State of Illinois
90th General Assembly
Legislation

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[ Introduced ]

90_HB0521eng

      35 ILCS 105/3-5           from Ch. 120, par. 439.3-5
      35 ILCS 110/3-5           from Ch. 120, par. 439.33-5
      35 ILCS 115/3-5           from Ch. 120, par. 439.103-5
      35 ILCS 120/2-5           from Ch. 120, par. 441-5
          Amends the Use Tax Act, the  Service  Use  Tax  Act,  the
      Service Occupation Tax Act, and the Retailers' Occupation Tax
      Act.   Provides  that horticultural polyhouses or hoop houses
      used for propagating, growing, or overwintering plants  shall
      be  considered  farm  machinery  and  equipment for exemption
      purposes. Exempts the provisions from the  sunset  provisions
      of the Acts.
                                                    LRB9001534DNmbA
HB0521 Engrossed                              LRB9001534DNmbA
 1        AN ACT regarding farm machinery, amending named Acts.
 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:
 4        Section 5.  The  Use  Tax  Act  is  amended  by  changing
 5    Section 3-5 as follows:
 6        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 7        Sec.  3-5.   Exemptions.   Use  of the following tangible
 8    personal property is exempt from the tax imposed by this Act:
 9        (1)  Personal  property  purchased  from  a  corporation,
10    society,    association,    foundation,    institution,    or
11    organization, other than a limited liability company, that is
12    organized and operated as a not-for-profit service enterprise
13    for the benefit of persons 65 years of age or  older  if  the
14    personal property was not purchased by the enterprise for the
15    purpose of resale by the enterprise.
16        (2)  Personal  property  purchased  by  a  not-for-profit
17    Illinois  county  fair  association  for  use  in conducting,
18    operating, or promoting the county fair.
19        (3)  Personal  property  purchased  by  a  not-for-profit
20    music or dramatic  arts  organization  that  establishes,  by
21    proof  required  by  the  Department  by  rule,  that  it has
22    received an exemption under Section 501(c)(3) of the Internal
23    Revenue Code and that  is  organized  and  operated  for  the
24    presentation  of  live  public  performances  of  musical  or
25    theatrical works on a regular basis.
26        (4)  Personal  property purchased by a governmental body,
27    by  a  corporation,  society,  association,  foundation,   or
28    institution    organized   and   operated   exclusively   for
29    charitable, religious,  or  educational  purposes,  or  by  a
30    not-for-profit corporation, society, association, foundation,
31    institution, or organization that has no compensated officers
HB0521 Engrossed            -2-               LRB9001534DNmbA
 1    or employees and that is organized and operated primarily for
 2    the recreation of persons 55 years of age or older. A limited
 3    liability  company  may  qualify for the exemption under this
 4    paragraph only if the limited liability company is  organized
 5    and  operated  exclusively  for  educational purposes. On and
 6    after July 1, 1987, however, no entity otherwise eligible for
 7    this exemption shall make tax-free purchases unless it has an
 8    active  exemption  identification  number   issued   by   the
 9    Department.
10        (5)  A passenger car that is a replacement vehicle to the
11    extent  that  the purchase price of the car is subject to the
12    Replacement Vehicle Tax.
13        (6)  Graphic  arts  machinery  and  equipment,  including
14    repair  and  replacement  parts,  both  new  and  used,   and
15    including  that  manufactured  on special order, certified by
16    the  purchaser  to  be  used  primarily  for   graphic   arts
17    production,  and  including machinery and equipment purchased
18    for lease.
19        (7)  Farm chemicals.
20        (8)  Legal  tender,  currency,  medallions,  or  gold  or
21    silver  coinage  issued  by  the  State  of   Illinois,   the
22    government of the United States of America, or the government
23    of any foreign country, and bullion.
24        (9)  Personal property purchased from a teacher-sponsored
25    student   organization   affiliated  with  an  elementary  or
26    secondary school located in Illinois.
27        (10)  A motor vehicle of  the  first  division,  a  motor
28    vehicle of the second division that is a self-contained motor
29    vehicle  designed  or permanently converted to provide living
30    quarters for  recreational,  camping,  or  travel  use,  with
31    direct  walk through to the living quarters from the driver's
32    seat, or a motor vehicle of the second division  that  is  of
33    the  van configuration designed for the transportation of not
34    less than 7 nor  more  than  16  passengers,  as  defined  in
HB0521 Engrossed            -3-               LRB9001534DNmbA
 1    Section  1-146 of the Illinois Vehicle Code, that is used for
 2    automobile renting, as  defined  in  the  Automobile  Renting
 3    Occupation and Use Tax Act.
 4        (11)  Farm  machinery  and  equipment, both new and used,
 5    including that manufactured on special  order,  certified  by
 6    the purchaser to be used primarily for production agriculture
 7    or   State   or   federal  agricultural  programs,  including
 8    individual replacement parts for the machinery and equipment,
 9    and including machinery and equipment  purchased  for  lease,
10    but  excluding motor vehicles required to be registered under
11    the Illinois Vehicle Code. Horticultural polyhouses  or  hoop
12    houses used for propagating, growing, or overwintering plants
13    shall  be  considered farm machinery and equipment under this
14    paragraph.  This amendatory Act of 1997 is  exempt  from  the
15    provisions of Section 3-90.
16        (12)  Fuel  and  petroleum products sold to or used by an
17    air common carrier, certified by the carrier to be  used  for
18    consumption,  shipment,  or  storage  in  the  conduct of its
19    business as an air common carrier, for a flight destined  for
20    or  returning from a location or locations outside the United
21    States without regard  to  previous  or  subsequent  domestic
22    stopovers.
23        (13)  Proceeds  of  mandatory  service charges separately
24    stated on customers' bills for the purchase  and  consumption
25    of food and beverages purchased at retail from a retailer, to
26    the  extent  that  the  proceeds of the service charge are in
27    fact turned over as tips or as a substitute for tips  to  the
28    employees  who  participate  directly  in preparing, serving,
29    hosting or cleaning up the food  or  beverage  function  with
30    respect to which the service charge is imposed.
31        (14)  Oil  field  exploration,  drilling,  and production
32    equipment, including (i) rigs and parts of rigs, rotary rigs,
33    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
34    goods,  including  casing  and drill strings, (iii) pumps and
HB0521 Engrossed            -4-               LRB9001534DNmbA
 1    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
 2    individual   replacement  part  for  oil  field  exploration,
 3    drilling, and production equipment, and  (vi)  machinery  and
 4    equipment  purchased  for lease; but excluding motor vehicles
 5    required to be registered under the Illinois Vehicle Code.
 6        (15)  Photoprocessing machinery and equipment,  including
 7    repair  and  replacement  parts, both new and used, including
 8    that  manufactured  on  special  order,  certified   by   the
 9    purchaser  to  be  used  primarily  for  photoprocessing, and
10    including photoprocessing machinery and  equipment  purchased
11    for lease.
12        (16)  Coal   exploration,   mining,  offhighway  hauling,
13    processing, maintenance, and reclamation equipment, including
14    replacement parts  and  equipment,  and  including  equipment
15    purchased for lease, but excluding motor vehicles required to
16    be registered under the Illinois Vehicle Code.
17        (17)  Distillation  machinery  and  equipment,  sold as a
18    unit  or  kit,  assembled  or  installed  by  the   retailer,
19    certified  by  the user to be used only for the production of
20    ethyl alcohol that will be used for consumption as motor fuel
21    or as a component of motor fuel for the personal use  of  the
22    user, and not subject to sale or resale.
23        (18)  Manufacturing    and   assembling   machinery   and
24    equipment used primarily in the process of  manufacturing  or
25    assembling tangible personal property for wholesale or retail
26    sale or lease, whether that sale or lease is made directly by
27    the  manufacturer  or  by  some  other  person,  whether  the
28    materials  used  in the process are owned by the manufacturer
29    or some other person, or whether that sale or lease  is  made
30    apart  from or as an incident to the seller's engaging in the
31    service occupation of producing machines, tools, dies,  jigs,
32    patterns,  gauges,  or  other  similar items of no commercial
33    value on special order for a particular purchaser.
34        (19)  Personal  property  delivered  to  a  purchaser  or
HB0521 Engrossed            -5-               LRB9001534DNmbA
 1    purchaser's donee inside Illinois when the purchase order for
 2    that personal property was  received  by  a  florist  located
 3    outside  Illinois  who  has a florist located inside Illinois
 4    deliver the personal property.
 5        (20)  Semen used for artificial insemination of livestock
 6    for direct agricultural production.
 7        (21)  Horses, or interests in horses, registered with and
 8    meeting the requirements of any of  the  Arabian  Horse  Club
 9    Registry  of  America, Appaloosa Horse Club, American Quarter
10    Horse Association, United  States  Trotting  Association,  or
11    Jockey Club, as appropriate, used for purposes of breeding or
12    racing for prizes.
13        (22)   Computers  and  communications  equipment utilized
14    for any hospital purpose and equipment used in the diagnosis,
15    analysis, or treatment of hospital patients  purchased  by  a
16    lessor who leases the equipment, under a lease of one year or
17    longer  executed  or  in  effect at the time the lessor would
18    otherwise be subject to the tax imposed by  this  Act,  to  a
19    hospital    that  has  been  issued  an  active tax exemption
20    identification number by the Department under Section  1g  of
21    the  Retailers'  Occupation  Tax  Act.   If  the equipment is
22    leased in a manner that does not qualify for  this  exemption
23    or  is  used in any other non-exempt manner, the lessor shall
24    be liable for the tax imposed under this Act or  the  Service
25    Use  Tax  Act,  as  the case may be, based on the fair market
26    value of the property at  the  time  the  non-qualifying  use
27    occurs.   No  lessor  shall  collect or attempt to collect an
28    amount (however designated) that purports to  reimburse  that
29    lessor for the tax imposed by this Act or the Service Use Tax
30    Act,  as the case may be, if the tax has not been paid by the
31    lessor.  If a lessor improperly collects any such amount from
32    the lessee, the lessee shall have a legal right  to  claim  a
33    refund  of  that  amount  from the lessor.  If, however, that
34    amount is not refunded to the  lessee  for  any  reason,  the
HB0521 Engrossed            -6-               LRB9001534DNmbA
 1    lessor is liable to pay that amount to the Department.
 2        (23)   Personal property purchased by a lessor who leases
 3    the  property,  under a lease of  one year or longer executed
 4    or in effect at  the  time  the  lessor  would  otherwise  be
 5    subject  to  the  tax  imposed by this Act, to a governmental
 6    body that has been  issued  an  active  sales  tax  exemption
 7    identification  number  by the Department under Section 1g of
 8    the Retailers' Occupation Tax Act. If the property is  leased
 9    in  a manner that does not qualify for this exemption or used
10    in any other non-exempt manner, the lessor  shall  be  liable
11    for  the  tax  imposed  under this Act or the Service Use Tax
12    Act, as the case may be, based on the fair  market  value  of
13    the  property  at the time the non-qualifying use occurs.  No
14    lessor shall collect or attempt to collect an amount (however
15    designated) that purports to reimburse that  lessor  for  the
16    tax  imposed  by  this Act or the Service Use Tax Act, as the
17    case may be, if the tax has not been paid by the lessor.   If
18    a lessor improperly collects any such amount from the lessee,
19    the lessee shall have a legal right to claim a refund of that
20    amount  from  the  lessor.   If,  however, that amount is not
21    refunded to the lessee for any reason, the lessor  is  liable
22    to pay that amount to the Department.
23        (24)   Beginning  with  taxable  years ending on or after
24    December 31, 1995 and ending with taxable years ending on  or
25    before  December  31, 2004, personal property that is donated
26    for disaster relief to  be  used  in  a  State  or  federally
27    declared disaster area in Illinois or bordering Illinois by a
28    manufacturer  or retailer that is registered in this State to
29    a   corporation,   society,   association,   foundation,   or
30    institution that  has  been  issued  a  sales  tax  exemption
31    identification  number by the Department that assists victims
32    of the disaster who reside within the declared disaster area.
33        (25)   Beginning with taxable years ending  on  or  after
34    December  31, 1995 and ending with taxable years ending on or
HB0521 Engrossed            -7-               LRB9001534DNmbA
 1    before December 31, 2004, personal property that is  used  in
 2    the  performance  of  infrastructure  repairs  in this State,
 3    including but not limited to  municipal  roads  and  streets,
 4    access  roads,  bridges,  sidewalks,  waste disposal systems,
 5    water and  sewer  line  extensions,  water  distribution  and
 6    purification  facilities,  storm water drainage and retention
 7    facilities, and sewage treatment facilities, resulting from a
 8    State or federally declared disaster in Illinois or bordering
 9    Illinois  when  such  repairs  are  initiated  on  facilities
10    located in the declared disaster area within 6  months  after
11    the disaster.
12    (Source:  P.A.  88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
13    89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;  89-349,  eff.
14    8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96;  89-626,
15    eff. 8-9-96; revised 8-21-96.)
16        Section  10.   The  Service  Use  Tax  Act  is amended by
17    changing Section 3-5 as follows:
18        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
19        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
20    personal property is exempt from the tax imposed by this Act:
21        (1)  Personal  property  purchased  from  a  corporation,
22    society,    association,    foundation,    institution,    or
23    organization, other than a limited liability company, that is
24    organized and operated as a not-for-profit service enterprise
25    for  the  benefit  of persons 65 years of age or older if the
26    personal property was not purchased by the enterprise for the
27    purpose of resale by the enterprise.
28        (2)  Personal property purchased by a non-profit Illinois
29    county fair association for use in conducting, operating,  or
30    promoting the county fair.
31        (3)  Personal  property  purchased  by  a  not-for-profit
32    music  or  dramatic  arts  organization  that establishes, by
HB0521 Engrossed            -8-               LRB9001534DNmbA
 1    proof required  by  the  Department  by  rule,  that  it  has
 2    received an exemption under Section 501(c)(3) of the Internal
 3    Revenue  Code  and  that  is  organized  and operated for the
 4    presentation  of  live  public  performances  of  musical  or
 5    theatrical works on a regular basis.
 6        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 7    silver  coinage  issued  by  the  State  of   Illinois,   the
 8    government of the United States of America, or the government
 9    of any foreign country, and bullion.
10        (5)  Graphic  arts  machinery  and  equipment,  including
11    repair   and  replacement  parts,  both  new  and  used,  and
12    including that manufactured on special order or purchased for
13    lease, certified by the purchaser to be  used  primarily  for
14    graphic arts production.
15        (6)  Personal property purchased from a teacher-sponsored
16    student   organization   affiliated  with  an  elementary  or
17    secondary school located in Illinois.
18        (7)  Farm machinery and equipment,  both  new  and  used,
19    including  that  manufactured  on special order, certified by
20    the purchaser to be used primarily for production agriculture
21    or  State  or  federal   agricultural   programs,   including
22    individual replacement parts for the machinery and equipment,
23    and  including  machinery  and equipment purchased for lease,
24    but excluding motor vehicles required to be registered  under
25    the  Illinois  Vehicle Code. Horticultural polyhouses or hoop
26    houses used for propagating, growing, or overwintering plants
27    shall be considered farm machinery and equipment  under  this
28    paragraph.   This  amendatory  Act of 1997 is exempt from the
29    provisions of Section 3-75.
30        (8)  Fuel and petroleum products sold to or  used  by  an
31    air  common  carrier, certified by the carrier to be used for
32    consumption, shipment, or  storage  in  the  conduct  of  its
33    business  as an air common carrier, for a flight destined for
34    or returning from a location or locations outside the  United
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 1    States  without  regard  to  previous  or subsequent domestic
 2    stopovers.
 3        (9)  Proceeds of  mandatory  service  charges  separately
 4    stated  on  customers' bills for the purchase and consumption
 5    of food and beverages acquired as an incident to the purchase
 6    of a service from  a  serviceman,  to  the  extent  that  the
 7    proceeds  of  the  service  charge are in fact turned over as
 8    tips or as  a  substitute  for  tips  to  the  employees  who
 9    participate   directly  in  preparing,  serving,  hosting  or
10    cleaning up the food or beverage  function  with  respect  to
11    which the service charge is imposed.
12        (10)  Oil  field  exploration,  drilling,  and production
13    equipment, including (i) rigs and parts of rigs, rotary rigs,
14    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
15    goods,  including  casing  and drill strings, (iii) pumps and
16    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
17    individual   replacement  part  for  oil  field  exploration,
18    drilling, and production equipment, and  (vi)  machinery  and
19    equipment  purchased  for lease; but excluding motor vehicles
20    required to be registered under the Illinois Vehicle Code.
21        (11)  Proceeds from the sale of photoprocessing machinery
22    and equipment, including repair and replacement  parts,  both
23    new  and  used, including that manufactured on special order,
24    certified  by  the  purchaser  to  be  used   primarily   for
25    photoprocessing,  and including photoprocessing machinery and
26    equipment purchased for lease.
27        (12)  Coal  exploration,  mining,   offhighway   hauling,
28    processing, maintenance, and reclamation equipment, including
29    replacement  parts  and  equipment,  and  including equipment
30    purchased for lease, but excluding motor vehicles required to
31    be registered under the Illinois Vehicle Code.
32        (13)  Semen used for artificial insemination of livestock
33    for direct agricultural production.
34        (14)  Horses, or interests in horses, registered with and
HB0521 Engrossed            -10-              LRB9001534DNmbA
 1    meeting the requirements of any of  the  Arabian  Horse  Club
 2    Registry  of  America, Appaloosa Horse Club, American Quarter
 3    Horse Association, United  States  Trotting  Association,  or
 4    Jockey Club, as appropriate, used for purposes of breeding or
 5    racing for prizes.
 6        (15)  Computers and communications equipment utilized for
 7    any  hospital  purpose  and  equipment used in the diagnosis,
 8    analysis, or treatment of hospital patients  purchased  by  a
 9    lessor who leases the equipment, under a lease of one year or
10    longer  executed  or  in  effect at the time the lessor would
11    otherwise be subject to the tax imposed by  this  Act,  to  a
12    hospital  that  has  been  issued  an  active  tax  exemption
13    identification  number  by the Department under Section 1g of
14    the Retailers' Occupation Tax Act. If the equipment is leased
15    in a manner that does not qualify for this  exemption  or  is
16    used  in  any  other  non-exempt  manner, the lessor shall be
17    liable for the tax imposed under this Act or the Use Tax Act,
18    as the case may be, based on the fair  market  value  of  the
19    property  at  the  time  the  non-qualifying  use occurs.  No
20    lessor shall collect or attempt to collect an amount (however
21    designated) that purports to reimburse that  lessor  for  the
22    tax  imposed  by this Act or the Use Tax Act, as the case may
23    be, if the tax has not been paid by the lessor.  If a  lessor
24    improperly  collects  any  such  amount  from the lessee, the
25    lessee shall have a legal right to claim  a  refund  of  that
26    amount  from  the  lessor.   If,  however, that amount is not
27    refunded to the lessee for any reason, the lessor  is  liable
28    to pay that amount to the Department.
29        (16)  Personal  property purchased by a lessor who leases
30    the property, under a lease of one year or longer executed or
31    in effect at the time the lessor would otherwise  be  subject
32    to  the  tax imposed by this Act, to a governmental body that
33    has been issued an active tax exemption identification number
34    by  the  Department  under  Section  1g  of  the   Retailers'
HB0521 Engrossed            -11-              LRB9001534DNmbA
 1    Occupation  Tax  Act.   If the property is leased in a manner
 2    that does not qualify for this exemption or is  used  in  any
 3    other  non-exempt  manner, the lessor shall be liable for the
 4    tax imposed under this Act or the Use Tax Act,  as  the  case
 5    may be, based on the fair market value of the property at the
 6    time  the non-qualifying use occurs.  No lessor shall collect
 7    or attempt to collect an  amount  (however  designated)  that
 8    purports to reimburse that lessor for the tax imposed by this
 9    Act  or  the  Use Tax Act, as the case may be, if the tax has
10    not been paid by the lessor.  If a lessor improperly collects
11    any such amount from the lessee,  the  lessee  shall  have  a
12    legal right to claim a refund of that amount from the lessor.
13    If,  however,  that  amount is not refunded to the lessee for
14    any reason, the lessor is liable to pay that  amount  to  the
15    Department.
16        (17)  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
19    for disaster relief to  be  used  in  a  State  or  federally
20    declared disaster area in Illinois or bordering Illinois by a
21    manufacturer  or retailer that is registered in this State to
22    a   corporation,   society,   association,   foundation,   or
23    institution that  has  been  issued  a  sales  tax  exemption
24    identification  number by the Department that assists victims
25    of the disaster who reside within the declared disaster area.
26        (18)  Beginning with taxable years  ending  on  or  after
27    December  31, 1995 and ending with taxable years ending on or
28    before December 31, 2004, personal property that is  used  in
29    the  performance  of  infrastructure  repairs  in this State,
30    including but not limited to  municipal  roads  and  streets,
31    access  roads,  bridges,  sidewalks,  waste disposal systems,
32    water and  sewer  line  extensions,  water  distribution  and
33    purification  facilities,  storm water drainage and retention
34    facilities, and sewage treatment facilities, resulting from a
HB0521 Engrossed            -12-              LRB9001534DNmbA
 1    State or federally declared disaster in Illinois or bordering
 2    Illinois  when  such  repairs  are  initiated  on  facilities
 3    located in the declared disaster area within 6  months  after
 4    the disaster.
 5    (Source:  P.A.  88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
 6    89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;  89-349,  eff.
 7    8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96;  89-626,
 8    eff. 8-9-96; revised 8-21-96.)
 9        Section 15.  The Service Occupation Tax Act is amended by
10    changing Section 3-5 as follows:
11        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
12        Sec.  3-5.   Exemptions.  The following tangible personal
13    property is exempt from the tax imposed by this Act:
14        (1)  Personal property sold by  a  corporation,  society,
15    association,  foundation, institution, or organization, other
16    than a limited  liability  company,  that  is  organized  and
17    operated  as  a  not-for-profit  service  enterprise  for the
18    benefit of persons 65 years of age or older if  the  personal
19    property  was not purchased by the enterprise for the purpose
20    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 any not-for-profit
25    music or dramatic  arts  organization  that  establishes,  by
26    proof  required  by  the  Department  by  rule,  that  it has
27    received  an  exemption   under  Section  501(c)(3)  of   the
28    Internal  Revenue Code and that is organized and operated for
29    the presentation of live public performances  of  musical  or
30    theatrical works on a regular basis.
31        (4)  Legal  tender,  currency,  medallions,  or  gold  or
32    silver   coinage   issued  by  the  State  of  Illinois,  the
33    government of the United States of America, or the government
HB0521 Engrossed            -13-              LRB9001534DNmbA
 1    of any foreign country, and bullion.
 2        (5)  Graphic  arts  machinery  and  equipment,  including
 3    repair  and  replacement  parts,  both  new  and  used,   and
 4    including that manufactured on special order or purchased for
 5    lease,  certified  by  the purchaser to be used primarily for
 6    graphic arts production.
 7        (6)  Personal  property  sold  by   a   teacher-sponsored
 8    student   organization   affiliated  with  an  elementary  or
 9    secondary school located in Illinois.
10        (7)  Farm machinery and equipment,  both  new  and  used,
11    including  that  manufactured  on special order, certified by
12    the purchaser to be used primarily for production agriculture
13    or  State  or  federal   agricultural   programs,   including
14    individual replacement parts for the machinery and equipment,
15    and  including  machinery  and equipment purchased for lease,
16    but excluding motor vehicles required to be registered  under
17    the  Illinois  Vehicle Code. Horticultural polyhouses or hoop
18    houses used for propagating, growing, or overwintering plants
19    shall be considered farm machinery and equipment  under  this
20    paragraph.   This  amendatory  Act of 1997 is exempt from the
21    provisions of Section 3-55.
22        (8)  Fuel and petroleum products sold to or  used  by  an
23    air  common  carrier, certified by the carrier to be used for
24    consumption, shipment, or  storage  in  the  conduct  of  its
25    business  as an air common carrier, for a flight destined for
26    or returning from a location or locations outside the  United
27    States  without  regard  to  previous  or subsequent domestic
28    stopovers.
29        (9)  Proceeds of  mandatory  service  charges  separately
30    stated  on  customers' bills for the purchase and consumption
31    of food and beverages, to the extent that the proceeds of the
32    service charge are in fact  turned  over  as  tips  or  as  a
33    substitute for tips to the employees who participate directly
34    in  preparing,  serving,  hosting  or cleaning up the food or
HB0521 Engrossed            -14-              LRB9001534DNmbA
 1    beverage function with respect to which the service charge is
 2    imposed.
 3        (10)  Oil field  exploration,  drilling,  and  production
 4    equipment, including (i) rigs and parts of rigs, rotary rigs,
 5    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 6    goods, including casing and drill strings,  (iii)  pumps  and
 7    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
 8    individual  replacement  part  for  oil  field   exploration,
 9    drilling,  and  production  equipment, and (vi) machinery and
10    equipment purchased for lease; but excluding  motor  vehicles
11    required to be registered under the Illinois Vehicle Code.
12        (11)  Photoprocessing  machinery and equipment, including
13    repair and replacement parts, both new  and  used,  including
14    that   manufactured   on  special  order,  certified  by  the
15    purchaser to  be  used  primarily  for  photoprocessing,  and
16    including  photoprocessing  machinery and equipment purchased
17    for lease.
18        (12)  Coal  exploration,  mining,   offhighway   hauling,
19    processing, maintenance, and reclamation equipment, including
20    replacement  parts  and  equipment,  and  including equipment
21    purchased for lease, but excluding motor vehicles required to
22    be registered under the Illinois Vehicle Code.
23        (13)  Food for human consumption that is to  be  consumed
24    off  the  premises  where  it  is  sold (other than alcoholic
25    beverages, soft drinks and food that has  been  prepared  for
26    immediate  consumption)  and prescription and nonprescription
27    medicines, drugs,  medical  appliances,  and  insulin,  urine
28    testing  materials,  syringes, and needles used by diabetics,
29    for human use, when purchased for use by a  person  receiving
30    medical assistance under Article 5 of the Illinois Public Aid
31    Code  who  resides  in a licensed long-term care facility, as
32    defined in the Nursing Home Care Act.
33        (14)  Semen used for artificial insemination of livestock
34    for direct agricultural production.
HB0521 Engrossed            -15-              LRB9001534DNmbA
 1        (15)  Horses, or interests in horses, registered with and
 2    meeting the requirements of any of  the  Arabian  Horse  Club
 3    Registry  of  America, Appaloosa Horse Club, American Quarter
 4    Horse Association, United  States  Trotting  Association,  or
 5    Jockey Club, as appropriate, used for purposes of breeding or
 6    racing for prizes.
 7        (16)  Computers and communications equipment utilized for
 8    any  hospital  purpose  and  equipment used in the diagnosis,
 9    analysis, or treatment of hospital patients sold to a  lessor
10    who leases the equipment, under a lease of one year or longer
11    executed  or  in  effect  at  the  time of the purchase, to a
12    hospital  that  has  been  issued  an  active  tax  exemption
13    identification number by the Department under Section  1g  of
14    the Retailers' Occupation Tax Act.
15        (17)  Personal  property  sold to a lessor who leases the
16    property, under a lease of one year or longer executed or  in
17    effect  at  the  time of the purchase, to a governmental body
18    that has been issued an active tax  exemption  identification
19    number  by  the Department under Section 1g of the Retailers'
20    Occupation Tax Act.
21        (18)  Beginning with taxable years  ending  on  or  after
22    December  31, 1995 and ending with taxable years ending on or
23    before December 31, 2004, personal property that  is  donated
24    for  disaster  relief  to  be  used  in  a State or federally
25    declared disaster area in Illinois or bordering Illinois by a
26    manufacturer or retailer that is registered in this State  to
27    a   corporation,   society,   association,   foundation,   or
28    institution  that  has  been  issued  a  sales  tax exemption
29    identification number by the Department that assists  victims
30    of the disaster who reside within the declared disaster area.
31        (19)  Beginning  with  taxable  years  ending on or after
32    December 31, 1995 and ending with taxable years ending on  or
33    before  December  31, 2004, personal property that is used in
34    the performance of  infrastructure  repairs  in  this  State,
HB0521 Engrossed            -16-              LRB9001534DNmbA
 1    including  but  not  limited  to municipal roads and streets,
 2    access roads, bridges,  sidewalks,  waste  disposal  systems,
 3    water  and  sewer  line  extensions,  water  distribution and
 4    purification facilities, storm water drainage  and  retention
 5    facilities, and sewage treatment facilities, resulting from a
 6    State or federally declared disaster in Illinois or bordering
 7    Illinois  when  such  repairs  are  initiated  on  facilities
 8    located  in  the declared disaster area within 6 months after
 9    the disaster.
10    (Source: P.A. 88-337; 88-480; 88-547; 88-670,  eff.  12-2-94;
11    89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;  89-349,  eff.
12    8-17-95;  89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
13    eff. 8-9-96; revised 8-21-96.)
14        Section 20.  The Retailers' Occupation Tax Act is amended
15    by changing Section 2-5 as follows:
16        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
17        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
18    the sale of the  following  tangible  personal  property  are
19    exempt from the tax imposed by this Act:
20        (1)  Farm chemicals.
21        (2)  Farm  machinery  and  equipment,  both new and used,
22    including that manufactured on special  order,  certified  by
23    the purchaser to be used primarily for production agriculture
24    or   State   or   federal  agricultural  programs,  including
25    individual replacement parts for the machinery and equipment,
26    and including machinery and equipment  purchased  for  lease,
27    but  excluding motor vehicles required to be registered under
28    the Illinois Vehicle Code. Horticultural polyhouses  or  hoop
29    houses used for propagating, growing, or overwintering plants
30    shall  be  considered farm machinery and equipment under this
31    paragraph.  This amendatory Act of 1997 is  exempt  from  the
32    provisions of Section 2-70.
HB0521 Engrossed            -17-              LRB9001534DNmbA
 1        (3)  Distillation machinery and equipment, sold as a unit
 2    or  kit, assembled or installed by the retailer, certified by
 3    the user to be used only for the production of ethyl  alcohol
 4    that  will  be  used  for  consumption  as motor fuel or as a
 5    component of motor fuel for the personal use of the user, and
 6    not subject to sale or resale.
 7        (4)  Graphic  arts  machinery  and  equipment,  including
 8    repair  and  replacement  parts,  both  new  and  used,   and
 9    including that manufactured on special order or purchased for
10    lease,  certified  by  the purchaser to be used primarily for
11    graphic arts production.
12        (5)  A motor vehicle  of  the  first  division,  a  motor
13    vehicle of the second division that is a self-contained motor
14    vehicle  designed  or permanently converted to provide living
15    quarters for  recreational,  camping,  or  travel  use,  with
16    direct  walk  through  access to the living quarters from the
17    driver's seat, or a motor vehicle of the second division that
18    is of the van configuration designed for  the  transportation
19    of not less than 7 nor more than 16 passengers, as defined in
20    Section  1-146 of the Illinois Vehicle Code, that is used for
21    automobile renting, as  defined  in  the  Automobile  Renting
22    Occupation and Use Tax Act.
23        (6)  Personal   property   sold  by  a  teacher-sponsored
24    student  organization  affiliated  with  an   elementary   or
25    secondary school located in Illinois.
26        (7)  Proceeds  of  that portion of the selling price of a
27    passenger car the sale of which is subject to the Replacement
28    Vehicle Tax.
29        (8)  Personal property sold to an  Illinois  county  fair
30    association  for  use  in conducting, operating, or promoting
31    the county fair.
32        (9)  Personal property sold to a not-for-profit music  or
33    dramatic   arts   organization  that  establishes,  by  proof
34    required by the Department by rule, that it has  received  an
HB0521 Engrossed            -18-              LRB9001534DNmbA
 1    exemption  under  Section  501(c) (3) of the Internal Revenue
 2    Code and that is organized and operated for the  presentation
 3    of live public performances of musical or theatrical works on
 4    a regular basis.
 5        (10)  Personal  property  sold by a corporation, society,
 6    association, foundation, institution, or organization,  other
 7    than  a  limited  liability  company,  that  is organized and
 8    operated as  a  not-for-profit  service  enterprise  for  the
 9    benefit  of  persons 65 years of age or older if the personal
10    property was not purchased by the enterprise for the  purpose
11    of resale by the enterprise.
12        (11)  Personal property sold to a governmental body, to a
13    corporation, society, association, foundation, or institution
14    organized and operated exclusively for charitable, religious,
15    or  educational purposes, or to a not-for-profit corporation,
16    society,    association,    foundation,    institution,    or
17    organization that has no compensated  officers  or  employees
18    and   that  is  organized  and  operated  primarily  for  the
19    recreation of persons 55 years of age  or  older.  A  limited
20    liability  company  may  qualify for the exemption under this
21    paragraph only if the limited liability company is  organized
22    and  operated  exclusively  for  educational purposes. On and
23    after July 1, 1987, however, no entity otherwise eligible for
24    this exemption shall make tax-free purchases unless it has an
25    active identification number issued by the Department.
26        (12)  Personal property sold to interstate  carriers  for
27    hire  for  use as rolling stock moving in interstate commerce
28    or to lessors under leases of one year or longer executed  or
29    in  effect at the time of purchase by interstate carriers for
30    hire for use as rolling stock moving in  interstate  commerce
31    and  equipment  operated  by  a  telecommunications provider,
32    licensed as a common carrier by  the  Federal  Communications
33    Commission,  which  is permanently installed in or affixed to
34    aircraft moving in interstate commerce.
HB0521 Engrossed            -19-              LRB9001534DNmbA
 1        (13)  Proceeds from sales to owners, lessors, or shippers
 2    of tangible personal property that is utilized by  interstate
 3    carriers  for  hire  for  use  as  rolling  stock  moving  in
 4    interstate    commerce    and   equipment   operated   by   a
 5    telecommunications provider, licensed as a common carrier  by
 6    the  Federal  Communications Commission, which is permanently
 7    installed in or affixed  to  aircraft  moving  in  interstate
 8    commerce.
 9        (14)  Machinery  and  equipment  that will be used by the
10    purchaser, or a lessee of the  purchaser,  primarily  in  the
11    process  of  manufacturing  or  assembling  tangible personal
12    property for wholesale or retail sale or lease,  whether  the
13    sale or lease is made directly by the manufacturer or by some
14    other  person,  whether the materials used in the process are
15    owned by the manufacturer or some other  person,  or  whether
16    the sale or lease is made apart from or as an incident to the
17    seller's  engaging  in  the  service  occupation of producing
18    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
19    similar  items  of no commercial value on special order for a
20    particular purchaser.
21        (15)  Proceeds of mandatory  service  charges  separately
22    stated  on  customers'  bills for purchase and consumption of
23    food and beverages, to the extent that the  proceeds  of  the
24    service  charge  are  in  fact  turned  over  as tips or as a
25    substitute for tips to the employees who participate directly
26    in preparing, serving, hosting or cleaning  up  the  food  or
27    beverage function with respect to which the service charge is
28    imposed.
29        (16)  Petroleum  products  sold  to  a  purchaser  if the
30    seller is prohibited by federal law from charging tax to  the
31    purchaser.
32        (17)  Tangible personal property sold to a common carrier
33    by rail that receives the physical possession of the property
34    in  Illinois and that transports the property, or shares with
HB0521 Engrossed            -20-              LRB9001534DNmbA
 1    another common carrier in the transportation of the property,
 2    out of Illinois on a standard uniform bill of lading  showing
 3    the seller of the property as the shipper or consignor of the
 4    property  to  a destination outside Illinois, for use outside
 5    Illinois.
 6        (18)  Legal tender,  currency,  medallions,  or  gold  or
 7    silver   coinage   issued  by  the  State  of  Illinois,  the
 8    government of the United States of America, or the government
 9    of any foreign country, and bullion.
10        (19)  Oil field  exploration,  drilling,  and  production
11    equipment, including (i) rigs and parts of rigs, rotary rigs,
12    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
13    goods, including casing and drill strings,  (iii)  pumps  and
14    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
15    individual  replacement  part  for  oil  field   exploration,
16    drilling,  and  production  equipment, and (vi) machinery and
17    equipment purchased for lease; but excluding  motor  vehicles
18    required to be registered under the Illinois Vehicle Code.
19        (20)  Photoprocessing  machinery and equipment, including
20    repair and replacement parts, both new  and  used,  including
21    that   manufactured   on  special  order,  certified  by  the
22    purchaser to  be  used  primarily  for  photoprocessing,  and
23    including  photoprocessing  machinery and equipment purchased
24    for lease.
25        (21)  Coal  exploration,  mining,   offhighway   hauling,
26    processing, maintenance, and reclamation equipment, including
27    replacement  parts  and  equipment,  and  including equipment
28    purchased for lease, but excluding motor vehicles required to
29    be registered under the Illinois Vehicle Code.
30        (22)  Fuel and petroleum products sold to or used  by  an
31    air  carrier,  certified  by  the  carrier  to  be  used  for
32    consumption,  shipment,  or  storage  in  the  conduct of its
33    business as an air common carrier, for a flight destined  for
34    or  returning from a location or locations outside the United
HB0521 Engrossed            -21-              LRB9001534DNmbA
 1    States without regard  to  previous  or  subsequent  domestic
 2    stopovers.
 3        (23)  A  transaction  in  which  the  purchase  order  is
 4    received  by  a  florist who is located outside Illinois, but
 5    who has a florist located in Illinois deliver the property to
 6    the purchaser or the purchaser's donee in Illinois.
 7        (24)  Fuel consumed or used in the  operation  of  ships,
 8    barges,  or  vessels  that  are  used primarily in or for the
 9    transportation of property or the conveyance of  persons  for
10    hire  on  rivers  bordering  on  this  State  if  the fuel is
11    delivered by the seller to the purchaser's  barge,  ship,  or
12    vessel while it is afloat upon that bordering river.
13        (25)  A motor vehicle sold in this State to a nonresident
14    even though the motor vehicle is delivered to the nonresident
15    in  this  State,  if the motor vehicle is not to be titled in
16    this State, and if a driveaway decal permit is issued to  the
17    motor  vehicle  as  provided in Section 3-603 of the Illinois
18    Vehicle Code or if  the  nonresident  purchaser  has  vehicle
19    registration  plates  to  transfer  to the motor vehicle upon
20    returning to his or her home  state.   The  issuance  of  the
21    driveaway   decal   permit   or   having   the   out-of-state
22    registration plates to be transferred is prima facie evidence
23    that the motor vehicle will not be titled in this State.
24        (26)  Semen used for artificial insemination of livestock
25    for direct agricultural production.
26        (27)  Horses, or interests in horses, registered with and
27    meeting  the  requirements  of  any of the Arabian Horse Club
28    Registry of America, Appaloosa Horse Club,  American  Quarter
29    Horse  Association,  United  States  Trotting Association, or
30    Jockey Club, as appropriate, used for purposes of breeding or
31    racing for prizes.
32        (28)  Computers and communications equipment utilized for
33    any hospital purpose and equipment  used  in  the  diagnosis,
34    analysis,  or treatment of hospital patients sold to a lessor
HB0521 Engrossed            -22-              LRB9001534DNmbA
 1    who leases the equipment, under a lease of one year or longer
 2    executed or in effect at the  time  of  the  purchase,  to  a
 3    hospital  that  has  been  issued  an  active  tax  exemption
 4    identification  number  by the Department under Section 1g of
 5    this Act.
 6        (29)  Personal property sold to a lessor who  leases  the
 7    property,  under a lease of one year or longer executed or in
 8    effect at the time of the purchase, to  a  governmental  body
 9    that  has  been issued an active tax exemption identification
10    number by the Department under Section 1g of this Act.
11        (30)  Beginning with taxable years  ending  on  or  after
12    December  31, 1995 and ending with taxable years ending on or
13    before December 31, 2004, personal property that  is  donated
14    for  disaster  relief  to  be  used  in  a State or federally
15    declared disaster area in Illinois or bordering Illinois by a
16    manufacturer or retailer that is registered in this State  to
17    a   corporation,   society,   association,   foundation,   or
18    institution  that  has  been  issued  a  sales  tax exemption
19    identification number by the Department that assists  victims
20    of the disaster who reside within the declared disaster area.
21        (31)  Beginning  with  taxable  years  ending on or after
22    December 31, 1995 and ending with taxable years ending on  or
23    before  December  31, 2004, personal property that is used in
24    the performance of  infrastructure  repairs  in  this  State,
25    including  but  not  limited  to municipal roads and streets,
26    access roads, bridges,  sidewalks,  waste  disposal  systems,
27    water  and  sewer  line  extensions,  water  distribution and
28    purification facilities, storm water drainage  and  retention
29    facilities, and sewage treatment facilities, resulting from a
30    State or federally declared disaster in Illinois or bordering
31    Illinois  when  such  repairs  are  initiated  on  facilities
32    located  in  the declared disaster area within 6 months after
33    the disaster.
34    (Source: P.A. 88-337; 88-480; 88-547; 88-670,  eff.  12-2-94;
HB0521 Engrossed            -23-              LRB9001534DNmbA
 1    89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;  89-349,  eff.
 2    8-17-95;  89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
 3    eff. 8-9-96; revised 8-21-96.)

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