Full Text of SB1434 100th General Assembly
SB1434enr 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the Rental | 5 | | Purchase Agreement Occupation and Use Tax Act. | 6 | | Section 5. Definitions. As used in this Act:
| 7 | | "Consumer" means an individual who leases personal | 8 | | property under a rental-purchase agreement. | 9 | | "Department" means the Department of Revenue.
| 10 | | "Gross receipts" from the renting of tangible personal | 11 | | property or "rent" means the total rental price or leasing | 12 | | price. In the case of rental transactions in which the | 13 | | consideration is paid to the merchant on an installment basis, | 14 | | the amounts of such payments shall be included by the merchant | 15 | | in gross receipts or rent only as and when payments are | 16 | | received by the merchant.
"Gross receipts" does not include | 17 | | receipts received by a merchant for delivery fees, | 18 | | reinstatement fees, processing fees, waiver fees or club | 19 | | program fees.
| 20 | | "Merchandise" means the personal property that is the | 21 | | subject of a rental-purchase agreement.
| 22 | | "Merchant" means a person who, in the ordinary course of | 23 | | business, regularly leases, offers to lease or arranges for the |
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| 1 | | leasing of merchandise under a rental-purchase agreement, and | 2 | | includes a person who is assigned an interest in a | 3 | | rental-purchase agreement.
| 4 | | "Person" means any natural individual, firm, partnership, | 5 | | association, joint stock company, joint adventure, public or | 6 | | private corporation, limited liability company, or a receiver, | 7 | | executor, trustee, conservator or other representative | 8 | | appointed by order of any court.
| 9 | | "Rental price" means the consideration for renting | 10 | | merchandise valued in money, whether received in money or | 11 | | otherwise, including cash credits, property and services, and | 12 | | shall be determined without any deduction on account of the | 13 | | cost of the property rented, the cost of materials used, labor | 14 | | or service cost, or any other expense whatsoever, but does not | 15 | | include charges that are added by a merchant on account of the | 16 | | merchant's tax liability under this Act or on account of the | 17 | | merchant's duty to collect, from the consumer, the tax that is | 18 | | imposed by Section 4 of this Act. The phrase "rental price" | 19 | | does not include compensation paid to a merchant by a consumer | 20 | | in consideration of the waiver by the merchant of any right of | 21 | | action or claim against the consumer for loss or damage to the | 22 | | merchandise rented and also does not include a separately | 23 | | stated charge for insurance or other separately stated charges | 24 | | that are not for the use of tangible personal property.
| 25 | |
"Rental purchase agreement" means an agreement for the use | 26 | | of merchandise by a consumer for personal, family, or household |
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| 1 | | purposes for an initial period of 4 months or less that is | 2 | | automatically renewable with each payment after the initial | 3 | | period and that permits the consumer to become the owner of the | 4 | | merchandise. | 5 | | "Renting" means any transfer of the possession or right to | 6 | | possession of merchandise to a user for a valuable | 7 | | consideration under a rental-purchase agreement.
| 8 | | Section 10. Rental Purchase Agreement Occupation Tax. A tax | 9 | | is imposed upon persons engaged in this State in the business | 10 | | of renting merchandise under a rental-purchase agreement in | 11 | | Illinois at the rate of 6.25% of the gross receipts received | 12 | | from the business. Every person engaged in this State in the | 13 | | business of renting merchandise shall apply to the Department | 14 | | (upon a form prescribed and furnished by the Department) for a | 15 | | certificate of registration under this Act. The certificate of | 16 | | registration which is issued by the Department to a retailer | 17 | | under the Retailers' Occupation Tax Act shall permit the | 18 | | merchant to engage in a business that is taxable under this | 19 | | Section without registering separately with the Department. | 20 | | The Department shall have full power to administer and | 21 | | enforce this Section, to collect all taxes and penalties due | 22 | | hereunder, to dispose of taxes and penalties so collected in | 23 | | the manner hereinafter provided, and to determine all rights to | 24 | | credit memoranda, arising on account of the erroneous payment | 25 | | of tax or penalty hereunder. In the administration of, and |
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| 1 | | compliance with, this Section, the Department and persons who | 2 | | are subject to this Section shall have the same rights, | 3 | | remedies, privileges, immunities, powers and duties, and be | 4 | | subject to the same conditions, restrictions, limitations, | 5 | | penalties and definitions of terms, and employ the same modes | 6 | | of procedure, as are prescribed in Sections 1, 1a, 2, 2-10 | 7 | | through 2-65 (in respect to all provisions therein other than | 8 | | the State rate of tax), 2a, 2b, 2c, 3 (except provisions | 9 | | relating to transaction returns), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, | 10 | | 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of | 11 | | the Retailers' Occupation Tax Act and Section 3-7 of the | 12 | | Uniform Penalty and Interest Act as fully as if those | 13 | | provisions were set forth herein.
| 14 | | Section 15. Rental Purchase Agreement Use Tax. A tax is | 15 | | imposed upon the privilege of using, in this State, merchandise | 16 | | which is rented from a merchant. Such tax is at the rate of | 17 | | 6.25% of the rental price paid to the merchant under any rental | 18 | | purchase agreement. | 19 | | The tax hereby imposed shall be collected from the consumer | 20 | | by a merchant maintaining a place of business in this State and | 21 | | remitted to the Department. | 22 | | The tax hereby imposed and not paid to a merchant pursuant | 23 | | to the preceding paragraph of this Section shall be paid to the | 24 | | Department directly by any person using such merchandise within | 25 | | this State. |
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| 1 | | Merchants shall collect the tax from consumers by adding | 2 | | the tax to the rental price of the merchandise, when rented for | 3 | | use, in the manner prescribed by the Department. The Department | 4 | | shall have the power to adopt and promulgate reasonable rules | 5 | | and regulations for the adding of such tax by merchants to | 6 | | rental prices by prescribing bracket systems for the purpose of | 7 | | enabling such merchants to add and collect, as far as | 8 | | practicable, the amount of such tax. | 9 | | The tax imposed by this Section shall, when collected, be | 10 | | stated as a distinct item separate and apart from the rental | 11 | | price of the merchandise. | 12 | | The Department shall have full power to administer and | 13 | | enforce this Section; to collect all taxes, penalties and | 14 | | interest due hereunder; to dispose of taxes, penalties and | 15 | | interest so collected in the manner hereinafter provided, and | 16 | | to determine all rights to credit memoranda or refunds arising | 17 | | on account of the erroneous payment of tax, penalty or interest | 18 | | hereunder. In the administration of, and compliance with, this | 19 | | Section, the Department and persons who are subject to this | 20 | | Section shall have the same rights, remedies, privileges, | 21 | | immunities, powers, and duties, and be subject to the same | 22 | | conditions, restrictions, limitations, penalties, and | 23 | | definitions of terms, and employ the same modes of procedure, | 24 | | as are prescribed in Sections 2, 3, 3-10 through 3-80, 4, 6, 7, | 25 | | 8, 9 (except provisions relating to transaction returns), 10, | 26 | | 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21, and 22 of the Use Tax |
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| 1 | | Act, and are not inconsistent with this Section, as fully as if | 2 | | those provisions were set forth herein.
| 3 | | Section 20. Electronic filing and payment. Any return or | 4 | | document that is required to be filed under this Act shall be | 5 | | filed electronically, in the form and manner required by the | 6 | | Department. | 7 | | Any payment required to be made under this Act shall be | 8 | | paid electronically, in the form and manner required by the | 9 | | Department. | 10 | | The Department shall grant a waiver of the electronic | 11 | | filing or payment requirement under this Section for any | 12 | | taxpayer who petitions the Department and demonstrates undue | 13 | | hardship in complying with the electronic filing or payment | 14 | | requirement. The waiver shall be for a period not to exceed 2 | 15 | | years, but may be renewed an unlimited number of times for | 16 | | periods not to exceed 2 years each.
| 17 | | Section 25. Deposit of taxes. | 18 | | (a) Each month, from the net revenue realized for the | 19 | | preceding month, the Department shall pay an amount estimated | 20 | | by the Department to be required for refunds of the tax under | 21 | | this Act, which shall be deposited into the Rental Purchase | 22 | | Agreement Tax Refund Fund. | 23 | | (b) Of the remainder of funds after the deposit under | 24 | | subsection (a) of this Section: |
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| 1 | | (1) each month the Department shall pay into the State | 2 | | and Local Sales Tax Reform Fund 20% of the net revenue | 3 | | realized for the preceding month from the tax imposed under | 4 | | this Act; and | 5 | | (2) each month the Department shall pay into the | 6 | | General Revenue Fund 80% of the net revenue realized for | 7 | | the preceding month from the tax imposed under this Act.
| 8 | | Section 30. One-Time Transitional Use Tax Credit. Within 3 | 9 | | months after the effective date of this Act, the merchant shall | 10 | | file an application (upon a form prescribed and furnished by | 11 | | the Department) to receive a one-time credit for the Use Tax | 12 | | paid on merchandise subject to tax under this Act purchased | 13 | | during the 6 months immediately prior to the effective date of | 14 | | this Act. The Department shall issue a credit equal to the | 15 | | total Use Tax paid in the 6 months immediately prior to the | 16 | | effective date of this Act. Upon the issuance of the credit, | 17 | | the merchant may apply the credit against the tax imposed under | 18 | | this Act. | 19 | | Section 35. Applicability. This Act does not apply to | 20 | | tangible personal property which is required to be titled and | 21 | | registered by a State agency. | 22 | | Section 40. Rulemaking. The Department may make such rules | 23 | | as it may deem necessary to implement the purposes of this Act. |
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| 1 | | Section 45. The State Finance Act is amended by adding | 2 | | Sections 5.878 and 6z-102 as follows: | 3 | | (30 ILCS 105/5.878 new) | 4 | | Sec. 5.878. The Rental Purchase Agreement Tax Refund Fund. | 5 | | (30 ILCS 105/6z-102 new) | 6 | | Sec. 6z-102. The Rental Purchase Agreement Tax Refund Fund. | 7 | | (a) The Rental Purchase Agreement Tax Refund Fund is hereby | 8 | | created as a special fund in the State treasury. Moneys in the | 9 | | Fund shall be used by the Department of Revenue to pay refunds | 10 | | of Rental Purchase Agreement Tax in the manner provided in | 11 | | Section 6 of the Retailers' Occupation Tax Act and Section 19 | 12 | | of the Use Tax Act, as incorporated into Sections 10 and 15 of | 13 | | the Rental Purchase Agreement Tax Act. | 14 | | (b) Moneys in the Rental Purchase Agreement Tax Refund Fund | 15 | | shall be expended exclusively for the purpose of paying refunds | 16 | | pursuant to this Section. | 17 | | (c) The Director of Revenue shall order payment of refunds | 18 | | under this Section from the Rental Purchase Agreement Tax | 19 | | Refund Fund only to the extent that amounts collected pursuant | 20 | | to Sections 10 and 15 of the Rental Purchase Agreement | 21 | | Occupation and Use Tax Act have been deposited and retained in | 22 | | the Fund. | 23 | | As soon as possible after the end of each fiscal year, the |
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| 1 | | Director of Revenue shall order transferred, and the State | 2 | | Treasurer and State Comptroller shall transfer from the Rental | 3 | | Purchase Agreement Tax Refund Fund to the General Revenue Fund, | 4 | | any surplus remaining as of the end of such fiscal year. | 5 | | This Section shall constitute an irrevocable and continuing | 6 | | appropriation from the Rental Purchase Agreement Tax Refund | 7 | | Fund for the purpose of paying refunds in accordance with the | 8 | | provisions of this Section. | 9 | | Section 50. The Use Tax Act is amended by changing Section | 10 | | 3-5 as follows:
| 11 | | (35 ILCS 105/3-5)
| 12 | | Sec. 3-5. Exemptions. Use of the following tangible | 13 | | personal property
is exempt from the tax imposed by this Act:
| 14 | | (1) Personal property purchased from a corporation, | 15 | | society, association,
foundation, institution, or | 16 | | organization, other than a limited liability
company, that is | 17 | | organized and operated as a not-for-profit service enterprise
| 18 | | for the benefit of persons 65 years of age or older if the | 19 | | personal property
was not purchased by the enterprise for the | 20 | | purpose of resale by the
enterprise.
| 21 | | (2) Personal property purchased by a not-for-profit | 22 | | Illinois county
fair association for use in conducting, | 23 | | operating, or promoting the
county fair.
| 24 | | (3) Personal property purchased by a not-for-profit
arts or |
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| 1 | | cultural organization that establishes, by proof required by | 2 | | the
Department by
rule, that it has received an exemption under | 3 | | Section 501(c)(3) of the Internal
Revenue Code and that is | 4 | | organized and operated primarily for the
presentation
or | 5 | | support of arts or cultural programming, activities, or | 6 | | services. These
organizations include, but are not limited to, | 7 | | music and dramatic arts
organizations such as symphony | 8 | | orchestras and theatrical groups, arts and
cultural service | 9 | | organizations, local arts councils, visual arts organizations,
| 10 | | and media arts organizations.
On and after the effective date | 11 | | of this amendatory Act of the 92nd General
Assembly, however, | 12 | | an entity otherwise eligible for this exemption shall not
make | 13 | | tax-free purchases unless it has an active identification | 14 | | number issued by
the Department.
| 15 | | (4) Personal property purchased by a governmental body, by | 16 | | a
corporation, society, association, foundation, or | 17 | | institution organized and
operated exclusively for charitable, | 18 | | religious, or educational purposes, or
by a not-for-profit | 19 | | corporation, society, association, foundation,
institution, or | 20 | | organization that has no compensated officers or employees
and | 21 | | that is organized and operated primarily for the recreation of | 22 | | persons
55 years of age or older. A limited liability company | 23 | | may qualify for the
exemption under this paragraph only if the | 24 | | limited liability company is
organized and operated | 25 | | exclusively for educational purposes. On and after July
1, | 26 | | 1987, however, no entity otherwise eligible for this exemption |
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| 1 | | shall make
tax-free purchases unless it has an active exemption | 2 | | identification number
issued by the Department.
| 3 | | (5) Until July 1, 2003, a passenger car that is a | 4 | | replacement vehicle to
the extent that the
purchase price of | 5 | | the car is subject to the Replacement Vehicle Tax.
| 6 | | (6) Until July 1, 2003 and beginning again on September 1, | 7 | | 2004 through August 30, 2014, graphic arts machinery and | 8 | | equipment, including
repair and replacement
parts, both new and | 9 | | used, and including that manufactured on special order,
| 10 | | certified by the purchaser to be used primarily for graphic | 11 | | arts production,
and including machinery and equipment | 12 | | purchased for lease.
Equipment includes chemicals or chemicals | 13 | | acting as catalysts but only if
the
chemicals or chemicals | 14 | | acting as catalysts effect a direct and immediate change
upon a | 15 | | graphic arts product.
| 16 | | (7) Farm chemicals.
| 17 | | (8) Legal tender, currency, medallions, or gold or silver | 18 | | coinage issued by
the State of Illinois, the government of the | 19 | | United States of America, or the
government of any foreign | 20 | | country, and bullion.
| 21 | | (9) Personal property purchased from a teacher-sponsored | 22 | | student
organization affiliated with an elementary or | 23 | | secondary school located in
Illinois.
| 24 | | (10) A motor vehicle that is used for automobile renting, | 25 | | as defined in the
Automobile Renting Occupation and Use Tax | 26 | | Act.
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| 1 | | (11) Farm machinery and equipment, both new and used,
| 2 | | including that manufactured on special order, certified by the | 3 | | purchaser
to be used primarily for production agriculture or | 4 | | State or federal
agricultural programs, including individual | 5 | | replacement parts for
the machinery and equipment, including | 6 | | machinery and equipment
purchased
for lease,
and including | 7 | | implements of husbandry defined in Section 1-130 of
the | 8 | | Illinois Vehicle Code, farm machinery and agricultural | 9 | | chemical and
fertilizer spreaders, and nurse wagons required to | 10 | | be registered
under Section 3-809 of the Illinois Vehicle Code,
| 11 | | but excluding other motor
vehicles required to be
registered | 12 | | under the Illinois Vehicle Code.
Horticultural polyhouses or | 13 | | hoop houses used for propagating, growing, or
overwintering | 14 | | plants shall be considered farm machinery and equipment under
| 15 | | this item (11).
Agricultural chemical tender tanks and dry | 16 | | boxes shall include units sold
separately from a motor vehicle | 17 | | required to be licensed and units sold mounted
on a motor | 18 | | vehicle required to be licensed if the selling price of the | 19 | | tender
is separately stated.
| 20 | | Farm machinery and equipment shall include precision | 21 | | farming equipment
that is
installed or purchased to be | 22 | | installed on farm machinery and equipment
including, but not | 23 | | limited to, tractors, harvesters, sprayers, planters,
seeders, | 24 | | or spreaders.
Precision farming equipment includes, but is not | 25 | | limited to, soil testing
sensors, computers, monitors, | 26 | | software, global positioning
and mapping systems, and other |
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| 1 | | such equipment.
| 2 | | Farm machinery and equipment also includes computers, | 3 | | sensors, software, and
related equipment used primarily in the
| 4 | | computer-assisted operation of production agriculture | 5 | | facilities, equipment,
and
activities such as, but not limited | 6 | | to,
the collection, monitoring, and correlation of
animal and | 7 | | crop data for the purpose of
formulating animal diets and | 8 | | agricultural chemicals. This item (11) is exempt
from the | 9 | | provisions of
Section 3-90.
| 10 | | (12) Until June 30, 2013, fuel and petroleum products sold | 11 | | to or used by an air common
carrier, certified by the carrier | 12 | | to be used for consumption, shipment, or
storage in the conduct | 13 | | of its business as an air common carrier, for a
flight destined | 14 | | for or returning from a location or locations
outside the | 15 | | United States without regard to previous or subsequent domestic
| 16 | | stopovers.
| 17 | | Beginning July 1, 2013, fuel and petroleum products sold to | 18 | | or used by an air carrier, certified by the carrier to be used | 19 | | for consumption, shipment, or storage in the conduct of its | 20 | | business as an air common carrier, for a flight that (i) is | 21 | | engaged in foreign trade or is engaged in trade between the | 22 | | United States and any of its possessions and (ii) transports at | 23 | | least one individual or package for hire from the city of | 24 | | origination to the city of final destination on the same | 25 | | aircraft, without regard to a change in the flight number of | 26 | | that aircraft. |
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| 1 | | (13) Proceeds of mandatory service charges separately
| 2 | | stated on customers' bills for the purchase and consumption of | 3 | | food and
beverages purchased at retail from a retailer, to the | 4 | | extent that the proceeds
of the service charge are in fact | 5 | | turned over as tips or as a substitute
for tips to the | 6 | | employees who participate directly in preparing, serving,
| 7 | | hosting or cleaning up the food or beverage function with | 8 | | respect to which
the service charge is imposed.
| 9 | | (14) Until July 1, 2003, oil field exploration, drilling, | 10 | | and production
equipment,
including (i) rigs and parts of rigs, | 11 | | rotary
rigs, cable tool rigs, and workover rigs, (ii) pipe and | 12 | | tubular goods,
including casing and drill strings, (iii) pumps | 13 | | and pump-jack units, (iv)
storage tanks and flow lines, (v) any | 14 | | individual replacement part for oil
field exploration, | 15 | | drilling, and production equipment, and (vi) machinery and
| 16 | | equipment purchased
for lease; but excluding motor vehicles | 17 | | required to be registered under the
Illinois Vehicle Code.
| 18 | | (15) Photoprocessing machinery and equipment, including | 19 | | repair and
replacement parts, both new and used, including that
| 20 | | manufactured on special order, certified by the purchaser to be | 21 | | used
primarily for photoprocessing, and including
| 22 | | photoprocessing machinery and equipment purchased for lease.
| 23 | | (16) Coal and aggregate exploration, mining, off-highway | 24 | | hauling,
processing, maintenance, and reclamation equipment,
| 25 | | including replacement parts and equipment, and
including | 26 | | equipment purchased for lease, but excluding motor
vehicles |
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| 1 | | required to be registered under the Illinois Vehicle Code. The | 2 | | changes made to this Section by Public Act 97-767 apply on and | 3 | | after July 1, 2003, but no claim for credit or refund is | 4 | | allowed on or after August 16, 2013 (the effective date of | 5 | | Public Act 98-456)
for such taxes paid during the period | 6 | | beginning July 1, 2003 and ending on August 16, 2013 (the | 7 | | effective date of Public Act 98-456).
| 8 | | (17) Until July 1, 2003, distillation machinery and | 9 | | equipment, sold as a
unit or kit,
assembled or installed by the | 10 | | retailer, certified by the user to be used
only for the | 11 | | production of ethyl alcohol that will be used for consumption
| 12 | | as motor fuel or as a component of motor fuel for the personal | 13 | | use of the
user, and not subject to sale or resale.
| 14 | | (18) Manufacturing and assembling machinery and equipment | 15 | | used
primarily in the process of manufacturing or assembling | 16 | | tangible
personal property for wholesale or retail sale or | 17 | | lease, whether that sale
or lease is made directly by the | 18 | | manufacturer or by some other person,
whether the materials | 19 | | used in the process are
owned by the manufacturer or some other | 20 | | person, or whether that sale or
lease is made apart from or as | 21 | | an incident to the seller's engaging in
the service occupation | 22 | | of producing machines, tools, dies, jigs,
patterns, gauges, or | 23 | | other similar items of no commercial value on
special order for | 24 | | a particular purchaser. The exemption provided by this | 25 | | paragraph (18) does not include machinery and equipment used in | 26 | | (i) the generation of electricity for wholesale or retail sale; |
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| 1 | | (ii) the generation or treatment of natural or artificial gas | 2 | | for wholesale or retail sale that is delivered to customers | 3 | | through pipes, pipelines, or mains; or (iii) the treatment of | 4 | | water for wholesale or retail sale that is delivered to | 5 | | customers through pipes, pipelines, or mains. The provisions of | 6 | | Public Act 98-583 are declaratory of existing law as to the | 7 | | meaning and scope of this exemption.
| 8 | | (19) Personal property delivered to a purchaser or | 9 | | purchaser's donee
inside Illinois when the purchase order for | 10 | | that personal property was
received by a florist located | 11 | | outside Illinois who has a florist located
inside Illinois | 12 | | deliver the personal property.
| 13 | | (20) Semen used for artificial insemination of livestock | 14 | | for direct
agricultural production.
| 15 | | (21) Horses, or interests in horses, registered with and | 16 | | meeting the
requirements of any of the
Arabian Horse Club | 17 | | Registry of America, Appaloosa Horse Club, American Quarter
| 18 | | Horse Association, United States
Trotting Association, or | 19 | | Jockey Club, as appropriate, used for
purposes of breeding or | 20 | | racing for prizes. This item (21) is exempt from the provisions | 21 | | of Section 3-90, and the exemption provided for under this item | 22 | | (21) applies for all periods beginning May 30, 1995, but no | 23 | | claim for credit or refund is allowed on or after January 1, | 24 | | 2008
for such taxes paid during the period beginning May 30, | 25 | | 2000 and ending on January 1, 2008.
| 26 | | (22) Computers and communications equipment utilized for |
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| 1 | | any
hospital
purpose
and equipment used in the diagnosis,
| 2 | | analysis, or treatment of hospital patients purchased by a | 3 | | lessor who leases
the
equipment, under a lease of one year or | 4 | | longer executed or in effect at the
time the lessor would | 5 | | otherwise be subject to the tax imposed by this Act, to a
| 6 | | hospital
that has been issued an active tax exemption | 7 | | identification number by
the
Department under Section 1g of the | 8 | | Retailers' Occupation Tax Act. If the
equipment is leased in a | 9 | | manner that does not qualify for
this exemption or is used in | 10 | | any other non-exempt manner, the lessor
shall be liable for the
| 11 | | tax imposed under this Act or the Service Use Tax Act, as the | 12 | | case may
be, based on the fair market value of the property at | 13 | | the time the
non-qualifying use occurs. No lessor shall collect | 14 | | or attempt to collect an
amount (however
designated) that | 15 | | purports to reimburse that lessor for the tax imposed by this
| 16 | | Act or the Service Use Tax Act, as the case may be, if the tax | 17 | | has not been
paid by the lessor. If a lessor improperly | 18 | | collects any such amount from the
lessee, the lessee shall have | 19 | | a legal right to claim a refund of that amount
from the lessor. | 20 | | If, however, that amount is not refunded to the lessee for
any | 21 | | reason, the lessor is liable to pay that amount to the | 22 | | Department.
| 23 | | (23) Personal property purchased by a lessor who leases the
| 24 | | property, under
a
lease of
one year or longer executed or in | 25 | | effect at the time
the lessor would otherwise be subject to the | 26 | | tax imposed by this Act,
to a governmental body
that has been |
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| 1 | | issued an active sales tax exemption identification number by | 2 | | the
Department under Section 1g of the Retailers' Occupation | 3 | | Tax Act.
If the
property is leased in a manner that does not | 4 | | qualify for
this exemption
or used in any other non-exempt | 5 | | manner, the lessor shall be liable for the
tax imposed under | 6 | | this Act or the Service Use Tax Act, as the case may
be, based | 7 | | on the fair market value of the property at the time the
| 8 | | non-qualifying use occurs. No lessor shall collect or attempt | 9 | | to collect an
amount (however
designated) that purports to | 10 | | reimburse that lessor for the tax imposed by this
Act or the | 11 | | Service Use Tax Act, as the case may be, if the tax has not been
| 12 | | paid by the lessor. If a lessor improperly collects any such | 13 | | amount from the
lessee, the lessee shall have a legal right to | 14 | | claim a refund of that amount
from the lessor. If, however, | 15 | | that amount is not refunded to the lessee for
any reason, the | 16 | | lessor is liable to pay that amount to the Department.
| 17 | | (24) Beginning with taxable years ending on or after | 18 | | December
31, 1995
and
ending with taxable years ending on or | 19 | | before December 31, 2004,
personal property that is
donated for | 20 | | disaster relief to be used in a State or federally declared
| 21 | | disaster area in Illinois or bordering Illinois by a | 22 | | manufacturer or retailer
that is registered in this State to a | 23 | | corporation, society, association,
foundation, or institution | 24 | | that has been issued a sales tax exemption
identification | 25 | | number by the Department that assists victims of the disaster
| 26 | | who reside within the declared disaster area.
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| 1 | | (25) Beginning with taxable years ending on or after | 2 | | December
31, 1995 and
ending with taxable years ending on or | 3 | | before December 31, 2004, personal
property that is used in the | 4 | | performance of infrastructure repairs in this
State, including | 5 | | but not limited to municipal roads and streets, access roads,
| 6 | | bridges, sidewalks, waste disposal systems, water and sewer | 7 | | line extensions,
water distribution and purification | 8 | | facilities, storm water drainage and
retention facilities, and | 9 | | sewage treatment facilities, resulting from a State
or | 10 | | federally declared disaster in Illinois or bordering Illinois | 11 | | when such
repairs are initiated on facilities located in the | 12 | | declared disaster area
within 6 months after the disaster.
| 13 | | (26) Beginning July 1, 1999, game or game birds purchased | 14 | | at a "game
breeding
and hunting preserve area" as that term is
| 15 | | used in
the Wildlife Code. This paragraph is exempt from the | 16 | | provisions
of
Section 3-90.
| 17 | | (27) A motor vehicle, as that term is defined in Section | 18 | | 1-146
of the
Illinois
Vehicle Code, that is donated to a | 19 | | corporation, limited liability company,
society, association, | 20 | | foundation, or institution that is determined by the
Department | 21 | | to be organized and operated exclusively for educational | 22 | | purposes.
For purposes of this exemption, "a corporation, | 23 | | limited liability company,
society, association, foundation, | 24 | | or institution organized and operated
exclusively for | 25 | | educational purposes" means all tax-supported public schools,
| 26 | | private schools that offer systematic instruction in useful |
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| 1 | | branches of
learning by methods common to public schools and | 2 | | that compare favorably in
their scope and intensity with the | 3 | | course of study presented in tax-supported
schools, and | 4 | | vocational or technical schools or institutes organized and
| 5 | | operated exclusively to provide a course of study of not less | 6 | | than 6 weeks
duration and designed to prepare individuals to | 7 | | follow a trade or to pursue a
manual, technical, mechanical, | 8 | | industrial, business, or commercial
occupation.
| 9 | | (28) Beginning January 1, 2000, personal property, | 10 | | including
food,
purchased through fundraising
events for the | 11 | | benefit of
a public or private elementary or
secondary school, | 12 | | a group of those schools, or one or more school
districts if | 13 | | the events are
sponsored by an entity recognized by the school | 14 | | district that consists
primarily of volunteers and includes
| 15 | | parents and teachers of the school children. This paragraph | 16 | | does not apply
to fundraising
events (i) for the benefit of | 17 | | private home instruction or (ii)
for which the fundraising | 18 | | entity purchases the personal property sold at
the events from | 19 | | another individual or entity that sold the property for the
| 20 | | purpose of resale by the fundraising entity and that
profits | 21 | | from the sale to the
fundraising entity. This paragraph is | 22 | | exempt
from the provisions
of Section 3-90.
| 23 | | (29) Beginning January 1, 2000 and through December 31, | 24 | | 2001, new or
used automatic vending
machines that prepare and | 25 | | serve hot food and beverages, including coffee, soup,
and
other | 26 | | items, and replacement parts for these machines.
Beginning |
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| 1 | | January 1,
2002 and through June 30, 2003, machines and parts | 2 | | for machines used in
commercial, coin-operated amusement and | 3 | | vending business if a use or occupation
tax is paid on the | 4 | | gross receipts derived from the use of the commercial,
| 5 | | coin-operated amusement and vending machines.
This
paragraph
| 6 | | is exempt from the provisions of Section 3-90.
| 7 | | (30) Beginning January 1, 2001 and through June 30, 2016, | 8 | | food for human consumption that is to be consumed off the | 9 | | premises
where it is sold (other than alcoholic beverages, soft | 10 | | drinks, and food that
has been prepared for immediate | 11 | | consumption) and prescription and
nonprescription medicines, | 12 | | drugs, medical appliances, and insulin, urine
testing | 13 | | materials, syringes, and needles used by diabetics, for human | 14 | | use, when
purchased for use by a person receiving medical | 15 | | assistance under Article V of
the Illinois Public Aid Code who | 16 | | resides in a licensed long-term care facility,
as defined in | 17 | | the Nursing Home Care Act, or in a licensed facility as defined | 18 | | in the ID/DD Community Care Act, the MC/DD Act, or the | 19 | | Specialized Mental Health Rehabilitation Act of 2013.
| 20 | | (31) Beginning on
the effective date of this amendatory Act | 21 | | of the 92nd General Assembly,
computers and communications | 22 | | equipment
utilized for any hospital purpose and equipment used | 23 | | in the diagnosis,
analysis, or treatment of hospital patients | 24 | | purchased by a lessor who leases
the equipment, under a lease | 25 | | of one year or longer executed or in effect at the
time the | 26 | | lessor would otherwise be subject to the tax imposed by this |
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| 1 | | Act, to a
hospital that has been issued an active tax exemption | 2 | | identification number by
the Department under Section 1g of the | 3 | | Retailers' Occupation Tax Act. If the
equipment is leased in a | 4 | | manner that does not qualify for this exemption or is
used in | 5 | | any other nonexempt manner, the lessor shall be liable for the | 6 | | tax
imposed under this Act or the Service Use Tax Act, as the | 7 | | case may be, based on
the fair market value of the property at | 8 | | the time the nonqualifying use
occurs. No lessor shall collect | 9 | | or attempt to collect an amount (however
designated) that | 10 | | purports to reimburse that lessor for the tax imposed by this
| 11 | | Act or the Service Use Tax Act, as the case may be, if the tax | 12 | | has not been
paid by the lessor. If a lessor improperly | 13 | | collects any such amount from the
lessee, the lessee shall have | 14 | | a legal right to claim a refund of that amount
from the lessor. | 15 | | If, however, that amount is not refunded to the lessee for
any | 16 | | reason, the lessor is liable to pay that amount to the | 17 | | Department.
This paragraph is exempt from the provisions of | 18 | | Section 3-90.
| 19 | | (32) Beginning on
the effective date of this amendatory Act | 20 | | of the 92nd General Assembly,
personal property purchased by a | 21 | | lessor who leases the property,
under a lease of one year or | 22 | | longer executed or in effect at the time the
lessor would | 23 | | otherwise be subject to the tax imposed by this Act, to a
| 24 | | governmental body that has been issued an active sales tax | 25 | | exemption
identification number by the Department under | 26 | | Section 1g of the Retailers'
Occupation Tax Act. If the |
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| 1 | | property is leased in a manner that does not
qualify for this | 2 | | exemption or used in any other nonexempt manner, the lessor
| 3 | | shall be liable for the tax imposed under this Act or the | 4 | | Service Use Tax Act,
as the case may be, based on the fair | 5 | | market value of the property at the time
the nonqualifying use | 6 | | occurs. No lessor shall collect or attempt to collect
an amount | 7 | | (however designated) that purports to reimburse that lessor for | 8 | | the
tax imposed by this Act or the Service Use Tax Act, as the | 9 | | case may be, if the
tax has not been paid by the lessor. If a | 10 | | lessor improperly collects any such
amount from the lessee, the | 11 | | lessee shall have a legal right to claim a refund
of that | 12 | | amount from the lessor. If, however, that amount is not | 13 | | refunded to
the lessee for any reason, the lessor is liable to | 14 | | pay that amount to the
Department. This paragraph is exempt | 15 | | from the provisions of Section 3-90.
| 16 | | (33) On and after July 1, 2003 and through June 30, 2004, | 17 | | the use in this State of motor vehicles of
the second division | 18 | | with a gross vehicle weight in excess of 8,000 pounds and
that | 19 | | are subject to the commercial distribution fee imposed under | 20 | | Section
3-815.1 of the Illinois Vehicle Code. Beginning on July | 21 | | 1, 2004 and through June 30, 2005, the use in this State of | 22 | | motor vehicles of the second division: (i) with a gross vehicle | 23 | | weight rating in excess of 8,000 pounds; (ii) that are subject | 24 | | to the commercial distribution fee imposed under Section | 25 | | 3-815.1 of the Illinois Vehicle Code; and (iii) that are | 26 | | primarily used for commercial purposes. Through June 30, 2005, |
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| 1 | | this exemption applies to repair and
replacement parts added | 2 | | after the initial purchase of such a motor vehicle if
that | 3 | | motor
vehicle is used in a manner that would qualify for the | 4 | | rolling stock exemption
otherwise provided for in this Act. For | 5 | | purposes of this paragraph, the term "used for commercial | 6 | | purposes" means the transportation of persons or property in | 7 | | furtherance of any commercial or industrial enterprise, | 8 | | whether for-hire or not.
| 9 | | (34) Beginning January 1, 2008, tangible personal property | 10 | | used in the construction or maintenance of a community water | 11 | | supply, as defined under Section 3.145 of the Environmental | 12 | | Protection Act, that is operated by a not-for-profit | 13 | | corporation that holds a valid water supply permit issued under | 14 | | Title IV of the Environmental Protection Act. This paragraph is | 15 | | exempt from the provisions of Section 3-90. | 16 | | (35) Beginning January 1, 2010, materials, parts, | 17 | | equipment, components, and furnishings incorporated into or | 18 | | upon an aircraft as part of the modification, refurbishment, | 19 | | completion, replacement, repair, or maintenance of the | 20 | | aircraft. This exemption includes consumable supplies used in | 21 | | the modification, refurbishment, completion, replacement, | 22 | | repair, and maintenance of aircraft, but excludes any | 23 | | materials, parts, equipment, components, and consumable | 24 | | supplies used in the modification, replacement, repair, and | 25 | | maintenance of aircraft engines or power plants, whether such | 26 | | engines or power plants are installed or uninstalled upon any |
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| 1 | | such aircraft. "Consumable supplies" include, but are not | 2 | | limited to, adhesive, tape, sandpaper, general purpose | 3 | | lubricants, cleaning solution, latex gloves, and protective | 4 | | films. This exemption applies only to the use of qualifying | 5 | | tangible personal property by persons who modify, refurbish, | 6 | | complete, repair, replace, or maintain aircraft and who (i) | 7 | | hold an Air Agency Certificate and are empowered to operate an | 8 | | approved repair station by the Federal Aviation | 9 | | Administration, (ii) have a Class IV Rating, and (iii) conduct | 10 | | operations in accordance with Part 145 of the Federal Aviation | 11 | | Regulations. The exemption does not include aircraft operated | 12 | | by a commercial air carrier providing scheduled passenger air | 13 | | service pursuant to authority issued under Part 121 or Part 129 | 14 | | of the Federal Aviation Regulations. The changes made to this | 15 | | paragraph (35) by Public Act 98-534 are declarative of existing | 16 | | law. | 17 | | (36) Tangible personal property purchased by a | 18 | | public-facilities corporation, as described in Section | 19 | | 11-65-10 of the Illinois Municipal Code, for purposes of | 20 | | constructing or furnishing a municipal convention hall, but | 21 | | only if the legal title to the municipal convention hall is | 22 | | transferred to the municipality without any further | 23 | | consideration by or on behalf of the municipality at the time | 24 | | of the completion of the municipal convention hall or upon the | 25 | | retirement or redemption of any bonds or other debt instruments | 26 | | issued by the public-facilities corporation in connection with |
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| 1 | | the development of the municipal convention hall. This | 2 | | exemption includes existing public-facilities corporations as | 3 | | provided in Section 11-65-25 of the Illinois Municipal Code. | 4 | | This paragraph is exempt from the provisions of Section 3-90. | 5 | | (37) Beginning January 1, 2017, menstrual pads, tampons, | 6 | | and menstrual cups. | 7 | | (38) Merchandise that is subject to the Rental Purchase | 8 | | Agreement Occupation and Use Tax. The purchaser must certify | 9 | | that the item is purchased to be rented subject to a rental | 10 | | purchase agreement, as defined in the Rental Purchase Agreement | 11 | | Act, and provide proof of registration under the Rental | 12 | | Purchase Agreement Occupation and Use Tax Act. This paragraph | 13 | | is exempt from the provisions of Section 3-90. | 14 | | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | 15 | | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | 16 | | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | 17 | | 7-29-15; 99-855, eff. 8-19-16.)
| 18 | | Section 55. The Retailers' Occupation Tax Act is amended by | 19 | | changing Section 2-5 as follows:
| 20 | | (35 ILCS 120/2-5)
| 21 | | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | 22 | | sale of
the following tangible personal property are exempt | 23 | | from the tax imposed
by this Act:
| 24 | | (1) Farm chemicals.
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| 1 | | (2) Farm machinery and equipment, both new and used, | 2 | | including that
manufactured on special order, certified by the | 3 | | purchaser to be used
primarily for production agriculture or | 4 | | State or federal agricultural
programs, including individual | 5 | | replacement parts for the machinery and
equipment, including | 6 | | machinery and equipment purchased for lease,
and including | 7 | | implements of husbandry defined in Section 1-130 of
the | 8 | | Illinois Vehicle Code, farm machinery and agricultural | 9 | | chemical and
fertilizer spreaders, and nurse wagons required to | 10 | | be registered
under Section 3-809 of the Illinois Vehicle Code,
| 11 | | but
excluding other motor vehicles required to be registered | 12 | | under the Illinois
Vehicle Code.
Horticultural polyhouses or | 13 | | hoop houses used for propagating, growing, or
overwintering | 14 | | plants shall be considered farm machinery and equipment under
| 15 | | this item (2).
Agricultural chemical tender tanks and dry boxes | 16 | | shall include units sold
separately from a motor vehicle | 17 | | required to be licensed and units sold mounted
on a motor | 18 | | vehicle required to be licensed, if the selling price of the | 19 | | tender
is separately stated.
| 20 | | Farm machinery and equipment shall include precision | 21 | | farming equipment
that is
installed or purchased to be | 22 | | installed on farm machinery and equipment
including, but not | 23 | | limited to, tractors, harvesters, sprayers, planters,
seeders, | 24 | | or spreaders.
Precision farming equipment includes, but is not | 25 | | limited to,
soil testing sensors, computers, monitors, | 26 | | software, global positioning
and mapping systems, and other |
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| 1 | | such equipment.
| 2 | | Farm machinery and equipment also includes computers, | 3 | | sensors, software, and
related equipment used primarily in the
| 4 | | computer-assisted operation of production agriculture | 5 | | facilities, equipment,
and activities such as, but
not limited | 6 | | to,
the collection, monitoring, and correlation of
animal and | 7 | | crop data for the purpose of
formulating animal diets and | 8 | | agricultural chemicals. This item (2) is exempt
from the | 9 | | provisions of
Section 2-70.
| 10 | | (3) Until July 1, 2003, distillation machinery and | 11 | | equipment, sold as a
unit or kit,
assembled or installed by the | 12 | | retailer, certified by the user to be used
only for the | 13 | | production of ethyl alcohol that will be used for consumption
| 14 | | as motor fuel or as a component of motor fuel for the personal | 15 | | use of the
user, and not subject to sale or resale.
| 16 | | (4) Until July 1, 2003 and beginning again September 1, | 17 | | 2004 through August 30, 2014, graphic arts machinery and | 18 | | equipment, including
repair and
replacement parts, both new and | 19 | | used, and including that manufactured on
special order or | 20 | | purchased for lease, certified by the purchaser to be used
| 21 | | primarily for graphic arts production.
Equipment includes | 22 | | chemicals or
chemicals acting as catalysts but only if
the | 23 | | chemicals or chemicals acting as catalysts effect a direct and | 24 | | immediate
change upon a
graphic arts product.
| 25 | | (5) A motor vehicle that is used for automobile renting, as | 26 | | defined in the Automobile Renting Occupation and Use Tax Act. |
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| 1 | | This paragraph is exempt from
the provisions of Section 2-70.
| 2 | | (6) Personal property sold by a teacher-sponsored student | 3 | | organization
affiliated with an elementary or secondary school | 4 | | located in Illinois.
| 5 | | (7) Until July 1, 2003, proceeds of that portion of the | 6 | | selling price of
a passenger car the
sale of which is subject | 7 | | to the Replacement Vehicle Tax.
| 8 | | (8) Personal property sold to an Illinois county fair | 9 | | association for
use in conducting, operating, or promoting the | 10 | | county fair.
| 11 | | (9) Personal property sold to a not-for-profit arts
or | 12 | | cultural organization that establishes, by proof required by | 13 | | the Department
by
rule, that it has received an exemption under | 14 | | Section 501(c)(3) of the
Internal Revenue Code and that is | 15 | | organized and operated primarily for the
presentation
or | 16 | | support of arts or cultural programming, activities, or | 17 | | services. These
organizations include, but are not limited to, | 18 | | music and dramatic arts
organizations such as symphony | 19 | | orchestras and theatrical groups, arts and
cultural service | 20 | | organizations, local arts councils, visual arts organizations,
| 21 | | and media arts organizations.
On and after the effective date | 22 | | of this amendatory Act of the 92nd General
Assembly, however, | 23 | | an entity otherwise eligible for this exemption shall not
make | 24 | | tax-free purchases unless it has an active identification | 25 | | number issued by
the Department.
| 26 | | (10) Personal property sold by a corporation, society, |
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| 1 | | association,
foundation, institution, or organization, other | 2 | | than a limited liability
company, that is organized and | 3 | | operated as a not-for-profit service enterprise
for the benefit | 4 | | of persons 65 years of age or older if the personal property
| 5 | | was not purchased by the enterprise for the purpose of resale | 6 | | by the
enterprise.
| 7 | | (11) Personal property sold to a governmental body, to a | 8 | | corporation,
society, association, foundation, or institution | 9 | | organized and operated
exclusively for charitable, religious, | 10 | | or educational purposes, or to a
not-for-profit corporation, | 11 | | society, association, foundation, institution,
or organization | 12 | | that has no compensated officers or employees and that is
| 13 | | organized and operated primarily for the recreation of persons | 14 | | 55 years of
age or older. A limited liability company may | 15 | | qualify for the exemption under
this paragraph only if the | 16 | | limited liability company is organized and operated
| 17 | | exclusively for educational purposes. On and after July 1, | 18 | | 1987, however, no
entity otherwise eligible for this exemption | 19 | | shall make tax-free purchases
unless it has an active | 20 | | identification number issued by the Department.
| 21 | | (12) Tangible personal property sold to
interstate | 22 | | carriers
for hire for use as
rolling stock moving in interstate | 23 | | commerce or to lessors under leases of
one year or longer | 24 | | executed or in effect at the time of purchase by
interstate | 25 | | carriers for hire for use as rolling stock moving in interstate
| 26 | | commerce and equipment operated by a telecommunications |
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| 1 | | provider, licensed as a
common carrier by the Federal | 2 | | Communications Commission, which is permanently
installed in | 3 | | or affixed to aircraft moving in interstate commerce.
| 4 | | (12-5) On and after July 1, 2003 and through June 30, 2004, | 5 | | motor vehicles of the second division
with a gross vehicle | 6 | | weight in excess of 8,000 pounds
that
are
subject to the | 7 | | commercial distribution fee imposed under Section 3-815.1 of
| 8 | | the Illinois
Vehicle Code. Beginning on July 1, 2004 and | 9 | | through June 30, 2005, the use in this State of motor vehicles | 10 | | of the second division: (i) with a gross vehicle weight rating | 11 | | in excess of 8,000 pounds; (ii) that are subject to the | 12 | | commercial distribution fee imposed under Section 3-815.1 of | 13 | | the Illinois Vehicle Code; and (iii) that are primarily used | 14 | | for commercial purposes. Through June 30, 2005, this
exemption | 15 | | applies to repair and replacement parts added
after the
initial | 16 | | purchase of such a motor vehicle if that motor vehicle is used | 17 | | in a
manner that
would qualify for the rolling stock exemption | 18 | | otherwise provided for in this
Act. For purposes of this | 19 | | paragraph, "used for commercial purposes" means the | 20 | | transportation of persons or property in furtherance of any | 21 | | commercial or industrial enterprise whether for-hire or not.
| 22 | | (13) Proceeds from sales to owners, lessors, or
shippers of
| 23 | | tangible personal property that is utilized by interstate | 24 | | carriers for
hire for use as rolling stock moving in interstate | 25 | | commerce
and equipment operated by a telecommunications | 26 | | provider, licensed as a
common carrier by the Federal |
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| 1 | | Communications Commission, which is
permanently installed in | 2 | | or affixed to aircraft moving in interstate commerce.
| 3 | | (14) Machinery and equipment that will be used by the | 4 | | purchaser, or a
lessee of the purchaser, primarily in the | 5 | | process of manufacturing or
assembling tangible personal | 6 | | property for wholesale or retail sale or
lease, whether the | 7 | | sale or lease is made directly by the manufacturer or by
some | 8 | | other person, whether the materials used in the process are | 9 | | owned by
the manufacturer or some other person, or whether the | 10 | | sale or lease is made
apart from or as an incident to the | 11 | | seller's engaging in the service
occupation of producing | 12 | | machines, tools, dies, jigs, patterns, gauges, or
other similar | 13 | | items of no commercial value on special order for a particular
| 14 | | purchaser. The exemption provided by this paragraph (14) does | 15 | | not include machinery and equipment used in (i) the generation | 16 | | of electricity for wholesale or retail sale; (ii) the | 17 | | generation or treatment of natural or artificial gas for | 18 | | wholesale or retail sale that is delivered to customers through | 19 | | pipes, pipelines, or mains; or (iii) the treatment of water for | 20 | | wholesale or retail sale that is delivered to customers through | 21 | | pipes, pipelines, or mains. The provisions of Public Act 98-583 | 22 | | are declaratory of existing law as to the meaning and scope of | 23 | | this exemption.
| 24 | | (15) Proceeds of mandatory service charges separately | 25 | | stated on
customers' bills for purchase and consumption of food | 26 | | and beverages, to the
extent that the proceeds of the service |
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| 1 | | charge are in fact turned over as
tips or as a substitute for | 2 | | tips to the employees who participate directly
in preparing, | 3 | | serving, hosting or cleaning up the food or beverage function
| 4 | | with respect to which the service charge is imposed.
| 5 | | (16) Petroleum products sold to a purchaser if the seller
| 6 | | is prohibited by federal law from charging tax to the | 7 | | purchaser.
| 8 | | (17) Tangible personal property sold to a common carrier by | 9 | | rail or
motor that
receives the physical possession of the | 10 | | property in Illinois and that
transports the property, or | 11 | | shares with another common carrier in the
transportation of the | 12 | | property, out of Illinois on a standard uniform bill
of lading | 13 | | showing the seller of the property as the shipper or consignor | 14 | | of
the property to a destination outside Illinois, for use | 15 | | outside Illinois.
| 16 | | (18) Legal tender, currency, medallions, or gold or silver | 17 | | coinage
issued by the State of Illinois, the government of the | 18 | | United States of
America, or the government of any foreign | 19 | | country, and bullion.
| 20 | | (19) Until July 1 2003, oil field exploration, drilling, | 21 | | and production
equipment, including
(i) rigs and parts of rigs, | 22 | | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | 23 | | tubular goods, including casing and
drill strings, (iii) pumps | 24 | | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | 25 | | individual replacement part for oil field exploration,
| 26 | | drilling, and production equipment, and (vi) machinery and |
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| 1 | | equipment purchased
for lease; but
excluding motor vehicles | 2 | | required to be registered under the Illinois
Vehicle Code.
| 3 | | (20) Photoprocessing machinery and equipment, including | 4 | | repair and
replacement parts, both new and used, including that | 5 | | manufactured on
special order, certified by the purchaser to be | 6 | | used primarily for
photoprocessing, and including | 7 | | photoprocessing machinery and equipment
purchased for lease.
| 8 | | (21) Coal and aggregate exploration, mining, off-highway | 9 | | hauling,
processing,
maintenance, and reclamation equipment, | 10 | | including
replacement parts and equipment, and including
| 11 | | equipment purchased for lease, but excluding motor vehicles | 12 | | required to be
registered under the Illinois Vehicle Code. The | 13 | | changes made to this Section by Public Act 97-767 apply on and | 14 | | after July 1, 2003, but no claim for credit or refund is | 15 | | allowed on or after August 16, 2013 (the effective date of | 16 | | Public Act 98-456)
for such taxes paid during the period | 17 | | beginning July 1, 2003 and ending on August 16, 2013 (the | 18 | | effective date of Public Act 98-456).
| 19 | | (22) Until June 30, 2013, fuel and petroleum products sold | 20 | | to or used by an air carrier,
certified by the carrier to be | 21 | | used for consumption, shipment, or storage
in the conduct of | 22 | | its business as an air common carrier, for a flight
destined | 23 | | for or returning from a location or locations
outside the | 24 | | United States without regard to previous or subsequent domestic
| 25 | | stopovers.
| 26 | | Beginning July 1, 2013, fuel and petroleum products sold to |
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| 1 | | or used by an air carrier, certified by the carrier to be used | 2 | | for consumption, shipment, or storage in the conduct of its | 3 | | business as an air common carrier, for a flight that (i) is | 4 | | engaged in foreign trade or is engaged in trade between the | 5 | | United States and any of its possessions and (ii) transports at | 6 | | least one individual or package for hire from the city of | 7 | | origination to the city of final destination on the same | 8 | | aircraft, without regard to a change in the flight number of | 9 | | that aircraft. | 10 | | (23) A transaction in which the purchase order is received | 11 | | by a florist
who is located outside Illinois, but who has a | 12 | | florist located in Illinois
deliver the property to the | 13 | | purchaser or the purchaser's donee in Illinois.
| 14 | | (24) Fuel consumed or used in the operation of ships, | 15 | | barges, or vessels
that are used primarily in or for the | 16 | | transportation of property or the
conveyance of persons for | 17 | | hire on rivers bordering on this State if the
fuel is delivered | 18 | | by the seller to the purchaser's barge, ship, or vessel
while | 19 | | it is afloat upon that bordering river.
| 20 | | (25) Except as provided in item (25-5) of this Section, a
| 21 | | motor vehicle sold in this State to a nonresident even though | 22 | | the
motor vehicle is delivered to the nonresident in this | 23 | | State, if the motor
vehicle is not to be titled in this State, | 24 | | and if a drive-away permit
is issued to the motor vehicle as | 25 | | provided in Section 3-603 of the Illinois
Vehicle Code or if | 26 | | the nonresident purchaser has vehicle registration
plates to |
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| 1 | | transfer to the motor vehicle upon returning to his or her home
| 2 | | state. The issuance of the drive-away permit or having
the
| 3 | | out-of-state registration plates to be transferred is prima | 4 | | facie evidence
that the motor vehicle will not be titled in | 5 | | this State.
| 6 | | (25-5) The exemption under item (25) does not apply if the | 7 | | state in which the motor vehicle will be titled does not allow | 8 | | a reciprocal exemption for a motor vehicle sold and delivered | 9 | | in that state to an Illinois resident but titled in Illinois. | 10 | | The tax collected under this Act on the sale of a motor vehicle | 11 | | in this State to a resident of another state that does not | 12 | | allow a reciprocal exemption shall be imposed at a rate equal | 13 | | to the state's rate of tax on taxable property in the state in | 14 | | which the purchaser is a resident, except that the tax shall | 15 | | not exceed the tax that would otherwise be imposed under this | 16 | | Act. At the time of the sale, the purchaser shall execute a | 17 | | statement, signed under penalty of perjury, of his or her | 18 | | intent to title the vehicle in the state in which the purchaser | 19 | | is a resident within 30 days after the sale and of the fact of | 20 | | the payment to the State of Illinois of tax in an amount | 21 | | equivalent to the state's rate of tax on taxable property in | 22 | | his or her state of residence and shall submit the statement to | 23 | | the appropriate tax collection agency in his or her state of | 24 | | residence. In addition, the retailer must retain a signed copy | 25 | | of the statement in his or her records. Nothing in this item | 26 | | shall be construed to require the removal of the vehicle from |
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| 1 | | this state following the filing of an intent to title the | 2 | | vehicle in the purchaser's state of residence if the purchaser | 3 | | titles the vehicle in his or her state of residence within 30 | 4 | | days after the date of sale. The tax collected under this Act | 5 | | in accordance with this item (25-5) shall be proportionately | 6 | | distributed as if the tax were collected at the 6.25% general | 7 | | rate imposed under this Act.
| 8 | | (25-7) Beginning on July 1, 2007, no tax is imposed under | 9 | | this Act on the sale of an aircraft, as defined in Section 3 of | 10 | | the Illinois Aeronautics Act, if all of the following | 11 | | conditions are met: | 12 | | (1) the aircraft leaves this State within 15 days after | 13 | | the later of either the issuance of the final billing for | 14 | | the sale of the aircraft, or the authorized approval for | 15 | | return to service, completion of the maintenance record | 16 | | entry, and completion of the test flight and ground test | 17 | | for inspection, as required by 14 C.F.R. 91.407; | 18 | | (2) the aircraft is not based or registered in this | 19 | | State after the sale of the aircraft; and | 20 | | (3) the seller retains in his or her books and records | 21 | | and provides to the Department a signed and dated | 22 | | certification from the purchaser, on a form prescribed by | 23 | | the Department, certifying that the requirements of this | 24 | | item (25-7) are met. The certificate must also include the | 25 | | name and address of the purchaser, the address of the | 26 | | location where the aircraft is to be titled or registered, |
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| 1 | | the address of the primary physical location of the | 2 | | aircraft, and other information that the Department may | 3 | | reasonably require. | 4 | | For purposes of this item (25-7): | 5 | | "Based in this State" means hangared, stored, or otherwise | 6 | | used, excluding post-sale customizations as defined in this | 7 | | Section, for 10 or more days in each 12-month period | 8 | | immediately following the date of the sale of the aircraft. | 9 | | "Registered in this State" means an aircraft registered | 10 | | with the Department of Transportation, Aeronautics Division, | 11 | | or titled or registered with the Federal Aviation | 12 | | Administration to an address located in this State. | 13 | | This paragraph (25-7) is exempt from the provisions
of
| 14 | | Section 2-70.
| 15 | | (26) Semen used for artificial insemination of livestock | 16 | | for direct
agricultural production.
| 17 | | (27) Horses, or interests in horses, registered with and | 18 | | meeting the
requirements of any of the
Arabian Horse Club | 19 | | Registry of America, Appaloosa Horse Club, American Quarter
| 20 | | Horse Association, United States
Trotting Association, or | 21 | | Jockey Club, as appropriate, used for
purposes of breeding or | 22 | | racing for prizes. This item (27) is exempt from the provisions | 23 | | of Section 2-70, and the exemption provided for under this item | 24 | | (27) applies for all periods beginning May 30, 1995, but no | 25 | | claim for credit or refund is allowed on or after January 1, | 26 | | 2008 (the effective date of Public Act 95-88)
for such taxes |
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| 1 | | paid during the period beginning May 30, 2000 and ending on | 2 | | January 1, 2008 (the effective date of Public Act 95-88).
| 3 | | (28) Computers and communications equipment utilized for | 4 | | any
hospital
purpose
and equipment used in the diagnosis,
| 5 | | analysis, or treatment of hospital patients sold to a lessor | 6 | | who leases the
equipment, under a lease of one year or longer | 7 | | executed or in effect at the
time of the purchase, to a
| 8 | | hospital
that has been issued an active tax exemption | 9 | | identification number by the
Department under Section 1g of | 10 | | this Act.
| 11 | | (29) Personal property sold to a lessor who leases the
| 12 | | property, under a
lease of one year or longer executed or in | 13 | | effect at the time of the purchase,
to a governmental body
that | 14 | | has been issued an active tax exemption identification number | 15 | | by the
Department under Section 1g of this Act.
| 16 | | (30) Beginning with taxable years ending on or after | 17 | | December
31, 1995
and
ending with taxable years ending on or | 18 | | before December 31, 2004,
personal property that is
donated for | 19 | | disaster relief to be used in a State or federally declared
| 20 | | disaster area in Illinois or bordering Illinois by a | 21 | | manufacturer or retailer
that is registered in this State to a | 22 | | corporation, society, association,
foundation, or institution | 23 | | that has been issued a sales tax exemption
identification | 24 | | number by the Department that assists victims of the disaster
| 25 | | who reside within the declared disaster area.
| 26 | | (31) Beginning with taxable years ending on or after |
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| 1 | | December
31, 1995 and
ending with taxable years ending on or | 2 | | before December 31, 2004, personal
property that is used in the | 3 | | performance of infrastructure repairs in this
State, including | 4 | | but not limited to municipal roads and streets, access roads,
| 5 | | bridges, sidewalks, waste disposal systems, water and sewer | 6 | | line extensions,
water distribution and purification | 7 | | facilities, storm water drainage and
retention facilities, and | 8 | | sewage treatment facilities, resulting from a State
or | 9 | | federally declared disaster in Illinois or bordering Illinois | 10 | | when such
repairs are initiated on facilities located in the | 11 | | declared disaster area
within 6 months after the disaster.
| 12 | | (32) Beginning July 1, 1999, game or game birds sold at a | 13 | | "game breeding
and
hunting preserve area" as that term is used
| 14 | | in the
Wildlife Code. This paragraph is exempt from the | 15 | | provisions
of
Section 2-70.
| 16 | | (33) A motor vehicle, as that term is defined in Section | 17 | | 1-146
of the
Illinois Vehicle Code, that is donated to a | 18 | | corporation, limited liability
company, society, association, | 19 | | foundation, or institution that is determined by
the Department | 20 | | to be organized and operated exclusively for educational
| 21 | | purposes. For purposes of this exemption, "a corporation, | 22 | | limited liability
company, society, association, foundation, | 23 | | or institution organized and
operated
exclusively for | 24 | | educational purposes" means all tax-supported public schools,
| 25 | | private schools that offer systematic instruction in useful | 26 | | branches of
learning by methods common to public schools and |
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| 1 | | that compare favorably in
their scope and intensity with the | 2 | | course of study presented in tax-supported
schools, and | 3 | | vocational or technical schools or institutes organized and
| 4 | | operated exclusively to provide a course of study of not less | 5 | | than 6 weeks
duration and designed to prepare individuals to | 6 | | follow a trade or to pursue a
manual, technical, mechanical, | 7 | | industrial, business, or commercial
occupation.
| 8 | | (34) Beginning January 1, 2000, personal property, | 9 | | including food, purchased
through fundraising events for the | 10 | | benefit of a public or private elementary or
secondary school, | 11 | | a group of those schools, or one or more school districts if
| 12 | | the events are sponsored by an entity recognized by the school | 13 | | district that
consists primarily of volunteers and includes | 14 | | parents and teachers of the
school children. This paragraph | 15 | | does not apply to fundraising events (i) for
the benefit of | 16 | | private home instruction or (ii) for which the fundraising
| 17 | | entity purchases the personal property sold at the events from | 18 | | another
individual or entity that sold the property for the | 19 | | purpose of resale by the
fundraising entity and that profits | 20 | | from the sale to the fundraising entity.
This paragraph is | 21 | | exempt from the provisions of Section 2-70.
| 22 | | (35) Beginning January 1, 2000 and through December 31, | 23 | | 2001, new or used
automatic vending machines that prepare and | 24 | | serve hot food and beverages,
including coffee, soup, and other | 25 | | items, and replacement parts for these
machines. Beginning | 26 | | January 1, 2002 and through June 30, 2003, machines
and parts |
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| 1 | | for machines used in
commercial, coin-operated amusement and | 2 | | vending business if a use or occupation
tax is paid on the | 3 | | gross receipts derived from the use of the commercial,
| 4 | | coin-operated amusement and vending machines. This paragraph | 5 | | is exempt from
the provisions of Section 2-70.
| 6 | | (35-5) Beginning August 23, 2001 and through June 30, 2016, | 7 | | food for human consumption that is to be consumed off
the | 8 | | premises where it is sold (other than alcoholic beverages, soft | 9 | | drinks,
and food that has been prepared for immediate | 10 | | consumption) and prescription
and nonprescription medicines, | 11 | | drugs, medical appliances, and insulin, urine
testing | 12 | | materials, syringes, and needles used by diabetics, for human | 13 | | use, when
purchased for use by a person receiving medical | 14 | | assistance under Article V of
the Illinois Public Aid Code who | 15 | | resides in a licensed long-term care facility,
as defined in | 16 | | the Nursing Home Care Act, or a licensed facility as defined in | 17 | | the ID/DD Community Care Act, the MC/DD Act, or the Specialized | 18 | | Mental Health Rehabilitation Act of 2013.
| 19 | | (36) Beginning August 2, 2001, computers and | 20 | | communications equipment
utilized for any hospital purpose and | 21 | | equipment used in the diagnosis,
analysis, or treatment of | 22 | | hospital patients sold to a lessor who leases the
equipment, | 23 | | under a lease of one year or longer executed or in effect at | 24 | | the
time of the purchase, to a hospital that has been issued an | 25 | | active tax
exemption identification number by the Department | 26 | | under Section 1g of this Act.
This paragraph is exempt from the |
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| 1 | | provisions of Section 2-70.
| 2 | | (37) Beginning August 2, 2001, personal property sold to a | 3 | | lessor who
leases the property, under a lease of one year or | 4 | | longer executed or in effect
at the time of the purchase, to a | 5 | | governmental body that has been issued an
active tax exemption | 6 | | identification number by the Department under Section 1g
of | 7 | | this Act. This paragraph is exempt from the provisions of | 8 | | Section 2-70.
| 9 | | (38) Beginning on January 1, 2002 and through June 30, | 10 | | 2016, tangible personal property purchased
from an Illinois | 11 | | retailer by a taxpayer engaged in centralized purchasing
| 12 | | activities in Illinois who will, upon receipt of the property | 13 | | in Illinois,
temporarily store the property in Illinois (i) for | 14 | | the purpose of subsequently
transporting it outside this State | 15 | | for use or consumption thereafter solely
outside this State or | 16 | | (ii) for the purpose of being processed, fabricated, or
| 17 | | manufactured into, attached to, or incorporated into other | 18 | | tangible personal
property to be transported outside this State | 19 | | and thereafter used or consumed
solely outside this State. The | 20 | | Director of Revenue shall, pursuant to rules
adopted in | 21 | | accordance with the Illinois Administrative Procedure Act, | 22 | | issue a
permit to any taxpayer in good standing with the | 23 | | Department who is eligible for
the exemption under this | 24 | | paragraph (38). The permit issued under
this paragraph (38) | 25 | | shall authorize the holder, to the extent and
in the manner | 26 | | specified in the rules adopted under this Act, to purchase
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| 1 | | tangible personal property from a retailer exempt from the | 2 | | taxes imposed by
this Act. Taxpayers shall maintain all | 3 | | necessary books and records to
substantiate the use and | 4 | | consumption of all such tangible personal property
outside of | 5 | | the State of Illinois.
| 6 | | (39) Beginning January 1, 2008, tangible personal property | 7 | | used in the construction or maintenance of a community water | 8 | | supply, as defined under Section 3.145 of the Environmental | 9 | | Protection Act, that is operated by a not-for-profit | 10 | | corporation that holds a valid water supply permit issued under | 11 | | Title IV of the Environmental Protection Act. This paragraph is | 12 | | exempt from the provisions of Section 2-70.
| 13 | | (40) Beginning January 1, 2010, materials, parts, | 14 | | equipment, components, and furnishings incorporated into or | 15 | | upon an aircraft as part of the modification, refurbishment, | 16 | | completion, replacement, repair, or maintenance of the | 17 | | aircraft. This exemption includes consumable supplies used in | 18 | | the modification, refurbishment, completion, replacement, | 19 | | repair, and maintenance of aircraft, but excludes any | 20 | | materials, parts, equipment, components, and consumable | 21 | | supplies used in the modification, replacement, repair, and | 22 | | maintenance of aircraft engines or power plants, whether such | 23 | | engines or power plants are installed or uninstalled upon any | 24 | | such aircraft. "Consumable supplies" include, but are not | 25 | | limited to, adhesive, tape, sandpaper, general purpose | 26 | | lubricants, cleaning solution, latex gloves, and protective |
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| 1 | | films. This exemption applies only to the sale of qualifying | 2 | | tangible personal property to persons who modify, refurbish, | 3 | | complete, replace, or maintain an aircraft and who (i) hold an | 4 | | Air Agency Certificate and are empowered to operate an approved | 5 | | repair station by the Federal Aviation Administration, (ii) | 6 | | have a Class IV Rating, and (iii) conduct operations in | 7 | | accordance with Part 145 of the Federal Aviation Regulations. | 8 | | The exemption does not include aircraft operated by a | 9 | | commercial air carrier providing scheduled passenger air | 10 | | service pursuant to authority issued under Part 121 or Part 129 | 11 | | of the Federal Aviation Regulations. The changes made to this | 12 | | paragraph (40) by Public Act 98-534 are declarative of existing | 13 | | law. | 14 | | (41) Tangible personal property sold to a | 15 | | public-facilities corporation, as described in Section | 16 | | 11-65-10 of the Illinois Municipal Code, for purposes of | 17 | | constructing or furnishing a municipal convention hall, but | 18 | | only if the legal title to the municipal convention hall is | 19 | | transferred to the municipality without any further | 20 | | consideration by or on behalf of the municipality at the time | 21 | | of the completion of the municipal convention hall or upon the | 22 | | retirement or redemption of any bonds or other debt instruments | 23 | | issued by the public-facilities corporation in connection with | 24 | | the development of the municipal convention hall. This | 25 | | exemption includes existing public-facilities corporations as | 26 | | provided in Section 11-65-25 of the Illinois Municipal Code. |
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| 1 | | This paragraph is exempt from the provisions of Section 2-70. | 2 | | (42) Beginning January 1, 2017, menstrual pads, tampons, | 3 | | and menstrual cups. | 4 | | (43) Merchandise that is subject to the Rental Purchase | 5 | | Agreement Occupation and Use Tax. The purchaser must certify | 6 | | that the item is purchased to be rented subject to a rental | 7 | | purchase agreement, as defined in the Rental Purchase Agreement | 8 | | Act, and provide proof of registration under the Rental | 9 | | Purchase Agreement Occupation and Use Tax Act. This paragraph | 10 | | is exempt from the provisions of Section 2-70. | 11 | | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | 12 | | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | 13 | | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | 14 | | 7-29-15; 99-855, eff. 8-19-16.)
| 15 | | Section 99. Effective date. This Act takes effect January | 16 | | 1, 2018. |
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