35 ILCS 120/5l

(35 ILCS 120/5l) (from Ch. 120, par. 444l)

Sec. 5l. Building materials exemption; High Impact Business.

(a) Beginning January 1, 1995, each retailer who makes a sale of building materials that will be incorporated into a High Impact Business location as designated by the Department of Commerce and Economic Opportunity under Section 5.5 of the Illinois Enterprise Zone Act may deduct receipts from such sales when calculating only the 6.25% State rate of tax imposed by this Act. Beginning on the effective date of this amendatory Act of 1995, a retailer may also deduct receipts from such sales when calculating any applicable local taxes. However, until the effective date of this amendatory Act of 1995, a retailer may file claims for credit or refund to recover the amount of any applicable local tax paid on such sales. No retailer who is eligible for the deduction or credit under Section 5k of this Act for making a sale of building materials to be incorporated into real estate in an enterprise zone by rehabilitation, remodeling or new construction shall be eligible for the deduction or credit authorized under this Section.

(b) On and after July 1, 2013, in addition to any other requirements to document the exemption allowed under this Section, the retailer must obtain from the purchaser the purchaser's High Impact Business Building Materials Exemption Certificate number issued by the Department. A construction contractor or other entity shall not make tax-free purchases unless it has an active Exemption Certificate issued by the Department at the time of purchase.

Upon request from the designated High Impact Business, the Department shall issue a High Impact Business Building Materials Exemption Certificate for each construction contractor or other entity identified by the designated High Impact Business. The Department shall make the Exemption Certificates available to each construction contractor or other entity and the designated High Impact Business. The request for Building Materials Exemption Certificates from the designated High Impact Business to the Department must include the following information:

(1) the name and address of the construction contractor or other entity;

(2) the name and location or address of the designated High Impact Business;

(3) the estimated amount of the exemption for each construction contractor or other entity for which a request for Exemption Certificate is made, based on a stated estimated average tax rate and the percentage of the contract that consists of materials;

(4) the period of time over which supplies for the project are expected to be purchased; and

(5) other reasonable information as the Department may require, including but not limited to FEIN numbers, to determine if the contractor or other entity, or any partner, or a corporate officer, and in the case of a limited liability company, any manager or member, of the construction contractor or other entity, is or has been the owner, a partner, a corporate officer, and in the case of a limited liability company, a manager or member, of a person that is in default for moneys due to the Department under this Act or any other tax or fee Act administered by the Department.

The Department shall issue the High Impact Business Building Materials Exemption Certificates within 3 business days after receipt of request from the designated High Impact Business. This requirement does not apply in circumstances where the Department, for reasonable cause, is unable to issue the Exemption Certificate within 3 business days. The Department may refuse to issue an Exemption Certificate if the owner, any partner, or a corporate officer, and in the case of a limited liability company, any manager or member, of the construction contractor or other entity is or has been the owner, a partner, a corporate officer, and in the case of a limited liability company, a manager or member, of a person that is in default for moneys due to the Department under this Act or any other tax or fee Act administered by the Department. The High Impact Business Building Materials Exemption Certificate shall contain language stating that if the construction contractor or other entity who is issued the Exemption Certificate makes a tax-exempt purchase, as described in this Section, that is not eligible for exemption under this Section or allows another person to make a tax-exempt purchase, as described in this Section, that is not eligible for exemption under this Section, then, in addition to any tax or other penalty imposed, the construction contractor or other entity is subject to a penalty equal to the tax that would have been paid by the retailer under this Act as well as any applicable local retailers' occupation tax on the purchase that is not eligible for the exemption.

The Department, in its discretion, may require that the request for High Impact Business Building Materials Exemption Certificates be submitted electronically. The Department may, in its discretion, issue the Exemption Certificates electronically. The High Impact Business Building Materials Exemption Certificate number shall be designed in such a way that the Department can identify from the unique number on the Exemption Certificate issued to a given construction contractor or other entity, the name of the designated High Impact Business and the construction contractor or other entity to whom the Exemption Certificate is issued. The Exemption Certificate shall contain an expiration date, which shall be no more than 2 years after the date of issuance. At the request of the designated High Impact Business, the Department may renew an Exemption Certificate. After the Department issues Exemption Certificates for a given designated High Impact Business, the designated High Impact Business may notify the Department of additional construction contractors or other entities eligible for a Building Materials Exemption Certificate. Upon notification by the designated High Impact Business and subject to the other provisions of this subsection (b), the Department shall issue a High Impact Business Building Materials Exemption Certificate to each additional construction contractor or other entity identified by the designated High Impact Business. A designated High Impact Business may notify the Department to rescind a Building Materials Exemption Certificate previously issued by the Department but that has not yet expired. Upon notification by the designated High Impact Business and subject to the other provisions of this subsection (b), the Department shall issue the rescission of the Building Materials Exemption Certificate to the construction contractor or other entity identified by the designated High Impact Business and provide a copy to the designated High Impact Business.

If the Department of Revenue determines that a construction contractor or other entity that was issued an Exemption Certificate under this subsection (b) made a tax-exempt purchase, as described in this Section, that was not eligible for exemption under this Section or allowed another person to make a tax-exempt purchase, as described in this Section, that was not eligible for exemption under this Section, then, in addition to any tax or other penalty imposed, the construction contractor or other entity is subject to a penalty equal to the tax that would have been paid by the retailer under this Act as well as any applicable local retailers' occupation tax on the purchase that was not eligible for the exemption.

(c) Notwithstanding anything to the contrary in this Section, for High Impact Businesses for which projects are already in existence and for which construction contracts are already in place on July 1, 2013, the request for High Impact Business Building Materials Exemption Certificates from the High Impact Business to the Department for these pre-existing construction contractors and other entities must include the information required under subsection (b), but not including the information listed in items (3) and (4). For any new construction contract entered into on or after July 1, 2013, however, all of the information in subsection (b) must be provided.

(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)