093_HB0852sam001

 










                                     LRB093 05725 SJM 20018 a

 1                     AMENDMENT TO HOUSE BILL 852

 2        AMENDMENT NO.     .  Amend House Bill  852  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section   5.   The Illinois Income Tax Act is amended by
 5    changing Section 215 as follows:

 6        (35 ILCS 5/215)
 7        Sec. 215. Transportation Employee Credit.
 8        (a)  For each taxable year beginning on or after  January
 9    1,  2004  and  on  or  before  December 31, 2006, a qualified
10    employer shall be allowed a credit against the tax imposed by
11    subsections (a) and (b) of Section 201 of  this  Act  in  the
12    amount  of  $50  for  each  eligible employee employed by the
13    taxpayer as of the last day of the taxable year.
14        (b)  For purposes of this Section,  "qualified  employer"
15    means:
16             (1)  any employer who pays a commercial distribution
17        fee  under  Section  3-815.1 of the Illinois Vehicle Code
18        during the taxable year; or
19             (2)  any employer who, as of the end of the  taxable
20        year,  has  one  or  more employees whose compensation is
21        subject to tax only by the employee's state of  residence
22        pursuant to 49 U.S.C 14503(a)(1).
 
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 1        (c)  For purposes of this Section, "employee" includes an
 2    individual  who  is  treated  as  an employee of the taxpayer
 3    under Section 401(c) of the Internal Revenue Code  and  whose
 4    actual  assigned duties are such that, if the individual were
 5    a common-law employee performing such duties  in  2  or  more
 6    states, the individual's compensation would be subject to tax
 7    only  by  the  individual's state of residence pursuant to 49
 8    U.S.C. 14503(a)(1).
 9        (d)  An employee is an "eligible employee" only if all of
10    the following criteria are met:
11             (1)  The employee is an operator of a motor vehicle;
12             (2)  The employee's  compensation,  pursuant  to  49
13        U.S.C.  14503(a)(1),  is  subject  to  tax  only  by  the
14        employee's state of residence, or would be subject to tax
15        only   by  the  employee's  state  of  residence  if  the
16        employee's actual duties were  performed  in  2  or  more
17        states;
18             (3)  As of the end of the taxable year for which the
19        credit  is  claimed,  the  employee is a resident of this
20        State for purposes of this Act and 49 U.S.C. 14503(a)(1);
21        and
22             (4)  The employee is a full-time employee working 30
23        or more hours per week for 180 consecutive days; provided
24        that such 180-day period may be completed after  the  end
25        of  the  taxable  year  for  which  the credit under this
26        Section is claimed.
27        (e)  For   partners,   shareholders   of   subchapter   S
28    corporations, and owners of limited liability  companies,  if
29    the limited liability company is treated as a partnership for
30    purposes of federal and State income taxation, there shall be
31    allowed  a  credit  under  this  Section  to be determined in
32    accordance with the determination of income and  distributive
33    share  of  income under Sections 702 and 704 and subchapter S
34    of the Internal Revenue Code.
 
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 1        (f)  Any credit  allowed  under  this  Section  which  is
 2    unused  in  the  year  the  credit  is  earned may be carried
 3    forward to each of the 5 taxable years following the year for
 4    which the credit is first computed until  it  is  used.  This
 5    credit  shall be applied first to the earliest year for which
 6    there is a liability. If there is a credit under this Section
 7    from more than one tax year that is  available  to  offset  a
 8    liability,  the  earliest  credit  arising under this Section
 9    shall be applied first.
10        (g)  (Blank) This Section is exempt from  the  provisions
11    of Section 250 of this Act.
12        (h)  The  Department  of  Revenue  shall  promulgate such
13    rules and regulations as may be deemed necessary to carry out
14    the purposes of this Section.
15    (Source: P.A. 93-23, eff. 6-20-03.)

16        Section 10.  The Use  Tax  Act  is  amended  by  changing
17    Sections 3-5 and 3-61 as follows:

18        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
19        Sec.  3-5.   Exemptions.   Use  of the following tangible
20    personal property is exempt from the tax imposed by this Act:
21        (1)  Personal  property  purchased  from  a  corporation,
22    society,    association,    foundation,    institution,    or
23    organization, other than a limited liability company, that is
24    organized and operated as a not-for-profit service enterprise
25    for the benefit of persons 65 years of age or  older  if  the
26    personal property was not purchased by the enterprise for the
27    purpose of resale by the enterprise.
28        (2)  Personal  property  purchased  by  a  not-for-profit
29    Illinois  county  fair  association  for  use  in conducting,
30    operating, or promoting the county fair.
31        (3)  Personal property purchased by a not-for-profit arts
32    or cultural organization that establishes, by proof  required
 
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 1    by  the Department by rule, that it has received an exemption
 2    under Section 501(c)(3) of the Internal Revenue Code and that
 3    is organized and operated primarily for the  presentation  or
 4    support  of  arts  or  cultural  programming,  activities, or
 5    services.  These organizations include, but are  not  limited
 6    to,  music  and  dramatic arts organizations such as symphony
 7    orchestras and theatrical groups, arts and  cultural  service
 8    organizations,    local    arts    councils,    visual   arts
 9    organizations, and media arts organizations. On and after the
10    effective date of this amendatory Act  of  the  92nd  General
11    Assembly,  however,  an  entity  otherwise  eligible for this
12    exemption shall not make tax-free purchases unless it has  an
13    active identification number issued by the Department.
14        (4)  Personal  property purchased by a governmental body,
15    by  a  corporation,  society,  association,  foundation,   or
16    institution    organized   and   operated   exclusively   for
17    charitable, religious,  or  educational  purposes,  or  by  a
18    not-for-profit corporation, society, association, foundation,
19    institution, or organization that has no compensated officers
20    or employees and that is organized and operated primarily for
21    the recreation of persons 55 years of age or older. A limited
22    liability  company  may  qualify for the exemption under this
23    paragraph only if the limited liability company is  organized
24    and  operated  exclusively  for  educational purposes. On and
25    after July 1, 1987, however, no entity otherwise eligible for
26    this exemption shall make tax-free purchases unless it has an
27    active  exemption  identification  number   issued   by   the
28    Department.
29        (5)  Until  July  1,  2003,  a  passenger  car  that is a
30    replacement vehicle to the extent that the purchase price  of
31    the car is subject to the Replacement Vehicle Tax.
32        (6)  Until  July  1,  2003,  graphic  arts  machinery and
33    equipment, including repair and replacement parts,  both  new
34    and  used,  and including that manufactured on special order,
 
                            -5-      LRB093 05725 SJM 20018 a
 1    certified by the purchaser to be used primarily  for  graphic
 2    arts   production,  and  including  machinery  and  equipment
 3    purchased  for  lease.    Equipment  includes  chemicals   or
 4    chemicals  acting  as  catalysts but only if the chemicals or
 5    chemicals acting as catalysts effect a direct  and  immediate
 6    change upon a graphic arts product.
 7        (7)  Farm chemicals.
 8        (8)  Legal  tender,  currency,  medallions,  or  gold  or
 9    silver   coinage   issued  by  the  State  of  Illinois,  the
10    government of the United States of America, or the government
11    of any foreign country, and bullion.
12        (9)  Personal property purchased from a teacher-sponsored
13    student  organization  affiliated  with  an   elementary   or
14    secondary school located in Illinois.
15        (10)  A  motor  vehicle  of  the  first division, a motor
16    vehicle of the second division that is a self-contained motor
17    vehicle designed or permanently converted to  provide  living
18    quarters  for  recreational,  camping,  or  travel  use, with
19    direct walk through to the living quarters from the  driver's
20    seat,  or  a  motor vehicle of the second division that is of
21    the van configuration designed for the transportation of  not
22    less  than  7  nor  more  than  16  passengers, as defined in
23    Section 1-146 of the Illinois Vehicle Code, that is used  for
24    automobile  renting,  as  defined  in  the Automobile Renting
25    Occupation and Use Tax Act.
26        (11)  Farm machinery and equipment, both  new  and  used,
27    including  that  manufactured  on special order, certified by
28    the purchaser to be used primarily for production agriculture
29    or  State  or  federal   agricultural   programs,   including
30    individual replacement parts for the machinery and equipment,
31    including  machinery  and  equipment purchased for lease, and
32    including implements of husbandry defined in Section 1-130 of
33    the Illinois Vehicle Code, farm  machinery  and  agricultural
34    chemical  and fertilizer spreaders, and nurse wagons required
 
                            -6-      LRB093 05725 SJM 20018 a
 1    to be registered under Section 3-809 of the Illinois  Vehicle
 2    Code,  but  excluding  other  motor  vehicles  required to be
 3    registered under the  Illinois  Vehicle  Code.  Horticultural
 4    polyhouses  or  hoop houses used for propagating, growing, or
 5    overwintering plants shall be considered farm  machinery  and
 6    equipment  under this item (11). Agricultural chemical tender
 7    tanks and dry boxes shall include units sold separately  from
 8    a  motor  vehicle  required  to  be  licensed  and units sold
 9    mounted on a motor vehicle required to  be  licensed  if  the
10    selling price of the tender is separately 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 not
14    limited  to,  tractors,   harvesters,   sprayers,   planters,
15    seeders,  or spreaders. Precision farming equipment includes,
16    but is not  limited  to,  soil  testing  sensors,  computers,
17    monitors,  software,  global positioning and mapping systems,
18    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.  This item (11) is exempt
26    from the provisions of Section 3-90.
27        (12)  Fuel and petroleum products sold to or used  by  an
28    air  common  carrier, certified by the carrier to be used for
29    consumption, shipment, or  storage  in  the  conduct  of  its
30    business  as an air common carrier, for a flight destined for
31    or returning from a location or locations outside the  United
32    States  without  regard  to  previous  or subsequent domestic
33    stopovers.
34        (13)  Proceeds of mandatory  service  charges  separately
 
                            -7-      LRB093 05725 SJM 20018 a
 1    stated  on  customers' bills for the purchase and consumption
 2    of food and beverages purchased at retail from a retailer, to
 3    the extent that the proceeds of the  service  charge  are  in
 4    fact  turned  over as tips or as a substitute for tips to the
 5    employees who participate  directly  in  preparing,  serving,
 6    hosting  or  cleaning  up  the food or beverage function with
 7    respect to which the service charge is imposed.
 8        (14)  Until  July  1,  2003,   oil   field   exploration,
 9    drilling,  and  production  equipment, including (i) rigs and
10    parts of rigs, rotary rigs, cable  tool  rigs,  and  workover
11    rigs, (ii) pipe and tubular goods, including casing and drill
12    strings,  (iii) pumps and pump-jack units, (iv) storage tanks
13    and flow lines, (v) any individual replacement part  for  oil
14    field  exploration,  drilling,  and production equipment, and
15    (vi)  machinery  and  equipment  purchased  for  lease;   but
16    excluding  motor vehicles required to be registered under the
17    Illinois Vehicle Code.
18        (15)  Photoprocessing machinery and equipment,  including
19    repair  and  replacement  parts, both new and used, including
20    that  manufactured  on  special  order,  certified   by   the
21    purchaser  to  be  used  primarily  for  photoprocessing, and
22    including photoprocessing machinery and  equipment  purchased
23    for lease.
24        (16)  Until  July  1,  2003,  coal  exploration,  mining,
25    offhighway  hauling, processing, maintenance, and reclamation
26    equipment, including replacement  parts  and  equipment,  and
27    including  equipment purchased for lease, but excluding motor
28    vehicles required to be registered under the Illinois Vehicle
29    Code.
30        (17)  Until July  1,  2003,  distillation  machinery  and
31    equipment,  sold  as a unit or kit, assembled or installed by
32    the retailer, certified by the user to be used only  for  the
33    production of ethyl alcohol that will be used for consumption
34    as  motor  fuel  or  as  a  component  of  motor fuel for the
 
                            -8-      LRB093 05725 SJM 20018 a
 1    personal use of the user, and not subject to sale or resale.
 2        (18)  Manufacturing   and   assembling   machinery    and
 3    equipment  used  primarily in the process of manufacturing or
 4    assembling tangible personal property for wholesale or retail
 5    sale or lease, whether that sale or lease is made directly by
 6    the  manufacturer  or  by  some  other  person,  whether  the
 7    materials used in the process are owned by  the  manufacturer
 8    or  some  other person, or whether that sale or lease is made
 9    apart from or as an incident to the seller's engaging in  the
10    service  occupation of producing machines, tools, dies, jigs,
11    patterns, gauges, or other similar  items  of  no  commercial
12    value on special order for a particular purchaser.
13        (19)  Personal  property  delivered  to  a  purchaser  or
14    purchaser's donee inside Illinois when the purchase order for
15    that  personal  property  was  received  by a florist located
16    outside Illinois who has a florist  located  inside  Illinois
17    deliver the personal property.
18        (20)  Semen used for artificial insemination of livestock
19    for direct agricultural production.
20        (21)  Horses, or interests in horses, registered with and
21    meeting  the  requirements  of  any of the Arabian Horse Club
22    Registry of America, Appaloosa Horse Club,  American  Quarter
23    Horse  Association,  United  States  Trotting Association, or
24    Jockey Club, as appropriate, used for purposes of breeding or
25    racing for prizes.
26        (22)  Computers and communications equipment utilized for
27    any hospital purpose and equipment  used  in  the  diagnosis,
28    analysis,  or  treatment  of hospital patients purchased by a
29    lessor who leases the equipment, under a lease of one year or
30    longer executed or in effect at the  time  the  lessor  would
31    otherwise  be  subject  to  the tax imposed by this Act, to a
32    hospital  that  has  been  issued  an  active  tax  exemption
33    identification  number  by the Department under Section 1g of
34    the Retailers' Occupation  Tax  Act.   If  the  equipment  is
 
                            -9-      LRB093 05725 SJM 20018 a
 1    leased  in  a manner that does not qualify for this exemption
 2    or is used in any other non-exempt manner, the  lessor  shall
 3    be  liable  for the tax imposed under this Act or the Service
 4    Use Tax Act, as the case may be, based  on  the  fair  market
 5    value  of  the  property  at  the time the non-qualifying use
 6    occurs.  No lessor shall collect or  attempt  to  collect  an
 7    amount  (however  designated) that purports to reimburse that
 8    lessor for the tax imposed by this Act or the Service Use Tax
 9    Act, as the case may be, if the tax has not been paid by  the
10    lessor.  If a lessor improperly collects any such amount from
11    the  lessee,  the  lessee shall have a legal right to claim a
12    refund of that amount from the  lessor.   If,  however,  that
13    amount  is  not  refunded  to  the lessee for any reason, the
14    lessor is liable to pay that amount to the Department.
15        (23)  Personal property purchased by a lessor who  leases
16    the  property,  under a lease of  one year or longer executed
17    or in effect at  the  time  the  lessor  would  otherwise  be
18    subject  to  the  tax  imposed by this Act, to a governmental
19    body that has been  issued  an  active  sales  tax  exemption
20    identification  number  by the Department under Section 1g of
21    the Retailers' Occupation Tax Act. If the property is  leased
22    in  a manner that does not qualify for this exemption or used
23    in any other non-exempt manner, the lessor  shall  be  liable
24    for  the  tax  imposed  under this Act or the Service Use Tax
25    Act, as the case may be, based on the fair  market  value  of
26    the  property  at the time the non-qualifying use occurs.  No
27    lessor shall collect or attempt to collect an amount (however
28    designated) that purports to reimburse that  lessor  for  the
29    tax  imposed  by  this Act or the Service Use Tax Act, as the
30    case may be, if the tax has not been paid by the lessor.   If
31    a lessor improperly collects any such amount from the lessee,
32    the lessee shall have a legal right to claim a refund of that
33    amount  from  the  lessor.   If,  however, that amount is not
34    refunded to the lessee for any reason, the lessor  is  liable
 
                            -10-     LRB093 05725 SJM 20018 a
 1    to pay that amount to the Department.
 2        (24)  Beginning  with  taxable  years  ending on or after
 3    December 31, 1995 and ending with taxable years ending on  or
 4    before  December  31, 2004, personal property that is donated
 5    for disaster relief to  be  used  in  a  State  or  federally
 6    declared disaster area in Illinois or bordering Illinois by a
 7    manufacturer  or retailer that is registered in this State to
 8    a   corporation,   society,   association,   foundation,   or
 9    institution that  has  been  issued  a  sales  tax  exemption
10    identification  number by the Department that assists victims
11    of the disaster who reside within the declared disaster area.
12        (25)  Beginning with taxable years  ending  on  or  after
13    December  31, 1995 and ending with taxable years ending on or
14    before December 31, 2004, personal property that is  used  in
15    the  performance  of  infrastructure  repairs  in this State,
16    including but not limited to  municipal  roads  and  streets,
17    access  roads,  bridges,  sidewalks,  waste disposal systems,
18    water and  sewer  line  extensions,  water  distribution  and
19    purification  facilities,  storm water drainage and retention
20    facilities, and sewage treatment facilities, resulting from a
21    State or federally declared disaster in Illinois or bordering
22    Illinois  when  such  repairs  are  initiated  on  facilities
23    located in the declared disaster area within 6  months  after
24    the disaster.
25        (26)  Beginning   July   1,  1999,  game  or  game  birds
26    purchased at a "game breeding and hunting preserve  area"  or
27    an  "exotic game hunting area" as those terms are used in the
28    Wildlife Code or at  a  hunting  enclosure  approved  through
29    rules  adopted  by the Department of Natural Resources.  This
30    paragraph is exempt from the provisions of Section 3-90.
31        (27)  A motor vehicle, as that term is defined in Section
32    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
33    corporation, limited liability company, society, association,
34    foundation,   or   institution  that  is  determined  by  the
 
                            -11-     LRB093 05725 SJM 20018 a
 1    Department to  be  organized  and  operated  exclusively  for
 2    educational  purposes.    For  purposes of this exemption, "a
 3    corporation, limited liability company, society, association,
 4    foundation, or institution organized and operated exclusively
 5    for educational  purposes"  means  all  tax-supported  public
 6    schools, private schools that offer systematic instruction in
 7    useful  branches  of  learning  by  methods  common to public
 8    schools  and  that  compare  favorably  in  their  scope  and
 9    intensity with the course of study presented in tax-supported
10    schools, and vocational or technical  schools  or  institutes
11    organized  and  operated  exclusively  to provide a course of
12    study of not less than  6  weeks  duration  and  designed  to
13    prepare  individuals to follow a trade or to pursue a manual,
14    technical, mechanical, industrial,  business,  or  commercial
15    occupation.
16        (28)  Beginning  January  1,  2000,   personal  property,
17    including  food, purchased through fundraising events for the
18    benefit of  a  public  or  private  elementary  or  secondary
19    school,  a  group  of  those  schools,  or one or more school
20    districts if the events are sponsored by an entity recognized
21    by the school district that consists primarily of  volunteers
22    and  includes  parents  and  teachers of the school children.
23    This paragraph does not apply to fundraising events  (i)  for
24    the benefit of private home instruction or (ii) for which the
25    fundraising  entity  purchases  the personal property sold at
26    the events from another individual or entity  that  sold  the
27    property  for the purpose of resale by the fundraising entity
28    and that profits from the sale  to  the  fundraising  entity.
29    This paragraph is exempt from the provisions of Section 3-90.
30        (29)  Beginning  January 1, 2000 and through December 31,
31    2001, new or used automatic vending machines that prepare and
32    serve hot food and beverages,  including  coffee,  soup,  and
33    other  items,  and  replacement  parts  for  these  machines.
34    Beginning January 1, 2002 and through June 30, 2003, machines
 
                            -12-     LRB093 05725 SJM 20018 a
 1    and  parts  for  machines  used  in commercial, coin-operated
 2    amusement and vending business if a use or occupation tax  is
 3    paid  on  the  gross  receipts  derived  from  the use of the
 4    commercial, coin-operated  amusement  and  vending  machines.
 5    This paragraph is exempt from the provisions of Section 3-90.
 6        (30)  Food  for  human consumption that is to be consumed
 7    off the premises where  it  is  sold  (other  than  alcoholic
 8    beverages,  soft  drinks, and food that has been prepared for
 9    immediate consumption) and prescription  and  nonprescription
10    medicines,  drugs,  medical  appliances,  and  insulin, urine
11    testing materials, syringes, and needles used  by  diabetics,
12    for  human  use, when purchased for use by a person receiving
13    medical assistance under Article 5 of the Illinois Public Aid
14    Code who resides in a licensed long-term  care  facility,  as
15    defined in the Nursing Home Care Act.
16        (31)  Beginning  on the effective date of this amendatory
17    Act   of   the   92nd   General   Assembly,   computers   and
18    communications equipment utilized for  any  hospital  purpose
19    and  equipment  used in the diagnosis, analysis, or treatment
20    of hospital patients purchased by a  lessor  who  leases  the
21    equipment, under a lease of one year or longer executed or in
22    effect  at  the time the lessor would otherwise be subject to
23    the tax imposed by this Act, to  a  hospital  that  has  been
24    issued  an  active tax exemption identification number by the
25    Department under Section 1g of the Retailers' Occupation  Tax
26    Act.   If  the  equipment is leased in a manner that does not
27    qualify for this exemption or is used in any other  nonexempt
28    manner,  the lessor shall be liable for the tax imposed under
29    this Act or the Service Use Tax Act,  as  the  case  may  be,
30    based  on  the  fair market value of the property at the time
31    the nonqualifying use occurs.  No  lessor  shall  collect  or
32    attempt  to  collect  an  amount  (however  designated)  that
33    purports to reimburse that lessor for the tax imposed by this
34    Act  or  the  Service Use Tax Act, as the case may be, if the
 
                            -13-     LRB093 05725 SJM 20018 a
 1    tax has not been paid by the lessor.  If a lessor  improperly
 2    collects  any  such  amount from the lessee, the lessee shall
 3    have a legal right to claim a refund of that amount from  the
 4    lessor.   If,  however,  that  amount  is not refunded to the
 5    lessee for any reason, the  lessor  is  liable  to  pay  that
 6    amount  to  the Department. This paragraph is exempt from the
 7    provisions of Section 3-90.
 8        (32)  Beginning on the effective date of this  amendatory
 9    Act of the 92nd General Assembly, personal property purchased
10    by  a  lessor  who  leases the property, under a lease of one
11    year or longer executed or in effect at the time  the  lessor
12    would otherwise be subject to the tax imposed by this Act, to
13    a  governmental body that has been issued an active sales tax
14    exemption  identification  number  by  the  Department  under
15    Section 1g of the Retailers'  Occupation  Tax  Act.   If  the
16    property is leased in a manner that does not qualify for this
17    exemption  or  used in any other nonexempt manner, the lessor
18    shall be liable for the tax imposed under  this  Act  or  the
19    Service  Use  Tax  Act, as the case may be, based on the fair
20    market value of the property at the  time  the  nonqualifying
21    use occurs.  No lessor shall collect or attempt to collect an
22    amount  (however  designated) that purports to reimburse that
23    lessor for the tax imposed by this Act or the Service Use Tax
24    Act, as the case may be, if the tax has not been paid by  the
25    lessor.  If a lessor improperly collects any such amount from
26    the  lessee,  the  lessee shall have a legal right to claim a
27    refund of that amount from the  lessor.   If,  however,  that
28    amount  is  not  refunded  to  the lessee for any reason, the
29    lessor is liable to pay that amount to the Department.   This
30    paragraph is exempt from the provisions of Section 3-90.
31        (33)  On  and  after  July  1,  2003 and through June 30,
32    2006, the use in this State of motor vehicles of  the  second
33    division  with  a  gross  vehicle  weight  in excess of 8,000
34    pounds and that are subject to  the  commercial  distribution
 
                            -14-     LRB093 05725 SJM 20018 a
 1    fee  imposed  under  Section  3-815.1 of the Illinois Vehicle
 2    Code. This exemption applies to repair and replacement  parts
 3    added  after  the initial purchase of such a motor vehicle if
 4    that motor vehicle is used in a manner that would qualify for
 5    the rolling stock exemption otherwise provided  for  in  this
 6    Act.
 7    (Source:  P.A.  92-35,  eff.  7-1-01;  92-227,  eff.  8-2-01;
 8    92-337,  eff.  8-10-01;  92-484,  eff.  8-23-01; 92-651, eff.
 9    7-11-02; 93-23, eff. 6-20-03; 93-24,  eff.  6-20-03;  revised
10    9-11-03.)

11        (35 ILCS 105/3-61)
12        Sec.   3-61.    Motor  vehicles;  use  as  rolling  stock
13    definition.  Through June 30, 2003  and  beginning  again  on
14    July  1,  2006,  "use  as  rolling stock moving in interstate
15    commerce" in subsections (b) and (c) of  Section  3-55  means
16    for  motor  vehicles,  as  defined  in  Section  1-146 of the
17    Illinois Vehicle Code, and trailers, as  defined  in  Section
18    1-209  of  the  Illinois  Vehicle  Code,  when  on 15 or more
19    occasions in a 12-month period the motor vehicle and  trailer
20    has  carried  persons  or  property  for  hire  in interstate
21    commerce, even just between points in Illinois, if the  motor
22    vehicle  and  trailer  transports  persons  whose journeys or
23    property  whose  shipments  originate  or  terminate  outside
24    Illinois.  This definition applies to all property  purchased
25    for  the purpose of being attached to those motor vehicles or
26    trailers as a part thereof. On and after  July  1,  2003  and
27    through  June  30,  2006,  "use  as  rolling  stock moving in
28    interstate commerce" in paragraphs (b)  and  (c)  of  Section
29    3-55  occurs  for motor vehicles, as defined in Section 1-146
30    of the Illinois Vehicle Code, when during a  12-month  period
31    the rolling stock has carried persons or property for hire in
32    interstate commerce for 51% of its total trips and transports
33    persons  whose journeys or property whose shipments originate
 
                            -15-     LRB093 05725 SJM 20018 a
 1    or terminate outside Illinois. Trips that  are  only  between
 2    points  in  Illinois shall not be counted as interstate trips
 3    when  calculating  whether  the  tangible  personal  property
 4    qualifies for the exemption but such trips shall be  included
 5    in total trips taken.
 6    (Source: P.A. 93-23, eff. 6-20-03.)

 7        Section  15.  The  Service  Use  Tax  Act  is  amended by
 8    changing Sections 2 and 3-5 as follows:

 9        (35 ILCS 110/2) (from Ch. 120, par. 439.32)
10        Sec. 2. "Use" means the exercise by  any  person  of  any
11    right  or  power  over tangible personal property incident to
12    the ownership of that property, but does not include the sale
13    or use for demonstration by him of that property in any  form
14    as  tangible  personal  property  in  the  regular  course of
15    business. "Use" does not mean the  interim  use  of  tangible
16    personal  property nor the physical incorporation of tangible
17    personal property, as  an  ingredient  or  constituent,  into
18    other  tangible  personal  property, (a) which is sold in the
19    regular  course  of  business  or  (b)   which   the   person
20    incorporating  such  ingredient  or  constituent  therein has
21    undertaken at the time  of  such  purchase  to  cause  to  be
22    transported  in  interstate  commerce to destinations outside
23    the State of Illinois.
24        "Purchased from a serviceman" means  the  acquisition  of
25    the  ownership  of,  or  title to, tangible personal property
26    through a sale of service.
27        "Purchaser" means any  person  who,  through  a  sale  of
28    service, acquires the ownership of, or title to, any tangible
29    personal property.
30        "Cost   price"   means  the  consideration  paid  by  the
31    serviceman for a purchase valued in money,  whether  paid  in
32    money or otherwise, including cash, credits and services, and
 
                            -16-     LRB093 05725 SJM 20018 a
 1    shall  be  determined without any deduction on account of the
 2    supplier's cost of the property sold or  on  account  of  any
 3    other  expense  incurred  by  the supplier. When a serviceman
 4    contracts out part or all of the  services  required  in  his
 5    sale  of service, it shall be presumed that the cost price to
 6    the serviceman of the property transferred to him or  her  by
 7    his   or   her   subcontractor   is   equal  to  50%  of  the
 8    subcontractor's charges to the serviceman in the  absence  of
 9    proof  of the consideration paid by the subcontractor for the
10    purchase of such property.
11        "Selling price" means the consideration for a sale valued
12    in money whether received in money  or  otherwise,  including
13    cash,  credits  and  service, and shall be determined without
14    any deduction on account of  the  serviceman's  cost  of  the
15    property  sold,  the cost of materials used, labor or service
16    cost or any other expense whatsoever, but  does  not  include
17    interest or finance charges which appear as separate items on
18    the bill of sale or sales contract nor charges that are added
19    to  prices  by  sellers  on  account  of the seller's duty to
20    collect, from the purchaser, the tax that is imposed by  this
21    Act.
22        "Department" means the Department of Revenue.
23        "Person" means any natural individual, firm, partnership,
24    association,  joint  stock  company, joint venture, public or
25    private  corporation,  limited  liability  company,  and  any
26    receiver, executor, trustee, guardian or other representative
27    appointed by order of any court.
28        "Sale of service" means any transaction except:
29             (1)  a retail sale  of  tangible  personal  property
30        taxable  under the Retailers' Occupation Tax Act or under
31        the Use Tax Act.
32             (2)  a sale of tangible personal  property  for  the
33        purpose  of  resale made in compliance with Section 2c of
34        the Retailers' Occupation Tax Act.
 
                            -17-     LRB093 05725 SJM 20018 a
 1             (3)  except  as  hereinafter  provided,  a  sale  or
 2        transfer of tangible personal property as an incident  to
 3        the rendering of service for or by any governmental body,
 4        or  for  or  by  any  corporation,  society, association,
 5        foundation  or   institution   organized   and   operated
 6        exclusively  for  charitable,  religious  or  educational
 7        purposes  or  any  not-for-profit  corporation,  society,
 8        association,   foundation,  institution  or  organization
 9        which has no compensated officers or employees and  which
10        is organized and operated primarily for the recreation of
11        persons  55  years  of  age or older. A limited liability
12        company  may  qualify  for  the  exemption   under   this
13        paragraph  only  if  the  limited  liability  company  is
14        organized   and   operated  exclusively  for  educational
15        purposes.
16             (4)  a  sale  or  transfer  of   tangible   personal
17        property  as  an incident to the rendering of service for
18        interstate carriers for hire for  use  as  rolling  stock
19        moving in interstate commerce or by lessors under a lease
20        of  one year or longer, executed or in effect at the time
21        of purchase of personal property, to interstate  carriers
22        for  hire  for  use as rolling stock moving in interstate
23        commerce so long as so used by such  interstate  carriers
24        for  hire, and equipment operated by a telecommunications
25        provider, licensed as a common  carrier  by  the  Federal
26        Communications Commission, which is permanently installed
27        in or affixed to aircraft moving in interstate commerce.
28             (4a)  a   sale  or  transfer  of  tangible  personal
29        property as an incident to the rendering of  service  for
30        owners,   lessors,   or  shippers  of  tangible  personal
31        property which is utilized  by  interstate  carriers  for
32        hire  for  use  as  rolling  stock  moving  in interstate
33        commerce so long as so used by  interstate  carriers  for
34        hire,  and  equipment  operated  by  a telecommunications
 
                            -18-     LRB093 05725 SJM 20018 a
 1        provider, licensed as a common  carrier  by  the  Federal
 2        Communications Commission, which is permanently installed
 3        in or affixed to aircraft moving in interstate commerce.
 4             (4a-5)  on  and  after July 1, 2003 and through June
 5        30, 2006, a sale or transfer of a motor  vehicle  of  the
 6        second  division with a gross vehicle weight in excess of
 7        8,000 pounds as an incident to the rendering  of  service
 8        if  that  motor  vehicle  is  subject   to the commercial
 9        distribution fee imposed under  Section  3-815.1  of  the
10        Illinois  Vehicle    Code.    This  exemption  applies to
11        repair and replacement  parts  added  after  the  initial
12        purchase of such a motor vehicle if that motor vehicle is
13        used  in  a  manner  that  would  qualify for the rolling
14        stock exemption otherwise provided for in this Act.
15             (5)  a sale or transfer of machinery  and  equipment
16        used  primarily  in  the  process of the manufacturing or
17        assembling, either in an existing, an expanded or  a  new
18        manufacturing facility, of tangible personal property for
19        wholesale  or  retail sale or lease, whether such sale or
20        lease is made directly by the  manufacturer  or  by  some
21        other  person,  whether the materials used in the process
22        are owned by the manufacturer or some  other  person,  or
23        whether  such  sale  or lease is made apart from or as an
24        incident to the seller's engaging in a service occupation
25        and the applicable tax is a Service Use  Tax  or  Service
26        Occupation   Tax,  rather  than  Use  Tax  or  Retailers'
27        Occupation Tax.
28             (5a)  the repairing, reconditioning  or  remodeling,
29        for  a  common  carrier  by  rail,  of  tangible personal
30        property which belongs to such carrier for hire,  and  as
31        to which such carrier receives the physical possession of
32        the repaired, reconditioned or remodeled item of tangible
33        personal  property  in  Illinois,  and which such carrier
34        transports, or shares with another common carrier in  the
 
                            -19-     LRB093 05725 SJM 20018 a
 1        transportation  of  such  property,  out of Illinois on a
 2        standard uniform bill of lading showing  the  person  who
 3        repaired,  reconditioned  or  remodeled the property to a
 4        destination outside Illinois, for use outside Illinois.
 5             (5b)  a  sale  or  transfer  of  tangible   personal
 6        property  which  is  produced  by  the  seller thereof on
 7        special  order  in  such  a  way  as  to  have  made  the
 8        applicable tax the Service Occupation Tax or the  Service
 9        Use Tax, rather than the Retailers' Occupation Tax or the
10        Use Tax, for an interstate carrier by rail which receives
11        the physical possession of such property in Illinois, and
12        which  transports  such  property, or shares with another
13        common carrier in the transportation  of  such  property,
14        out  of  Illinois  on  a  standard uniform bill of lading
15        showing the seller of the  property  as  the  shipper  or
16        consignor  of  such  property  to  a  destination outside
17        Illinois, for use outside Illinois.
18             (6)  until July 1,  2003,  a  sale  or  transfer  of
19        distillation  machinery  and equipment, sold as a unit or
20        kit and assembled or installed  by  the  retailer,  which
21        machinery  and  equipment  is certified by the user to be
22        used only for the production of ethyl alcohol  that  will
23        be  used  for consumption as motor fuel or as a component
24        of motor fuel for the personal use of such user  and  not
25        subject to sale or resale.
26             (7)  at  the election of any serviceman not required
27        to be otherwise registered as a retailer under Section 2a
28        of the Retailers'  Occupation  Tax  Act,  made  for  each
29        fiscal  year  sales  of  service  in  which the aggregate
30        annual  cost  price   of   tangible   personal   property
31        transferred  as  an  incident  to the sales of service is
32        less  than  35%,  or  75%  in  the  case  of   servicemen
33        transferring  prescription drugs or servicemen engaged in
34        graphic arts production, of the  aggregate  annual  total
 
                            -20-     LRB093 05725 SJM 20018 a
 1        gross receipts from all sales of service. The purchase of
 2        such  tangible  personal property by the serviceman shall
 3        be subject to tax under the Retailers' Occupation Tax Act
 4        and the Use Tax Act. However, if a primary serviceman who
 5        has  made  the  election  described  in  this   paragraph
 6        subcontracts  service  work to a secondary serviceman who
 7        has also made the election described in  this  paragraph,
 8        the primary serviceman does not incur a Use Tax liability
 9        if  the secondary serviceman (i) has paid or will pay Use
10        Tax on his or her cost price  of  any  tangible  personal
11        property  transferred  to the primary serviceman and (ii)
12        certifies that fact in writing to the primary serviceman.
13        Tangible personal property transferred  incident  to  the
14    completion  of a maintenance agreement is exempt from the tax
15    imposed pursuant to this Act.
16        Exemption (5) also includes machinery and equipment  used
17    in the general maintenance or repair of such exempt machinery
18    and equipment or for in-house manufacture of exempt machinery
19    and  equipment.  For  the  purposes of exemption (5), each of
20    these  terms  shall  have  the   following   meanings:    (1)
21    "manufacturing  process"  shall  mean  the  production of any
22    article of tangible personal property, whether  such  article
23    is a finished product or an article for use in the process of
24    manufacturing  or  assembling a different article of tangible
25    personal  property,  by  procedures  commonly   regarded   as
26    manufacturing,  processing,  fabricating,  or  refining which
27    changes some existing material or materials into  a  material
28    with  a  different  form,  use  or  name.   In  relation to a
29    recognized  integrated  business  composed  of  a  series  of
30    operations which collectively  constitute  manufacturing,  or
31    individually   constitute   manufacturing   operations,   the
32    manufacturing  process  shall  be deemed to commence with the
33    first operation or stage of production  in  the  series,  and
34    shall  not be deemed to end until the completion of the final
 
                            -21-     LRB093 05725 SJM 20018 a
 1    product in the last operation or stage of production  in  the
 2    series;   and   further,   for  purposes  of  exemption  (5),
 3    photoprocessing is deemed to be a  manufacturing  process  of
 4    tangible  personal property for wholesale or retail sale; (2)
 5    "assembling process" shall mean the production of any article
 6    of tangible personal property,  whether  such  article  is  a
 7    finished  product  or  an  article  for use in the process of
 8    manufacturing or assembling a different article  of  tangible
 9    personal  property,  by the combination of existing materials
10    in a manner commonly regarded as assembling which results  in
11    a  material of a different form, use or name; (3) "machinery"
12    shall mean major mechanical machines or major  components  of
13    such  machines  contributing to a manufacturing or assembling
14    process; and (4) "equipment" shall  include  any  independent
15    device  or  tool separate from any machinery but essential to
16    an integrated manufacturing or  assembly  process;  including
17    computers   used   primarily  in  a  manufacturer's  computer
18    assisted design, computer  assisted  manufacturing  (CAD/CAM)
19    system;  or any subunit or assembly comprising a component of
20    any machinery or auxiliary, adjunct or  attachment  parts  of
21    machinery,  such as tools, dies, jigs, fixtures, patterns and
22    molds; or any parts which require periodic replacement in the
23    course of normal operation; but shall not include hand tools.
24    Equipment includes chemicals or chemicals acting as catalysts
25    but only if the chemicals or chemicals  acting  as  catalysts
26    effect  a  direct  and  immediate change upon a product being
27    manufactured or assembled for wholesale  or  retail  sale  or
28    lease.  The purchaser of such machinery and equipment who has
29    an active  resale  registration  number  shall  furnish  such
30    number  to  the  seller  at the time of purchase. The user of
31    such machinery and equipment  and  tools  without  an  active
32    resale  registration  number  shall  prepare a certificate of
33    exemption for each transaction stating facts establishing the
34    exemption for that transaction, which  certificate  shall  be
 
                            -22-     LRB093 05725 SJM 20018 a
 1    available  to  the  Department  for inspection or audit.  The
 2    Department shall prescribe the form of the certificate.
 3        Any informal rulings, opinions or letters issued  by  the
 4    Department  in  response  to  an  inquiry  or request for any
 5    opinion  from  any  person   regarding   the   coverage   and
 6    applicability  of  exemption (5) to specific devices shall be
 7    published, maintained as a public record, and made  available
 8    for  public  inspection and copying.  If the informal ruling,
 9    opinion  or  letter   contains   trade   secrets   or   other
10    confidential information, where possible the Department shall
11    delete  such information prior to publication.  Whenever such
12    informal rulings, opinions, or letters contain any policy  of
13    general  applicability,  the  Department  shall formulate and
14    adopt such policy as a rule in accordance with the provisions
15    of the Illinois Administrative Procedure Act.
16        On and after July 1, 1987, no entity  otherwise  eligible
17    under  exemption  (3)  of  this  Section  shall make tax free
18    purchases unless it has an  active  exemption  identification
19    number issued by the Department.
20        The  purchase,  employment  and transfer of such tangible
21    personal property  as  newsprint  and  ink  for  the  primary
22    purpose of conveying news (with or without other information)
23    is  not  a  purchase,  use  or sale of service or of tangible
24    personal property within the meaning of this Act.
25        "Serviceman" means any  person  who  is  engaged  in  the
26    occupation of making sales of service.
27        "Sale at retail" means "sale at retail" as defined in the
28    Retailers' Occupation Tax Act.
29        "Supplier"  means  any person who makes sales of tangible
30    personal property to servicemen for the purpose of resale  as
31    an incident to a sale of service.
32        "Serviceman  maintaining  a  place  of  business  in this
33    State", or any like term, means and includes any serviceman:
34             1.  having  or  maintaining   within   this   State,
 
                            -23-     LRB093 05725 SJM 20018 a
 1        directly  or  by  a  subsidiary,  an office, distribution
 2        house, sales house, warehouse or other place of business,
 3        or any agent or  other  representative  operating  within
 4        this  State  under the authority of the serviceman or its
 5        subsidiary,  irrespective  of  whether  such   place   of
 6        business or agent or other representative is located here
 7        permanently or temporarily, or whether such serviceman or
 8        subsidiary is licensed to do business in this State;
 9             2.  soliciting orders for tangible personal property
10        by  means  of  a telecommunication or television shopping
11        system  (which  utilizes  toll  free  numbers)  which  is
12        intended  by  the  retailer  to  be  broadcast  by  cable
13        television or other means of broadcasting,  to  consumers
14        located in this State;
15             3.  pursuant  to  a  contract  with a broadcaster or
16        publisher located in this State,  soliciting  orders  for
17        tangible  personal property by means of advertising which
18        is disseminated primarily to consumers  located  in  this
19        State and only secondarily to bordering jurisdictions;
20             4.  soliciting orders for tangible personal property
21        by   mail   if  the  solicitations  are  substantial  and
22        recurring and if the retailer benefits from any  banking,
23        financing,   debt   collection,   telecommunication,   or
24        marketing  activities occurring in this State or benefits
25        from  the  location   in   this   State   of   authorized
26        installation, servicing, or repair facilities;
27             5.  being  owned or controlled by the same interests
28        which own or control any retailer engaging in business in
29        the same or similar line of business in this State;
30             6.  having a franchisee or licensee operating  under
31        its  trade name if the franchisee or licensee is required
32        to collect the tax under this Section;
33             7.  pursuant to a contract with a  cable  television
34        operator  located  in  this  State, soliciting orders for
 
                            -24-     LRB093 05725 SJM 20018 a
 1        tangible personal property by means of advertising  which
 2        is  transmitted  or  distributed  over a cable television
 3        system in this State; or
 4             8.  engaging  in  activities  in   Illinois,   which
 5        activities  in  the  state  in  which the supply business
 6        engaging in such activities is located  would  constitute
 7        maintaining a place of business in that state.
 8    (Source: P.A.  92-484,  eff.  8-23-01;  93-23,  eff. 6-20-03;
 9    93-24, eff. 6-20-03; revised 8-21-03.)

10        (35 ILCS 110/3-51)
11        Sec.  3-51.   Motor  vehicles;  use  as   rolling   stock
12    definition.   Through  June  30,  2003 and beginning again on
13    July 1, 2006, "use as  rolling  stock  moving  in  interstate
14    commerce"  in  subsection (b) of Section 3-45 means for motor
15    vehicles, as defined in Section 1-46 of the Illinois  Vehicle
16    Code,  and  trailers,  as  defined  in  Section  1-209 of the
17    Illinois Vehicle Code, when on 15  or  more  occasions  in  a
18    12-month  period  the  motor  vehicle and trailer has carried
19    persons or property for hire  in  interstate  commerce,  even
20    just  between  points  in  Illinois, if the motor vehicle and
21    trailer transports persons whose journeys or  property  whose
22    shipments  originate  or  terminate  outside  Illinois.  This
23    definition applies to all property purchased for the  purpose
24    of  being  attached  to those motor vehicles or trailers as a
25    part thereof. On and after July 1, 2003 and through June  30,
26    2006, "use as rolling stock moving in interstate commerce" in
27    paragraphs  (4)  and  (4a)  of  the  definition  of  "sale of
28    service" in Section 2 and  subsection  (b)  of  Section  3-45
29    occurs for motor vehicles, as defined in Section 1-146 of the
30    Illinois  Vehicle  Code,  when   during a 12-month period the
31    rolling stock has carried persons or  property  for  hire  in
32    interstate commerce for 51% of its total trips and transports
33    persons whose journeys or  property whose shipments originate
 
                            -25-     LRB093 05725 SJM 20018 a
 1    or terminate outside Illinois.   Trips that are only  between
 2    points  in  Illinois shall not be counted as interstate trips
 3    when calculating whether    the  tangible  personal  property
 4    qualifies for the exemption but such trips shall be included
 5    in total trips taken.
 6    (Source: P.A. 93-23, eff. 6-20-03.)

 7        Section 20.  The Service Occupation Tax Act is amended by
 8    changing Sections 2 and 2d as follows:

 9        (35 ILCS 115/2) (from Ch. 120, par. 439.102)
10        Sec.  2.  "Transfer"  means  any transfer of the title to
11    property or of the ownership of property whether or  not  the
12    transferor  retains  title  as  security  for  the payment of
13    amounts due him from the transferee.
14        "Cost  Price"  means  the  consideration  paid   by   the
15    serviceman  for  a  purchase valued in money, whether paid in
16    money or otherwise, including cash, credits and services, and
17    shall be determined without any deduction on account  of  the
18    supplier's  cost  of  the  property sold or on account of any
19    other expense incurred by the  supplier.  When  a  serviceman
20    contracts  out  part  or  all of the services required in his
21    sale of service, it shall be presumed that the cost price  to
22    the  serviceman  of the property transferred to him by his or
23    her subcontractor is equal  to  50%  of  the  subcontractor's
24    charges  to  the  serviceman  in  the absence of proof of the
25    consideration paid by the subcontractor for the  purchase  of
26    such property.
27        "Department" means the Department of Revenue.
28        "Person" means any natural individual, firm, partnership,
29    association,  joint  stock  company, joint venture, public or
30    private  corporation,  limited  liability  company,  and  any
31    receiver, executor, trustee, guardian or other representative
32    appointed by order of any court.
 
                            -26-     LRB093 05725 SJM 20018 a
 1        "Sale of Service" means any transaction except:
 2        (a)  A retail sale of tangible personal property  taxable
 3    under  the Retailers' Occupation Tax Act or under the Use Tax
 4    Act.
 5        (b)  A sale of tangible personal property for the purpose
 6    of  resale  made  in  compliance  with  Section  2c  of   the
 7    Retailers' Occupation Tax Act.
 8        (c)  Except  as  hereinafter provided, a sale or transfer
 9    of tangible personal property as an incident to the rendering
10    of service for or by any governmental body or for or  by  any
11    corporation,  society, association, foundation or institution
12    organized and operated exclusively for charitable,  religious
13    or  educational  purposes  or any not-for-profit corporation,
14    society, association, foundation, institution or organization
15    which has no compensated officers or employees and  which  is
16    organized  and  operated  primarily  for  the  recreation  of
17    persons 55 years of age or older. A limited liability company
18    may  qualify  for  the exemption under this paragraph only if
19    the limited  liability  company  is  organized  and  operated
20    exclusively for educational purposes.
21        (d)  A  sale or transfer of tangible personal property as
22    an incident  to  the  rendering  of  service  for  interstate
23    carriers  for  hire  for  use  as  rolling  stock  moving  in
24    interstate  commerce  or  lessors under leases of one year or
25    longer, executed or in effect at the  time  of  purchase,  to
26    interstate  carriers for hire for use as rolling stock moving
27    in  interstate  commerce,  and  equipment   operated   by   a
28    telecommunications  provider, licensed as a common carrier by
29    the Federal Communications Commission, which  is  permanently
30    installed  in  or  affixed  to  aircraft moving in interstate
31    commerce.
32        (d-1)  A sale or transfer of tangible  personal  property
33    as  an  incident  to  the  rendering  of  service for owners,
34    lessors or shippers of tangible personal  property  which  is
 
                            -27-     LRB093 05725 SJM 20018 a
 1    utilized  by  interstate carriers for hire for use as rolling
 2    stock moving in interstate commerce, and  equipment  operated
 3    by  a  telecommunications  provider,  licensed  as  a  common
 4    carrier  by  the  Federal Communications Commission, which is
 5    permanently installed in or affixed  to  aircraft  moving  in
 6    interstate commerce.
 7        (d-1.1)  On  and  after July 1, 2003 and through June 30,
 8    2006, a sale or transfer of a motor  vehicle  of  the  second
 9    division  with  a  gross  vehicle  weight  in excess of 8,000
10    pounds as an incident to the rendering  of  service  if  that
11    motor  vehicle  is subject to the commercial distribution fee
12    imposed under Section 3-815.1 of the Illinois  Vehicle  Code.
13    This  exemption applies to repair and replacement parts added
14    after the initial purchase of such a motor  vehicle  if  that
15    motor  vehicle is used in a manner that would qualify for the
16    rolling stock exemption otherwise provided for in this Act.
17        (d-2)  The repairing, reconditioning or remodeling, for a
18    common carrier by rail, of tangible personal  property  which
19    belongs  to  such  carrier  for  hire,  and  as to which such
20    carrier receives the physical  possession  of  the  repaired,
21    reconditioned or remodeled item of tangible personal property
22    in  Illinois,  and  which  such carrier transports, or shares
23    with another common carrier in  the  transportation  of  such
24    property,  out  of  Illinois  on  a  standard uniform bill of
25    lading showing the  person  who  repaired,  reconditioned  or
26    remodeled  the  property  as the shipper or consignor of such
27    property to a destination outside Illinois, for  use  outside
28    Illinois.
29        (d-3)  A  sale  or transfer of tangible personal property
30    which is produced by the seller thereof on special  order  in
31    such  a  way  as  to have made the applicable tax the Service
32    Occupation Tax or  the  Service  Use  Tax,  rather  than  the
33    Retailers'  Occupation  Tax or the Use Tax, for an interstate
34    carrier by rail which receives  the  physical  possession  of
 
                            -28-     LRB093 05725 SJM 20018 a
 1    such   property   in  Illinois,  and  which  transports  such
 2    property, or  shares  with  another  common  carrier  in  the
 3    transportation  of  such  property,  out  of  Illinois  on  a
 4    standard  uniform  bill  of  lading showing the seller of the
 5    property as the shipper or consignor of such  property  to  a
 6    destination outside Illinois, for use outside Illinois.
 7        (d-4)  Until  January  1,  1997,  a sale, by a registered
 8    serviceman paying tax under this Act to  the  Department,  of
 9    special  order  printed  materials delivered outside Illinois
10    and which are not returned to this State, if delivery is made
11    by the seller or agent of the seller, including an agent  who
12    causes  the  product  to  be  delivered outside Illinois by a
13    common carrier or the U.S. postal service.
14        (e)  A sale or transfer of machinery and  equipment  used
15    primarily  in the process of the manufacturing or assembling,
16    either in an existing, an expanded  or  a  new  manufacturing
17    facility,  of  tangible  personal  property  for wholesale or
18    retail sale or lease, whether such  sale  or  lease  is  made
19    directly by the manufacturer or by some other person, whether
20    the   materials   used  in  the  process  are  owned  by  the
21    manufacturer or some other person, or whether  such  sale  or
22    lease  is  made  apart from or as an incident to the seller's
23    engaging in a service occupation and the applicable tax is  a
24    Service  Occupation  Tax  or  Service  Use  Tax,  rather than
25    Retailers' Occupation Tax or Use Tax.
26        (f)  Until  July  1,  2003,  the  sale  or  transfer   of
27    distillation  machinery  and equipment, sold as a unit or kit
28    and assembled or installed by the retailer,  which  machinery
29    and  equipment  is  certified by the user to be used only for
30    the production  of  ethyl  alcohol  that  will  be  used  for
31    consumption as motor fuel or as a component of motor fuel for
32    the  personal  use  of  such  user and not subject to sale or
33    resale.
34        (g)  At the election of any serviceman not required to be
 
                            -29-     LRB093 05725 SJM 20018 a
 1    otherwise registered as a retailer under Section  2a  of  the
 2    Retailers'  Occupation  Tax  Act,  made  for each fiscal year
 3    sales of service in which the aggregate annual cost price  of
 4    tangible  personal property transferred as an incident to the
 5    sales of service is  less  than  35%  (75%  in  the  case  of
 6    servicemen  transferring  prescription  drugs  or  servicemen
 7    engaged  in  graphic arts production) of the aggregate annual
 8    total gross receipts from all sales of service. The  purchase
 9    of such tangible personal property by the serviceman shall be
10    subject  to  tax  under the Retailers' Occupation Tax Act and
11    the Use Tax Act. However, if a  primary  serviceman  who  has
12    made  the  election  described in this paragraph subcontracts
13    service work to a secondary serviceman who has also made  the
14    election  described in this paragraph, the primary serviceman
15    does  not  incur  a  Use  Tax  liability  if  the   secondary
16    serviceman  (i)  has  paid  or will pay Use Tax on his or her
17    cost price of any tangible personal property  transferred  to
18    the  primary  serviceman  and  (ii)  certifies  that  fact in
19    writing to the primary serviceman.
20        Tangible personal property transferred  incident  to  the
21    completion  of a maintenance agreement is exempt from the tax
22    imposed pursuant to this Act.
23        Exemption (e) also includes machinery and equipment  used
24    in the general maintenance or repair of such exempt machinery
25    and equipment or for in-house manufacture of exempt machinery
26    and  equipment.    For the purposes of exemption (e), each of
27    these  terms  shall  have  the   following   meanings:    (1)
28    "manufacturing  process"  shall  mean  the  production of any
29    article of tangible personal property, whether  such  article
30    is a finished product or an article for use in the process of
31    manufacturing  or  assembling a different article of tangible
32    personal  property,  by  procedures  commonly   regarded   as
33    manufacturing,  processing,  fabricating,  or  refining which
34    changes some existing material or materials into  a  material
 
                            -30-     LRB093 05725 SJM 20018 a
 1    with  a  different  form,  use  or  name.   In  relation to a
 2    recognized  integrated  business  composed  of  a  series  of
 3    operations which collectively  constitute  manufacturing,  or
 4    individually   constitute   manufacturing   operations,   the
 5    manufacturing  process  shall  be deemed to commence with the
 6    first operation or stage of production  in  the  series,  and
 7    shall  not be deemed to end until the completion of the final
 8    product in the last operation or stage of production  in  the
 9    series;   and   further   for   purposes  of  exemption  (e),
10    photoprocessing is deemed to be a  manufacturing  process  of
11    tangible  personal property for wholesale or retail sale; (2)
12    "assembling process" shall mean the production of any article
13    of tangible personal property,  whether  such  article  is  a
14    finished  product  or  an  article  for use in the process of
15    manufacturing or assembling a different article  of  tangible
16    personal  property,  by the combination of existing materials
17    in a manner commonly regarded as assembling which results  in
18    a  material of a different form, use or name; (3) "machinery"
19    shall mean major mechanical machines or major  components  of
20    such  machines  contributing to a manufacturing or assembling
21    process; and (4) "equipment" shall  include  any  independent
22    device  or  tool separate from any machinery but essential to
23    an integrated manufacturing or  assembly  process;  including
24    computers   used   primarily  in  a  manufacturer's  computer
25    assisted design, computer  assisted  manufacturing  (CAD/CAM)
26    system;  or any subunit or assembly comprising a component of
27    any machinery or auxiliary, adjunct or  attachment  parts  of
28    machinery,  such as tools, dies, jigs, fixtures, patterns and
29    molds; or any parts which require periodic replacement in the
30    course of normal operation; but shall not include hand tools.
31    Equipment includes chemicals or chemicals acting as catalysts
32    but only if the chemicals or chemicals  acting  as  catalysts
33    effect  a  direct  and  immediate change upon a product being
34    manufactured or assembled for wholesale  or  retail  sale  or
 
                            -31-     LRB093 05725 SJM 20018 a
 1    lease.  The purchaser of such machinery and equipment who has
 2    an  active  resale  registration  number  shall  furnish such
 3    number to the seller at the time of purchase.  The  purchaser
 4    of  such  machinery and equipment and tools without an active
 5    resale registration number shall  furnish  to  the  seller  a
 6    certificate  of  exemption for each transaction stating facts
 7    establishing  the  exemption  for  that  transaction,   which
 8    certificate   shall   be  available  to  the  Department  for
 9    inspection or audit.
10        Except as provided in Section 2d of this Act, the rolling
11    stock  exemption  applies  to  rolling  stock  used   by   an
12    interstate  carrier  for  hire,  even  just between points in
13    Illinois, if such rolling stock transports, for hire, persons
14    whose journeys  or  property  whose  shipments  originate  or
15    terminate outside Illinois.
16        Any  informal  rulings, opinions or letters issued by the
17    Department in response to  an  inquiry  or  request  for  any
18    opinion   from   any   person   regarding  the  coverage  and
19    applicability of exemption (e) to specific devices  shall  be
20    published,  maintained as a public record, and made available
21    for public inspection and copying.  If the  informal  ruling,
22    opinion   or   letter   contains   trade   secrets  or  other
23    confidential information, where possible the Department shall
24    delete such information prior to publication.  Whenever  such
25    informal  rulings, opinions, or letters contain any policy of
26    general applicability, the  Department  shall  formulate  and
27    adopt such policy as a rule in accordance with the provisions
28    of the Illinois Administrative Procedure Act.
29        On  and  after July 1, 1987, no entity otherwise eligible
30    under exemption (c) of  this  Section  shall  make  tax  free
31    purchases  unless  it  has an active exemption identification
32    number issued by the Department.
33        "Serviceman" means any  person  who  is  engaged  in  the
34    occupation of making sales of service.
 
                            -32-     LRB093 05725 SJM 20018 a
 1        "Sale at Retail" means "sale at retail" as defined in the
 2    Retailers' Occupation Tax Act.
 3        "Supplier"  means  any person who makes sales of tangible
 4    personal property to servicemen for the purpose of resale  as
 5    an incident to a sale of service.
 6    (Source: P.A.  92-484,  eff.  8-23-01;  93-23,  eff. 6-20-03;
 7    93-24, eff. 6-20-03; revised 8-21-03.)

 8        (35 ILCS 115/2d)
 9        Sec. 2d. Motor vehicles; use as rolling stock definition.
10    Through June 30, 2003 and beginning again on  July  1,  2006,
11    "use  as  rolling  stock  moving  in  interstate commerce" in
12    subsections (d) and (d-1)  of  the  definition  of  "sale  of
13    service" in Section 2 means for motor vehicles, as defined in
14    Section  1-146 of the Illinois Vehicle Code, and trailers, as
15    defined in Section 1-209 of the Illinois Vehicle  Code,  when
16    on  15  or  more  occasions  in  a  12-month period the motor
17    vehicle and trailer has carried persons or property for  hire
18    in interstate commerce, even just between points in Illinois,
19    if  the  motor  vehicle  and trailer transports persons whose
20    journeys or property whose shipments originate  or  terminate
21    outside  Illinois.    This definition applies to all property
22    purchased for the purpose of being attached  to  those  motor
23    vehicles  or trailers as a part thereof. On and after July 1,
24    2003 and through June 30, 2006, "use as rolling stock  moving
25    in  interstate  commerce"  in paragraphs (d) and (d-1) of the
26    definition of "sale of service" in Section 2 occurs for motor
27    vehicles, as defined in Section 1-146 of the Illinois Vehicle
28    Code, when during a 12-month period  the  rolling  stock  has
29    carried  persons  or property for hire in interstate commerce
30    for 51% of its  total  trips  and  transports  persons  whose
31    journeys  or  property whose shipments originate or terminate
32    outside Illinois. Trips  that  are  only  between  points  in
33    Illinois  will  not  be  counted  as  interstate  trips  when
 
                            -33-     LRB093 05725 SJM 20018 a
 1    calculating  whether the tangible personal property qualifies
 2    for the exemption but such trips will be  included  in  total
 3    trips taken.
 4    (Source: P.A. 93-23, eff. 6-20-03.)

 5        Section 25.  The Retailers' Occupation Tax Act is amended
 6    by changing Sections 2-5 and 2-51 as follows:

 7        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
 8        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
 9    the  sale  of  the  following  tangible personal property are
10    exempt from the tax imposed by this Act:
11        (1)  Farm chemicals.
12        (2)  Farm machinery and equipment,  both  new  and  used,
13    including  that  manufactured  on special order, certified by
14    the purchaser to be used primarily for production agriculture
15    or  State  or  federal   agricultural   programs,   including
16    individual replacement parts for the machinery and equipment,
17    including  machinery  and  equipment purchased for lease, and
18    including implements of husbandry defined in Section 1-130 of
19    the Illinois Vehicle Code, farm  machinery  and  agricultural
20    chemical  and fertilizer spreaders, and nurse wagons required
21    to be registered under Section 3-809 of the Illinois  Vehicle
22    Code,  but  excluding  other  motor  vehicles  required to be
23    registered under the  Illinois  Vehicle  Code.  Horticultural
24    polyhouses  or  hoop houses used for propagating, growing, or
25    overwintering plants shall be considered farm  machinery  and
26    equipment  under  this item (2). Agricultural chemical tender
27    tanks and dry boxes shall include units sold separately  from
28    a  motor  vehicle  required  to  be  licensed  and units sold
29    mounted on a motor vehicle required to be  licensed,  if  the
30    selling price of the tender is separately stated.
31        Farm  machinery  and  equipment  shall  include precision
32    farming equipment  that  is  installed  or  purchased  to  be
 
                            -34-     LRB093 05725 SJM 20018 a
 1    installed  on farm machinery and equipment including, but not
 2    limited  to,  tractors,   harvesters,   sprayers,   planters,
 3    seeders,  or spreaders. Precision farming equipment includes,
 4    but is not  limited  to,  soil  testing  sensors,  computers,
 5    monitors,  software,  global positioning and mapping systems,
 6    and other such equipment.
 7        Farm machinery and  equipment  also  includes  computers,
 8    sensors,  software,  and  related equipment used primarily in
 9    the computer-assisted  operation  of  production  agriculture
10    facilities,  equipment,  and  activities  such  as,  but  not
11    limited  to,  the  collection, monitoring, and correlation of
12    animal and crop data for the purpose  of  formulating  animal
13    diets  and  agricultural  chemicals.  This item (7) is exempt
14    from the provisions of Section 2-70.
15        (3)  Until  July  1,  2003,  distillation  machinery  and
16    equipment, sold as a unit or kit, assembled or  installed  by
17    the  retailer,  certified by the user to be used only for the
18    production of ethyl alcohol that will be used for consumption
19    as motor fuel or  as  a  component  of  motor  fuel  for  the
20    personal use of the user, and not subject to sale or resale.
21        (4)  Until  July  1,  2003,  graphic  arts  machinery and
22    equipment, including repair and replacement parts,  both  new
23    and used, and including that manufactured on special order or
24    purchased  for  lease,  certified by the purchaser to be used
25    primarily for graphic  arts  production.  Equipment  includes
26    chemicals  or  chemicals  acting as catalysts but only if the
27    chemicals or chemicals acting as catalysts  effect  a  direct
28    and immediate change upon a graphic arts product.
29        (5)  A  motor  vehicle  of  the  first  division, a motor
30    vehicle of the second division that is a self-contained motor
31    vehicle designed or permanently converted to  provide  living
32    quarters  for  recreational,  camping,  or  travel  use, with
33    direct walk through access to the living  quarters  from  the
34    driver's seat, or a motor vehicle of the second division that
 
                            -35-     LRB093 05725 SJM 20018 a
 1    is  of  the van configuration designed for the transportation
 2    of not less than 7 nor more than 16 passengers, as defined in
 3    Section 1-146 of the Illinois Vehicle Code, that is used  for
 4    automobile  renting,  as  defined  in  the Automobile Renting
 5    Occupation and Use Tax Act.
 6        (6)  Personal  property  sold  by   a   teacher-sponsored
 7    student   organization   affiliated  with  an  elementary  or
 8    secondary school located in Illinois.
 9        (7)  Until July 1, 2003, proceeds of that portion of  the
10    selling price of a passenger car the sale of which is subject
11    to the Replacement Vehicle Tax.
12        (8)  Personal  property  sold  to an Illinois county fair
13    association for use in conducting,  operating,  or  promoting
14    the county fair.
15        (9)  Personal  property  sold to a not-for-profit arts or
16    cultural organization that establishes, by proof required  by
17    the  Department  by  rule,  that it has received an exemption
18    under Section 501(c)(3) of the Internal Revenue Code and that
19    is organized and operated primarily for the  presentation  or
20    support  of  arts  or  cultural  programming,  activities, or
21    services.  These organizations include, but are  not  limited
22    to,  music  and  dramatic arts organizations such as symphony
23    orchestras and theatrical groups, arts and  cultural  service
24    organizations,    local    arts    councils,    visual   arts
25    organizations, and media arts organizations. On and after the
26    effective date of this amendatory Act  of  the  92nd  General
27    Assembly,  however,  an  entity  otherwise  eligible for this
28    exemption shall not make tax-free purchases unless it has  an
29    active identification number issued by the Department.
30        (10)  Personal  property  sold by a corporation, society,
31    association, foundation, institution, or organization,  other
32    than  a  limited  liability  company,  that  is organized and
33    operated as  a  not-for-profit  service  enterprise  for  the
34    benefit  of  persons 65 years of age or older if the personal
 
                            -36-     LRB093 05725 SJM 20018 a
 1    property was not purchased by the enterprise for the  purpose
 2    of resale by the enterprise.
 3        (11)  Personal property sold to a governmental body, to a
 4    corporation, society, association, foundation, or institution
 5    organized and operated exclusively for charitable, religious,
 6    or  educational purposes, or to a not-for-profit corporation,
 7    society,    association,    foundation,    institution,    or
 8    organization that has no compensated  officers  or  employees
 9    and   that  is  organized  and  operated  primarily  for  the
10    recreation of persons 55 years of age  or  older.  A  limited
11    liability  company  may  qualify for the exemption under this
12    paragraph only if the limited liability company is  organized
13    and  operated  exclusively  for  educational purposes. On and
14    after July 1, 1987, however, no entity otherwise eligible for
15    this exemption shall make tax-free purchases unless it has an
16    active identification number issued by the Department.
17        (12)  Tangible  personal  property  sold  to   interstate
18    carriers  for  hire  for  use  as  rolling  stock  moving  in
19    interstate commerce or to lessors under leases of one year or
20    longer  executed  or  in  effect  at  the time of purchase by
21    interstate carriers for hire for use as rolling stock  moving
22    in   interstate   commerce   and   equipment  operated  by  a
23    telecommunications provider, licensed as a common carrier  by
24    the  Federal  Communications Commission, which is permanently
25    installed in or affixed  to  aircraft  moving  in  interstate
26    commerce.
27        (12-5)  On  and  after  July 1, 2003 and through June 30,
28    2006, motor vehicles of the  second  division  with  a  gross
29    vehicle  weight in excess of 8,000 pounds that are subject to
30    the commercial distribution fee imposed under Section 3-815.1
31    of the Illinois  Vehicle  Code.  This  exemption  applies  to
32    repair and replacement parts added after the initial purchase
33    of  such  a  motor vehicle if that motor vehicle is used in a
34    manner that would qualify for  the  rolling  stock  exemption
 
                            -37-     LRB093 05725 SJM 20018 a
 1    otherwise provided for in this Act.
 2        (13)  Proceeds from sales to owners, lessors, or shippers
 3    of  tangible personal property that is utilized by interstate
 4    carriers  for  hire  for  use  as  rolling  stock  moving  in
 5    interstate   commerce   and   equipment   operated    by    a
 6    telecommunications  provider, licensed as a common carrier by
 7    the Federal Communications Commission, which  is  permanently
 8    installed  in  or  affixed  to  aircraft moving in interstate
 9    commerce.
10        (14)  Machinery and equipment that will be  used  by  the
11    purchaser,  or  a  lessee  of the purchaser, primarily in the
12    process of  manufacturing  or  assembling  tangible  personal
13    property  for  wholesale or retail sale or lease, whether the
14    sale or lease is made directly by the manufacturer or by some
15    other person, whether the materials used in the  process  are
16    owned  by  the  manufacturer or some other person, or whether
17    the sale or lease is made apart from or as an incident to the
18    seller's engaging in  the  service  occupation  of  producing
19    machines,  tools,  dies,  jigs,  patterns,  gauges,  or other
20    similar items of no commercial value on special order  for  a
21    particular purchaser.
22        (15)  Proceeds  of  mandatory  service charges separately
23    stated on customers' bills for purchase  and  consumption  of
24    food  and  beverages,  to the extent that the proceeds of the
25    service charge are in fact  turned  over  as  tips  or  as  a
26    substitute for tips to the employees who participate directly
27    in  preparing,  serving,  hosting  or cleaning up the food or
28    beverage function with respect to which the service charge is
29    imposed.
30        (16)  Petroleum products  sold  to  a  purchaser  if  the
31    seller  is prohibited by federal law from charging tax to the
32    purchaser.
33        (17)  Tangible personal property sold to a common carrier
34    by rail or motor that receives the physical possession of the
 
                            -38-     LRB093 05725 SJM 20018 a
 1    property in Illinois and that  transports  the  property,  or
 2    shares  with  another common carrier in the transportation of
 3    the property, out of Illinois on a standard uniform  bill  of
 4    lading  showing  the seller of the property as the shipper or
 5    consignor of the property to a destination outside  Illinois,
 6    for use outside Illinois.
 7        (18)  Legal  tender,  currency,  medallions,  or  gold or
 8    silver  coinage  issued  by  the  State  of   Illinois,   the
 9    government of the United States of America, or the government
10    of any foreign country, and bullion.
11        (19)  Until July 1 2003, oil field exploration, drilling,
12    and  production  equipment,  including  (i) rigs and parts of
13    rigs, rotary rigs, cable tool rigs, and workover  rigs,  (ii)
14    pipe  and  tubular goods, including casing and drill strings,
15    (iii) pumps and pump-jack units, (iv) storage tanks and  flow
16    lines,  (v)  any  individual  replacement  part for oil field
17    exploration, drilling, and  production  equipment,  and  (vi)
18    machinery  and  equipment  purchased for lease; but excluding
19    motor vehicles required to be registered under  the  Illinois
20    Vehicle Code.
21        (20)  Photoprocessing  machinery and equipment, including
22    repair and replacement parts, both new  and  used,  including
23    that   manufactured   on  special  order,  certified  by  the
24    purchaser to  be  used  primarily  for  photoprocessing,  and
25    including  photoprocessing  machinery and equipment purchased
26    for lease.
27        (21)  Until  July  1,  2003,  coal  exploration,  mining,
28    offhighway hauling, processing, maintenance, and  reclamation
29    equipment,  including  replacement  parts  and equipment, and
30    including equipment purchased for lease, but excluding  motor
31    vehicles required to be registered under the Illinois Vehicle
32    Code.
33        (22)  Fuel  and  petroleum products sold to or used by an
34    air  carrier,  certified  by  the  carrier  to  be  used  for
 
                            -39-     LRB093 05725 SJM 20018 a
 1    consumption, shipment, or  storage  in  the  conduct  of  its
 2    business  as an air common carrier, for a flight destined for
 3    or returning from a location or locations outside the  United
 4    States  without  regard  to  previous  or subsequent domestic
 5    stopovers.
 6        (23)  A  transaction  in  which  the  purchase  order  is
 7    received by a florist who is located  outside  Illinois,  but
 8    who has a florist located in Illinois deliver the property to
 9    the purchaser or the purchaser's donee in Illinois.
10        (24)  Fuel  consumed  or  used in the operation of ships,
11    barges, or vessels that are used  primarily  in  or  for  the
12    transportation  of  property or the conveyance of persons for
13    hire on rivers  bordering  on  this  State  if  the  fuel  is
14    delivered  by  the  seller to the purchaser's barge, ship, or
15    vessel while it is afloat upon that bordering river.
16        (25)  A motor vehicle sold in this State to a nonresident
17    even though the motor vehicle is delivered to the nonresident
18    in this State, if the motor vehicle is not to  be  titled  in
19    this State, and if a drive-away permit is issued to the motor
20    vehicle  as provided in Section 3-603 of the Illinois Vehicle
21    Code or if the nonresident purchaser has vehicle registration
22    plates to transfer to the motor vehicle upon returning to his
23    or her home state.  The issuance of the drive-away permit  or
24    having the out-of-state registration plates to be transferred
25    is  prima  facie  evidence that the motor vehicle will not be
26    titled in this State.
27        (26)  Semen used for artificial insemination of livestock
28    for direct agricultural production.
29        (27)  Horses, or interests in horses, registered with and
30    meeting the requirements of any of  the  Arabian  Horse  Club
31    Registry  of  America, Appaloosa Horse Club, American Quarter
32    Horse Association, United  States  Trotting  Association,  or
33    Jockey Club, as appropriate, used for purposes of breeding or
34    racing for prizes.
 
                            -40-     LRB093 05725 SJM 20018 a
 1        (28)  Computers and communications equipment utilized for
 2    any  hospital  purpose  and  equipment used in the diagnosis,
 3    analysis, or treatment of hospital patients sold to a  lessor
 4    who leases the equipment, under a lease of one year or longer
 5    executed  or  in  effect  at  the  time of the purchase, to a
 6    hospital  that  has  been  issued  an  active  tax  exemption
 7    identification number by the Department under Section  1g  of
 8    this Act.
 9        (29)  Personal  property  sold to a lessor who leases the
10    property, under a lease of one year or longer executed or  in
11    effect  at  the  time of the purchase, to a governmental body
12    that has been issued an active tax  exemption  identification
13    number by the Department under Section 1g of this Act.
14        (30)  Beginning  with  taxable  years  ending on or after
15    December 31, 1995 and ending with taxable years ending on  or
16    before  December  31, 2004, personal property that is donated
17    for disaster relief to  be  used  in  a  State  or  federally
18    declared disaster area in Illinois or bordering Illinois by a
19    manufacturer  or retailer that is registered in this State to
20    a   corporation,   society,   association,   foundation,   or
21    institution that  has  been  issued  a  sales  tax  exemption
22    identification  number by the Department that assists victims
23    of the disaster who reside within the declared disaster area.
24        (31)  Beginning with taxable years  ending  on  or  after
25    December  31, 1995 and ending with taxable years ending on or
26    before December 31, 2004, personal property that is  used  in
27    the  performance  of  infrastructure  repairs  in this State,
28    including but not limited to  municipal  roads  and  streets,
29    access  roads,  bridges,  sidewalks,  waste disposal systems,
30    water and  sewer  line  extensions,  water  distribution  and
31    purification  facilities,  storm water drainage and retention
32    facilities, and sewage treatment facilities, resulting from a
33    State or federally declared disaster in Illinois or bordering
34    Illinois  when  such  repairs  are  initiated  on  facilities
 
                            -41-     LRB093 05725 SJM 20018 a
 1    located in the declared disaster area within 6  months  after
 2    the disaster.
 3        (32)  Beginning  July 1, 1999, game or game birds sold at
 4    a "game breeding and hunting preserve  area"  or  an  "exotic
 5    game  hunting  area"  as those terms are used in the Wildlife
 6    Code or at a hunting enclosure approved through rules adopted
 7    by the Department of Natural Resources.   This  paragraph  is
 8    exempt from the provisions of Section 2-70.
 9        (33)  A motor vehicle, as that term is defined in Section
10    1-146  of  the  Illinois  Vehicle  Code, that is donated to a
11    corporation, limited liability company, society, association,
12    foundation,  or  institution  that  is  determined   by   the
13    Department  to  be  organized  and  operated  exclusively for
14    educational purposes.  For purposes  of  this  exemption,  "a
15    corporation, limited liability company, society, association,
16    foundation, or institution organized and operated exclusively
17    for  educational  purposes"  means  all  tax-supported public
18    schools, private schools that offer systematic instruction in
19    useful branches of  learning  by  methods  common  to  public
20    schools  and  that  compare  favorably  in  their  scope  and
21    intensity with the course of study presented in tax-supported
22    schools,  and  vocational  or technical schools or institutes
23    organized and operated exclusively to  provide  a  course  of
24    study  of  not  less  than  6  weeks duration and designed to
25    prepare individuals to follow a trade or to pursue a  manual,
26    technical,  mechanical,  industrial,  business, or commercial
27    occupation.
28        (34)  Beginning  January  1,  2000,  personal   property,
29    including  food, purchased through fundraising events for the
30    benefit of  a  public  or  private  elementary  or  secondary
31    school,  a  group  of  those  schools,  or one or more school
32    districts if the events are sponsored by an entity recognized
33    by the school district that consists primarily of  volunteers
34    and  includes  parents  and  teachers of the school children.
 
                            -42-     LRB093 05725 SJM 20018 a
 1    This paragraph does not apply to fundraising events  (i)  for
 2    the benefit of private home instruction or (ii) for which the
 3    fundraising  entity  purchases  the personal property sold at
 4    the events from another individual or entity  that  sold  the
 5    property  for the purpose of resale by the fundraising entity
 6    and that profits from the sale  to  the  fundraising  entity.
 7    This paragraph is exempt from the provisions of Section 2-70.
 8        (35)  Beginning  January 1, 2000 and through December 31,
 9    2001, new or used automatic vending machines that prepare and
10    serve hot food and beverages,  including  coffee,  soup,  and
11    other  items,  and  replacement  parts  for  these  machines.
12    Beginning January 1, 2002 and through June 30, 2003, machines
13    and  parts  for  machines  used  in commercial, coin-operated
14    amusement and vending business if a use or occupation tax  is
15    paid  on  the  gross  receipts  derived  from  the use of the
16    commercial, coin-operated  amusement  and  vending  machines.
17    This paragraph is exempt from the provisions of Section 2-70.
18        (35-5)  Food for human consumption that is to be consumed
19    off  the  premises  where  it  is  sold (other than alcoholic
20    beverages, soft drinks, and food that has been  prepared  for
21    immediate  consumption)  and prescription and nonprescription
22    medicines, drugs,  medical  appliances,  and  insulin,  urine
23    testing  materials,  syringes, and needles used by diabetics,
24    for human use, when purchased for use by a  person  receiving
25    medical assistance under Article 5 of the Illinois Public Aid
26    Code  who  resides  in a licensed long-term care facility, as
27    defined in the Nursing Home Care Act.
28        (36)  Beginning   August   2,   2001,    computers    and
29    communications  equipment  utilized  for any hospital purpose
30    and equipment used in the diagnosis, analysis,  or  treatment
31    of  hospital  patients  sold  to  a  lessor  who  leases  the
32    equipment, under a lease of one year or longer executed or in
33    effect  at  the  time of the purchase, to a hospital that has
34    been issued an active tax exemption identification number  by
 
                            -43-     LRB093 05725 SJM 20018 a
 1    the  Department under Section 1g of this Act.  This paragraph
 2    is exempt from the provisions of Section 2-70.
 3        (37)  Beginning August 2, 2001, personal property sold to
 4    a lessor who leases the property, under a lease of  one  year
 5    or  longer executed or in effect at the time of the purchase,
 6    to a governmental body that has been  issued  an  active  tax
 7    exemption  identification  number  by  the  Department  under
 8    Section  1g  of  this Act.  This paragraph is exempt from the
 9    provisions of Section 2-70.
10        (38)  Beginning on January  1,  2002,  tangible  personal
11    property  purchased  from  an Illinois retailer by a taxpayer
12    engaged in centralized purchasing activities in Illinois  who
13    will,  upon  receipt of the property in Illinois, temporarily
14    store the  property  in  Illinois  (i)  for  the  purpose  of
15    subsequently  transporting  it  outside this State for use or
16    consumption thereafter solely outside this State or (ii)  for
17    the  purpose  of being processed, fabricated, or manufactured
18    into,  attached  to,  or  incorporated  into  other  tangible
19    personal property to be transported outside  this  State  and
20    thereafter  used  or consumed solely outside this State.  The
21    Director of Revenue  shall,  pursuant  to  rules  adopted  in
22    accordance  with  the  Illinois Administrative Procedure Act,
23    issue a permit to any taxpayer  in  good  standing  with  the
24    Department  who  is  eligible  for  the  exemption under this
25    paragraph (38).  The permit issued under this paragraph  (38)
26    shall  authorize  the holder, to the extent and in the manner
27    specified in the rules adopted under this  Act,  to  purchase
28    tangible  personal  property  from a retailer exempt from the
29    taxes imposed by this  Act.   Taxpayers  shall  maintain  all
30    necessary  books  and  records  to  substantiate  the use and
31    consumption of all such tangible personal property outside of
32    the State of Illinois.
33    (Source: P.A.  92-16,  eff.  6-28-01;  92-35,  eff.   7-1-01;
34    92-227,  eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484, eff.
 
                            -44-     LRB093 05725 SJM 20018 a
 1    8-23-01; 92-488, eff. 8-23-01; 92-651, eff. 7-11-02;  92-680,
 2    eff.  7-16-02;  93-23,  eff.  6-20-03;  93-24,  eff. 6-20-03;
 3    revised 9-11-03.)

 4        (35 ILCS 120/2-51)
 5        Sec.  2-51.   Motor  vehicles;  use  as   rolling   stock
 6    definition.   Through  June  30,  2003 and beginning again on
 7    July 1, 2006, "use as  rolling  stock  moving  in  interstate
 8    commerce"  in  paragraphs  (12) and (13) of Section 2-5 means
 9    for motor vehicles,  as  defined  in  Section  1-146  of  the
10    Illinois  Vehicle  Code,  and trailers, as defined in Section
11    1-209 of the Illinois  Vehicle  Code,  when  on  15  or  more
12    occasions  in a 12-month period the motor vehicle and trailer
13    has carried  persons  or  property  for  hire  in  interstate
14    commerce,  even just between points in Illinois, if the motor
15    vehicle and trailer  transports  persons  whose  journeys  or
16    property  whose  shipments  originate  or  terminate  outside
17    Illinois.   This definition applies to all property purchased
18    for the purpose of being attached to those motor vehicles  or
19    trailers  as  a  part  thereof. On and after July 1, 2003 and
20    through June 30,  2006,  "use  as  rolling  stock  moving  in
21    interstate  commerce"  in paragraphs (12) and (13) of Section
22    2-5 occurs for motor vehicles, as defined in Section 1-146 of
23    the Illinois Vehicle Code, when during a 12-month period  the
24    rolling  stock  has  carried  persons or property for hire in
25    interstate commerce for 51% of its total trips and transports
26    persons whose journeys or property whose shipments  originate
27    or  terminate  outside  Illinois. Trips that are only between
28    points in Illinois shall not be counted as  interstate  trips
29    when  calculating  whether  the  tangible  personal  property
30    qualifies  for the exemption but such trips shall be included
31    in total trips taken.
32    (Source: P.A. 93-23, eff. 6-20-03.)
 
                            -45-     LRB093 05725 SJM 20018 a
 1        Section  30.  The Illinois Vehicle  Code  is  amended  by
 2    changing Section 3-815.1 as follows:

 3        (625 ILCS 5/3-815.1)
 4        Sec.  3-815.1.  Commercial  distribution  fee.  Beginning
 5    July  1,  2003,  in  addition to any tax or fee imposed under
 6    this Code:
 7             (a)  Vehicles of the second division  with  a  gross
 8        vehicle  weight  that exceeds 8,000 pounds and that incur
 9        any tax or fee under subsection (a) of Section  3-815  of
10        this  Code  or  subsection  (a)  of Section 3-818 of this
11        Code, as applicable, and shall pay to  the  Secretary  of
12        State   a   commercial   distribution   fee,   for   each
13        registration  year,  for  the use of the public highways,
14        State infrastructure, and State services,  in  an  amount
15        equal to:
16                  36% for the registration year beginning on July
17             1, 2003;
18                  24% for the registration year beginning on July
19             1, 2004;
20                  12% for the registration year beginning on July
21             1, 2005; and
22                  0%  for the registration year beginning on July
23             1, 2006 and for each registration year thereafter
24        of the taxes and fees incurred under  subsection  (a)  of
25        Section  3-815 of this Code, or subsection (a) of Section
26        3-818 of this Code, as  applicable,  rounded  up  to  the
27        nearest whole dollar.
28             (b)  Vehicles  of  the  second division with a gross
29        vehicle weight of 8,000 pounds or less and that incur any
30        tax or fee under subsection (a) of Section 3-815 of  this
31        Code  or subsection (a) of Section 3-818 of this Code, as
32        applicable, and have claimed the rolling stock  exemption
33        under  the  Retailers'  Occupation  Tax Act, Use Tax Act,
 
                            -46-     LRB093 05725 SJM 20018 a
 1        Service Occupation Tax Act, or Service Use Tax Act  shall
 2        pay  to  the  Illinois  Department  of  Revenue  (or  the
 3        Secretary  of State under an intergovernmental agreement)
 4        a commercial  distribution  fee,  for  each  registration
 5        year,   for   the  use  of  the  public  highways,  State
 6        infrastructure, and State services, in  an  amount  equal
 7        to:
 8                  36% for the registration year beginning on July
 9             1, 2003;
10                  24% for the registration year beginning on July
11             1, 2004;
12                  12% for the registration year beginning on July
13             1, 2005; and
14                  0%  for the registration year beginning on July
15             1, 2006 and for each registration year thereafter
16        of the taxes and fees incurred under  subsection  (a)  of
17        Section  3-815  of this Code or subsection (a) of Section
18        3-818 of this Code, as  applicable,  rounded  up  to  the
19        nearest whole dollar.
20        The  fees  paid  under this Section shall be deposited by
21    the Secretary of State into the General Revenue Fund.
22    (Source: P.A. 93-23, eff. 6-20-03; revised 10-9-03.)

23        Section 99.  Effective date.  This Act takes effect  upon
24    becoming law.".