Illinois General Assembly - Full Text of HB3659
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Full Text of HB3659  96th General Assembly

HB3659sam003 96TH GENERAL ASSEMBLY

Sen. John J. Cullerton

Filed: 1/4/2011

 

 


 

 


 
09600HB3659sam003LRB096 09388 PJG 44648 a

1
AMENDMENT TO HOUSE BILL 3659

2    AMENDMENT NO. ______. Amend House Bill 3659, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Use Tax Act is amended by changing Section
62 as follows:
 
7    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
8    Sec. 2. "Use" means the exercise by any person of any right
9or power over tangible personal property incident to the
10ownership of that property, except that it does not include the
11sale of such property in any form as tangible personal property
12in the regular course of business to the extent that such
13property is not first subjected to a use for which it was
14purchased, and does not include the use of such property by its
15owner for demonstration purposes: Provided that the property
16purchased is deemed to be purchased for the purpose of resale,

 

 

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1despite first being used, to the extent to which it is resold
2as an ingredient of an intentionally produced product or
3by-product of manufacturing. "Use" does not mean the
4demonstration use or interim use of tangible personal property
5by a retailer before he sells that tangible personal property.
6For watercraft or aircraft, if the period of demonstration use
7or interim use by the retailer exceeds 18 months, the retailer
8shall pay on the retailers' original cost price the tax imposed
9by this Act, and no credit for that tax is permitted if the
10watercraft or aircraft is subsequently sold by the retailer.
11"Use" does not mean the physical incorporation of tangible
12personal property, to the extent not first subjected to a use
13for which it was purchased, as an ingredient or constituent,
14into other tangible personal property (a) which is sold in the
15regular course of business or (b) which the person
16incorporating such ingredient or constituent therein has
17undertaken at the time of such purchase to cause to be
18transported in interstate commerce to destinations outside the
19State of Illinois: Provided that the property purchased is
20deemed to be purchased for the purpose of resale, despite first
21being used, to the extent to which it is resold as an
22ingredient of an intentionally produced product or by-product
23of manufacturing.
24    "Watercraft" means a Class 2, Class 3, or Class 4
25watercraft as defined in Section 3-2 of the Boat Registration
26and Safety Act, a personal watercraft, or any boat equipped

 

 

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1with an inboard motor.
2    "Purchase at retail" means the acquisition of the ownership
3of or title to tangible personal property through a sale at
4retail.
5    "Purchaser" means anyone who, through a sale at retail,
6acquires the ownership of tangible personal property for a
7valuable consideration.
8    "Sale at retail" means any transfer of the ownership of or
9title to tangible personal property to a purchaser, for the
10purpose of use, and not for the purpose of resale in any form
11as tangible personal property to the extent not first subjected
12to a use for which it was purchased, for a valuable
13consideration: Provided that the property purchased is deemed
14to be purchased for the purpose of resale, despite first being
15used, to the extent to which it is resold as an ingredient of
16an intentionally produced product or by-product of
17manufacturing. For this purpose, slag produced as an incident
18to manufacturing pig iron or steel and sold is considered to be
19an intentionally produced by-product of manufacturing. "Sale
20at retail" includes any such transfer made for resale unless
21made in compliance with Section 2c of the Retailers' Occupation
22Tax Act, as incorporated by reference into Section 12 of this
23Act. Transactions whereby the possession of the property is
24transferred but the seller retains the title as security for
25payment of the selling price are sales.
26    "Sale at retail" shall also be construed to include any

 

 

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1Illinois florist's sales transaction in which the purchase
2order is received in Illinois by a florist and the sale is for
3use or consumption, but the Illinois florist has a florist in
4another state deliver the property to the purchaser or the
5purchaser's donee in such other state.
6    Nonreusable tangible personal property that is used by
7persons engaged in the business of operating a restaurant,
8cafeteria, or drive-in is a sale for resale when it is
9transferred to customers in the ordinary course of business as
10part of the sale of food or beverages and is used to deliver,
11package, or consume food or beverages, regardless of where
12consumption of the food or beverages occurs. Examples of those
13items include, but are not limited to nonreusable, paper and
14plastic cups, plates, baskets, boxes, sleeves, buckets or other
15containers, utensils, straws, placemats, napkins, doggie bags,
16and wrapping or packaging materials that are transferred to
17customers as part of the sale of food or beverages in the
18ordinary course of business.
19    The purchase, employment and transfer of such tangible
20personal property as newsprint and ink for the primary purpose
21of conveying news (with or without other information) is not a
22purchase, use or sale of tangible personal property.
23    "Selling price" means the consideration for a sale valued
24in money whether received in money or otherwise, including
25cash, credits, property other than as hereinafter provided, and
26services, but not including the value of or credit given for

 

 

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1traded-in tangible personal property where the item that is
2traded-in is of like kind and character as that which is being
3sold, and shall be determined without any deduction on account
4of the cost of the property sold, the cost of materials used,
5labor or service cost or any other expense whatsoever, but does
6not include interest or finance charges which appear as
7separate items on the bill of sale or sales contract nor
8charges that are added to prices by sellers on account of the
9seller's tax liability under the "Retailers' Occupation Tax
10Act", or on account of the seller's duty to collect, from the
11purchaser, the tax that is imposed by this Act, or, except as
12otherwise provided with respect to any cigarette tax imposed by
13a home rule unit, on account of the seller's tax liability
14under any local occupation tax administered by the Department,
15or, except as otherwise provided with respect to any cigarette
16tax imposed by a home rule unit on account of the seller's duty
17to collect, from the purchasers, the tax that is imposed under
18any local use tax administered by the Department. Effective
19December 1, 1985, "selling price" shall include charges that
20are added to prices by sellers on account of the seller's tax
21liability under the Cigarette Tax Act, on account of the
22seller's duty to collect, from the purchaser, the tax imposed
23under the Cigarette Use Tax Act, and on account of the seller's
24duty to collect, from the purchaser, any cigarette tax imposed
25by a home rule unit.
26    The phrase "like kind and character" shall be liberally

 

 

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1construed (including but not limited to any form of motor
2vehicle for any form of motor vehicle, or any kind of farm or
3agricultural implement for any other kind of farm or
4agricultural implement), while not including a kind of item
5which, if sold at retail by that retailer, would be exempt from
6retailers' occupation tax and use tax as an isolated or
7occasional sale.
8    "Department" means the Department of Revenue.
9    "Person" means any natural individual, firm, partnership,
10association, joint stock company, joint adventure, public or
11private corporation, limited liability company, or a receiver,
12executor, trustee, guardian or other representative appointed
13by order of any court.
14    "Retailer" means and includes every person engaged in the
15business of making sales at retail as defined in this Section.
16    A person who holds himself or herself out as being engaged
17(or who habitually engages) in selling tangible personal
18property at retail is a retailer hereunder with respect to such
19sales (and not primarily in a service occupation)
20notwithstanding the fact that such person designs and produces
21such tangible personal property on special order for the
22purchaser and in such a way as to render the property of value
23only to such purchaser, if such tangible personal property so
24produced on special order serves substantially the same
25function as stock or standard items of tangible personal
26property that are sold at retail.

 

 

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1    A person whose activities are organized and conducted
2primarily as a not-for-profit service enterprise, and who
3engages in selling tangible personal property at retail
4(whether to the public or merely to members and their guests)
5is a retailer with respect to such transactions, excepting only
6a person organized and operated exclusively for charitable,
7religious or educational purposes either (1), to the extent of
8sales by such person to its members, students, patients or
9inmates of tangible personal property to be used primarily for
10the purposes of such person, or (2), to the extent of sales by
11such person of tangible personal property which is not sold or
12offered for sale by persons organized for profit. The selling
13of school books and school supplies by schools at retail to
14students is not "primarily for the purposes of" the school
15which does such selling. This paragraph does not apply to nor
16subject to taxation occasional dinners, social or similar
17activities of a person organized and operated exclusively for
18charitable, religious or educational purposes, whether or not
19such activities are open to the public.
20    A person who is the recipient of a grant or contract under
21Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
22serves meals to participants in the federal Nutrition Program
23for the Elderly in return for contributions established in
24amount by the individual participant pursuant to a schedule of
25suggested fees as provided for in the federal Act is not a
26retailer under this Act with respect to such transactions.

 

 

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1    Persons who engage in the business of transferring tangible
2personal property upon the redemption of trading stamps are
3retailers hereunder when engaged in such business.
4    The isolated or occasional sale of tangible personal
5property at retail by a person who does not hold himself out as
6being engaged (or who does not habitually engage) in selling
7such tangible personal property at retail or a sale through a
8bulk vending machine does not make such person a retailer
9hereunder. However, any person who is engaged in a business
10which is not subject to the tax imposed by the "Retailers'
11Occupation Tax Act" because of involving the sale of or a
12contract to sell real estate or a construction contract to
13improve real estate, but who, in the course of conducting such
14business, transfers tangible personal property to users or
15consumers in the finished form in which it was purchased, and
16which does not become real estate, under any provision of a
17construction contract or real estate sale or real estate sales
18agreement entered into with some other person arising out of or
19because of such nontaxable business, is a retailer to the
20extent of the value of the tangible personal property so
21transferred. If, in such transaction, a separate charge is made
22for the tangible personal property so transferred, the value of
23such property, for the purposes of this Act, is the amount so
24separately charged, but not less than the cost of such property
25to the transferor; if no separate charge is made, the value of
26such property, for the purposes of this Act, is the cost to the

 

 

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1transferor of such tangible personal property.
2    "Retailer maintaining a place of business in this State",
3or any like term, means and includes any of the following
4retailers:
5        1. A retailer having or maintaining within this State,
6    directly or by a subsidiary, an office, distribution house,
7    sales house, warehouse or other place of business, or any
8    agent or other representative operating within this State
9    under the authority of the retailer or its subsidiary,
10    irrespective of whether such place of business or agent or
11    other representative is located here permanently or
12    temporarily, or whether such retailer or subsidiary is
13    licensed to do business in this State. However, the
14    ownership of property that is located at the premises of a
15    printer with which the retailer has contracted for printing
16    and that consists of the final printed product, property
17    that becomes a part of the final printed product, or copy
18    from which the printed product is produced shall not result
19    in the retailer being deemed to have or maintain an office,
20    distribution house, sales house, warehouse, or other place
21    of business within this State.
22        1.1. Beginning July 1, 2011, a retailer having a
23    contract with a person located in this State under which
24    the person, for a commission or other consideration based
25    upon the sale of tangible personal property by the
26    retailer, directly or indirectly refers potential

 

 

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1    customers to the retailer by a link on the person's
2    Internet website. The provisions of this paragraph 1.1
3    shall apply only if the cumulative gross receipts from
4    sales of tangible personal property by the retailer to
5    customers who are referred to the retailer by all persons
6    in this State under such contracts exceed $10,000 during
7    the preceding 4 quarterly periods ending on the last day of
8    March, June, September, and December.
9        1.2. Beginning July 1, 2011, a retailer having a
10    contract with a person located in this State under which:
11            A. the retailer sells the same or substantially
12        similar line of products as the person located in this
13        State and does so using an identical or substantially
14        similar name, trade name, or trademark as the person
15        located in this State; and
16            B. the retailer provides a commission or other
17        consideration to the person located in this State based
18        upon the sale of tangible personal property by the
19        retailer.
20    The provisions of this paragraph 1.2 shall apply only if
21    the cumulative gross receipts from sales of tangible
22    personal property by the retailer to customers in this
23    State under all such contracts exceed $10,000 during the
24    preceding 4 quarterly periods ending on the last day of
25    March, June, September, and December.
26        2. A retailer soliciting orders for tangible personal

 

 

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1    property by means of a telecommunication or television
2    shopping system (which utilizes toll free numbers) which is
3    intended by the retailer to be broadcast by cable
4    television or other means of broadcasting, to consumers
5    located in this State.
6        3. A retailer, pursuant to a contract with a
7    broadcaster or publisher located in this State, soliciting
8    orders for tangible personal property by means of
9    advertising which is disseminated primarily to consumers
10    located in this State and only secondarily to bordering
11    jurisdictions.
12        4. A retailer soliciting orders for tangible personal
13    property by mail if the solicitations are substantial and
14    recurring and if the retailer benefits from any banking,
15    financing, debt collection, telecommunication, or
16    marketing activities occurring in this State or benefits
17    from the location in this State of authorized installation,
18    servicing, or repair facilities.
19        5. A retailer that is owned or controlled by the same
20    interests that own or control any retailer engaging in
21    business in the same or similar line of business in this
22    State.
23        6. A retailer having a franchisee or licensee operating
24    under its trade name if the franchisee or licensee is
25    required to collect the tax under this Section.
26        7. A retailer, pursuant to a contract with a cable

 

 

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1    television operator located in this State, soliciting
2    orders for tangible personal property by means of
3    advertising which is transmitted or distributed over a
4    cable television system in this State.
5        8. A retailer engaging in activities in Illinois, which
6    activities in the state in which the retail business
7    engaging in such activities is located would constitute
8    maintaining a place of business in that state.
9    "Bulk vending machine" means a vending machine, containing
10unsorted confections, nuts, toys, or other items designed
11primarily to be used or played with by children which, when a
12coin or coins of a denomination not larger than $0.50 are
13inserted, are dispensed in equal portions, at random and
14without selection by the customer.
15(Source: P.A. 94-1074, eff. 12-26-06; 95-723, eff. 6-23-08.)
 
16    Section 10. The Service Use Tax Act is amended by changing
17Section 2 as follows:
 
18    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
19    Sec. 2. "Use" means the exercise by any person of any right
20or power over tangible personal property incident to the
21ownership of that property, but does not include the sale or
22use for demonstration by him of that property in any form as
23tangible personal property in the regular course of business.
24"Use" does not mean the interim use of tangible personal

 

 

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1property nor the physical incorporation of tangible personal
2property, as an ingredient or constituent, into other tangible
3personal property, (a) which is sold in the regular course of
4business or (b) which the person incorporating such ingredient
5or constituent therein has undertaken at the time of such
6purchase to cause to be transported in interstate commerce to
7destinations outside the State of Illinois.
8    "Purchased from a serviceman" means the acquisition of the
9ownership of, or title to, tangible personal property through a
10sale of service.
11    "Purchaser" means any person who, through a sale of
12service, acquires the ownership of, or title to, any tangible
13personal property.
14    "Cost price" means the consideration paid by the serviceman
15for a purchase valued in money, whether paid in money or
16otherwise, including cash, credits and services, and shall be
17determined without any deduction on account of the supplier's
18cost of the property sold or on account of any other expense
19incurred by the supplier. When a serviceman contracts out part
20or all of the services required in his sale of service, it
21shall be presumed that the cost price to the serviceman of the
22property transferred to him or her by his or her subcontractor
23is equal to 50% of the subcontractor's charges to the
24serviceman in the absence of proof of the consideration paid by
25the subcontractor for the purchase of such property.
26    "Selling price" means the consideration for a sale valued

 

 

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1in money whether received in money or otherwise, including
2cash, credits and service, and shall be determined without any
3deduction on account of the serviceman's cost of the property
4sold, the cost of materials used, labor or service cost or any
5other expense whatsoever, but does not include interest or
6finance charges which appear as separate items on the bill of
7sale or sales contract nor charges that are added to prices by
8sellers on account of the seller's duty to collect, from the
9purchaser, the tax that is imposed by this Act.
10    "Department" means the Department of Revenue.
11    "Person" means any natural individual, firm, partnership,
12association, joint stock company, joint venture, public or
13private corporation, limited liability company, and any
14receiver, executor, trustee, guardian or other representative
15appointed by order of any court.
16    "Sale of service" means any transaction except:
17        (1) a retail sale of tangible personal property taxable
18    under the Retailers' Occupation Tax Act or under the Use
19    Tax Act.
20        (2) a sale of tangible personal property for the
21    purpose of resale made in compliance with Section 2c of the
22    Retailers' Occupation Tax Act.
23        (3) except as hereinafter provided, a sale or transfer
24    of tangible personal property as an incident to the
25    rendering of service for or by any governmental body, or
26    for or by any corporation, society, association,

 

 

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1    foundation or institution organized and operated
2    exclusively for charitable, religious or educational
3    purposes or any not-for-profit corporation, society,
4    association, foundation, institution or organization which
5    has no compensated officers or employees and which is
6    organized and operated primarily for the recreation of
7    persons 55 years of age or older. A limited liability
8    company may qualify for the exemption under this paragraph
9    only if the limited liability company is organized and
10    operated exclusively for educational purposes.
11        (4) a sale or transfer of tangible personal property as
12    an incident to the rendering of service for interstate
13    carriers for hire for use as rolling stock moving in
14    interstate commerce or by lessors under a lease of one year
15    or longer, executed or in effect at the time of purchase of
16    personal property, to interstate carriers for hire for use
17    as rolling stock moving in interstate commerce so long as
18    so used by such interstate carriers for hire, and equipment
19    operated by a telecommunications provider, licensed as a
20    common carrier by the Federal Communications Commission,
21    which is permanently installed in or affixed to aircraft
22    moving in interstate commerce.
23        (4a) a sale or transfer of tangible personal property
24    as an incident to the rendering of service for owners,
25    lessors, or shippers of tangible personal property which is
26    utilized by interstate carriers for hire for use as rolling

 

 

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1    stock moving in interstate commerce so long as so used by
2    interstate carriers for hire, and equipment operated by a
3    telecommunications provider, licensed as a common carrier
4    by the Federal Communications Commission, which is
5    permanently installed in or affixed to aircraft moving in
6    interstate commerce.
7        (4a-5) on and after July 1, 2003 and through June 30,
8    2004, 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    Beginning on July 1, 2004 and through June 30, 2005, the
14    use in this State of motor vehicles of the second division:
15    (i) with a gross vehicle weight rating in excess of 8,000
16    pounds; (ii) that are subject to the commercial
17    distribution fee imposed under Section 3-815.1 of the
18    Illinois Vehicle Code; and (iii) that are primarily used
19    for commercial purposes. Through June 30, 2005, this
20    exemption applies to repair and replacement parts added
21    after the initial purchase of such a motor vehicle if that
22    motor vehicle is used in a manner that would qualify for
23    the rolling stock exemption otherwise provided for in this
24    Act. For purposes of this paragraph, "used for commercial
25    purposes" means the transportation of persons or property
26    in furtherance of any commercial or industrial enterprise

 

 

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1    whether for-hire or not.
2        (5) a sale or transfer of machinery and equipment used
3    primarily in the process of the manufacturing or
4    assembling, either in an existing, an expanded or a new
5    manufacturing facility, of tangible personal property for
6    wholesale or retail sale or lease, whether such sale or
7    lease is made directly by the manufacturer or by some other
8    person, whether the materials used in the process are owned
9    by the manufacturer or some other person, or whether such
10    sale or lease is made apart from or as an incident to the
11    seller's engaging in a service occupation and the
12    applicable tax is a Service Use Tax or Service Occupation
13    Tax, rather than Use Tax or Retailers' Occupation Tax.
14        (5a) the repairing, reconditioning or remodeling, for
15    a common carrier by rail, of tangible personal property
16    which belongs to such carrier for hire, and as to which
17    such carrier receives the physical possession of the
18    repaired, reconditioned or remodeled item of tangible
19    personal property in Illinois, and which such carrier
20    transports, or shares with another common carrier in the
21    transportation of such property, out of Illinois on a
22    standard uniform bill of lading showing the person who
23    repaired, reconditioned or remodeled the property to a
24    destination outside Illinois, for use outside Illinois.
25        (5b) a sale or transfer of tangible personal property
26    which is produced by the seller thereof on special order in

 

 

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1    such a way as to have made the applicable tax the Service
2    Occupation Tax or the Service Use Tax, rather than the
3    Retailers' Occupation Tax or the Use Tax, for an interstate
4    carrier by rail which receives the physical possession of
5    such property in Illinois, and which transports such
6    property, or shares with another common carrier in the
7    transportation of such property, out of Illinois on a
8    standard uniform bill of lading showing the seller of the
9    property as the shipper or consignor of such property to a
10    destination outside Illinois, for use outside Illinois.
11        (6) until July 1, 2003, a sale or transfer of
12    distillation machinery and equipment, sold as a unit or kit
13    and assembled or installed by the retailer, which machinery
14    and equipment is certified by the user to be used only for
15    the production of ethyl alcohol that will be used for
16    consumption as motor fuel or as a component of motor fuel
17    for the personal use of such user and not subject to sale
18    or resale.
19        (7) at the election of any serviceman not required to
20    be otherwise registered as a retailer under Section 2a of
21    the Retailers' Occupation Tax Act, made for each fiscal
22    year sales of service in which the aggregate annual cost
23    price of tangible personal property transferred as an
24    incident to the sales of service is less than 35%, or 75%
25    in the case of servicemen transferring prescription drugs
26    or servicemen engaged in graphic arts production, of the

 

 

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1    aggregate annual total gross receipts from all sales of
2    service. The purchase of such tangible personal property by
3    the serviceman shall be subject to tax under the Retailers'
4    Occupation Tax Act and the Use Tax Act. However, if a
5    primary serviceman who has made the election described in
6    this paragraph subcontracts service work to a secondary
7    serviceman who has also made the election described in this
8    paragraph, the primary serviceman does not incur a Use Tax
9    liability if the secondary serviceman (i) has paid or will
10    pay Use Tax on his or her cost price of any tangible
11    personal property transferred to the primary serviceman
12    and (ii) certifies that fact in writing to the primary
13    serviceman.
14    Tangible personal property transferred incident to the
15completion of a maintenance agreement is exempt from the tax
16imposed pursuant to this Act.
17    Exemption (5) also includes machinery and equipment used in
18the general maintenance or repair of such exempt machinery and
19equipment or for in-house manufacture of exempt machinery and
20equipment. For the purposes of exemption (5), each of these
21terms shall have the following meanings: (1) "manufacturing
22process" shall mean the production of any article of tangible
23personal property, whether such article is a finished product
24or an article for use in the process of manufacturing or
25assembling a different article of tangible personal property,
26by procedures commonly regarded as manufacturing, processing,

 

 

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1fabricating, or refining which changes some existing material
2or materials into a material with a different form, use or
3name. In relation to a recognized integrated business composed
4of a series of operations which collectively constitute
5manufacturing, or individually constitute manufacturing
6operations, the manufacturing process shall be deemed to
7commence with the first operation or stage of production in the
8series, and shall not be deemed to end until the completion of
9the final product in the last operation or stage of production
10in the series; and further, for purposes of exemption (5),
11photoprocessing is deemed to be a manufacturing process of
12tangible personal property for wholesale or retail sale; (2)
13"assembling process" shall mean the production of any article
14of tangible personal property, whether such article is a
15finished product or an article for use in the process of
16manufacturing or assembling a different article of tangible
17personal property, by the combination of existing materials in
18a manner commonly regarded as assembling which results in a
19material of a different form, use or name; (3) "machinery"
20shall mean major mechanical machines or major components of
21such machines contributing to a manufacturing or assembling
22process; and (4) "equipment" shall include any independent
23device or tool separate from any machinery but essential to an
24integrated manufacturing or assembly process; including
25computers used primarily in a manufacturer's computer assisted
26design, computer assisted manufacturing (CAD/CAM) system; or

 

 

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1any subunit or assembly comprising a component of any machinery
2or auxiliary, adjunct or attachment parts of machinery, such as
3tools, dies, jigs, fixtures, patterns and molds; or any parts
4which require periodic replacement in the course of normal
5operation; but shall not include hand tools. Equipment includes
6chemicals or chemicals acting as catalysts but only if the
7chemicals or chemicals acting as catalysts effect a direct and
8immediate change upon a product being manufactured or assembled
9for wholesale or retail sale or lease. The purchaser of such
10machinery and equipment who has an active resale registration
11number shall furnish such number to the seller at the time of
12purchase. The user of such machinery and equipment and tools
13without an active resale registration number shall prepare a
14certificate of exemption for each transaction stating facts
15establishing the exemption for that transaction, which
16certificate shall be available to the Department for inspection
17or audit. The Department shall prescribe the form of the
18certificate.
19    Any informal rulings, opinions or letters issued by the
20Department in response to an inquiry or request for any opinion
21from any person regarding the coverage and applicability of
22exemption (5) to specific devices shall be published,
23maintained as a public record, and made available for public
24inspection and copying. If the informal ruling, opinion or
25letter contains trade secrets or other confidential
26information, where possible the Department shall delete such

 

 

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1information prior to publication. Whenever such informal
2rulings, opinions, or letters contain any policy of general
3applicability, the Department shall formulate and adopt such
4policy as a rule in accordance with the provisions of the
5Illinois Administrative Procedure Act.
6    On and after July 1, 1987, no entity otherwise eligible
7under exemption (3) of this Section shall make tax free
8purchases unless it has an active exemption identification
9number issued by the Department.
10    The purchase, employment and transfer of such tangible
11personal property as newsprint and ink for the primary purpose
12of conveying news (with or without other information) is not a
13purchase, use or sale of service or of tangible personal
14property within the meaning of this Act.
15    "Serviceman" means any person who is engaged in the
16occupation of making sales of service.
17    "Sale at retail" means "sale at retail" as defined in the
18Retailers' Occupation Tax Act.
19    "Supplier" means any person who makes sales of tangible
20personal property to servicemen for the purpose of resale as an
21incident to a sale of service.
22    "Serviceman maintaining a place of business in this State",
23or any like term, means and includes any serviceman:
24        1. having or maintaining within this State, directly or
25    by a subsidiary, an office, distribution house, sales
26    house, warehouse or other place of business, or any agent

 

 

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1    or other representative operating within this State under
2    the authority of the serviceman or its subsidiary,
3    irrespective of whether such place of business or agent or
4    other representative is located here permanently or
5    temporarily, or whether such serviceman or subsidiary is
6    licensed to do business in this State;
7        1.1. beginning July 1, 2011, having a contract with a
8    person located in this State under which the person, for a
9    commission or other consideration based on the sale of
10    service by the, directly or indirectly refers potential
11    customers to the serviceman by a link on the person's
12    Internet website. The provisions of this paragraph 1.1
13    shall apply only if the cumulative gross receipts from
14    sales of service by the serviceman to customers who are
15    referred to the serviceman by all persons in this State
16    under such contracts exceed $10,000 during the preceding 4
17    quarterly periods ending on the last day of March, June,
18    September, and December;
19        1.2. beginning July 1, 2011, having a contract with a
20    person located in this State under which:
21            A. the serviceman sells the same or substantially
22        similar line of services as the person located in this
23        State and does so using an identical or substantially
24        similar name, trade name, or trademark as the person
25        located in this State; and
26            B. the serviceman provides a commission or other

 

 

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1        consideration to the person located in this State based
2        upon the sale of services by the serviceman.
3    The provisions of this paragraph 1.2 shall apply only if
4    the cumulative gross receipts from sales of service by the
5    serviceman to customers in this State under all such
6    contracts exceed $10,000 during the preceding 4 quarterly
7    periods ending on the last day of March, June, September,
8    and December;
9        2. soliciting orders for tangible personal property by
10    means of a telecommunication or television shopping system
11    (which utilizes toll free numbers) which is intended by the
12    retailer to be broadcast by cable television or other means
13    of broadcasting, to consumers located in this State;
14        3. pursuant to a contract with a broadcaster or
15    publisher located in this State, soliciting orders for
16    tangible personal property by means of advertising which is
17    disseminated primarily to consumers located in this State
18    and only secondarily to bordering jurisdictions;
19        4. soliciting orders for tangible personal property by
20    mail if the solicitations are substantial and recurring and
21    if the retailer benefits from any banking, financing, debt
22    collection, telecommunication, or marketing activities
23    occurring in this State or benefits from the location in
24    this State of authorized installation, servicing, or
25    repair facilities;
26        5. being owned or controlled by the same interests

 

 

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1    which own or control any retailer engaging in business in
2    the same or similar line of business in this State;
3        6. having a franchisee or licensee operating under its
4    trade name if the franchisee or licensee is required to
5    collect the tax under this Section;
6        7. pursuant to a contract with a cable television
7    operator located in this State, soliciting orders for
8    tangible personal property by means of advertising which is
9    transmitted or distributed over a cable television system
10    in this State; or
11        8. engaging in activities in Illinois, which
12    activities in the state in which the supply business
13    engaging in such activities is located would constitute
14    maintaining a place of business in that state.
15(Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
16eff. 6-20-03; 93-1033, eff. 9-3-04.)
 
17    Section 97. Severability. The provisions of this Act are
18severable under Section 1.31 of the Statute on Statutes.
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.".