HIGH IMPACT BUSINESSES

 
4    Section 45-5. The Illinois Enterprise Zone Act is amended
5by changing Section 5.5 as follows:
 
6    (20 ILCS 655/5.5)   (from Ch. 67 1/2, par. 609.1)
7    Sec. 5.5. High Impact Business.
8    (a) In order to respond to unique opportunities to assist
9in the encouragement, development, growth, and expansion of
10the private sector through large scale investment and
11development projects, the Department is authorized to receive
12and approve applications for the designation of "High Impact
13Businesses" in Illinois, for an initial term of 20 years with
14an option for renewal for a term not to exceed 20 years,
15subject to the following conditions:
16        (1) such applications may be submitted at any time
17    during the year;
18        (2) such business is not located, at the time of
19    designation, in an enterprise zone designated pursuant to
20    this Act;
21        (3) the business intends to do one or more of the
22    following:
23            (A) the business intends to make a minimum

 

 

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1        investment of $12,000,000 which will be placed in
2        service in qualified property and intends to create
3        500 full-time equivalent jobs at a designated location
4        in Illinois or intends to make a minimum investment of
5        $30,000,000 which will be placed in service in
6        qualified property and intends to retain 1,500
7        full-time retained jobs at a designated location in
8        Illinois. The terms "placed in service" and "qualified
9        property" have the same meanings as described in
10        subsection (h) of Section 201 of the Illinois Income
11        Tax Act; or
12            (B) the business intends to establish a new
13        electric generating facility at a designated location
14        in Illinois. "New electric generating facility", for
15        purposes of this Section, means a newly constructed
16        electric generation plant or a newly constructed
17        generation capacity expansion at an existing electric
18        generation plant, including the transmission lines and
19        associated equipment that transfers electricity from
20        points of supply to points of delivery, and for which
21        such new foundation construction commenced not sooner
22        than July 1, 2001. Such facility shall be designed to
23        provide baseload electric generation and shall operate
24        on a continuous basis throughout the year; and (i)
25        shall have an aggregate rated generating capacity of
26        at least 1,000 megawatts for all new units at one site

 

 

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1        if it uses natural gas as its primary fuel and
2        foundation construction of the facility is commenced
3        on or before December 31, 2004, or shall have an
4        aggregate rated generating capacity of at least 400
5        megawatts for all new units at one site if it uses coal
6        or gases derived from coal as its primary fuel and
7        shall support the creation of at least 150 new
8        Illinois coal mining jobs, or (ii) shall be funded
9        through a federal Department of Energy grant before
10        December 31, 2010 and shall support the creation of
11        Illinois coal-mining jobs, or (iii) shall use coal
12        gasification or integrated gasification-combined cycle
13        units that generate electricity or chemicals, or both,
14        and shall support the creation of Illinois coal-mining
15        jobs. The term "placed in service" has the same
16        meaning as described in subsection (h) of Section 201
17        of the Illinois Income Tax Act; or
18            (B-5) the business intends to establish a new
19        gasification facility at a designated location in
20        Illinois. As used in this Section, "new gasification
21        facility" means a newly constructed coal gasification
22        facility that generates chemical feedstocks or
23        transportation fuels derived from coal (which may
24        include, but are not limited to, methane, methanol,
25        and nitrogen fertilizer), that supports the creation
26        or retention of Illinois coal-mining jobs, and that

 

 

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1        qualifies for financial assistance from the Department
2        before December 31, 2010. A new gasification facility
3        does not include a pilot project located within
4        Jefferson County or within a county adjacent to
5        Jefferson County for synthetic natural gas from coal;
6        or
7            (C) the business intends to establish production
8        operations at a new coal mine, re-establish production
9        operations at a closed coal mine, or expand production
10        at an existing coal mine at a designated location in
11        Illinois not sooner than July 1, 2001; provided that
12        the production operations result in the creation of
13        150 new Illinois coal mining jobs as described in
14        subdivision (a)(3)(B) of this Section, and further
15        provided that the coal extracted from such mine is
16        utilized as the predominant source for a new electric
17        generating facility. The term "placed in service" has
18        the same meaning as described in subsection (h) of
19        Section 201 of the Illinois Income Tax Act; or
20            (D) the business intends to construct new
21        transmission facilities or upgrade existing
22        transmission facilities at designated locations in
23        Illinois, for which construction commenced not sooner
24        than July 1, 2001. For the purposes of this Section,
25        "transmission facilities" means transmission lines
26        with a voltage rating of 115 kilovolts or above,

 

 

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1        including associated equipment, that transfer
2        electricity from points of supply to points of
3        delivery and that transmit a majority of the
4        electricity generated by a new electric generating
5        facility designated as a High Impact Business in
6        accordance with this Section. The term "placed in
7        service" has the same meaning as described in
8        subsection (h) of Section 201 of the Illinois Income
9        Tax Act; or
10            (E) the business intends to establish a new wind
11        power facility at a designated location in Illinois.
12        For purposes of this Section, "new wind power
13        facility" means a newly constructed electric
14        generation facility, a newly constructed expansion of
15        an existing electric generation facility, or the
16        replacement of an existing electric generation
17        facility, including the demolition and removal of an
18        electric generation facility irrespective of whether
19        it will be replaced, placed in service or replaced on
20        or after July 1, 2009, that generates electricity
21        using wind energy devices, and such facility shall be
22        deemed to include any permanent structures associated
23        with the electric generation facility and all
24        associated transmission lines, substations, and other
25        equipment related to the generation of electricity
26        from wind energy devices. For purposes of this

 

 

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1        Section, "wind energy device" means any device, with a
2        nameplate capacity of at least 0.5 megawatts, that is
3        used in the process of converting kinetic energy from
4        the wind to generate electricity; or
5            (E-5) the business intends to establish a new
6        utility-scale solar facility at a designated location
7        in Illinois. For purposes of this Section, "new
8        utility-scale solar power facility" means a newly
9        constructed electric generation facility, or a newly
10        constructed expansion of an existing electric
11        generation facility, placed in service on or after
12        July 1, 2021, that (i) generates electricity using
13        photovoltaic cells and (ii) has a nameplate capacity
14        that is greater than 5,000 kilowatts, and such
15        facility shall be deemed to include all associated
16        transmission lines, substations, energy storage
17        facilities, and other equipment related to the
18        generation and storage of electricity from
19        photovoltaic cells; or
20            (F) the business commits to (i) make a minimum
21        investment of $500,000,000, which will be placed in
22        service in a qualified property, (ii) create 125
23        full-time equivalent jobs at a designated location in
24        Illinois, (iii) establish a fertilizer plant at a
25        designated location in Illinois that complies with the
26        set-back standards as described in Table 1: Initial

 

 

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1        Isolation and Protective Action Distances in the 2012
2        Emergency Response Guidebook published by the United
3        States Department of Transportation, (iv) pay a
4        prevailing wage for employees at that location who are
5        engaged in construction activities, and (v) secure an
6        appropriate level of general liability insurance to
7        protect against catastrophic failure of the fertilizer
8        plant or any of its constituent systems; in addition,
9        the business must agree to enter into a construction
10        project labor agreement including provisions
11        establishing wages, benefits, and other compensation
12        for employees performing work under the project labor
13        agreement at that location; for the purposes of this
14        Section, "fertilizer plant" means a newly constructed
15        or upgraded plant utilizing gas used in the production
16        of anhydrous ammonia and downstream nitrogen
17        fertilizer products for resale; for the purposes of
18        this Section, "prevailing wage" means the hourly cash
19        wages plus fringe benefits for training and
20        apprenticeship programs approved by the U.S.
21        Department of Labor, Bureau of Apprenticeship and
22        Training, health and welfare, insurance, vacations and
23        pensions paid generally, in the locality in which the
24        work is being performed, to employees engaged in work
25        of a similar character on public works; this paragraph
26        (F) applies only to businesses that submit an

 

 

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1        application to the Department within 60 days after
2        July 25, 2013 (the effective date of Public Act
3        98-109); or and
4            (G) the business intends to establish a new
5        cultured cell material food production facility at a
6        designated location in Illinois. As used in this
7        paragraph (G):
8            "Cultured cell material food production facility"
9        means a facility (i) at which cultured animal cell
10        food is developed using animal cell culture
11        technology, (ii) at which production processes occur
12        that include the establishment of cell lines and cell
13        banks, manufacturing controls, and all components and
14        inputs, and (iii) that complies with all existing
15        registrations, inspections, licensing, and approvals
16        from all applicable and participating State and
17        federal food agencies, including the Department of
18        Agriculture, the Department of Public Health, and the
19        United States Food and Drug Administration, to ensure
20        that all food production is safe and lawful under
21        provisions of the Federal Food, Drug and Cosmetic Act
22        related to the development, production, and storage of
23        cultured animal cell food.
24            "New cultured cell material food production
25        facility" means a newly constructed cultured cell
26        material food production facility that is placed in

 

 

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1        service on or after the effective date of this
2        amendatory Act of the 103rd General Assembly or a
3        newly constructed expansion of an existing cultured
4        cell material food production facility, in a
5        controlled environment, when the improvements are
6        placed in service on or after the effective date of
7        this amendatory Act of the 103rd General Assembly; and
8        (4) no later than 90 days after an application is
9    submitted, the Department shall notify the applicant of
10    the Department's determination of the qualification of the
11    proposed High Impact Business under this Section.
12    (b) Businesses designated as High Impact Businesses
13pursuant to subdivision (a)(3)(A) of this Section shall
14qualify for the credits and exemptions described in the
15following Acts: Section 9-222 and Section 9-222.1A of the
16Public Utilities Act, subsection (h) of Section 201 of the
17Illinois Income Tax Act, and Section 1d of the Retailers'
18Occupation Tax Act; provided that these credits and exemptions
19described in these Acts shall not be authorized until the
20minimum investments set forth in subdivision (a)(3)(A) of this
21Section have been placed in service in qualified properties
22and, in the case of the exemptions described in the Public
23Utilities Act and Section 1d of the Retailers' Occupation Tax
24Act, the minimum full-time equivalent jobs or full-time
25retained jobs set forth in subdivision (a)(3)(A) of this
26Section have been created or retained. Businesses designated

 

 

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1as High Impact Businesses under this Section shall also
2qualify for the exemption described in Section 5l of the
3Retailers' Occupation Tax Act. The credit provided in
4subsection (h) of Section 201 of the Illinois Income Tax Act
5shall be applicable to investments in qualified property as
6set forth in subdivision (a)(3)(A) of this Section.
7    (b-5) Businesses designated as High Impact Businesses
8pursuant to subdivisions (a)(3)(B), (a)(3)(B-5), (a)(3)(C),
9and (a)(3)(D), and (a)(3)(G) of this Section shall qualify for
10the credits and exemptions described in the following Acts:
11Section 51 of the Retailers' Occupation Tax Act, Section 9-222
12and Section 9-222.1A of the Public Utilities Act, and
13subsection (h) of Section 201 of the Illinois Income Tax Act;
14however, the credits and exemptions authorized under Section
159-222 and Section 9-222.1A of the Public Utilities Act, and
16subsection (h) of Section 201 of the Illinois Income Tax Act
17shall not be authorized until the new electric generating
18facility, the new gasification facility, the new transmission
19facility, or the new, expanded, or reopened coal mine, or the
20new cultured cell material food production facility is
21operational, except that a new electric generating facility
22whose primary fuel source is natural gas is eligible only for
23the exemption under Section 5l of the Retailers' Occupation
24Tax Act.
25    (b-6) Businesses designated as High Impact Businesses
26pursuant to subdivision (a)(3)(E) or (a)(3)(E-5) of this

 

 

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1Section shall qualify for the exemptions described in Section
25l of the Retailers' Occupation Tax Act; any business so
3designated as a High Impact Business being, for purposes of
4this Section, a "Wind Energy Business".
5    (b-7) Beginning on January 1, 2021, businesses designated
6as High Impact Businesses by the Department shall qualify for
7the High Impact Business construction jobs credit under
8subsection (h-5) of Section 201 of the Illinois Income Tax Act
9if the business meets the criteria set forth in subsection (i)
10of this Section. The total aggregate amount of credits awarded
11under the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
12shall not exceed $20,000,000 in any State fiscal year.
13    (c) High Impact Businesses located in federally designated
14foreign trade zones or sub-zones are also eligible for
15additional credits, exemptions and deductions as described in
16the following Acts: Section 9-221 and Section 9-222.1 of the
17Public Utilities Act; and subsection (g) of Section 201, and
18Section 203 of the Illinois Income Tax Act.
19    (d) Except for businesses contemplated under subdivision
20(a)(3)(E), or (a)(3)(E-5), or (a)(3)(G) of this Section,
21existing Illinois businesses which apply for designation as a
22High Impact Business must provide the Department with the
23prospective plan for which 1,500 full-time retained jobs would
24be eliminated in the event that the business is not
25designated.
26    (e) Except for new businesses wind power facilities

 

 

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1contemplated under subdivision (a)(3)(E) or subdivision
2(a)(3)(G) of this Section, new proposed facilities which apply
3for designation as High Impact Business must provide the
4Department with proof of alternative non-Illinois sites which
5would receive the proposed investment and job creation in the
6event that the business is not designated as a High Impact
7Business.
8    (f) Except for businesses contemplated under subdivision
9(a)(3)(E) or subdivision (a)(3)(G) of this Section, in the
10event that a business is designated a High Impact Business and
11it is later determined after reasonable notice and an
12opportunity for a hearing as provided under the Illinois
13Administrative Procedure Act, that the business would have
14placed in service in qualified property the investments and
15created or retained the requisite number of jobs without the
16benefits of the High Impact Business designation, the
17Department shall be required to immediately revoke the
18designation and notify the Director of the Department of
19Revenue who shall begin proceedings to recover all wrongfully
20exempted State taxes with interest. The business shall also be
21ineligible for all State funded Department programs for a
22period of 10 years.
23    (g) The Department shall revoke a High Impact Business
24designation if the participating business fails to comply with
25the terms and conditions of the designation.
26    (h) Prior to designating a business, the Department shall

 

 

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1provide the members of the General Assembly and Commission on
2Government Forecasting and Accountability with a report
3setting forth the terms and conditions of the designation and
4guarantees that have been received by the Department in
5relation to the proposed business being designated.
6    (i) High Impact Business construction jobs credit.
7Beginning on January 1, 2021, a High Impact Business may
8receive a tax credit against the tax imposed under subsections
9(a) and (b) of Section 201 of the Illinois Income Tax Act in an
10amount equal to 50% of the amount of the incremental income tax
11attributable to High Impact Business construction jobs credit
12employees employed in the course of completing a High Impact
13Business construction jobs project. However, the High Impact
14Business construction jobs credit may equal 75% of the amount
15of the incremental income tax attributable to High Impact
16Business construction jobs credit employees if the High Impact
17Business construction jobs credit project is located in an
18underserved area.
19    The Department shall certify to the Department of Revenue:
20(1) the identity of taxpayers that are eligible for the High
21Impact Business construction jobs credit; and (2) the amount
22of High Impact Business construction jobs credits that are
23claimed pursuant to subsection (h-5) of Section 201 of the
24Illinois Income Tax Act in each taxable year. Any business
25entity that receives a High Impact Business construction jobs
26credit shall maintain a certified payroll pursuant to

 

 

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1subsection (j) of this Section.
2    As used in this subsection (i):
3    "High Impact Business construction jobs credit" means an
4amount equal to 50% (or 75% if the High Impact Business
5construction project is located in an underserved area) of the
6incremental income tax attributable to High Impact Business
7construction job employees. The total aggregate amount of
8credits awarded under the Blue Collar Jobs Act (Article 20 of
9Public Act 101-9) shall not exceed $20,000,000 in any State
10fiscal year
11    "High Impact Business construction job employee" means a
12laborer or worker who is employed by an Illinois contractor or
13subcontractor in the actual construction work on the site of a
14High Impact Business construction job project.
15    "High Impact Business construction jobs project" means
16building a structure or building or making improvements of any
17kind to real property, undertaken and commissioned by a
18business that was designated as a High Impact Business by the
19Department. The term "High Impact Business construction jobs
20project" does not include the routine operation, routine
21repair, or routine maintenance of existing structures,
22buildings, or real property.
23    "Incremental income tax" means the total amount withheld
24during the taxable year from the compensation of High Impact
25Business construction job employees.
26    "Underserved area" means a geographic area that meets one

 

 

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1or more of the following conditions:
2        (1) the area has a poverty rate of at least 20%
3    according to the latest American Community Survey;
4        (2) 35% or more of the families with children in the
5    area are living below 130% of the poverty line, according
6    to the latest American Community Survey;
7        (3) at least 20% of the households in the area receive
8    assistance under the Supplemental Nutrition Assistance
9    Program (SNAP); or
10        (4) the area has an average unemployment rate, as
11    determined by the Illinois Department of Employment
12    Security, that is more than 120% of the national
13    unemployment average, as determined by the U.S. Department
14    of Labor, for a period of at least 2 consecutive calendar
15    years preceding the date of the application.
16    (j) Each contractor and subcontractor who is engaged in
17and executing a High Impact Business Construction jobs
18project, as defined under subsection (i) of this Section, for
19a business that is entitled to a credit pursuant to subsection
20(i) of this Section shall:
21        (1) make and keep, for a period of 5 years from the
22    date of the last payment made on or after June 5, 2019 (the
23    effective date of Public Act 101-9) on a contract or
24    subcontract for a High Impact Business Construction Jobs
25    Project, records for all laborers and other workers
26    employed by the contractor or subcontractor on the

 

 

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1    project; the records shall include:
2            (A) the worker's name;
3            (B) the worker's address;
4            (C) the worker's telephone number, if available;
5            (D) the worker's social security number;
6            (E) the worker's classification or
7        classifications;
8            (F) the worker's gross and net wages paid in each
9        pay period;
10            (G) the worker's number of hours worked each day;
11            (H) the worker's starting and ending times of work
12        each day;
13            (I) the worker's hourly wage rate;
14            (J) the worker's hourly overtime wage rate;
15            (K) the worker's race and ethnicity; and
16            (L) the worker's gender;
17        (2) no later than the 15th day of each calendar month,
18    provide a certified payroll for the immediately preceding
19    month to the taxpayer in charge of the High Impact
20    Business construction jobs project; within 5 business days
21    after receiving the certified payroll, the taxpayer shall
22    file the certified payroll with the Department of Labor
23    and the Department of Commerce and Economic Opportunity; a
24    certified payroll must be filed for only those calendar
25    months during which construction on a High Impact Business
26    construction jobs project has occurred; the certified

 

 

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1    payroll shall consist of a complete copy of the records
2    identified in paragraph (1) of this subsection (j), but
3    may exclude the starting and ending times of work each
4    day; the certified payroll shall be accompanied by a
5    statement signed by the contractor or subcontractor or an
6    officer, employee, or agent of the contractor or
7    subcontractor which avers that:
8            (A) he or she has examined the certified payroll
9        records required to be submitted by the Act and such
10        records are true and accurate; and
11            (B) the contractor or subcontractor is aware that
12        filing a certified payroll that he or she knows to be
13        false is a Class A misdemeanor.
14    A general contractor is not prohibited from relying on a
15certified payroll of a lower-tier subcontractor, provided the
16general contractor does not knowingly rely upon a
17subcontractor's false certification.
18    Any contractor or subcontractor subject to this
19subsection, and any officer, employee, or agent of such
20contractor or subcontractor whose duty as an officer,
21employee, or agent it is to file a certified payroll under this
22subsection, who willfully fails to file such a certified
23payroll on or before the date such certified payroll is
24required by this paragraph to be filed and any person who
25willfully files a false certified payroll that is false as to
26any material fact is in violation of this Act and guilty of a

 

 

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1Class A misdemeanor.
2    The taxpayer in charge of the project shall keep the
3records submitted in accordance with this subsection on or
4after June 5, 2019 (the effective date of Public Act 101-9) for
5a period of 5 years from the date of the last payment for work
6on a contract or subcontract for the High Impact Business
7construction jobs project.
8    The records submitted in accordance with this subsection
9shall be considered public records, except an employee's
10address, telephone number, and social security number, and
11made available in accordance with the Freedom of Information
12Act. The Department of Labor shall share the information with
13the Department in order to comply with the awarding of a High
14Impact Business construction jobs credit. A contractor,
15subcontractor, or public body may retain records required
16under this Section in paper or electronic format.
17    (k) Upon 7 business days' notice, each contractor and
18subcontractor shall make available for inspection and copying
19at a location within this State during reasonable hours, the
20records identified in this subsection (j) to the taxpayer in
21charge of the High Impact Business construction jobs project,
22its officers and agents, the Director of the Department of
23Labor and his or her deputies and agents, and to federal,
24State, or local law enforcement agencies and prosecutors.
25    (l) The changes made to this Section by this amendatory
26Act of the 102nd General Assembly, other than the changes in

 

 

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1subsection (a), apply to high impact businesses that submit
2applications on or after the effective date of this amendatory
3Act of the 102nd General Assembly.
4(Source: P.A. 101-9, eff. 6-5-19; 102-108, eff. 1-1-22;
5102-558, eff. 8-20-21; 102-605, eff. 8-27-21; 102-662, eff.
69-15-21; 102-673, eff. 11-30-21; 102-813, eff. 5-13-22;
7102-1125, eff. 2-3-23.)
 
8    Section 45-10. The Economic Development for a Growing
9Economy Tax Credit Act is amended by changing Sections 5-5 and
105-15 as follows:
 
11    (35 ILCS 10/5-5)
12    Sec. 5-5. Definitions. As used in this Act:
13    "Agreement" means the Agreement between a Taxpayer and the
14Department under the provisions of Section 5-50 of this Act.
15    "Applicant" means a Taxpayer that is operating a business
16located or that the Taxpayer plans to locate within the State
17of Illinois and that is engaged in interstate or intrastate
18commerce for the purpose of manufacturing, processing,
19assembling, warehousing, or distributing products, conducting
20research and development, providing tourism services, or
21providing services in interstate commerce, office industries,
22or agricultural processing, but excluding retail, retail food,
23health, or professional services. "Applicant" does not include
24a Taxpayer who closes or substantially reduces an operation at

 

 

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1one location in the State and relocates substantially the same
2operation to another location in the State. This does not
3prohibit a Taxpayer from expanding its operations at another
4location in the State, provided that existing operations of a
5similar nature located within the State are not closed or
6substantially reduced. This also does not prohibit a Taxpayer
7from moving its operations from one location in the State to
8another location in the State for the purpose of expanding the
9operation provided that the Department determines that
10expansion cannot reasonably be accommodated within the
11municipality in which the business is located, or in the case
12of a business located in an incorporated area of the county,
13within the county in which the business is located, after
14conferring with the chief elected official of the municipality
15or county and taking into consideration any evidence offered
16by the municipality or county regarding the ability to
17accommodate expansion within the municipality or county.
18    "Credit" means the amount agreed to between the Department
19and Applicant under this Act, but not to exceed the lesser of:
20(1) the sum of (i) 50% of the Incremental Income Tax
21attributable to New Employees at the Applicant's project and
22(ii) 10% of the training costs of New Employees; or (2) 100% of
23the Incremental Income Tax attributable to New Employees at
24the Applicant's project. However, if the project is located in
25an underserved area, then the amount of the Credit may not
26exceed the lesser of: (1) the sum of (i) 75% of the Incremental

 

 

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1Income Tax attributable to New Employees at the Applicant's
2project and (ii) 10% of the training costs of New Employees; or
3(2) 100% of the Incremental Income Tax attributable to New
4Employees at the Applicant's project. If the project is not
5located in an underserved area and the Applicant agrees to
6hire the required number of New Employees, then the maximum
7amount of the Credit for that Applicant may be increased by an
8amount not to exceed 25% of the Incremental Income Tax
9attributable to retained employees at the Applicant's project.
10If the project is located in an underserved area and the
11Applicant agrees to hire the required number of New Employees,
12then the maximum amount of the credit for that Applicant may be
13increased by an amount not to exceed 50% of the Incremental
14Income Tax attributable to retained employees at the
15Applicant's project.
16    "Department" means the Department of Commerce and Economic
17Opportunity.
18    "Director" means the Director of Commerce and Economic
19Opportunity.
20    "Full-time Employee" means an individual who is employed
21for consideration for at least 35 hours each week or who
22renders any other standard of service generally accepted by
23industry custom or practice as full-time employment. An
24individual for whom a W-2 is issued by a Professional Employer
25Organization (PEO) is a full-time employee if employed in the
26service of the Applicant for consideration for at least 35

 

 

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1hours each week or who renders any other standard of service
2generally accepted by industry custom or practice as full-time
3employment to Applicant.
4    "Incremental Income Tax" means the total amount withheld
5during the taxable year from the compensation of New Employees
6and, if applicable, retained employees under Article 7 of the
7Illinois Income Tax Act arising from employment at a project
8that is the subject of an Agreement.
9    "New Construction EDGE Agreement" means the Agreement
10between a Taxpayer and the Department under the provisions of
11Section 5-51 of this Act.
12    "New Construction EDGE Credit" means an amount agreed to
13between the Department and the Applicant under this Act as
14part of a New Construction EDGE Agreement that does not exceed
1550% of the Incremental Income Tax attributable to New
16Construction EDGE Employees at the Applicant's project;
17however, if the New Construction EDGE Project is located in an
18underserved area, then the amount of the New Construction EDGE
19Credit may not exceed 75% of the Incremental Income Tax
20attributable to New Construction EDGE Employees at the
21Applicant's New Construction EDGE Project.
22    "New Construction EDGE Employee" means a laborer or worker
23who is employed by an Illinois contractor or subcontractor in
24the actual construction work on the site of a New Construction
25EDGE Project, pursuant to a New Construction EDGE Agreement.
26    "New Construction EDGE Incremental Income Tax" means the

 

 

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1total amount withheld during the taxable year from the
2compensation of New Construction EDGE Employees.
3    "New Construction EDGE Project" means the building of a
4Taxpayer's structure or building, or making improvements of
5any kind to real property. "New Construction EDGE Project"
6does not include the routine operation, routine repair, or
7routine maintenance of existing structures, buildings, or real
8property.
9    "New Employee" means:
10        (a) A Full-time Employee first employed by a Taxpayer
11    in the project that is the subject of an Agreement and who
12    is hired after the Taxpayer enters into the tax credit
13    Agreement.
14        (b) The term "New Employee" does not include:
15            (1) an employee of the Taxpayer who performs a job
16        that was previously performed by another employee, if
17        that job existed for at least 6 months before hiring
18        the employee;
19            (2) an employee of the Taxpayer who was previously
20        employed in Illinois by a Related Member of the
21        Taxpayer and whose employment was shifted to the
22        Taxpayer after the Taxpayer entered into the tax
23        credit Agreement; or
24            (3) a child, grandchild, parent, or spouse, other
25        than a spouse who is legally separated from the
26        individual, of any individual who has a direct or an

 

 

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1        indirect ownership interest of at least 5% in the
2        profits, capital, or value of the Taxpayer.
3        (c) Notwithstanding paragraph (1) of subsection (b),
4    an employee may be considered a New Employee under the
5    Agreement if the employee performs a job that was
6    previously performed by an employee who was:
7            (1) treated under the Agreement as a New Employee;
8        and
9            (2) promoted by the Taxpayer to another job.
10        (d) Notwithstanding subsection (a), the Department may
11    award Credit to an Applicant with respect to an employee
12    hired prior to the date of the Agreement if:
13            (1) the Applicant is in receipt of a letter from
14        the Department stating an intent to enter into a
15        credit Agreement;
16            (2) the letter described in paragraph (1) is
17        issued by the Department not later than 15 days after
18        the effective date of this Act; and
19            (3) the employee was hired after the date the
20        letter described in paragraph (1) was issued.
21    "Noncompliance Date" means, in the case of a Taxpayer that
22is not complying with the requirements of the Agreement or the
23provisions of this Act, the day following the last date upon
24which the Taxpayer was in compliance with the requirements of
25the Agreement and the provisions of this Act, as determined by
26the Director, pursuant to Section 5-65.

 

 

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1    "Pass Through Entity" means an entity that is exempt from
2the tax under subsection (b) or (c) of Section 205 of the
3Illinois Income Tax Act.
4    "Professional Employer Organization" (PEO) means an
5employee leasing company, as defined in Section 206.1(A)(2) of
6the Illinois Unemployment Insurance Act.
7    "Related Member" means a person that, with respect to the
8Taxpayer during any portion of the taxable year, is any one of
9the following:
10        (1) An individual stockholder, if the stockholder and
11    the members of the stockholder's family (as defined in
12    Section 318 of the Internal Revenue Code) own directly,
13    indirectly, beneficially, or constructively, in the
14    aggregate, at least 50% of the value of the Taxpayer's
15    outstanding stock.
16        (2) A partnership, estate, or trust and any partner or
17    beneficiary, if the partnership, estate, or trust, and its
18    partners or beneficiaries own directly, indirectly,
19    beneficially, or constructively, in the aggregate, at
20    least 50% of the profits, capital, stock, or value of the
21    Taxpayer.
22        (3) A corporation, and any party related to the
23    corporation in a manner that would require an attribution
24    of stock from the corporation to the party or from the
25    party to the corporation under the attribution rules of
26    Section 318 of the Internal Revenue Code, if the Taxpayer

 

 

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1    owns directly, indirectly, beneficially, or constructively
2    at least 50% of the value of the corporation's outstanding
3    stock.
4        (4) A corporation and any party related to that
5    corporation in a manner that would require an attribution
6    of stock from the corporation to the party or from the
7    party to the corporation under the attribution rules of
8    Section 318 of the Internal Revenue Code, if the
9    corporation and all such related parties own in the
10    aggregate at least 50% of the profits, capital, stock, or
11    value of the Taxpayer.
12        (5) A person to or from whom there is attribution of
13    stock ownership in accordance with Section 1563(e) of the
14    Internal Revenue Code, except, for purposes of determining
15    whether a person is a Related Member under this paragraph,
16    20% shall be substituted for 5% wherever 5% appears in
17    Section 1563(e) of the Internal Revenue Code.
18    "Startup taxpayer" means, for Agreements that are executed
19before the effective date of the changes made to this Section
20by this amendatory Act of the 103rd General Assembly, a
21corporation, partnership, or other entity incorporated or
22organized no more than 5 years before the filing of an
23application for an Agreement that has never had any Illinois
24income tax liability, excluding any Illinois income tax
25liability of a Related Member which shall not be attributed to
26the startup taxpayer. "Startup taxpayer" means, for Agreements

 

 

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1that are executed on or after the effective date of this
2amendatory Act of the 103rd General Assembly, a corporation,
3partnership, or other entity that is incorporated or organized
4no more than 10 years before the filing of an application for
5an Agreement and that has never had any Illinois income tax
6liability. For the purpose of determining whether the taxpayer
7has had any Illinois income tax liability, the Illinois income
8tax liability of a Related Member shall not be attributed to
9the startup taxpayer.
10    "Taxpayer" means an individual, corporation, partnership,
11or other entity that has any Illinois Income Tax liability.
12    Until July 1, 2022, "underserved area" means a geographic
13area that meets one or more of the following conditions:
14        (1) the area has a poverty rate of at least 20%
15    according to the latest federal decennial census;
16        (2) 75% or more of the children in the area
17    participate in the federal free lunch program according to
18    reported statistics from the State Board of Education;
19        (3) at least 20% of the households in the area receive
20    assistance under the Supplemental Nutrition Assistance
21    Program (SNAP); or
22        (4) the area has an average unemployment rate, as
23    determined by the Illinois Department of Employment
24    Security, that is more than 120% of the national
25    unemployment average, as determined by the U.S. Department
26    of Labor, for a period of at least 2 consecutive calendar

 

 

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1    years preceding the date of the application.
2    On and after July 1, 2022, "underserved area" means a
3geographic area that meets one or more of the following
4conditions:
5        (1) the area has a poverty rate of at least 20%
6    according to the latest American Community Survey;
7        (2) 35% or more of the families with children in the
8    area are living below 130% of the poverty line, according
9    to the latest American Community Survey;
10        (3) at least 20% of the households in the area receive
11    assistance under the Supplemental Nutrition Assistance
12    Program (SNAP); or
13        (4) the area has an average unemployment rate, as
14    determined by the Illinois Department of Employment
15    Security, that is more than 120% of the national
16    unemployment average, as determined by the U.S. Department
17    of Labor, for a period of at least 2 consecutive calendar
18    years preceding the date of the application.
19(Source: P.A. 101-9, eff. 6-5-19; 102-330, eff. 1-1-22;
20102-700, eff. 4-19-22; 102-1125, eff. 2-3-23.)
 
21    (35 ILCS 10/5-15)
22    Sec. 5-15. Tax Credit Awards. Subject to the conditions
23set forth in this Act, a Taxpayer is entitled to a Credit
24against or, as described in subsection (g) of this Section, a
25payment towards taxes imposed pursuant to subsections (a) and

 

 

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1(b) of Section 201 of the Illinois Income Tax Act that may be
2imposed on the Taxpayer for a taxable year beginning on or
3after January 1, 1999, if the Taxpayer is awarded a Credit by
4the Department under this Act for that taxable year.
5    (a) The Department shall make Credit awards under this Act
6to foster job creation and retention in Illinois.
7    (b) A person that proposes a project to create new jobs in
8Illinois must enter into an Agreement with the Department for
9the Credit under this Act.
10    (c) The Credit shall be claimed for the taxable years
11specified in the Agreement.
12    (d) The Credit shall not exceed the Incremental Income Tax
13attributable to the project that is the subject of the
14Agreement.
15    (e) Nothing herein shall prohibit a Tax Credit Award to an
16Applicant that uses a PEO if all other award criteria are
17satisfied.
18    (f) In lieu of the Credit allowed under this Act against
19the taxes imposed pursuant to subsections (a) and (b) of
20Section 201 of the Illinois Income Tax Act for any taxable year
21ending on or after December 31, 2009, for Taxpayers that
22entered into Agreements prior to January 1, 2015 and otherwise
23meet the criteria set forth in this subsection (f), the
24Taxpayer may elect to claim the Credit against its obligation
25to pay over withholding under Section 704A of the Illinois
26Income Tax Act.

 

 

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1        (1) The election under this subsection (f) may be made
2    only by a Taxpayer that (i) is primarily engaged in one of
3    the following business activities: water purification and
4    treatment, motor vehicle metal stamping, automobile
5    manufacturing, automobile and light duty motor vehicle
6    manufacturing, motor vehicle manufacturing, light truck
7    and utility vehicle manufacturing, heavy duty truck
8    manufacturing, motor vehicle body manufacturing, cable
9    television infrastructure design or manufacturing, or
10    wireless telecommunication or computing terminal device
11    design or manufacturing for use on public networks and
12    (ii) meets the following criteria:
13            (A) the Taxpayer (i) had an Illinois net loss or an
14        Illinois net loss deduction under Section 207 of the
15        Illinois Income Tax Act for the taxable year in which
16        the Credit is awarded, (ii) employed a minimum of
17        1,000 full-time employees in this State during the
18        taxable year in which the Credit is awarded, (iii) has
19        an Agreement under this Act on December 14, 2009 (the
20        effective date of Public Act 96-834), and (iv) is in
21        compliance with all provisions of that Agreement;
22            (B) the Taxpayer (i) had an Illinois net loss or an
23        Illinois net loss deduction under Section 207 of the
24        Illinois Income Tax Act for the taxable year in which
25        the Credit is awarded, (ii) employed a minimum of
26        1,000 full-time employees in this State during the

 

 

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1        taxable year in which the Credit is awarded, and (iii)
2        has applied for an Agreement within 365 days after
3        December 14, 2009 (the effective date of Public Act
4        96-834);
5            (C) the Taxpayer (i) had an Illinois net operating
6        loss carryforward under Section 207 of the Illinois
7        Income Tax Act in a taxable year ending during
8        calendar year 2008, (ii) has applied for an Agreement
9        within 150 days after the effective date of this
10        amendatory Act of the 96th General Assembly, (iii)
11        creates at least 400 new jobs in Illinois, (iv)
12        retains at least 2,000 jobs in Illinois that would
13        have been at risk of relocation out of Illinois over a
14        10-year period, and (v) makes a capital investment of
15        at least $75,000,000;
16            (D) the Taxpayer (i) had an Illinois net operating
17        loss carryforward under Section 207 of the Illinois
18        Income Tax Act in a taxable year ending during
19        calendar year 2009, (ii) has applied for an Agreement
20        within 150 days after the effective date of this
21        amendatory Act of the 96th General Assembly, (iii)
22        creates at least 150 new jobs, (iv) retains at least
23        1,000 jobs in Illinois that would have been at risk of
24        relocation out of Illinois over a 10-year period, and
25        (v) makes a capital investment of at least
26        $57,000,000; or

 

 

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1            (E) the Taxpayer (i) employed at least 2,500
2        full-time employees in the State during the year in
3        which the Credit is awarded, (ii) commits to make at
4        least $500,000,000 in combined capital improvements
5        and project costs under the Agreement, (iii) applies
6        for an Agreement between January 1, 2011 and June 30,
7        2011, (iv) executes an Agreement for the Credit during
8        calendar year 2011, and (v) was incorporated no more
9        than 5 years before the filing of an application for an
10        Agreement.
11        (1.5) The election under this subsection (f) may also
12    be made by a Taxpayer for any Credit awarded pursuant to an
13    agreement that was executed between January 1, 2011 and
14    June 30, 2011, if the Taxpayer (i) is primarily engaged in
15    the manufacture of inner tubes or tires, or both, from
16    natural and synthetic rubber, (ii) employs a minimum of
17    2,400 full-time employees in Illinois at the time of
18    application, (iii) creates at least 350 full-time jobs and
19    retains at least 250 full-time jobs in Illinois that would
20    have been at risk of being created or retained outside of
21    Illinois, and (iv) makes a capital investment of at least
22    $200,000,000 at the project location.
23        (1.6) The election under this subsection (f) may also
24    be made by a Taxpayer for any Credit awarded pursuant to an
25    agreement that was executed within 150 days after the
26    effective date of this amendatory Act of the 97th General

 

 

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1    Assembly, if the Taxpayer (i) is primarily engaged in the
2    operation of a discount department store, (ii) maintains
3    its corporate headquarters in Illinois, (iii) employs a
4    minimum of 4,250 full-time employees at its corporate
5    headquarters in Illinois at the time of application, (iv)
6    retains at least 4,250 full-time jobs in Illinois that
7    would have been at risk of being relocated outside of
8    Illinois, (v) had a minimum of $40,000,000,000 in total
9    revenue in 2010, and (vi) makes a capital investment of at
10    least $300,000,000 at the project location.
11        (1.7) Notwithstanding any other provision of law, the
12    election under this subsection (f) may also be made by a
13    Taxpayer for any Credit awarded pursuant to an agreement
14    that was executed or applied for on or after July 1, 2011
15    and on or before March 31, 2012, if the Taxpayer is
16    primarily engaged in the manufacture of original and
17    aftermarket filtration parts and products for automobiles,
18    motor vehicles, light duty motor vehicles, light trucks
19    and utility vehicles, and heavy duty trucks, (ii) employs
20    a minimum of 1,000 full-time employees in Illinois at the
21    time of application, (iii) creates at least 250 full-time
22    jobs in Illinois, (iv) relocates its corporate
23    headquarters to Illinois from another state, and (v) makes
24    a capital investment of at least $4,000,000 at the project
25    location.
26        (1.8) Notwithstanding any other provision of law, the

 

 

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1    election under this subsection (f) may also be made by a
2    startup taxpayer for any Credit awarded pursuant to an
3    Agreement that was executed or applied for on or after the
4    effective date of this amendatory Act of the 102nd General
5    Assembly, if the startup taxpayer, without considering any
6    Related Member or other investor, (i) has never had any
7    Illinois income tax liability and (ii) was incorporated no
8    more than 5 years before the filing of an application for
9    an Agreement. Any such election under this paragraph (1.8)
10    shall be effective unless and until such startup taxpayer
11    has any Illinois income tax liability. This election under
12    this paragraph (1.8) shall automatically terminate when
13    the startup taxpayer has any Illinois income tax liability
14    at the end of any taxable year during the term of the
15    Agreement. Thereafter, the startup taxpayer may receive a
16    Credit, taking into account any benefits previously
17    enjoyed or received by way of the election under this
18    paragraph (1.8), so long as the startup taxpayer remains
19    in compliance with the terms and conditions of the
20    Agreement.
21        (2) An election under this subsection shall allow the
22    credit to be taken against payments otherwise due under
23    Section 704A of the Illinois Income Tax Act during the
24    first calendar quarter year beginning after the end of the
25    taxable quarter year in which the credit is awarded under
26    this Act.

 

 

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1        (3) The election shall be made in the form and manner
2    required by the Illinois Department of Revenue and, once
3    made, shall be irrevocable.
4        (4) If a Taxpayer who meets the requirements of
5    subparagraph (A) of paragraph (1) of this subsection (f)
6    elects to claim the Credit against its withholdings as
7    provided in this subsection (f), then, on and after the
8    date of the election, the terms of the Agreement between
9    the Taxpayer and the Department may not be further amended
10    during the term of the Agreement.
11    (g) A pass-through entity that has been awarded a credit
12under this Act, its shareholders, or its partners may treat
13some or all of the credit awarded pursuant to this Act as a tax
14payment for purposes of the Illinois Income Tax Act. The term
15"tax payment" means a payment as described in Article 6 or
16Article 8 of the Illinois Income Tax Act or a composite payment
17made by a pass-through entity on behalf of any of its
18shareholders or partners to satisfy such shareholders' or
19partners' taxes imposed pursuant to subsections (a) and (b) of
20Section 201 of the Illinois Income Tax Act. In no event shall
21the amount of the award credited pursuant to this Act exceed
22the Illinois income tax liability of the pass-through entity
23or its shareholders or partners for the taxable year.
24(Source: P.A. 102-700, eff. 4-19-22.)
 
25    Section 45-15. The Public Utilities Act is amended by

 

 

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1changing Section 9-222.1A as follows:
 
2    (220 ILCS 5/9-222.1A)
3    Sec. 9-222.1A. High impact business. Beginning on August
41, 1998 and thereafter, a business enterprise that is
5certified as a High Impact Business by the Department of
6Commerce and Economic Opportunity (formerly Department of
7Commerce and Community Affairs) is exempt from the tax imposed
8by Section 2-4 of the Electricity Excise Tax Law, if the High
9Impact Business is registered to self-assess that tax, and is
10exempt from any additional charges added to the business
11enterprise's utility bills as a pass-on of State utility taxes
12under Section 9-222 of this Act, to the extent the tax or
13charges are exempted by the percentage specified by the
14Department of Commerce and Economic Opportunity for State
15utility taxes, provided the business enterprise meets the
16following criteria:
17        (1) (A) it intends either (i) to make a minimum
18        eligible investment of $12,000,000 that will be placed
19        in service in qualified property in Illinois and is
20        intended to create at least 500 full-time equivalent
21        jobs at a designated location in Illinois; or (ii) to
22        make a minimum eligible investment of $30,000,000 that
23        will be placed in service in qualified property in
24        Illinois and is intended to retain at least 1,500
25        full-time equivalent jobs at a designated location in

 

 

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1        Illinois; or
2            (B) it meets the criteria of subdivision
3        (a)(3)(B), (a)(3)(C), (a)(3)(D), or (a)(3)(F), or
4        (a)(3)(G) of Section 5.5 of the Illinois Enterprise
5        Zone Act;
6        (2) it is designated as a High Impact Business by the
7    Department of Commerce and Economic Opportunity; and
8        (3) it is certified by the Department of Commerce and
9    Economic Opportunity as complying with the requirements
10    specified in clauses (1) and (2) of this Section.
11    The Department of Commerce and Economic Opportunity shall
12determine the period during which the exemption from the
13Electricity Excise Tax Law and the charges imposed under
14Section 9-222 are in effect and shall specify the percentage
15of the exemption from those taxes or additional charges.
16    The Department of Commerce and Economic Opportunity is
17authorized to promulgate rules and regulations to carry out
18the provisions of this Section, including procedures for
19complying with the requirements specified in clauses (1) and
20(2) of this Section and procedures for applying for the
21exemptions authorized under this Section; to define the
22amounts and types of eligible investments that business
23enterprises must make in order to receive State utility tax
24exemptions or exemptions from the additional charges imposed
25under Section 9-222 and this Section; to approve such utility
26tax exemptions for business enterprises whose investments are

 

 

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1not yet placed in service; and to require that business
2enterprises granted tax exemptions or exemptions from
3additional charges under Section 9-222 repay the exempted
4amount if the business enterprise fails to comply with the
5terms and conditions of the certification.
6    Upon certification of the business enterprises by the
7Department of Commerce and Economic Opportunity, the
8Department of Commerce and Economic Opportunity shall notify
9the Department of Revenue of the certification. The Department
10of Revenue shall notify the public utilities of the exemption
11status of business enterprises from the tax or pass-on charges
12of State utility taxes. The exemption status shall take effect
13within 3 months after certification of the business
14enterprise.
15(Source: P.A. 102-1125, eff. 2-3-23.)
 
16
ARTICLE 50. INVESTMENT PARTNERSHIPS

 
17    Section 50-5. The Illinois Income Tax Act is amended by
18changing Sections 709.5 and 1501 as follows:
 
19    (35 ILCS 5/709.5)
20    Sec. 709.5. Withholding by partnerships, Subchapter S
21corporations, and trusts.
22    (a) In general. For each taxable year ending on or after
23December 31, 2008, every partnership (other than a publicly

 

 

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1traded partnership under Section 7704 of the Internal Revenue
2Code or investment partnership), Subchapter S corporation, and
3trust must withhold from each nonresident partner,
4shareholder, or beneficiary (other than a partner,
5shareholder, or beneficiary who is exempt from tax under
6Section 501(a) of the Internal Revenue Code or under Section
7205 of this Act, who is included on a composite return filed by
8the partnership or Subchapter S corporation for the taxable
9year under subsection (f) of Section 502 of this Act), or who
10is a retired partner, to the extent that partner's
11distributions are exempt from tax under Section 203(a)(2)(F)
12of this Act) an amount equal to the sum of (i) the share of
13business income of the partnership, Subchapter S corporation,
14or trust apportionable to Illinois plus (ii) for taxable years
15ending on or after December 31, 2014, the share of nonbusiness
16income of the partnership, Subchapter S corporation, or trust
17allocated to Illinois under Section 303 of this Act (other
18than an amount allocated to the commercial domicile of the
19taxpayer under Section 303 of this Act) that is distributable
20to that partner, shareholder, or beneficiary under Sections
21702 and 704 and Subchapter S of the Internal Revenue Code,
22whether or not distributed, (iii) multiplied by the applicable
23rates of tax for that partner, shareholder, or beneficiary
24under subsections (a) through (d) of Section 201 of this Act,
25and (iv) net of the share of any credit under Article 2 of this
26Act that is distributable by the partnership, Subchapter S

 

 

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1corporation, or trust and allowable against the tax liability
2of that partner, shareholder, or beneficiary for a taxable
3year ending on or after December 31, 2014.
4    (b) Credit for taxes withheld. Any amount withheld under
5subsection (a) of this Section and paid to the Department
6shall be treated as a payment of the estimated tax liability or
7of the liability for withholding under this Section of the
8partner, shareholder, or beneficiary to whom the income is
9distributable for the taxable year in which that person
10incurred a liability under this Act with respect to that
11income. The Department shall adopt rules pursuant to which a
12partner, shareholder, or beneficiary may claim a credit
13against its obligation for withholding under this Section for
14amounts withheld under this Section with respect to income
15distributable to it by a partnership, Subchapter S
16corporation, or trust and allowing its partners, shareholders,
17or beneficiaries to claim a credit under this subsection (b)
18for those withheld amounts.
19    (c) Exemption from withholding.
20        (1) A partnership, Subchapter S corporation, or trust
21    shall not be required to withhold tax under subsection (a)
22    of this Section with respect to any nonresident partner,
23    shareholder, or beneficiary (other than an individual)
24    from whom the partnership, S corporation, or trust has
25    received a certificate, completed in the form and manner
26    prescribed by the Department, stating that such

 

 

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1    nonresident partner, shareholder, or beneficiary shall:
2            (A) file all returns that the partner,
3        shareholder, or beneficiary is required to file under
4        Section 502 of this Act and make timely payment of all
5        taxes imposed under Section 201 of this Act or under
6        this Section on the partner, shareholder, or
7        beneficiary with respect to income of the partnership,
8        S corporation, or trust; and
9            (B) be subject to personal jurisdiction in this
10        State for purposes of the collection of income taxes,
11        together with related interest and penalties, imposed
12        on the partner, shareholder, or beneficiary with
13        respect to the income of the partnership, S
14        corporation, or trust.
15        (2) The Department may revoke the exemption provided
16    by this subsection (c) at any time that it determines that
17    the nonresident partner, shareholder, or beneficiary is
18    not abiding by the terms of the certificate. The
19    Department shall notify the partnership, S corporation, or
20    trust that it has revoked a certificate by notice left at
21    the usual place of business of the partnership, S
22    corporation, or trust or by mail to the last known address
23    of the partnership, S corporation, or trust.
24        (3) A partnership, S corporation, or trust that
25    receives a certificate under this subsection (c) properly
26    completed by a nonresident partner, shareholder, or

 

 

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1    beneficiary shall not be required to withhold any amount
2    from that partner, shareholder, or beneficiary, the
3    payment of which would be due under Section 711(a-5) of
4    this Act after the receipt of the certificate and no
5    earlier than 60 days after the Department has notified the
6    partnership, S corporation, or trust that the certificate
7    has been revoked.
8        (4) Certificates received by a partnership, S
9    corporation, or trust under this subsection (c) must be
10    retained by the partnership, S corporation, or trust and a
11    record of such certificates must be provided to the
12    Department, in a format in which the record is available
13    for review by the Department, upon request by the
14    Department. The Department may, by rule, require the
15    record of certificates to be maintained and provided to
16    the Department electronically.
17    (d) For taxable years ending on and after December 31,
182023, every investment partnership, as defined in Section 1501
19of this Act, shall withhold from each nonresident partner
20(other than a partner who is exempt from tax under Section
21501(a) of the Internal Revenue Code or under Section 205 of
22this Act, or who is a retired partner, to the extent that
23partner's distributions are exempt from tax under Section
24203(a)(2)(F) of this Act) an amount calculated as follows:
25        (1) the sum of (i) the share of income that, but for
26    the provisions of subsection (c-5) of Section 305 of this

 

 

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1    Act, would be apportioned to Illinois by the investment
2    partnership under subsection (a) of Section 305 of this
3    Act and (ii) the share of nonbusiness income that, but for
4    the provisions of subsection (c-5) of Section 305 of this
5    Act, would be allocated to Illinois by the investment
6    partnership under subsection (b) of Sections 305 and
7    Section 303 of this Act (other than an amount allocated to
8    the commercial domicile of the taxpayer under Section 303
9    of this Act) that is distributable to that partner under
10    Sections 702 and 704 of the Internal Revenue Code, whether
11    or not distributed; multiplied by
12        (2) the applicable rates of tax for that partner under
13    subsections (a) through (d) of Section 201 of this Act
14    (except that, if the partner is a partnership or
15    subchapter S corporation, the rate shall be equal to the
16    rate imposed on individuals under subsection (b) of
17    Section 201 of this Act); and
18        (3) net of the investment partnership's distributive
19    share of any credit under Article 2 of this Act that is
20    distributable by the partnership and first allowable
21    against the tax liability of that partner for a taxable
22    year ending on or after December 31, 2023.
23    Except to the extent that the income of the investment
24partnership is business income in the hands of the partner
25under subsection (c-5) of Section 305 of this Act, no credit
26for taxes withheld shall be allowed under subsection (b) of

 

 

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1this Section for amounts withheld under this subsection.
2    The provisions of subsection (c) of this Section, allowing
3for exemption from withholding, shall not apply for purposes
4of this subsection.
5(Source: P.A. 100-201, eff. 8-18-17.)
 
6    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
7    Sec. 1501. Definitions.
8    (a) In general. When used in this Act, where not otherwise
9distinctly expressed or manifestly incompatible with the
10intent thereof:
11        (1) Business income. The term "business income" means
12    all income that may be treated as apportionable business
13    income under the Constitution of the United States.
14    Business income is net of the deductions allocable
15    thereto. Such term does not include compensation or the
16    deductions allocable thereto. For each taxable year
17    beginning on or after January 1, 2003, a taxpayer may
18    elect to treat all income other than compensation as
19    business income. This election shall be made in accordance
20    with rules adopted by the Department and, once made, shall
21    be irrevocable.
22        (1.5) Captive real estate investment trust:
23            (A) The term "captive real estate investment
24        trust" means a corporation, trust, or association:
25                (i) that is considered a real estate

 

 

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1            investment trust for the taxable year under
2            Section 856 of the Internal Revenue Code;
3                (ii) the certificates of beneficial interest
4            or shares of which are not regularly traded on an
5            established securities market; and
6                (iii) of which more than 50% of the voting
7            power or value of the beneficial interest or
8            shares, at any time during the last half of the
9            taxable year, is owned or controlled, directly,
10            indirectly, or constructively, by a single
11            corporation.
12            (B) The term "captive real estate investment
13        trust" does not include:
14                (i) a real estate investment trust of which
15            more than 50% of the voting power or value of the
16            beneficial interest or shares is owned or
17            controlled, directly, indirectly, or
18            constructively, by:
19                    (a) a real estate investment trust, other
20                than a captive real estate investment trust;
21                    (b) a person who is exempt from taxation
22                under Section 501 of the Internal Revenue
23                Code, and who is not required to treat income
24                received from the real estate investment trust
25                as unrelated business taxable income under
26                Section 512 of the Internal Revenue Code;

 

 

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1                    (c) a listed Australian property trust, if
2                no more than 50% of the voting power or value
3                of the beneficial interest or shares of that
4                trust, at any time during the last half of the
5                taxable year, is owned or controlled, directly
6                or indirectly, by a single person;
7                    (d) an entity organized as a trust,
8                provided a listed Australian property trust
9                described in subparagraph (c) owns or
10                controls, directly or indirectly, or
11                constructively, 75% or more of the voting
12                power or value of the beneficial interests or
13                shares of such entity; or
14                    (e) an entity that is organized outside of
15                the laws of the United States and that
16                satisfies all of the following criteria:
17                        (1) at least 75% of the entity's total
18                    asset value at the close of its taxable
19                    year is represented by real estate assets
20                    (as defined in Section 856(c)(5)(B) of the
21                    Internal Revenue Code, thereby including
22                    shares or certificates of beneficial
23                    interest in any real estate investment
24                    trust), cash and cash equivalents, and
25                    U.S. Government securities;
26                        (2) the entity is not subject to tax

 

 

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1                    on amounts that are distributed to its
2                    beneficial owners or is exempt from
3                    entity-level taxation;
4                        (3) the entity distributes at least
5                    85% of its taxable income (as computed in
6                    the jurisdiction in which it is organized)
7                    to the holders of its shares or
8                    certificates of beneficial interest on an
9                    annual basis;
10                        (4) either (i) the shares or
11                    beneficial interests of the entity are
12                    regularly traded on an established
13                    securities market or (ii) not more than
14                    10% of the voting power or value in the
15                    entity is held, directly, indirectly, or
16                    constructively, by a single entity or
17                    individual; and
18                        (5) the entity is organized in a
19                    country that has entered into a tax treaty
20                    with the United States; or
21                (ii) during its first taxable year for which
22            it elects to be treated as a real estate
23            investment trust under Section 856(c)(1) of the
24            Internal Revenue Code, a real estate investment
25            trust the certificates of beneficial interest or
26            shares of which are not regularly traded on an

 

 

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1            established securities market, but only if the
2            certificates of beneficial interest or shares of
3            the real estate investment trust are regularly
4            traded on an established securities market prior
5            to the earlier of the due date (including
6            extensions) for filing its return under this Act
7            for that first taxable year or the date it
8            actually files that return.
9            (C) For the purposes of this subsection (1.5), the
10        constructive ownership rules prescribed under Section
11        318(a) of the Internal Revenue Code, as modified by
12        Section 856(d)(5) of the Internal Revenue Code, apply
13        in determining the ownership of stock, assets, or net
14        profits of any person.
15            (D) For the purposes of this item (1.5), for
16        taxable years ending on or after August 16, 2007, the
17        voting power or value of the beneficial interest or
18        shares of a real estate investment trust does not
19        include any voting power or value of beneficial
20        interest or shares in a real estate investment trust
21        held directly or indirectly in a segregated asset
22        account by a life insurance company (as described in
23        Section 817 of the Internal Revenue Code) to the
24        extent such voting power or value is for the benefit of
25        entities or persons who are either immune from
26        taxation or exempt from taxation under subtitle A of

 

 

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1        the Internal Revenue Code.
2        (2) Commercial domicile. The term "commercial
3    domicile" means the principal place from which the trade
4    or business of the taxpayer is directed or managed.
5        (3) Compensation. The term "compensation" means wages,
6    salaries, commissions and any other form of remuneration
7    paid to employees for personal services.
8        (4) Corporation. The term "corporation" includes
9    associations, joint-stock companies, insurance companies
10    and cooperatives. Any entity, including a limited
11    liability company formed under the Illinois Limited
12    Liability Company Act, shall be treated as a corporation
13    if it is so classified for federal income tax purposes.
14        (5) Department. The term "Department" means the
15    Department of Revenue of this State.
16        (6) Director. The term "Director" means the Director
17    of Revenue of this State.
18        (7) Fiduciary. The term "fiduciary" means a guardian,
19    trustee, executor, administrator, receiver, or any person
20    acting in any fiduciary capacity for any person.
21        (8) Financial organization.
22            (A) The term "financial organization" means any
23        bank, bank holding company, trust company, savings
24        bank, industrial bank, land bank, safe deposit
25        company, private banker, savings and loan association,
26        building and loan association, credit union, currency

 

 

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1        exchange, cooperative bank, small loan company, sales
2        finance company, investment company, or any person
3        which is owned by a bank or bank holding company. For
4        the purpose of this Section a "person" will include
5        only those persons which a bank holding company may
6        acquire and hold an interest in, directly or
7        indirectly, under the provisions of the Bank Holding
8        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
9        where interests in any person must be disposed of
10        within certain required time limits under the Bank
11        Holding Company Act of 1956.
12            (B) For purposes of subparagraph (A) of this
13        paragraph, the term "bank" includes (i) any entity
14        that is regulated by the Comptroller of the Currency
15        under the National Bank Act, or by the Federal Reserve
16        Board, or by the Federal Deposit Insurance Corporation
17        and (ii) any federally or State chartered bank
18        operating as a credit card bank.
19            (C) For purposes of subparagraph (A) of this
20        paragraph, the term "sales finance company" has the
21        meaning provided in the following item (i) or (ii):
22                (i) A person primarily engaged in one or more
23            of the following businesses: the business of
24            purchasing customer receivables, the business of
25            making loans upon the security of customer
26            receivables, the business of making loans for the

 

 

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1            express purpose of funding purchases of tangible
2            personal property or services by the borrower, or
3            the business of finance leasing. For purposes of
4            this item (i), "customer receivable" means:
5                    (a) a retail installment contract or
6                retail charge agreement within the meaning of
7                the Sales Finance Agency Act, the Retail
8                Installment Sales Act, or the Motor Vehicle
9                Retail Installment Sales Act;
10                    (b) an installment, charge, credit, or
11                similar contract or agreement arising from the
12                sale of tangible personal property or services
13                in a transaction involving a deferred payment
14                price payable in one or more installments
15                subsequent to the sale; or
16                    (c) the outstanding balance of a contract
17                or agreement described in provisions (a) or
18                (b) of this item (i).
19                A customer receivable need not provide for
20            payment of interest on deferred payments. A sales
21            finance company may purchase a customer receivable
22            from, or make a loan secured by a customer
23            receivable to, the seller in the original
24            transaction or to a person who purchased the
25            customer receivable directly or indirectly from
26            that seller.

 

 

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1                (ii) A corporation meeting each of the
2            following criteria:
3                    (a) the corporation must be a member of an
4                "affiliated group" within the meaning of
5                Section 1504(a) of the Internal Revenue Code,
6                determined without regard to Section 1504(b)
7                of the Internal Revenue Code;
8                    (b) more than 50% of the gross income of
9                the corporation for the taxable year must be
10                interest income derived from qualifying loans.
11                A "qualifying loan" is a loan made to a member
12                of the corporation's affiliated group that
13                originates customer receivables (within the
14                meaning of item (i)) or to whom customer
15                receivables originated by a member of the
16                affiliated group have been transferred, to the
17                extent the average outstanding balance of
18                loans from that corporation to members of its
19                affiliated group during the taxable year do
20                not exceed the limitation amount for that
21                corporation. The "limitation amount" for a
22                corporation is the average outstanding
23                balances during the taxable year of customer
24                receivables (within the meaning of item (i))
25                originated by all members of the affiliated
26                group. If the average outstanding balances of

 

 

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1                the loans made by a corporation to members of
2                its affiliated group exceed the limitation
3                amount, the interest income of that
4                corporation from qualifying loans shall be
5                equal to its interest income from loans to
6                members of its affiliated groups times a
7                fraction equal to the limitation amount
8                divided by the average outstanding balances of
9                the loans made by that corporation to members
10                of its affiliated group;
11                    (c) the total of all shareholder's equity
12                (including, without limitation, paid-in
13                capital on common and preferred stock and
14                retained earnings) of the corporation plus the
15                total of all of its loans, advances, and other
16                obligations payable or owed to members of its
17                affiliated group may not exceed 20% of the
18                total assets of the corporation at any time
19                during the tax year; and
20                    (d) more than 50% of all interest-bearing
21                obligations of the affiliated group payable to
22                persons outside the group determined in
23                accordance with generally accepted accounting
24                principles must be obligations of the
25                corporation.
26            This amendatory Act of the 91st General Assembly

 

 

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1        is declaratory of existing law.
2            (D) Subparagraphs (B) and (C) of this paragraph
3        are declaratory of existing law and apply
4        retroactively, for all tax years beginning on or
5        before December 31, 1996, to all original returns, to
6        all amended returns filed no later than 30 days after
7        the effective date of this amendatory Act of 1996, and
8        to all notices issued on or before the effective date
9        of this amendatory Act of 1996 under subsection (a) of
10        Section 903, subsection (a) of Section 904, subsection
11        (e) of Section 909, or Section 912. A taxpayer that is
12        a "financial organization" that engages in any
13        transaction with an affiliate shall be a "financial
14        organization" for all purposes of this Act.
15            (E) For all tax years beginning on or before
16        December 31, 1996, a taxpayer that falls within the
17        definition of a "financial organization" under
18        subparagraphs (B) or (C) of this paragraph, but who
19        does not fall within the definition of a "financial
20        organization" under the Proposed Regulations issued by
21        the Department of Revenue on July 19, 1996, may
22        irrevocably elect to apply the Proposed Regulations
23        for all of those years as though the Proposed
24        Regulations had been lawfully promulgated, adopted,
25        and in effect for all of those years. For purposes of
26        applying subparagraphs (B) or (C) of this paragraph to

 

 

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1        all of those years, the election allowed by this
2        subparagraph applies only to the taxpayer making the
3        election and to those members of the taxpayer's
4        unitary business group who are ordinarily required to
5        apportion business income under the same subsection of
6        Section 304 of this Act as the taxpayer making the
7        election. No election allowed by this subparagraph
8        shall be made under a claim filed under subsection (d)
9        of Section 909 more than 30 days after the effective
10        date of this amendatory Act of 1996.
11            (F) Finance Leases. For purposes of this
12        subsection, a finance lease shall be treated as a loan
13        or other extension of credit, rather than as a lease,
14        regardless of how the transaction is characterized for
15        any other purpose, including the purposes of any
16        regulatory agency to which the lessor is subject. A
17        finance lease is any transaction in the form of a lease
18        in which the lessee is treated as the owner of the
19        leased asset entitled to any deduction for
20        depreciation allowed under Section 167 of the Internal
21        Revenue Code.
22        (9) Fiscal year. The term "fiscal year" means an
23    accounting period of 12 months ending on the last day of
24    any month other than December.
25        (9.5) Fixed place of business. The term "fixed place
26    of business" has the same meaning as that term is given in

 

 

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1    Section 864 of the Internal Revenue Code and the related
2    Treasury regulations.
3        (10) Includes and including. The terms "includes" and
4    "including" when used in a definition contained in this
5    Act shall not be deemed to exclude other things otherwise
6    within the meaning of the term defined.
7        (11) Internal Revenue Code. The term "Internal Revenue
8    Code" means the United States Internal Revenue Code of
9    1954 or any successor law or laws relating to federal
10    income taxes in effect for the taxable year.
11        (11.5) Investment partnership.
12            (A) For tax years ending before December 31, 2023,
13        the The term "investment partnership" means any entity
14        that is treated as a partnership for federal income
15        tax purposes that meets the following requirements:
16                (i) no less than 90% of the partnership's cost
17            of its total assets consists of qualifying
18            investment securities, deposits at banks or other
19            financial institutions, and office space and
20            equipment reasonably necessary to carry on its
21            activities as an investment partnership;
22                (ii) no less than 90% of its gross income
23            consists of interest, dividends, and gains from
24            the sale or exchange of qualifying investment
25            securities; and
26                (iii) the partnership is not a dealer in

 

 

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1            qualifying investment securities.
2            (A-5) For tax years ending on or after December
3        31, 2023, the term "investment partnership" means any
4        entity that is treated as a partnership for federal
5        income tax purposes that meets the following
6        requirements:
7                (i) no less than 90% of the partnership's cost
8            of its total assets consists of qualifying
9            investment securities, deposits at banks or other
10            financial institutions, and office space and
11            equipment reasonably necessary to carry on its
12            activities as an investment partnership; and
13                (ii) no less than 90% of its gross income
14            consists of interest, dividends, gains from the
15            sale or exchange of qualifying investment
16            securities, and the distributive share of
17            partnership income from lower-tier partnership
18            interests meeting the definition of qualifying
19            investment security under subparagraph (B)(xiii);
20            for the purposes of this subparagraph (ii), "gross
21            income" does not include income from partnerships
22            that are operating at a federal taxable loss.
23            (B) For purposes of this paragraph (11.5), the
24        term "qualifying investment securities" (other than,
25        for tax years ending on or after December 31, 2023,
26        securities with respect to which the taxpayer is

 

 

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1        required to apply the rules of Internal Revenue Code
2        Section 475(a)) includes all of the following:
3                (i) common stock, including preferred or debt
4            securities convertible into common stock, and
5            preferred stock;
6                (ii) bonds, debentures, and other debt
7            securities;
8                (iii) foreign and domestic currency deposits
9            secured by federal, state, or local governmental
10            agencies;
11                (iv) mortgage or asset-backed securities
12            secured by federal, state, or local governmental
13            agencies;
14                (v) repurchase agreements and loan
15            participations;
16                (vi) foreign currency exchange contracts and
17            forward and futures contracts on foreign
18            currencies;
19                (vii) stock and bond index securities and
20            futures contracts and other similar financial
21            securities and futures contracts on those
22            securities;
23                (viii) options for the purchase or sale of any
24            of the securities, currencies, contracts, or
25            financial instruments described in items (i) to
26            (vii), inclusive;

 

 

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1                (ix) regulated futures contracts;
2                (x) commodities (not described in Section
3            1221(a)(1) of the Internal Revenue Code) or
4            futures, forwards, and options with respect to
5            such commodities, provided, however, that any item
6            of a physical commodity to which title is actually
7            acquired in the partnership's capacity as a dealer
8            in such commodity shall not be a qualifying
9            investment security;
10                (xi) derivatives; and
11                (xii) a partnership interest in another
12            partnership that is an investment partnership; and
13            .
14                (xiii) for tax years ending on or after
15            December 31, 2023, a partnership interest that, in
16            the hands of the partnership, qualifies as a
17            security within the meaning of subsection (a)(1)
18            of Subchapter 77b of Chapter 2A of Title 15 of the
19            United States Code.
20        (12) Mathematical error. The term "mathematical error"
21    includes the following types of errors, omissions, or
22    defects in a return filed by a taxpayer which prevents
23    acceptance of the return as filed for processing:
24            (A) arithmetic errors or incorrect computations on
25        the return or supporting schedules;
26            (B) entries on the wrong lines;

 

 

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1            (C) omission of required supporting forms or
2        schedules or the omission of the information in whole
3        or in part called for thereon; and
4            (D) an attempt to claim, exclude, deduct, or
5        improperly report, in a manner directly contrary to
6        the provisions of the Act and regulations thereunder
7        any item of income, exemption, deduction, or credit.
8        (13) Nonbusiness income. The term "nonbusiness income"
9    means all income other than business income or
10    compensation.
11        (14) Nonresident. The term "nonresident" means a
12    person who is not a resident.
13        (15) Paid, incurred and accrued. The terms "paid",
14    "incurred" and "accrued" shall be construed according to
15    the method of accounting upon the basis of which the
16    person's base income is computed under this Act.
17        (16) Partnership and partner. The term "partnership"
18    includes a syndicate, group, pool, joint venture or other
19    unincorporated organization, through or by means of which
20    any business, financial operation, or venture is carried
21    on, and which is not, within the meaning of this Act, a
22    trust or estate or a corporation; and the term "partner"
23    includes a member in such syndicate, group, pool, joint
24    venture or organization.
25        The term "partnership" includes any entity, including
26    a limited liability company formed under the Illinois

 

 

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1    Limited Liability Company Act, classified as a partnership
2    for federal income tax purposes.
3        The term "partnership" does not include a syndicate,
4    group, pool, joint venture, or other unincorporated
5    organization established for the sole purpose of playing
6    the Illinois State Lottery.
7        (17) Part-year resident. The term "part-year resident"
8    means an individual who became a resident during the
9    taxable year or ceased to be a resident during the taxable
10    year. Under Section 1501(a)(20)(A)(i) residence commences
11    with presence in this State for other than a temporary or
12    transitory purpose and ceases with absence from this State
13    for other than a temporary or transitory purpose. Under
14    Section 1501(a)(20)(A)(ii) residence commences with the
15    establishment of domicile in this State and ceases with
16    the establishment of domicile in another State.
17        (18) Person. The term "person" shall be construed to
18    mean and include an individual, a trust, estate,
19    partnership, association, firm, company, corporation,
20    limited liability company, or fiduciary. For purposes of
21    Section 1301 and 1302 of this Act, a "person" means (i) an
22    individual, (ii) a corporation, (iii) an officer, agent,
23    or employee of a corporation, (iv) a member, agent or
24    employee of a partnership, or (v) a member, manager,
25    employee, officer, director, or agent of a limited
26    liability company who in such capacity commits an offense

 

 

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1    specified in Section 1301 and 1302.
2        (18A) Records. The term "records" includes all data
3    maintained by the taxpayer, whether on paper, microfilm,
4    microfiche, or any type of machine-sensible data
5    compilation.
6        (19) Regulations. The term "regulations" includes
7    rules promulgated and forms prescribed by the Department.
8        (20) Resident. The term "resident" means:
9            (A) an individual (i) who is in this State for
10        other than a temporary or transitory purpose during
11        the taxable year; or (ii) who is domiciled in this
12        State but is absent from the State for a temporary or
13        transitory purpose during the taxable year;
14            (B) The estate of a decedent who at his or her
15        death was domiciled in this State;
16            (C) A trust created by a will of a decedent who at
17        his death was domiciled in this State; and
18            (D) An irrevocable trust, the grantor of which was
19        domiciled in this State at the time such trust became
20        irrevocable. For purpose of this subparagraph, a trust
21        shall be considered irrevocable to the extent that the
22        grantor is not treated as the owner thereof under
23        Sections 671 through 678 of the Internal Revenue Code.
24        (21) Sales. The term "sales" means all gross receipts
25    of the taxpayer not allocated under Sections 301, 302 and
26    303.

 

 

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1        (22) State. The term "state" when applied to a
2    jurisdiction other than this State means any state of the
3    United States, the District of Columbia, the Commonwealth
4    of Puerto Rico, any Territory or Possession of the United
5    States, and any foreign country, or any political
6    subdivision of any of the foregoing. For purposes of the
7    foreign tax credit under Section 601, the term "state"
8    means any state of the United States, the District of
9    Columbia, the Commonwealth of Puerto Rico, and any
10    territory or possession of the United States, or any
11    political subdivision of any of the foregoing, effective
12    for tax years ending on or after December 31, 1989.
13        (23) Taxable year. The term "taxable year" means the
14    calendar year, or the fiscal year ending during such
15    calendar year, upon the basis of which the base income is
16    computed under this Act. "Taxable year" means, in the case
17    of a return made for a fractional part of a year under the
18    provisions of this Act, the period for which such return
19    is made.
20        (24) Taxpayer. The term "taxpayer" means any person
21    subject to the tax imposed by this Act.
22        (25) International banking facility. The term
23    international banking facility shall have the same meaning
24    as is set forth in the Illinois Banking Act or as is set
25    forth in the laws of the United States or regulations of
26    the Board of Governors of the Federal Reserve System.

 

 

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1        (26) Income Tax Return Preparer.
2            (A) The term "income tax return preparer" means
3        any person who prepares for compensation, or who
4        employs one or more persons to prepare for
5        compensation, any return of tax imposed by this Act or
6        any claim for refund of tax imposed by this Act. The
7        preparation of a substantial portion of a return or
8        claim for refund shall be treated as the preparation
9        of that return or claim for refund.
10            (B) A person is not an income tax return preparer
11        if all he or she does is
12                (i) furnish typing, reproducing, or other
13            mechanical assistance;
14                (ii) prepare returns or claims for refunds for
15            the employer by whom he or she is regularly and
16            continuously employed;
17                (iii) prepare as a fiduciary returns or claims
18            for refunds for any person; or
19                (iv) prepare claims for refunds for a taxpayer
20            in response to any notice of deficiency issued to
21            that taxpayer or in response to any waiver of
22            restriction after the commencement of an audit of
23            that taxpayer or of another taxpayer if a
24            determination in the audit of the other taxpayer
25            directly or indirectly affects the tax liability
26            of the taxpayer whose claims he or she is

 

 

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1            preparing.
2        (27) Unitary business group.
3            (A) The term "unitary business group" means a
4        group of persons related through common ownership
5        whose business activities are integrated with,
6        dependent upon and contribute to each other. The group
7        will not include those members whose business activity
8        outside the United States is 80% or more of any such
9        member's total business activity; for purposes of this
10        paragraph and clause (a)(3)(B)(ii) of Section 304,
11        business activity within the United States shall be
12        measured by means of the factors ordinarily applicable
13        under subsections (a), (b), (c), (d), or (h) of
14        Section 304 except that, in the case of members
15        ordinarily required to apportion business income by
16        means of the 3 factor formula of property, payroll and
17        sales specified in subsection (a) of Section 304,
18        including the formula as weighted in subsection (h) of
19        Section 304, such members shall not use the sales
20        factor in the computation and the results of the
21        property and payroll factor computations of subsection
22        (a) of Section 304 shall be divided by 2 (by one if
23        either the property or payroll factor has a
24        denominator of zero). The computation required by the
25        preceding sentence shall, in each case, involve the
26        division of the member's property, payroll, or revenue

 

 

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1        miles in the United States, insurance premiums on
2        property or risk in the United States, or financial
3        organization business income from sources within the
4        United States, as the case may be, by the respective
5        worldwide figures for such items. Common ownership in
6        the case of corporations is the direct or indirect
7        control or ownership of more than 50% of the
8        outstanding voting stock of the persons carrying on
9        unitary business activity. Unitary business activity
10        can ordinarily be illustrated where the activities of
11        the members are: (1) in the same general line (such as
12        manufacturing, wholesaling, retailing of tangible
13        personal property, insurance, transportation or
14        finance); or (2) are steps in a vertically structured
15        enterprise or process (such as the steps involved in
16        the production of natural resources, which might
17        include exploration, mining, refining, and marketing);
18        and, in either instance, the members are functionally
19        integrated through the exercise of strong centralized
20        management (where, for example, authority over such
21        matters as purchasing, financing, tax compliance,
22        product line, personnel, marketing and capital
23        investment is not left to each member).
24            (B) In no event, for taxable years ending prior to
25        December 31, 2017, shall any unitary business group
26        include members which are ordinarily required to

 

 

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1        apportion business income under different subsections
2        of Section 304 except that for tax years ending on or
3        after December 31, 1987 this prohibition shall not
4        apply to a holding company that would otherwise be a
5        member of a unitary business group with taxpayers that
6        apportion business income under any of subsections
7        (b), (c), (c-1), or (d) of Section 304. If a unitary
8        business group would, but for the preceding sentence,
9        include members that are ordinarily required to
10        apportion business income under different subsections
11        of Section 304, then for each subsection of Section
12        304 for which there are two or more members, there
13        shall be a separate unitary business group composed of
14        such members. For purposes of the preceding two
15        sentences, a member is "ordinarily required to
16        apportion business income" under a particular
17        subsection of Section 304 if it would be required to
18        use the apportionment method prescribed by such
19        subsection except for the fact that it derives
20        business income solely from Illinois. As used in this
21        paragraph, for taxable years ending before December
22        31, 2017, the phrase "United States" means only the 50
23        states and the District of Columbia, but does not
24        include any territory or possession of the United
25        States or any area over which the United States has
26        asserted jurisdiction or claimed exclusive rights with

 

 

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1        respect to the exploration for or exploitation of
2        natural resources. For taxable years ending on or
3        after December 31, 2017, the phrase "United States",
4        as used in this paragraph, means only the 50 states,
5        the District of Columbia, and any area over which the
6        United States has asserted jurisdiction or claimed
7        exclusive rights with respect to the exploration for
8        or exploitation of natural resources, but does not
9        include any territory or possession of the United
10        States.
11            (C) Holding companies.
12                (i) For purposes of this subparagraph, a
13            "holding company" is a corporation (other than a
14            corporation that is a financial organization under
15            paragraph (8) of this subsection (a) of Section
16            1501 because it is a bank holding company under
17            the provisions of the Bank Holding Company Act of
18            1956 (12 U.S.C. 1841, et seq.) or because it is
19            owned by a bank or a bank holding company) that
20            owns a controlling interest in one or more other
21            taxpayers ("controlled taxpayers"); that, during
22            the period that includes the taxable year and the
23            2 immediately preceding taxable years or, if the
24            corporation was formed during the current or
25            immediately preceding taxable year, the taxable
26            years in which the corporation has been in

 

 

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1            existence, derived substantially all its gross
2            income from dividends, interest, rents, royalties,
3            fees or other charges received from controlled
4            taxpayers for the provision of services, and gains
5            on the sale or other disposition of interests in
6            controlled taxpayers or in property leased or
7            licensed to controlled taxpayers or used by the
8            taxpayer in providing services to controlled
9            taxpayers; and that incurs no substantial expenses
10            other than expenses (including interest and other
11            costs of borrowing) incurred in connection with
12            the acquisition and holding of interests in
13            controlled taxpayers and in the provision of
14            services to controlled taxpayers or in the leasing
15            or licensing of property to controlled taxpayers.
16                (ii) The income of a holding company which is
17            a member of more than one unitary business group
18            shall be included in each unitary business group
19            of which it is a member on a pro rata basis, by
20            including in each unitary business group that
21            portion of the base income of the holding company
22            that bears the same proportion to the total base
23            income of the holding company as the gross
24            receipts of the unitary business group bears to
25            the combined gross receipts of all unitary
26            business groups (in both cases without regard to

 

 

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1            the holding company) or on any other reasonable
2            basis, consistently applied.
3                (iii) A holding company shall apportion its
4            business income under the subsection of Section
5            304 used by the other members of its unitary
6            business group. The apportionment factors of a
7            holding company which would be a member of more
8            than one unitary business group shall be included
9            with the apportionment factors of each unitary
10            business group of which it is a member on a pro
11            rata basis using the same method used in clause
12            (ii).
13                (iv) The provisions of this subparagraph (C)
14            are intended to clarify existing law.
15            (D) If including the base income and factors of a
16        holding company in more than one unitary business
17        group under subparagraph (C) does not fairly reflect
18        the degree of integration between the holding company
19        and one or more of the unitary business groups, the
20        dependence of the holding company and one or more of
21        the unitary business groups upon each other, or the
22        contributions between the holding company and one or
23        more of the unitary business groups, the holding
24        company may petition the Director, under the
25        procedures provided under Section 304(f), for
26        permission to include all base income and factors of

 

 

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1        the holding company only with members of a unitary
2        business group apportioning their business income
3        under one subsection of subsections (a), (b), (c), or
4        (d) of Section 304. If the petition is granted, the
5        holding company shall be included in a unitary
6        business group only with persons apportioning their
7        business income under the selected subsection of
8        Section 304 until the Director grants a petition of
9        the holding company either to be included in more than
10        one unitary business group under subparagraph (C) or
11        to include its base income and factors only with
12        members of a unitary business group apportioning their
13        business income under a different subsection of
14        Section 304.
15            (E) If the unitary business group members'
16        accounting periods differ, the common parent's
17        accounting period or, if there is no common parent,
18        the accounting period of the member that is expected
19        to have, on a recurring basis, the greatest Illinois
20        income tax liability must be used to determine whether
21        to use the apportionment method provided in subsection
22        (a) or subsection (h) of Section 304. The prohibition
23        against membership in a unitary business group for
24        taxpayers ordinarily required to apportion income
25        under different subsections of Section 304 does not
26        apply to taxpayers required to apportion income under

 

 

10300SB1963ham002- 329 -LRB103 25648 HLH 62334 a

1        subsection (a) and subsection (h) of Section 304. The
2        provisions of this amendatory Act of 1998 apply to tax
3        years ending on or after December 31, 1998.
4        (28) Subchapter S corporation. The term "Subchapter S
5    corporation" means a corporation for which there is in
6    effect an election under Section 1362 of the Internal
7    Revenue Code, or for which there is a federal election to
8    opt out of the provisions of the Subchapter S Revision Act
9    of 1982 and have applied instead the prior federal
10    Subchapter S rules as in effect on July 1, 1982.
11        (30) Foreign person. The term "foreign person" means
12    any person who is a nonresident individual who is a
13    national or citizen of a country other than the United
14    States and any nonindividual entity, regardless of where
15    created or organized, whose business activity outside the
16    United States is 80% or more of the entity's total
17    business activity.
18    (b) Other definitions.
19        (1) Words denoting number, gender, and so forth, when
20    used in this Act, where not otherwise distinctly expressed
21    or manifestly incompatible with the intent thereof:
22            (A) Words importing the singular include and apply
23        to several persons, parties or things;
24            (B) Words importing the plural include the
25        singular; and
26            (C) Words importing the masculine gender include

 

 

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1        the feminine as well.
2        (2) "Company" or "association" as including successors
3    and assigns. The word "company" or "association", when
4    used in reference to a corporation, shall be deemed to
5    embrace the words "successors and assigns of such company
6    or association", and in like manner as if these last-named
7    words, or words of similar import, were expressed.
8        (3) Other terms. Any term used in any Section of this
9    Act with respect to the application of, or in connection
10    with, the provisions of any other Section of this Act
11    shall have the same meaning as in such other Section.
12(Source: P.A. 102-1030, eff. 5-27-22.)
 
13
ARTICLE 55. ANGEL INVESTMENT CREDIT

 
14    Section 55-5. The Illinois Income Tax Act is amended by
15changing Section 220 as follows:
 
16    (35 ILCS 5/220)
17    Sec. 220. Angel investment credit.
18    (a) As used in this Section:
19    "Applicant" means a corporation, partnership, limited
20liability company, or a natural person that makes an
21investment in a qualified new business venture. The term
22"applicant" does not include (i) a corporation, partnership,
23limited liability company, or a natural person who has a

 

 

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1direct or indirect ownership interest of at least 51% in the
2profits, capital, or value of the qualified new business
3venture receiving the investment or (ii) a related member.
4    "Claimant" means an applicant certified by the Department
5who files a claim for a credit under this Section.
6    "Department" means the Department of Commerce and Economic
7Opportunity.
8    "Investment" means money (or its equivalent) given to a
9qualified new business venture, at a risk of loss, in
10consideration for an equity interest of the qualified new
11business venture. The Department may adopt rules to permit
12certain forms of contingent equity investments to be
13considered eligible for a tax credit under this Section.
14    "Qualified new business venture" means a business that is
15registered with the Department under this Section.
16    "Related member" means a person that, with respect to the
17applicant, is any one of the following:
18        (1) An individual, if the individual and the members
19    of the individual's family (as defined in Section 318 of
20    the Internal Revenue Code) own directly, indirectly,
21    beneficially, or constructively, in the aggregate, at
22    least 50% of the value of the outstanding profits,
23    capital, stock, or other ownership interest in the
24    qualified new business venture that is the recipient of
25    the applicant's investment.
26        (2) A partnership, estate, or trust and any partner or

 

 

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1    beneficiary, if the partnership, estate, or trust and its
2    partners or beneficiaries own directly, indirectly,
3    beneficially, or constructively, in the aggregate, at
4    least 50% of the profits, capital, stock, or other
5    ownership interest in the qualified new business venture
6    that is the recipient of the applicant's investment.
7        (3) A corporation, and any party related to the
8    corporation in a manner that would require an attribution
9    of stock from the corporation under the attribution rules
10    of Section 318 of the Internal Revenue Code, if the
11    applicant and any other related member own, in the
12    aggregate, directly, indirectly, beneficially, or
13    constructively, at least 50% of the value of the
14    outstanding stock of the qualified new business venture
15    that is the recipient of the applicant's investment.
16        (4) A corporation and any party related to that
17    corporation in a manner that would require an attribution
18    of stock from the corporation to the party or from the
19    party to the corporation under the attribution rules of
20    Section 318 of the Internal Revenue Code, if the
21    corporation and all such related parties own, in the
22    aggregate, at least 50% of the profits, capital, stock, or
23    other ownership interest in the qualified new business
24    venture that is the recipient of the applicant's
25    investment.
26        (5) A person to or from whom there is attribution of

 

 

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1    ownership of stock in the qualified new business venture
2    that is the recipient of the applicant's investment in
3    accordance with Section 1563(e) of the Internal Revenue
4    Code, except that for purposes of determining whether a
5    person is a related member under this paragraph, "20%"
6    shall be substituted for "5%" whenever "5%" appears in
7    Section 1563(e) of the Internal Revenue Code.
8    (b) For taxable years beginning after December 31, 2010,
9and ending on or before December 31, 2026, subject to the
10limitations provided in this Section, a claimant may claim, as
11a credit against the tax imposed under subsections (a) and (b)
12of Section 201 of this Act, an amount equal to 25% of the
13claimant's investment made directly in a qualified new
14business venture. However, the amount of the credit is 35% of
15the claimant's investment made directly in the qualified new
16business venture if the investment is made in: (1) a qualified
17new business venture that is a minority-owned business, a
18women-owned business, or a business owned a person with a
19disability (as those terms are used and defined in the
20Business Enterprise for Minorities, Women, and Persons with
21Disabilities Act); or (2) a qualified new business venture in
22which the principal place of business is located in a county
23with a population of not more than 250,000. In order for an
24investment in a qualified new business venture to be eligible
25for tax credits, the business must have applied for and
26received certification under subsection (e) for the taxable

 

 

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1year in which the investment was made prior to the date on
2which the investment was made. The credit under this Section
3may not exceed the taxpayer's Illinois income tax liability
4for the taxable year. If the amount of the credit exceeds the
5tax liability for the year, the excess may be carried forward
6and applied to the tax liability of the 5 taxable years
7following the excess credit year. The credit shall be applied
8to the earliest year for which there is a tax liability. If
9there are credits from more than one tax year that are
10available to offset a liability, the earlier credit shall be
11applied first. In the case of a partnership or Subchapter S
12Corporation, the credit is allowed to the partners or
13shareholders in accordance with the determination of income
14and distributive share of income under Sections 702 and 704
15and Subchapter S of the Internal Revenue Code.
16    (c) The minimum amount an applicant must invest in any
17single qualified new business venture in order to be eligible
18for a credit under this Section is $10,000. The maximum amount
19of an applicant's total investment made in any single
20qualified new business venture that may be used as the basis
21for a credit under this Section is $2,000,000.
22    (d) The Department shall implement a program to certify an
23applicant for an angel investment credit. Upon satisfactory
24review, the Department shall issue a tax credit certificate
25stating the amount of the tax credit to which the applicant is
26entitled. The Department shall annually certify that: (i) each

 

 

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1qualified new business venture that receives an angel
2investment under this Section has maintained a minimum
3employment threshold, as defined by rule, in the State (and
4continues to maintain a minimum employment threshold in the
5State for a period of no less than 3 years from the issue date
6of the last tax credit certificate issued by the Department
7with respect to such business pursuant to this Section); and
8(ii) the claimant's investment has been made and remains,
9except in the event of a qualifying liquidity event, in the
10qualified new business venture for no less than 3 years.
11    If an investment for which a claimant is allowed a credit
12under subsection (b) is held by the claimant for less than 3
13years, other than as a result of a permitted sale of the
14investment to person who is not a related member, the claimant
15shall pay to the Department of Revenue, in the manner
16prescribed by the Department of Revenue, the aggregate amount
17of the disqualified credits that the claimant received related
18to the subject investment.
19    If the Department determines that a qualified new business
20venture failed to maintain a minimum employment threshold in
21the State through the date which is 3 years from the issue date
22of the last tax credit certificate issued by the Department
23with respect to the subject business pursuant to this Section,
24the claimant or claimants shall pay to the Department of
25Revenue, in the manner prescribed by the Department of
26Revenue, the aggregate amount of the disqualified credits that

 

 

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1claimant or claimants received related to investments in that
2business.
3    (e) The Department shall implement a program to register
4qualified new business ventures for purposes of this Section.
5A business desiring registration under this Section shall be
6required to submit a full and complete application to the
7Department. A submitted application shall be effective only
8for the taxable year in which it is submitted, and a business
9desiring registration under this Section shall be required to
10submit a separate application in and for each taxable year for
11which the business desires registration. Further, if at any
12time prior to the acceptance of an application for
13registration under this Section by the Department one or more
14events occurs which makes the information provided in that
15application materially false or incomplete (in whole or in
16part), the business shall promptly notify the Department of
17the same. Any failure of a business to promptly provide the
18foregoing information to the Department may, at the discretion
19of the Department, result in a revocation of a previously
20approved application for that business, or disqualification of
21the business from future registration under this Section, or
22both. The Department may register the business only if all of
23the following conditions are satisfied:
24        (1) it has its principal place of business in this
25    State;
26        (2) at least 51% of the employees employed by the

 

 

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1    business are employed in this State;
2        (3) the business has the potential for increasing jobs
3    in this State, increasing capital investment in this
4    State, or both, as determined by the Department, and
5    either of the following apply:
6            (A) it is principally engaged in innovation in any
7        of the following: manufacturing; biotechnology;
8        nanotechnology; communications; agricultural
9        sciences; clean energy creation or storage technology;
10        processing or assembling products, including medical
11        devices, pharmaceuticals, computer software, computer
12        hardware, semiconductors, other innovative technology
13        products, or other products that are produced using
14        manufacturing methods that are enabled by applying
15        proprietary technology; or providing services that are
16        enabled by applying proprietary technology; or
17            (B) it is undertaking pre-commercialization
18        activity related to proprietary technology that
19        includes conducting research, developing a new product
20        or business process, or developing a service that is
21        principally reliant on applying proprietary
22        technology;
23        (4) it is not principally engaged in real estate
24    development, insurance, banking, lending, lobbying,
25    political consulting, professional services provided by
26    attorneys, accountants, business consultants, physicians,

 

 

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1    or health care consultants, wholesale or retail trade,
2    leisure, hospitality, transportation, or construction,
3    except construction of power production plants that derive
4    energy from a renewable energy resource, as defined in
5    Section 1 of the Illinois Power Agency Act;
6        (5) at the time it is first certified:
7            (A) it has fewer than 100 employees;
8            (B) it has been in operation in Illinois for not
9        more than 10 consecutive years prior to the year of
10        certification; and
11            (C) it has received not more than $10,000,000 in
12        aggregate investments;
13        (5.1) it agrees to maintain a minimum employment
14    threshold in the State of Illinois prior to the date which
15    is 3 years from the issue date of the last tax credit
16    certificate issued by the Department with respect to that
17    business pursuant to this Section;
18        (6) (blank); and
19        (7) it has received not more than $4,000,000 in
20    investments that qualified for tax credits under this
21    Section.
22    (f) The Department, in consultation with the Department of
23Revenue, shall adopt rules to administer this Section. For
24taxable years beginning before January 1, 2024, the The
25aggregate amount of the tax credits that may be claimed under
26this Section for investments made in qualified new business

 

 

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1ventures shall be limited to at $10,000,000 per calendar year,
2of which $500,000 shall be reserved for investments made in
3qualified new business ventures which are minority-owned
4businesses, women-owned businesses, or businesses owned by a
5person with a disability (as those terms are used and defined
6in the Business Enterprise for Minorities, Women, and Persons
7with Disabilities Act), and an additional $500,000 shall be
8reserved for investments made in qualified new business
9ventures with their principal place of business in counties
10with a population of not more than 250,000. For taxable years
11beginning on or after January 1, 2024, the aggregate amount of
12the tax credits that may be claimed under this Section for
13investments made in qualified new business ventures shall be
14limited to $15,000,000 per calendar year, of which $2,500,000
15shall be reserved for investments made in qualified new
16business ventures that are minority-owned businesses (as the
17term is defined in the Business Enterprise for Minorities,
18Women, and Persons with Disabilities Act), $1,250,000 shall be
19reserved for investments made in qualified new business
20ventures that are women-owned businesses or businesses owned
21by a person with a disability (as those terms are defined in
22the Business Enterprise for Minorities, Women, and Persons
23with Disabilities Act), and $1,250,000 shall be reserved for
24investments made in qualified new business ventures with their
25principal place of business in a county with a population of
26not more than 250,000. The foregoing annual allowable amounts

 

 

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1set forth in this Section shall be allocated by the
2Department, on a per calendar quarter basis and prior to the
3commencement of each calendar year, in such proportion as
4determined by the Department, provided that: (i) the amount
5initially allocated by the Department for any one calendar
6quarter shall not exceed 35% of the total allowable amount;
7(ii) any portion of the allocated allowable amount remaining
8unused as of the end of any of the first 3 calendar quarters of
9a given calendar year shall be rolled into, and added to, the
10total allocated amount for the next available calendar
11quarter; and (iii) the reservation of tax credits for
12investments in minority-owned businesses, women-owned
13businesses, businesses owned by a person with a disability,
14and in businesses in counties with a population of not more
15than 250,000 is limited to the first 3 calendar quarters of a
16given calendar year, after which they may be claimed by
17investors in any qualified new business venture.
18    (g) A claimant may not sell or otherwise transfer a credit
19awarded under this Section to another person.
20    (h) On or before March 1 of each year, the Department shall
21report to the Governor and to the General Assembly on the tax
22credit certificates awarded under this Section for the prior
23calendar year.
24        (1) This report must include, for each tax credit
25    certificate awarded:
26            (A) the name of the claimant and the amount of

 

 

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1        credit awarded or allocated to that claimant;
2            (B) the name and address (including the county) of
3        the qualified new business venture that received the
4        investment giving rise to the credit, the North
5        American Industry Classification System (NAICS) code
6        applicable to that qualified new business venture, and
7        the number of employees of the qualified new business
8        venture; and
9            (C) the date of approval by the Department of each
10        claimant's tax credit certificate.
11        (2) The report must also include:
12            (A) the total number of applicants and the total
13        number of claimants, including the amount of each tax
14        credit certificate awarded to a claimant under this
15        Section in the prior calendar year;
16            (B) the total number of applications from
17        businesses seeking registration under this Section,
18        the total number of new qualified business ventures
19        registered by the Department, and the aggregate amount
20        of investment upon which tax credit certificates were
21        issued in the prior calendar year; and
22            (C) the total amount of tax credit certificates
23        sought by applicants, the amount of each tax credit
24        certificate issued to a claimant, the aggregate amount
25        of all tax credit certificates issued in the prior
26        calendar year and the aggregate amount of tax credit

 

 

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1        certificates issued as authorized under this Section
2        for all calendar years.
3    (i) For each business seeking registration under this
4Section after December 31, 2016, the Department shall require
5the business to include in its application the North American
6Industry Classification System (NAICS) code applicable to the
7business and the number of employees of the business at the
8time of application. Each business registered by the
9Department as a qualified new business venture that receives
10an investment giving rise to the issuance of a tax credit
11certificate pursuant to this Section shall, for each of the 3
12years following the issue date of the last tax credit
13certificate issued by the Department with respect to such
14business pursuant to this Section, report to the Department
15the following:
16        (1) the number of employees and the location at which
17    those employees are employed, both as of the end of each
18    year;
19        (2) the amount of additional new capital investment
20    raised as of the end of each year, if any; and
21        (3) the terms of any liquidity event occurring during
22    such year; for the purposes of this Section, a "liquidity
23    event" means any event that would be considered an exit
24    for an illiquid investment, including any event that
25    allows the equity holders of the business (or any material
26    portion thereof) to cash out some or all of their

 

 

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1    respective equity interests.
2(Source: P.A. 101-81, eff. 7-12-19; 102-16, eff. 6-17-21.)
 
3
ARTICLE 60. NEW MARKETS DEVELOPMENT PROGRAM

 
4    Section 60-5. The New Markets Development Program Act is
5amended by changing Sections 5, 20, 25, 45, and 50 as follows:
 
6    (20 ILCS 663/5)
7    Sec. 5. Definitions. As used in this Act:
8    "Applicable percentage" means 0% for each of the first 2
9credit allowance dates, 7% for the third credit allowance
10date, and 8% for the next 4 credit allowance dates.
11    "Credit allowance date" means with respect to any
12qualified equity investment:
13        (1) the date on which the investment is initially
14    made; and
15        (2) each of the 6 anniversary dates of that date
16    thereafter.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Long-term debt security" means any debt instrument issued
20by a qualified community development entity, at par value or a
21premium, with an original maturity date of at least 7 years
22from the date of its issuance, with no acceleration of
23repayment, amortization, or prepayment features prior to its

 

 

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1original maturity date. Cumulative cash payments of interest
2on the qualified debt instrument during the period commencing
3with the issuance of the qualified debt instrument and ending
4with the seventh anniversary of its issuance shall not exceed
5the sum of such cash interest payments and the cumulative net
6income of the issuing community development entity for the
7same period. This definition in no way limits the holder's
8ability to accelerate payments on the debt instrument in
9situations where the issuer has defaulted on covenants
10designed to ensure compliance with this Act or Section 45D of
11the Internal Revenue Code of 1986, as amended.
12    "Purchase price" means the amount paid to the issuer of a
13qualified equity investment for that qualified equity
14investment.
15    "Qualified active low-income community business" has the
16meaning given to that term in Section 45D of the Internal
17Revenue Code of 1986, as amended; except that any business
18that derives or projects to derive 15% or more of its annual
19revenue from the rental or sale of real estate is not
20considered to be a qualified active low-income community
21business. This exception does not apply to a business that is
22controlled by or under common control with another business if
23the second business (i) does not derive or project to derive
2415% or more of its annual revenue from the rental or sale of
25real estate and (ii) is the primary tenant of the real estate
26leased from the initial business. A business shall be

 

 

10300SB1963ham002- 345 -LRB103 25648 HLH 62334 a

1considered a qualified active low-income community business
2for the duration of the qualified community development
3entity's investment in or loan to the business if the entity
4reasonably expects, at the time it makes the investment or
5loan, that the business will continue to satisfy the
6requirements for being a qualified active low-income community
7business throughout the entire period of the investment or
8loan.
9    "Qualified community development entity" has the meaning
10given to that term in Section 45D of the Internal Revenue Code
11of 1986, as amended; provided that such entity has entered
12into, or is controlled by an entity that has entered into, an
13allocation agreement with the Community Development Financial
14Institutions Fund of the U.S. Treasury Department with respect
15to credits authorized by Section 45D of the Internal Revenue
16Code of 1986, as amended, that includes the State of Illinois
17within the service area set forth in that allocation
18agreement.
19    "Qualified equity investment" means any equity investment
20in, or long-term debt security issued by, a qualified
21community development entity that:
22        (1) is acquired after the effective date of this Act
23    at its original issuance solely in exchange for cash;
24        (2) with respect to qualified equity investments made
25    before January 1, 2024 2017, has at least 85% of its cash
26    purchase price used by the issuer to make qualified

 

 

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1    low-income community investments in the State of Illinois,
2    and, with respect to qualified equity investments made on
3    or after January 1, 2024 2017, has 100% of the cash
4    purchase price used by the issuer to make qualified
5    low-income community investments in the State of Illinois;
6    and
7        (3) is designated by the issuer as a qualified equity
8    investment under this Act; with respect to qualified
9    equity investments made on or after January 1, 2024 2017,
10    is designated by the issuer as a qualified equity
11    investment under Section 45D of the Internal Revenue Code
12    of 1986, as amended; and is certified by the Department as
13    not exceeding the limitation contained in Section 20.
14    This term includes any qualified equity investment that
15does not meet the provisions of item (1) of this definition if
16the investment was a qualified equity investment in the hands
17of a prior holder.
18    "Qualified low-income community investment" means any
19capital or equity investment in, or loan to, any qualified
20active low-income community business. With respect to any one
21qualified active low-income community business, the maximum
22amount of qualified low-income community investments made in
23that business, on a collective basis with all of its
24affiliates that may be counted towards the satisfaction of
25paragraph (2) of the definition of qualified equity
26investment, shall be $10,000,000 whether issued to one or

 

 

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1several qualified community development entities.
2    "Tax credit" means a credit against any income, franchise,
3or insurance premium taxes, including insurance retaliatory
4taxes, otherwise due under Illinois law.
5    "Taxpayer" means any individual or entity subject to any
6income, franchise, or insurance premium tax under Illinois
7law.
8(Source: P.A. 100-408, eff. 8-25-17.)
 
9    (20 ILCS 663/20)
10    Sec. 20. Annual cap on credits. The Department shall limit
11the monetary amount of qualified equity investments permitted
12under this Act to a level necessary to limit tax credit use at
13no more than (i) $20,000,000 in of tax credits for fiscal years
14beginning before July 1, 2023 and (ii) $25,000,000 in tax
15credits for fiscal years beginning on or after July 1, 2023 in
16any fiscal year. This limitation on qualified equity
17investments shall be based on the anticipated use of credits
18without regard to the potential for taxpayers to carry forward
19tax credits to later tax years.
20(Source: P.A. 100-408, eff. 8-25-17.)
 
21    (20 ILCS 663/25)
22    Sec. 25. Certification of qualified equity investments.
23    (a) A qualified community development entity that seeks to
24have an equity investment or long-term debt security

 

 

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1designated as a qualified equity investment and eligible for
2tax credits under this Section shall apply to the Department.
3The qualified community development entity must submit an
4application on a form that the Department provides that
5includes:
6        (1) The name, address, tax identification number of
7    the entity, and evidence of the entity's certification as
8    a qualified community development entity.
9        (2) A copy of the allocation agreement executed by the
10    entity, or its controlling entity, and the Community
11    Development Financial Institutions Fund.
12        (3) A certificate executed by an executive officer of
13    the entity attesting that the allocation agreement remains
14    in effect and has not been revoked or cancelled by the
15    Community Development Financial Institutions Fund.
16        (4) A description of the proposed amount, structure,
17    and purchaser of the equity investment or long-term debt
18    security.
19        (5) The name and tax identification number of any
20    taxpayer eligible to utilize tax credits earned as a
21    result of the issuance of the qualified equity investment.
22        (6) Information regarding the proposed use of proceeds
23    from the issuance of the qualified equity investment.
24        (7) A nonrefundable application fee of $5,000. This
25    fee shall be paid to the Department and shall be required
26    of each application submitted.

 

 

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1        (8) With respect to qualified equity investments made
2    on or after January 1, 2017, the amount of qualified
3    equity investment authority the applicant agrees to
4    designate as a federal qualified equity investment under
5    Section 45D of the Internal Revenue Code, including a copy
6    of the screen shot from the Community Development
7    Financial Institutions Fund's Allocation Tracking System
8    of the applicant's remaining federal qualified equity
9    investment authority.
10    (b) Within 30 days after receipt of a completed
11application containing the information necessary for the
12Department to certify a potential qualified equity investment,
13including the payment of the application fee, the Department
14shall grant or deny the application in full or in part. If the
15Department denies any part of the application, it shall inform
16the qualified community development entity of the grounds for
17the denial. If the qualified community development entity
18provides any additional information required by the Department
19or otherwise completes its application within 15 days of the
20notice of denial, the application shall be considered
21completed as of the original date of submission. If the
22qualified community development entity fails to provide the
23information or complete its application within the 15-day
24period, the application remains denied and must be resubmitted
25in full with a new submission date.
26    (c) If the application is deemed complete, the Department

 

 

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1shall certify the proposed equity investment or long-term debt
2security as a qualified equity investment that is eligible for
3tax credits under this Section, subject to the limitations
4contained in Section 20. The Department shall provide written
5notice of the certification to the qualified community
6development entity. The notice shall include the names of
7those taxpayers who are eligible to utilize the credits and
8their respective credit amounts. If the names of the taxpayers
9who are eligible to utilize the credits change due to a
10transfer of a qualified equity investment or a change in an
11allocation pursuant to Section 15, the qualified community
12development entity shall notify the Department of such change.
13    (d) With respect to applications received before January
141, 2017, the Department shall certify qualified equity
15investments in the order applications are received by the
16Department. Applications received on the same day shall be
17deemed to have been received simultaneously. For applications
18received on the same day and deemed complete, the Department
19shall certify, consistent with remaining tax credit capacity,
20qualified equity investments in proportionate percentages
21based upon the ratio of the amount of qualified equity
22investment requested in an application to the total amount of
23qualified equity investments requested in all applications
24received on the same day.
25    (d-5) With respect to applications received on or after
26January 1, 2017, the Department shall certify applications by

 

 

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1applicants that agree to designate qualified equity
2investments as federal qualified equity investments in
3accordance with item (8) of subsection (a) of this Section in
4proportionate percentages based upon the ratio of the amount
5of qualified equity investments requested in an application to
6be designated as federal qualified equity investments to the
7total amount of qualified equity investments to be designated
8as federal qualified equity investments requested in all
9applications received on the same day.
10    (d-10) With respect to applications received on or after
11January 1, 2017, after complying with subsection (d-5), the
12Department shall certify the qualified equity investments of
13all other applicants, including the remaining qualified equity
14investment authority requested by applicants not designated as
15federal qualified equity investments in accordance with item
16(8) of subsection (a) of this Section, in proportionate
17percentages based upon the ratio of the amount of qualified
18equity investments requested in the applications to the total
19amount of qualified equity investments requested in all
20applications received on the same day.
21    (e) Once the Department has certified qualified equity
22investments that, on a cumulative basis, are eligible for
23$20,000,000 in tax credits (for taxable years beginning before
24July 1, 2023) or $25,000,000 in tax credits (for taxable years
25beginning on or after July 1, 2023), the Department may not
26certify any more qualified equity investments. If a pending

 

 

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1request cannot be fully certified, the Department shall
2certify the portion that may be certified unless the qualified
3community development entity elects to withdraw its request
4rather than receive partial credit.
5    (f) Within 30 days after receiving notice of
6certification, the qualified community development entity
7shall (i) issue the qualified equity investment and receive
8cash in the amount of the certified amount and (ii) with
9respect to qualified equity investments made on or after
10January 1, 2017, if applicable, designate the required amount
11of qualified equity investment authority as a federal
12qualified equity investment. The qualified community
13development entity must provide the Department with evidence
14of the receipt of the cash investment within 10 business days
15after receipt and, with respect to qualified equity
16investments made on or after January 1, 2017, if applicable,
17provide evidence that the required amount of qualified equity
18investment authority was designated as a federal qualified
19equity investment. If the qualified community development
20entity does not receive the cash investment and issue the
21qualified equity investment within 30 days following receipt
22of the certification notice, the certification shall lapse and
23the entity may not issue the qualified equity investment
24without reapplying to the Department for certification. A
25certification that lapses reverts back to the Department and
26may be reissued only in accordance with the application

 

 

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1process outline in this Section 25.
2    (g) Allocation rounds enabled by this Act shall be applied
3for according to the following schedule:
4        (1) on January 2, 2019, $125,000,000 of qualified
5    equity investments; and
6        (2) not less than 45 days after but not more than 90
7    days after the Community Development Financial
8    Institutions Fund of the United States Department of the
9    Treasury announces allocation awards under a Notice of
10    Funding Availability that is published in the Federal
11    Register after September 6, 2019, $125,000,000 of
12    qualified equity investments; and .
13        (3) on or after January 1, 2024, but not more than 120
14    days after the Community Development Financial
15    Institutions Fund of the United States Department of the
16    Treasury announces allocation awards under a Notice of
17    Funding Availability that was published in the Federal
18    Register on November 22, 2022, $312,500,000 of qualified
19    equity investments.
20(Source: P.A. 100-408, eff. 8-25-17; 101-604, eff. 12-13-19.)
 
21    (20 ILCS 663/45)
22    Sec. 45. Examination and Rulemaking.
23    (a) The Department may conduct examinations to verify that
24the tax credits under this Act have been received and applied
25according to the requirements of this Act and to verify that no

 

 

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1event has occurred that would result in a recapture of tax
2credits under Section 40.
3    (b) Neither the Department nor the Department of Revenue
4shall have the authority to promulgate rules under the Act,
5but, with respect to qualified equity investments issued
6before January 1, 2024, the Department and the Department of
7Revenue shall have the authority to issue advisory letters to
8individual qualified community development entities and their
9investors that are limited to the specific facts outlined in
10an advisory letter request from a qualified community
11development entity. Such rulings cannot be relied upon by any
12person or entity other than the qualified community
13development entity that requested the letter and the taxpayers
14that are entitled to any tax credits generated from
15investments in such entity. For purposes of this subsection,
16"rules" is given the meaning contained in Section 1-70 of the
17Illinois Administrative Procedure Act.
18    (c) In rendering advisory letters and making other
19determinations under this Act prior to January 1, 2024, to the
20extent applicable, the Department and the Department of
21Revenue shall look for guidance to Section 45D of the Internal
22Revenue Code of 1986, as amended, and the rules and
23regulations issued thereunder.
24    (d) It is the intent of the General Assembly that
25qualified equity investment structures allowed pursuant to
26advisory letters and other determinations by the Department

 

 

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1and the Department of Revenue prior to January 1, 2024 shall be
2allowed and that qualified community development entities may
3rely on the rules and regulations issued under Section 45D of
4the Internal Revenue Code of 1986, as amended, where
5applicable.
6(Source: P.A. 95-1024, eff. 12-31-08.)
 
7    (20 ILCS 663/50)
8    Sec. 50. Sunset. For fiscal years following fiscal year
92031 2024, qualified equity investments shall not be made
10under this Act unless reauthorization is made pursuant to this
11Section. For all fiscal years following fiscal year 2031 2024,
12unless the General Assembly adopts a joint resolution granting
13authority to the Department to approve qualified equity
14investments for the Illinois new markets development program
15and clearly describing the amount of tax credits available for
16the next fiscal year, or otherwise complies with the
17provisions of this Section, no qualified equity investments
18may be permitted to be made under this Act. The amount of
19available tax credits contained in such a resolution shall not
20exceed the limitation provided under Section 20. Nothing in
21this Section precludes a taxpayer who makes a qualified equity
22investment prior to the expiration of authority to make
23qualified equity investments from claiming tax credits
24relating to that qualified equity investment for each
25applicable credit allowance date.

 

 

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1(Source: P.A. 102-16, eff. 6-17-21.)
 
2
ARTICLE 65. STANDARD EXEMPTION

 
3    Section 65-5. The Illinois Income Tax Act is amended by
4changing Section 204 as follows:
 
5    (35 ILCS 5/204)  (from Ch. 120, par. 2-204)
6    Sec. 204. Standard exemption.
7    (a) Allowance of exemption. In computing net income under
8this Act, there shall be allowed as an exemption the sum of the
9amounts determined under subsections (b), (c) and (d),
10multiplied by a fraction the numerator of which is the amount
11of the taxpayer's base income allocable to this State for the
12taxable year and the denominator of which is the taxpayer's
13total base income for the taxable year.
14    (b) Basic amount. For the purpose of subsection (a) of
15this Section, except as provided by subsection (a) of Section
16205 and in this subsection, each taxpayer shall be allowed a
17basic amount of $1000, except that for corporations the basic
18amount shall be zero for tax years ending on or after December
1931, 2003, and for individuals the basic amount shall be:
20        (1) for taxable years ending on or after December 31,
21    1998 and prior to December 31, 1999, $1,300;
22        (2) for taxable years ending on or after December 31,
23    1999 and prior to December 31, 2000, $1,650;

 

 

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1        (3) for taxable years ending on or after December 31,
2    2000 and prior to December 31, 2012, $2,000;
3        (4) for taxable years ending on or after December 31,
4    2012 and prior to December 31, 2013, $2,050;
5        (5) for taxable years ending on or after December 31,
6    2013 and on or before December 31, 2022 December 31, 2023,
7    $2,050 plus the cost-of-living adjustment under subsection
8    (d-5); .
9        (6) for taxable years ending on or after December 31,
10    2023 and prior to December 31, 2024, $2,425;
11        (7) for taxable years ending on or after December 31,
12    2024 and on or before December 31, 2028, $2,050 plus the
13    cost-of-living adjustment under subsection (d-5).
14For taxable years ending on or after December 31, 1992, a
15taxpayer whose Illinois base income exceeds the basic amount
16and who is claimed as a dependent on another person's tax
17return under the Internal Revenue Code shall not be allowed
18any basic amount under this subsection.
19    (c) Additional amount for individuals. In the case of an
20individual taxpayer, there shall be allowed for the purpose of
21subsection (a), in addition to the basic amount provided by
22subsection (b), an additional exemption equal to the basic
23amount for each exemption in excess of one allowable to such
24individual taxpayer for the taxable year under Section 151 of
25the Internal Revenue Code.
26    (d) Additional exemptions for an individual taxpayer and

 

 

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1his or her spouse. In the case of an individual taxpayer and
2his or her spouse, he or she shall each be allowed additional
3exemptions as follows:
4        (1) Additional exemption for taxpayer or spouse 65
5    years of age or older.
6            (A) For taxpayer. An additional exemption of
7        $1,000 for the taxpayer if he or she has attained the
8        age of 65 before the end of the taxable year.
9            (B) For spouse when a joint return is not filed. An
10        additional exemption of $1,000 for the spouse of the
11        taxpayer if a joint return is not made by the taxpayer
12        and his spouse, and if the spouse has attained the age
13        of 65 before the end of such taxable year, and, for the
14        calendar year in which the taxable year of the
15        taxpayer begins, has no gross income and is not the
16        dependent of another taxpayer.
17        (2) Additional exemption for blindness of taxpayer or
18    spouse.
19            (A) For taxpayer. An additional exemption of
20        $1,000 for the taxpayer if he or she is blind at the
21        end of the taxable year.
22            (B) For spouse when a joint return is not filed. An
23        additional exemption of $1,000 for the spouse of the
24        taxpayer if a separate return is made by the taxpayer,
25        and if the spouse is blind and, for the calendar year
26        in which the taxable year of the taxpayer begins, has

 

 

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1        no gross income and is not the dependent of another
2        taxpayer. For purposes of this paragraph, the
3        determination of whether the spouse is blind shall be
4        made as of the end of the taxable year of the taxpayer;
5        except that if the spouse dies during such taxable
6        year such determination shall be made as of the time of
7        such death.
8            (C) Blindness defined. For purposes of this
9        subsection, an individual is blind only if his or her
10        central visual acuity does not exceed 20/200 in the
11        better eye with correcting lenses, or if his or her
12        visual acuity is greater than 20/200 but is
13        accompanied by a limitation in the fields of vision
14        such that the widest diameter of the visual fields
15        subtends an angle no greater than 20 degrees.
16    (d-5) Cost-of-living adjustment. For purposes of item (5)
17of subsection (b), the cost-of-living adjustment for any
18calendar year and for taxable years ending prior to the end of
19the subsequent calendar year is equal to $2,050 times the
20percentage (if any) by which:
21        (1) the Consumer Price Index for the preceding
22    calendar year, exceeds
23        (2) the Consumer Price Index for the calendar year
24    2011.
25    The Consumer Price Index for any calendar year is the
26average of the Consumer Price Index as of the close of the

 

 

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112-month period ending on August 31 of that calendar year.
2    The term "Consumer Price Index" means the last Consumer
3Price Index for All Urban Consumers published by the United
4States Department of Labor or any successor agency.
5    If any cost-of-living adjustment is not a multiple of $25,
6that adjustment shall be rounded to the next lowest multiple
7of $25.
8    (e) Cross reference. See Article 3 for the manner of
9determining base income allocable to this State.
10    (f) Application of Section 250. Section 250 does not apply
11to the amendments to this Section made by Public Act 90-613.
12    (g) Notwithstanding any other provision of law, for
13taxable years beginning on or after January 1, 2017, no
14taxpayer may claim an exemption under this Section if the
15taxpayer's adjusted gross income for the taxable year exceeds
16(i) $500,000, in the case of spouses filing a joint federal tax
17return or (ii) $250,000, in the case of all other taxpayers.
18(Source: P.A. 100-22, eff. 7-6-17; 100-865, eff. 8-14-18.)
 
19
ARTICLE 70. AVIATION FUEL

 
20    Section 70-5. The Use Tax Act is amended by changing
21Section 3-87 as follows:
 
22    (35 ILCS 105/3-87)
23    Sec. 3-87. Sustainable Aviation Fuel Purchase Credit.

 

 

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1    (a) From July 1, 2023 through December 31, 2032 June 1,
22023 through January 1, 2033, sustainable aviation fuel sold
3to or used by an air common carrier, certified by the carrier
4to the Department to be used in Illinois, earns a credit in the
5amount of $1.50 per gallon of sustainable aviation fuel
6purchased. The credit earned shall be referred to as the
7Sustainable Aviation Fuel Purchase Credit.
8    Only that portion of each gallon of aviation fuel that
9consists of sustainable aviation fuel, as defined in this
10Section, is eligible to earn the credit.
11    The credit is earned at the time sustainable aviation fuel
12is purchased for use in Illinois. The amount of credit that is
13earned is based on the number of whole gallons of sustainable
14aviation fuel purchased for use in Illinois. Partial gallons
15will not earn a credit. Credits may be used at the same time as
16they are earned.
17    For a sale or use of aviation fuel to qualify to earn the
18Sustainable Aviation Fuel Purchase Credit, taxpayers must
19retain in their books and records a certification from the
20producer of the aviation fuel that the aviation fuel sold or
21used and for which a sustainable aviation fuel purchase credit
22was earned meets the definition of sustainable aviation fuel
23under this Section. The documentation must include detail
24sufficient for the Department to determine the number of
25gallons of sustainable aviation fuel sold or used.
26    A Sustainable Aviation Fuel Purchase Credit earned by an

 

 

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1air common carrier expires on December 31, 2032. The
2Sustainable Aviation Fuel Purchase Credit is non-transferable
3and non-refundable. Taxpayers shall account for the earning
4and usage of Sustainable Aviation Fuel Purchase Credits on
5each monthly return filed with the Department, as deemed
6necessary by the Department.
7    The purchaser of sustainable aviation fuel shall certify
8to the seller of the aviation fuel that the purchaser is
9satisfying all or part of its liability for the 6.25% tax under
10the Use Tax Act or the Service Use Tax Act that is due on the
11purchase of aviation fuel by use of the sustainable aviation
12fuel purchase credit.
13    The Sustainable Aviation Fuel Purchase Credit
14certification must be dated and shall include the name and
15address of the purchaser, the purchaser's registration number,
16if registered, the credit being applied, and a statement that
17the State Use Tax or Service Use Tax use tax or service use tax
18liability is being satisfied with the air common carrier's
19accumulated sustainable aviation fuel purchase credit.
20    An air common carrier-purchaser of aviation fuel may
21utilize the Sustainable Aviation Fuel Purchase Credit in
22satisfaction of the 6.25% tax arising from the purchase of
23aviation fuel, but not in satisfaction of penalty or interest.
24    Until January 1, 2033 July 1, 2033, on an annual basis,
25running from January through December each year, no credit may
26be earned by an air common carrier for soybean oil-derived

 

 

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1sustainable aviation fuel once air common carriers in this
2State have collectively purchased sustainable aviation fuel
3containing 10,000,000 gallons of soybean oil feedstock. If, in
4any year, air common carriers collectively purchase
5sustainable aviation fuel containing more than 10,000,000
6gallons of soybean oil feedstock for use in this State, then,
7in the month in which taxpayer reporting shows that the credit
8earned from these purchases exceeds the cap, the Department
9shall first determine the remaining number of gallons of
10soybean oil feedstock available to earn the credit for that
11year by subtracting from 10,000,000 the number of gallons of
12soybean oil feedstock collectively purchased that year based
13on the prior month's taxpayer reporting. The Department shall
14then allocate the credit from these remaining gallons of
15soybean oil feedstock available to earn the credit for that
16year by allowing credit to each air common carrier in the same
17proportion as the number of gallons of soybean oil feedstock
18reported as having been purchased by each air common carrier
19during the month in which the cap is exceeded is to all of the
20gallons of soybean oil feedstock reported as having been
21purchased during that month. The earning of any credit in
22excess of this shall be disallowed for the remainder of the
23year. For any credit that was used, the earning of which was
24disallowed in the process described in this paragraph, any
25resulting tax shall be due on or before April 20th of the year
26following the year in which the 10,000,000 gallon cap on

 

 

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1soybean oil feedstock was exceeded and shall be reported and
2paid on the aviation fuel tax return. Any credit that is earned
3for the purchase of soybean oil feedstock but not timely
4reported in a year in which the cap is exceeded is disallowed.
5    A Sustainable Aviation Fuel Purchase Credit certification
6provided by the air common carrier may be used to satisfy the
7retailer's or serviceman's 6.25% tax liability on aviation
8fuel under the Retailers' Occupation Tax Act or Service
9Occupation Tax Act for the credit claimed.
10    (b) As used in this Section, "sustainable aviation fuel"
11means liquid fuel that meets the criteria set forth in
12subsections (d) and (e) of Section 40B of the federal Internal
13Revenue Code of 1986 or:
14        (1) consists of synthesized hydrocarbons and meets the
15    requirements of:
16            (A) the American Society for Testing and Materials
17        International Standard D7566; or
18            (B) the Fischer-Tropsch provisions of American
19        Society for Testing and Materials International
20        Standard D1655, Annex A1;
21        (2) prior to June 1, 2028, is derived from biomass
22    resources, waste streams, renewable energy sources, or
23    gaseous carbon oxides, and beginning on June 1, 2028 is
24    derived from domestic biomass resources;
25        (3) is not derived from any palm derivatives; and
26        (4) the fuel production pathway for the sustainable

 

 

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1    aviation fuel achieves at least a 50% lifecycle greenhouse
2    gas emissions reduction in comparison with petroleum-based
3    jet fuel, as determined by a test that shows:
4            (A) that the fuel production pathway achieves at
5        least a 50% reduction of the aggregate attributional
6        core lifecycle emissions and the positive induced land
7        use change values under the lifecycle methodology for
8        sustainable aviation fuels adopted by the
9        International Civil Aviation Organization with the
10        agreement of the United States; or
11            (B) that the fuel production pathway achieves at
12        least a 50% reduction of the aggregate attributional
13        core lifecycle greenhouse gas emissions values
14        utilizing the most recent version of Argonne National
15        Laboratory's GREET model, inclusive of agricultural
16        practices and carbon capture and sequestration.
17(Source: P.A. 102-1125, eff. 2-3-23.)
 
18    Section 70-10. The Service Use Tax Act is amended by
19changing Section 3-72 as follows:
 
20    (35 ILCS 110/3-72)
21    Sec. 3-72. Sustainable Aviation Fuel Purchase Credit.
22    (a) From July 1, 2023 through December 31, 2032 June 1,
232023 through January 1, 2033, sustainable aviation fuel sold
24to or used by an air common carrier, certified by the carrier

 

 

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1to the Department to be used in Illinois, earns a credit in the
2amount of $1.50 per gallon of sustainable aviation fuel
3purchased. The credit earned shall be referred to as the
4Sustainable Aviation Fuel Purchase Credit.
5    Only that portion of each gallon of aviation fuel that
6consists of sustainable aviation fuel, as defined in this
7Section, is eligible to earn the credit.
8    The credit is earned at the time sustainable aviation fuel
9is purchased for use in Illinois. The amount of credit that is
10earned is based on the number of whole gallons of sustainable
11aviation fuel purchased for use in Illinois. Partial gallons
12will not earn a credit. Credits may be used at the same time as
13they are earned.
14    For a sale or use of aviation fuel to qualify to earn the
15Sustainable Aviation Fuel Purchase Credit, taxpayers must
16retain in their books and records a certification from the
17producer of the aviation fuel that the aviation fuel sold or
18used and for which a sustainable aviation fuel purchase credit
19was earned meets the definition of sustainable aviation fuel
20under this Section. The documentation must include detail
21sufficient for the Department to determine the number of
22gallons of sustainable aviation fuel sold or used.
23    A Sustainable Aviation Fuel Purchase Credit earned by an
24air common carrier expires on December 31, 2032. The
25Sustainable Aviation Fuel Purchase Credit is a
26non-transferable and non-refundable credit. Taxpayers shall

 

 

10300SB1963ham002- 367 -LRB103 25648 HLH 62334 a

1account for the earning and usage of Sustainable Aviation Fuel
2Purchase Credits on each monthly return filed with the
3Department, as deemed necessary by the Department.
4    The purchaser of sustainable aviation fuel shall certify
5to the seller of the aviation fuel that the purchaser is
6satisfying all or part of its liability for the 6.25% tax under
7the Use Tax Act or the Service Use Tax Act that is due on the
8purchase of aviation fuel by use of the sustainable aviation
9fuel purchase credit.
10    The Sustainable Aviation Fuel Purchase Credit
11certification must be dated and shall include the name and
12address of the purchaser, the purchaser's registration number,
13if registered, the credit being applied, and a statement that
14the State Use Tax or Service Use Tax use tax or service use tax
15liability is being satisfied with the air common carrier's
16accumulated sustainable aviation fuel purchase credit.
17    An air common carrier-purchaser of aviation fuel may
18utilize the Sustainable Aviation Fuel Purchase Credit in
19satisfaction of the 6.25% tax arising from the purchase of
20aviation fuel, but not in satisfaction of penalty or interest.
21    Until January 1, 2033 July 1, 2033, on an annual basis
22running from January through December each year, no credit may
23be earned by an air common carrier for soybean oil-derived
24sustainable aviation fuel once air common carriers in this
25State have collectively purchased sustainable aviation fuel
26containing 10,000,000 gallons of soybean oil feedstock. If, in

 

 

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1any year, air common carriers collectively purchase
2sustainable aviation fuel containing more than 10,000,000
3gallons of soybean oil feedstock for use in this State, then,
4in the month in which taxpayer reporting shows that the credit
5earned from these purchases exceeds the cap, the Department
6shall first determine the remaining number of gallons of
7soybean oil feedstock available to earn the credit for that
8year by subtracting from 10,000,000 the number of gallons of
9soybean oil feedstock collectively purchased that year based
10on the prior month's taxpayer reporting. The Department shall
11then allocate the credit from these remaining gallons of
12soybean oil feedstock available to earn the credit for that
13year by allowing credit to each air common carrier in the same
14proportion as the number of gallons of soybean oil feedstock
15reported as having been purchased by each air common carrier
16during the month in which the cap is exceeded is to all of the
17gallons of soybean oil feedstock reported as having been
18purchased during that month. The earning of any credit in
19excess of this shall be disallowed for the remainder of the
20year. For any credit that was used, the earning of which was
21disallowed in the process described in this paragraph, any
22resulting tax shall be due on or before April 20th of the year
23following the year in which the 10,000,000 gallon cap on
24soybean oil feedstock was exceeded and shall be reported and
25paid on the aviation fuel tax return. Any credit that is earned
26for the purchase of soybean oil feedstock but not timely

 

 

10300SB1963ham002- 369 -LRB103 25648 HLH 62334 a

1reported in a year in which the cap is exceeded is disallowed.
2    A Sustainable Aviation Fuel Purchase Credit certification
3provided by the air common carrier may be used to satisfy the
4retailer's or serviceman's 6.25% tax liability on aviation
5fuel under the Retailers' Occupation Tax Act or Service
6Occupation Tax Act for the credit claimed.
7    (b) As used in this Section, "sustainable aviation fuel"
8means liquid fuel that meets the criteria set forth in
9subsections (d) and (e) of Section 40B of the federal Internal
10Revenue Code of 1986 or:
11        (1) consists of synthesized hydrocarbons and meets the
12    requirements of:
13            (A) the American Society for Testing and Materials
14        International Standard D7566; or
15            (B) the Fischer-Tropsch provisions of American
16        Society for Testing and Materials International
17        Standard D1655, Annex A1;
18        (2) prior to June 1, 2028, is derived from biomass
19    resources, waste streams, renewable energy sources, or
20    gaseous carbon oxides, and beginning on June 1, 2028 is
21    derived from domestic biomass resources;
22        (3) is not derived from any palm derivatives; and
23        (4) the fuel production pathway for the sustainable
24    aviation fuel achieves at least a 50% lifecycle greenhouse
25    gas emissions reduction in comparison with petroleum-based
26    jet fuel, as determined by a test that shows:

 

 

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1            (A) that the fuel production pathway achieves at
2        least a 50% reduction of the aggregate attributional
3        core lifecycle emissions and the positive induced land
4        use change values under the lifecycle methodology for
5        sustainable aviation fuels adopted by the
6        International Civil Aviation Organization with the
7        agreement of the United States; or
8            (B) that the fuel production pathway achieves at
9        least a 50% reduction of the aggregate attributional
10        core lifecycle greenhouse gas emissions values
11        utilizing the most recent version of Argonne National
12        Laboratory's GREET model, inclusive of agricultural
13        practices and carbon capture and sequestration.
14(Source: P.A. 102-1125, eff. 2-3-23.)
 
15    Section 70-15. The Service Occupation Tax Act is amended
16by changing Section 9 as follows:
 
17    (35 ILCS 115/9)  (from Ch. 120, par. 439.109)
18    Sec. 9. Each serviceman required or authorized to collect
19the tax herein imposed shall pay to the Department the amount
20of such tax at the time when he is required to file his return
21for the period during which such tax was collectible, less a
22discount of 2.1% prior to January 1, 1990, and 1.75% on and
23after January 1, 1990, or $5 per calendar year, whichever is
24greater, which is allowed to reimburse the serviceman for

 

 

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1expenses incurred in collecting the tax, keeping records,
2preparing and filing returns, remitting the tax and supplying
3data to the Department on request. When determining the
4discount allowed under this Section, servicemen shall include
5the amount of tax that would have been due at the 1% rate but
6for the 0% rate imposed under this amendatory Act of the 102nd
7General Assembly. The discount under this Section is not
8allowed for the 1.25% portion of taxes paid on aviation fuel
9that is subject to the revenue use requirements of 49 U.S.C.
1047107(b) and 49 U.S.C. 47133. The discount allowed under this
11Section is allowed only for returns that are filed in the
12manner required by this Act. The Department may disallow the
13discount for servicemen whose certificate of registration is
14revoked at the time the return is filed, but only if the
15Department's decision to revoke the certificate of
16registration has become final.
17    Where such tangible personal property is sold under a
18conditional sales contract, or under any other form of sale
19wherein the payment of the principal sum, or a part thereof, is
20extended beyond the close of the period for which the return is
21filed, the serviceman, in collecting the tax may collect, for
22each tax return period, only the tax applicable to the part of
23the selling price actually received during such tax return
24period.
25    Except as provided hereinafter in this Section, on or
26before the twentieth day of each calendar month, such

 

 

10300SB1963ham002- 372 -LRB103 25648 HLH 62334 a

1serviceman shall file a return for the preceding calendar
2month in accordance with reasonable rules and regulations to
3be promulgated by the Department of Revenue. Such return shall
4be filed on a form prescribed by the Department and shall
5contain such information as the Department may reasonably
6require. The return shall include the gross receipts which
7were received during the preceding calendar month or quarter
8on the following items upon which tax would have been due but
9for the 0% rate imposed under this amendatory Act of the 102nd
10General Assembly: (i) food for human consumption that is to be
11consumed off the premises where it is sold (other than
12alcoholic beverages, food consisting of or infused with adult
13use cannabis, soft drinks, and food that has been prepared for
14immediate consumption); and (ii) food prepared for immediate
15consumption and transferred incident to a sale of service
16subject to this Act or the Service Use Tax Act by an entity
17licensed under the Hospital Licensing Act, the Nursing Home
18Care Act, the Assisted Living and Shared Housing Act, the
19ID/DD Community Care Act, the MC/DD Act, the Specialized
20Mental Health Rehabilitation Act of 2013, or the Child Care
21Act of 1969, or an entity that holds a permit issued pursuant
22to the Life Care Facilities Act. The return shall also include
23the amount of tax that would have been due on the items listed
24in the previous sentence but for the 0% rate imposed under this
25amendatory Act of the 102nd General Assembly.
26    On and after January 1, 2018, with respect to servicemen

 

 

10300SB1963ham002- 373 -LRB103 25648 HLH 62334 a

1whose annual gross receipts average $20,000 or more, all
2returns required to be filed pursuant to this Act shall be
3filed electronically. Servicemen who demonstrate that they do
4not have access to the Internet or demonstrate hardship in
5filing electronically may petition the Department to waive the
6electronic filing requirement.
7    The Department may require returns to be filed on a
8quarterly basis. If so required, a return for each calendar
9quarter shall be filed on or before the twentieth day of the
10calendar month following the end of such calendar quarter. The
11taxpayer shall also file a return with the Department for each
12of the first two months of each calendar quarter, on or before
13the twentieth day of the following calendar month, stating:
14        1. The name of the seller;
15        2. The address of the principal place of business from
16    which he engages in business as a serviceman in this
17    State;
18        3. The total amount of taxable receipts received by
19    him during the preceding calendar month, including
20    receipts from charge and time sales, but less all
21    deductions allowed by law;
22        4. The amount of credit provided in Section 2d of this
23    Act;
24        5. The amount of tax due;
25        5-5. The signature of the taxpayer; and
26        6. Such other reasonable information as the Department

 

 

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1    may require.
2    Each serviceman required or authorized to collect the tax
3herein imposed on aviation fuel acquired as an incident to the
4purchase of a service in this State during the preceding
5calendar month shall, instead of reporting and paying tax as
6otherwise required by this Section, report and pay such tax on
7a separate aviation fuel tax return. The requirements related
8to the return shall be as otherwise provided in this Section.
9Notwithstanding any other provisions of this Act to the
10contrary, servicemen transferring aviation fuel incident to
11sales of service shall file all aviation fuel tax returns and
12shall make all aviation fuel tax payments by electronic means
13in the manner and form required by the Department. For
14purposes of this Section, "aviation fuel" means jet fuel and
15aviation gasoline.
16    If a taxpayer fails to sign a return within 30 days after
17the proper notice and demand for signature by the Department,
18the return shall be considered valid and any amount shown to be
19due on the return shall be deemed assessed.
20    Notwithstanding any other provision of this Act to the
21contrary, servicemen subject to tax on cannabis shall file all
22cannabis tax returns and shall make all cannabis tax payments
23by electronic means in the manner and form required by the
24Department.
25    Prior to October 1, 2003, and on and after September 1,
262004 a serviceman may accept a Manufacturer's Purchase Credit

 

 

10300SB1963ham002- 375 -LRB103 25648 HLH 62334 a

1certification from a purchaser in satisfaction of Service Use
2Tax as provided in Section 3-70 of the Service Use Tax Act if
3the purchaser provides the appropriate documentation as
4required by Section 3-70 of the Service Use Tax Act. A
5Manufacturer's Purchase Credit certification, accepted prior
6to October 1, 2003 or on or after September 1, 2004 by a
7serviceman as provided in Section 3-70 of the Service Use Tax
8Act, may be used by that serviceman to satisfy Service
9Occupation Tax liability in the amount claimed in the
10certification, not to exceed 6.25% of the receipts subject to
11tax from a qualifying purchase. A Manufacturer's Purchase
12Credit reported on any original or amended return filed under
13this Act after October 20, 2003 for reporting periods prior to
14September 1, 2004 shall be disallowed. Manufacturer's Purchase
15Credit reported on annual returns due on or after January 1,
162005 will be disallowed for periods prior to September 1,
172004. No Manufacturer's Purchase Credit may be used after
18September 30, 2003 through August 31, 2004 to satisfy any tax
19liability imposed under this Act, including any audit
20liability.
21    Beginning on July 1, 2023 and through December 31, 2032, a
22serviceman may accept a Sustainable Aviation Fuel Purchase
23Credit certification from an air common carrier-purchaser in
24satisfaction of Service Use Tax as provided in Section 3-72 of
25the Service Use Tax Act if the purchaser provides the
26appropriate documentation as required by Section 3-72 of the

 

 

10300SB1963ham002- 376 -LRB103 25648 HLH 62334 a

1Service Use Tax Act. A Sustainable Aviation Fuel Purchase
2Credit certification accepted by a serviceman in accordance
3with this paragraph may be used by that serviceman to satisfy
4service occupation tax liability (but not in satisfaction of
5penalty or interest) in the amount claimed in the
6certification, not to exceed 6.25% of the receipts subject to
7tax from a sale of aviation fuel. In addition, for a sale of
8aviation fuel to qualify to earn the Sustainable Aviation Fuel
9Purchase Credit, servicemen must retain in their books and
10records a certification from the producer of the aviation fuel
11that the aviation fuel sold by the serviceman and for which a
12sustainable aviation fuel purchase credit was earned meets the
13definition of sustainable aviation fuel under Section 3-72 of
14the Service Use Tax Act. The documentation must include detail
15sufficient for the Department to determine the number of
16gallons of sustainable aviation fuel sold.
17    If the serviceman's average monthly tax liability to the
18Department does not exceed $200, the Department may authorize
19his returns to be filed on a quarter annual basis, with the
20return for January, February and March of a given year being
21due by April 20 of such year; with the return for April, May
22and June of a given year being due by July 20 of such year;
23with the return for July, August and September of a given year
24being due by October 20 of such year, and with the return for
25October, November and December of a given year being due by
26January 20 of the following year.

 

 

10300SB1963ham002- 377 -LRB103 25648 HLH 62334 a

1    If the serviceman's average monthly tax liability to the
2Department does not exceed $50, the Department may authorize
3his returns to be filed on an annual basis, with the return for
4a given year being due by January 20 of the following year.
5    Such quarter annual and annual returns, as to form and
6substance, shall be subject to the same requirements as
7monthly returns.
8    Notwithstanding any other provision in this Act concerning
9the time within which a serviceman may file his return, in the
10case of any serviceman who ceases to engage in a kind of
11business which makes him responsible for filing returns under
12this Act, such serviceman shall file a final return under this
13Act with the Department not more than 1 month after
14discontinuing such business.
15    Beginning October 1, 1993, a taxpayer who has an average
16monthly tax liability of $150,000 or more shall make all
17payments required by rules of the Department by electronic
18funds transfer. Beginning October 1, 1994, a taxpayer who has
19an average monthly tax liability of $100,000 or more shall
20make all payments required by rules of the Department by
21electronic funds transfer. Beginning October 1, 1995, a
22taxpayer who has an average monthly tax liability of $50,000
23or more shall make all payments required by rules of the
24Department by electronic funds transfer. Beginning October 1,
252000, a taxpayer who has an annual tax liability of $200,000 or
26more shall make all payments required by rules of the

 

 

10300SB1963ham002- 378 -LRB103 25648 HLH 62334 a

1Department by electronic funds transfer. The term "annual tax
2liability" shall be the sum of the taxpayer's liabilities
3under this Act, and under all other State and local occupation
4and use tax laws administered by the Department, for the
5immediately preceding calendar year. The term "average monthly
6tax liability" means the sum of the taxpayer's liabilities
7under this Act, and under all other State and local occupation
8and use tax laws administered by the Department, for the
9immediately preceding calendar year divided by 12. Beginning
10on October 1, 2002, a taxpayer who has a tax liability in the
11amount set forth in subsection (b) of Section 2505-210 of the
12Department of Revenue Law shall make all payments required by
13rules of the Department by electronic funds transfer.
14    Before August 1 of each year beginning in 1993, the
15Department shall notify all taxpayers required to make
16payments by electronic funds transfer. All taxpayers required
17to make payments by electronic funds transfer shall make those
18payments for a minimum of one year beginning on October 1.
19    Any taxpayer not required to make payments by electronic
20funds transfer may make payments by electronic funds transfer
21with the permission of the Department.
22    All taxpayers required to make payment by electronic funds
23transfer and any taxpayers authorized to voluntarily make
24payments by electronic funds transfer shall make those
25payments in the manner authorized by the Department.
26    The Department shall adopt such rules as are necessary to

 

 

10300SB1963ham002- 379 -LRB103 25648 HLH 62334 a

1effectuate a program of electronic funds transfer and the
2requirements of this Section.
3    Where a serviceman collects the tax with respect to the
4selling price of tangible personal property which he sells and
5the purchaser thereafter returns such tangible personal
6property and the serviceman refunds the selling price thereof
7to the purchaser, such serviceman shall also refund, to the
8purchaser, the tax so collected from the purchaser. When
9filing his return for the period in which he refunds such tax
10to the purchaser, the serviceman may deduct the amount of the
11tax so refunded by him to the purchaser from any other Service
12Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
13Use Tax which such serviceman may be required to pay or remit
14to the Department, as shown by such return, provided that the
15amount of the tax to be deducted shall previously have been
16remitted to the Department by such serviceman. If the
17serviceman shall not previously have remitted the amount of
18such tax to the Department, he shall be entitled to no
19deduction hereunder upon refunding such tax to the purchaser.
20    If experience indicates such action to be practicable, the
21Department may prescribe and furnish a combination or joint
22return which will enable servicemen, who are required to file
23returns hereunder and also under the Retailers' Occupation Tax
24Act, the Use Tax Act or the Service Use Tax Act, to furnish all
25the return information required by all said Acts on the one
26form.

 

 

10300SB1963ham002- 380 -LRB103 25648 HLH 62334 a

1    Where the serviceman has more than one business registered
2with the Department under separate registrations hereunder,
3such serviceman shall file separate returns for each
4registered business.
5    Beginning January 1, 1990, each month the Department shall
6pay into the Local Government Tax Fund the revenue realized
7for the preceding month from the 1% tax imposed under this Act.
8    Beginning January 1, 1990, each month the Department shall
9pay into the County and Mass Transit District Fund 4% of the
10revenue realized for the preceding month from the 6.25%
11general rate on sales of tangible personal property other than
12aviation fuel sold on or after December 1, 2019. This
13exception for aviation fuel only applies for so long as the
14revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
1547133 are binding on the State.
16    Beginning August 1, 2000, each month the Department shall
17pay into the County and Mass Transit District Fund 20% of the
18net revenue realized for the preceding month from the 1.25%
19rate on the selling price of motor fuel and gasohol.
20    Beginning January 1, 1990, each month the Department shall
21pay into the Local Government Tax Fund 16% of the revenue
22realized for the preceding month from the 6.25% general rate
23on transfers of tangible personal property other than aviation
24fuel sold on or after December 1, 2019. This exception for
25aviation fuel only applies for so long as the revenue use
26requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are

 

 

10300SB1963ham002- 381 -LRB103 25648 HLH 62334 a

1binding on the State.
2    For aviation fuel sold on or after December 1, 2019, each
3month the Department shall pay into the State Aviation Program
4Fund 20% of the net revenue realized for the preceding month
5from the 6.25% general rate on the selling price of aviation
6fuel, less an amount estimated by the Department to be
7required for refunds of the 20% portion of the tax on aviation
8fuel under this Act, which amount shall be deposited into the
9Aviation Fuel Sales Tax Refund Fund. The Department shall only
10pay moneys into the State Aviation Program Fund and the
11Aviation Fuel Sales Tax Refund Fund under this Act for so long
12as the revenue use requirements of 49 U.S.C. 47107(b) and 49
13U.S.C. 47133 are binding on the State.
14    Beginning August 1, 2000, each month the Department shall
15pay into the Local Government Tax Fund 80% of the net revenue
16realized for the preceding month from the 1.25% rate on the
17selling price of motor fuel and gasohol.
18    Beginning October 1, 2009, each month the Department shall
19pay into the Capital Projects Fund an amount that is equal to
20an amount estimated by the Department to represent 80% of the
21net revenue realized for the preceding month from the sale of
22candy, grooming and hygiene products, and soft drinks that had
23been taxed at a rate of 1% prior to September 1, 2009 but that
24are now taxed at 6.25%.
25    Beginning July 1, 2013, each month the Department shall
26pay into the Underground Storage Tank Fund from the proceeds

 

 

10300SB1963ham002- 382 -LRB103 25648 HLH 62334 a

1collected under this Act, the Use Tax Act, the Service Use Tax
2Act, and the Retailers' Occupation Tax Act an amount equal to
3the average monthly deficit in the Underground Storage Tank
4Fund during the prior year, as certified annually by the
5Illinois Environmental Protection Agency, but the total
6payment into the Underground Storage Tank Fund under this Act,
7the Use Tax Act, the Service Use Tax Act, and the Retailers'
8Occupation Tax Act shall not exceed $18,000,000 in any State
9fiscal year. As used in this paragraph, the "average monthly
10deficit" shall be equal to the difference between the average
11monthly claims for payment by the fund and the average monthly
12revenues deposited into the fund, excluding payments made
13pursuant to this paragraph.
14    Beginning July 1, 2015, of the remainder of the moneys
15received by the Department under the Use Tax Act, the Service
16Use Tax Act, this Act, and the Retailers' Occupation Tax Act,
17each month the Department shall deposit $500,000 into the
18State Crime Laboratory Fund.
19    Of the remainder of the moneys received by the Department
20pursuant to this Act, (a) 1.75% thereof shall be paid into the
21Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
22and after July 1, 1989, 3.8% thereof shall be paid into the
23Build Illinois Fund; provided, however, that if in any fiscal
24year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
25may be, of the moneys received by the Department and required
26to be paid into the Build Illinois Fund pursuant to Section 3

 

 

10300SB1963ham002- 383 -LRB103 25648 HLH 62334 a

1of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
2Act, Section 9 of the Service Use Tax Act, and Section 9 of the
3Service Occupation Tax Act, such Acts being hereinafter called
4the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
5may be, of moneys being hereinafter called the "Tax Act
6Amount", and (2) the amount transferred to the Build Illinois
7Fund from the State and Local Sales Tax Reform Fund shall be
8less than the Annual Specified Amount (as defined in Section 3
9of the Retailers' Occupation Tax Act), an amount equal to the
10difference shall be immediately paid into the Build Illinois
11Fund from other moneys received by the Department pursuant to
12the Tax Acts; and further provided, that if on the last
13business day of any month the sum of (1) the Tax Act Amount
14required to be deposited into the Build Illinois Account in
15the Build Illinois Fund during such month and (2) the amount
16transferred during such month to the Build Illinois Fund from
17the State and Local Sales Tax Reform Fund shall have been less
18than 1/12 of the Annual Specified Amount, an amount equal to
19the difference shall be immediately paid into the Build
20Illinois Fund from other moneys received by the Department
21pursuant to the Tax Acts; and, further provided, that in no
22event shall the payments required under the preceding proviso
23result in aggregate payments into the Build Illinois Fund
24pursuant to this clause (b) for any fiscal year in excess of
25the greater of (i) the Tax Act Amount or (ii) the Annual
26Specified Amount for such fiscal year; and, further provided,

 

 

10300SB1963ham002- 384 -LRB103 25648 HLH 62334 a

1that the amounts payable into the Build Illinois Fund under
2this clause (b) shall be payable only until such time as the
3aggregate amount on deposit under each trust indenture
4securing Bonds issued and outstanding pursuant to the Build
5Illinois Bond Act is sufficient, taking into account any
6future investment income, to fully provide, in accordance with
7such indenture, for the defeasance of or the payment of the
8principal of, premium, if any, and interest on the Bonds
9secured by such indenture and on any Bonds expected to be
10issued thereafter and all fees and costs payable with respect
11thereto, all as certified by the Director of the Bureau of the
12Budget (now Governor's Office of Management and Budget). If on
13the last business day of any month in which Bonds are
14outstanding pursuant to the Build Illinois Bond Act, the
15aggregate of the moneys deposited in the Build Illinois Bond
16Account in the Build Illinois Fund in such month shall be less
17than the amount required to be transferred in such month from
18the Build Illinois Bond Account to the Build Illinois Bond
19Retirement and Interest Fund pursuant to Section 13 of the
20Build Illinois Bond Act, an amount equal to such deficiency
21shall be immediately paid from other moneys received by the
22Department pursuant to the Tax Acts to the Build Illinois
23Fund; provided, however, that any amounts paid to the Build
24Illinois Fund in any fiscal year pursuant to this sentence
25shall be deemed to constitute payments pursuant to clause (b)
26of the preceding sentence and shall reduce the amount

 

 

10300SB1963ham002- 385 -LRB103 25648 HLH 62334 a

1otherwise payable for such fiscal year pursuant to clause (b)
2of the preceding sentence. The moneys received by the
3Department pursuant to this Act and required to be deposited
4into the Build Illinois Fund are subject to the pledge, claim
5and charge set forth in Section 12 of the Build Illinois Bond
6Act.
7    Subject to payment of amounts into the Build Illinois Fund
8as provided in the preceding paragraph or in any amendment
9thereto hereafter enacted, the following specified monthly
10installment of the amount requested in the certificate of the
11Chairman of the Metropolitan Pier and Exposition Authority
12provided under Section 8.25f of the State Finance Act, but not
13in excess of the sums designated as "Total Deposit", shall be
14deposited in the aggregate from collections under Section 9 of
15the Use Tax Act, Section 9 of the Service Use Tax Act, Section
169 of the Service Occupation Tax Act, and Section 3 of the
17Retailers' Occupation Tax Act into the McCormick Place
18Expansion Project Fund in the specified fiscal years.
 
19Fiscal YearTotal Deposit
201993         $0
211994 53,000,000
221995 58,000,000
231996 61,000,000
241997 64,000,000
251998 68,000,000

 

 

10300SB1963ham002- 386 -LRB103 25648 HLH 62334 a

11999 71,000,000
22000 75,000,000
32001 80,000,000
42002 93,000,000
52003 99,000,000
62004103,000,000
72005108,000,000
82006113,000,000
92007119,000,000
102008126,000,000
112009132,000,000
122010139,000,000
132011146,000,000
142012153,000,000
152013161,000,000
162014170,000,000
172015179,000,000
182016189,000,000
192017199,000,000
202018210,000,000
212019221,000,000
222020233,000,000
232021300,000,000
242022300,000,000
252023300,000,000
262024 300,000,000

 

 

10300SB1963ham002- 387 -LRB103 25648 HLH 62334 a

12025 300,000,000
22026 300,000,000
32027 375,000,000
42028 375,000,000
52029 375,000,000
62030 375,000,000
72031 375,000,000
82032 375,000,000
92033 375,000,000
102034375,000,000
112035375,000,000
122036450,000,000
13and
14each fiscal year
15thereafter that bonds
16are outstanding under
17Section 13.2 of the
18Metropolitan Pier and
19Exposition Authority Act,
20but not after fiscal year 2060.
21    Beginning July 20, 1993 and in each month of each fiscal
22year thereafter, one-eighth of the amount requested in the
23certificate of the Chairman of the Metropolitan Pier and
24Exposition Authority for that fiscal year, less the amount
25deposited into the McCormick Place Expansion Project Fund by
26the State Treasurer in the respective month under subsection

 

 

10300SB1963ham002- 388 -LRB103 25648 HLH 62334 a

1(g) of Section 13 of the Metropolitan Pier and Exposition
2Authority Act, plus cumulative deficiencies in the deposits
3required under this Section for previous months and years,
4shall be deposited into the McCormick Place Expansion Project
5Fund, until the full amount requested for the fiscal year, but
6not in excess of the amount specified above as "Total
7Deposit", has been deposited.
8    Subject to payment of amounts into the Capital Projects
9Fund, the Build Illinois Fund, and the McCormick Place
10Expansion Project Fund pursuant to the preceding paragraphs or
11in any amendments thereto hereafter enacted, for aviation fuel
12sold on or after December 1, 2019, the Department shall each
13month deposit into the Aviation Fuel Sales Tax Refund Fund an
14amount estimated by the Department to be required for refunds
15of the 80% portion of the tax on aviation fuel under this Act.
16The Department shall only deposit moneys into the Aviation
17Fuel Sales Tax Refund Fund under this paragraph for so long as
18the revenue use requirements of 49 U.S.C. 47107(b) and 49
19U.S.C. 47133 are binding on the State.
20    Subject to payment of amounts into the Build Illinois Fund
21and the McCormick Place Expansion Project Fund pursuant to the
22preceding paragraphs or in any amendments thereto hereafter
23enacted, beginning July 1, 1993 and ending on September 30,
242013, the Department shall each month pay into the Illinois
25Tax Increment Fund 0.27% of 80% of the net revenue realized for
26the preceding month from the 6.25% general rate on the selling

 

 

10300SB1963ham002- 389 -LRB103 25648 HLH 62334 a

1price of tangible personal property.
2    Subject to payment of amounts into the Build Illinois Fund
3and the McCormick Place Expansion Project Fund pursuant to the
4preceding paragraphs or in any amendments thereto hereafter
5enacted, beginning with the receipt of the first report of
6taxes paid by an eligible business and continuing for a
725-year period, the Department shall each month pay into the
8Energy Infrastructure Fund 80% of the net revenue realized
9from the 6.25% general rate on the selling price of
10Illinois-mined coal that was sold to an eligible business. For
11purposes of this paragraph, the term "eligible business" means
12a new electric generating facility certified pursuant to
13Section 605-332 of the Department of Commerce and Economic
14Opportunity Law of the Civil Administrative Code of Illinois.
15    Subject to payment of amounts into the Build Illinois
16Fund, the McCormick Place Expansion Project Fund, the Illinois
17Tax Increment Fund, and the Energy Infrastructure Fund
18pursuant to the preceding paragraphs or in any amendments to
19this Section hereafter enacted, beginning on the first day of
20the first calendar month to occur on or after August 26, 2014
21(the effective date of Public Act 98-1098), each month, from
22the collections made under Section 9 of the Use Tax Act,
23Section 9 of the Service Use Tax Act, Section 9 of the Service
24Occupation Tax Act, and Section 3 of the Retailers' Occupation
25Tax Act, the Department shall pay into the Tax Compliance and
26Administration Fund, to be used, subject to appropriation, to

 

 

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1fund additional auditors and compliance personnel at the
2Department of Revenue, an amount equal to 1/12 of 5% of 80% of
3the cash receipts collected during the preceding fiscal year
4by the Audit Bureau of the Department under the Use Tax Act,
5the Service Use Tax Act, the Service Occupation Tax Act, the
6Retailers' Occupation Tax Act, and associated local occupation
7and use taxes administered by the Department.
8    Subject to payments of amounts into the Build Illinois
9Fund, the McCormick Place Expansion Project Fund, the Illinois
10Tax Increment Fund, the Energy Infrastructure Fund, and the
11Tax Compliance and Administration Fund as provided in this
12Section, beginning on July 1, 2018 the Department shall pay
13each month into the Downstate Public Transportation Fund the
14moneys required to be so paid under Section 2-3 of the
15Downstate Public Transportation Act.
16    Subject to successful execution and delivery of a
17public-private agreement between the public agency and private
18entity and completion of the civic build, beginning on July 1,
192023, of the remainder of the moneys received by the
20Department under the Use Tax Act, the Service Use Tax Act, the
21Service Occupation Tax Act, and this Act, the Department shall
22deposit the following specified deposits in the aggregate from
23collections under the Use Tax Act, the Service Use Tax Act, the
24Service Occupation Tax Act, and the Retailers' Occupation Tax
25Act, as required under Section 8.25g of the State Finance Act
26for distribution consistent with the Public-Private

 

 

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1Partnership for Civic and Transit Infrastructure Project Act.
2The moneys received by the Department pursuant to this Act and
3required to be deposited into the Civic and Transit
4Infrastructure Fund are subject to the pledge, claim and
5charge set forth in Section 25-55 of the Public-Private
6Partnership for Civic and Transit Infrastructure Project Act.
7As used in this paragraph, "civic build", "private entity",
8"public-private agreement", and "public agency" have the
9meanings provided in Section 25-10 of the Public-Private
10Partnership for Civic and Transit Infrastructure Project Act.
11        Fiscal Year............................Total Deposit
12        2024....................................$200,000,000
13        2025....................................$206,000,000
14        2026....................................$212,200,000
15        2027....................................$218,500,000
16        2028....................................$225,100,000
17        2029....................................$288,700,000
18        2030....................................$298,900,000
19        2031....................................$309,300,000
20        2032....................................$320,100,000
21        2033....................................$331,200,000
22        2034....................................$341,200,000
23        2035....................................$351,400,000
24        2036....................................$361,900,000
25        2037....................................$372,800,000
26        2038....................................$384,000,000

 

 

10300SB1963ham002- 392 -LRB103 25648 HLH 62334 a

1        2039....................................$395,500,000
2        2040....................................$407,400,000
3        2041....................................$419,600,000
4        2042....................................$432,200,000
5        2043....................................$445,100,000
6    Beginning July 1, 2021 and until July 1, 2022, subject to
7the payment of amounts into the County and Mass Transit
8District Fund, the Local Government Tax Fund, the Build
9Illinois Fund, the McCormick Place Expansion Project Fund, the
10Illinois Tax Increment Fund, the Energy Infrastructure Fund,
11and the Tax Compliance and Administration Fund as provided in
12this Section, the Department shall pay each month into the
13Road Fund the amount estimated to represent 16% of the net
14revenue realized from the taxes imposed on motor fuel and
15gasohol. Beginning July 1, 2022 and until July 1, 2023,
16subject to the payment of amounts into the County and Mass
17Transit District Fund, the Local Government Tax Fund, the
18Build Illinois Fund, the McCormick Place Expansion Project
19Fund, the Illinois Tax Increment Fund, the Energy
20Infrastructure Fund, and the Tax Compliance and Administration
21Fund as provided in this Section, the Department shall pay
22each month into the Road Fund the amount estimated to
23represent 32% of the net revenue realized from the taxes
24imposed on motor fuel and gasohol. Beginning July 1, 2023 and
25until July 1, 2024, subject to the payment of amounts into the
26County and Mass Transit District Fund, the Local Government

 

 

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1Tax Fund, the Build Illinois Fund, the McCormick Place
2Expansion Project Fund, the Illinois Tax Increment Fund, the
3Energy Infrastructure Fund, and the Tax Compliance and
4Administration Fund as provided in this Section, the
5Department shall pay each month into the Road Fund the amount
6estimated to represent 48% of the net revenue realized from
7the taxes imposed on motor fuel and gasohol. Beginning July 1,
82024 and until July 1, 2025, subject to the payment of amounts
9into the County and Mass Transit District Fund, the Local
10Government Tax Fund, the Build Illinois Fund, the McCormick
11Place Expansion Project Fund, the Illinois Tax Increment Fund,
12the Energy Infrastructure Fund, and the Tax Compliance and
13Administration Fund as provided in this Section, the
14Department shall pay each month into the Road Fund the amount
15estimated to represent 64% of the net revenue realized from
16the taxes imposed on motor fuel and gasohol. Beginning on July
171, 2025, subject to the payment of amounts into the County and
18Mass Transit District Fund, the Local Government Tax Fund, the
19Build Illinois Fund, the McCormick Place Expansion Project
20Fund, the Illinois Tax Increment Fund, the Energy
21Infrastructure Fund, and the Tax Compliance and Administration
22Fund as provided in this Section, the Department shall pay
23each month into the Road Fund the amount estimated to
24represent 80% of the net revenue realized from the taxes
25imposed on motor fuel and gasohol. As used in this paragraph
26"motor fuel" has the meaning given to that term in Section 1.1

 

 

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1of the Motor Fuel Tax Law, and "gasohol" has the meaning given
2to that term in Section 3-40 of the Use Tax Act.
3    Of the remainder of the moneys received by the Department
4pursuant to this Act, 75% shall be paid into the General
5Revenue Fund of the State Treasury and 25% shall be reserved in
6a special account and used only for the transfer to the Common
7School Fund as part of the monthly transfer from the General
8Revenue Fund in accordance with Section 8a of the State
9Finance Act.
10    The Department may, upon separate written notice to a
11taxpayer, require the taxpayer to prepare and file with the
12Department on a form prescribed by the Department within not
13less than 60 days after receipt of the notice an annual
14information return for the tax year specified in the notice.
15Such annual return to the Department shall include a statement
16of gross receipts as shown by the taxpayer's last Federal
17income tax return. If the total receipts of the business as
18reported in the Federal income tax return do not agree with the
19gross receipts reported to the Department of Revenue for the
20same period, the taxpayer shall attach to his annual return a
21schedule showing a reconciliation of the 2 amounts and the
22reasons for the difference. The taxpayer's annual return to
23the Department shall also disclose the cost of goods sold by
24the taxpayer during the year covered by such return, opening
25and closing inventories of such goods for such year, cost of
26goods used from stock or taken from stock and given away by the

 

 

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1taxpayer during such year, pay roll information of the
2taxpayer's business during such year and any additional
3reasonable information which the Department deems would be
4helpful in determining the accuracy of the monthly, quarterly
5or annual returns filed by such taxpayer as hereinbefore
6provided for in this Section.
7    If the annual information return required by this Section
8is not filed when and as required, the taxpayer shall be liable
9as follows:
10        (i) Until January 1, 1994, the taxpayer shall be
11    liable for a penalty equal to 1/6 of 1% of the tax due from
12    such taxpayer under this Act during the period to be
13    covered by the annual return for each month or fraction of
14    a month until such return is filed as required, the
15    penalty to be assessed and collected in the same manner as
16    any other penalty provided for in this Act.
17        (ii) On and after January 1, 1994, the taxpayer shall
18    be liable for a penalty as described in Section 3-4 of the
19    Uniform Penalty and Interest Act.
20    The chief executive officer, proprietor, owner or highest
21ranking manager shall sign the annual return to certify the
22accuracy of the information contained therein. Any person who
23willfully signs the annual return containing false or
24inaccurate information shall be guilty of perjury and punished
25accordingly. The annual return form prescribed by the
26Department shall include a warning that the person signing the

 

 

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1return may be liable for perjury.
2    The foregoing portion of this Section concerning the
3filing of an annual information return shall not apply to a
4serviceman who is not required to file an income tax return
5with the United States Government.
6    As soon as possible after the first day of each month, upon
7certification of the Department of Revenue, the Comptroller
8shall order transferred and the Treasurer shall transfer from
9the General Revenue Fund to the Motor Fuel Tax Fund an amount
10equal to 1.7% of 80% of the net revenue realized under this Act
11for the second preceding month. Beginning April 1, 2000, this
12transfer is no longer required and shall not be made.
13    Net revenue realized for a month shall be the revenue
14collected by the State pursuant to this Act, less the amount
15paid out during that month as refunds to taxpayers for
16overpayment of liability.
17    For greater simplicity of administration, it shall be
18permissible for manufacturers, importers and wholesalers whose
19products are sold by numerous servicemen in Illinois, and who
20wish to do so, to assume the responsibility for accounting and
21paying to the Department all tax accruing under this Act with
22respect to such sales, if the servicemen who are affected do
23not make written objection to the Department to this
24arrangement.
25(Source: P.A. 101-10, Article 15, Section 15-20, eff. 6-5-19;
26101-10, Article 25, Section 25-115, eff. 6-5-19; 101-27, eff.

 

 

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16-25-19; 101-32, eff. 6-28-19; 101-604, eff. 12-13-19;
2101-636, eff. 6-10-20; 102-700, eff. 4-19-22.)
 
3    Section 70-20. The Retailers' Occupation Tax Act is
4amended by changing Section 3 as follows:
 
5    (35 ILCS 120/3)  (from Ch. 120, par. 442)
6    Sec. 3. Except as provided in this Section, on or before
7the twentieth day of each calendar month, every person engaged
8in the business of selling tangible personal property at
9retail in this State during the preceding calendar month shall
10file a return with the Department, stating:
11        1. The name of the seller;
12        2. His residence address and the address of his
13    principal place of business and the address of the
14    principal place of business (if that is a different
15    address) from which he engages in the business of selling
16    tangible personal property at retail in this State;
17        3. Total amount of receipts received by him during the
18    preceding calendar month or quarter, as the case may be,
19    from sales of tangible personal property, and from
20    services furnished, by him during such preceding calendar
21    month or quarter;
22        4. Total amount received by him during the preceding
23    calendar month or quarter on charge and time sales of
24    tangible personal property, and from services furnished,

 

 

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1    by him prior to the month or quarter for which the return
2    is filed;
3        5. Deductions allowed by law;
4        6. Gross receipts which were received by him during
5    the preceding calendar month or quarter and upon the basis
6    of which the tax is imposed, including gross receipts on
7    food for human consumption that is to be consumed off the
8    premises where it is sold (other than alcoholic beverages,
9    food consisting of or infused with adult use cannabis,
10    soft drinks, and food that has been prepared for immediate
11    consumption) which were received during the preceding
12    calendar month or quarter and upon which tax would have
13    been due but for the 0% rate imposed under Public Act
14    102-700 this amendatory Act of the 102nd General Assembly;
15        7. The amount of credit provided in Section 2d of this
16    Act;
17        8. The amount of tax due, including the amount of tax
18    that would have been due on food for human consumption
19    that is to be consumed off the premises where it is sold
20    (other than alcoholic beverages, food consisting of or
21    infused with adult use cannabis, soft drinks, and food
22    that has been prepared for immediate consumption) but for
23    the 0% rate imposed under Public Act 102-700 this
24    amendatory Act of the 102nd General Assembly;
25        9. The signature of the taxpayer; and
26        10. Such other reasonable information as the

 

 

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1    Department may require.
2    On and after January 1, 2018, except for returns required
3to be filed prior to January 1, 2023 for motor vehicles,
4watercraft, aircraft, and trailers that are required to be
5registered with an agency of this State, with respect to
6retailers whose annual gross receipts average $20,000 or more,
7all returns required to be filed pursuant to this Act shall be
8filed electronically. On and after January 1, 2023, with
9respect to retailers whose annual gross receipts average
10$20,000 or more, all returns required to be filed pursuant to
11this Act, including, but not limited to, returns for motor
12vehicles, watercraft, aircraft, and trailers that are required
13to be registered with an agency of this State, shall be filed
14electronically. Retailers who demonstrate that they do not
15have access to the Internet or demonstrate hardship in filing
16electronically may petition the Department to waive the
17electronic filing requirement.
18    If a taxpayer fails to sign a return within 30 days after
19the proper notice and demand for signature by the Department,
20the return shall be considered valid and any amount shown to be
21due on the return shall be deemed assessed.
22    Each return shall be accompanied by the statement of
23prepaid tax issued pursuant to Section 2e for which credit is
24claimed.
25    Prior to October 1, 2003, and on and after September 1,
262004 a retailer may accept a Manufacturer's Purchase Credit

 

 

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1certification from a purchaser in satisfaction of Use Tax as
2provided in Section 3-85 of the Use Tax Act if the purchaser
3provides the appropriate documentation as required by Section
43-85 of the Use Tax Act. A Manufacturer's Purchase Credit
5certification, accepted by a retailer prior to October 1, 2003
6and on and after September 1, 2004 as provided in Section 3-85
7of the Use Tax Act, may be used by that retailer to satisfy
8Retailers' Occupation Tax liability in the amount claimed in
9the certification, not to exceed 6.25% of the receipts subject
10to tax from a qualifying purchase. A Manufacturer's Purchase
11Credit reported on any original or amended return filed under
12this Act after October 20, 2003 for reporting periods prior to
13September 1, 2004 shall be disallowed. Manufacturer's Purchase
14Credit reported on annual returns due on or after January 1,
152005 will be disallowed for periods prior to September 1,
162004. No Manufacturer's Purchase Credit may be used after
17September 30, 2003 through August 31, 2004 to satisfy any tax
18liability imposed under this Act, including any audit
19liability.
20    Beginning on July 1, 2023 and through December 31, 2032, a
21retailer may accept a Sustainable Aviation Fuel Purchase
22Credit certification from an air common carrier-purchaser in
23satisfaction of Use Tax on aviation fuel as provided in
24Section 3-87 of the Use Tax Act if the purchaser provides the
25appropriate documentation as required by Section 3-87 of the
26Use Tax Act. A Sustainable Aviation Fuel Purchase Credit

 

 

10300SB1963ham002- 401 -LRB103 25648 HLH 62334 a

1certification accepted by a retailer in accordance with this
2paragraph may be used by that retailer to satisfy Retailers'
3Occupation Tax liability (but not in satisfaction of penalty
4or interest) in the amount claimed in the certification, not
5to exceed 6.25% of the receipts subject to tax from a sale of
6aviation fuel. In addition, for a sale of aviation fuel to
7qualify to earn the Sustainable Aviation Fuel Purchase Credit,
8retailers must retain in their books and records a
9certification from the producer of the aviation fuel that the
10aviation fuel sold by the retailer and for which a sustainable
11aviation fuel purchase credit was earned meets the definition
12of sustainable aviation fuel under Section 3-87 of the Use Tax
13Act. The documentation must include detail sufficient for the
14Department to determine the number of gallons of sustainable
15aviation fuel sold.
16    The Department may require returns to be filed on a
17quarterly basis. If so required, a return for each calendar
18quarter shall be filed on or before the twentieth day of the
19calendar month following the end of such calendar quarter. The
20taxpayer shall also file a return with the Department for each
21of the first two months of each calendar quarter, on or before
22the twentieth day of the following calendar month, stating:
23        1. The name of the seller;
24        2. The address of the principal place of business from
25    which he engages in the business of selling tangible
26    personal property at retail in this State;

 

 

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1        3. The total amount of taxable receipts received by
2    him during the preceding calendar month from sales of
3    tangible personal property by him during such preceding
4    calendar month, including receipts from charge and time
5    sales, but less all deductions allowed by law;
6        4. The amount of credit provided in Section 2d of this
7    Act;
8        5. The amount of tax due; and
9        6. Such other reasonable information as the Department
10    may require.
11    Every person engaged in the business of selling aviation
12fuel at retail in this State during the preceding calendar
13month shall, instead of reporting and paying tax as otherwise
14required by this Section, report and pay such tax on a separate
15aviation fuel tax return. The requirements related to the
16return shall be as otherwise provided in this Section.
17Notwithstanding any other provisions of this Act to the
18contrary, retailers selling aviation fuel shall file all
19aviation fuel tax returns and shall make all aviation fuel tax
20payments by electronic means in the manner and form required
21by the Department. For purposes of this Section, "aviation
22fuel" means jet fuel and aviation gasoline.
23    Beginning on October 1, 2003, any person who is not a
24licensed distributor, importing distributor, or manufacturer,
25as defined in the Liquor Control Act of 1934, but is engaged in
26the business of selling, at retail, alcoholic liquor shall

 

 

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1file a statement with the Department of Revenue, in a format
2and at a time prescribed by the Department, showing the total
3amount paid for alcoholic liquor purchased during the
4preceding month and such other information as is reasonably
5required by the Department. The Department may adopt rules to
6require that this statement be filed in an electronic or
7telephonic format. Such rules may provide for exceptions from
8the filing requirements of this paragraph. For the purposes of
9this paragraph, the term "alcoholic liquor" shall have the
10meaning prescribed in the Liquor Control Act of 1934.
11    Beginning on October 1, 2003, every distributor, importing
12distributor, and manufacturer of alcoholic liquor as defined
13in the Liquor Control Act of 1934, shall file a statement with
14the Department of Revenue, no later than the 10th day of the
15month for the preceding month during which transactions
16occurred, by electronic means, showing the total amount of
17gross receipts from the sale of alcoholic liquor sold or
18distributed during the preceding month to purchasers;
19identifying the purchaser to whom it was sold or distributed;
20the purchaser's tax registration number; and such other
21information reasonably required by the Department. A
22distributor, importing distributor, or manufacturer of
23alcoholic liquor must personally deliver, mail, or provide by
24electronic means to each retailer listed on the monthly
25statement a report containing a cumulative total of that
26distributor's, importing distributor's, or manufacturer's

 

 

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1total sales of alcoholic liquor to that retailer no later than
2the 10th day of the month for the preceding month during which
3the transaction occurred. The distributor, importing
4distributor, or manufacturer shall notify the retailer as to
5the method by which the distributor, importing distributor, or
6manufacturer will provide the sales information. If the
7retailer is unable to receive the sales information by
8electronic means, the distributor, importing distributor, or
9manufacturer shall furnish the sales information by personal
10delivery or by mail. For purposes of this paragraph, the term
11"electronic means" includes, but is not limited to, the use of
12a secure Internet website, e-mail, or facsimile.
13    If a total amount of less than $1 is payable, refundable or
14creditable, such amount shall be disregarded if it is less
15than 50 cents and shall be increased to $1 if it is 50 cents or
16more.
17    Notwithstanding any other provision of this Act to the
18contrary, retailers subject to tax on cannabis shall file all
19cannabis tax returns and shall make all cannabis tax payments
20by electronic means in the manner and form required by the
21Department.
22    Beginning October 1, 1993, a taxpayer who has an average
23monthly tax liability of $150,000 or more shall make all
24payments required by rules of the Department by electronic
25funds transfer. Beginning October 1, 1994, a taxpayer who has
26an average monthly tax liability of $100,000 or more shall

 

 

10300SB1963ham002- 405 -LRB103 25648 HLH 62334 a

1make all payments required by rules of the Department by
2electronic funds transfer. Beginning October 1, 1995, a
3taxpayer who has an average monthly tax liability of $50,000
4or more shall make all payments required by rules of the
5Department by electronic funds transfer. Beginning October 1,
62000, a taxpayer who has an annual tax liability of $200,000 or
7more shall make all payments required by rules of the
8Department by electronic funds transfer. The term "annual tax
9liability" shall be the sum of the taxpayer's liabilities
10under this Act, and under all other State and local occupation
11and use tax laws administered by the Department, for the
12immediately preceding calendar year. The term "average monthly
13tax liability" shall be the sum of the taxpayer's liabilities
14under this Act, and under all other State and local occupation
15and use tax laws administered by the Department, for the
16immediately preceding calendar year divided by 12. Beginning
17on October 1, 2002, a taxpayer who has a tax liability in the
18amount set forth in subsection (b) of Section 2505-210 of the
19Department of Revenue Law shall make all payments required by
20rules of the Department by electronic funds transfer.
21    Before August 1 of each year beginning in 1993, the
22Department shall notify all taxpayers required to make
23payments by electronic funds transfer. All taxpayers required
24to make payments by electronic funds transfer shall make those
25payments for a minimum of one year beginning on October 1.
26    Any taxpayer not required to make payments by electronic

 

 

10300SB1963ham002- 406 -LRB103 25648 HLH 62334 a

1funds transfer may make payments by electronic funds transfer
2with the permission of the Department.
3    All taxpayers required to make payment by electronic funds
4transfer and any taxpayers authorized to voluntarily make
5payments by electronic funds transfer shall make those
6payments in the manner authorized by the Department.
7    The Department shall adopt such rules as are necessary to
8effectuate a program of electronic funds transfer and the
9requirements of this Section.
10    Any amount which is required to be shown or reported on any
11return or other document under this Act shall, if such amount
12is not a whole-dollar amount, be increased to the nearest
13whole-dollar amount in any case where the fractional part of a
14dollar is 50 cents or more, and decreased to the nearest
15whole-dollar amount where the fractional part of a dollar is
16less than 50 cents.
17    If the retailer is otherwise required to file a monthly
18return and if the retailer's average monthly tax liability to
19the Department does not exceed $200, the Department may
20authorize his returns to be filed on a quarter annual basis,
21with the return for January, February and March of a given year
22being due by April 20 of such year; with the return for April,
23May and June of a given year being due by July 20 of such year;
24with the return for July, August and September of a given year
25being due by October 20 of such year, and with the return for
26October, November and December of a given year being due by

 

 

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1January 20 of the following year.
2    If the retailer is otherwise required to file a monthly or
3quarterly return and if the retailer's average monthly tax
4liability with the Department does not exceed $50, the
5Department may authorize his returns to be filed on an annual
6basis, with the return for a given year being due by January 20
7of the following year.
8    Such quarter annual and annual returns, as to form and
9substance, shall be subject to the same requirements as
10monthly returns.
11    Notwithstanding any other provision in this Act concerning
12the time within which a retailer may file his return, in the
13case of any retailer who ceases to engage in a kind of business
14which makes him responsible for filing returns under this Act,
15such retailer shall file a final return under this Act with the
16Department not more than one month after discontinuing such
17business.
18    Where the same person has more than one business
19registered with the Department under separate registrations
20under this Act, such person may not file each return that is
21due as a single return covering all such registered
22businesses, but shall file separate returns for each such
23registered business.
24    In addition, with respect to motor vehicles, watercraft,
25aircraft, and trailers that are required to be registered with
26an agency of this State, except as otherwise provided in this

 

 

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1Section, every retailer selling this kind of tangible personal
2property shall file, with the Department, upon a form to be
3prescribed and supplied by the Department, a separate return
4for each such item of tangible personal property which the
5retailer sells, except that if, in the same transaction, (i) a
6retailer of aircraft, watercraft, motor vehicles or trailers
7transfers more than one aircraft, watercraft, motor vehicle or
8trailer to another aircraft, watercraft, motor vehicle
9retailer or trailer retailer for the purpose of resale or (ii)
10a retailer of aircraft, watercraft, motor vehicles, or
11trailers transfers more than one aircraft, watercraft, motor
12vehicle, or trailer to a purchaser for use as a qualifying
13rolling stock as provided in Section 2-5 of this Act, then that
14seller may report the transfer of all aircraft, watercraft,
15motor vehicles or trailers involved in that transaction to the
16Department on the same uniform invoice-transaction reporting
17return form. For purposes of this Section, "watercraft" means
18a Class 2, Class 3, or Class 4 watercraft as defined in Section
193-2 of the Boat Registration and Safety Act, a personal
20watercraft, or any boat equipped with an inboard motor.
21    In addition, with respect to motor vehicles, watercraft,
22aircraft, and trailers that are required to be registered with
23an agency of this State, every person who is engaged in the
24business of leasing or renting such items and who, in
25connection with such business, sells any such item to a
26retailer for the purpose of resale is, notwithstanding any

 

 

10300SB1963ham002- 409 -LRB103 25648 HLH 62334 a

1other provision of this Section to the contrary, authorized to
2meet the return-filing requirement of this Act by reporting
3the transfer of all the aircraft, watercraft, motor vehicles,
4or trailers transferred for resale during a month to the
5Department on the same uniform invoice-transaction reporting
6return form on or before the 20th of the month following the
7month in which the transfer takes place. Notwithstanding any
8other provision of this Act to the contrary, all returns filed
9under this paragraph must be filed by electronic means in the
10manner and form as required by the Department.
11    Any retailer who sells only motor vehicles, watercraft,
12aircraft, or trailers that are required to be registered with
13an agency of this State, so that all retailers' occupation tax
14liability is required to be reported, and is reported, on such
15transaction reporting returns and who is not otherwise
16required to file monthly or quarterly returns, need not file
17monthly or quarterly returns. However, those retailers shall
18be required to file returns on an annual basis.
19    The transaction reporting return, in the case of motor
20vehicles or trailers that are required to be registered with
21an agency of this State, shall be the same document as the
22Uniform Invoice referred to in Section 5-402 of the Illinois
23Vehicle Code and must show the name and address of the seller;
24the name and address of the purchaser; the amount of the
25selling price including the amount allowed by the retailer for
26traded-in property, if any; the amount allowed by the retailer

 

 

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1for the traded-in tangible personal property, if any, to the
2extent to which Section 1 of this Act allows an exemption for
3the value of traded-in property; the balance payable after
4deducting such trade-in allowance from the total selling
5price; the amount of tax due from the retailer with respect to
6such transaction; the amount of tax collected from the
7purchaser by the retailer on such transaction (or satisfactory
8evidence that such tax is not due in that particular instance,
9if that is claimed to be the fact); the place and date of the
10sale; a sufficient identification of the property sold; such
11other information as is required in Section 5-402 of the
12Illinois Vehicle Code, and such other information as the
13Department may reasonably require.
14    The transaction reporting return in the case of watercraft
15or aircraft must show the name and address of the seller; the
16name and address of the purchaser; the amount of the selling
17price including the amount allowed by the retailer for
18traded-in property, if any; the amount allowed by the retailer
19for the traded-in tangible personal property, if any, to the
20extent to which Section 1 of this Act allows an exemption for
21the value of traded-in property; the balance payable after
22deducting such trade-in allowance from the total selling
23price; the amount of tax due from the retailer with respect to
24such transaction; the amount of tax collected from the
25purchaser by the retailer on such transaction (or satisfactory
26evidence that such tax is not due in that particular instance,

 

 

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1if that is claimed to be the fact); the place and date of the
2sale, a sufficient identification of the property sold, and
3such other information as the Department may reasonably
4require.
5    Such transaction reporting return shall be filed not later
6than 20 days after the day of delivery of the item that is
7being sold, but may be filed by the retailer at any time sooner
8than that if he chooses to do so. The transaction reporting
9return and tax remittance or proof of exemption from the
10Illinois use tax may be transmitted to the Department by way of
11the State agency with which, or State officer with whom the
12tangible personal property must be titled or registered (if
13titling or registration is required) if the Department and
14such agency or State officer determine that this procedure
15will expedite the processing of applications for title or
16registration.
17    With each such transaction reporting return, the retailer
18shall remit the proper amount of tax due (or shall submit
19satisfactory evidence that the sale is not taxable if that is
20the case), to the Department or its agents, whereupon the
21Department shall issue, in the purchaser's name, a use tax
22receipt (or a certificate of exemption if the Department is
23satisfied that the particular sale is tax exempt) which such
24purchaser may submit to the agency with which, or State
25officer with whom, he must title or register the tangible
26personal property that is involved (if titling or registration

 

 

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1is required) in support of such purchaser's application for an
2Illinois certificate or other evidence of title or
3registration to such tangible personal property.
4    No retailer's failure or refusal to remit tax under this
5Act precludes a user, who has paid the proper tax to the
6retailer, from obtaining his certificate of title or other
7evidence of title or registration (if titling or registration
8is required) upon satisfying the Department that such user has
9paid the proper tax (if tax is due) to the retailer. The
10Department shall adopt appropriate rules to carry out the
11mandate of this paragraph.
12    If the user who would otherwise pay tax to the retailer
13wants the transaction reporting return filed and the payment
14of the tax or proof of exemption made to the Department before
15the retailer is willing to take these actions and such user has
16not paid the tax to the retailer, such user may certify to the
17fact of such delay by the retailer and may (upon the Department
18being satisfied of the truth of such certification) transmit
19the information required by the transaction reporting return
20and the remittance for tax or proof of exemption directly to
21the Department and obtain his tax receipt or exemption
22determination, in which event the transaction reporting return
23and tax remittance (if a tax payment was required) shall be
24credited by the Department to the proper retailer's account
25with the Department, but without the 2.1% or 1.75% discount
26provided for in this Section being allowed. When the user pays

 

 

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1the tax directly to the Department, he shall pay the tax in the
2same amount and in the same form in which it would be remitted
3if the tax had been remitted to the Department by the retailer.
4    Refunds made by the seller during the preceding return
5period to purchasers, on account of tangible personal property
6returned to the seller, shall be allowed as a deduction under
7subdivision 5 of his monthly or quarterly return, as the case
8may be, in case the seller had theretofore included the
9receipts from the sale of such tangible personal property in a
10return filed by him and had paid the tax imposed by this Act
11with respect to such receipts.
12    Where the seller is a corporation, the return filed on
13behalf of such corporation shall be signed by the president,
14vice-president, secretary or treasurer or by the properly
15accredited agent of such corporation.
16    Where the seller is a limited liability company, the
17return filed on behalf of the limited liability company shall
18be signed by a manager, member, or properly accredited agent
19of the limited liability company.
20    Except as provided in this Section, the retailer filing
21the return under this Section shall, at the time of filing such
22return, pay to the Department the amount of tax imposed by this
23Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
24on and after January 1, 1990, or $5 per calendar year,
25whichever is greater, which is allowed to reimburse the
26retailer for the expenses incurred in keeping records,

 

 

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1preparing and filing returns, remitting the tax and supplying
2data to the Department on request. On and after January 1,
32021, a certified service provider, as defined in the Leveling
4the Playing Field for Illinois Retail Act, filing the return
5under this Section on behalf of a remote retailer shall, at the
6time of such return, pay to the Department the amount of tax
7imposed by this Act less a discount of 1.75%. A remote retailer
8using a certified service provider to file a return on its
9behalf, as provided in the Leveling the Playing Field for
10Illinois Retail Act, is not eligible for the discount. When
11determining the discount allowed under this Section, retailers
12shall include the amount of tax that would have been due at the
131% rate but for the 0% rate imposed under Public Act 102-700
14this amendatory Act of the 102nd General Assembly. When
15determining the discount allowed under this Section, retailers
16shall include the amount of tax that would have been due at the
176.25% rate but for the 1.25% rate imposed on sales tax holiday
18items under Public Act 102-700 this amendatory Act of the
19102nd General Assembly. The discount under this Section is not
20allowed for the 1.25% portion of taxes paid on aviation fuel
21that is subject to the revenue use requirements of 49 U.S.C.
2247107(b) and 49 U.S.C. 47133. Any prepayment made pursuant to
23Section 2d of this Act shall be included in the amount on which
24such 2.1% or 1.75% discount is computed. In the case of
25retailers who report and pay the tax on a transaction by
26transaction basis, as provided in this Section, such discount

 

 

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1shall be taken with each such tax remittance instead of when
2such retailer files his periodic return. The discount allowed
3under this Section is allowed only for returns that are filed
4in the manner required by this Act. The Department may
5disallow the discount for retailers whose certificate of
6registration is revoked at the time the return is filed, but
7only if the Department's decision to revoke the certificate of
8registration has become final.
9    Before October 1, 2000, if the taxpayer's average monthly
10tax liability to the Department under this Act, the Use Tax
11Act, the Service Occupation Tax Act, and the Service Use Tax
12Act, excluding any liability for prepaid sales tax to be
13remitted in accordance with Section 2d of this Act, was
14$10,000 or more during the preceding 4 complete calendar
15quarters, he shall file a return with the Department each
16month by the 20th day of the month next following the month
17during which such tax liability is incurred and shall make
18payments to the Department on or before the 7th, 15th, 22nd and
19last day of the month during which such liability is incurred.
20On and after October 1, 2000, if the taxpayer's average
21monthly tax liability to the Department under this Act, the
22Use Tax Act, the Service Occupation Tax Act, and the Service
23Use Tax Act, excluding any liability for prepaid sales tax to
24be remitted in accordance with Section 2d of this Act, was
25$20,000 or more during the preceding 4 complete calendar
26quarters, he shall file a return with the Department each

 

 

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1month by the 20th day of the month next following the month
2during which such tax liability is incurred and shall make
3payment to the Department on or before the 7th, 15th, 22nd and
4last day of the month during which such liability is incurred.
5If the month during which such tax liability is incurred began
6prior to January 1, 1985, each payment shall be in an amount
7equal to 1/4 of the taxpayer's actual liability for the month
8or an amount set by the Department not to exceed 1/4 of the
9average monthly liability of the taxpayer to the Department
10for the preceding 4 complete calendar quarters (excluding the
11month of highest liability and the month of lowest liability
12in such 4 quarter period). If the month during which such tax
13liability is incurred begins on or after January 1, 1985 and
14prior to January 1, 1987, each payment shall be in an amount
15equal to 22.5% of the taxpayer's actual liability for the
16month or 27.5% of the taxpayer's liability for the same
17calendar month of the preceding year. If the month during
18which such tax liability is incurred begins on or after
19January 1, 1987 and prior to January 1, 1988, each payment
20shall be in an amount equal to 22.5% of the taxpayer's actual
21liability for the month or 26.25% of the taxpayer's liability
22for the same calendar month of the preceding year. If the month
23during which such tax liability is incurred begins on or after
24January 1, 1988, and prior to January 1, 1989, or begins on or
25after January 1, 1996, each payment shall be in an amount equal
26to 22.5% of the taxpayer's actual liability for the month or

 

 

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125% of the taxpayer's liability for the same calendar month of
2the preceding year. If the month during which such tax
3liability is incurred begins on or after January 1, 1989, and
4prior to January 1, 1996, each payment shall be in an amount
5equal to 22.5% of the taxpayer's actual liability for the
6month or 25% of the taxpayer's liability for the same calendar
7month of the preceding year or 100% of the taxpayer's actual
8liability for the quarter monthly reporting period. The amount
9of such quarter monthly payments shall be credited against the
10final tax liability of the taxpayer's return for that month.
11Before October 1, 2000, once applicable, the requirement of
12the making of quarter monthly payments to the Department by
13taxpayers having an average monthly tax liability of $10,000
14or more as determined in the manner provided above shall
15continue until such taxpayer's average monthly liability to
16the Department during the preceding 4 complete calendar
17quarters (excluding the month of highest liability and the
18month of lowest liability) is less than $9,000, or until such
19taxpayer's average monthly liability to the Department as
20computed for each calendar quarter of the 4 preceding complete
21calendar quarter period is less than $10,000. However, if a
22taxpayer can show the Department that a substantial change in
23the taxpayer's business has occurred which causes the taxpayer
24to anticipate that his average monthly tax liability for the
25reasonably foreseeable future will fall below the $10,000
26threshold stated above, then such taxpayer may petition the

 

 

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1Department for a change in such taxpayer's reporting status.
2On and after October 1, 2000, once applicable, the requirement
3of the making of quarter monthly payments to the Department by
4taxpayers having an average monthly tax liability of $20,000
5or more as determined in the manner provided above shall
6continue until such taxpayer's average monthly liability to
7the Department during the preceding 4 complete calendar
8quarters (excluding the month of highest liability and the
9month of lowest liability) is less than $19,000 or until such
10taxpayer's average monthly liability to the Department as
11computed for each calendar quarter of the 4 preceding complete
12calendar quarter period is less than $20,000. However, if a
13taxpayer can show the Department that a substantial change in
14the taxpayer's business has occurred which causes the taxpayer
15to anticipate that his average monthly tax liability for the
16reasonably foreseeable future will fall below the $20,000
17threshold stated above, then such taxpayer may petition the
18Department for a change in such taxpayer's reporting status.
19The Department shall change such taxpayer's reporting status
20unless it finds that such change is seasonal in nature and not
21likely to be long term. Quarter monthly payment status shall
22be determined under this paragraph as if the rate reduction to
230% in Public Act 102-700 this amendatory Act of the 102nd
24General Assembly on food for human consumption that is to be
25consumed off the premises where it is sold (other than
26alcoholic beverages, food consisting of or infused with adult

 

 

10300SB1963ham002- 419 -LRB103 25648 HLH 62334 a

1use cannabis, soft drinks, and food that has been prepared for
2immediate consumption) had not occurred. For quarter monthly
3payments due under this paragraph on or after July 1, 2023 and
4through June 30, 2024, "25% of the taxpayer's liability for
5the same calendar month of the preceding year" shall be
6determined as if the rate reduction to 0% in Public Act 102-700
7this amendatory Act of the 102nd General Assembly had not
8occurred. Quarter monthly payment status shall be determined
9under this paragraph as if the rate reduction to 1.25% in
10Public Act 102-700 this amendatory Act of the 102nd General
11Assembly on sales tax holiday items had not occurred. For
12quarter monthly payments due on or after July 1, 2023 and
13through June 30, 2024, "25% of the taxpayer's liability for
14the same calendar month of the preceding year" shall be
15determined as if the rate reduction to 1.25% in Public Act
16102-700 this amendatory Act of the 102nd General Assembly on
17sales tax holiday items had not occurred. If any such quarter
18monthly payment is not paid at the time or in the amount
19required by this Section, then the taxpayer shall be liable
20for penalties and interest on the difference between the
21minimum amount due as a payment and the amount of such quarter
22monthly payment actually and timely paid, except insofar as
23the taxpayer has previously made payments for that month to
24the Department in excess of the minimum payments previously
25due as provided in this Section. The Department shall make
26reasonable rules and regulations to govern the quarter monthly

 

 

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1payment amount and quarter monthly payment dates for taxpayers
2who file on other than a calendar monthly basis.
3    The provisions of this paragraph apply before October 1,
42001. Without regard to whether a taxpayer is required to make
5quarter monthly payments as specified above, any taxpayer who
6is required by Section 2d of this Act to collect and remit
7prepaid taxes and has collected prepaid taxes which average in
8excess of $25,000 per month during the preceding 2 complete
9calendar quarters, shall file a return with the Department as
10required by Section 2f and shall make payments to the
11Department on or before the 7th, 15th, 22nd and last day of the
12month during which such liability is incurred. If the month
13during which such tax liability is incurred began prior to
14September 1, 1985 (the effective date of Public Act 84-221),
15each payment shall be in an amount not less than 22.5% of the
16taxpayer's actual liability under Section 2d. If the month
17during which such tax liability is incurred begins on or after
18January 1, 1986, each payment shall be in an amount equal to
1922.5% of the taxpayer's actual liability for the month or
2027.5% of the taxpayer's liability for the same calendar month
21of the preceding calendar year. If the month during which such
22tax liability is incurred begins on or after January 1, 1987,
23each payment shall be in an amount equal to 22.5% of the
24taxpayer's actual liability for the month or 26.25% of the
25taxpayer's liability for the same calendar month of the
26preceding year. The amount of such quarter monthly payments

 

 

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1shall be credited against the final tax liability of the
2taxpayer's return for that month filed under this Section or
3Section 2f, as the case may be. Once applicable, the
4requirement of the making of quarter monthly payments to the
5Department pursuant to this paragraph shall continue until
6such taxpayer's average monthly prepaid tax collections during
7the preceding 2 complete calendar quarters is $25,000 or less.
8If any such quarter monthly payment is not paid at the time or
9in the amount required, the taxpayer shall be liable for
10penalties and interest on such difference, except insofar as
11the taxpayer has previously made payments for that month in
12excess of the minimum payments previously due.
13    The provisions of this paragraph apply on and after
14October 1, 2001. Without regard to whether a taxpayer is
15required to make quarter monthly payments as specified above,
16any taxpayer who is required by Section 2d of this Act to
17collect and remit prepaid taxes and has collected prepaid
18taxes that average in excess of $20,000 per month during the
19preceding 4 complete calendar quarters shall file a return
20with the Department as required by Section 2f and shall make
21payments to the Department on or before the 7th, 15th, 22nd and
22last day of the month during which the liability is incurred.
23Each payment shall be in an amount equal to 22.5% of the
24taxpayer's actual liability for the month or 25% of the
25taxpayer's liability for the same calendar month of the
26preceding year. The amount of the quarter monthly payments

 

 

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1shall be credited against the final tax liability of the
2taxpayer's return for that month filed under this Section or
3Section 2f, as the case may be. Once applicable, the
4requirement of the making of quarter monthly payments to the
5Department pursuant to this paragraph shall continue until the
6taxpayer's average monthly prepaid tax collections during the
7preceding 4 complete calendar quarters (excluding the month of
8highest liability and the month of lowest liability) is less
9than $19,000 or until such taxpayer's average monthly
10liability to the Department as computed for each calendar
11quarter of the 4 preceding complete calendar quarters is less
12than $20,000. If any such quarter monthly payment is not paid
13at the time or in the amount required, the taxpayer shall be
14liable for penalties and interest on such difference, except
15insofar as the taxpayer has previously made payments for that
16month in excess of the minimum payments previously due.
17    If any payment provided for in this Section exceeds the
18taxpayer's liabilities under this Act, the Use Tax Act, the
19Service Occupation Tax Act and the Service Use Tax Act, as
20shown on an original monthly return, the Department shall, if
21requested by the taxpayer, issue to the taxpayer a credit
22memorandum no later than 30 days after the date of payment. The
23credit evidenced by such credit memorandum may be assigned by
24the taxpayer to a similar taxpayer under this Act, the Use Tax
25Act, the Service Occupation Tax Act or the Service Use Tax Act,
26in accordance with reasonable rules and regulations to be

 

 

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1prescribed by the Department. If no such request is made, the
2taxpayer may credit such excess payment against tax liability
3subsequently to be remitted to the Department under this Act,
4the Use Tax Act, the Service Occupation Tax Act or the Service
5Use Tax Act, in accordance with reasonable rules and
6regulations prescribed by the Department. If the Department
7subsequently determined that all or any part of the credit
8taken was not actually due to the taxpayer, the taxpayer's
92.1% and 1.75% vendor's discount shall be reduced by 2.1% or
101.75% of the difference between the credit taken and that
11actually due, and that taxpayer shall be liable for penalties
12and interest on such difference.
13    If a retailer of motor fuel is entitled to a credit under
14Section 2d of this Act which exceeds the taxpayer's liability
15to the Department under this Act for the month for which the
16taxpayer is filing a return, the Department shall issue the
17taxpayer a credit memorandum for the excess.
18    Beginning January 1, 1990, each month the Department shall
19pay into the Local Government Tax Fund, a special fund in the
20State treasury which is hereby created, the net revenue
21realized for the preceding month from the 1% tax imposed under
22this Act.
23    Beginning January 1, 1990, each month the Department shall
24pay into the County and Mass Transit District Fund, a special
25fund in the State treasury which is hereby created, 4% of the
26net revenue realized for the preceding month from the 6.25%

 

 

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1general rate other than aviation fuel sold on or after
2December 1, 2019. This exception for aviation fuel only
3applies for so long as the revenue use requirements of 49
4U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the State.
5    Beginning August 1, 2000, each month the Department shall
6pay into the County and Mass Transit District Fund 20% of the
7net revenue realized for the preceding month from the 1.25%
8rate on the selling price of motor fuel and gasohol. If, in any
9month, the tax on sales tax holiday items, as defined in
10Section 2-8, is imposed at the rate of 1.25%, then the
11Department shall pay 20% of the net revenue realized for that
12month from the 1.25% rate on the selling price of sales tax
13holiday items into the County and Mass Transit District Fund.
14    Beginning January 1, 1990, each month the Department shall
15pay into the Local Government Tax Fund 16% of the net revenue
16realized for the preceding month from the 6.25% general rate
17on the selling price of tangible personal property other than
18aviation fuel sold on or after December 1, 2019. This
19exception for aviation fuel only applies for so long as the
20revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
2147133 are binding on the State.
22    For aviation fuel sold on or after December 1, 2019, each
23month the Department shall pay into the State Aviation Program
24Fund 20% of the net revenue realized for the preceding month
25from the 6.25% general rate on the selling price of aviation
26fuel, less an amount estimated by the Department to be

 

 

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1required for refunds of the 20% portion of the tax on aviation
2fuel under this Act, which amount shall be deposited into the
3Aviation Fuel Sales Tax Refund Fund. The Department shall only
4pay moneys into the State Aviation Program Fund and the
5Aviation Fuel Sales Tax Refund Fund under this Act for so long
6as the revenue use requirements of 49 U.S.C. 47107(b) and 49
7U.S.C. 47133 are binding on the State.
8    Beginning August 1, 2000, each month the Department shall
9pay into the Local Government Tax Fund 80% of the net revenue
10realized for the preceding month from the 1.25% rate on the
11selling price of motor fuel and gasohol. If, in any month, the
12tax on sales tax holiday items, as defined in Section 2-8, is
13imposed at the rate of 1.25%, then the Department shall pay 80%
14of the net revenue realized for that month from the 1.25% rate
15on the selling price of sales tax holiday items into the Local
16Government Tax Fund.
17    Beginning October 1, 2009, each month the Department shall
18pay into the Capital Projects Fund an amount that is equal to
19an amount estimated by the Department to represent 80% of the
20net revenue realized for the preceding month from the sale of
21candy, grooming and hygiene products, and soft drinks that had
22been taxed at a rate of 1% prior to September 1, 2009 but that
23are now taxed at 6.25%.
24    Beginning July 1, 2011, each month the Department shall
25pay into the Clean Air Act Permit Fund 80% of the net revenue
26realized for the preceding month from the 6.25% general rate

 

 

10300SB1963ham002- 426 -LRB103 25648 HLH 62334 a

1on the selling price of sorbents used in Illinois in the
2process of sorbent injection as used to comply with the
3Environmental Protection Act or the federal Clean Air Act, but
4the total payment into the Clean Air Act Permit Fund under this
5Act and the Use Tax Act shall not exceed $2,000,000 in any
6fiscal year.
7    Beginning July 1, 2013, each month the Department shall
8pay into the Underground Storage Tank Fund from the proceeds
9collected under this Act, the Use Tax Act, the Service Use Tax
10Act, and the Service Occupation Tax Act an amount equal to the
11average monthly deficit in the Underground Storage Tank Fund
12during the prior year, as certified annually by the Illinois
13Environmental Protection Agency, but the total payment into
14the Underground Storage Tank Fund under this Act, the Use Tax
15Act, the Service Use Tax Act, and the Service Occupation Tax
16Act shall not exceed $18,000,000 in any State fiscal year. As
17used in this paragraph, the "average monthly deficit" shall be
18equal to the difference between the average monthly claims for
19payment by the fund and the average monthly revenues deposited
20into the fund, excluding payments made pursuant to this
21paragraph.
22    Beginning July 1, 2015, of the remainder of the moneys
23received by the Department under the Use Tax Act, the Service
24Use Tax Act, the Service Occupation Tax Act, and this Act, each
25month the Department shall deposit $500,000 into the State
26Crime Laboratory Fund.

 

 

10300SB1963ham002- 427 -LRB103 25648 HLH 62334 a

1    Of the remainder of the moneys received by the Department
2pursuant to this Act, (a) 1.75% thereof shall be paid into the
3Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
4and after July 1, 1989, 3.8% thereof shall be paid into the
5Build Illinois Fund; provided, however, that if in any fiscal
6year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
7may be, of the moneys received by the Department and required
8to be paid into the Build Illinois Fund pursuant to this Act,
9Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
10Act, and Section 9 of the Service Occupation Tax Act, such Acts
11being hereinafter called the "Tax Acts" and such aggregate of
122.2% or 3.8%, as the case may be, of moneys being hereinafter
13called the "Tax Act Amount", and (2) the amount transferred to
14the Build Illinois Fund from the State and Local Sales Tax
15Reform Fund shall be less than the Annual Specified Amount (as
16hereinafter defined), an amount equal to the difference shall
17be immediately paid into the Build Illinois Fund from other
18moneys received by the Department pursuant to the Tax Acts;
19the "Annual Specified Amount" means the amounts specified
20below for fiscal years 1986 through 1993:
21Fiscal YearAnnual Specified Amount
221986$54,800,000
231987$76,650,000
241988$80,480,000
251989$88,510,000
261990$115,330,000

 

 

10300SB1963ham002- 428 -LRB103 25648 HLH 62334 a

11991$145,470,000
21992$182,730,000
31993$206,520,000;
4and means the Certified Annual Debt Service Requirement (as
5defined in Section 13 of the Build Illinois Bond Act) or the
6Tax Act Amount, whichever is greater, for fiscal year 1994 and
7each fiscal year thereafter; and further provided, that if on
8the last business day of any month the sum of (1) the Tax Act
9Amount required to be deposited into the Build Illinois Bond
10Account in the Build Illinois Fund during such month and (2)
11the amount transferred to the Build Illinois Fund from the
12State and Local Sales Tax Reform Fund shall have been less than
131/12 of the Annual Specified Amount, an amount equal to the
14difference shall be immediately paid into the Build Illinois
15Fund from other moneys received by the Department pursuant to
16the Tax Acts; and, further provided, that in no event shall the
17payments required under the preceding proviso result in
18aggregate payments into the Build Illinois Fund pursuant to
19this clause (b) for any fiscal year in excess of the greater of
20(i) the Tax Act Amount or (ii) the Annual Specified Amount for
21such fiscal year. The amounts payable into the Build Illinois
22Fund under clause (b) of the first sentence in this paragraph
23shall be payable only until such time as the aggregate amount
24on deposit under each trust indenture securing Bonds issued
25and outstanding pursuant to the Build Illinois Bond Act is
26sufficient, taking into account any future investment income,

 

 

10300SB1963ham002- 429 -LRB103 25648 HLH 62334 a

1to fully provide, in accordance with such indenture, for the
2defeasance of or the payment of the principal of, premium, if
3any, and interest on the Bonds secured by such indenture and on
4any Bonds expected to be issued thereafter and all fees and
5costs payable with respect thereto, all as certified by the
6Director of the Bureau of the Budget (now Governor's Office of
7Management and Budget). If on the last business day of any
8month in which Bonds are outstanding pursuant to the Build
9Illinois Bond Act, the aggregate of moneys deposited in the
10Build Illinois Bond Account in the Build Illinois Fund in such
11month shall be less than the amount required to be transferred
12in such month from the Build Illinois Bond Account to the Build
13Illinois Bond Retirement and Interest Fund pursuant to Section
1413 of the Build Illinois Bond Act, an amount equal to such
15deficiency shall be immediately paid from other moneys
16received by the Department pursuant to the Tax Acts to the
17Build Illinois Fund; provided, however, that any amounts paid
18to the Build Illinois Fund in any fiscal year pursuant to this
19sentence shall be deemed to constitute payments pursuant to
20clause (b) of the first sentence of this paragraph and shall
21reduce the amount otherwise payable for such fiscal year
22pursuant to that clause (b). The moneys received by the
23Department pursuant to this Act and required to be deposited
24into the Build Illinois Fund are subject to the pledge, claim
25and charge set forth in Section 12 of the Build Illinois Bond
26Act.

 

 

10300SB1963ham002- 430 -LRB103 25648 HLH 62334 a

1    Subject to payment of amounts into the Build Illinois Fund
2as provided in the preceding paragraph or in any amendment
3thereto hereafter enacted, the following specified monthly
4installment of the amount requested in the certificate of the
5Chairman of the Metropolitan Pier and Exposition Authority
6provided under Section 8.25f of the State Finance Act, but not
7in excess of sums designated as "Total Deposit", shall be
8deposited in the aggregate from collections under Section 9 of
9the Use Tax Act, Section 9 of the Service Use Tax Act, Section
109 of the Service Occupation Tax Act, and Section 3 of the
11Retailers' Occupation Tax Act into the McCormick Place
12Expansion Project Fund in the specified fiscal years.
13Fiscal YearTotal Deposit
141993         $0
151994 53,000,000
161995 58,000,000
171996 61,000,000
181997 64,000,000
191998 68,000,000
201999 71,000,000
212000 75,000,000
222001 80,000,000
232002 93,000,000
242003 99,000,000
252004103,000,000
262005108,000,000

 

 

10300SB1963ham002- 431 -LRB103 25648 HLH 62334 a

12006113,000,000
22007119,000,000
32008126,000,000
42009132,000,000
52010139,000,000
62011146,000,000
72012153,000,000
82013161,000,000
92014170,000,000
102015179,000,000
112016189,000,000
122017199,000,000
132018210,000,000
142019221,000,000
152020233,000,000
162021300,000,000
172022300,000,000
182023300,000,000
192024 300,000,000
202025 300,000,000
212026 300,000,000
222027 375,000,000
232028 375,000,000
242029 375,000,000
252030 375,000,000
262031 375,000,000

 

 

10300SB1963ham002- 432 -LRB103 25648 HLH 62334 a

12032 375,000,000
22033375,000,000
32034375,000,000
42035375,000,000
52036450,000,000
6and
7each fiscal year
8thereafter that bonds
9are outstanding under
10Section 13.2 of the
11Metropolitan Pier and
12Exposition Authority Act,
13but not after fiscal year 2060.
14    Beginning July 20, 1993 and in each month of each fiscal
15year thereafter, one-eighth of the amount requested in the
16certificate of the Chairman of the Metropolitan Pier and
17Exposition Authority for that fiscal year, less the amount
18deposited into the McCormick Place Expansion Project Fund by
19the State Treasurer in the respective month under subsection
20(g) of Section 13 of the Metropolitan Pier and Exposition
21Authority Act, plus cumulative deficiencies in the deposits
22required under this Section for previous months and years,
23shall be deposited into the McCormick Place Expansion Project
24Fund, until the full amount requested for the fiscal year, but
25not in excess of the amount specified above as "Total
26Deposit", has been deposited.

 

 

10300SB1963ham002- 433 -LRB103 25648 HLH 62334 a

1    Subject to payment of amounts into the Capital Projects
2Fund, the Clean Air Act Permit Fund, the Build Illinois Fund,
3and the McCormick Place Expansion Project Fund pursuant to the
4preceding paragraphs or in any amendments thereto hereafter
5enacted, for aviation fuel sold on or after December 1, 2019,
6the Department shall each month deposit into the Aviation Fuel
7Sales Tax Refund Fund an amount estimated by the Department to
8be required for refunds of the 80% portion of the tax on
9aviation fuel under this Act. The Department shall only
10deposit moneys into the Aviation Fuel Sales Tax Refund Fund
11under this paragraph for so long as the revenue use
12requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
13binding on the State.
14    Subject to payment of amounts into the Build Illinois Fund
15and the McCormick Place Expansion Project Fund pursuant to the
16preceding paragraphs or in any amendments thereto hereafter
17enacted, beginning July 1, 1993 and ending on September 30,
182013, the Department shall each month pay into the Illinois
19Tax Increment Fund 0.27% of 80% of the net revenue realized for
20the preceding month from the 6.25% general rate on the selling
21price of tangible personal property.
22    Subject to payment of amounts into the Build Illinois Fund
23and the McCormick Place Expansion Project Fund pursuant to the
24preceding paragraphs or in any amendments thereto hereafter
25enacted, beginning with the receipt of the first report of
26taxes paid by an eligible business and continuing for a

 

 

10300SB1963ham002- 434 -LRB103 25648 HLH 62334 a

125-year period, the Department shall each month pay into the
2Energy Infrastructure Fund 80% of the net revenue realized
3from the 6.25% general rate on the selling price of
4Illinois-mined coal that was sold to an eligible business. For
5purposes of this paragraph, the term "eligible business" means
6a new electric generating facility certified pursuant to
7Section 605-332 of the Department of Commerce and Economic
8Opportunity Law of the Civil Administrative Code of Illinois.
9    Subject to payment of amounts into the Build Illinois
10Fund, the McCormick Place Expansion Project Fund, the Illinois
11Tax Increment Fund, and the Energy Infrastructure Fund
12pursuant to the preceding paragraphs or in any amendments to
13this Section hereafter enacted, beginning on the first day of
14the first calendar month to occur on or after August 26, 2014
15(the effective date of Public Act 98-1098), each month, from
16the collections made under Section 9 of the Use Tax Act,
17Section 9 of the Service Use Tax Act, Section 9 of the Service
18Occupation Tax Act, and Section 3 of the Retailers' Occupation
19Tax Act, the Department shall pay into the Tax Compliance and
20Administration Fund, to be used, subject to appropriation, to
21fund additional auditors and compliance personnel at the
22Department of Revenue, an amount equal to 1/12 of 5% of 80% of
23the cash receipts collected during the preceding fiscal year
24by the Audit Bureau of the Department under the Use Tax Act,
25the Service Use Tax Act, the Service Occupation Tax Act, the
26Retailers' Occupation Tax Act, and associated local occupation

 

 

10300SB1963ham002- 435 -LRB103 25648 HLH 62334 a

1and use taxes administered by the Department.
2    Subject to payments of amounts into the Build Illinois
3Fund, the McCormick Place Expansion Project Fund, the Illinois
4Tax Increment Fund, the Energy Infrastructure Fund, and the
5Tax Compliance and Administration Fund as provided in this
6Section, beginning on July 1, 2018 the Department shall pay
7each month into the Downstate Public Transportation Fund the
8moneys required to be so paid under Section 2-3 of the
9Downstate Public Transportation Act.
10    Subject to successful execution and delivery of a
11public-private agreement between the public agency and private
12entity and completion of the civic build, beginning on July 1,
132023, of the remainder of the moneys received by the
14Department under the Use Tax Act, the Service Use Tax Act, the
15Service Occupation Tax Act, and this Act, the Department shall
16deposit the following specified deposits in the aggregate from
17collections under the Use Tax Act, the Service Use Tax Act, the
18Service Occupation Tax Act, and the Retailers' Occupation Tax
19Act, as required under Section 8.25g of the State Finance Act
20for distribution consistent with the Public-Private
21Partnership for Civic and Transit Infrastructure Project Act.
22The moneys received by the Department pursuant to this Act and
23required to be deposited into the Civic and Transit
24Infrastructure Fund are subject to the pledge, claim and
25charge set forth in Section 25-55 of the Public-Private
26Partnership for Civic and Transit Infrastructure Project Act.

 

 

10300SB1963ham002- 436 -LRB103 25648 HLH 62334 a

1As used in this paragraph, "civic build", "private entity",
2"public-private agreement", and "public agency" have the
3meanings provided in Section 25-10 of the Public-Private
4Partnership for Civic and Transit Infrastructure Project Act.
5        Fiscal Year.............................Total Deposit
6        2024.....................................$200,000,000
7        2025....................................$206,000,000
8        2026....................................$212,200,000
9        2027....................................$218,500,000
10        2028....................................$225,100,000
11        2029....................................$288,700,000
12        2030....................................$298,900,000
13        2031....................................$309,300,000
14        2032....................................$320,100,000
15        2033....................................$331,200,000
16        2034....................................$341,200,000
17        2035....................................$351,400,000
18        2036....................................$361,900,000
19        2037....................................$372,800,000
20        2038....................................$384,000,000
21        2039....................................$395,500,000
22        2040....................................$407,400,000
23        2041....................................$419,600,000
24        2042....................................$432,200,000
25        2043....................................$445,100,000
26    Beginning July 1, 2021 and until July 1, 2022, subject to

 

 

10300SB1963ham002- 437 -LRB103 25648 HLH 62334 a

1the payment of amounts into the County and Mass Transit
2District Fund, the Local Government Tax Fund, the Build
3Illinois Fund, the McCormick Place Expansion Project Fund, the
4Illinois Tax Increment Fund, the Energy Infrastructure Fund,
5and the Tax Compliance and Administration Fund as provided in
6this Section, the Department shall pay each month into the
7Road Fund the amount estimated to represent 16% of the net
8revenue realized from the taxes imposed on motor fuel and
9gasohol. Beginning July 1, 2022 and until July 1, 2023,
10subject to the payment of amounts into the County and Mass
11Transit District Fund, the Local Government Tax Fund, the
12Build Illinois Fund, the McCormick Place Expansion Project
13Fund, the Illinois Tax Increment Fund, the Energy
14Infrastructure Fund, and the Tax Compliance and Administration
15Fund as provided in this Section, the Department shall pay
16each month into the Road Fund the amount estimated to
17represent 32% of the net revenue realized from the taxes
18imposed on motor fuel and gasohol. Beginning July 1, 2023 and
19until July 1, 2024, subject to the payment of amounts into the
20County and Mass Transit District Fund, the Local Government
21Tax Fund, the Build Illinois Fund, the McCormick Place
22Expansion Project Fund, the Illinois Tax Increment Fund, the
23Energy Infrastructure Fund, and the Tax Compliance and
24Administration Fund as provided in this Section, the
25Department shall pay each month into the Road Fund the amount
26estimated to represent 48% of the net revenue realized from

 

 

10300SB1963ham002- 438 -LRB103 25648 HLH 62334 a

1the taxes imposed on motor fuel and gasohol. Beginning July 1,
22024 and until July 1, 2025, subject to the payment of amounts
3into the County and Mass Transit District Fund, the Local
4Government Tax Fund, the Build Illinois Fund, the McCormick
5Place Expansion Project Fund, the Illinois Tax Increment Fund,
6the Energy Infrastructure Fund, and the Tax Compliance and
7Administration Fund as provided in this Section, the
8Department shall pay each month into the Road Fund the amount
9estimated to represent 64% of the net revenue realized from
10the taxes imposed on motor fuel and gasohol. Beginning on July
111, 2025, subject to the payment of amounts into the County and
12Mass Transit District Fund, the Local Government Tax Fund, the
13Build Illinois Fund, the McCormick Place Expansion Project
14Fund, the Illinois Tax Increment Fund, the Energy
15Infrastructure Fund, and the Tax Compliance and Administration
16Fund as provided in this Section, the Department shall pay
17each month into the Road Fund the amount estimated to
18represent 80% of the net revenue realized from the taxes
19imposed on motor fuel and gasohol. As used in this paragraph
20"motor fuel" has the meaning given to that term in Section 1.1
21of the Motor Fuel Tax Law, and "gasohol" has the meaning given
22to that term in Section 3-40 of the Use Tax Act.
23    Of the remainder of the moneys received by the Department
24pursuant to this Act, 75% thereof shall be paid into the State
25treasury Treasury and 25% shall be reserved in a special
26account and used only for the transfer to the Common School

 

 

10300SB1963ham002- 439 -LRB103 25648 HLH 62334 a

1Fund as part of the monthly transfer from the General Revenue
2Fund in accordance with Section 8a of the State Finance Act.
3    The Department may, upon separate written notice to a
4taxpayer, require the taxpayer to prepare and file with the
5Department on a form prescribed by the Department within not
6less than 60 days after receipt of the notice an annual
7information return for the tax year specified in the notice.
8Such annual return to the Department shall include a statement
9of gross receipts as shown by the retailer's last Federal
10income tax return. If the total receipts of the business as
11reported in the Federal income tax return do not agree with the
12gross receipts reported to the Department of Revenue for the
13same period, the retailer shall attach to his annual return a
14schedule showing a reconciliation of the 2 amounts and the
15reasons for the difference. The retailer's annual return to
16the Department shall also disclose the cost of goods sold by
17the retailer during the year covered by such return, opening
18and closing inventories of such goods for such year, costs of
19goods used from stock or taken from stock and given away by the
20retailer during such year, payroll information of the
21retailer's business during such year and any additional
22reasonable information which the Department deems would be
23helpful in determining the accuracy of the monthly, quarterly
24or annual returns filed by such retailer as provided for in
25this Section.
26    If the annual information return required by this Section

 

 

10300SB1963ham002- 440 -LRB103 25648 HLH 62334 a

1is not filed when and as required, the taxpayer shall be liable
2as follows:
3        (i) Until January 1, 1994, the taxpayer shall be
4    liable for a penalty equal to 1/6 of 1% of the tax due from
5    such taxpayer under this Act during the period to be
6    covered by the annual return for each month or fraction of
7    a month until such return is filed as required, the
8    penalty to be assessed and collected in the same manner as
9    any other penalty provided for in this Act.
10        (ii) On and after January 1, 1994, the taxpayer shall
11    be liable for a penalty as described in Section 3-4 of the
12    Uniform Penalty and Interest Act.
13    The chief executive officer, proprietor, owner or highest
14ranking manager shall sign the annual return to certify the
15accuracy of the information contained therein. Any person who
16willfully signs the annual return containing false or
17inaccurate information shall be guilty of perjury and punished
18accordingly. The annual return form prescribed by the
19Department shall include a warning that the person signing the
20return may be liable for perjury.
21    The provisions of this Section concerning the filing of an
22annual information return do not apply to a retailer who is not
23required to file an income tax return with the United States
24Government.
25    As soon as possible after the first day of each month, upon
26certification of the Department of Revenue, the Comptroller

 

 

10300SB1963ham002- 441 -LRB103 25648 HLH 62334 a

1shall order transferred and the Treasurer shall transfer from
2the General Revenue Fund to the Motor Fuel Tax Fund an amount
3equal to 1.7% of 80% of the net revenue realized under this Act
4for the second preceding month. Beginning April 1, 2000, this
5transfer is no longer required and shall not be made.
6    Net revenue realized for a month shall be the revenue
7collected by the State pursuant to this Act, less the amount
8paid out during that month as refunds to taxpayers for
9overpayment of liability.
10    For greater simplicity of administration, manufacturers,
11importers and wholesalers whose products are sold at retail in
12Illinois by numerous retailers, and who wish to do so, may
13assume the responsibility for accounting and paying to the
14Department all tax accruing under this Act with respect to
15such sales, if the retailers who are affected do not make
16written objection to the Department to this arrangement.
17    Any person who promotes, organizes, provides retail
18selling space for concessionaires or other types of sellers at
19the Illinois State Fair, DuQuoin State Fair, county fairs,
20local fairs, art shows, flea markets and similar exhibitions
21or events, including any transient merchant as defined by
22Section 2 of the Transient Merchant Act of 1987, is required to
23file a report with the Department providing the name of the
24merchant's business, the name of the person or persons engaged
25in merchant's business, the permanent address and Illinois
26Retailers Occupation Tax Registration Number of the merchant,

 

 

10300SB1963ham002- 442 -LRB103 25648 HLH 62334 a

1the dates and location of the event and other reasonable
2information that the Department may require. The report must
3be filed not later than the 20th day of the month next
4following the month during which the event with retail sales
5was held. Any person who fails to file a report required by
6this Section commits a business offense and is subject to a
7fine not to exceed $250.
8    Any person engaged in the business of selling tangible
9personal property at retail as a concessionaire or other type
10of seller at the Illinois State Fair, county fairs, art shows,
11flea markets and similar exhibitions or events, or any
12transient merchants, as defined by Section 2 of the Transient
13Merchant Act of 1987, may be required to make a daily report of
14the amount of such sales to the Department and to make a daily
15payment of the full amount of tax due. The Department shall
16impose this requirement when it finds that there is a
17significant risk of loss of revenue to the State at such an
18exhibition or event. Such a finding shall be based on evidence
19that a substantial number of concessionaires or other sellers
20who are not residents of Illinois will be engaging in the
21business of selling tangible personal property at retail at
22the exhibition or event, or other evidence of a significant
23risk of loss of revenue to the State. The Department shall
24notify concessionaires and other sellers affected by the
25imposition of this requirement. In the absence of notification
26by the Department, the concessionaires and other sellers shall

 

 

10300SB1963ham002- 443 -LRB103 25648 HLH 62334 a

1file their returns as otherwise required in this Section.
2(Source: P.A. 101-10, Article 15, Section 15-25, eff. 6-5-19;
3101-10, Article 25, Section 25-120, eff. 6-5-19; 101-27, eff.
46-25-19; 101-32, eff. 6-28-19; 101-604, eff. 12-13-19;
5101-636, eff. 6-10-20; 102-634, eff. 8-27-21; 102-700, Article
660, Section 60-30, eff. 4-19-22; 102-700, Article 65, Section
765-10, eff. 4-19-22; 102-813, eff. 5-13-22; 102-1019, eff.
81-1-23; revised 12-13-22.)
 
9
ARTICLE 75. REV ILLINOIS PROGRAM

 
10    Section 75-5. The Reimagining Energy and Vehicles in
11Illinois Act is amended by changing Sections 20, 30, 40, and 45
12as follows:
 
13    (20 ILCS 686/20)
14    Sec. 20. REV Illinois Program; project applications.
15    (a) The Reimagining Energy and Vehicles in Illinois (REV
16Illinois) Program is hereby established and shall be
17administered by the Department. The Program will provide
18financial incentives to any one or more of the following: (1)
19eligible manufacturers of electric vehicles, electric vehicle
20component parts, and electric vehicle power supply equipment;
21(2) battery recycling and reuse manufacturers; (3) battery raw
22materials refining service providers; or (4) renewable energy
23manufacturers.

 

 

10300SB1963ham002- 444 -LRB103 25648 HLH 62334 a

1    (b) Any taxpayer planning a project to be located in
2Illinois may request consideration for designation of its
3project as a REV Illinois Project, by formal written letter of
4request or by formal application to the Department, in which
5the applicant states its intent to make at least a specified
6level of investment and intends to hire a specified number of
7full-time employees at a designated location in Illinois. As
8circumstances require, the Department shall require a formal
9application from an applicant and a formal letter of request
10for assistance.
11    (c) In order to qualify for credits under the REV Illinois
12Program, an applicant must:
13        (1) if the applicant is an electric vehicle
14    manufacturer:
15            (A) make an investment of at least $1,500,000,000
16        in capital improvements at the project site;
17            (B) to be placed in service within the State
18        within a 60-month period after approval of the
19        application; and
20            (C) create at least 500 new full-time employee
21        jobs; or
22        (2) if the applicant is an electric vehicle component
23    parts manufacturer or a renewable energy manufacturer:
24            (A) make an investment of at least $300,000,000 in
25        capital improvements at the project site;
26            (B) manufacture one or more parts that are

 

 

10300SB1963ham002- 445 -LRB103 25648 HLH 62334 a

1        primarily used for electric vehicle manufacturing;
2            (C) to be placed in service within the State
3        within a 60-month period after approval of the
4        application; and
5            (D) create at least 150 new full-time employee
6        jobs; or
7        (3) if the agreement is entered into before the
8    effective date of this amendatory Act of the 102nd General
9    Assembly and the applicant is an electric vehicle
10    manufacturer, an electric vehicle power supply equipment
11    manufacturer, an electric vehicle component part
12    manufacturer that does not qualify under paragraph (2)
13    above, a battery recycling and reuse manufacturer, or a
14    battery raw materials refining service provider:
15            (A) make an investment of at least $20,000,000 in
16        capital improvements at the project site;
17            (B) for electric vehicle component part
18        manufacturers, manufacture one or more parts that are
19        primarily used for electric vehicle manufacturing;
20            (C) to be placed in service within the State
21        within a 48-month period after approval of the
22        application; and
23            (D) create at least 50 new full-time employee
24        jobs; or
25        (3.1) if the agreement is entered into on or after the
26    effective date of this amendatory Act of the 102nd General

 

 

10300SB1963ham002- 446 -LRB103 25648 HLH 62334 a

1    Assembly and the applicant is an electric vehicle
2    manufacturer, an electric vehicle power supply equipment
3    manufacturer, an electric vehicle component part
4    manufacturer that does not qualify under paragraph (2)
5    above, a renewable energy manufacturer that does not
6    qualify under paragraph (2) above, a battery recycling and
7    reuse manufacturer, or a battery raw materials refining
8    service provider:
9            (A) make an investment of at least $2,500,000 in
10        capital improvements at the project site;
11            (B) in the case of electric vehicle component part
12        manufacturers, manufacture one or more parts that are
13        used for electric vehicle manufacturing;
14            (C) to be placed in service within the State
15        within a 48-month period after approval of the
16        application; and
17            (D) create the lesser of 50 new full-time employee
18        jobs or new full-time employee jobs equivalent to 10%
19        of the Statewide baseline applicable to the taxpayer
20        and any related member at the time of application; or
21        (4) if the agreement is entered into before the
22    effective date of this amendatory Act of the 102nd General
23    Assembly and the applicant is an electric vehicle
24    manufacturer or electric vehicle component parts
25    manufacturer with existing operations within Illinois that
26    intends to convert or expand, in whole or in part, the

 

 

10300SB1963ham002- 447 -LRB103 25648 HLH 62334 a

1    existing facility from traditional manufacturing to
2    primarily electric vehicle manufacturing, electric vehicle
3    component parts manufacturing, or electric vehicle power
4    supply equipment manufacturing:
5            (A) make an investment of at least $100,000,000 in
6        capital improvements at the project site;
7            (B) to be placed in service within the State
8        within a 60-month period after approval of the
9        application; and
10            (C) create the lesser of 75 new full-time employee
11        jobs or new full-time employee jobs equivalent to 10%
12        of the Statewide baseline applicable to the taxpayer
13        and any related member at the time of application; or
14        (4.1) if the agreement is entered into on or after the
15    effective date of this amendatory Act of the 102nd General
16    Assembly and the applicant (i) is an electric vehicle
17    manufacturer, an electric vehicle component parts
18    manufacturer, or a renewable energy manufacturer and (ii)
19    has existing operations within Illinois that the applicant
20    intends to convert or expand, in whole or in part, from
21    traditional manufacturing to electric vehicle
22    manufacturing, electric vehicle component parts
23    manufacturing, renewable energy manufacturing, or electric
24    vehicle power supply equipment manufacturing:
25            (A) make an investment of at least $100,000,000 in
26        capital improvements at the project site;

 

 

10300SB1963ham002- 448 -LRB103 25648 HLH 62334 a

1            (B) to be placed in service within the State
2        within a 60-month period after approval of the
3        application; and
4            (C) create the lesser of 50 new full-time employee
5        jobs or new full-time employee jobs equivalent to 10%
6        of the Statewide baseline applicable to the taxpayer
7        and any related member at the time of application; or .
8        (5) if the agreement is entered into on or after the
9    effective date of the changes made to this Section by this
10    amendatory Act of the 103rd General Assembly and before
11    June 1, 2024 and the applicant (i) is an electric vehicle
12    manufacturer, an electric vehicle component parts
13    manufacturer, or a renewable energy manufacturer or (ii)
14    has existing operations within Illinois that the applicant
15    intends to convert or expand, in whole or in part, from
16    traditional manufacturing to electric vehicle
17    manufacturing, electric vehicle component parts
18    manufacturing, renewable energy manufacturing, or electric
19    vehicle power supply equipment manufacturing:
20            (A) make an investment of at least $500,000,000 in
21        capital improvements at the project site;
22            (B) to be placed in service within the State
23        within a 60-month period after approval of the
24        application; and
25            (C) retain at least 800 full-time employee jobs at
26        the project.

 

 

10300SB1963ham002- 449 -LRB103 25648 HLH 62334 a

1    (d) For agreements entered into prior to April 19, 2022
2(the effective date of Public Act 102-700), for any applicant
3creating the full-time employee jobs noted in subsection (c),
4those jobs must have a total compensation equal to or greater
5than 120% of the average wage paid to full-time employees in
6the county where the project is located, as determined by the
7U.S. Bureau of Labor Statistics. For agreements entered into
8on or after April 19, 2022 (the effective date of Public Act
9102-700), for any applicant creating the full-time employee
10jobs noted in subsection (c), those jobs must have a
11compensation equal to or greater than 120% of the average wage
12paid to full-time employees in a similar position within an
13occupational group in the county where the project is located,
14as determined by the Department.
15    (e) For any applicant, within 24 months after being placed
16in service, it must certify to the Department that it is carbon
17neutral or has attained certification under one of more of the
18following green building standards:
19        (1) BREEAM for New Construction or BREEAM In-Use;
20        (2) ENERGY STAR;
21        (3) Envision;
22        (4) ISO 50001 - energy management;
23        (5) LEED for Building Design and Construction or LEED
24    for Building Operations and Maintenance;
25        (6) Green Globes for New Construction or Green Globes
26    for Existing Buildings; or

 

 

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1        (7) UL 3223.
2    (f) Each applicant must outline its hiring plan and
3commitment to recruit and hire full-time employee positions at
4the project site. The hiring plan may include a partnership
5with an institution of higher education to provide
6internships, including, but not limited to, internships
7supported by the Clean Jobs Workforce Network Program, or
8full-time permanent employment for students at the project
9site. Additionally, the applicant may create or utilize
10participants from apprenticeship programs that are approved by
11and registered with the United States Department of Labor's
12Bureau of Apprenticeship and Training. The applicant may apply
13for apprenticeship education expense credits in accordance
14with the provisions set forth in 14 Ill. Adm. Code 522. Each
15applicant is required to report annually, on or before April
1615, on the diversity of its workforce in accordance with
17Section 50 of this Act. For existing facilities of applicants
18under paragraph (3) of subsection (b) above, if the taxpayer
19expects a reduction in force due to its transition to
20manufacturing electric vehicle, electric vehicle component
21parts, or electric vehicle power supply equipment, the plan
22submitted under this Section must outline the taxpayer's plan
23to assist with retraining its workforce aligned with the
24taxpayer's adoption of new technologies and anticipated
25efforts to retrain employees through employment opportunities
26within the taxpayer's workforce.

 

 

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1    (g) Each applicant must demonstrate a contractual or other
2relationship with a recycling facility, or demonstrate its own
3recycling capabilities, at the time of application and report
4annually a continuing contractual or other relationship with a
5recycling facility and the percentage of batteries used in
6electric vehicles recycled throughout the term of the
7agreement.
8    (h) A taxpayer may not enter into more than one agreement
9under this Act with respect to a single address or location for
10the same period of time. Also, a taxpayer may not enter into an
11agreement under this Act with respect to a single address or
12location for the same period of time for which the taxpayer
13currently holds an active agreement under the Economic
14Development for a Growing Economy Tax Credit Act. This
15provision does not preclude the applicant from entering into
16an additional agreement after the expiration or voluntary
17termination of an earlier agreement under this Act or under
18the Economic Development for a Growing Economy Tax Credit Act
19to the extent that the taxpayer's application otherwise
20satisfies the terms and conditions of this Act and is approved
21by the Department. An applicant with an existing agreement
22under the Economic Development for a Growing Economy Tax
23Credit Act may submit an application for an agreement under
24this Act after it terminates any existing agreement under the
25Economic Development for a Growing Economy Tax Credit Act with
26respect to the same address or location. If a project that is

 

 

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1subject to an existing agreement under the Economic
2Development for a Growing Economy Tax Credit Act meets the
3requirements to be designated as a REV Illinois project under
4this Act, including for actions undertaken prior to the
5effective date of this Act, the taxpayer that is subject to
6that existing agreement under the Economic Development for a
7Growing Economy Tax Credit Act may apply to the Department to
8amend the agreement to allow the project to become a
9designated REV Illinois project. Following the amendment, time
10accrued during which the project was eligible for credits
11under the existing agreement under the Economic Development
12for a Growing Economy Tax Credit Act shall count toward the
13duration of the credit subject to limitations described in
14Section 40 of this Act.
15    (i) If, at any time following the designation of a project
16as a REV Illinois Project by the Department and prior to the
17termination or expiration of an agreement under this Act, the
18project ceases to qualify as a REV Illinois project because
19the taxpayer is no longer an electric vehicle manufacturer, an
20electric vehicle component manufacturer, an electric vehicle
21power supply equipment manufacturer, a battery recycling and
22reuse manufacturer, or a battery raw materials refining
23service provider, that project may receive tax credit awards
24as described in Section 5-15 and Section 5-51 of the Economic
25Development for a Growing Economy Tax Credit Act, as long as
26the project continues to meet requirements to obtain those

 

 

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1credits as described in the Economic Development for a Growing
2Economy Tax Credit Act and remains compliant with terms
3contained in the Agreement under this Act not related to their
4status as an electric vehicle manufacturer, an electric
5vehicle component manufacturer, an electric vehicle power
6supply equipment manufacturer, a battery recycling and reuse
7manufacturer, or a battery raw materials refining service
8provider. Time accrued during which the project was eligible
9for credits under an agreement under this Act shall count
10toward the duration of the credit subject to limitations
11described in Section 5-45 of the Economic Development for a
12Growing Economy Tax Credit Act.
13(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22;
14102-1112, eff. 12-21-22; 102-1125, eff. 2-3-23.)
 
15    (20 ILCS 686/30)
16    Sec. 30. Tax credit awards.
17    (a) Subject to the conditions set forth in this Act, a
18taxpayer is entitled to a credit against the tax imposed
19pursuant to subsections (a) and (b) of Section 201 of the
20Illinois Income Tax Act for a taxable year beginning on or
21after January 1, 2025 if the taxpayer is awarded a credit by
22the Department in accordance with an agreement under this Act.
23The Department has authority to award credits under this Act
24on and after January 1, 2022.
25    (b) REV Illinois Credits. A taxpayer may receive a tax

 

 

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1credit against the tax imposed under subsections (a) and (b)
2of Section 201 of the Illinois Income Tax Act, not to exceed
3the sum of (i) 75% of the incremental income tax attributable
4to new employees at the applicant's project and (ii) 10% of the
5training costs of the new employees. If the project is located
6in an underserved area or an energy transition area, then the
7amount of the credit may not exceed the sum of (i) 100% of the
8incremental income tax attributable to new employees at the
9applicant's project; and (ii) 10% of the training costs of the
10new employees. The percentage of training costs includable in
11the calculation may be increased by an additional 15% for
12training costs associated with new employees that are recent
13(2 years or less) graduates, certificate holders, or
14credential recipients from an institution of higher education
15in Illinois, or, if the training is provided by an institution
16of higher education in Illinois, the Clean Jobs Workforce
17Network Program, or an apprenticeship and training program
18located in Illinois and approved by and registered with the
19United States Department of Labor's Bureau of Apprenticeship
20and Training. An applicant is also eligible for a training
21credit that shall not exceed 10% of the training costs of
22retained employees for the purpose of upskilling to meet the
23operational needs of the applicant or the REV Illinois
24Project. The percentage of training costs includable in the
25calculation shall not exceed a total of 25%. If an applicant
26agrees to hire the required number of new employees, then the

 

 

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1maximum amount of the credit for that applicant may be
2increased by an amount not to exceed 75% of the incremental
3income tax attributable to retained employees at the
4applicant's project; provided that, in order to receive the
5increase for retained employees, the applicant must, if
6applicable, meet or exceed the statewide baseline. For
7agreements entered into on or after the effective date of this
8amendatory Act of the 103rd General Assembly and before June
91, 2024 that qualify under paragraph (5) of subsection (c) of
10Section 20, a taxpayer may receive a tax credit not to exceed
1175% of the incremental income tax attributable to retained
12employees at the applicant's project. If the project is in an
13underserved area or an energy transition area and qualifies
14under paragraph (5) of subsection (c) of Section 20, then the
15maximum amount of the credit attributable to retained
16employees for the applicant may be increased to an amount not
17to exceed 100% of the incremental income tax attributable to
18retained employees at the applicant's project.
19    If the Project is in an underserved area or an energy
20transition area, the maximum amount of the credit attributable
21to retained employees for the applicant may be increased to an
22amount not to exceed 100% of the incremental income tax
23attributable to retained employees at the applicant's project;
24provided that, in order to receive the increase for retained
25employees, the applicant must meet or exceed the statewide
26baseline. REV Illinois Credits awarded may include credit

 

 

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1earned for incremental income tax withheld and training costs
2incurred by the taxpayer beginning on or after January 1,
32022. Credits so earned and certified by the Department may be
4applied against the tax imposed by subsections (a) and (b) of
5Section 201 of the Illinois Income Tax Act for taxable years
6beginning on or after January 1, 2025.
7    (c) REV Construction Jobs Credit. For construction wages
8associated with a project that qualified for a REV Illinois
9Credit under subsection (b), the taxpayer may receive a tax
10credit against the tax imposed under subsections (a) and (b)
11of Section 201 of the Illinois Income Tax Act in an amount
12equal to 50% of the incremental income tax attributable to
13construction wages paid in connection with construction of the
14project facilities, as a jobs credit for workers hired to
15construct the project.
16    The REV Construction Jobs Credit may not exceed 75% of the
17amount of the incremental income tax attributable to
18construction wages paid in connection with construction of the
19project facilities if the project is in an underserved area or
20an energy transition area.
21    (d) The Department shall certify to the Department of
22Revenue: (1) the identity of Taxpayers that are eligible for
23the REV Illinois Credit and REV Construction Jobs Credit; (2)
24the amount of the REV Illinois Credits and REV Construction
25Jobs Credits awarded in each calendar year; and (3) the amount
26of the REV Illinois Credit and REV Construction Jobs Credit

 

 

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1claimed in each calendar year. REV Illinois Credits awarded
2may include credit earned for Incremental Income Tax withheld
3and Training Costs incurred by the Taxpayer beginning on or
4after January 1, 2022. Credits so earned and certified by the
5Department may be applied against the tax imposed by Section
6201(a) and (b) of the Illinois Income Tax Act for taxable years
7beginning on or after January 1, 2025.
8    (e) Applicants seeking certification for a tax credits
9related to the construction of the project facilities in the
10State shall require the contractor to enter into a project
11labor agreement that conforms with the Project Labor
12Agreements Act.
13    (f) Any applicant issued a certificate for a tax credit or
14tax exemption under this Act must annually report to the
15Department the total project tax benefits received. Reports
16are due no later than May 31 of each year and shall cover the
17previous calendar year. The first report is for the 2022
18calendar year and is due no later than May 31, 2023. For
19applicants issued a certificate of exemption under Section 105
20of this Act, the report shall be the same as required for a
21High Impact Business under subsection (a-5) of Section 8.1 of
22the Illinois Enterprise Zone Act. Each person required to file
23a return under the Gas Revenue Tax Act, the Electricity Excise
24Tax Law, or the Telecommunications Excise Tax Act shall file a
25report containing information about customers that are issued
26an exemption certificate under Section 95 of this Act in the

 

 

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1same manner and form as they are required to report under
2subsection (b) of Section 8.1 of the Illinois Enterprise Zone
3Act.
4    (g) Nothing in this Act shall prohibit an award of credit
5to an applicant that uses a PEO if all other award criteria are
6satisfied.
7    (h) With respect to any portion of a REV Illinois Credit
8that is based on the incremental income tax attributable to
9new employees or retained employees, in lieu of the Credit
10allowed under this Act against the taxes imposed pursuant to
11subsections (a) and (b) of Section 201 of the Illinois Income
12Tax Act, a taxpayer that otherwise meets the criteria set
13forth in this Section, the taxpayer may elect to claim the
14credit, on or after January 1, 2025, against its obligation to
15pay over withholding under Section 704A of the Illinois Income
16Tax Act. The election shall be made in the manner prescribed by
17the Department of Revenue and once made shall be irrevocable.
18(Source: P.A. 102-669, eff. 11-16-21; 102-1112, eff. 12-21-22;
19102-1125, eff. 2-3-23; revised 4-5-23.)
 
20    (20 ILCS 686/40)
21    Sec. 40. Amount and duration of the credits; limitation to
22amount of costs of specified items. The Department shall
23determine the amount and duration of the REV Illinois Credit
24awarded under this Act, subject to the limitations set forth
25in this Act. For a project that qualified under paragraph (1),

 

 

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1(2), (4), or (4.1), or (5) of subsection (c) of Section 20, the
2duration of the credit may not exceed 15 taxable years, with an
3option to renew the agreement for no more than one term not to
4exceed an additional 15 taxable years. For a project that
5qualified under paragraph (3) or (3.1) of subsection (c) of
6Section 20, the duration of the credit may not exceed 10
7taxable years, with an option to renew the agreement for no
8more than one term not to exceed an additional 10 taxable
9years. The credit may be stated as a percentage of the
10incremental income tax and training costs attributable to the
11applicant's project and may include a fixed dollar limitation.
12    Nothing in this Section shall prevent the Department, in
13consultation with the Department of Revenue, from adopting
14rules to extend the sunset of any earned, existing, and unused
15tax credit or credits a taxpayer may be in possession of, as
16provided for in Section 605-1055 of the Department of Commerce
17and Economic Opportunity Law of the Civil Administrative Code
18of Illinois, notwithstanding the carry-forward provisions
19pursuant to paragraph (4) of Section 211 of the Illinois
20Income Tax Act.
21(Source: P.A. 102-669, eff. 11-16-21; 102-1112, eff. 12-21-22;
22102-1125, eff. 2-3-23; revised 4-5-23.)
 
23    (20 ILCS 686/45)
24    Sec. 45. Contents of agreements with applicants.
25    (a) The Department shall enter into an agreement with an

 

 

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1applicant that is awarded a credit under this Act. The
2agreement shall include all of the following:
3        (1) A detailed description of the project that is the
4    subject of the agreement, including the location and
5    amount of the investment and jobs created or retained.
6        (2) The duration of the credit, the first taxable year
7    for which the credit may be awarded, and the first taxable
8    year in which the credit may be used by the taxpayer.
9        (3) The credit amount that will be allowed for each
10    taxable year.
11        (4) For a project qualified under paragraphs (1), (2),
12    or (4), or (5) of subsection (c) of Section 20, a
13    requirement that the taxpayer shall maintain operations at
14    the project location a minimum number of years not to
15    exceed 15. For a project qualified under paragraph (3) of
16    subsection (c) of Section 20, a requirement that the
17    taxpayer shall maintain operations at the project location
18    a minimum number of years not to exceed 10.
19        (5) A specific method for determining the number of
20    new employees and if applicable, retained employees,
21    employed during a taxable year.
22        (6) A requirement that the taxpayer shall annually
23    report to the Department the number of new employees, the
24    incremental income tax withheld in connection with the new
25    employees, and any other information the Department deems
26    necessary and appropriate to perform its duties under this

 

 

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1    Act.
2        (7) A requirement that the Director is authorized to
3    verify with the appropriate State agencies the amounts
4    reported under paragraph (6), and after doing so shall
5    issue a certificate to the taxpayer stating that the
6    amounts have been verified.
7        (8) A requirement that the taxpayer shall provide
8    written notification to the Director not more than 30 days
9    after the taxpayer makes or receives a proposal that would
10    transfer the taxpayer's State tax liability obligations to
11    a successor taxpayer.
12        (9) A detailed description of the number of new
13    employees to be hired, and the occupation and payroll of
14    full-time jobs to be created or retained because of the
15    project.
16        (10) The minimum investment the taxpayer will make in
17    capital improvements, the time period for placing the
18    property in service, and the designated location in
19    Illinois for the investment.
20        (11) A requirement that the taxpayer shall provide
21    written notification to the Director and the Director's
22    designee not more than 30 days after the taxpayer
23    determines that the minimum job creation or retention,
24    employment payroll, or investment no longer is or will be
25    achieved or maintained as set forth in the terms and
26    conditions of the agreement. Additionally, the

 

 

10300SB1963ham002- 462 -LRB103 25648 HLH 62334 a

1    notification should outline to the Department the number
2    of layoffs, date of the layoffs, and detail taxpayer's
3    efforts to provide career and training counseling for the
4    impacted workers with industry-related certifications and
5    trainings.
6        (12) If applicable, a A provision that, if the total
7    number of new employees falls below a specified level, the
8    allowance of credit shall be suspended until the number of
9    new employees equals or exceeds the agreement amount.
10        (13) If applicable, a provision that specifies the
11    statewide baseline at the time of application for retained
12    employees. The Additionally, the agreement must have a
13    provision addressing if the total number of retained
14    employees falls below the lesser of the statewide baseline
15    or the retention requirements specified in the agreement,
16    the allowance of the credit shall be suspended until the
17    number of retained employees equals or exceeds the
18    agreement amount.
19        (14) A detailed description of the items for which the
20    costs incurred by the Taxpayer will be included in the
21    limitation on the Credit provided in Section 40.
22        (15) If the agreement is entered into before the
23    effective date of the changes made to this Section by this
24    amendatory Act of the 103rd General Assembly, a A
25    provision stating that if the taxpayer fails to meet
26    either the investment or job creation and retention

 

 

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1    requirements specified in the agreement during the entire
2    5-year period beginning on the first day of the first
3    taxable year in which the agreement is executed and ending
4    on the last day of the fifth taxable year after the
5    agreement is executed, then the agreement is automatically
6    terminated on the last day of the fifth taxable year after
7    the agreement is executed, and the taxpayer is not
8    entitled to the award of any credits for any of that 5-year
9    period. If the agreement is entered into on or after the
10    effective date of the changes made to this Section by this
11    amendatory Act of the 103rd General Assembly, a provision
12    stating that if the taxpayer fails to meet either the
13    investment or job creation and retention requirements
14    specified in the agreement during the entire 10-year
15    period beginning on the effective date of the agreement
16    and ending 10 years after the effective date of the
17    agreement, then the agreement is automatically terminated,
18    and the taxpayer is not entitled to the award of any
19    credits for any of that 10-year period.
20        (16) A provision stating that if the taxpayer ceases
21    principal operations with the intent to permanently shut
22    down the project in the State during the term of the
23    Agreement, then the entire credit amount awarded to the
24    taxpayer prior to the date the taxpayer ceases principal
25    operations shall be returned to the Department and shall
26    be reallocated to the local workforce investment area in

 

 

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1    which the project was located.
2        (17) A provision stating that the Taxpayer must
3    provide the reports outlined in Sections 50 and 55 on or
4    before April 15 each year.
5        (18) A provision requiring the taxpayer to report
6    annually its contractual obligations or otherwise with a
7    recycling facility for its operations.
8        (19) Any other performance conditions or contract
9    provisions the Department determines are necessary or
10    appropriate.
11        (20) Each taxpayer under paragraph (1) of subsection
12    (c) of Section 20 above shall maintain labor neutrality
13    toward any union organizing campaign for any employees of
14    the taxpayer assigned to work on the premises of the REV
15    Illinois Project Site. This paragraph shall not apply to
16    an electric vehicle manufacturer, electric vehicle
17    component part manufacturer, electric vehicle power supply
18    manufacturer, or renewable energy manufacturer, or any
19    joint venture including an electric vehicle manufacturer,
20    electric vehicle component part manufacturer, electric
21    vehicle power supply manufacturer, or renewable energy
22    manufacturer, who is subject to collective bargaining
23    agreement entered into prior to the taxpayer filing an
24    application pursuant to this Act.
25    (b) The Department shall post on its website the terms of
26each agreement entered into under this Act. Such information

 

 

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1shall be posted within 10 days after entering into the
2agreement and must include the following:
3        (1) the name of the taxpayer;
4        (2) the location of the project;
5        (3) the estimated value of the credit;
6        (4) the number of new employee jobs and, if
7    applicable, number of retained employee jobs at the
8    project; and
9        (5) whether or not the project is in an underserved
10    area or energy transition area.
11(Source: P.A. 102-669, eff. 11-16-21; 102-1125, eff. 2-3-23;
12revised 4-5-23.)
 
13
ARTICLE 80. CIGARETTE TAX

 
14    Section 80-5. The Cigarette Tax Act is amended by changing
15Section 2 as follows:
 
16    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
17    Sec. 2. Tax imposed; rate; collection, payment, and
18distribution; discount.
19    (a) Beginning on July 1, 2019, in place of the aggregate
20tax rate of 99 mills previously imposed by this Act, a tax is
21imposed upon any person engaged in business as a retailer of
22cigarettes at the rate of 149 mills per cigarette sold or
23otherwise disposed of in the course of such business in this

 

 

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1State.
2    (b) The payment of such taxes shall be evidenced by a stamp
3affixed to each original package of cigarettes, or an
4authorized substitute for such stamp imprinted on each
5original package of such cigarettes underneath the sealed
6transparent outside wrapper of such original package, as
7hereinafter provided. However, such taxes are not imposed upon
8any activity in such business in interstate commerce or
9otherwise, which activity may not under the Constitution and
10statutes of the United States be made the subject of taxation
11by this State.
12    Out of the 149 mills per cigarette tax imposed by
13subsection (a), until July 1, 2023, the revenues received from
144 mills shall be paid into the Common School Fund each month,
15not to exceed $9,000,000 per month. Out of the 149 mills per
16cigarette tax imposed by subsection (a), until July 1, 2023,
17all of the revenues received from 7 mills shall be paid into
18the Common School Fund each month. Out of the 149 mills per
19cigarette tax imposed by subsection (a), until July 1, 2023,
2050 mills per cigarette each month shall be paid into the
21Healthcare Provider Relief Fund.
22    Beginning on July 1, 2006 and until July 1, 2023, all of
23the moneys received by the Department of Revenue pursuant to
24this Act and the Cigarette Use Tax Act, other than the moneys
25that are dedicated to the Common School Fund and, beginning on
26the effective date of this amendatory Act of the 97th General

 

 

10300SB1963ham002- 467 -LRB103 25648 HLH 62334 a

1Assembly, other than the moneys from the additional taxes
2imposed by this amendatory Act of the 97th General Assembly
3that must be paid each month into the Healthcare Provider
4Relief Fund, and other than the moneys from the additional
5taxes imposed by this amendatory Act of the 101st General
6Assembly that must be paid each month under subsection (c),
7shall be distributed each month as follows: first, there shall
8be paid into the General Revenue Fund an amount that, when
9added to the amount paid into the Common School Fund for that
10month, equals $29,200,000; then, from the moneys remaining, if
11any amounts required to be paid into the General Revenue Fund
12in previous months remain unpaid, those amounts shall be paid
13into the General Revenue Fund; then from the moneys remaining,
14$5,000,000 per month shall be paid into the School
15Infrastructure Fund; then, if any amounts required to be paid
16into the School Infrastructure Fund in previous months remain
17unpaid, those amounts shall be paid into the School
18Infrastructure Fund; then the moneys remaining, if any, shall
19be paid into the Long-Term Care Provider Fund. Any amounts
20required to be paid into the General Revenue Fund, the School
21Infrastructure Fund, the Long-Term Care Provider Fund, the
22Common School Fund, the Capital Projects Fund, or the
23Healthcare Provider Relief Fund under this subsection that
24remain unpaid as of July 1, 2023 shall be deemed satisfied on
25that date, eliminating any deficiency accrued through that
26date.

 

 

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1    (c) Beginning on July 1, 2019 and until July 1, 2023, all
2of the moneys from the additional taxes imposed by Public Act
3101-31, except for moneys received from the tax on electronic
4cigarettes, received by the Department of Revenue pursuant to
5this Act, the Cigarette Use Tax Act, and the Tobacco Products
6Tax Act of 1995 shall be distributed each month into the
7Capital Projects Fund.
8    (c-5) Beginning on July 1, 2023, all of the moneys
9received by the Department of Revenue pursuant to (i) this
10Act, (ii) the Cigarette Use Tax Act, and (iii) the tax imposed
11on little cigars under Section 10-10 of the Tobacco Products
12Tax Act of 1995 shall be paid each month as follows:
13        (1) 7% into the Common School Fund;
14        (2) 34% into the Healthcare Provider Relief Fund;
15        (3) 34% into the Capital Projects Fund; and
16        (4) 25% into the General Revenue Fund.
17    (d) Until July 1, 2023, except Except for moneys received
18from the additional taxes imposed by Public Act 101-31, moneys
19collected from the tax imposed on little cigars under Section
2010-10 of the Tobacco Products Tax Act of 1995 shall be included
21with the moneys collected under the Cigarette Tax Act and the
22Cigarette Use Tax Act when making distributions to the Common
23School Fund, the Healthcare Provider Relief Fund, the General
24Revenue Fund, the School Infrastructure Fund, and the
25Long-Term Care Provider Fund under this Section. Any amounts,
26including moneys collected from the tax imposed on little

 

 

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1cigars under Section 10-10 of the Tobacco Products Tax Act of
21995, that are required to be paid into the General Revenue
3Fund, the School Infrastructure Fund, the Long-Term Care
4Provider Fund, the Common School Fund, the Capital Projects
5Fund, or the Healthcare Provider Relief Fund under subsection
6(b) that remain unpaid as of July 1, 2023 shall be deemed
7satisfied on that date, eliminating any deficiency accrued
8through that date. Beginning on July 1, 2023, moneys collected
9from the tax imposed on little cigars under Section 10-10 of
10the Tobacco Products Tax Act of 1995 shall be included with the
11moneys collected under the Cigarette Tax Act and the Cigarette
12Use Tax Act when making distributions under subsections (c-5).
13    (e) If the tax imposed herein terminates or has
14terminated, distributors who have bought stamps while such tax
15was in effect and who therefore paid such tax, but who can
16show, to the Department's satisfaction, that they sold the
17cigarettes to which they affixed such stamps after such tax
18had terminated and did not recover the tax or its equivalent
19from purchasers, shall be allowed by the Department to take
20credit for such absorbed tax against subsequent tax stamp
21purchases from the Department by such distributor.
22    (f) The impact of the tax levied by this Act is imposed
23upon the retailer and shall be prepaid or pre-collected by the
24distributor for the purpose of convenience and facility only,
25and the amount of the tax shall be added to the price of the
26cigarettes sold by such distributor. Collection of the tax

 

 

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1shall be evidenced by a stamp or stamps affixed to each
2original package of cigarettes, as hereinafter provided. Any
3distributor who purchases stamps may credit any excess
4payments verified by the Department against amounts
5subsequently due for the purchase of additional stamps, until
6such time as no excess payment remains.
7    (g) Each distributor shall collect the tax from the
8retailer at or before the time of the sale, shall affix the
9stamps as hereinafter required, and shall remit the tax
10collected from retailers to the Department, as hereinafter
11provided. Any distributor who fails to properly collect and
12pay the tax imposed by this Act shall be liable for the tax.
13    (h) Any distributor having cigarettes in his or her
14possession on July 1, 2019 to which tax stamps have been
15affixed, and any distributor having stamps in his or her
16possession on July 1, 2019 that have not been affixed to
17packages of cigarettes before July 1, 2019, is required to pay
18the additional tax that begins on July 1, 2019 imposed by this
19amendatory Act of the 101st General Assembly to the extent
20that the volume of affixed and unaffixed stamps in the
21distributor's possession on July 1, 2019 exceeds the average
22monthly volume of cigarette stamps purchased by the
23distributor in calendar year 2018. This payment, less the
24discount provided in subsection (l), is due when the
25distributor first makes a purchase of cigarette stamps on or
26after July 1, 2019 or on the first due date of a return under

 

 

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1this Act occurring on or after July 1, 2019, whichever occurs
2first. Those distributors may elect to pay the additional tax
3on packages of cigarettes to which stamps have been affixed
4and on any stamps in the distributor's possession that have
5not been affixed to packages of cigarettes in their possession
6on July 1, 2019 over a period not to exceed 12 months from the
7due date of the additional tax by notifying the Department in
8writing. The first payment for distributors making such
9election is due when the distributor first makes a purchase of
10cigarette tax stamps on or after July 1, 2019 or on the first
11due date of a return under this Act occurring on or after July
121, 2019, whichever occurs first. Distributors making such an
13election are not entitled to take the discount provided in
14subsection (l) on such payments.
15    (i) Any retailer having cigarettes in its possession on
16July 1, 2019 to which tax stamps have been affixed is not
17required to pay the additional tax that begins on July 1, 2019
18imposed by this amendatory Act of the 101st General Assembly
19on those stamped cigarettes.
20    (j) Distributors making sales of cigarettes to secondary
21distributors shall add the amount of the tax to the price of
22the cigarettes sold by the distributors. Secondary
23distributors making sales of cigarettes to retailers shall
24include the amount of the tax in the price of the cigarettes
25sold to retailers. The amount of tax shall not be less than the
26amount of taxes imposed by the State and all local

 

 

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1jurisdictions. The amount of local taxes shall be calculated
2based on the location of the retailer's place of business
3shown on the retailer's certificate of registration or
4sub-registration issued to the retailer pursuant to Section 2a
5of the Retailers' Occupation Tax Act. The original packages of
6cigarettes sold to the retailer shall bear all the required
7stamps, or other indicia, for the taxes included in the price
8of cigarettes.
9    (k) The amount of the Cigarette Tax imposed by this Act
10shall be separately stated, apart from the price of the goods,
11by distributors, manufacturer representatives, secondary
12distributors, and retailers, in all bills and sales invoices.
13    (l) The distributor shall be required to collect the tax
14provided under paragraph (a) hereof, and, to cover the costs
15of such collection, shall be allowed a discount during any
16year commencing July 1st and ending the following June 30th in
17accordance with the schedule set out hereinbelow, which
18discount shall be allowed at the time of purchase of the stamps
19when purchase is required by this Act, or at the time when the
20tax is remitted to the Department without the purchase of
21stamps from the Department when that method of paying the tax
22is required or authorized by this Act.
23    On and after December 1, 1985, a discount equal to 1.75% of
24the amount of the tax payable under this Act up to and
25including the first $3,000,000 paid hereunder by such
26distributor to the Department during any such year and 1.5% of

 

 

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1the amount of any additional tax paid hereunder by such
2distributor to the Department during any such year shall
3apply.
4    Two or more distributors that use a common means of
5affixing revenue tax stamps or that are owned or controlled by
6the same interests shall be treated as a single distributor
7for the purpose of computing the discount.
8    (m) The taxes herein imposed are in addition to all other
9occupation or privilege taxes imposed by the State of
10Illinois, or by any political subdivision thereof, or by any
11municipal corporation.
12(Source: P.A. 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19;
13101-604, eff. 12-13-19.)
 
14
ARTICLE 85. USE AND OCCUPATION TAXES

 
15    Section 85-5. The Use Tax Act is amended by changing
16Section 12 as follows:
 
17    (35 ILCS 105/12)  (from Ch. 120, par. 439.12)
18    Sec. 12. Applicability of Retailers' Occupation Tax Act
19and Uniform Penalty and Interest Act. All of the provisions of
20Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
212-54, 2a, 2b, 2c, 3, 4 (except that the time limitation
22provisions shall run from the date when the tax is due rather
23than from the date when gross receipts are received), 5

 

 

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1(except that the time limitation provisions on the issuance of
2notices of tax liability shall run from the date when the tax
3is due rather than from the date when gross receipts are
4received and except that in the case of a failure to file a
5return required by this Act, no notice of tax liability shall
6be issued on and after each July 1 and January 1 covering tax
7due with that return during any month or period more than 6
8years before that July 1 or January 1, respectively), 5a, 5b,
95c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 5m, 5n, 7, 8, 9, 10, 11 and
1012 of the Retailers' Occupation Tax Act and Section 3-7 of the
11Uniform Penalty and Interest Act, which are not inconsistent
12with this Act, shall apply, as far as practicable, to the
13subject matter of this Act to the same extent as if such
14provisions were included herein.
15(Source: P.A. 102-700, eff. 4-19-22.)
 
16    Section 85-10. The Service Use Tax Act is amended by
17changing Section 12 as follows:
 
18    (35 ILCS 110/12)  (from Ch. 120, par. 439.42)
19    Sec. 12. Applicability of Retailers' Occupation Tax Act
20and Uniform Penalty and Interest Act. All of the provisions of
21Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
222-54, 2a, 2b, 2c, 3 (except as to the disposition by the
23Department of the money collected under this Act), 4 (except
24that the time limitation provisions shall run from the date

 

 

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1when gross receipts are received), 5 (except that the time
2limitation provisions on the issuance of notices of tax
3liability shall run from the date when the tax is due rather
4than from the date when gross receipts are received and except
5that in the case of a failure to file a return required by this
6Act, no notice of tax liability shall be issued on and after
7July 1 and January 1 covering tax due with that return during
8any month or period more than 6 years before that July 1 or
9January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k,
105l, 5m, 5n, 6d, 7, 8, 9, 10, 11 and 12 of the Retailers'
11Occupation Tax Act which are not inconsistent with this Act,
12and Section 3-7 of the Uniform Penalty and Interest Act, shall
13apply, as far as practicable, to the subject matter of this Act
14to the same extent as if such provisions were included herein.
15(Source: P.A. 102-700, eff. 4-19-22.)
 
16    Section 85-15. The Service Occupation Tax Act is amended
17by changing Section 12 as follows:
 
18    (35 ILCS 115/12)  (from Ch. 120, par. 439.112)
19    Sec. 12. All of the provisions of Sections 1d, 1e, 1f, 1i,
201j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-54, 2a, 2b, 2c, 3
21(except as to the disposition by the Department of the tax
22collected under this Act), 4 (except that the time limitation
23provisions shall run from the date when the tax is due rather
24than from the date when gross receipts are received), 5

 

 

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1(except that the time limitation provisions on the issuance of
2notices of tax liability shall run from the date when the tax
3is due rather than from the date when gross receipts are
4received), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5m, 5n, 6d,
57, 8, 9, 10, 11 and 12 of the "Retailers' Occupation Tax Act"
6which are not inconsistent with this Act, and Section 3-7 of
7the Uniform Penalty and Interest Act shall apply, as far as
8practicable, to the subject matter of this Act to the same
9extent as if such provisions were included herein.
10(Source: P.A. 102-700, eff. 4-19-22.)
 
11
ARTICLE 90. MUNICIPAL USE AND OCCUPATION TAXES

 
12    Section 90-5. The Illinois Municipal Code is amended by
13changing Sections 8-11-1.4 and 8-11-1.5 as follows:
 
14    (65 ILCS 5/8-11-1.4)  (from Ch. 24, par. 8-11-1.4)
15    Sec. 8-11-1.4. Non-Home Rule Municipal Service Occupation
16Tax Act. The corporate authorities of a non-home rule
17municipality may impose a tax upon all persons engaged, in
18such municipality, in the business of making sales of service
19for expenditure on public infrastructure or for property tax
20relief or both as defined in Section 8-11-1.2 if approved by
21referendum as provided in Section 8-11-1.1, of the selling
22price of all tangible personal property transferred by such
23servicemen either in the form of tangible personal property or

 

 

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1in the form of real estate as an incident to a sale of service.
2If the tax is approved by referendum on or after July 14, 2010
3(the effective date of Public Act 96-1057), the corporate
4authorities of a non-home rule municipality may, until
5December 31, 2030 December 31, 2020, use the proceeds of the
6tax for expenditure on municipal operations, in addition to or
7in lieu of any expenditure on public infrastructure or for
8property tax relief. The tax imposed may not be more than 1%
9and may be imposed only in 1/4% increments. The tax may not be
10imposed on tangible personal property taxed at the 1% rate
11under the Service Occupation Tax Act (or at the 0% rate imposed
12under this amendatory Act of the 102nd General Assembly).
13Beginning December 1, 2019, this tax is not imposed on sales of
14aviation fuel unless the tax revenue is expended for
15airport-related purposes. If a municipality does not have an
16airport-related purpose to which it dedicates aviation fuel
17tax revenue, then aviation fuel is excluded from the tax. Each
18municipality must comply with the certification requirements
19for airport-related purposes under Section 2-22 of the
20Retailers' Occupation Tax Act. For purposes of this Section,
21"airport-related purposes" has the meaning ascribed in Section
226z-20.2 of the State Finance Act. This exclusion for aviation
23fuel only applies for so long as the revenue use requirements
24of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
25municipality. The tax imposed by a municipality pursuant to
26this Section and all civil penalties that may be assessed as an

 

 

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1incident thereof shall be collected and enforced by the State
2Department of Revenue. The certificate of registration which
3is issued by the Department to a retailer under the Retailers'
4Occupation Tax Act or under the Service Occupation Tax Act
5shall permit such registrant to engage in a business which is
6taxable under any ordinance or resolution enacted pursuant to
7this Section without registering separately with the
8Department under such ordinance or resolution or under this
9Section. The Department shall have full power to administer
10and enforce this Section; to collect all taxes and penalties
11due hereunder; to dispose of taxes and penalties so collected
12in the manner hereinafter provided, and to determine all
13rights to credit memoranda arising on account of the erroneous
14payment of tax or penalty hereunder. In the administration of,
15and compliance with, this Section the Department and persons
16who are subject to this Section shall have the same rights,
17remedies, privileges, immunities, powers and duties, and be
18subject to the same conditions, restrictions, limitations,
19penalties and definitions of terms, and employ the same modes
20of procedure, as are prescribed in Sections 1a-1, 2, 2a, 3
21through 3-50 (in respect to all provisions therein other than
22the State rate of tax), 4 (except that the reference to the
23State shall be to the taxing municipality), 5, 7, 8 (except
24that the jurisdiction to which the tax shall be a debt to the
25extent indicated in that Section 8 shall be the taxing
26municipality), 9 (except as to the disposition of taxes and

 

 

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1penalties collected, and except that the returned merchandise
2credit for this municipal tax may not be taken against any
3State tax, and except that the retailer's discount is not
4allowed for taxes paid on aviation fuel that are subject to the
5revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
647133), 10, 11, 12 (except the reference therein to Section 2b
7of the Retailers' Occupation Tax Act), 13 (except that any
8reference to the State shall mean the taxing municipality),
9the first paragraph of Section 15, 16, 17, 18, 19 and 20 of the
10Service Occupation Tax Act and Section 3-7 of the Uniform
11Penalty and Interest Act, as fully as if those provisions were
12set forth herein.
13    No municipality may impose a tax under this Section unless
14the municipality also imposes a tax at the same rate under
15Section 8-11-1.3 of this Code.
16    Persons subject to any tax imposed pursuant to the
17authority granted in this Section may reimburse themselves for
18their serviceman's tax liability hereunder by separately
19stating such tax as an additional charge, which charge may be
20stated in combination, in a single amount, with State tax
21which servicemen are authorized to collect under the Service
22Use Tax Act, pursuant to such bracket schedules as the
23Department may prescribe.
24    Whenever the Department determines that a refund should be
25made under this Section to a claimant instead of issuing
26credit memorandum, the Department shall notify the State

 

 

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1Comptroller, who shall cause the order to be drawn for the
2amount specified, and to the person named, in such
3notification from the Department. Such refund shall be paid by
4the State Treasurer out of the municipal retailers' occupation
5tax fund or the Local Government Aviation Trust Fund, as
6appropriate.
7    Except as otherwise provided in this paragraph, the
8Department shall forthwith pay over to the State Treasurer, ex
9officio, as trustee, all taxes and penalties collected
10hereunder for deposit into the municipal retailers' occupation
11tax fund. Taxes and penalties collected on aviation fuel sold
12on or after December 1, 2019, shall be immediately paid over by
13the Department to the State Treasurer, ex officio, as trustee,
14for deposit into the Local Government Aviation Trust Fund. The
15Department shall only pay moneys into the Local Government
16Aviation Trust Fund under this Section for so long as the
17revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
1847133 are binding on the municipality.
19    As soon as possible after the first day of each month,
20beginning January 1, 2011, upon certification of the
21Department of Revenue, the Comptroller shall order
22transferred, and the Treasurer shall transfer, to the STAR
23Bonds Revenue Fund the local sales tax increment, as defined
24in the Innovation Development and Economy Act, collected under
25this Section during the second preceding calendar month for
26sales within a STAR bond district.

 

 

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1    After the monthly transfer to the STAR Bonds Revenue Fund,
2on or before the 25th day of each calendar month, the
3Department shall prepare and certify to the Comptroller the
4disbursement of stated sums of money to named municipalities,
5the municipalities to be those from which suppliers and
6servicemen have paid taxes or penalties hereunder to the
7Department during the second preceding calendar month. The
8amount to be paid to each municipality shall be the amount (not
9including credit memoranda and not including taxes and
10penalties collected on aviation fuel sold on or after December
111, 2019) collected hereunder during the second preceding
12calendar month by the Department, and not including an amount
13equal to the amount of refunds made during the second
14preceding calendar month by the Department on behalf of such
15municipality, and not including any amounts that are
16transferred to the STAR Bonds Revenue Fund, less 1.5% of the
17remainder, which the Department shall transfer into the Tax
18Compliance and Administration Fund. The Department, at the
19time of each monthly disbursement to the municipalities, shall
20prepare and certify to the State Comptroller the amount to be
21transferred into the Tax Compliance and Administration Fund
22under this Section. Within 10 days after receipt, by the
23Comptroller, of the disbursement certification to the
24municipalities, the General Revenue Fund, and the Tax
25Compliance and Administration Fund provided for in this
26Section to be given to the Comptroller by the Department, the

 

 

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1Comptroller shall cause the orders to be drawn for the
2respective amounts in accordance with the directions contained
3in such certification.
4    The Department of Revenue shall implement Public Act
591-649 so as to collect the tax on and after January 1, 2002.
6    Nothing in this Section shall be construed to authorize a
7municipality to impose a tax upon the privilege of engaging in
8any business which under the constitution of the United States
9may not be made the subject of taxation by this State.
10    As used in this Section, "municipal" or "municipality"
11means or refers to a city, village or incorporated town,
12including an incorporated town which has superseded a civil
13township.
14    This Section shall be known and may be cited as the
15"Non-Home Rule Municipal Service Occupation Tax Act".
16(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
17101-604, eff. 12-13-19; 102-700, eff. 4-19-22.)
 
18    (65 ILCS 5/8-11-1.5)  (from Ch. 24, par. 8-11-1.5)
19    Sec. 8-11-1.5. Non-Home Rule Municipal Use Tax Act. The
20corporate authorities of a non-home rule municipality may
21impose a tax upon the privilege of using, in such
22municipality, any item of tangible personal property which is
23purchased at retail from a retailer, and which is titled or
24registered with an agency of this State's government, based on
25the selling price of such tangible personal property, as

 

 

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1"selling price" is defined in the Use Tax Act, for expenditure
2on public infrastructure or for property tax relief or both as
3defined in Section 8-11-1.2, if approved by referendum as
4provided in Section 8-11-1.1. If the tax is approved by
5referendum on or after the effective date of this amendatory
6Act of the 96th General Assembly, the corporate authorities of
7a non-home rule municipality may, until December 31, 2030
8December 31, 2020, use the proceeds of the tax for expenditure
9on municipal operations, in addition to or in lieu of any
10expenditure on public infrastructure or for property tax
11relief. The tax imposed may not be more than 1% and may be
12imposed only in 1/4% increments. Such tax shall be collected
13from persons whose Illinois address for title or registration
14purposes is given as being in such municipality. Such tax
15shall be collected by the municipality imposing such tax. A
16non-home rule municipality may not impose and collect the tax
17prior to January 1, 2002.
18    This Section shall be known and may be cited as the
19"Non-Home Rule Municipal Use Tax Act".
20(Source: P.A. 96-1057, eff. 7-14-10; 97-837, eff. 7-20-12.)
 
21
ARTICLE 95. VOLUNTEER EMERGENCY WORKERS

 
22    Section 95-5. The Illinois Administrative Procedure Act is
23amended by adding Section 5-45.36 as follows:
 

 

 

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1    (5 ILCS 100/5-45.36 new)
2    Sec. 5-45.36. Emergency rulemaking. To provide for the
3expeditious and timely implementation of Section 234 of the
4Illinois Income Tax Act, emergency rules implementing that
5Section may be adopted in accordance with Section 5-45 by the
6Department of Revenue. The adoption of emergency rules
7authorized by Section 5-45 and this Section is deemed to be
8necessary for the public interest, safety, and welfare.
9    This Section is repealed one year after the effective date
10of this amendatory Act of the 103rd General Assembly.
 
11    Section 95-10. The Illinois Income Tax Act is amended by
12adding Section 234 as follows:
 
13    (35 ILCS 5/234 new)
14    Sec. 234. Volunteer emergency workers.
15    (a) For taxable years beginning on or after January 1,
162023 and beginning prior to January 1, 2028, each individual
17who (i) serves as a volunteer emergency worker for at least 9
18months during the taxable year and (ii) does not receive
19compensation for his or her services as a volunteer emergency
20worker of more than $5,000 for the taxable year may apply to
21the Department for a credit against the taxes imposed by
22subsections (a) and (b) of Section 201. The amount of the
23credit shall be $500 per eligible individual. The aggregate
24amount of all tax credits awarded by the Department under this

 

 

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1Section in any calendar year may not exceed $5,000,000.
2Credits shall be awarded on a first-come first-served basis.
3    (b) A credit under this Section may not reduce a
4taxpayer's liability to less than zero.
5    (c) By January 24 of each year, the Office of the State
6Fire Marshal shall provide the Department of Revenue an
7electronic file with the names of volunteer emergency workers
8who (i) volunteered for at least 9 months during the
9immediately preceding calendar year, (ii) did not receive
10compensation for their services as a volunteer emergency
11worker of more than $5,000 during the immediately preceding
12calendar year, and (iii) are registered with the Office of the
13State Fire Marshal as of January 12 of the current year as
14meeting the requirements of items (i) and (ii) for the
15immediately preceding calendar year. The chief of the fire
16department, fire protection district, or fire protection
17association shall be responsible for notifying the State Fire
18Marshal of the volunteer emergency workers who met the
19requirements of items (i) and (ii) during the immediately
20preceding calendar year by January 12 of the current year.
21Notification shall be required in the format required by the
22State Fire Marshal. The chief of the fire department, fire
23protection district, or fire protection association shall be
24responsible for the verification and accuracy of their
25submission to the State Fire Marshal under this subsection.
26    (d) As used in this Section, "volunteer emergency worker"

 

 

10300SB1963ham002- 486 -LRB103 25648 HLH 62334 a

1means a person who serves as a member, other than on a
2full-time career basis, of a fire department, fire protection
3district, or fire protection association that has a Fire
4Department Identification Number issued by the Office of the
5State Fire Marshal and who does not serve as a member on a
6full-time career basis for another fire department, fire
7protection district, fire protection association, or
8governmental entity.
9    (e) The Department shall adopt rules to implement and
10administer this Section, including rules concerning
11applications for the tax credit.
 
12
ARTICLE 100. USE AND OCCUPATION TAX ASSESSMENTS

 
13    Section 100-5. The Retailers' Occupation Tax Act is
14amended by changing Section 4 as follows:
 
15    (35 ILCS 120/4)  (from Ch. 120, par. 443)
16    Sec. 4. As soon as practicable after any return is filed,
17the Department shall examine such return and shall, if
18necessary, correct such return according to its best judgment
19and information. If the correction of a return results in an
20amount of tax that is understated on the taxpayer's return due
21to a mathematical error, the Department shall notify the
22taxpayer that the amount of tax in excess of that shown on the
23return is due and has been assessed. The term "mathematical

 

 

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1error" means arithmetic errors or incorrect computations on
2the return or supporting schedules. No such notice of
3additional tax due shall be issued on and after each July 1 and
4January 1 covering gross receipts received during any month or
5period of time more than 3 years prior to such July 1 and
6January 1, respectively. Such notice of additional tax due
7shall not be considered a notice of tax liability nor shall the
8taxpayer have any right of protest. In the event that the
9return is corrected for any reason other than a mathematical
10error, any return so corrected by the Department shall be
11prima facie correct and shall be prima facie evidence of the
12correctness of the amount of tax due, as shown therein. In
13correcting transaction by transaction reporting returns
14provided for in Section 3 of this Act, it shall be permissible
15for the Department to show a single corrected return figure
16for any given period of a calendar month instead of having to
17correct each transaction by transaction return form
18individually and having to show a corrected return figure for
19each of such transaction by transaction return forms. In
20making a correction of transaction by transaction, monthly or
21quarterly returns covering a period of 6 months or more, it
22shall be permissible for the Department to show a single
23corrected return figure for any given 6-month period.
24    Instead of requiring the person filing such return to file
25an amended return, the Department may simply notify him of the
26correction or corrections it has made.

 

 

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1    Proof of such correction by the Department may be made at
2any hearing before the Department or the Illinois Independent
3Tax Tribunal or in any legal proceeding by a reproduced copy or
4computer print-out of the Department's record relating thereto
5in the name of the Department under the certificate of the
6Director of Revenue. If reproduced copies of the Department's
7records are offered as proof of such correction, the Director
8must certify that those copies are true and exact copies of
9records on file with the Department. If computer print-outs of
10the Department's records are offered as proof of such
11correction, the Director must certify that those computer
12print-outs are true and exact representations of records
13properly entered into standard electronic computing equipment,
14in the regular course of the Department's business, at or
15reasonably near the time of the occurrence of the facts
16recorded, from trustworthy and reliable information. Such
17certified reproduced copy or certified computer print-out
18shall without further proof, be admitted into evidence before
19the Department or in any legal proceeding and shall be prima
20facie proof of the correctness of the amount of tax due, as
21shown therein.
22    If the tax computed upon the basis of the gross receipts as
23fixed by the Department is greater than the amount of tax due
24under the return or returns as filed, the Department shall (or
25if the tax or any part thereof that is admitted to be due by a
26return or returns, whether filed on time or not, is not paid,

 

 

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1the Department may) issue the taxpayer a notice of tax
2liability for the amount of tax claimed by the Department to be
3due, together with a penalty in an amount determined in
4accordance with Section 3-3 of the Uniform Penalty and
5Interest Act. Provided, that if the incorrectness of any
6return or returns as determined by the Department is due to
7negligence or fraud, said penalty shall be in an amount
8determined in accordance with Section 3-5 or Section 3-6 of
9the Uniform Penalty and Interest Act, as the case may be. If
10the notice of tax liability is not based on a correction of the
11taxpayer's return or returns, but is based on the taxpayer's
12failure to pay all or a part of the tax admitted by his return
13or returns (whether filed on time or not) to be due, such
14notice of tax liability shall be prima facie correct and shall
15be prima facie evidence of the correctness of the amount of tax
16due, as shown therein.
17    Proof of such notice of tax liability by the Department
18may be made at any hearing before the Department or the
19Illinois Independent Tax Tribunal or in any legal proceeding
20by a reproduced copy of the Department's record relating
21thereto in the name of the Department under the certificate of
22the Director of Revenue. Such reproduced copy shall without
23further proof, be admitted into evidence before the Department
24or in any legal proceeding and shall be prima facie proof of
25the correctness of the amount of tax due, as shown therein.
26    If the person filing any return dies or becomes a person

 

 

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1under legal disability at any time before the Department
2issues its notice of tax liability, such notice shall be
3issued to the administrator, executor or other legal
4representative, as such, of such person.
5    Except in case of a fraudulent return, or in the case of an
6amended return (where a notice of tax liability may be issued
7on or after each January 1 and July 1 for an amended return
8filed not more than 3 years prior to such January 1 or July 1,
9respectively), no notice of tax liability shall be issued on
10and after each January 1 and July 1 covering gross receipts
11received during any month or period of time more than 3 years
12prior to such January 1 and July 1, respectively. If, before
13the expiration of the time prescribed in this Section for the
14issuance of a notice of tax liability, both the Department and
15the taxpayer have consented in writing to its issuance after
16such time, such notice may be issued at any time prior to the
17expiration of the period agreed upon. The period so agreed
18upon may be extended by subsequent agreements in writing made
19before the expiration of the period previously agreed upon.
20The foregoing limitations upon the issuance of a notice of tax
21liability shall not apply to the issuance of a notice of tax
22liability with respect to any period of time prior thereto in
23cases where the Department has, within the period of
24limitation then provided, notified the person making the
25return of a notice of tax liability even though such return,
26with which the tax that was shown by such return to be due was

 

 

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1paid when the return was filed, had not been corrected by the
2Department in the manner required herein prior to the issuance
3of such notice, but in no case shall the amount of any such
4notice of tax liability for any period otherwise barred by
5this Act exceed for such period the amount shown in the notice
6of tax liability theretofore issued.
7    If, when a tax or penalty under this Act becomes due and
8payable, the person alleged to be liable therefor is out of the
9State, the notice of tax liability may be issued within the
10times herein limited after his coming into or return to the
11State; and if, after the tax or penalty under this Act becomes
12due and payable, the person alleged to be liable therefor
13departs from and remains out of the State, the time of his or
14her absence is no part of the time limited for the issuance of
15the notice of tax liability; but the foregoing provisions
16concerning absence from the State shall not apply to any case
17in which, at the time when a tax or penalty becomes due under
18this Act, the person allegedly liable therefor is not a
19resident of this State.
20    The time limitation period on the Department's right to
21issue a notice of tax liability shall not run during any period
22of time in which the Order of any Court has the effect of
23enjoining or restraining the Department from issuing the
24notice of tax liability.
25    If such person or legal representative shall within 60
26days after such notice of tax liability file a protest to said

 

 

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1notice of tax liability with the Department and request a
2hearing thereon, the Department shall give notice to such
3person or legal representative of the time and place fixed for
4such hearing and shall hold a hearing in conformity with the
5provisions of this Act, and pursuant thereto shall issue to
6such person or legal representative a final assessment for the
7amount found to be due as a result of such hearing. On or after
8July 1, 2013, protests concerning matters that are subject to
9the jurisdiction of the Illinois Independent Tax Tribunal
10shall be filed with the Illinois Independent Tax Tribunal in
11accordance with the Illinois Independent Tax Tribunal Act of
122012, and hearings concerning those matters shall be held
13before the Tribunal in accordance with that Act. The Tribunal
14shall give notice to such person of the time and place fixed
15for such hearing and shall hold a hearing. With respect to
16protests filed with the Department prior to July 1, 2013 that
17would otherwise be subject to the jurisdiction of the Illinois
18Independent Tax Tribunal, the taxpayer may elect to be subject
19to the provisions of the Illinois Independent Tax Tribunal Act
20of 2012 at any time on or after July 1, 2013, but not later
21than 30 days after the date on which the protest was filed. If
22made, the election shall be irrevocable.
23    If a protest to the notice of tax liability and a request
24for a hearing thereon is not filed within 60 days after such
25notice, such notice of tax liability shall become final
26without the necessity of a final assessment being issued and

 

 

10300SB1963ham002- 493 -LRB103 25648 HLH 62334 a

1shall be deemed to be a final assessment.
2    Notwithstanding any other provisions of this Act, any
3amount paid as tax or in respect of tax paid under this Act,
4other than amounts paid as quarter-monthly payments, shall be
5deemed assessed upon the date of receipt of payment.
6    After the issuance of a final assessment, or a notice of
7tax liability which becomes final without the necessity of
8actually issuing a final assessment as hereinbefore provided,
9the Department, at any time before such assessment is reduced
10to judgment, may (subject to rules of the Department) grant a
11rehearing (or grant departmental review and hold an original
12hearing if no previous hearing in the matter has been held)
13upon the application of the person aggrieved. Pursuant to such
14hearing or rehearing, the Department shall issue a revised
15final assessment to such person or his legal representative
16for the amount found to be due as a result of such hearing or
17rehearing.
18(Source: P.A. 97-1129, eff. 8-28-12.)
 
19    Section 100-10. The Cigarette Machine Operators'
20Occupation Tax Act is amended by changing Section 1-45 as
21follows:
 
22    (35 ILCS 128/1-45)
23    Sec. 1-45. Examination and correction of returns.
24    (a) As soon as practicable after any return is filed, the

 

 

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1Department shall examine that return and shall correct the
2return according to its best judgment and information, which
3return so corrected by the Department shall be prima facie
4correct and shall be prima facie evidence of the correctness
5of the amount of tax due, as shown on the corrected return.
6Instead of requiring the cigarette machine operator to file an
7amended return, the Department may simply notify the cigarette
8machine operator of the correction or corrections it has made.
9Proof of the correction by the Department may be made at any
10hearing before the Department or in any legal proceeding by a
11reproduced copy of the Department's record relating thereto in
12the name of the Department under the certificate of the
13Director of Revenue. Such reproduced copy shall, without
14further proof, be admitted into evidence before the Department
15or in any legal proceeding and shall be prima facie proof of
16the correctness of the amount of tax due, as shown on the
17reproduced copy. If the Department finds that any amount of
18tax is due from the cigarette machine operator, the Department
19shall issue the cigarette machine operator a notice of tax
20liability for the amount of tax claimed by the Department to be
21due, together with a penalty in an amount determined in
22accordance with Sections 3-3, 3-5 and 3-6 of the Uniform
23Penalty and Interest Act. If, in administering the provisions
24of this Act, comparison of a return or returns of a cigarette
25machine operator with the books, records, and inventories of
26such cigarette machine operator discloses a deficiency that

 

 

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1cannot be allocated by the Department to a particular month or
2months, the Department shall issue the cigarette machine
3operator a notice of tax liability for the amount of tax
4claimed by the Department to be due for a given period, but
5without any obligation upon the Department to allocate that
6deficiency to any particular month or months, together with a
7penalty in an amount determined in accordance with Sections
83-3, 3-5, and 3-6 of the Uniform Penalty and Interest Act,
9under which circumstances the aforesaid notice of tax
10liability shall be prima facie correct and shall be prima
11facie evidence of the correctness of the amount of tax due, as
12shown therein; and proof of such correctness may be made in
13accordance with, and the admissibility of a reproduced copy of
14such notice of tax liability shall be governed by, all the
15provisions of this Act applicable to corrected returns. If any
16cigarette machine operator filing any return dies or becomes a
17person under legal disability at any time before the
18Department issues its notice of tax liability, such notice
19shall be issued to the administrator, executor, or other legal
20representative of the cigarette machine operator.
21    (b) If, within 60 days after such notice of tax liability,
22the cigarette machine operator or his or her legal
23representative files a written protest to such notice of tax
24liability and requests a hearing thereon, the Department shall
25give notice to such cigarette machine operator or legal
26representative of the time and place fixed for such hearing,

 

 

10300SB1963ham002- 496 -LRB103 25648 HLH 62334 a

1and shall hold a hearing in conformity with the provisions of
2this Act, and pursuant thereto shall issue a final assessment
3to such cigarette machine operator or legal representative for
4the amount found to be due as a result of such hearing. If a
5written protest to the notice of tax liability and a request
6for a hearing thereon is not filed within 60 days after such
7notice of tax liability, such notice of tax liability shall
8become final without the necessity of a final assessment being
9issued and shall be deemed to be a final assessment.
10    (c) In case of failure to pay the tax, or any portion
11thereof, or any penalty provided for in this Act, when due, the
12Department may bring suit to recover the amount of such tax, or
13portion thereof, or penalty; or, if the taxpayer dies or
14becomes incompetent, by filing claim therefore against his or
15her estate; provided that no such action with respect to any
16tax, or portion thereof, or penalty, shall be instituted more
17than 2 years after the cause of action accrues, except with the
18consent of the person from whom such tax or penalty is due.
19    After the expiration of the period within which the person
20assessed may file an action for judicial review under the
21Administrative Review Law without such an action being filed,
22a certified copy of the final assessment or revised final
23assessment of the Department may be filed with the circuit
24court of the county in which the taxpayer has his or her
25principal place of business, or of Sangamon County in those
26cases in which the taxpayer does not have his or her principal

 

 

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1place of business in this State. The certified copy of the
2final assessment or revised final assessment shall be
3accompanied by a certification which recites facts that are
4sufficient to show that the Department complied with the
5jurisdictional requirements of the law in arriving at its
6final assessment or its revised final assessment and that the
7taxpayer had his or her opportunity for an administrative
8hearing and for judicial review, whether he or she availed
9himself or herself of either or both of these opportunities or
10not. If the court is satisfied that the Department complied
11with the jurisdictional requirements of the law in arriving at
12its final assessment or its revised final assessment and that
13the taxpayer had his or her opportunity for an administrative
14hearing and for judicial review, whether he or she availed
15himself or herself of either or both of these opportunities or
16not, the court shall enter judgment in favor of the Department
17and against the taxpayer for the amount shown to be due by the
18final assessment or the revised final assessment, and such
19judgment shall be filed of record in the court. Such judgment
20shall bear the rate of interest set in the Uniform Penalty and
21Interest Act, but otherwise shall have the same effect as
22other judgments. The judgment may be enforced, and all laws
23applicable to sales for the enforcement of a judgment shall be
24applicable to sales made under such judgments. The Department
25shall file the certified copy of its assessment, as herein
26provided, with the circuit court within 2 years after such

 

 

10300SB1963ham002- 498 -LRB103 25648 HLH 62334 a

1assessment becomes final except when the taxpayer consents in
2writing to an extension of such filing period.
3    If, when the cause of action for a proceeding in court
4accrues against a person, he or she is out of the State, the
5action may be commenced within the times herein limited, after
6his or her coming into or returning to the State; and if, after
7the cause of action accrues, he or she departs from and remains
8out of the State, the time of his or her absence is no part of
9the time limited for the commencement of the action; but the
10foregoing provisions concerning absence from the State shall
11not apply to any case in which, at the time the cause of action
12accrues, the party against whom the cause of action accrues is
13not a resident of this State. The time within which a court
14action is to be commenced by the Department hereunder shall
15not run while the taxpayer is a debtor in any proceeding under
16the federal Bankruptcy Code nor thereafter until 90 days after
17the Department is notified by such debtor of being discharged
18in bankruptcy.
19    No claim shall be filed against the estate of any deceased
20person or a person under legal disability for any tax or
21penalty or part of either except in the manner prescribed and
22within the time limited by the Probate Act of 1975.
23    The remedies provided for herein shall not be exclusive,
24but all remedies available to creditors for the collection of
25debts shall be available for the collection of any tax or
26penalty due hereunder.

 

 

10300SB1963ham002- 499 -LRB103 25648 HLH 62334 a

1    The collection of tax or penalty by any means provided for
2herein shall not be a bar to any prosecution under this Act.
3    The certificate of the Director of the Department to the
4effect that a tax or amount required to be paid by this Act has
5not been paid, that a return has not been filed, or that
6information has not been supplied pursuant to the provisions
7of this Act, shall be prima facie evidence thereof.
8    Notwithstanding any other provisions of this Act, any
9amount paid as tax or in respect of tax paid under this Act
10shall be deemed assessed upon the date of receipt of payment.
11    All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,
125g, 5i and 5j of the Retailers' Occupation Tax Act, which are
13not inconsistent with this Act, shall apply, as far as
14practicable, to the subject matter of this Act to the same
15extent as if such provisions were included herein. References
16in such incorporated Sections of the Retailers' Occupation Tax
17Act to retailers, to sellers, or to persons engaged in the
18business of selling tangible personal property shall mean
19cigarette machine operator when used in this Act.
20(Source: P.A. 97-688, eff. 6-14-12.)
 
21    Section 100-15. The Cigarette Tax Act is amended by
22changing Section 9a as follows:
 
23    (35 ILCS 130/9a)  (from Ch. 120, par. 453.9a)
24    Sec. 9a. Examination and correction of returns.

 

 

10300SB1963ham002- 500 -LRB103 25648 HLH 62334 a

1    (1) As soon as practicable after any return is filed, the
2Department shall examine such return and shall correct such
3return according to its best judgment and information, which
4return so corrected by the Department shall be prima facie
5correct and shall be prima facie evidence of the correctness
6of the amount of tax due, as shown therein. Instead of
7requiring the distributor to file an amended return, the
8Department may simply notify the distributor of the correction
9or corrections it has made. Proof of such correction by the
10Department may be made at any hearing before the Department or
11in any legal proceeding by a reproduced copy of the
12Department's record relating thereto in the name of the
13Department under the certificate of the Director of Revenue.
14Such reproduced copy shall, without further proof, be admitted
15into evidence before the Department or in any legal proceeding
16and shall be prima facie proof of the correctness of the amount
17of tax due, as shown therein. If the Department finds that any
18amount of tax is due from the distributor, the Department
19shall issue the distributor a notice of tax liability for the
20amount of tax claimed by the Department to be due, together
21with a penalty in an amount determined in accordance with
22Sections 3-3, 3-5 and 3-6 of the Uniform Penalty and Interest
23Act. If, in administering the provisions of this Act,
24comparison of a return or returns of a distributor with the
25books, records and inventories of such distributor discloses a
26deficiency which cannot be allocated by the Department to a

 

 

10300SB1963ham002- 501 -LRB103 25648 HLH 62334 a

1particular month or months, the Department shall issue the
2distributor a notice of tax liability for the amount of tax
3claimed by the Department to be due for a given period, but
4without any obligation upon the Department to allocate such
5deficiency to any particular month or months, together with a
6penalty in an amount determined in accordance with Sections
73-3, 3-5 and 3-6 of the Uniform Penalty and Interest Act, under
8which circumstances the aforesaid notice of tax liability
9shall be prima facie correct and shall be prima facie evidence
10of the correctness of the amount of tax due, as shown therein;
11and proof of such correctness may be made in accordance with,
12and the admissibility of a reproduced copy of such notice of
13tax liability shall be governed by, all the provisions of this
14Act applicable to corrected returns. If any distributor filing
15any return dies or becomes a person under legal disability at
16any time before the Department issues its notice of tax
17liability, such notice shall be issued to the administrator,
18executor or other legal representative, as such, of such
19distributor.
20    (2) Except as otherwise provided in this Section, if,
21within 60 days after such notice of tax liability, the
22distributor or his or her legal representative files a protest
23to such notice of tax liability and requests a hearing
24thereon, the Department shall give notice to such distributor
25or legal representative of the time and place fixed for such
26hearing, and shall hold a hearing in conformity with the

 

 

10300SB1963ham002- 502 -LRB103 25648 HLH 62334 a

1provisions of this Act, and pursuant thereto shall issue a
2final assessment to such distributor or legal representative
3for the amount found to be due as a result of such hearing. On
4or after July 1, 2013, protests concerning matters that are
5subject to the jurisdiction of the Illinois Independent Tax
6Tribunal shall be filed in accordance with the Illinois
7Independent Tax Tribunal Act of 2012, and hearings concerning
8those matters shall be held before the Tribunal in accordance
9with that Act. With respect to protests filed with the
10Department prior to July 1, 2013 that would otherwise be
11subject to the jurisdiction of the Illinois Independent Tax
12Tribunal, the taxpayer may elect to be subject to the
13provisions of the Illinois Independent Tax Tribunal Act of
142012 at any time on or after July 1, 2013, but not later than
1530 days after the date on which the protest was filed. If made,
16the election shall be irrevocable. If a protest to the notice
17of tax liability and a request for a hearing thereon is not
18filed within the time allowed by law, such notice of tax
19liability shall become final without the necessity of a final
20assessment being issued and shall be deemed to be a final
21assessment.
22    (3) In case of failure to pay the tax, or any portion
23thereof, or any penalty provided for in this Act, when due, the
24Department may bring suit to recover the amount of such tax, or
25portion thereof, or penalty; or, if the taxpayer dies or
26becomes incompetent, by filing claim therefor against his

 

 

10300SB1963ham002- 503 -LRB103 25648 HLH 62334 a

1estate; provided that no such action with respect to any tax,
2or portion thereof, or penalty, shall be instituted more than
32 years after the cause of action accrues, except with the
4consent of the person from whom such tax or penalty is due.
5    After the expiration of the period within which the person
6assessed may file an action for judicial review under the
7Administrative Review Law without such an action being filed,
8a certified copy of the final assessment or revised final
9assessment of the Department may be filed with the Circuit
10Court of the county in which the taxpayer has his or her
11principal place of business, or of Sangamon County in those
12cases in which the taxpayer does not have his principal place
13of business in this State. The certified copy of the final
14assessment or revised final assessment shall be accompanied by
15a certification which recites facts that are sufficient to
16show that the Department complied with the jurisdictional
17requirements of the Law in arriving at its final assessment or
18its revised final assessment and that the taxpayer had his or
19her opportunity for an administrative hearing and for judicial
20review, whether he availed himself or herself of either or
21both of these opportunities or not. If the court is satisfied
22that the Department complied with the jurisdictional
23requirements of the Law in arriving at its final assessment or
24its revised final assessment and that the taxpayer had his or
25her opportunity for an administrative hearing and for judicial
26review, whether he or she availed himself or herself of either

 

 

10300SB1963ham002- 504 -LRB103 25648 HLH 62334 a

1or both of these opportunities or not, the court shall enter
2judgment in favor of the Department and against the taxpayer
3for the amount shown to be due by the final assessment or the
4revised final assessment, and such judgment shall be filed of
5record in the court. Such judgment shall bear the rate of
6interest set in the Uniform Penalty and Interest Act, but
7otherwise shall have the same effect as other judgments. The
8judgment may be enforced, and all laws applicable to sales for
9the enforcement of a judgment shall be applicable to sales
10made under such judgments. The Department shall file the
11certified copy of its assessment, as herein provided, with the
12Circuit Court within 2 years after such assessment becomes
13final except when the taxpayer consents in writing to an
14extension of such filing period.
15    If, when the cause of action for a proceeding in court
16accrues against a person, he or she is out of the State, the
17action may be commenced within the times herein limited, after
18his or her coming into or return to the State; and if, after
19the cause of action accrues, he or she departs from and remains
20out of the State, the time of his or her absence is no part of
21the time limited for the commencement of the action; but the
22foregoing provisions concerning absence from the State shall
23not apply to any case in which, at the time the cause of action
24accrues, the party against whom the cause of action accrues is
25not a resident of this State. The time within which a court
26action is to be commenced by the Department hereunder shall

 

 

10300SB1963ham002- 505 -LRB103 25648 HLH 62334 a

1not run while the taxpayer is a debtor in any proceeding under
2the Federal Bankruptcy Act nor thereafter until 90 days after
3the Department is notified by such debtor of being discharged
4in bankruptcy.
5    No claim shall be filed against the estate of any deceased
6person or a person under legal disability for any tax or
7penalty or part of either except in the manner prescribed and
8within the time limited by the Probate Act of 1975, as amended.
9    The remedies provided for herein shall not be exclusive,
10but all remedies available to creditors for the collection of
11debts shall be available for the collection of any tax or
12penalty due hereunder.
13    The collection of tax or penalty by any means provided for
14herein shall not be a bar to any prosecution under this Act.
15    The certificate of the Director of the Department to the
16effect that a tax or amount required to be paid by this Act has
17not been paid, that a return has not been filed, or that
18information has not been supplied pursuant to the provisions
19of this Act, shall be prima facie evidence thereof.
20    Notwithstanding any other provisions of this Act, any
21amount paid as tax or in respect of tax paid under this Act
22shall be deemed assessed upon the date of receipt of payment.
23    All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,
245g, 5i and 5j of the Retailers' Occupation Tax Act, which are
25not inconsistent with this Act, and Section 3-7 of the Uniform
26Penalty and Interest Act shall apply, as far as practicable,

 

 

10300SB1963ham002- 506 -LRB103 25648 HLH 62334 a

1to the subject matter of this Act to the same extent as if such
2provisions were included herein. References in such
3incorporated Sections of the "Retailers' Occupation Tax Act"
4to retailers, to sellers or to persons engaged in the business
5of selling tangible personal property shall mean distributors
6when used in this Act.
7(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)
 
8    Section 100-20. The Cigarette Use Tax Act is amended by
9changing Section 13 as follows:
 
10    (35 ILCS 135/13)  (from Ch. 120, par. 453.43)
11    Sec. 13. Examination and correction of return. As soon as
12practicable after any return is filed, the Department shall
13examine such return and shall correct such return according to
14its best judgment and information, which return so corrected
15by the Department shall be prima facie correct and shall be
16prima facie evidence of the correctness of the amount of tax
17due, as shown therein. Proof of such correction by the
18Department may be made at any hearing before the Department or
19in any legal proceeding by a reproduced copy of the
20Department's record relating thereto in the name of the
21Department under the certificate of the Director of Revenue.
22Such reproduced copy shall, without further proof, be admitted
23into evidence before the Department or in any legal proceeding
24and shall be prima facie proof of the correctness of the amount

 

 

10300SB1963ham002- 507 -LRB103 25648 HLH 62334 a

1of tax due, as shown therein. If the tax as fixed by the
2Department is greater than the amount of the tax due under the
3return as filed, the Department shall issue the person filing
4such return a notice of tax liability for the amount of tax
5claimed by the Department to be due, together with a penalty in
6an amount determined in accordance with Sections 3-3, 3-5 and
73-6 of the Uniform Penalty and Interest Act. If, in
8administering the provisions of this Act, comparison of a
9return or returns of a distributor with the books, records and
10inventories of such distributor discloses a deficiency which
11cannot be allocated by the Department to a particular month or
12months, the Department shall issue the distributor a notice of
13tax liability for the amount of tax claimed by the Department
14to be due for a given period, but without any obligation upon
15the Department to allocate such deficiency to any particular
16month or months, together with a penalty in an amount
17determined in accordance with Sections 3-3, 3-5 and 3-6 of the
18Uniform Penalty and Interest Act, under which circumstances
19the aforesaid notice of tax liability shall be prima facie
20correct and shall be prima facie evidence of the correctness
21of the amount of tax due, as shown therein; and proof of such
22correctness may be made in accordance with, and the
23admissibility of a reproduced copy of such notice of tax
24liability shall be governed by, all the provisions of this Act
25applicable to corrected returns.
26    If any person filing any return dies or becomes a person

 

 

10300SB1963ham002- 508 -LRB103 25648 HLH 62334 a

1under legal disability at any time before the Department
2issues its notice of tax liability, such notice shall be
3issued to the administrator, executor or other legal
4representative, as such, of such person.
5    Except as otherwise provided in this Section, if within 60
6days after such notice of tax liability, the person to whom
7such notice is issued or his legal representative files a
8protest to such notice of tax liability and requests a hearing
9thereon, the Department shall give notice to such person or
10legal representative of the time and place fixed for such
11hearing, and shall hold a hearing in conformity with the
12provisions of this Act, and pursuant thereto shall issue a
13final assessment to such person or legal representative for
14the amount found to be due as a result of such hearing.
15Effective July 1, 2013, protests concerning matters that are
16subject to the jurisdiction of the Illinois Independent Tax
17Tribunal shall be filed with the Tribunal in accordance with
18the Illinois Independent Tax Tribunal Act of 2012, and
19hearings concerning those matters shall be held before the
20Tribunal in accordance with that Act. With respect to protests
21filed with the Department prior to July 1, 2013 that would
22otherwise be subject to the jurisdiction of the Illinois
23Independent Tax Tribunal, the person filing the protest may
24elect to be subject to the provisions of the Illinois
25Independent Tax Tribunal Act of 2012 at any time on or after
26July 1, 2013, but not later than 30 days after the date on

 

 

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1which the protest was filed. If made, the election shall be
2irrevocable. If a protest to the notice of tax liability and a
3request for a hearing thereon is not filed within the time
4allowed by law, such notice of tax liability shall become
5final without the necessity of a final assessment being issued
6and shall be deemed to be a final assessment.
7    Notwithstanding any other provisions of this Act, any
8amount paid as tax or in respect of tax paid under this Act
9shall be deemed assessed upon the date of receipt of payment.
10(Source: P.A. 97-1129, eff. 8-28-12.)
 
11    Section 100-25. The Liquor Control Act of 1934 is amended
12by changing Section 8-5 as follows:
 
13    (235 ILCS 5/8-5)  (from Ch. 43, par. 163a)
14    Sec. 8-5. As soon as practicable after any return is
15filed, the Department shall examine such return or amended
16return and shall correct such return according to its best
17judgment and information, which return so corrected by the
18Department shall be prima facie correct and shall be prima
19facie evidence of the correctness of the amount of tax due, as
20shown therein. Instead of requiring the licensee to file an
21amended return, the Department may simply notify the licensee
22of the correction or corrections it has made. Proof of such
23correction by the Department, or of the determination of the
24amount of tax due as provided in Sections 8-4 and 8-10, may be

 

 

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1made at any hearing before the Department or in any legal
2proceeding by a reproduced copy of the Department's record
3relating thereto in the name of the Department under the
4certificate of the Director of Revenue. Such reproduced copy
5shall, without further proof, be admitted into evidence before
6the Department or in any legal proceeding and shall be prima
7facie proof of the correctness of the amount of tax due, as
8shown therein. If the return so corrected by the Department
9discloses the sale or use, by a licensed manufacturer or
10importing distributor, of alcoholic liquors as to which the
11tax provided for in this Article should have been paid, but has
12not been paid, in excess of the alcoholic liquors reported as
13being taxable by the licensee, and as to which the proper tax
14was paid the Department shall notify the licensee that it
15shall issue the taxpayer a notice of tax liability for the
16amount of tax claimed by the Department to be due, together
17with penalties at the rates prescribed by Sections 3-3, 3-5
18and 3-6 of the Uniform Penalty and Interest Act, which amount
19of tax shall be equivalent to the amount of tax which, at the
20prescribed rate per gallon, should have been paid with respect
21to the alcoholic liquors disposed of in excess of those
22reported as being taxable. No earlier than 90 days after the
23due date of the return, the Department may compare filed
24returns, or any amendments thereto, against reports of sales
25of alcoholic liquor submitted to the Department by other
26manufacturers and distributors. If a return or amended return

 

 

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1is corrected by the Department because the return or amended
2return failed to disclose the purchase of alcoholic liquor
3from manufacturers or distributors on which the tax provided
4for in this Article should have been paid, but has not been
5paid, the Department shall issue the taxpayer a notice of tax
6liability for the amount of tax claimed by the Department to be
7due, together with penalties at the rates prescribed by
8Sections 3-3, 3-5, and 3-6 of the Uniform Penalty and Interest
9Act. In a case where no return has been filed, the Department
10shall determine the amount of tax due according to its best
11judgment and information and shall issue the taxpayer a notice
12of tax liability for the amount of tax claimed by the
13Department to be due as herein provided together with
14penalties at the rates prescribed by Sections 3-3, 3-5 and 3-6
15of the Uniform Penalty and Interest Act. If, in administering
16the provisions of this Act, a comparison of a licensee's
17return or returns with the books, records and physical
18inventories of such licensee discloses a deficiency which
19cannot be allocated by the Department to a particular month or
20months, the Department shall issue the taxpayer a notice of
21tax liability for the amount of tax claimed by the Department
22to be due for a given period, but without any obligation upon
23the Department to allocate such deficiency to any particular
24month or months, together with penalties at the rates
25prescribed by Sections 3-3, 3-5 and 3-6 of the Uniform Penalty
26and Interest Act, which amount of tax shall be equivalent to

 

 

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1the amount of tax which, at the prescribed rate per gallon,
2should have been paid with respect to the alcoholic liquors
3disposed of in excess of those reported being taxable, with
4the tax thereon having been paid under which circumstances the
5aforesaid notice of tax liability shall be prima facie correct
6and shall be prima facie evidence of the correctness of the
7amount of tax due as shown therein; and proof of such
8correctness may be made in accordance with, and the
9admissibility of a reproduced copy of such notice of the
10Department's notice of tax liability shall be governed by, all
11the provisions of this Act applicable to corrected returns.
12    If the licensee dies or becomes a person under legal
13disability at any time before the Department issues its notice
14of tax liability, such notice shall be issued to the
15administrator, executor or other legal representative, as
16such, of the deceased or licensee who is under legal
17disability.
18    If such licensee or legal representative, within 60 days
19after such notice of tax liability, files a protest to such
20notice of tax liability and requests a hearing thereon, the
21Department shall give at least 7 days' notice to such licensee
22or legal representative, as the case may be, of the time and
23place fixed for such hearing and shall hold a hearing in
24conformity with the provisions of this Act, and pursuant
25thereto shall issue a final assessment to such licensee or
26legal representative for the amount found to be due as a result

 

 

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1of such hearing.
2    If a protest to the notice of tax liability and a request
3for a hearing thereon is not filed within 60 days after such
4notice of tax liability, such notice of tax liability shall
5become final without the necessity of a final assessment being
6issued and shall be deemed to be a final assessment.
7    Notwithstanding any other provisions of this Act, any
8amount paid as tax or in respect of tax paid under this Act
9shall be deemed assessed upon the date of receipt of payment.
10    In case of failure to pay the tax, or any portion thereof,
11or any penalty provided for herein, when due, the Department
12may recover the amount of such tax, or portion thereof, or
13penalty in a civil action; or if the licensee dies or becomes a
14person under legal disability, by filing a claim therefor
15against his or her estate; provided that no such claim shall be
16filed against the estate of any deceased or of the licensee who
17is under legal disability for any tax or penalty or portion
18thereof except in the manner prescribed and within the time
19limited by the Probate Act of 1975, as amended.
20    The collection of any such tax and penalty, or either, by
21any means provided for herein, shall not be a bar to any
22prosecution under this Act.
23    In addition to any other penalty provided for in this
24Article, all provisions of the Uniform Penalty and Interest
25Act that are not inconsistent with this Act apply.
26(Source: P.A. 100-1050, eff. 7-1-19; 101-16, eff. 6-14-19.)
 

 

 

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1
ARTICLE 110. PARTNERSHIPS

 
2    Section 5. The Illinois Income Tax Act is amended by
3changing Section 201 as follows:
 
4    (35 ILCS 5/201)
5    Sec. 201. Tax imposed.
6    (a) In general. A tax measured by net income is hereby
7imposed on every individual, corporation, trust and estate for
8each taxable year ending after July 31, 1969 on the privilege
9of earning or receiving income in or as a resident of this
10State. Such tax shall be in addition to all other occupation or
11privilege taxes imposed by this State or by any municipal
12corporation or political subdivision thereof.
13    (b) Rates. The tax imposed by subsection (a) of this
14Section shall be determined as follows, except as adjusted by
15subsection (d-1):
16        (1) In the case of an individual, trust or estate, for
17    taxable years ending prior to July 1, 1989, an amount
18    equal to 2 1/2% of the taxpayer's net income for the
19    taxable year.
20        (2) In the case of an individual, trust or estate, for
21    taxable years beginning prior to July 1, 1989 and ending
22    after June 30, 1989, an amount equal to the sum of (i) 2
23    1/2% of the taxpayer's net income for the period prior to

 

 

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1    July 1, 1989, as calculated under Section 202.3, and (ii)
2    3% of the taxpayer's net income for the period after June
3    30, 1989, as calculated under Section 202.3.
4        (3) In the case of an individual, trust or estate, for
5    taxable years beginning after June 30, 1989, and ending
6    prior to January 1, 2011, an amount equal to 3% of the
7    taxpayer's net income for the taxable year.
8        (4) In the case of an individual, trust, or estate,
9    for taxable years beginning prior to January 1, 2011, and
10    ending after December 31, 2010, an amount equal to the sum
11    of (i) 3% of the taxpayer's net income for the period prior
12    to January 1, 2011, as calculated under Section 202.5, and
13    (ii) 5% of the taxpayer's net income for the period after
14    December 31, 2010, as calculated under Section 202.5.
15        (5) In the case of an individual, trust, or estate,
16    for taxable years beginning on or after January 1, 2011,
17    and ending prior to January 1, 2015, an amount equal to 5%
18    of the taxpayer's net income for the taxable year.
19        (5.1) In the case of an individual, trust, or estate,
20    for taxable years beginning prior to January 1, 2015, and
21    ending after December 31, 2014, an amount equal to the sum
22    of (i) 5% of the taxpayer's net income for the period prior
23    to January 1, 2015, as calculated under Section 202.5, and
24    (ii) 3.75% of the taxpayer's net income for the period
25    after December 31, 2014, as calculated under Section
26    202.5.

 

 

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1        (5.2) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after January 1, 2015,
3    and ending prior to July 1, 2017, an amount equal to 3.75%
4    of the taxpayer's net income for the taxable year.
5        (5.3) In the case of an individual, trust, or estate,
6    for taxable years beginning prior to July 1, 2017, and
7    ending after June 30, 2017, an amount equal to the sum of
8    (i) 3.75% of the taxpayer's net income for the period
9    prior to July 1, 2017, as calculated under Section 202.5,
10    and (ii) 4.95% of the taxpayer's net income for the period
11    after June 30, 2017, as calculated under Section 202.5.
12        (5.4) In the case of an individual, trust, or estate,
13    for taxable years beginning on or after July 1, 2017, an
14    amount equal to 4.95% of the taxpayer's net income for the
15    taxable year.
16        (6) In the case of a corporation, for taxable years
17    ending prior to July 1, 1989, an amount equal to 4% of the
18    taxpayer's net income for the taxable year.
19        (7) In the case of a corporation, for taxable years
20    beginning prior to July 1, 1989 and ending after June 30,
21    1989, an amount equal to the sum of (i) 4% of the
22    taxpayer's net income for the period prior to July 1,
23    1989, as calculated under Section 202.3, and (ii) 4.8% of
24    the taxpayer's net income for the period after June 30,
25    1989, as calculated under Section 202.3.
26        (8) In the case of a corporation, for taxable years

 

 

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1    beginning after June 30, 1989, and ending prior to January
2    1, 2011, an amount equal to 4.8% of the taxpayer's net
3    income for the taxable year.
4        (9) In the case of a corporation, for taxable years
5    beginning prior to January 1, 2011, and ending after
6    December 31, 2010, an amount equal to the sum of (i) 4.8%
7    of the taxpayer's net income for the period prior to
8    January 1, 2011, as calculated under Section 202.5, and
9    (ii) 7% of the taxpayer's net income for the period after
10    December 31, 2010, as calculated under Section 202.5.
11        (10) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2011, and ending prior to
13    January 1, 2015, an amount equal to 7% of the taxpayer's
14    net income for the taxable year.
15        (11) In the case of a corporation, for taxable years
16    beginning prior to January 1, 2015, and ending after
17    December 31, 2014, an amount equal to the sum of (i) 7% of
18    the taxpayer's net income for the period prior to January
19    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
20    of the taxpayer's net income for the period after December
21    31, 2014, as calculated under Section 202.5.
22        (12) In the case of a corporation, for taxable years
23    beginning on or after January 1, 2015, and ending prior to
24    July 1, 2017, an amount equal to 5.25% of the taxpayer's
25    net income for the taxable year.
26        (13) In the case of a corporation, for taxable years

 

 

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1    beginning prior to July 1, 2017, and ending after June 30,
2    2017, an amount equal to the sum of (i) 5.25% of the
3    taxpayer's net income for the period prior to July 1,
4    2017, as calculated under Section 202.5, and (ii) 7% of
5    the taxpayer's net income for the period after June 30,
6    2017, as calculated under Section 202.5.
7        (14) In the case of a corporation, for taxable years
8    beginning on or after July 1, 2017, an amount equal to 7%
9    of the taxpayer's net income for the taxable year.
10    The rates under this subsection (b) are subject to the
11provisions of Section 201.5.
12    (b-5) Surcharge; sale or exchange of assets, properties,
13and intangibles of organization gaming licensees. For each of
14taxable years 2019 through 2027, a surcharge is imposed on all
15taxpayers on income arising from the sale or exchange of
16capital assets, depreciable business property, real property
17used in the trade or business, and Section 197 intangibles (i)
18of an organization licensee under the Illinois Horse Racing
19Act of 1975 and (ii) of an organization gaming licensee under
20the Illinois Gambling Act. The amount of the surcharge is
21equal to the amount of federal income tax liability for the
22taxable year attributable to those sales and exchanges. The
23surcharge imposed shall not apply if:
24        (1) the organization gaming license, organization
25    license, or racetrack property is transferred as a result
26    of any of the following:

 

 

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1            (A) bankruptcy, a receivership, or a debt
2        adjustment initiated by or against the initial
3        licensee or the substantial owners of the initial
4        licensee;
5            (B) cancellation, revocation, or termination of
6        any such license by the Illinois Gaming Board or the
7        Illinois Racing Board;
8            (C) a determination by the Illinois Gaming Board
9        that transfer of the license is in the best interests
10        of Illinois gaming;
11            (D) the death of an owner of the equity interest in
12        a licensee;
13            (E) the acquisition of a controlling interest in
14        the stock or substantially all of the assets of a
15        publicly traded company;
16            (F) a transfer by a parent company to a wholly
17        owned subsidiary; or
18            (G) the transfer or sale to or by one person to
19        another person where both persons were initial owners
20        of the license when the license was issued; or
21        (2) the controlling interest in the organization
22    gaming license, organization license, or racetrack
23    property is transferred in a transaction to lineal
24    descendants in which no gain or loss is recognized or as a
25    result of a transaction in accordance with Section 351 of
26    the Internal Revenue Code in which no gain or loss is

 

 

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1    recognized; or
2        (3) live horse racing was not conducted in 2010 at a
3    racetrack located within 3 miles of the Mississippi River
4    under a license issued pursuant to the Illinois Horse
5    Racing Act of 1975.
6    The transfer of an organization gaming license,
7organization license, or racetrack property by a person other
8than the initial licensee to receive the organization gaming
9license is not subject to a surcharge. The Department shall
10adopt rules necessary to implement and administer this
11subsection.
12    (c) Personal Property Tax Replacement Income Tax.
13Beginning on July 1, 1979 and thereafter, in addition to such
14income tax, there is also hereby imposed the Personal Property
15Tax Replacement Income Tax measured by net income on every
16corporation (including Subchapter S corporations), partnership
17and trust, for each taxable year ending after June 30, 1979.
18Such taxes are imposed on the privilege of earning or
19receiving income in or as a resident of this State. The
20Personal Property Tax Replacement Income Tax shall be in
21addition to the income tax imposed by subsections (a) and (b)
22of this Section and in addition to all other occupation or
23privilege taxes imposed by this State or by any municipal
24corporation or political subdivision thereof.
25    (d) Additional Personal Property Tax Replacement Income
26Tax Rates. The personal property tax replacement income tax

 

 

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1imposed by this subsection and subsection (c) of this Section
2in the case of a corporation, other than a Subchapter S
3corporation and except as adjusted by subsection (d-1), shall
4be an additional amount equal to 2.85% of such taxpayer's net
5income for the taxable year, except that beginning on January
61, 1981, and thereafter, the rate of 2.85% specified in this
7subsection shall be reduced to 2.5%, and in the case of a
8partnership, trust or a Subchapter S corporation shall be an
9additional amount equal to 1.5% of such taxpayer's net income
10for the taxable year.
11    (d-1) Rate reduction for certain foreign insurers. In the
12case of a foreign insurer, as defined by Section 35A-5 of the
13Illinois Insurance Code, whose state or country of domicile
14imposes on insurers domiciled in Illinois a retaliatory tax
15(excluding any insurer whose premiums from reinsurance assumed
16are 50% or more of its total insurance premiums as determined
17under paragraph (2) of subsection (b) of Section 304, except
18that for purposes of this determination premiums from
19reinsurance do not include premiums from inter-affiliate
20reinsurance arrangements), beginning with taxable years ending
21on or after December 31, 1999, the sum of the rates of tax
22imposed by subsections (b) and (d) shall be reduced (but not
23increased) to the rate at which the total amount of tax imposed
24under this Act, net of all credits allowed under this Act,
25shall equal (i) the total amount of tax that would be imposed
26on the foreign insurer's net income allocable to Illinois for

 

 

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1the taxable year by such foreign insurer's state or country of
2domicile if that net income were subject to all income taxes
3and taxes measured by net income imposed by such foreign
4insurer's state or country of domicile, net of all credits
5allowed or (ii) a rate of zero if no such tax is imposed on
6such income by the foreign insurer's state of domicile. For
7the purposes of this subsection (d-1), an inter-affiliate
8includes a mutual insurer under common management.
9        (1) For the purposes of subsection (d-1), in no event
10    shall the sum of the rates of tax imposed by subsections
11    (b) and (d) be reduced below the rate at which the sum of:
12            (A) the total amount of tax imposed on such
13        foreign insurer under this Act for a taxable year, net
14        of all credits allowed under this Act, plus
15            (B) the privilege tax imposed by Section 409 of
16        the Illinois Insurance Code, the fire insurance
17        company tax imposed by Section 12 of the Fire
18        Investigation Act, and the fire department taxes
19        imposed under Section 11-10-1 of the Illinois
20        Municipal Code,
21    equals 1.25% for taxable years ending prior to December
22    31, 2003, or 1.75% for taxable years ending on or after
23    December 31, 2003, of the net taxable premiums written for
24    the taxable year, as described by subsection (1) of
25    Section 409 of the Illinois Insurance Code. This paragraph
26    will in no event increase the rates imposed under

 

 

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1    subsections (b) and (d).
2        (2) Any reduction in the rates of tax imposed by this
3    subsection shall be applied first against the rates
4    imposed by subsection (b) and only after the tax imposed
5    by subsection (a) net of all credits allowed under this
6    Section other than the credit allowed under subsection (i)
7    has been reduced to zero, against the rates imposed by
8    subsection (d).
9    This subsection (d-1) is exempt from the provisions of
10Section 250.
11    (e) Investment credit. A taxpayer shall be allowed a
12credit against the Personal Property Tax Replacement Income
13Tax for investment in qualified property.
14        (1) A taxpayer shall be allowed a credit equal to .5%
15    of the basis of qualified property placed in service
16    during the taxable year, provided such property is placed
17    in service on or after July 1, 1984. There shall be allowed
18    an additional credit equal to .5% of the basis of
19    qualified property placed in service during the taxable
20    year, provided such property is placed in service on or
21    after July 1, 1986, and the taxpayer's base employment
22    within Illinois has increased by 1% or more over the
23    preceding year as determined by the taxpayer's employment
24    records filed with the Illinois Department of Employment
25    Security. Taxpayers who are new to Illinois shall be
26    deemed to have met the 1% growth in base employment for the

 

 

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1    first year in which they file employment records with the
2    Illinois Department of Employment Security. The provisions
3    added to this Section by Public Act 85-1200 (and restored
4    by Public Act 87-895) shall be construed as declaratory of
5    existing law and not as a new enactment. If, in any year,
6    the increase in base employment within Illinois over the
7    preceding year is less than 1%, the additional credit
8    shall be limited to that percentage times a fraction, the
9    numerator of which is .5% and the denominator of which is
10    1%, but shall not exceed .5%. The investment credit shall
11    not be allowed to the extent that it would reduce a
12    taxpayer's liability in any tax year below zero, nor may
13    any credit for qualified property be allowed for any year
14    other than the year in which the property was placed in
15    service in Illinois. For tax years ending on or after
16    December 31, 1987, and on or before December 31, 1988, the
17    credit shall be allowed for the tax year in which the
18    property is placed in service, or, if the amount of the
19    credit exceeds the tax liability for that year, whether it
20    exceeds the original liability or the liability as later
21    amended, such excess may be carried forward and applied to
22    the tax liability of the 5 taxable years following the
23    excess credit years if the taxpayer (i) makes investments
24    which cause the creation of a minimum of 2,000 full-time
25    equivalent jobs in Illinois, (ii) is located in an
26    enterprise zone established pursuant to the Illinois

 

 

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1    Enterprise Zone Act and (iii) is certified by the
2    Department of Commerce and Community Affairs (now
3    Department of Commerce and Economic Opportunity) as
4    complying with the requirements specified in clause (i)
5    and (ii) by July 1, 1986. The Department of Commerce and
6    Community Affairs (now Department of Commerce and Economic
7    Opportunity) shall notify the Department of Revenue of all
8    such certifications immediately. For tax years ending
9    after December 31, 1988, the credit shall be allowed for
10    the tax year in which the property is placed in service,
11    or, if the amount of the credit exceeds the tax liability
12    for that year, whether it exceeds the original liability
13    or the liability as later amended, such excess may be
14    carried forward and applied to the tax liability of the 5
15    taxable years following the excess credit years. The
16    credit shall be applied to the earliest year for which
17    there is a liability. If there is credit from more than one
18    tax year that is available to offset a liability, earlier
19    credit shall be applied first.
20        (2) The term "qualified property" means property
21    which:
22            (A) is tangible, whether new or used, including
23        buildings and structural components of buildings and
24        signs that are real property, but not including land
25        or improvements to real property that are not a
26        structural component of a building such as

 

 

10300SB1963ham002- 526 -LRB103 25648 HLH 62334 a

1        landscaping, sewer lines, local access roads, fencing,
2        parking lots, and other appurtenances;
3            (B) is depreciable pursuant to Section 167 of the
4        Internal Revenue Code, except that "3-year property"
5        as defined in Section 168(c)(2)(A) of that Code is not
6        eligible for the credit provided by this subsection
7        (e);
8            (C) is acquired by purchase as defined in Section
9        179(d) of the Internal Revenue Code;
10            (D) is used in Illinois by a taxpayer who is
11        primarily engaged in manufacturing, or in mining coal
12        or fluorite, or in retailing, or was placed in service
13        on or after July 1, 2006 in a River Edge Redevelopment
14        Zone established pursuant to the River Edge
15        Redevelopment Zone Act; and
16            (E) has not previously been used in Illinois in
17        such a manner and by such a person as would qualify for
18        the credit provided by this subsection (e) or
19        subsection (f).
20        (3) For purposes of this subsection (e),
21    "manufacturing" means the material staging and production
22    of tangible personal property by procedures commonly
23    regarded as manufacturing, processing, fabrication, or
24    assembling which changes some existing material into new
25    shapes, new qualities, or new combinations. For purposes
26    of this subsection (e) the term "mining" shall have the

 

 

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1    same meaning as the term "mining" in Section 613(c) of the
2    Internal Revenue Code. For purposes of this subsection
3    (e), the term "retailing" means the sale of tangible
4    personal property for use or consumption and not for
5    resale, or services rendered in conjunction with the sale
6    of tangible personal property for use or consumption and
7    not for resale. For purposes of this subsection (e),
8    "tangible personal property" has the same meaning as when
9    that term is used in the Retailers' Occupation Tax Act,
10    and, for taxable years ending after December 31, 2008,
11    does not include the generation, transmission, or
12    distribution of electricity.
13        (4) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (5) If the basis of the property for federal income
17    tax depreciation purposes is increased after it has been
18    placed in service in Illinois by the taxpayer, the amount
19    of such increase shall be deemed property placed in
20    service on the date of such increase in basis.
21        (6) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (7) If during any taxable year, any property ceases to
24    be qualified property in the hands of the taxpayer within
25    48 months after being placed in service, or the situs of
26    any qualified property is moved outside Illinois within 48

 

 

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1    months after being placed in service, the Personal
2    Property Tax Replacement Income Tax for such taxable year
3    shall be increased. Such increase shall be determined by
4    (i) recomputing the investment credit which would have
5    been allowed for the year in which credit for such
6    property was originally allowed by eliminating such
7    property from such computation and, (ii) subtracting such
8    recomputed credit from the amount of credit previously
9    allowed. For the purposes of this paragraph (7), a
10    reduction of the basis of qualified property resulting
11    from a redetermination of the purchase price shall be
12    deemed a disposition of qualified property to the extent
13    of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs
17    incurred pursuant to a binding contract entered into on or
18    before December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners
21    the credits to which the partnership is entitled under
22    this subsection (e) for the taxable year. A partner may
23    use the credit allocated to him or her under this
24    paragraph only against the tax imposed in subsections (c)
25    and (d) of this Section. If the partnership makes that
26    election, those credits shall be allocated among the

 

 

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1    partners in the partnership in accordance with the rules
2    set forth in Section 704(b) of the Internal Revenue Code,
3    and the rules promulgated under that Section, and the
4    allocated amount of the credits shall be allowed to the
5    partners for that taxable year. The partnership shall make
6    this election on its Personal Property Tax Replacement
7    Income Tax return for that taxable year. The election to
8    pass through the credits shall be irrevocable.
9        For taxable years ending on or after December 31,
10    2000, a partner that qualifies its partnership for a
11    subtraction under subparagraph (I) of paragraph (2) of
12    subsection (d) of Section 203 or a shareholder that
13    qualifies a Subchapter S corporation for a subtraction
14    under subparagraph (S) of paragraph (2) of subsection (b)
15    of Section 203 shall be allowed a credit under this
16    subsection (e) equal to its share of the credit earned
17    under this subsection (e) during the taxable year by the
18    partnership or Subchapter S corporation, determined in
19    accordance with the determination of income and
20    distributive share of income under Sections 702 and 704
21    and Subchapter S of the Internal Revenue Code. This
22    paragraph is exempt from the provisions of Section 250.
23    (f) Investment credit; Enterprise Zone; River Edge
24Redevelopment Zone.
25        (1) A taxpayer shall be allowed a credit against the
26    tax imposed by subsections (a) and (b) of this Section for

 

 

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1    investment in qualified property which is placed in
2    service in an Enterprise Zone created pursuant to the
3    Illinois Enterprise Zone Act or, for property placed in
4    service on or after July 1, 2006, a River Edge
5    Redevelopment Zone established pursuant to the River Edge
6    Redevelopment Zone Act. For partners, shareholders of
7    Subchapter S corporations, and owners of limited liability
8    companies, if the liability company is treated as a
9    partnership for purposes of federal and State income
10    taxation, there shall be allowed a credit under this
11    subsection (f) to be determined in accordance with the
12    determination of income and distributive share of income
13    under Sections 702 and 704 and Subchapter S of the
14    Internal Revenue Code. The credit shall be .5% of the
15    basis for such property. The credit shall be available
16    only in the taxable year in which the property is placed in
17    service in the Enterprise Zone or River Edge Redevelopment
18    Zone and shall not be allowed to the extent that it would
19    reduce a taxpayer's liability for the tax imposed by
20    subsections (a) and (b) of this Section to below zero. For
21    tax years ending on or after December 31, 1985, the credit
22    shall be allowed for the tax year in which the property is
23    placed in service, or, if the amount of the credit exceeds
24    the tax liability for that year, whether it exceeds the
25    original liability or the liability as later amended, such
26    excess may be carried forward and applied to the tax

 

 

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1    liability of the 5 taxable years following the excess
2    credit year. The credit shall be applied to the earliest
3    year for which there is a liability. If there is credit
4    from more than one tax year that is available to offset a
5    liability, the credit accruing first in time shall be
6    applied first.
7        (2) The term qualified property means property which:
8            (A) is tangible, whether new or used, including
9        buildings and structural components of buildings;
10            (B) is depreciable pursuant to Section 167 of the
11        Internal Revenue Code, except that "3-year property"
12        as defined in Section 168(c)(2)(A) of that Code is not
13        eligible for the credit provided by this subsection
14        (f);
15            (C) is acquired by purchase as defined in Section
16        179(d) of the Internal Revenue Code;
17            (D) is used in the Enterprise Zone or River Edge
18        Redevelopment Zone by the taxpayer; and
19            (E) has not been previously used in Illinois in
20        such a manner and by such a person as would qualify for
21        the credit provided by this subsection (f) or
22        subsection (e).
23        (3) The basis of qualified property shall be the basis
24    used to compute the depreciation deduction for federal
25    income tax purposes.
26        (4) If the basis of the property for federal income

 

 

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1    tax depreciation purposes is increased after it has been
2    placed in service in the Enterprise Zone or River Edge
3    Redevelopment Zone by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (5) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (6) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside the Enterprise
12    Zone or River Edge Redevelopment Zone within 48 months
13    after being placed in service, the tax imposed under
14    subsections (a) and (b) of this Section for such taxable
15    year shall be increased. Such increase shall be determined
16    by (i) recomputing the investment credit which would have
17    been allowed for the year in which credit for such
18    property was originally allowed by eliminating such
19    property from such computation, and (ii) subtracting such
20    recomputed credit from the amount of credit previously
21    allowed. For the purposes of this paragraph (6), a
22    reduction of the basis of qualified property resulting
23    from a redetermination of the purchase price shall be
24    deemed a disposition of qualified property to the extent
25    of such reduction.
26        (7) There shall be allowed an additional credit equal

 

 

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1    to 0.5% of the basis of qualified property placed in
2    service during the taxable year in a River Edge
3    Redevelopment Zone, provided such property is placed in
4    service on or after July 1, 2006, and the taxpayer's base
5    employment within Illinois has increased by 1% or more
6    over the preceding year as determined by the taxpayer's
7    employment records filed with the Illinois Department of
8    Employment Security. Taxpayers who are new to Illinois
9    shall be deemed to have met the 1% growth in base
10    employment for the first year in which they file
11    employment records with the Illinois Department of
12    Employment Security. If, in any year, the increase in base
13    employment within Illinois over the preceding year is less
14    than 1%, the additional credit shall be limited to that
15    percentage times a fraction, the numerator of which is
16    0.5% and the denominator of which is 1%, but shall not
17    exceed 0.5%.
18        (8) For taxable years beginning on or after January 1,
19    2021, there shall be allowed an Enterprise Zone
20    construction jobs credit against the taxes imposed under
21    subsections (a) and (b) of this Section as provided in
22    Section 13 of the Illinois Enterprise Zone Act.
23        The credit or credits may not reduce the taxpayer's
24    liability to less than zero. If the amount of the credit or
25    credits exceeds the taxpayer's liability, the excess may
26    be carried forward and applied against the taxpayer's

 

 

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1    liability in succeeding calendar years in the same manner
2    provided under paragraph (4) of Section 211 of this Act.
3    The credit or credits shall be applied to the earliest
4    year for which there is a tax liability. If there are
5    credits from more than one taxable year that are available
6    to offset a liability, the earlier credit shall be applied
7    first.
8        For partners, shareholders of Subchapter S
9    corporations, and owners of limited liability companies,
10    if the liability company is treated as a partnership for
11    the purposes of federal and State income taxation, there
12    shall be allowed a credit under this Section to be
13    determined in accordance with the determination of income
14    and distributive share of income under Sections 702 and
15    704 and Subchapter S of the Internal Revenue Code.
16        The total aggregate amount of credits awarded under
17    the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
18    shall not exceed $20,000,000 in any State fiscal year.
19        This paragraph (8) is exempt from the provisions of
20    Section 250.
21    (g) (Blank).
22    (h) Investment credit; High Impact Business.
23        (1) Subject to subsections (b) and (b-5) of Section
24    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
25    be allowed a credit against the tax imposed by subsections
26    (a) and (b) of this Section for investment in qualified

 

 

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1    property which is placed in service by a Department of
2    Commerce and Economic Opportunity designated High Impact
3    Business. The credit shall be .5% of the basis for such
4    property. The credit shall not be available (i) until the
5    minimum investments in qualified property set forth in
6    subdivision (a)(3)(A) of Section 5.5 of the Illinois
7    Enterprise Zone Act have been satisfied or (ii) until the
8    time authorized in subsection (b-5) of the Illinois
9    Enterprise Zone Act for entities designated as High Impact
10    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
11    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
12    Act, and shall not be allowed to the extent that it would
13    reduce a taxpayer's liability for the tax imposed by
14    subsections (a) and (b) of this Section to below zero. The
15    credit applicable to such investments shall be taken in
16    the taxable year in which such investments have been
17    completed. The credit for additional investments beyond
18    the minimum investment by a designated high impact
19    business authorized under subdivision (a)(3)(A) of Section
20    5.5 of the Illinois Enterprise Zone Act shall be available
21    only in the taxable year in which the property is placed in
22    service and shall not be allowed to the extent that it
23    would reduce a taxpayer's liability for the tax imposed by
24    subsections (a) and (b) of this Section to below zero. For
25    tax years ending on or after December 31, 1987, the credit
26    shall be allowed for the tax year in which the property is

 

 

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1    placed in service, or, if the amount of the credit exceeds
2    the tax liability for that year, whether it exceeds the
3    original liability or the liability as later amended, such
4    excess may be carried forward and applied to the tax
5    liability of the 5 taxable years following the excess
6    credit year. The credit shall be applied to the earliest
7    year for which there is a liability. If there is credit
8    from more than one tax year that is available to offset a
9    liability, the credit accruing first in time shall be
10    applied first.
11        Changes made in this subdivision (h)(1) by Public Act
12    88-670 restore changes made by Public Act 85-1182 and
13    reflect existing law.
14        (2) The term qualified property means property which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (h);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code; and
24            (D) is not eligible for the Enterprise Zone
25        Investment Credit provided by subsection (f) of this
26        Section.

 

 

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1        (3) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (4) If the basis of the property for federal income
5    tax depreciation purposes is increased after it has been
6    placed in service in a federally designated Foreign Trade
7    Zone or Sub-Zone located in Illinois by the taxpayer, the
8    amount of such increase shall be deemed property placed in
9    service on the date of such increase in basis.
10        (5) The term "placed in service" shall have the same
11    meaning as under Section 46 of the Internal Revenue Code.
12        (6) If during any taxable year ending on or before
13    December 31, 1996, any property ceases to be qualified
14    property in the hands of the taxpayer within 48 months
15    after being placed in service, or the situs of any
16    qualified property is moved outside Illinois within 48
17    months after being placed in service, the tax imposed
18    under subsections (a) and (b) of this Section for such
19    taxable year shall be increased. Such increase shall be
20    determined by (i) recomputing the investment credit which
21    would have been allowed for the year in which credit for
22    such property was originally allowed by eliminating such
23    property from such computation, and (ii) subtracting such
24    recomputed credit from the amount of credit previously
25    allowed. For the purposes of this paragraph (6), a
26    reduction of the basis of qualified property resulting

 

 

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1    from a redetermination of the purchase price shall be
2    deemed a disposition of qualified property to the extent
3    of such reduction.
4        (7) Beginning with tax years ending after December 31,
5    1996, if a taxpayer qualifies for the credit under this
6    subsection (h) and thereby is granted a tax abatement and
7    the taxpayer relocates its entire facility in violation of
8    the explicit terms and length of the contract under
9    Section 18-183 of the Property Tax Code, the tax imposed
10    under subsections (a) and (b) of this Section shall be
11    increased for the taxable year in which the taxpayer
12    relocated its facility by an amount equal to the amount of
13    credit received by the taxpayer under this subsection (h).
14    (h-5) High Impact Business construction jobs credit. For
15taxable years beginning on or after January 1, 2021, there
16shall also be allowed a High Impact Business construction jobs
17credit against the tax imposed under subsections (a) and (b)
18of this Section as provided in subsections (i) and (j) of
19Section 5.5 of the Illinois Enterprise Zone Act.
20    The credit or credits may not reduce the taxpayer's
21liability to less than zero. If the amount of the credit or
22credits exceeds the taxpayer's liability, the excess may be
23carried forward and applied against the taxpayer's liability
24in succeeding calendar years in the manner provided under
25paragraph (4) of Section 211 of this Act. The credit or credits
26shall be applied to the earliest year for which there is a tax

 

 

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1liability. If there are credits from more than one taxable
2year that are available to offset a liability, the earlier
3credit shall be applied first.
4    For partners, shareholders of Subchapter S corporations,
5and owners of limited liability companies, if the liability
6company is treated as a partnership for the purposes of
7federal and State income taxation, there shall be allowed a
8credit under this Section to be determined in accordance with
9the determination of income and distributive share of income
10under Sections 702 and 704 and Subchapter S of the Internal
11Revenue Code.
12    The total aggregate amount of credits awarded under the
13Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
14exceed $20,000,000 in any State fiscal year.
15    This subsection (h-5) is exempt from the provisions of
16Section 250.
17    (i) Credit for Personal Property Tax Replacement Income
18Tax. For tax years ending prior to December 31, 2003, a credit
19shall be allowed against the tax imposed by subsections (a)
20and (b) of this Section for the tax imposed by subsections (c)
21and (d) of this Section. This credit shall be computed by
22multiplying the tax imposed by subsections (c) and (d) of this
23Section by a fraction, the numerator of which is base income
24allocable to Illinois and the denominator of which is Illinois
25base income, and further multiplying the product by the tax
26rate imposed by subsections (a) and (b) of this Section.

 

 

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1    Any credit earned on or after December 31, 1986 under this
2subsection which is unused in the year the credit is computed
3because it exceeds the tax liability imposed by subsections
4(a) and (b) for that year (whether it exceeds the original
5liability or the liability as later amended) may be carried
6forward and applied to the tax liability imposed by
7subsections (a) and (b) of the 5 taxable years following the
8excess credit year, provided that no credit may be carried
9forward to any year ending on or after December 31, 2003. This
10credit shall be applied first to the earliest year for which
11there is a liability. If there is a credit under this
12subsection from more than one tax year that is available to
13offset a liability the earliest credit arising under this
14subsection shall be applied first.
15    If, during any taxable year ending on or after December
1631, 1986, the tax imposed by subsections (c) and (d) of this
17Section for which a taxpayer has claimed a credit under this
18subsection (i) is reduced, the amount of credit for such tax
19shall also be reduced. Such reduction shall be determined by
20recomputing the credit to take into account the reduced tax
21imposed by subsections (c) and (d). If any portion of the
22reduced amount of credit has been carried to a different
23taxable year, an amended return shall be filed for such
24taxable year to reduce the amount of credit claimed.
25    (j) Training expense credit. Beginning with tax years
26ending on or after December 31, 1986 and prior to December 31,

 

 

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12003, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) under this Section for all
3amounts paid or accrued, on behalf of all persons employed by
4the taxpayer in Illinois or Illinois residents employed
5outside of Illinois by a taxpayer, for educational or
6vocational training in semi-technical or technical fields or
7semi-skilled or skilled fields, which were deducted from gross
8income in the computation of taxable income. The credit
9against the tax imposed by subsections (a) and (b) shall be
101.6% of such training expenses. For partners, shareholders of
11subchapter S corporations, and owners of limited liability
12companies, if the liability company is treated as a
13partnership for purposes of federal and State income taxation,
14there shall be allowed a credit under this subsection (j) to be
15determined in accordance with the determination of income and
16distributive share of income under Sections 702 and 704 and
17subchapter S of the Internal Revenue Code.
18    Any credit allowed under this subsection which is unused
19in the year the credit is earned may be carried forward to each
20of the 5 taxable years following the year for which the credit
21is first computed until it is used. This credit shall be
22applied first to the earliest year for which there is a
23liability. If there is a credit under this subsection from
24more than one tax year that is available to offset a liability,
25the earliest credit arising under this subsection shall be
26applied first. No carryforward credit may be claimed in any

 

 

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1tax year ending on or after December 31, 2003.
2    (k) Research and development credit. For tax years ending
3after July 1, 1990 and prior to December 31, 2003, and
4beginning again for tax years ending on or after December 31,
52004, and ending prior to January 1, 2027, a taxpayer shall be
6allowed a credit against the tax imposed by subsections (a)
7and (b) of this Section for increasing research activities in
8this State. The credit allowed against the tax imposed by
9subsections (a) and (b) shall be equal to 6 1/2% of the
10qualifying expenditures for increasing research activities in
11this State. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if
13the liability company is treated as a partnership for purposes
14of federal and State income taxation, there shall be allowed a
15credit under this subsection to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures
24for increasing research activities in this State" means the
25excess of qualifying expenditures for the taxable year in
26which incurred over qualifying expenditures for the base

 

 

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1period, "qualifying expenditures for the base period" means
2the average of the qualifying expenditures for each year in
3the base period, and "base period" means the 3 taxable years
4immediately preceding the taxable year for which the
5determination is being made.
6    Any credit in excess of the tax liability for the taxable
7year may be carried forward. A taxpayer may elect to have the
8unused credit shown on its final completed return carried over
9as a credit against the tax liability for the following 5
10taxable years or until it has been fully used, whichever
11occurs first; provided that no credit earned in a tax year
12ending prior to December 31, 2003 may be carried forward to any
13year ending on or after December 31, 2003.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from Public Act 91-644 in

 

 

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1construing this Section for taxable years beginning before
2January 1, 1999.
3    It is the intent of the General Assembly that the research
4and development credit under this subsection (k) shall apply
5continuously for all tax years ending on or after December 31,
62004 and ending prior to January 1, 2027, including, but not
7limited to, the period beginning on January 1, 2016 and ending
8on July 6, 2017 (the effective date of Public Act 100-22). All
9actions taken in reliance on the continuation of the credit
10under this subsection (k) by any taxpayer are hereby
11validated.
12    (l) Environmental Remediation Tax Credit.
13        (i) For tax years ending after December 31, 1997 and
14    on or before December 31, 2001, a taxpayer shall be
15    allowed a credit against the tax imposed by subsections
16    (a) and (b) of this Section for certain amounts paid for
17    unreimbursed eligible remediation costs, as specified in
18    this subsection. For purposes of this Section,
19    "unreimbursed eligible remediation costs" means costs
20    approved by the Illinois Environmental Protection Agency
21    ("Agency") under Section 58.14 of the Environmental
22    Protection Act that were paid in performing environmental
23    remediation at a site for which a No Further Remediation
24    Letter was issued by the Agency and recorded under Section
25    58.10 of the Environmental Protection Act. The credit must
26    be claimed for the taxable year in which Agency approval

 

 

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1    of the eligible remediation costs is granted. The credit
2    is not available to any taxpayer if the taxpayer or any
3    related party caused or contributed to, in any material
4    respect, a release of regulated substances on, in, or
5    under the site that was identified and addressed by the
6    remedial action pursuant to the Site Remediation Program
7    of the Environmental Protection Act. After the Pollution
8    Control Board rules are adopted pursuant to the Illinois
9    Administrative Procedure Act for the administration and
10    enforcement of Section 58.9 of the Environmental
11    Protection Act, determinations as to credit availability
12    for purposes of this Section shall be made consistent with
13    those rules. For purposes of this Section, "taxpayer"
14    includes a person whose tax attributes the taxpayer has
15    succeeded to under Section 381 of the Internal Revenue
16    Code and "related party" includes the persons disallowed a
17    deduction for losses by paragraphs (b), (c), and (f)(1) of
18    Section 267 of the Internal Revenue Code by virtue of
19    being a related taxpayer, as well as any of its partners.
20    The credit allowed against the tax imposed by subsections
21    (a) and (b) shall be equal to 25% of the unreimbursed
22    eligible remediation costs in excess of $100,000 per site,
23    except that the $100,000 threshold shall not apply to any
24    site contained in an enterprise zone as determined by the
25    Department of Commerce and Community Affairs (now
26    Department of Commerce and Economic Opportunity). The

 

 

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1    total credit allowed shall not exceed $40,000 per year
2    with a maximum total of $150,000 per site. For partners
3    and shareholders of subchapter S corporations, there shall
4    be allowed a credit under this subsection to be determined
5    in accordance with the determination of income and
6    distributive share of income under Sections 702 and 704
7    and subchapter S of the Internal Revenue Code.
8        (ii) A credit allowed under this subsection that is
9    unused in the year the credit is earned may be carried
10    forward to each of the 5 taxable years following the year
11    for which the credit is first earned until it is used. The
12    term "unused credit" does not include any amounts of
13    unreimbursed eligible remediation costs in excess of the
14    maximum credit per site authorized under paragraph (i).
15    This credit shall be applied first to the earliest year
16    for which there is a liability. If there is a credit under
17    this subsection from more than one tax year that is
18    available to offset a liability, the earliest credit
19    arising under this subsection shall be applied first. A
20    credit allowed under this subsection may be sold to a
21    buyer as part of a sale of all or part of the remediation
22    site for which the credit was granted. The purchaser of a
23    remediation site and the tax credit shall succeed to the
24    unused credit and remaining carry-forward period of the
25    seller. To perfect the transfer, the assignor shall record
26    the transfer in the chain of title for the site and provide

 

 

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1    written notice to the Director of the Illinois Department
2    of Revenue of the assignor's intent to sell the
3    remediation site and the amount of the tax credit to be
4    transferred as a portion of the sale. In no event may a
5    credit be transferred to any taxpayer if the taxpayer or a
6    related party would not be eligible under the provisions
7    of subsection (i).
8        (iii) For purposes of this Section, the term "site"
9    shall have the same meaning as under Section 58.2 of the
10    Environmental Protection Act.
11    (m) Education expense credit. Beginning with tax years
12ending after December 31, 1999, a taxpayer who is the
13custodian of one or more qualifying pupils shall be allowed a
14credit against the tax imposed by subsections (a) and (b) of
15this Section for qualified education expenses incurred on
16behalf of the qualifying pupils. The credit shall be equal to
1725% of qualified education expenses, but in no event may the
18total credit under this subsection claimed by a family that is
19the custodian of qualifying pupils exceed (i) $500 for tax
20years ending prior to December 31, 2017, and (ii) $750 for tax
21years ending on or after December 31, 2017. In no event shall a
22credit under this subsection reduce the taxpayer's liability
23under this Act to less than zero. Notwithstanding any other
24provision of law, for taxable years beginning on or after
25January 1, 2017, no taxpayer may claim a credit under this
26subsection (m) if the taxpayer's adjusted gross income for the

 

 

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1taxable year exceeds (i) $500,000, in the case of spouses
2filing a joint federal tax return or (ii) $250,000, in the case
3of all other taxpayers. This subsection is exempt from the
4provisions of Section 250 of this Act.
5    For purposes of this subsection:
6    "Qualifying pupils" means individuals who (i) are
7residents of the State of Illinois, (ii) are under the age of
821 at the close of the school year for which a credit is
9sought, and (iii) during the school year for which a credit is
10sought were full-time pupils enrolled in a kindergarten
11through twelfth grade education program at any school, as
12defined in this subsection.
13    "Qualified education expense" means the amount incurred on
14behalf of a qualifying pupil in excess of $250 for tuition,
15book fees, and lab fees at the school in which the pupil is
16enrolled during the regular school year.
17    "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify
23for the credit under this Section.
24    "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

 

 

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1    (n) River Edge Redevelopment Zone site remediation tax
2credit.
3        (i) For tax years ending on or after December 31,
4    2006, a taxpayer shall be allowed a credit against the tax
5    imposed by subsections (a) and (b) of this Section for
6    certain amounts paid for unreimbursed eligible remediation
7    costs, as specified in this subsection. For purposes of
8    this Section, "unreimbursed eligible remediation costs"
9    means costs approved by the Illinois Environmental
10    Protection Agency ("Agency") under Section 58.14a of the
11    Environmental Protection Act that were paid in performing
12    environmental remediation at a site within a River Edge
13    Redevelopment Zone for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval
17    of the eligible remediation costs is granted. The credit
18    is not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or
21    under the site that was identified and addressed by the
22    remedial action pursuant to the Site Remediation Program
23    of the Environmental Protection Act. Determinations as to
24    credit availability for purposes of this Section shall be
25    made consistent with rules adopted by the Pollution
26    Control Board pursuant to the Illinois Administrative

 

 

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1    Procedure Act for the administration and enforcement of
2    Section 58.9 of the Environmental Protection Act. For
3    purposes of this Section, "taxpayer" includes a person
4    whose tax attributes the taxpayer has succeeded to under
5    Section 381 of the Internal Revenue Code and "related
6    party" includes the persons disallowed a deduction for
7    losses by paragraphs (b), (c), and (f)(1) of Section 267
8    of the Internal Revenue Code by virtue of being a related
9    taxpayer, as well as any of its partners. The credit
10    allowed against the tax imposed by subsections (a) and (b)
11    shall be equal to 25% of the unreimbursed eligible
12    remediation costs in excess of $100,000 per site.
13        (ii) A credit allowed under this subsection that is
14    unused in the year the credit is earned may be carried
15    forward to each of the 5 taxable years following the year
16    for which the credit is first earned until it is used. This
17    credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available
20    to offset a liability, the earliest credit arising under
21    this subsection shall be applied first. A credit allowed
22    under this subsection may be sold to a buyer as part of a
23    sale of all or part of the remediation site for which the
24    credit was granted. The purchaser of a remediation site
25    and the tax credit shall succeed to the unused credit and
26    remaining carry-forward period of the seller. To perfect

 

 

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1    the transfer, the assignor shall record the transfer in
2    the chain of title for the site and provide written notice
3    to the Director of the Illinois Department of Revenue of
4    the assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Program, a surcharge is imposed on all
14taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Program Act. The amount of the surcharge is
19equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22        (1) the medical cannabis cultivation center
23    registration, medical cannabis dispensary registration, or
24    the property of a registration is transferred as a result
25    of any of the following:
26            (A) bankruptcy, a receivership, or a debt

 

 

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1        adjustment initiated by or against the initial
2        registration or the substantial owners of the initial
3        registration;
4            (B) cancellation, revocation, or termination of
5        any registration by the Illinois Department of Public
6        Health;
7            (C) a determination by the Illinois Department of
8        Public Health that transfer of the registration is in
9        the best interests of Illinois qualifying patients as
10        defined by the Compassionate Use of Medical Cannabis
11        Program Act;
12            (D) the death of an owner of the equity interest in
13        a registrant;
14            (E) the acquisition of a controlling interest in
15        the stock or substantially all of the assets of a
16        publicly traded company;
17            (F) a transfer by a parent company to a wholly
18        owned subsidiary; or
19            (G) the transfer or sale to or by one person to
20        another person where both persons were initial owners
21        of the registration when the registration was issued;
22        or
23        (2) the cannabis cultivation center registration,
24    medical cannabis dispensary registration, or the
25    controlling interest in a registrant's property is
26    transferred in a transaction to lineal descendants in

 

 

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1    which no gain or loss is recognized or as a result of a
2    transaction in accordance with Section 351 of the Internal
3    Revenue Code in which no gain or loss is recognized.
4    (p) Pass-through entity tax.
5        (1) For taxable years ending on or after December 31,
6    2021 and beginning prior to January 1, 2026, a partnership
7    (other than a publicly traded partnership under Section
8    7704 of the Internal Revenue Code) or Subchapter S
9    corporation may elect to apply the provisions of this
10    subsection. A separate election shall be made for each
11    taxable year. Such election shall be made at such time,
12    and in such form and manner as prescribed by the
13    Department, and, once made, is irrevocable.
14        (2) Entity-level tax. A partnership or Subchapter S
15    corporation electing to apply the provisions of this
16    subsection shall be subject to a tax for the privilege of
17    earning or receiving income in this State in an amount
18    equal to 4.95% of the taxpayer's net income for the
19    taxable year.
20        (3) Net income defined.
21            (A) In general. For purposes of paragraph (2), the
22        term net income has the same meaning as defined in
23        Section 202 of this Act, except that, for tax years
24        ending on or after December 31, 2023, a deduction
25        shall be allowed in computing base income for
26        distributions to a retired partner to the extent that

 

 

10300SB1963ham002- 554 -LRB103 25648 HLH 62334 a

1        the partner's distributions are exempt from tax under
2        Section 203(a)(2)(F) of this Act. In addition, the
3        following modifications provisions shall not apply:
4                (i) the standard exemption allowed under
5            Section 204;
6                (ii) the deduction for net losses allowed
7            under Section 207;
8                (iii) in the case of an S corporation, the
9            modification under Section 203(b)(2)(S); and
10                (iv) in the case of a partnership, the
11            modifications under Section 203(d)(2)(H) and
12            Section 203(d)(2)(I).
13            (B) Special rule for tiered partnerships. If a
14        taxpayer making the election under paragraph (1) is a
15        partner of another taxpayer making the election under
16        paragraph (1), net income shall be computed as
17        provided in subparagraph (A), except that the taxpayer
18        shall subtract its distributive share of the net
19        income of the electing partnership (including its
20        distributive share of the net income of the electing
21        partnership derived as a distributive share from
22        electing partnerships in which it is a partner).
23        (4) Credit for entity level tax. Each partner or
24    shareholder of a taxpayer making the election under this
25    Section shall be allowed a credit against the tax imposed
26    under subsections (a) and (b) of Section 201 of this Act

 

 

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1    for the taxable year of the partnership or Subchapter S
2    corporation for which an election is in effect ending
3    within or with the taxable year of the partner or
4    shareholder in an amount equal to 4.95% times the partner
5    or shareholder's distributive share of the net income of
6    the electing partnership or Subchapter S corporation, but
7    not to exceed the partner's or shareholder's share of the
8    tax imposed under paragraph (1) which is actually paid by
9    the partnership or Subchapter S corporation. If the
10    taxpayer is a partnership or Subchapter S corporation that
11    is itself a partner of a partnership making the election
12    under paragraph (1), the credit under this paragraph shall
13    be allowed to the taxpayer's partners or shareholders (or
14    if the partner is a partnership or Subchapter S
15    corporation then its partners or shareholders) in
16    accordance with the determination of income and
17    distributive share of income under Sections 702 and 704
18    and Subchapter S of the Internal Revenue Code. If the
19    amount of the credit allowed under this paragraph exceeds
20    the partner's or shareholder's liability for tax imposed
21    under subsections (a) and (b) of Section 201 of this Act
22    for the taxable year, such excess shall be treated as an
23    overpayment for purposes of Section 909 of this Act.
24        (5) Nonresidents. A nonresident individual who is a
25    partner or shareholder of a partnership or Subchapter S
26    corporation for a taxable year for which an election is in

 

 

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1    effect under paragraph (1) shall not be required to file
2    an income tax return under this Act for such taxable year
3    if the only source of net income of the individual (or the
4    individual and the individual's spouse in the case of a
5    joint return) is from an entity making the election under
6    paragraph (1) and the credit allowed to the partner or
7    shareholder under paragraph (4) equals or exceeds the
8    individual's liability for the tax imposed under
9    subsections (a) and (b) of Section 201 of this Act for the
10    taxable year.
11        (6) Liability for tax. Except as provided in this
12    paragraph, a partnership or Subchapter S making the
13    election under paragraph (1) is liable for the
14    entity-level tax imposed under paragraph (2). If the
15    electing partnership or corporation fails to pay the full
16    amount of tax deemed assessed under paragraph (2), the
17    partners or shareholders shall be liable to pay the tax
18    assessed (including penalties and interest). Each partner
19    or shareholder shall be liable for the unpaid assessment
20    based on the ratio of the partner's or shareholder's share
21    of the net income of the partnership over the total net
22    income of the partnership. If the partnership or
23    Subchapter S corporation fails to pay the tax assessed
24    (including penalties and interest) and thereafter an
25    amount of such tax is paid by the partners or
26    shareholders, such amount shall not be collected from the

 

 

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1    partnership or corporation.
2        (7) Foreign tax. For purposes of the credit allowed
3    under Section 601(b)(3) of this Act, tax paid by a
4    partnership or Subchapter S corporation to another state
5    which, as determined by the Department, is substantially
6    similar to the tax imposed under this subsection, shall be
7    considered tax paid by the partner or shareholder to the
8    extent that the partner's or shareholder's share of the
9    income of the partnership or Subchapter S corporation
10    allocated and apportioned to such other state bears to the
11    total income of the partnership or Subchapter S
12    corporation allocated or apportioned to such other state.
13        (8) Suspension of withholding. The provisions of
14    Section 709.5 of this Act shall not apply to a partnership
15    or Subchapter S corporation for the taxable year for which
16    an election under paragraph (1) is in effect.
17        (9) Requirement to pay estimated tax. For each taxable
18    year for which an election under paragraph (1) is in
19    effect, a partnership or Subchapter S corporation is
20    required to pay estimated tax for such taxable year under
21    Sections 803 and 804 of this Act if the amount payable as
22    estimated tax can reasonably be expected to exceed $500.
23        (10) The provisions of this subsection shall apply
24    only with respect to taxable years for which the
25    limitation on individual deductions applies under Section
26    164(b)(6) of the Internal Revenue Code.

 

 

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1(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
2101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
38-20-21; 102-658, eff. 8-27-21.)
 
4
ARTICLE 995. NON-ACCELERATION

 
5    Section 995-95. No acceleration or delay. Where this Act
6makes changes in a statute that is represented in this Act by
7text that is not yet or no longer in effect (for example, a
8Section represented by multiple versions), the use of that
9text does not accelerate or delay the taking effect of (i) the
10changes made by this Act or (ii) provisions derived from any
11other Public Act.
 
12
ARTICLE 999. EFFECTIVE DATE

 
13    Section 999-99. Effective date. This Act takes effect upon
14becoming law, except that Article 20 takes effect on July 1,
152023 and Articles 55 and 100 take effect on January 1, 2024.".