103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3364

 

Introduced 2/7/2024, by Sen. Craig Wilcox

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-10
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10
35 ILCS 120/2d  from Ch. 120, par. 441d

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning 30 days after the effective date of the amendatory Act, the cents per gallon rate established by the Department of Revenue for the prepayment of tax by motor fuel retailers may not exceed $0.18 per gallon for motor fuel and 80% of that amount for gasohol and biodiesel blends. Provides that the rate of tax imposed under the Acts for motor fuel, gasohol, majority blended ethanol fuel, and biodiesel and biodiesel blends may not exceed that prepayment amount set by the Department of Revenue. Effective immediately.


LRB103 37906 HLH 68038 b

 

 

A BILL FOR

 

SB3364LRB103 37906 HLH 68038 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-10 as follows:
 
6    (35 ILCS 105/3-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9either the selling price or the fair market value, if any, of
10the tangible personal property. In all cases where property
11functionally used or consumed is the same as the property that
12was purchased at retail, then the tax is imposed on the selling
13price of the property. In all cases where property
14functionally used or consumed is a by-product or waste product
15that has been refined, manufactured, or produced from property
16purchased at retail, then the tax is imposed on the lower of
17the fair market value, if any, of the specific property so used
18in this State or on the selling price of the property purchased
19at retail. For purposes of this Section "fair market value"
20means the price at which property would change hands between a
21willing buyer and a willing seller, neither being under any
22compulsion to buy or sell and both having reasonable knowledge
23of the relevant facts. The fair market value shall be

 

 

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1established by Illinois sales by the taxpayer of the same
2property as that functionally used or consumed, or if there
3are no such sales by the taxpayer, then comparable sales or
4purchases of property of like kind and character in Illinois.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning 30 days after the effective date of this
10amendatory Act of the 103rd General Assembly, the tax imposed
11under this Act on the following items may not exceed the cents
12per gallon rate established by the Department under subsection
13(e) of Section 2d of the Retailers' Occupation Tax Act: motor
14fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
15gasohol, as defined in Section 3-40 of this Act; majority
16blended ethanol fuel; and biodiesel and biodiesel blends. With
17respect to the tax imposed on biodiesel blends and gasohol,
18the maximum cents per gallon rate shall include the reduction
19allowed in subsection (e) of Section 2d of the Retailers'
20Occupation Tax Act.
21    Beginning on August 6, 2010 through August 15, 2010, and
22beginning again on August 5, 2022 through August 14, 2022,
23with respect to sales tax holiday items as defined in Section
243-6 of this Act, the tax is imposed at the rate of 1.25%.
25    With respect to gasohol, the tax imposed by this Act
26applies to (i) 70% of the proceeds of sales made on or after

 

 

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1January 1, 1990, and before July 1, 2003, (ii) 80% of the
2proceeds of sales made on or after July 1, 2003 and on or
3before July 1, 2017, (iii) 100% of the proceeds of sales made
4after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
5the proceeds of sales made on or after January 1, 2024 and on
6or before December 31, 2028, and (v) 100% of the proceeds of
7sales made after December 31, 2028. If, at any time, however,
8the tax under this Act on sales of gasohol is imposed at the
9rate of 1.25%, then the tax imposed by this Act applies to 100%
10of the proceeds of sales of gasohol made during that time.
11    With respect to mid-range ethanol blends, the tax imposed
12by this Act applies to (i) 80% of the proceeds of sales made on
13or after January 1, 2024 and on or before December 31, 2028 and
14(ii) 100% of the proceeds of sales made thereafter. If, at any
15time, however, the tax under this Act on sales of mid-range
16ethanol blends is imposed at the rate of 1.25%, then the tax
17imposed by this Act applies to 100% of the proceeds of sales of
18mid-range ethanol blends made during that time.
19    With respect to majority blended ethanol fuel, the tax
20imposed by this Act does not apply to the proceeds of sales
21made on or after July 1, 2003 and on or before December 31,
222028 but applies to 100% of the proceeds of sales made
23thereafter.
24    With respect to biodiesel blends with no less than 1% and
25no more than 10% biodiesel, the tax imposed by this Act applies
26to (i) 80% of the proceeds of sales made on or after July 1,

 

 

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12003 and on or before December 31, 2018 and (ii) 100% of the
2proceeds of sales made after December 31, 2018 and before
3January 1, 2024. On and after January 1, 2024 and on or before
4December 31, 2030, the taxation of biodiesel, renewable
5diesel, and biodiesel blends shall be as provided in Section
63-5.1. If, at any time, however, the tax under this Act on
7sales of biodiesel blends with no less than 1% and no more than
810% biodiesel is imposed at the rate of 1.25%, then the tax
9imposed by this Act applies to 100% of the proceeds of sales of
10biodiesel blends with no less than 1% and no more than 10%
11biodiesel made during that time.
12    With respect to biodiesel and biodiesel blends with more
13than 10% but no more than 99% biodiesel, the tax imposed by
14this Act does not apply to the proceeds of sales made on or
15after July 1, 2003 and on or before December 31, 2023. On and
16after January 1, 2024 and on or before December 31, 2030, the
17taxation of biodiesel, renewable diesel, and biodiesel blends
18shall be as provided in Section 3-5.1.
19    Until July 1, 2022 and beginning again on July 1, 2023,
20with respect to food for human consumption that is to be
21consumed off the premises where it is sold (other than
22alcoholic beverages, food consisting of or infused with adult
23use cannabis, soft drinks, and food that has been prepared for
24immediate consumption), the tax is imposed at the rate of 1%.
25Beginning on July 1, 2022 and until July 1, 2023, with respect
26to food for human consumption that is to be consumed off the

 

 

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1premises where it is sold (other than alcoholic beverages,
2food consisting of or infused with adult use cannabis, soft
3drinks, and food that has been prepared for immediate
4consumption), the tax is imposed at the rate of 0%.
5    With respect to prescription and nonprescription
6medicines, drugs, medical appliances, products classified as
7Class III medical devices by the United States Food and Drug
8Administration that are used for cancer treatment pursuant to
9a prescription, as well as any accessories and components
10related to those devices, modifications to a motor vehicle for
11the purpose of rendering it usable by a person with a
12disability, and insulin, blood sugar testing materials,
13syringes, and needles used by human diabetics, the tax is
14imposed at the rate of 1%. For the purposes of this Section,
15until September 1, 2009: the term "soft drinks" means any
16complete, finished, ready-to-use, non-alcoholic drink, whether
17carbonated or not, including, but not limited to, soda water,
18cola, fruit juice, vegetable juice, carbonated water, and all
19other preparations commonly known as soft drinks of whatever
20kind or description that are contained in any closed or sealed
21bottle, can, carton, or container, regardless of size; but
22"soft drinks" does not include coffee, tea, non-carbonated
23water, infant formula, milk or milk products as defined in the
24Grade A Pasteurized Milk and Milk Products Act, or drinks
25containing 50% or more natural fruit or vegetable juice.
26    Notwithstanding any other provisions of this Act,

 

 

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

 

 

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

 

 

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1Compassionate Use of Medical Cannabis Program Act.
2    If the property that is purchased at retail from a
3retailer is acquired outside Illinois and used outside
4Illinois before being brought to Illinois for use here and is
5taxable under this Act, the "selling price" on which the tax is
6computed shall be reduced by an amount that represents a
7reasonable allowance for depreciation for the period of prior
8out-of-state use.
9(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
10Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
1160-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
124-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 
13    Section 10. The Service Use Tax Act is amended by changing
14Section 3-10 as follows:
 
15    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
16    Sec. 3-10. Rate of tax. Unless otherwise provided in this
17Section, the tax imposed by this Act is at the rate of 6.25% of
18the selling price of tangible personal property transferred as
19an incident to the sale of service, but, for the purpose of
20computing this tax, in no event shall the selling price be less
21than the cost price of the property to the serviceman.
22    Beginning on July 1, 2000 and through December 31, 2000,
23with respect to motor fuel, as defined in Section 1.1 of the
24Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

 

 

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1the Use Tax Act, the tax is imposed at the rate of 1.25%.
2    Beginning 30 days after the effective date of this
3amendatory Act of the 103rd General Assembly, the tax imposed
4under this Act on the following items may not exceed the cents
5per gallon rate established by the Department under subsection
6(e) of Section 2d of the Retailers' Occupation Tax Act: motor
7fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
8gasohol, as defined in Section 3-40 of the Use Tax Act;
9majority blended ethanol fuel; and biodiesel and biodiesel
10blends. With respect to the tax imposed on biodiesel blends
11and gasohol, the maximum cents per gallon rate shall include
12the reduction allowed in subsection (e) of Section 2d of the
13Retailers' Occupation Tax Act.
14    With respect to gasohol, as defined in the Use Tax Act, the
15tax imposed by this Act applies to (i) 70% of the selling price
16of property transferred as an incident to the sale of service
17on or after January 1, 1990, and before July 1, 2003, (ii) 80%
18of the selling price of property transferred as an incident to
19the sale of service on or after July 1, 2003 and on or before
20July 1, 2017, (iii) 100% of the selling price of property
21transferred as an incident to the sale of service after July 1,
222017 and before January 1, 2024, (iv) 90% of the selling price
23of property transferred as an incident to the sale of service
24on or after January 1, 2024 and on or before December 31, 2028,
25and (v) 100% of the selling price of property transferred as an
26incident to the sale of service after December 31, 2028. If, at

 

 

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1any time, however, the tax under this Act on sales of gasohol,
2as defined in the Use Tax Act, is imposed at the rate of 1.25%,
3then the tax imposed by this Act applies to 100% of the
4proceeds of sales of gasohol made during that time.
5    With respect to mid-range ethanol blends, as defined in
6Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
7applies to (i) 80% of the selling price of property
8transferred as an incident to the sale of service on or after
9January 1, 2024 and on or before December 31, 2028 and (ii)
10100% of the selling price of property transferred as an
11incident to the sale of service after December 31, 2028. If, at
12any time, however, the tax under this Act on sales of mid-range
13ethanol blends is imposed at the rate of 1.25%, then the tax
14imposed by this Act applies to 100% of the selling price of
15mid-range ethanol blends transferred as an incident to the
16sale of service during that time.
17    With respect to majority blended ethanol fuel, as defined
18in the Use Tax Act, the tax imposed by this Act does not apply
19to the selling price of property transferred as an incident to
20the sale of service on or after July 1, 2003 and on or before
21December 31, 2028 but applies to 100% of the selling price
22thereafter.
23    With respect to biodiesel blends, as defined in the Use
24Tax Act, with no less than 1% and no more than 10% biodiesel,
25the tax imposed by this Act applies to (i) 80% of the selling
26price of property transferred as an incident to the sale of

 

 

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1service on or after July 1, 2003 and on or before December 31,
22018 and (ii) 100% of the proceeds of the selling price after
3December 31, 2018 and before January 1, 2024. On and after
4January 1, 2024 and on or before December 31, 2030, the
5taxation of biodiesel, renewable diesel, and biodiesel blends
6shall be as provided in Section 3-5.1 of the Use Tax Act. If,
7at any time, however, the tax under this Act on sales of
8biodiesel blends, as defined in the Use Tax Act, with no less
9than 1% and no more than 10% biodiesel is imposed at the rate
10of 1.25%, then the tax imposed by this Act applies to 100% of
11the proceeds of sales of biodiesel blends with no less than 1%
12and no more than 10% biodiesel made during that time.
13    With respect to biodiesel, as defined in the Use Tax Act,
14and biodiesel blends, as defined in the Use Tax Act, with more
15than 10% but no more than 99% biodiesel, the tax imposed by
16this Act does not apply to the proceeds of the selling price of
17property transferred as an incident to the sale of service on
18or after July 1, 2003 and on or before December 31, 2023. On
19and after January 1, 2024 and on or before December 31, 2030,
20the taxation of biodiesel, renewable diesel, and biodiesel
21blends shall be as provided in Section 3-5.1 of the Use Tax
22Act.
23    At the election of any registered serviceman made for each
24fiscal year, sales of service in which the aggregate annual
25cost price of tangible personal property transferred as an
26incident to the sales of service is less than 35%, or 75% in

 

 

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

 

 

SB3364- 13 -LRB103 37906 HLH 68038 b

1service subject to this Act or the Service Occupation Tax Act
2by an entity licensed under the Hospital Licensing Act, the
3Nursing Home Care Act, the Assisted Living and Shared Housing
4Act, the ID/DD Community Care Act, the MC/DD Act, the
5Specialized Mental Health Rehabilitation Act of 2013, or the
6Child Care Act of 1969, or an entity that holds a permit issued
7pursuant to the Life Care Facilities Act. Beginning on July 1,
82022 and until July 1, 2023, the tax shall also be imposed at
9the rate of 0% on food for human consumption that is to be
10consumed off the premises where it is sold (other than
11alcoholic beverages, food consisting of or infused with adult
12use cannabis, soft drinks, and food that has been prepared for
13immediate consumption and is not otherwise included in this
14paragraph).
15    The tax shall also be imposed at the rate of 1% on
16prescription and nonprescription medicines, drugs, medical
17appliances, products classified as Class III medical devices
18by the United States Food and Drug Administration that are
19used for cancer treatment pursuant to a prescription, as well
20as any accessories and components related to those devices,
21modifications to a motor vehicle for the purpose of rendering
22it usable by a person with a disability, and insulin, blood
23sugar testing materials, syringes, and needles used by human
24diabetics. For the purposes of this Section, until September
251, 2009: the term "soft drinks" means any complete, finished,
26ready-to-use, non-alcoholic drink, whether carbonated or not,

 

 

SB3364- 14 -LRB103 37906 HLH 68038 b

1including, but not limited to, soda water, cola, fruit juice,
2vegetable juice, carbonated water, and all other preparations
3commonly known as soft drinks of whatever kind or description
4that are contained in any closed or sealed bottle, can,
5carton, or container, regardless of size; but "soft drinks"
6does not include coffee, tea, non-carbonated water, infant
7formula, milk or milk products as defined in the Grade A
8Pasteurized Milk and Milk Products Act, or drinks containing
950% or more natural fruit or vegetable juice.
10    Notwithstanding any other provisions of this Act,
11beginning September 1, 2009, "soft drinks" means non-alcoholic
12beverages that contain natural or artificial sweeteners. "Soft
13drinks" does not include beverages that contain milk or milk
14products, soy, rice or similar milk substitutes, or greater
15than 50% of vegetable or fruit juice by volume.
16    Until August 1, 2009, and notwithstanding any other
17provisions of this Act, "food for human consumption that is to
18be consumed off the premises where it is sold" includes all
19food sold through a vending machine, except soft drinks and
20food products that are dispensed hot from a vending machine,
21regardless of the location of the vending machine. Beginning
22August 1, 2009, and notwithstanding any other provisions of
23this Act, "food for human consumption that is to be consumed
24off the premises where it is sold" includes all food sold
25through a vending machine, except soft drinks, candy, and food
26products that are dispensed hot from a vending machine,

 

 

SB3364- 15 -LRB103 37906 HLH 68038 b

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

 

 

SB3364- 16 -LRB103 37906 HLH 68038 b

1    substance or preparation.
2    Beginning on January 1, 2014 (the effective date of Public
3Act 98-122), "prescription and nonprescription medicines and
4drugs" includes medical cannabis purchased from a registered
5dispensing organization under the Compassionate Use of Medical
6Cannabis Program Act.
7    As used in this Section, "adult use cannabis" means
8cannabis subject to tax under the Cannabis Cultivation
9Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
10and does not include cannabis subject to tax under the
11Compassionate Use of Medical Cannabis Program Act.
12    If the property that is acquired from a serviceman is
13acquired outside Illinois and used outside Illinois before
14being brought to Illinois for use here and is taxable under
15this Act, the "selling price" on which the tax is computed
16shall be reduced by an amount that represents a reasonable
17allowance for depreciation for the period of prior
18out-of-state use.
19(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
20102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
21Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
22103-154, eff. 6-30-23.)
 
23    Section 15. The Service Occupation Tax Act is amended by
24changing Section 3-10 as follows:
 

 

 

SB3364- 17 -LRB103 37906 HLH 68038 b

1    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
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
4the "selling price", as defined in Section 2 of the Service Use
5Tax Act, of the tangible personal property. For the purpose of
6computing this tax, in no event shall the "selling price" be
7less than the cost price to the serviceman of the tangible
8personal property transferred. The selling price of each item
9of tangible personal property transferred as an incident of a
10sale of service may be shown as a distinct and separate item on
11the serviceman's billing to the service customer. If the
12selling price is not so shown, the selling price of the
13tangible personal property is deemed to be 50% of the
14serviceman's entire billing to the service customer. When,
15however, a serviceman contracts to design, develop, and
16produce special order machinery or equipment, the tax imposed
17by this Act shall be based on the serviceman's cost price of
18the tangible personal property transferred incident to the
19completion of the contract.
20    Beginning on July 1, 2000 and through December 31, 2000,
21with respect to motor fuel, as defined in Section 1.1 of the
22Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
23the Use Tax Act, the tax is imposed at the rate of 1.25%.
24    Beginning 30 days after the effective date of this
25amendatory Act of the 103rd General Assembly, the tax imposed
26under this Act on the following items may not exceed the cents

 

 

SB3364- 18 -LRB103 37906 HLH 68038 b

1per gallon rate established by the Department under subsection
2(e) of Section 2d of the Retailers' Occupation Tax Act: motor
3fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
4gasohol, as defined in Section 3-40 of the Use Tax Act;
5majority blended ethanol fuel; and biodiesel and biodiesel
6blends. With respect to the tax imposed on biodiesel blends
7and gasohol, the maximum cents per gallon rate shall include
8the reduction allowed in subsection (e) of Section 2d of the
9Retailers' Occupation Tax Act.
10    With respect to gasohol, as defined in the Use Tax Act, the
11tax imposed by this Act shall apply to (i) 70% of the cost
12price of property transferred as an incident to the sale of
13service on or after January 1, 1990, and before July 1, 2003,
14(ii) 80% of the selling price of property transferred as an
15incident to the sale of service on or after July 1, 2003 and on
16or before July 1, 2017, (iii) 100% of the selling price of
17property transferred as an incident to the sale of service
18after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
19the selling price of property transferred as an incident to
20the sale of service on or after January 1, 2024 and on or
21before December 31, 2028, and (v) 100% of the selling price of
22property transferred as an incident to the sale of service
23after December 31, 2028. If, at any time, however, the tax
24under this Act on sales of gasohol, as defined in the Use Tax
25Act, is imposed at the rate of 1.25%, then the tax imposed by
26this Act applies to 100% of the proceeds of sales of gasohol

 

 

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1made 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 selling price of property
5transferred as an incident to the sale of service on or after
6January 1, 2024 and on or before December 31, 2028 and (ii)
7100% of the selling price of property transferred as an
8incident to the sale of service after December 31, 2028. If, at
9any time, however, the tax under this Act on sales of mid-range
10ethanol blends is imposed at the rate of 1.25%, then the tax
11imposed by this Act applies to 100% of the selling price of
12mid-range ethanol blends transferred as an incident to the
13sale of service during that time.
14    With respect to majority blended ethanol fuel, as defined
15in the Use Tax Act, the tax imposed by this Act does not apply
16to the selling price of property transferred as an incident to
17the sale of service on or after July 1, 2003 and on or before
18December 31, 2028 but applies to 100% of the selling price
19thereafter.
20    With respect to biodiesel blends, as defined in the Use
21Tax Act, with no less than 1% and no more than 10% biodiesel,
22the tax imposed by this Act applies to (i) 80% of the selling
23price of property transferred as an incident to the sale of
24service on or after July 1, 2003 and on or before December 31,
252018 and (ii) 100% of the proceeds of the selling price after
26December 31, 2018 and before January 1, 2024. On and after

 

 

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1January 1, 2024 and on or before December 31, 2030, the
2taxation of biodiesel, renewable diesel, and biodiesel blends
3shall be as provided in Section 3-5.1 of the Use Tax Act. If,
4at any time, however, the tax under this Act on sales of
5biodiesel blends, as defined in the Use Tax Act, with no less
6than 1% and no more than 10% biodiesel is imposed at the rate
7of 1.25%, then the tax imposed by this Act applies to 100% of
8the proceeds of sales of biodiesel blends with no less than 1%
9and no more than 10% biodiesel made during that time.
10    With respect to biodiesel, as defined in the Use Tax Act,
11and biodiesel blends, as defined in the Use Tax Act, with more
12than 10% but no more than 99% biodiesel material, the tax
13imposed by this Act does not apply to the proceeds of the
14selling price of property transferred as an incident to the
15sale of service on or after July 1, 2003 and on or before
16December 31, 2023. On and after January 1, 2024 and on or
17before December 31, 2030, the taxation of biodiesel, renewable
18diesel, and biodiesel blends shall be as provided in Section
193-5.1 of the Use Tax Act.
20    At the election of any registered serviceman made for each
21fiscal year, sales of service in which the aggregate annual
22cost price of tangible personal property transferred as an
23incident to the sales of service is less than 35%, or 75% in
24the case of servicemen transferring prescription drugs or
25servicemen engaged in graphic arts production, of the
26aggregate annual total gross receipts from all sales of

 

 

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

 

 

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1ID/DD Community Care Act, the MC/DD Act, the Specialized
2Mental Health Rehabilitation Act of 2013, or the Child Care
3Act of 1969, or an entity that holds a permit issued pursuant
4to the Life Care Facilities Act. Beginning July 1, 2022 and
5until July 1, 2023, the tax shall also be imposed at the rate
6of 0% on food for human consumption that is to be consumed off
7the premises where it is sold (other than alcoholic beverages,
8food consisting of or infused with adult use cannabis, soft
9drinks, and food that has been prepared for immediate
10consumption and is not otherwise included in this paragraph).
11    The tax shall also be imposed at the rate of 1% on
12prescription and nonprescription medicines, drugs, medical
13appliances, products classified as Class III medical devices
14by the United States Food and Drug Administration that are
15used for cancer treatment pursuant to a prescription, as well
16as any accessories and components related to those devices,
17modifications to a motor vehicle for the purpose of rendering
18it usable by a person with a disability, and insulin, blood
19sugar testing materials, syringes, and needles used by human
20diabetics. For the purposes of this Section, until September
211, 2009: the term "soft drinks" means any complete, finished,
22ready-to-use, non-alcoholic drink, whether carbonated or not,
23including, but not limited to, soda water, cola, fruit juice,
24vegetable juice, carbonated water, and all other preparations
25commonly known as soft drinks of whatever kind or description
26that are contained in any closed or sealed can, carton, or

 

 

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

 

 

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

 

 

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1dispensing organization under the Compassionate Use of Medical
2Cannabis Program Act.
3    As used in this Section, "adult use cannabis" means
4cannabis subject to tax under the Cannabis Cultivation
5Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
6and does not include cannabis subject to tax under the
7Compassionate Use of Medical Cannabis Program Act.
8(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
9102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
10Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
11103-154, eff. 6-30-23.)
 
12    Section 20. The Retailers' Occupation Tax Act is amended
13by changing Sections 2-10 and 2d as follows:
 
14    (35 ILCS 120/2-10)
15    Sec. 2-10. Rate of tax. Unless otherwise provided in this
16Section, the tax imposed by this Act is at the rate of 6.25% of
17gross receipts from sales of tangible personal property made
18in the course of business.
19    Beginning on July 1, 2000 and through December 31, 2000,
20with respect to motor fuel, as defined in Section 1.1 of the
21Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
22the Use Tax Act, the tax is imposed at the rate of 1.25%.
23    Beginning 30 days after the effective date of this
24amendatory Act of the 103rd General Assembly, the tax imposed

 

 

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1under this Act on the following items may not exceed the cents
2per gallon rate established by the Department under subsection
3(e) of Section 2d of this Act: motor fuel, as defined in
4Section 1.1 of the Motor Fuel Tax Law; gasohol, as defined in
5Section 3-40 of the Use Tax Act; majority blended ethanol
6fuel; and biodiesel and biodiesel blends. With respect to the
7tax imposed on biodiesel blends and gasohol, the maximum cents
8per gallon rate shall include the reduction allowed in
9subsection (e) of Section 2d.
10    Beginning on August 6, 2010 through August 15, 2010, and
11beginning again on August 5, 2022 through August 14, 2022,
12with respect to sales tax holiday items as defined in Section
132-8 of this Act, the tax is imposed at the rate of 1.25%.
14    Within 14 days after July 1, 2000 (the effective date of
15Public Act 91-872), each retailer of motor fuel and gasohol
16shall cause the following notice to be posted in a prominently
17visible place on each retail dispensing device that is used to
18dispense motor fuel or gasohol in the State of Illinois: "As of
19July 1, 2000, the State of Illinois has eliminated the State's
20share of sales tax on motor fuel and gasohol through December
2131, 2000. The price on this pump should reflect the
22elimination of the tax." The notice shall be printed in bold
23print on a sign that is no smaller than 4 inches by 8 inches.
24The sign shall be clearly visible to customers. Any retailer
25who fails to post or maintain a required sign through December
2631, 2000 is guilty of a petty offense for which the fine shall

 

 

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1be $500 per day per each retail premises where a violation
2occurs.
3    With respect to gasohol, as defined in the Use Tax Act, the
4tax imposed by this Act applies to (i) 70% of the proceeds of
5sales made on or after January 1, 1990, and before July 1,
62003, (ii) 80% of the proceeds of sales made on or after July
71, 2003 and on or before July 1, 2017, (iii) 100% of the
8proceeds of sales made after July 1, 2017 and prior to January
91, 2024, (iv) 90% of the proceeds of sales made on or after
10January 1, 2024 and on or before December 31, 2028, and (v)
11100% of the proceeds of sales made after December 31, 2028. If,
12at any time, however, the tax under this Act on sales of
13gasohol, as defined in the Use Tax Act, is imposed at the rate
14of 1.25%, then the tax imposed by this Act applies to 100% of
15the proceeds of sales of gasohol made during that time.
16    With respect to mid-range ethanol blends, as defined in
17Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
18applies to (i) 80% of the proceeds of sales made on or after
19January 1, 2024 and on or before December 31, 2028 and (ii)
20100% of the proceeds of sales made after December 31, 2028. If,
21at any time, however, the tax under this Act on sales of
22mid-range ethanol blends is imposed at the rate of 1.25%, then
23the tax imposed by this Act applies to 100% of the proceeds of
24sales of mid-range ethanol blends made 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

 

 

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1to the proceeds of sales made on or after July 1, 2003 and on
2or before December 31, 2028 but applies to 100% of the proceeds
3of sales made thereafter.
4    With respect to biodiesel blends, as defined in the Use
5Tax Act, with no less than 1% and no more than 10% biodiesel,
6the tax imposed by this Act applies to (i) 80% of the proceeds
7of sales made on or after July 1, 2003 and on or before
8December 31, 2018 and (ii) 100% of the proceeds of sales made
9after December 31, 2018 and before January 1, 2024. 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. If,
13at any time, however, the tax under this Act on sales of
14biodiesel blends, as defined in the Use Tax Act, with no less
15than 1% and no more than 10% biodiesel is imposed at the rate
16of 1.25%, then the tax imposed by this Act applies to 100% of
17the proceeds of sales of biodiesel blends with no less than 1%
18and no more than 10% biodiesel made during that time.
19    With respect to biodiesel, as defined in the Use Tax Act,
20and biodiesel blends, as defined in the Use Tax Act, 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 of the Use Tax Act.

 

 

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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 July 1, 2022 and until July 1, 2023, with respect to
8food 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

 

 

SB3364- 30 -LRB103 37906 HLH 68038 b

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 not include beverages that contain milk or milk
12products, soy, rice or similar milk substitutes, or greater
13than 50% of vegetable or fruit juice by volume.
14    Until August 1, 2009, and notwithstanding any other
15provisions of this Act, "food for human consumption that is to
16be consumed off the premises where it is sold" includes all
17food sold through a vending machine, except soft drinks and
18food products that are dispensed hot from a vending machine,
19regardless of the location of the vending machine. Beginning
20August 1, 2009, and notwithstanding any other provisions of
21this Act, "food for human consumption that is to be consumed
22off the premises where it is sold" includes all food sold
23through a vending machine, except soft drinks, candy, and food
24products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine.
26    Notwithstanding any other provisions of this Act,

 

 

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

 

 

SB3364- 32 -LRB103 37906 HLH 68038 b

1Act 98-122), "prescription and nonprescription medicines and
2drugs" includes medical cannabis purchased from a registered
3dispensing organization under the Compassionate Use of Medical
4Cannabis Program Act.
5    As used in this Section, "adult use cannabis" means
6cannabis subject to tax under the Cannabis Cultivation
7Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
8and does not include cannabis subject to tax under the
9Compassionate Use of Medical Cannabis Program Act.
10(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
11Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
1260-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
134-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
 
14    (35 ILCS 120/2d)  (from Ch. 120, par. 441d)
15    Sec. 2d. Tax prepayment by motor fuel retailer.
16    (a) Any person engaged in the business of selling motor
17fuel at retail, as defined in the Motor Fuel Tax Law, and who
18is not a licensed distributor or supplier, as defined in the
19Motor Fuel Tax Law, shall prepay to his or her distributor,
20supplier, or other reseller of motor fuel a portion of the tax
21imposed by this Act if the distributor, supplier, or other
22reseller of motor fuel is registered under Section 2a or
23Section 2c of this Act. The prepayment requirement provided
24for in this Section does not apply to liquid propane gas.
25    (b) Beginning on July 1, 2000 and through December 31,

 

 

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12000, the Retailers' Occupation Tax paid to the distributor,
2supplier, or other reseller shall be an amount equal to $0.01
3per gallon of the motor fuel, except gasohol as defined in
4Section 2-10 of this Act which shall be an amount equal to
5$0.01 per gallon, purchased from the distributor, supplier, or
6other reseller.
7    (c) Before July 1, 2000 and then beginning on January 1,
82001 and through June 30, 2003, the Retailers' Occupation Tax
9paid to the distributor, supplier, or other reseller shall be
10an amount equal to $0.04 per gallon of the motor fuel, except
11gasohol as defined in Section 2-10 of this Act which shall be
12an amount equal to $0.03 per gallon, purchased from the
13distributor, supplier, or other reseller.
14    (d) Beginning July 1, 2003 and through December 31, 2010,
15the Retailers' Occupation Tax paid to the distributor,
16supplier, or other reseller shall be an amount equal to $0.06
17per gallon of the motor fuel, except gasohol as defined in
18Section 2-10 of this Act which shall be an amount equal to
19$0.05 per gallon, purchased from the distributor, supplier, or
20other reseller.
21    (e) Beginning on January 1, 2011 and thereafter, the
22Retailers' Occupation Tax paid to the distributor, supplier,
23or other reseller shall be at the rate established by the
24Department under this subsection. The rate shall be
25established by the Department on January 1 and July 1 of each
26year using the average selling price, as defined in Section 1

 

 

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1of this Act, per gallon of motor fuel sold in the State during
2the previous 6 months and multiplying that amount by 6.25% to
3determine the cents per gallon rate. Beginning 30 days after
4the effective date of this amendatory Act of the 103rd General
5Assembly, the cents per gallon rate established by the
6Department for motor fuel under this subsection may not exceed
7$0.18 per gallon. Beginning on January 1, 2024 and through
8December 31, 2028, in the case of gasohol, as defined in
9Section 3-40 of the Use Tax Act, the rate shall be 90% of the
10rate established by the Department under this subsection for
11motor fuel. Beginning on January 1, 2024 and through December
1231, 2028, in the case of mid-range ethanol blends, as defined
13in Section 3-44.3 of the Use Tax Act, the rate shall be 80% of
14the rate established by the Department under this subsection
15for motor fuel. The Department shall provide persons subject
16to this Section notice of the rate established under this
17subsection at least 20 days prior to each January 1 and July 1.
18The Department shall provide persons subject to this Section
19notice of the rate change required by this amendatory Act of
20the 103rd General Assembly at least 20 days prior to the date
21on which that change takes effect. Publication of the
22established rate on the Department's internet website shall
23constitute sufficient notice under this Section. The
24Department may use data derived from independent surveys
25conducted or accumulated by third parties to determine the
26average selling price per gallon of motor fuel sold in the

 

 

SB3364- 35 -LRB103 37906 HLH 68038 b

1State.
2    (f) Any person engaged in the business of selling motor
3fuel at retail shall be entitled to a credit against tax due
4under this Act in an amount equal to the tax paid to the
5distributor, supplier, or other reseller.
6    (g) Every distributor, supplier, or other reseller
7registered as provided in Section 2a or Section 2c of this Act
8shall remit the prepaid tax on all motor fuel that is due from
9any person engaged in the business of selling at retail motor
10fuel with the returns filed under Section 2f or Section 3 of
11this Act, but the vendors discount provided in Section 3 shall
12not apply to the amount of prepaid tax that is remitted. Any
13distributor or supplier who fails to properly collect and
14remit the tax shall be liable for the tax. For purposes of this
15Section, the prepaid tax is due on invoiced gallons sold
16during a month by the 20th day of the following month.
17(Source: P.A. 103-9, eff. 6-7-23.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.