98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB0165

 

Introduced 1/16/2013, by Rep. John E. Bradley

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 689/15
20 ILCS 689/20
35 ILCS 105/3-10
35 ILCS 105/3-40  from Ch. 120, par. 439.3-40
35 ILCS 105/3-44
35 ILCS 105/3-44.6 new
35 ILCS 105/3-44.7 new
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, on or after July 1, 2013 and on or before December 31, 2018, the taxes imposed under the Acts apply to (i) 90% of the proceeds of sales of gasohol, (ii) 80% of the proceeds of sales of E20 blended ethanol fuel, and (iii) 60% of the proceeds of sales of E30 blended ethanol fuel. Amends the Illinois Renewable Fuels Development Program Act. Provides that grants may be awarded for the following programs: a next generation renewable fuels program, a majority blended ethanol and blender pump infrastructure program, and a research and development program for sustainable corn production and corn-based renewable fuel production. Sets forth the maximum aggregate amount of grants that may be awarded under each program. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Renewable Fuels Development
5Program Act is amended by changing Sections 15 and 20 as
6follows:
 
7    (20 ILCS 689/15)
8    Sec. 15. Illinois Renewable Fuels Development Program.
9    (a) The Department must develop and administer the Illinois
10Renewable Fuels Development Program to assist in the
11construction, modification, alteration, or retrofitting of
12renewable fuel plants in Illinois. The recipient of a grant
13under this Section must:
14        (1) be constructing, modifying, altering, or
15    retrofitting a plant in the State of Illinois;
16        (2) be constructing, modifying, altering, or
17    retrofitting a plant that has annual production capacity of
18    no less than 5,000,000 gallons of renewable fuel per year;
19    and
20        (3) enter into a project labor agreement, whenever
21    practicable, as prescribed by Section 25 of this Act.
22    (b) Grant applications must be made on forms provided by
23and in accordance with procedures established by the

 

 

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1Department.
2    (c) The Department must give preference to applicants that
3use Illinois agricultural products in the production of
4renewable fuel at the plant for which the grant is being
5requested.
6(Source: P.A. 96-140, eff. 1-1-10.)
 
7    (20 ILCS 689/20)
8    Sec. 20. Grants. Subject to appropriation, the Director is
9authorized to award grants to eligible applicants for the
10following programs.
11        (1) Next generation ethanol/renewable fuels. Eligible
12    next generation ethanol/renewable fuel projects include
13    those renewable fuel facilities installing new
14    technologies to reduce water and energy usage as well as
15    technologies to reduce greenhouse gas emissions. Projects
16    that will result in more efficient processes, new
17    co-products, fuels and chemicals are also eligible for
18    funding. The annual aggregate amount of grants awarded
19    under this item (1) for next generation ethanol/renewable
20    fuel projects shall not exceed $15,000,000.
21        (2) Majority blended ethanol and blender pump
22    infrastructure program. The Department shall establish a
23    grant program to provide funds for the installation of
24    majority blended ethanol and blender pump fueling
25    facilities. The annual aggregate amount of grants awarded

 

 

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1    under this item (2) shall not exceed $5,000,000.
2        (3) Research and development program for sustainable
3    corn production and corn-based renewable fuel production.
4    The Department shall establish a grant program to provide
5    funds for research and development projects to reduce the
6    carbon footprint of corn based renewable fuels through new
7    co-products, new process technologies, and new fuels. The
8    Department shall also establish a grant program to fund
9    research on increasing the sustainability of corn
10    production through better nitrogen utilization, new best
11    management practices for improved soil health, water
12    conservation, and reduced environmental concerns. Eligible
13    projects include those that will increase corn
14    productivity with lower inputs and less risk. The annual
15    aggregate amount of grants awarded under this item (3)
16    shall not exceed $5,000,000.
17The annual aggregate amount of grants awarded shall not exceed
18$20,000,000, except that this amount does not include amounts,
19up to $4,000,000 per grant, that may be awarded to each
20eligible applicant who installs advanced technologies for
21water usage, carbon footprint reduction, and other blending
22improvements designed to optimize processes at the applicant's
23renewable fuels facility.
24(Source: P.A. 96-173, eff. 8-10-09.)
 
25    Section 10. The Use Tax Act is amended by changing Sections

 

 

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13-10, 3-40, and 3-44 and by adding Sections 3-44.6 and 3-44.7
2as follows:
 
3    (35 ILCS 105/3-10)
4    Sec. 3-10. Rate of tax. Unless otherwise provided in this
5Section, the tax imposed by this Act is at the rate of 6.25% of
6either the selling price or the fair market value, if any, of
7the tangible personal property. In all cases where property
8functionally used or consumed is the same as the property that
9was purchased at retail, then the tax is imposed on the selling
10price of the property. In all cases where property functionally
11used or consumed is a by-product or waste product that has been
12refined, manufactured, or produced from property purchased at
13retail, then the tax is imposed on the lower of the fair market
14value, if any, of the specific property so used in this State
15or on the selling price of the property purchased at retail.
16For purposes of this Section "fair market value" means the
17price at which property would change hands between a willing
18buyer and a willing seller, neither being under any compulsion
19to buy or sell and both having reasonable knowledge of the
20relevant facts. The fair market value shall be established by
21Illinois sales by the taxpayer of the same property as that
22functionally used or consumed, or if there are no such sales by
23the taxpayer, then comparable sales or purchases of property of
24like kind and character in Illinois.
25    Beginning on July 1, 2000 and through December 31, 2000,

 

 

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1with respect to motor fuel, as defined in Section 1.1 of the
2Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
3the Use Tax Act, the tax is imposed at the rate of 1.25%.
4    Beginning on August 6, 2010 through August 15, 2010, with
5respect to sales tax holiday items as defined in Section 3-6 of
6this Act, the tax is imposed at the rate of 1.25%.
7    With respect to gasohol, the tax imposed by this Act
8applies to (i) 70% of the proceeds of sales made on or after
9January 1, 1990, and before July 1, 2003, (ii) 80% of the
10proceeds of sales made on or after July 1, 2003 and on or
11before June 30, 2013, (iii) 90% of the proceeds of sales made
12on or after July 1, 2013 and on or before December 31, 2018,
13and (iv) (iii) 100% of the proceeds of sales made thereafter.
14If, at any time, however, the tax under this Act on sales of
15gasohol is imposed at the rate of 1.25%, then the tax imposed
16by this Act applies to 100% of the proceeds of sales of gasohol
17made during that time.
18    With respect to E20 blended ethanol fuel, the tax imposed
19by this Act applies to (i) 80% of the proceeds of sales made on
20or after July 1, 2013 and on or before December 31, 2018 and
21(ii) 100% of the proceeds of sales made thereafter. If, at any
22time, however, the tax under this Act on sales of E20 blended
23ethanol fuel is imposed at the rate of 1.25%, then the tax
24imposed by this Act applies to 100% of the proceeds of sales of
25E20 blended ethanol fuel made during that time.
26    With respect to E30 blended ethanol fuel, the tax imposed

 

 

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1by this Act applies to (i) 60% of the proceeds of sales made on
2or after July 1, 2013 and on or before December 31, 2018 and
3(ii) 100% of the proceeds of sales made thereafter. If, at any
4time, however, the tax under this Act on sales of E30 blended
5ethanol fuel is imposed at the rate of 1.25%, then the tax
6imposed by this Act applies to 100% of the proceeds of sales of
7E30 blended ethanol fuel made during that time.
8    With respect to majority blended ethanol fuel, the tax
9imposed by this Act does not apply to the proceeds of sales
10made on or after July 1, 2003 and on or before December 31,
112018 but applies to 100% of the proceeds of sales made
12thereafter.
13    With respect to biodiesel blends with no less than 1% and
14no more than 10% biodiesel, the tax imposed by this Act applies
15to (i) 80% of the proceeds of sales made on or after July 1,
162003 and on or before December 31, 2018 and (ii) 100% of the
17proceeds of sales made thereafter. If, at any time, however,
18the tax under this Act on sales of biodiesel blends with no
19less than 1% and no more than 10% biodiesel is imposed at the
20rate of 1.25%, then the tax imposed by this Act applies to 100%
21of the proceeds of sales of biodiesel blends with no less than
221% and no more than 10% biodiesel made during that time.
23    With respect to 100% biodiesel and biodiesel blends with
24more than 10% but no more than 99% biodiesel, the tax imposed
25by this Act does not apply to the proceeds of sales made on or
26after July 1, 2003 and on or before December 31, 2018 but

 

 

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1applies to 100% of the proceeds of sales made thereafter.
2    With respect to food for human consumption that is to be
3consumed off the premises where it is sold (other than
4alcoholic beverages, soft drinks, and food that has been
5prepared for immediate consumption) and prescription and
6nonprescription medicines, drugs, medical appliances,
7modifications to a motor vehicle for the purpose of rendering
8it usable by a disabled person, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, the tax is imposed at the rate of 1%. For the purposes of
11this Section, until September 1, 2009: the term "soft drinks"
12means any complete, finished, ready-to-use, non-alcoholic
13drink, whether carbonated or not, including but not limited to
14soda water, cola, fruit juice, vegetable juice, carbonated
15water, and all other preparations commonly known as soft drinks
16of whatever kind or description that are contained in any
17closed or sealed bottle, can, carton, or container, regardless
18of size; but "soft drinks" does not include coffee, tea,
19non-carbonated water, infant formula, milk or milk products as
20defined in the Grade A Pasteurized Milk and Milk Products Act,
21or drinks containing 50% or more natural fruit or vegetable
22juice.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "soft drinks" means non-alcoholic
25beverages that contain natural or artificial sweeteners. "Soft
26drinks" do not include beverages that contain milk or milk

 

 

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

 

 

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1purposes of this Section, "grooming and hygiene products"
2includes, but is not limited to, soaps and cleaning solutions,
3shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
4lotions and screens, unless those products are available by
5prescription only, regardless of whether the products meet the
6definition of "over-the-counter-drugs". For the purposes of
7this paragraph, "over-the-counter-drug" means a drug for human
8use that contains a label that identifies the product as a drug
9as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
10label includes:
11        (A) A "Drug Facts" panel; or
12        (B) A statement of the "active ingredient(s)" with a
13    list of those ingredients contained in the compound,
14    substance or preparation.
15    If the property that is purchased at retail from a retailer
16is acquired outside Illinois and used outside Illinois before
17being brought to Illinois for use here and is taxable under
18this Act, the "selling price" on which the tax is computed
19shall be reduced by an amount that represents a reasonable
20allowance for depreciation for the period of prior out-of-state
21use.
22(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
23eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10;
2497-636, eff. 6-1-12.)
 
25    (35 ILCS 105/3-40)  (from Ch. 120, par. 439.3-40)

 

 

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1    Sec. 3-40. Gasohol. As used in this Act, "gasohol" means
2motor fuel that is a denatured ethanol and gasoline blend of
3denatured ethanol and gasoline that contains (i) no more than
41.25% water by weight and (ii) the maximum proportion of
5ethanol authorized by the United States Environmental
6Protection Agency under Section 211 of the Clean Air Act. The
7blend must contain 90% gasoline and 10% denatured ethanol. A
8maximum of one percent error factor in the amount of denatured
9ethanol used in the blend is allowable to compensate for
10blending equipment variations. Any person who knowingly sells
11or represents as gasohol any fuel that does not qualify as
12gasohol under this Act is guilty of a business offense and
13shall be fined not more than $100 for each day that the sale or
14representation takes place after notification from the
15Department of Agriculture that the fuel in question does not
16qualify as gasohol.
17(Source: P.A. 93-724, eff. 7-13-04.)
 
18    (35 ILCS 105/3-44)
19    Sec. 3-44. Majority blended ethanol fuel. "Majority
20blended ethanol fuel" means motor fuel that (i) contains not
21less than 51% and no more than 83% by volume ethanol, as
22specified in ASTM Standard DS798-11 and (ii) is capable of
23being used in the operation of flexible fuel vehicles. 70% and
24no more than 90% denatured ethanol and no less than 10% and no
25more than 30% gasoline.

 

 

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1(Source: P.A. 93-17, eff. 6-11-03.)
 
2    (35 ILCS 105/3-44.6 new)
3    Sec. 3-44.6. E20 blended ethanol fuel. "E20 blended ethanol
4fuel" means a blend of 20% denatured ethanol, ASTM Standard D
54806, and 80% gasoline for use in flexible fuel vehicles.
 
6    (35 ILCS 105/3-44.7 new)
7    Sec. 3-44.7. E30 blended ethanol fuel. "E30 blended ethanol
8fuel" means a blend of 30% denatured ethanol, ASTM Standard D
94806, and 70% gasoline for use in flexible fuel vehicles.
 
10    Section 15. The Service Use Tax Act is amended by changing
11Section 3-10 as follows:
 
12    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
13    Sec. 3-10. Rate of tax. Unless otherwise provided in this
14Section, the tax imposed by this Act is at the rate of 6.25% of
15the selling price of tangible personal property transferred as
16an incident to the sale of service, but, for the purpose of
17computing this tax, in no event shall the selling price be less
18than the cost price of the property to the serviceman.
19    Beginning on July 1, 2000 and through December 31, 2000,
20with respect to motor fuel, as defined in Section 1.1 of the
21Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
22the Use Tax Act, the tax is imposed at the rate of 1.25%.

 

 

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1    With respect to gasohol, as defined in the Use Tax Act, the
2tax imposed by this Act applies to (i) 70% of the selling price
3of property transferred as an incident to the sale of service
4on or after January 1, 1990, and before July 1, 2003, (ii) 80%
5of the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7June 30, 2013, (iii) 90% of the selling price of property
8transferred as an incident to the sale of service on or after
9July 1, 2013, and on or before December 31, 2018, and (iv)
10(iii) 100% of the selling price thereafter. If, at any time,
11however, the tax under this Act on sales of gasohol, as defined
12in the Use Tax Act, is imposed at the rate of 1.25%, then the
13tax imposed by this Act applies to 100% of the proceeds of
14sales of gasohol made during that time.
15    With respect to E20 blended ethanol fuel, as defined in the
16Use Tax Act, the tax imposed by this Act applies to (i) 80% of
17the selling price of property transferred as an incident to the
18sale of service on or after July 1, 2013 and on or before
19December 31, 2018 and (ii) 100% of the selling price
20thereafter. If, at any time, however, the tax under this Act on
21sales of E20 blended ethanol fuel is imposed at the rate of
221.25%, then the tax imposed by this Act applies to 100% of the
23proceeds of sales of E20 blended ethanol fuel made during that
24time.
25    With respect to E30 blended ethanol fuel, as defined in the
26Use Tax Act, the tax imposed by this Act applies to (i) 60% of

 

 

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1the selling price of property transferred as an incident to the
2sale of service on or after July 1, 2013 and on or before
3December 31, 2018 and (ii) 100% of the selling price
4thereafter. If, at any time, however, the tax under this Act on
5sales of E30 blended ethanol fuel is imposed at the rate of
61.25%, then the tax imposed by this Act applies to 100% of the
7proceeds of sales of E30 blended ethanol fuel made during that
8time.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the selling price of property transferred as an incident to
12the sale of service on or after July 1, 2003 and on or before
13December 31, 2018 but applies to 100% of the selling price
14thereafter.
15    With respect to biodiesel blends, as defined in the Use Tax
16Act, with no less than 1% and no more than 10% biodiesel, the
17tax imposed by this Act applies to (i) 80% of the selling price
18of property transferred as an incident to the sale of service
19on or after July 1, 2003 and on or before December 31, 2018 and
20(ii) 100% of the proceeds of the selling price thereafter. If,
21at any time, however, the tax under this Act on sales of
22biodiesel blends, as defined in the Use Tax Act, with no less
23than 1% and no more than 10% biodiesel is imposed at the rate
24of 1.25%, then the tax imposed by this Act applies to 100% of
25the proceeds of sales of biodiesel blends with no less than 1%
26and no more than 10% biodiesel made during that time.

 

 

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1    With respect to 100% biodiesel, as defined in the Use Tax
2Act, and biodiesel blends, as defined in the Use Tax Act, with
3more than 10% but no more than 99% biodiesel, the tax imposed
4by this Act does not apply to the proceeds of the selling price
5of property transferred as an incident to the sale of service
6on or after July 1, 2003 and on or before December 31, 2018 but
7applies to 100% of the selling price thereafter.
8    At the election of any registered serviceman made for each
9fiscal year, sales of service in which the aggregate annual
10cost price of tangible personal property transferred as an
11incident to the sales of service is less than 35%, or 75% in
12the case of servicemen transferring prescription drugs or
13servicemen engaged in graphic arts production, of the aggregate
14annual total gross receipts from all sales of service, the tax
15imposed by this Act shall be based on the serviceman's cost
16price of the tangible personal property transferred as an
17incident to the sale of those services.
18    The tax shall be imposed at the rate of 1% on food prepared
19for immediate consumption and transferred incident to a sale of
20service subject to this Act or the Service Occupation Tax Act
21by an entity licensed under the Hospital Licensing Act, the
22Nursing Home Care Act, the ID/DD Community Care Act, the
23Specialized Mental Health Rehabilitation Act, or the Child Care
24Act of 1969. The tax shall also be imposed at the rate of 1% on
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages, soft

 

 

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1drinks, and food that has been prepared for immediate
2consumption and is not otherwise included in this paragraph)
3and prescription and nonprescription medicines, drugs, medical
4appliances, modifications to a motor vehicle for the purpose of
5rendering it usable by a disabled person, and insulin, urine
6testing materials, syringes, and needles used by diabetics, for
7human use. For the purposes of this Section, until September 1,
82009: the term "soft drinks" means any complete, finished,
9ready-to-use, non-alcoholic drink, whether carbonated or not,
10including but not limited to soda water, cola, fruit juice,
11vegetable juice, carbonated water, and all other preparations
12commonly known as soft drinks of whatever kind or description
13that are contained in any closed or sealed bottle, can, carton,
14or container, regardless of size; but "soft drinks" does not
15include coffee, tea, non-carbonated water, infant formula,
16milk or milk products as defined in the Grade A Pasteurized
17Milk and Milk Products Act, or drinks containing 50% or more
18natural fruit or vegetable juice.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "soft drinks" means non-alcoholic
21beverages that contain natural or artificial sweeteners. "Soft
22drinks" do not include beverages that contain milk or milk
23products, soy, rice or similar milk substitutes, or greater
24than 50% of vegetable or fruit juice by volume.
25    Until August 1, 2009, and notwithstanding any other
26provisions of this Act, "food for human consumption that is to

 

 

HB0165- 16 -LRB098 05105 HLH 35136 b

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

 

 

HB0165- 17 -LRB098 05105 HLH 35136 b

1prescription only, regardless of whether the products meet the
2definition of "over-the-counter-drugs". For the purposes of
3this paragraph, "over-the-counter-drug" means a drug for human
4use that contains a label that identifies the product as a drug
5as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
6label includes:
7        (A) A "Drug Facts" panel; or
8        (B) A statement of the "active ingredient(s)" with a
9    list of those ingredients contained in the compound,
10    substance or preparation.
11    If the property that is acquired from a serviceman is
12acquired outside Illinois and used outside Illinois before
13being brought to Illinois for use here and is taxable under
14this Act, the "selling price" on which the tax is computed
15shall be reduced by an amount that represents a reasonable
16allowance for depreciation for the period of prior out-of-state
17use.
18(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
19eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10; 97-38,
20eff. 6-28-11; 97-227, eff. 1-1-12; 97-636, eff. 6-1-12.)
 
21    Section 20. The Service Occupation Tax Act is amended by
22changing Section 3-10 as follows:
 
23    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
24    Sec. 3-10. Rate of tax. Unless otherwise provided in this

 

 

HB0165- 18 -LRB098 05105 HLH 35136 b

1Section, the tax imposed by this Act is at the rate of 6.25% of
2the "selling price", as defined in Section 2 of the Service Use
3Tax Act, of the tangible personal property. For the purpose of
4computing this tax, in no event shall the "selling price" be
5less than the cost price to the serviceman of the tangible
6personal property transferred. The selling price of each item
7of tangible personal property transferred as an incident of a
8sale of service may be shown as a distinct and separate item on
9the serviceman's billing to the service customer. If the
10selling price is not so shown, the selling price of the
11tangible personal property is deemed to be 50% of the
12serviceman's entire billing to the service customer. When,
13however, a serviceman contracts to design, develop, and produce
14special order machinery or equipment, the tax imposed by this
15Act shall be based on the serviceman's cost price of the
16tangible personal property transferred incident to the
17completion of the contract.
18    Beginning on July 1, 2000 and through December 31, 2000,
19with respect to motor fuel, as defined in Section 1.1 of the
20Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
21the Use Tax Act, the tax is imposed at the rate of 1.25%.
22    With respect to gasohol, as defined in the Use Tax Act, the
23tax imposed by this Act shall apply to (i) 70% of the cost
24price of property transferred as an incident to the sale of
25service on or after January 1, 1990, and before July 1, 2003,
26(ii) 80% of the selling price of property transferred as an

 

 

HB0165- 19 -LRB098 05105 HLH 35136 b

1incident to the sale of service on or after July 1, 2003 and on
2or before June 30, 2013, (iii) 90% of the selling price of
3property transferred as an incident to the sale of service on
4or after July 1, 2013, and on or before December 31, 2018, and
5(iv) (iii) 100% of the cost price thereafter. If, at any time,
6however, the tax under this Act on sales of gasohol, as defined
7in the Use Tax Act, is imposed at the rate of 1.25%, then the
8tax imposed by this Act applies to 100% of the proceeds of
9sales of gasohol made during that time.
10    With respect to E20 blended ethanol fuel, as defined in the
11Use Tax Act, the tax imposed by this Act applies to (i) 80% of
12the selling price of property transferred as an incident to the
13sale of service on or after July 1, 2013 and on or before
14December 31, 2018 and (ii) 100% of the selling price
15thereafter. If, at any time, however, the tax under this Act on
16sales of E20 blended ethanol fuel is imposed at the rate of
171.25%, then the tax imposed by this Act applies to 100% of the
18proceeds of sales of E20 blended ethanol fuel made during that
19time.
20    With respect to E30 blended ethanol fuel, as defined in the
21Use Tax Act, the tax imposed by this Act applies to (i) 60% of
22the selling price of property transferred as an incident to the
23sale of service on or after July 1, 2013 and on or before
24December 31, 2018 and (ii) 100% of the selling price
25thereafter. If, at any time, however, the tax under this Act on
26sales of E30 blended ethanol fuel is imposed at the rate of

 

 

HB0165- 20 -LRB098 05105 HLH 35136 b

11.25%, then the tax imposed by this Act applies to 100% of the
2proceeds of sales of E30 blended ethanol fuel made during that
3time.
4    With respect to majority blended ethanol fuel, as defined
5in the Use Tax Act, the tax imposed by this Act does not apply
6to the selling price of property transferred as an incident to
7the sale of service on or after July 1, 2003 and on or before
8December 31, 2018 but applies to 100% of the selling price
9thereafter.
10    With respect to biodiesel blends, as defined in the Use Tax
11Act, with no less than 1% and no more than 10% biodiesel, the
12tax imposed by this Act applies to (i) 80% of the selling price
13of property transferred as an incident to the sale of service
14on or after July 1, 2003 and on or before December 31, 2018 and
15(ii) 100% of the proceeds of the selling price thereafter. If,
16at any time, however, the tax under this Act on sales of
17biodiesel blends, as defined in the Use Tax Act, with no less
18than 1% and no more than 10% biodiesel is imposed at the rate
19of 1.25%, then the tax imposed by this Act applies to 100% of
20the proceeds of sales of biodiesel blends with no less than 1%
21and no more than 10% biodiesel made during that time.
22    With respect to 100% biodiesel, as defined in the Use Tax
23Act, and biodiesel blends, as defined in the Use Tax Act, with
24more than 10% but no more than 99% biodiesel material, the tax
25imposed by this Act does not apply to the proceeds of the
26selling price of property transferred as an incident to the

 

 

HB0165- 21 -LRB098 05105 HLH 35136 b

1sale of service on or after July 1, 2003 and on or before
2December 31, 2018 but applies to 100% of the selling price
3thereafter.
4    At the election of any registered serviceman made for each
5fiscal year, sales of service in which the aggregate annual
6cost price of tangible personal property transferred as an
7incident to the sales of service is less than 35%, or 75% in
8the case of servicemen transferring prescription drugs or
9servicemen engaged in graphic arts production, of the aggregate
10annual total gross receipts from all sales of service, the tax
11imposed by this Act shall be based on the serviceman's cost
12price of the tangible personal property transferred incident to
13the sale of those services.
14    The tax shall be imposed at the rate of 1% on food prepared
15for immediate consumption and transferred incident to a sale of
16service subject to this Act or the Service Occupation Tax Act
17by an entity licensed under the Hospital Licensing Act, the
18Nursing Home Care Act, the ID/DD Community Care Act, the
19Specialized Mental Health Rehabilitation Act, or the Child Care
20Act of 1969. The tax shall also be imposed at the rate of 1% on
21food for human consumption that is to be consumed off the
22premises where it is sold (other than alcoholic beverages, soft
23drinks, and food that has been prepared for immediate
24consumption and is not otherwise included in this paragraph)
25and prescription and nonprescription medicines, drugs, medical
26appliances, modifications to a motor vehicle for the purpose of

 

 

HB0165- 22 -LRB098 05105 HLH 35136 b

1rendering it usable by a disabled person, and insulin, urine
2testing materials, syringes, and needles used by diabetics, for
3human use. For the purposes of this Section, until September 1,
42009: the term "soft drinks" means any complete, finished,
5ready-to-use, non-alcoholic drink, whether carbonated or not,
6including but not limited to soda water, cola, fruit juice,
7vegetable juice, carbonated water, and all other preparations
8commonly known as soft drinks of whatever kind or description
9that are contained in any closed or sealed can, carton, or
10container, regardless of size; but "soft drinks" does not
11include coffee, tea, non-carbonated water, infant formula,
12milk or milk products as defined in the Grade A Pasteurized
13Milk and Milk Products Act, or drinks containing 50% or more
14natural fruit or vegetable juice.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "soft drinks" means non-alcoholic
17beverages that contain natural or artificial sweeteners. "Soft
18drinks" do not include beverages that contain milk or milk
19products, soy, rice or similar milk substitutes, or greater
20than 50% of vegetable or fruit juice by volume.
21    Until August 1, 2009, and notwithstanding any other
22provisions of this Act, "food for human consumption that is to
23be consumed off the premises where it is sold" includes all
24food sold through a vending machine, except soft drinks and
25food products that are dispensed hot from a vending machine,
26regardless of the location of the vending machine. Beginning

 

 

HB0165- 23 -LRB098 05105 HLH 35136 b

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

 

 

HB0165- 24 -LRB098 05105 HLH 35136 b

1as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
2label includes:
3        (A) A "Drug Facts" panel; or
4        (B) A statement of the "active ingredient(s)" with a
5    list of those ingredients contained in the compound,
6    substance or preparation.
7(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
8eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10; 97-38,
9eff. 6-28-11; 97-227, eff. 1-1-12; 97-636, eff. 6-1-12.)
 
10    Section 25. The Retailers' Occupation Tax Act is amended by
11changing Section 2-10 as follows:
 
12    (35 ILCS 120/2-10)
13    Sec. 2-10. Rate of tax. Unless otherwise provided in this
14Section, the tax imposed by this Act is at the rate of 6.25% of
15gross receipts from sales of tangible personal property made in
16the course of business.
17    Beginning on July 1, 2000 and through December 31, 2000,
18with respect to motor fuel, as defined in Section 1.1 of the
19Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
20the Use Tax Act, the tax is imposed at the rate of 1.25%.
21    Beginning on August 6, 2010 through August 15, 2010, with
22respect to sales tax holiday items as defined in Section 2-8 of
23this Act, the tax is imposed at the rate of 1.25%.
24    Within 14 days after the effective date of this amendatory

 

 

HB0165- 25 -LRB098 05105 HLH 35136 b

1Act of the 91st General Assembly, each retailer of motor fuel
2and gasohol shall cause the following notice to be posted in a
3prominently visible place on each retail dispensing device that
4is used to dispense motor fuel or gasohol in the State of
5Illinois: "As of July 1, 2000, the State of Illinois has
6eliminated the State's share of sales tax on motor fuel and
7gasohol through December 31, 2000. The price on this pump
8should reflect the elimination of the tax." The notice shall be
9printed in bold print on a sign that is no smaller than 4
10inches by 8 inches. The sign shall be clearly visible to
11customers. Any retailer who fails to post or maintain a
12required sign through December 31, 2000 is guilty of a petty
13offense for which the fine shall be $500 per day per each
14retail premises where a violation occurs.
15    With respect to gasohol, as defined in the Use Tax Act, the
16tax imposed by this Act applies to (i) 70% of the proceeds of
17sales made on or after January 1, 1990, and before July 1,
182003, (ii) 80% of the proceeds of sales made on or after July
191, 2003 and on or before June 30, 2013, (iii) 90% of the
20proceeds of sales made on or after July 1, 2013, and on or
21before December 31, 2018, and (iv) (iii) 100% of the proceeds
22of sales made thereafter. If, at any time, however, the tax
23under this Act on sales of gasohol, as defined in the Use Tax
24Act, is imposed at the rate of 1.25%, then the tax imposed by
25this Act applies to 100% of the proceeds of sales of gasohol
26made during that time.

 

 

HB0165- 26 -LRB098 05105 HLH 35136 b

1    With respect to E20 blended ethanol fuel, as defined in the
2Use Tax Act, the tax imposed by this Act applies to (i) 80% of
3the proceeds of sales made on or after July 1, 2013 and on or
4before December 31, 2018 and (ii) 100% of the proceeds of sales
5made thereafter. If, at any time, however, the tax under this
6Act on sales of E20 blended ethanol fuel is imposed at the rate
7of 1.25%, then the tax imposed by this Act applies to 100% of
8the proceeds of sales of E20 blended ethanol fuel made during
9that time.
10    With respect to E30 blended ethanol fuel, as defined in the
11Use Tax Act, the tax imposed by this Act applies to (i) 60% of
12the proceeds of sales made on or after July 1, 2013 and on or
13before December 31, 2018 and (ii) 100% of the proceeds of sales
14made thereafter. If, at any time, however, the tax under this
15Act on sales of E30 blended ethanol fuel is imposed at the rate
16of 1.25%, then the tax imposed by this Act applies to 100% of
17the proceeds of sales of E30 blended ethanol fuel made during
18that time.
19    With respect to majority blended ethanol fuel, as defined
20in the Use Tax Act, the tax imposed by this Act does not apply
21to the proceeds of sales made on or after July 1, 2003 and on or
22before December 31, 2018 but applies to 100% of the proceeds of
23sales made thereafter.
24    With respect to biodiesel blends, as defined in the Use Tax
25Act, with no less than 1% and no more than 10% biodiesel, the
26tax imposed by this Act applies to (i) 80% of the proceeds of

 

 

HB0165- 27 -LRB098 05105 HLH 35136 b

1sales made on or after July 1, 2003 and on or before December
231, 2018 and (ii) 100% of the proceeds of sales made
3thereafter. If, at any time, however, the tax under this Act on
4sales of biodiesel blends, as defined in the Use Tax Act, with
5no less than 1% and no more than 10% biodiesel is imposed at
6the rate of 1.25%, then the tax imposed by this Act applies to
7100% of the proceeds of sales of biodiesel blends with no less
8than 1% and no more than 10% biodiesel made during that time.
9    With respect to 100% biodiesel, as defined in the Use Tax
10Act, and biodiesel blends, as defined in the Use Tax Act, with
11more than 10% but no more than 99% biodiesel, the tax imposed
12by this Act does not apply to the proceeds of sales made on or
13after July 1, 2003 and on or before December 31, 2018 but
14applies to 100% of the proceeds of sales made thereafter.
15    With respect to food for human consumption that is to be
16consumed off the premises where it is sold (other than
17alcoholic beverages, soft drinks, and food that has been
18prepared for immediate consumption) and prescription and
19nonprescription medicines, drugs, medical appliances,
20modifications to a motor vehicle for the purpose of rendering
21it usable by a disabled person, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, the tax is imposed at the rate of 1%. For the purposes of
24this Section, until September 1, 2009: the term "soft drinks"
25means any complete, finished, ready-to-use, non-alcoholic
26drink, whether carbonated or not, including but not limited to

 

 

HB0165- 28 -LRB098 05105 HLH 35136 b

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

 

 

HB0165- 29 -LRB098 05105 HLH 35136 b

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

 

 

HB0165- 30 -LRB098 05105 HLH 35136 b

1    substance or preparation.
2(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
3eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10;
497-636, eff. 6-1-12.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.