Full Text of SB1248 95th General Assembly
SB1248eng 95TH GENERAL ASSEMBLY
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Use Tax Act is amended by changing Section | 5 |
| 3-50 as follows:
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| (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
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| Sec. 3-50. Manufacturing and assembly exemption. The | 8 |
| manufacturing
and assembling machinery and equipment exemption | 9 |
| includes
machinery and equipment that replaces machinery and | 10 |
| equipment in an
existing manufacturing facility as well as | 11 |
| machinery and equipment that
are for use in an expanded or new | 12 |
| manufacturing facility. The machinery and
equipment exemption | 13 |
| also includes machinery and equipment used in the
general | 14 |
| maintenance or repair of exempt machinery and equipment or for
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| in-house manufacture of exempt machinery and equipment. The | 16 |
| manufacturing and assembling machinery and equipment exemption | 17 |
| also includes production related tangible personal property.
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| For the
purposes of this exemption, terms have the following
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| meanings:
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| (1) "Manufacturing process" means the production of
an | 21 |
| article of tangible personal property, whether the article
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| is a finished product or an article for use in the process | 23 |
| of manufacturing
or assembling a different article of |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| tangible personal property, by
a procedure commonly | 2 |
| regarded as manufacturing, processing, fabricating, or
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| refining that changes some existing material into a | 4 |
| material
with a different form, use, or name. In relation | 5 |
| to a recognized integrated
business composed of a series of | 6 |
| operations that collectively constitute
manufacturing, or | 7 |
| individually constitute
manufacturing operations, the | 8 |
| manufacturing process commences with the
first operation | 9 |
| or stage of production in the series
and does not end until | 10 |
| the completion of the final product
in the last operation | 11 |
| or stage of production in the series. For purposes
of this | 12 |
| exemption, photoprocessing is a
manufacturing process of | 13 |
| tangible personal property for wholesale or retail
sale.
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| (2) "Assembling process" means the production of
an | 15 |
| article of tangible personal property, whether the article
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| is a finished product or an article for use in the process | 17 |
| of manufacturing
or assembling a different article of | 18 |
| tangible personal property, by the
combination of existing | 19 |
| materials in a manner commonly regarded as
assembling that | 20 |
| results in an article or material of a different
form, use, | 21 |
| or name.
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| (3) "Machinery" means major
mechanical machines or | 23 |
| major components of those machines contributing to a
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| manufacturing or assembling process.
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| (4) "Equipment" includes an independent device
or tool | 26 |
| separate from machinery but essential to an integrated
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| manufacturing or assembly process; including computers | 2 |
| used primarily in
a manufacturer's computer assisted | 3 |
| design,
computer assisted manufacturing (CAD/CAM) system; | 4 |
| any
subunit or assembly comprising a component of any | 5 |
| machinery or auxiliary,
adjunct, or attachment parts of | 6 |
| machinery, such as tools, dies, jigs,
fixtures, patterns, | 7 |
| and molds; and any parts that require
periodic replacement | 8 |
| in the course of normal operation; but does not
include | 9 |
| hand tools. Equipment includes chemicals or chemicals | 10 |
| acting as
catalysts but only if
the chemicals or chemicals | 11 |
| acting as catalysts effect a direct and
immediate change | 12 |
| upon a
product being manufactured or assembled for | 13 |
| wholesale or retail sale or
lease.
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| (5) "Production related tangible personal property" | 15 |
| means all tangible personal property used or consumed by | 16 |
| the purchaser in a manufacturing facility in which a | 17 |
| manufacturing process, as defined in this Section, takes | 18 |
| place, including tangible personal property purchased for | 19 |
| incorporation into real estate within a manufacturing | 20 |
| facility and including, but not limited to, tangible | 21 |
| personal property used or consumed in activities such as | 22 |
| research and development, preproduction material handling, | 23 |
| receiving, quality control, inventory control, storage, | 24 |
| staging, and packaging for shipping and transportation | 25 |
| purposes. "Production related tangible personal property" | 26 |
| does not include (i) tangible personal property used, |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| within or without a manufacturing facility, in sales, | 2 |
| purchasing, accounting, fiscal management, marketing, | 3 |
| personnel recruitment or selection, or landscaping or (ii) | 4 |
| tangible personal property required to be titled or | 5 |
| registered with a department, agency, or unit of federal, | 6 |
| State, or local government.
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| The manufacturing and assembling machinery and equipment
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| exemption includes the sale of materials to a purchaser who
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| produces exempted types of machinery, equipment, or tools and | 10 |
| who rents or
leases that machinery, equipment, or tools to a
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| manufacturer of tangible
personal property. This exemption | 12 |
| also includes the sale of materials to a
purchaser who | 13 |
| manufactures those materials into an exempted type of
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| machinery, equipment, or tools that the purchaser uses
himself | 15 |
| or herself in the
manufacturing of tangible personal property. | 16 |
| This exemption includes the
sale of exempted types of machinery | 17 |
| or equipment to a
purchaser who is not the manufacturer, but | 18 |
| who rents or leases the use of
the property to a manufacturer. | 19 |
| The purchaser of the machinery and
equipment who has an active | 20 |
| resale registration number shall
furnish that number to the | 21 |
| seller at the time of purchase.
A user of the machinery, | 22 |
| equipment, or tools without an
active resale registration | 23 |
| number shall prepare a certificate of exemption
for each | 24 |
| transaction stating facts establishing the exemption for that
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| transaction, and that certificate shall be
available to the | 26 |
| Department for inspection or audit. The Department shall
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| prescribe the form of the certificate. Informal rulings, | 2 |
| opinions, or
letters issued by the Department in
response to an | 3 |
| inquiry or request for an opinion from any person
regarding the | 4 |
| coverage and applicability of this exemption to specific
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| devices shall be published, maintained as a public record, and | 6 |
| made
available for public inspection and copying. If the | 7 |
| informal ruling,
opinion, or letter contains trade secrets or | 8 |
| other confidential
information, where possible, the Department | 9 |
| shall delete that information
before publication. Whenever | 10 |
| informal rulings, opinions, or
letters contain a policy of | 11 |
| general applicability, the Department
shall formulate and | 12 |
| adopt that policy as a rule in accordance with the
Illinois | 13 |
| Administrative Procedure Act.
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| (Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
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| Section 10. The Retailers' Occupation Tax Act is amended by | 16 |
| changing Section 2-45 as follows:
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| (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
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| Sec. 2-45. Manufacturing and assembly exemption. The | 19 |
| manufacturing
and assembly machinery and equipment exemption | 20 |
| includes machinery
and equipment that replaces machinery
and | 21 |
| equipment in an existing manufacturing facility as well as | 22 |
| machinery
and equipment that are for use in an expanded or new
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| manufacturing facility.
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| The machinery and equipment exemption also includes |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| machinery
and equipment used in the
general maintenance or | 2 |
| repair of exempt machinery and equipment or for
in-house | 3 |
| manufacture of exempt machinery and equipment.
The | 4 |
| manufacturing and assembling machinery and equipment exemption | 5 |
| also includes production related tangible personal property.
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| For the purposes of this exemption, terms have the following | 7 |
| meanings:
| 8 |
| (1) "Manufacturing process" means the production of an | 9 |
| article of
tangible personal property, whether the article | 10 |
| is a finished product or an
article for use in the process | 11 |
| of manufacturing or assembling a different
article of | 12 |
| tangible personal property, by a procedure commonly | 13 |
| regarded as
manufacturing, processing, fabricating, or | 14 |
| refining that changes some
existing material or materials | 15 |
| into a material with a different form, use,
or name. In | 16 |
| relation to a recognized integrated business composed of a
| 17 |
| series of operations that collectively constitute | 18 |
| manufacturing, or
individually constitute manufacturing | 19 |
| operations, the manufacturing process
commences with the | 20 |
| first operation or stage of production in the series and
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| does not end until the completion of the final product in | 22 |
| the last
operation or stage of production in the series. | 23 |
| For purposes of this
exemption, photoprocessing is a | 24 |
| manufacturing process of tangible personal
property for | 25 |
| wholesale or retail sale.
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| (2) "Assembling process" means the production of an |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
|
| 1 |
| article of
tangible personal property, whether the article | 2 |
| is a finished product or an
article for use in the process | 3 |
| of manufacturing or assembling a different
article of | 4 |
| tangible personal property, by the combination of existing
| 5 |
| materials in a manner commonly regarded as assembling that | 6 |
| results in a
material of a different form, use, or name.
| 7 |
| (3) "Machinery" means major mechanical machines or | 8 |
| major components of
those machines contributing to a | 9 |
| manufacturing or assembling process.
| 10 |
| (4) "Equipment" includes an independent device or tool | 11 |
| separate from
machinery but essential to an integrated | 12 |
| manufacturing or assembly process;
including computers | 13 |
| used primarily in a manufacturer's computer assisted | 14 |
| design, computer assisted manufacturing
(CAD/CAM) system; | 15 |
| any subunit or assembly comprising a component of any
| 16 |
| machinery or auxiliary, adjunct, or attachment parts of | 17 |
| machinery, such as
tools, dies, jigs, fixtures, patterns, | 18 |
| and molds; and any parts that
require periodic replacement | 19 |
| in the course of normal operation; but does
not include | 20 |
| hand tools. Equipment includes chemicals or chemicals | 21 |
| acting as
catalysts but only if
the chemicals or chemicals | 22 |
| acting as catalysts effect a direct and
immediate change | 23 |
| upon a
product being manufactured or assembled for | 24 |
| wholesale or retail sale or
lease.
| 25 |
| (5) "Production related tangible personal property" | 26 |
| means all tangible personal property used or consumed by |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
|
| 1 |
| the purchaser in a manufacturing facility in which a | 2 |
| manufacturing process, as defined in this Section, takes | 3 |
| place, including tangible personal property purchased for | 4 |
| incorporation into real estate within a manufacturing | 5 |
| facility and including, but not limited to, tangible | 6 |
| personal property used or consumed in activities such as | 7 |
| research and development, preproduction material handling, | 8 |
| receiving, quality control, inventory control, storage, | 9 |
| staging, and packaging for shipping and transportation | 10 |
| purposes. "Production related tangible personal property" | 11 |
| does not include (i) tangible personal property used, | 12 |
| within or without a manufacturing facility, in sales, | 13 |
| purchasing, accounting, fiscal management, marketing, | 14 |
| personnel recruitment or selection, or landscaping or (ii) | 15 |
| tangible personal property required to be titled or | 16 |
| registered with a department, agency, or unit of federal, | 17 |
| State, or local government.
| 18 |
| The manufacturing and assembling machinery and equipment | 19 |
| exemption
includes the sale of materials to a purchaser who | 20 |
| produces exempted types
of machinery, equipment, or tools and | 21 |
| who rents or leases that machinery,
equipment, or tools to a | 22 |
| manufacturer of tangible personal property. This
exemption | 23 |
| also includes the sale of materials to a purchaser who | 24 |
| manufactures
those materials into an exempted type of | 25 |
| machinery, equipment, or tools
that the purchaser uses himself | 26 |
| or herself in the manufacturing of tangible
personal property. |
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SB1248 Engrossed |
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LRB095 07862 BDD 28023 b |
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| 1 |
| The purchaser of the machinery and equipment who has an
active | 2 |
| resale registration number shall furnish that number to the | 3 |
| seller
at the time of purchase. A purchaser of the machinery, | 4 |
| equipment, and
tools without an active resale registration | 5 |
| number shall furnish to the
seller a certificate of exemption | 6 |
| for each transaction stating facts
establishing the exemption | 7 |
| for that transaction, and that certificate shall
be available | 8 |
| to the Department for inspection or audit. Informal
rulings, | 9 |
| opinions, or letters issued by the Department in response to an
| 10 |
| inquiry or request for an opinion from any person regarding the | 11 |
| coverage and
applicability of this exemption to specific | 12 |
| devices shall be published,
maintained as a public record,
and | 13 |
| made available for public inspection and copying. If the | 14 |
| informal
ruling, opinion, or letter contains trade secrets or | 15 |
| other confidential
information, where possible, the Department | 16 |
| shall delete that information
before publication. Whenever | 17 |
| informal rulings, opinions, or letters
contain a policy of | 18 |
| general applicability, the Department shall
formulate and | 19 |
| adopt that policy as a rule in accordance with the Illinois
| 20 |
| Administrative Procedure Act.
| 21 |
| (Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
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| Section 99. Effective date. This Act takes effect upon | 23 |
| becoming law.
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