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90_HB0601
New Act
30 ILCS 105/6z-18 from Ch. 127, par. 142z-18
30 ILCS 105/6z-20 from Ch. 127, par. 142z-20
35 ILCS 105/3-5 from Ch. 120, par. 439.3-5
35 ILCS 120/2-5 from Ch. 120, par. 441-5
Creates the Automobile Leasing Occupation and Use Tax Act
to impose a tax at the rate of 6.25% on the leasing of
automobiles for a period of more than one year. Provides that
tax proceeds shall be deposited into the Local Government Tax
Fund and the County and Mass Transit District Fund. Amends
the Use Tax Act and the Retailers' Occupation Tax Act to
exempt the leasing of automobiles and the use of leased
automobiles from taxation under those Acts. Provides that
lessors who claim not to be engaged in the auto leasing
business for purposes of collecting the Automobile Leasing
Occupation and Use Tax may not claim an exemption under the
Retailers' Occupation Tax Act unless they register with the
Department and pay tax under the Automobile Leasing
Occupation and Use Tax. Amends the State Finance Act to
provide for distribution of money in the Local Government Tax
Fund and the County and Mass Transit District Fund from the
Automobile Leasing Occupation and Use Tax to local
governments where the lease transactions occurred.
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1 AN ACT in relation to taxation of auto leases.
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
5 Automobile Leasing Occupation and Use Tax Act.
6 Section 5. Definitions. "Leasing" means any transfer of
7 the possession or right to possession of an automobile to a
8 user for a valuable consideration for a period of more than 1
9 year.
10 "Automobile" means any motor vehicle of the first
11 division, a motor vehicle of the second division that is a
12 self-contained motor vehicle designed or permanently
13 converted to provide living quarters for recreational,
14 camping or travel use, with direct walk through access to the
15 living quarters from the driver's seat, or a motor vehicle of
16 the second division that is of the van configuration designed
17 for the transportation of not less than 7 nor more than 16
18 passengers, as defined in Section 1-146 of the Illinois
19 Vehicle Code.
20 "Department" means the Department of Revenue.
21 "Person" means any natural individual, firm, partnership,
22 association, joint stock company, joint venture, public or
23 private corporation, limited liability company, or a
24 receiver, executor, trustee, conservator, or other
25 representatives appointed by order of any court.
26 "Lessor" means any person, firm, corporation, or
27 association engaged in this State in the business of leasing
28 automobiles for a period of more than one year to users. For
29 this purpose, the objective of making a profit is not
30 necessary to make the leasing activity a business.
31 "Lessee" means any user to whom the possession, or the
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1 right to possession, of an automobile is transferred for a
2 period of more than one year for a valuable consideration
3 that is paid by the lessee or by someone else.
4 "Gross receipts" from the leasing of tangible personal
5 property or "lease payments" means the total leasing price.
6 In the case of leasing transactions in which the
7 consideration is paid to the lessor on an installment basis,
8 the amounts of the payments shall be included by the lessor
9 in gross receipts or lease payments only as and when payments
10 are received by the lessor.
11 "Leasing price" or "lease price" means the consideration
12 for leasing an automobile valued in money, whether received
13 in money or otherwise (including cash, credits, property, and
14 services) and shall be determined without any deduction on
15 account of the cost of the property leased, the cost of
16 materials used, labor or service cost, or any other expense
17 whatsoever, and includes charges added for capital
18 contributions and up front payments, but does not include
19 charges that are added by lessors on account of the lessor's
20 tax liability under this Act or any other State of federal
21 law or on account of the lessor's duty to collect, from the
22 lessee, the tax that is imposed by Section 15 of this Act.
23 The phrase "leasing price" or "lease price" does not include
24 charges added on account of the lessor's tax liability under
25 the Chicago Transaction Tax or any other home rule leasing
26 tax on automobiles.
27 Section 10. Occupation tax imposed; rate. A tax is
28 imposed upon persons engaged in this State in the business of
29 leasing automobiles in Illinois at the rate of 6.25% of the
30 gross receipts received from that business. However, the tax
31 is not imposed if the lessor is prohibited by federal law
32 from charging tax to the lessee. Every person engaged in this
33 State in the business of leasing automobiles shall apply to
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1 the Department (upon a form prescribed and furnished by the
2 Department) for a certificate of registration under this Act.
3 The certificate of registration that is issued by the
4 Department to a retailer under the Retailers' Occupation Tax
5 Act shall permit the lessor to engage in a business that is
6 taxable under this Section without registering separately
7 with the Department.
8 The Department has power to administer and enforce this
9 Section, to collect all taxes and penalties due under this
10 Section, to dispose of taxes and penalties so collected in
11 the manner provided in this Act, and to determine all rights
12 to credit memoranda arising on account of the erroneous
13 payment of tax or penalty under this Act. In the
14 administration of, and compliance with, this Section, the
15 Department and persons who are subject to this Section shall
16 have the same rights, remedies, privileges, immunities,
17 powers and duties, shall be subject to the same conditions,
18 restrictions, limitations, penalties, and definitions of
19 terms, and shall employ the same modes of procedure as are
20 prescribed in Sections 1, 1a, 2, 2-10 (in respect to all
21 provisions therein other than the State rate of tax), 2-40,
22 2a, 2b, 2c, 3 (except provisions relating to transaction
23 returns and quarter monthly payments), 4, 5, 5a, 5b, 5c, 5d,
24 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12
25 and 13 of the Retailers' Occupation Tax Act and Section 3-7
26 of the Uniform Penalty and Interest Act as fully as if those
27 provisions were set forth in this Section.
28 Allocation of Automobile Leasing Occupation and Use Tax
29 attributable to units of local government shall be determined
30 by the location in this State from which an automobile is
31 removed from a retailer's inventory for subsequent lease
32 under this Act or, when an automobile is removed from a
33 retailer's inventory outside of this State, by the location
34 at which the first lessor executes the lease agreement,
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1 irrespective of subsequent assignments of the lease. Lessors
2 required to file returns under this Act must specifically
3 identify receipts from lease transactions that are
4 attributable to each unit of local government as determined
5 in this Section.
6 To the extent not inconsistent with this Act, references
7 in the incorporated Sections of the Retailers' Occupation Tax
8 Act to retailers, to sellers, or to persons engaged in the
9 business of selling tangible personal property shall mean
10 lessors as defined in this Act. References in those
11 incorporated Sections to sales of tangible personal property
12 shall mean leases of tangible personal property subject to
13 this Act. References in those incorporated Sections to
14 selling price of tangible personal property shall mean
15 leasing price of tangible personal property subject to this
16 Act.
17 Section 15. Use tax imposed; rate. A tax is imposed upon
18 the privilege of using, in this State, an automobile that is
19 leased from a lessor. The tax is at the rate of 6.25% of the
20 leasing price of the automobile paid to the lessor under any
21 lease agreement. However, the tax is not imposed if the
22 lessor is prohibited by federal law from charging tax to the
23 lessee.
24 The tax imposed by this Section shall be collected from
25 the lessee by a lessor maintaining a place of business in
26 this State and remitted to the Department.
27 The tax imposed by this Section and not paid to a lessor
28 pursuant to the preceding paragraph of this Section shall be
29 paid to the Department directly by any person using the
30 automobile within this State.
31 Lessors shall collect the tax from lessees by adding the
32 tax to the lease price of the automobile, when leased for
33 use, in the manner prescribed by the Department. The
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1 Department has the power to adopt and promulgate reasonable
2 rules for the adding of the tax by lessors to lease prices by
3 prescribing bracket systems for the purpose of enabling
4 lessors to add and collect, as far as practicable, the amount
5 of the tax.
6 The tax imposed by this Section shall, when collected, be
7 stated as a distinct item separate and apart from the lease
8 price of the automobile.
9 The Department has full power to administer and enforce
10 this Section; to collect all taxes, penalties, and interest
11 due under this Section; to dispose of taxes, penalties, and
12 interest so collected in the manner provided in this Act; and
13 to determine all rights to credit memoranda or refunds
14 arising on account of the erroneous payment of tax, penalty,
15 or interest under this Section. In the administration of, and
16 compliance with, this Section, the Department and persons who
17 are subject to this Section shall have the same rights,
18 remedies, privileges, immunities, powers, and duties, shall
19 be subject to the same conditions, restrictions, limitations,
20 penalties, and definitions of terms, and shall employ the
21 same modes of procedure as are prescribed in Sections 2, 3,
22 3-10, 3-45, 3-55, 3-65, 3a, 4, 6, 7, 8, 9 (except provisions
23 relating to transaction returns and quarter monthly
24 payments), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21 and
25 22 of the Use Tax Act, and are not inconsistent with this
26 Section, as fully as if those provisions were set forth in
27 this Section.
28 To the extent not inconsistent with this Act, references
29 in the incorporated Sections of the Use Tax Act to retailers,
30 to sellers, or to persons engaged in the business of selling
31 tangible personal property shall mean lessors as defined in
32 this Act. References in those incorporated Sections to sales
33 of tangible personal property shall mean leases of tangible
34 personal property subject to this Act. References in those
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1 incorporated Sections to selling price of tangible personal
2 property shall mean leasing price of tangible personal
3 property subject to this Act.
4 Section 45. The State Finance Act is amended by changing
5 Sections 6z-18 and 6z-20 as follows:
6 (30 ILCS 105/6z-18) (from Ch. 127, par. 142z-18)
7 Sec. 6z-18. A portion of the money paid into the Local
8 Government Tax Fund from sales of food for human consumption
9 which is to be consumed off the premises where it is sold
10 (other than alcoholic beverages, soft drinks and food which
11 has been prepared for immediate consumption) and prescription
12 and nonprescription medicines, drugs, medical appliances and
13 insulin, urine testing materials, syringes and needles used
14 by diabetics, which occurred in municipalities, shall be
15 distributed to each municipality based upon the sales which
16 occurred in that municipality. The remainder shall be
17 distributed to each county based upon the sales which
18 occurred in the unincorporated area of that county.
19 A portion of the money paid into the Local Government Tax
20 Fund from the 6.25% general use tax rate on the selling price
21 of tangible personal property which is purchased outside
22 Illinois at retail from a retailer and which is titled or
23 registered by any agency of this State's government, and from
24 the 6.25% leasing use tax rate on automobiles leased from a
25 lessor outside of Illinois and removed from a retailer's
26 inventory outside of Illinois and which are titled or
27 registered in this State, shall be distributed to
28 municipalities as provided in this paragraph. Each
29 municipality shall receive the amount attributable to sales
30 for which Illinois addresses for titling or registration
31 purposes are given as being in such municipality. The
32 remainder of the money paid into the Local Government Tax
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1 Fund from such sales shall be distributed to counties. Each
2 county shall receive the amount attributable to sales for
3 which Illinois addresses for titling or registration purposes
4 are given as being located in the unincorporated area of such
5 county.
6 A portion of the money paid into the Local Government Tax
7 Fund from the rate on leases of titled and registered
8 tangible personal property subject to the Automobile Leasing
9 Occupation and Use Tax Act, attributed to municipalities,
10 shall be distributed to each municipality based upon lease
11 transactions subject to the Automobile Leasing Occupation and
12 Use Tax Act attributed to that municipality. The remainder
13 shall be distributed to each county, based upon the lease
14 transactions subject to the Automobile Leasing Occupation and
15 Use Tax Act attributed to the unincorporated area of that
16 county.
17 A portion of the money paid into the Local Government Tax
18 Fund from the 6.25% general rate on sales subject to taxation
19 under the Retailers' Occupation Tax Act and the Service
20 Occupation Tax Act, which occurred in municipalities, shall
21 be distributed to each municipality, based upon the sales
22 which occurred in that municipality. The remainder shall be
23 distributed to each county, based upon the sales which
24 occurred in the unincorporated area of such county.
25 Whenever the Department determines that a refund of money
26 paid into the Local Government Tax Fund should be made to a
27 claimant instead of issuing a credit memorandum, the
28 Department shall notify the State Comptroller, who shall
29 cause the order to be drawn for the amount specified, and to
30 the person named, in such notification from the Department.
31 Such refund shall be paid by the State Treasurer out of the
32 Local Government Tax Fund.
33 On or before the 25th day of each calendar month, the
34 Department shall prepare and certify to the Comptroller the
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1 disbursement of stated sums of money to named municipalities
2 and counties, the municipalities and counties to be those
3 entitled to distribution of taxes or penalties paid to the
4 Department during the second preceding calendar month. The
5 amount to be paid to each municipality or county shall be the
6 amount (not including credit memoranda) collected during the
7 second preceding calendar month by the Department and paid
8 into the Local Government Tax Fund, plus an amount the
9 Department determines is necessary to offset any amounts
10 which were erroneously paid to a different taxing body, and
11 not including an amount equal to the amount of refunds made
12 during the second preceding calendar month by the Department,
13 and not including any amount which the Department determines
14 is necessary to offset any amounts which are payable to a
15 different taxing body but were erroneously paid to the
16 municipality or county. Within 10 days after receipt, by the
17 Comptroller, of the disbursement certification to the
18 municipalities and counties, provided for in this Section to
19 be given to the Comptroller by the Department, the
20 Comptroller shall cause the orders to be drawn for the
21 respective amounts in accordance with the directions
22 contained in such certification.
23 When certifying the amount of monthly disbursement to a
24 municipality or county under this Section, the Department
25 shall increase or decrease that amount by an amount necessary
26 to offset any misallocation of previous disbursements. The
27 offset amount shall be the amount erroneously disbursed
28 within the 6 months preceding the time a misallocation is
29 discovered.
30 The provisions directing the distributions from the
31 special fund in the State Treasury provided for in this
32 Section shall constitute an irrevocable and continuing
33 appropriation of all amounts as provided herein. The State
34 Treasurer and State Comptroller are hereby authorized to make
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1 distributions as provided in this Section.
2 In construing any development, redevelopment, annexation,
3 preannexation or other lawful agreement in effect prior to
4 September 1, 1990, which describes or refers to receipts from
5 a county or municipal retailers' occupation tax, use tax or
6 service occupation tax which now cannot be imposed, such
7 description or reference shall be deemed to include the
8 replacement revenue for such abolished taxes, distributed
9 from the Local Government Tax Fund.
10 (Source: P.A. 86-928; 86-1481.)
11 (30 ILCS 105/6z-20) (from Ch. 127, par. 142z-20)
12 Sec. 6z-20. Of the money received from the 6.25% general
13 rate on sales subject to taxation under the Retailers'
14 Occupation Tax Act and Service Occupation Tax Act and paid
15 into the County and Mass Transit District Fund, distribution
16 to the Regional Transportation Authority tax fund, created
17 pursuant to Section 4.03 of the Regional Transportation
18 Authority Act, for deposit therein shall be made based upon
19 the retail sales occurring in a county having more than
20 3,000,000 inhabitants. The remainder shall be distributed to
21 each county having 3,000,000 or fewer inhabitants based upon
22 the retail sales occurring in each such county.
23 Of the money received from the rate on leases of titled
24 and registered tangible personal property subject to the
25 Automobile Leasing Occupation and Use Tax Act and paid into
26 the County and Mass Transit District Fund, distribution to
27 the Regional Transportation Authority tax fund, created under
28 Section 4.03 of the Regional Transportation Authority Act,
29 for deposit therein shall be made based upon the lease
30 transactions subject to the Automobile Leasing Occupation and
31 Use Tax Act attributable to a county having more than
32 3,000,000 inhabitants. The remainder shall be distributed to
33 each county having 3,000,000 or fewer inhabitants based upon
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1 the lease transactions subject to the Automobile Leasing
2 Occupation and Use Tax Act attributable to that county.
3 Of the money received from the 6.25% general use tax rate
4 on tangible personal property which is purchased outside
5 Illinois at retail from a retailer and which is titled or
6 registered by any agency of this State's government, and from
7 the 6.25% leasing use tax rate on automobiles leased from a
8 lessor outside of Illinois and removed from a retailer's
9 inventory outside of Illinois and which are titled or
10 registered in this State, and paid into the County and Mass
11 Transit District Fund, the amount for which Illinois
12 addresses for titling or registration purposes are given as
13 being in each county having more than 3,000,000 inhabitants
14 shall be distributed into the Regional Transportation
15 Authority tax fund, created pursuant to Section 4.03 of the
16 Regional Transportation Authority Act. The remainder of the
17 money paid from such sales shall be distributed to each
18 county based on sales for which Illinois addresses for
19 titling or registration purposes are given as being located
20 in the county. Any money paid into the Regional
21 Transportation Authority Occupation and Use Tax Replacement
22 Fund from the County and Mass Transit District Fund prior to
23 January 14, 1991, which has not been paid to the Authority
24 prior to that date, shall be transferred to the Regional
25 Transportation Authority tax fund.
26 Whenever the Department determines that a refund of money
27 paid into the County and Mass Transit District Fund should be
28 made to a claimant instead of issuing a credit memorandum,
29 the Department shall notify the State Comptroller, who shall
30 cause the order to be drawn for the amount specified, and to
31 the person named, in such notification from the Department.
32 Such refund shall be paid by the State Treasurer out of the
33 County and Mass Transit District Fund.
34 On or before the 25th day of each calendar month, the
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1 Department shall prepare and certify to the Comptroller the
2 disbursement of stated sums of money to the Regional
3 Transportation Authority and to named counties, the counties
4 to be those entitled to distribution, as hereinabove
5 provided, of taxes or penalties paid to the Department during
6 the second preceding calendar month. The amount to be paid
7 to the Regional Transportation Authority and each county
8 having 3,000,000 or fewer inhabitants shall be the amount
9 (not including credit memoranda) collected during the second
10 preceding calendar month by the Department and paid into the
11 County and Mass Transit District Fund, plus an amount the
12 Department determines is necessary to offset any amounts
13 which were erroneously paid to a different taxing body, and
14 not including an amount equal to the amount of refunds made
15 during the second preceding calendar month by the Department,
16 and not including any amount which the Department determines
17 is necessary to offset any amounts which were payable to a
18 different taxing body but were erroneously paid to the
19 Regional Transportation Authority or county. Within 10 days
20 after receipt, by the Comptroller, of the disbursement
21 certification to the Regional Transportation Authority and
22 counties, provided for in this Section to be given to the
23 Comptroller by the Department, the Comptroller shall cause
24 the orders to be drawn for the respective amounts in
25 accordance with the directions contained in such
26 certification.
27 When certifying the amount of a monthly disbursement to
28 the Regional Transportation Authority or to a county under
29 this Section, the Department shall increase or decrease that
30 amount by an amount necessary to offset any misallocation of
31 previous disbursements. The offset amount shall be the
32 amount erroneously disbursed within the 6 months preceding
33 the time a misallocation is discovered.
34 The provisions directing the distributions from the
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1 special fund in the State Treasury provided for in this
2 Section and from the Regional Transportation Authority tax
3 fund created by Section 4.03 of the Regional Transportation
4 Authority Act shall constitute an irrevocable and continuing
5 appropriation of all amounts as provided herein. The State
6 Treasurer and State Comptroller are hereby authorized to make
7 distributions as provided in this Section.
8 In construing any development, redevelopment, annexation,
9 preannexation or other lawful agreement in effect prior to
10 September 1, 1990, which describes or refers to receipts from
11 a county or municipal retailers' occupation tax, use tax or
12 service occupation tax which now cannot be imposed, such
13 description or reference shall be deemed to include the
14 replacement revenue for such abolished taxes, distributed
15 from the County and Mass Transit District Fund or Local
16 Government Distributive Fund, as the case may be.
17 (Source: P.A. 86-928; 86-1481; 87-435.)
18 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
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 not-for-profit
29 Illinois county fair association for use in conducting,
30 operating, or promoting the county fair.
31 (3) Personal property purchased by a not-for-profit
32 music or dramatic arts organization that establishes, by
33 proof required by the Department by rule, that it has
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1 received an exemption under Section 501(c)(3) of the Internal
2 Revenue Code and that is organized and operated for the
3 presentation of live public performances of musical or
4 theatrical works on a regular basis.
5 (4) Personal property purchased by a governmental body,
6 by a corporation, society, association, foundation, or
7 institution organized and operated exclusively for
8 charitable, religious, or educational purposes, or by a
9 not-for-profit corporation, society, association, foundation,
10 institution, or organization that has no compensated officers
11 or employees and that is organized and operated primarily for
12 the recreation of persons 55 years of age or older. A limited
13 liability company may qualify for the exemption under this
14 paragraph only if the limited liability company is organized
15 and operated exclusively for educational purposes. On and
16 after July 1, 1987, however, no entity otherwise eligible for
17 this exemption shall make tax-free purchases unless it has an
18 active exemption identification number issued by the
19 Department.
20 (5) A passenger car that is a replacement vehicle to the
21 extent that the purchase price of the car is subject to the
22 Replacement Vehicle Tax.
23 (6) Graphic arts machinery and equipment, including
24 repair and replacement parts, both new and used, and
25 including that manufactured on special order, certified by
26 the purchaser to be used primarily for graphic arts
27 production, and including machinery and equipment purchased
28 for lease.
29 (7) Farm chemicals.
30 (8) Legal tender, currency, medallions, or gold or
31 silver coinage issued by the State of Illinois, the
32 government of the United States of America, or the government
33 of any foreign country, and bullion.
34 (9) Personal property purchased from a teacher-sponsored
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1 student organization affiliated with an elementary or
2 secondary school located in Illinois.
3 (10) A motor vehicle of the first division, a motor
4 vehicle of the second division that is a self-contained motor
5 vehicle designed or permanently converted to provide living
6 quarters for recreational, camping, or travel use, with
7 direct walk through to the living quarters from the driver's
8 seat, or a motor vehicle of the second division that is of
9 the van configuration designed for the transportation of not
10 less than 7 nor more than 16 passengers, as defined in
11 Section 1-146 of the Illinois Vehicle Code, that is used for
12 automobile renting, as defined in the Automobile Renting
13 Occupation and Use Tax Act, or that is used for automobile
14 leasing as defined in the Automobile Leasing Occupation and
15 Use Tax Act. Lessors who claim not be engaged in Illinois in
16 the business of leasing automobiles for the purpose of
17 collecting and remitting Automobile Leasing Occupation and
18 Use Tax may not claim this exemption unless they voluntarily
19 register with the Department and collect and remit Automobile
20 Leasing Occupation and Use Tax on vehicles which they
21 purchase, lease, or register in Illinois.
22 (11) Farm machinery and equipment, both new and used,
23 including that manufactured on special order, certified by
24 the purchaser to be used primarily for production agriculture
25 or State or federal agricultural programs, including
26 individual replacement parts for the machinery and equipment,
27 and including machinery and equipment purchased for lease,
28 but excluding motor vehicles required to be registered under
29 the Illinois Vehicle Code.
30 (12) 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 (13) Proceeds of mandatory service charges separately
4 stated on customers' bills for the purchase and consumption
5 of food and beverages purchased at retail from a retailer, to
6 the extent that the proceeds of the service charge are in
7 fact turned over as tips or as a substitute for tips to the
8 employees who participate directly in preparing, serving,
9 hosting or cleaning up the food or beverage function with
10 respect to which the service charge is imposed.
11 (14) Oil field exploration, drilling, and production
12 equipment, including (i) rigs and parts of rigs, rotary rigs,
13 cable tool rigs, and workover rigs, (ii) pipe and tubular
14 goods, including casing and drill strings, (iii) pumps and
15 pump-jack units, (iv) storage tanks and flow lines, (v) any
16 individual replacement part for oil field exploration,
17 drilling, and production equipment, and (vi) machinery and
18 equipment purchased for lease; but excluding motor vehicles
19 required to be registered under the Illinois Vehicle Code.
20 (15) Photoprocessing machinery and equipment, including
21 repair and replacement parts, both new and used, including
22 that manufactured on special order, certified by the
23 purchaser to be used primarily for photoprocessing, and
24 including photoprocessing machinery and equipment purchased
25 for lease.
26 (16) Coal exploration, mining, offhighway hauling,
27 processing, maintenance, and reclamation equipment, including
28 replacement parts and equipment, and including equipment
29 purchased for lease, but excluding motor vehicles required to
30 be registered under the Illinois Vehicle Code.
31 (17) Distillation machinery and equipment, sold as a
32 unit or kit, assembled or installed by the retailer,
33 certified by the user to be used only for the production of
34 ethyl alcohol that will be used for consumption as motor fuel
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1 or as a component of motor fuel for the personal use of the
2 user, and not subject to sale or resale.
3 (18) Manufacturing and assembling machinery and
4 equipment used primarily in the process of manufacturing or
5 assembling tangible personal property for wholesale or retail
6 sale or lease, whether that sale or lease is made directly by
7 the manufacturer or by some other person, whether the
8 materials used in the process are owned by the manufacturer
9 or some other person, or whether that sale or lease is made
10 apart from or as an incident to the seller's engaging in the
11 service occupation of producing machines, tools, dies, jigs,
12 patterns, gauges, or other similar items of no commercial
13 value on special order for a particular purchaser.
14 (19) Personal property delivered to a purchaser or
15 purchaser's donee inside Illinois when the purchase order for
16 that personal property was received by a florist located
17 outside Illinois who has a florist located inside Illinois
18 deliver the personal property.
19 (20) Semen used for artificial insemination of livestock
20 for direct agricultural production.
21 (21) Horses, or interests in horses, registered with and
22 meeting the requirements of any of the Arabian Horse Club
23 Registry of America, Appaloosa Horse Club, American Quarter
24 Horse Association, United States Trotting Association, or
25 Jockey Club, as appropriate, used for purposes of breeding or
26 racing for prizes.
27 (22) Computers and communications equipment utilized
28 for any hospital purpose and equipment used in the diagnosis,
29 analysis, or treatment of hospital patients purchased by a
30 lessor who leases the equipment, under a lease of one year or
31 longer executed or in effect at the time the lessor would
32 otherwise be subject to the tax imposed by this Act, to a
33 hospital that has been issued an active tax exemption
34 identification number by the Department under Section 1g of
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1 the Retailers' Occupation Tax Act. If the equipment is
2 leased in a manner that does not qualify for this exemption
3 or is used in any other non-exempt manner, the lessor shall
4 be liable for the tax imposed under this Act or the Service
5 Use Tax Act, as the case may be, based on the fair market
6 value of the property at the time the non-qualifying use
7 occurs. No lessor shall collect or attempt to collect an
8 amount (however designated) that purports to reimburse that
9 lessor for the tax imposed by this Act or the Service Use Tax
10 Act, as the case may be, if the tax has not been paid by the
11 lessor. If a lessor improperly collects any such amount from
12 the lessee, the lessee shall have a legal right to claim a
13 refund of that amount from the lessor. If, however, that
14 amount is not refunded to the lessee for any reason, the
15 lessor is liable to pay that amount to the Department.
16 (23) Personal property purchased by a lessor who leases
17 the property, under a lease of one year or longer executed
18 or in effect at the time the lessor would otherwise be
19 subject to the tax imposed by this Act, to a governmental
20 body that has been issued an active sales tax exemption
21 identification number by the Department under Section 1g of
22 the Retailers' Occupation Tax Act. If the property is leased
23 in a manner that does not qualify for this exemption or used
24 in any other non-exempt manner, the lessor shall be liable
25 for the tax imposed under this Act or the Service Use Tax
26 Act, as the case may be, based on the fair market value of
27 the property at the time the non-qualifying use occurs. No
28 lessor shall collect or attempt to collect an amount (however
29 designated) that purports to reimburse that lessor for the
30 tax imposed by this Act or the Service Use Tax Act, as the
31 case may be, if the tax has not been paid by the lessor. If
32 a lessor improperly collects any such amount from the lessee,
33 the lessee shall have a legal right to claim a refund of that
34 amount from the lessor. If, however, that amount is not
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1 refunded to the lessee for any reason, the lessor is liable
2 to pay that amount to the Department.
3 (24) Beginning with taxable years ending on or after
4 December 31, 1995 and ending with taxable years ending on or
5 before December 31, 2004, personal property that is donated
6 for disaster relief to be used in a State or federally
7 declared disaster area in Illinois or bordering Illinois by a
8 manufacturer or retailer that is registered in this State to
9 a corporation, society, association, foundation, or
10 institution that has been issued a sales tax exemption
11 identification number by the Department that assists victims
12 of the disaster who reside within the declared disaster area.
13 (25) Beginning with taxable years ending on or after
14 December 31, 1995 and ending with taxable years ending on or
15 before December 31, 2004, personal property that is used in
16 the performance of infrastructure repairs in this State,
17 including but not limited to municipal roads and streets,
18 access roads, bridges, sidewalks, waste disposal systems,
19 water and sewer line extensions, water distribution and
20 purification facilities, storm water drainage and retention
21 facilities, and sewage treatment facilities, resulting from a
22 State or federally declared disaster in Illinois or bordering
23 Illinois when such repairs are initiated on facilities
24 located in the declared disaster area within 6 months after
25 the disaster.
26 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
27 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
28 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
29 eff. 8-9-96; revised 8-21-96.)
30 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
31 Sec. 2-5. Exemptions. Gross receipts from proceeds from
32 the sale of the following tangible personal property are
33 exempt from the tax imposed by this Act:
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1 (1) Farm chemicals.
2 (2) Farm machinery and equipment, both new and used,
3 including that manufactured on special order, certified by
4 the purchaser to be used primarily for production agriculture
5 or State or federal agricultural programs, including
6 individual replacement parts for the machinery and equipment,
7 and including machinery and equipment purchased for lease,
8 but excluding motor vehicles required to be registered under
9 the Illinois Vehicle Code.
10 (3) Distillation machinery and equipment, sold as a unit
11 or kit, assembled or installed by the retailer, certified by
12 the user to be used only for the production of ethyl alcohol
13 that will be used for consumption as motor fuel or as a
14 component of motor fuel for the personal use of the user, and
15 not subject to sale or resale.
16 (4) Graphic arts machinery and equipment, including
17 repair and replacement parts, both new and used, and
18 including that manufactured on special order or purchased for
19 lease, certified by the purchaser to be used primarily for
20 graphic arts production.
21 (5) A motor vehicle of the first division, a motor
22 vehicle of the second division that is a self-contained motor
23 vehicle designed or permanently converted to provide living
24 quarters for recreational, camping, or travel use, with
25 direct walk through access to the living quarters from the
26 driver's seat, or a motor vehicle of the second division that
27 is of the van configuration designed for the transportation
28 of not less than 7 nor more than 16 passengers, as defined in
29 Section 1-146 of the Illinois Vehicle Code, that is used for
30 automobile renting, as defined in the Automobile Renting
31 Occupation and Use Tax Act, or that is used for automobile
32 leasing as defined in the Automobile Leasing Occupation and
33 Use Tax Act. Lessors who claim not be engaged in Illinois in
34 the business of leasing automobiles for the purpose of
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1 collecting and remitting Automobile Leasing Occupation and
2 Use Tax may not claim this exemption unless they voluntarily
3 register with the Department and collect and remit Automobile
4 Leasing Occupation and Use Tax on vehicles which they
5 purchase, lease, or register in Illinois.
6 (6) Personal property sold by a teacher-sponsored
7 student organization affiliated with an elementary or
8 secondary school located in Illinois.
9 (7) Proceeds of that portion of the selling price of a
10 passenger car the sale of which is subject to the Replacement
11 Vehicle Tax.
12 (8) Personal property sold to an Illinois county fair
13 association for use in conducting, operating, or promoting
14 the county fair.
15 (9) Personal property sold to a not-for-profit music or
16 dramatic arts organization that establishes, by proof
17 required by the Department by rule, that it has received an
18 exemption under Section 501(c) (3) of the Internal Revenue
19 Code and that is organized and operated for the presentation
20 of live public performances of musical or theatrical works on
21 a regular basis.
22 (10) Personal property sold by a corporation, society,
23 association, foundation, institution, or organization, other
24 than a limited liability company, that is organized and
25 operated as a not-for-profit service enterprise for the
26 benefit of persons 65 years of age or older if the personal
27 property was not purchased by the enterprise for the purpose
28 of resale by the enterprise.
29 (11) Personal property sold to a governmental body, to a
30 corporation, society, association, foundation, or institution
31 organized and operated exclusively for charitable, religious,
32 or educational purposes, or to a not-for-profit corporation,
33 society, association, foundation, institution, or
34 organization that has no compensated officers or employees
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1 and that is organized and operated primarily for the
2 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 identification number issued by the Department.
9 (12) Personal property sold to interstate carriers for
10 hire for use as rolling stock moving in interstate commerce
11 or to lessors under leases of one year or longer executed or
12 in effect at the time of purchase by interstate carriers for
13 hire for use as rolling stock moving in interstate commerce
14 and equipment operated by a telecommunications provider,
15 licensed as a common carrier by the Federal Communications
16 Commission, which is permanently installed in or affixed to
17 aircraft moving in interstate commerce.
18 (13) Proceeds from sales to owners, lessors, or shippers
19 of tangible personal property that is utilized by interstate
20 carriers for hire for use as rolling stock moving in
21 interstate commerce and equipment operated by a
22 telecommunications provider, licensed as a common carrier by
23 the Federal Communications Commission, which is permanently
24 installed in or affixed to aircraft moving in interstate
25 commerce.
26 (14) Machinery and equipment that will be used by the
27 purchaser, or a lessee of the purchaser, primarily in the
28 process of manufacturing or assembling tangible personal
29 property for wholesale or retail sale or lease, whether the
30 sale or lease is made directly by the manufacturer or by some
31 other person, whether the materials used in the process are
32 owned by the manufacturer or some other person, or whether
33 the sale or lease is made apart from or as an incident to the
34 seller's engaging in the service occupation of producing
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1 machines, tools, dies, jigs, patterns, gauges, or other
2 similar items of no commercial value on special order for a
3 particular purchaser.
4 (15) Proceeds of mandatory service charges separately
5 stated on customers' bills for purchase and consumption of
6 food and beverages, to the extent that the proceeds of the
7 service charge are in fact turned over as tips or as a
8 substitute for tips to the employees who participate directly
9 in preparing, serving, hosting or cleaning up the food or
10 beverage function with respect to which the service charge is
11 imposed.
12 (16) Petroleum products sold to a purchaser if the
13 seller is prohibited by federal law from charging tax to the
14 purchaser.
15 (17) Tangible personal property sold to a common carrier
16 by rail that receives the physical possession of the property
17 in Illinois and that transports the property, or shares with
18 another common carrier in the transportation of the property,
19 out of Illinois on a standard uniform bill of lading showing
20 the seller of the property as the shipper or consignor of the
21 property to a destination outside Illinois, for use outside
22 Illinois.
23 (18) Legal tender, currency, medallions, or gold or
24 silver coinage issued by the State of Illinois, the
25 government of the United States of America, or the government
26 of any foreign country, and bullion.
27 (19) Oil field exploration, drilling, and production
28 equipment, including (i) rigs and parts of rigs, rotary rigs,
29 cable tool rigs, and workover rigs, (ii) pipe and tubular
30 goods, including casing and drill strings, (iii) pumps and
31 pump-jack units, (iv) storage tanks and flow lines, (v) any
32 individual replacement part for oil field exploration,
33 drilling, and production equipment, and (vi) machinery and
34 equipment purchased for lease; but excluding motor vehicles
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1 required to be registered under the Illinois Vehicle Code.
2 (20) Photoprocessing machinery and equipment, including
3 repair and replacement parts, both new and used, including
4 that manufactured on special order, certified by the
5 purchaser to be used primarily for photoprocessing, and
6 including photoprocessing machinery and equipment purchased
7 for lease.
8 (21) Coal exploration, mining, offhighway hauling,
9 processing, maintenance, and reclamation equipment, including
10 replacement parts and equipment, and including equipment
11 purchased for lease, but excluding motor vehicles required to
12 be registered under the Illinois Vehicle Code.
13 (22) Fuel and petroleum products sold to or used by an
14 air carrier, certified by the carrier to be used for
15 consumption, shipment, or storage in the conduct of its
16 business as an air common carrier, for a flight destined for
17 or returning from a location or locations outside the United
18 States without regard to previous or subsequent domestic
19 stopovers.
20 (23) A transaction in which the purchase order is
21 received by a florist who is located outside Illinois, but
22 who has a florist located in Illinois deliver the property to
23 the purchaser or the purchaser's donee in Illinois.
24 (24) Fuel consumed or used in the operation of ships,
25 barges, or vessels that are used primarily in or for the
26 transportation of property or the conveyance of persons for
27 hire on rivers bordering on this State if the fuel is
28 delivered by the seller to the purchaser's barge, ship, or
29 vessel while it is afloat upon that bordering river.
30 (25) A motor vehicle sold in this State to a nonresident
31 even though the motor vehicle is delivered to the nonresident
32 in this State, if the motor vehicle is not to be titled in
33 this State, and if a driveaway decal permit is issued to the
34 motor vehicle as provided in Section 3-603 of the Illinois
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1 Vehicle Code or if the nonresident purchaser has vehicle
2 registration plates to transfer to the motor vehicle upon
3 returning to his or her home state. The issuance of the
4 driveaway decal permit or having the out-of-state
5 registration plates to be transferred is prima facie evidence
6 that the motor vehicle will not be titled in this State.
7 (26) Semen used for artificial insemination of livestock
8 for direct agricultural production.
9 (27) Horses, or interests in horses, registered with and
10 meeting the requirements of any of the Arabian Horse Club
11 Registry of America, Appaloosa Horse Club, American Quarter
12 Horse Association, United States Trotting Association, or
13 Jockey Club, as appropriate, used for purposes of breeding or
14 racing for prizes.
15 (28) Computers and communications equipment utilized
16 for any hospital purpose and equipment used in the diagnosis,
17 analysis, or treatment of hospital patients sold to a lessor
18 who leases the equipment, under a lease of one year or longer
19 executed or in effect at the time of the purchase, to a
20 hospital that has been issued an active tax exemption
21 identification number by the Department under Section 1g of
22 this Act.
23 (29) Personal property sold to a lessor who leases the
24 property, under a lease of one year or longer executed or in
25 effect at the time of the purchase, to a governmental body
26 that has been issued an active tax exemption identification
27 number by the Department under Section 1g of this Act.
28 (30) Beginning with taxable years ending on or after
29 December 31, 1995 and ending with taxable years ending on or
30 before December 31, 2004, personal property that is donated
31 for disaster relief to be used in a State or federally
32 declared disaster area in Illinois or bordering Illinois by a
33 manufacturer or retailer that is registered in this State to
34 a corporation, society, association, foundation, or
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1 institution that has been issued a sales tax exemption
2 identification number by the Department that assists victims
3 of the disaster who reside within the declared disaster area.
4 (31) Beginning with taxable years ending on or after
5 December 31, 1995 and ending with taxable years ending on or
6 before December 31, 2004, personal property that is used in
7 the performance of infrastructure repairs in this State,
8 including but not limited to municipal roads and streets,
9 access roads, bridges, sidewalks, waste disposal systems,
10 water and sewer line extensions, water distribution and
11 purification facilities, storm water drainage and retention
12 facilities, and sewage treatment facilities, resulting from a
13 State or federally declared disaster in Illinois or bordering
14 Illinois when such repairs are initiated on facilities
15 located in the declared disaster area within 6 months after
16 the disaster.
17 (Source: P.A. 88-337; 88-480; 88-547; 88-670, eff. 12-2-94;
18 89-16, eff. 5-30-95; 89-115, eff. 1-1-96; 89-349, eff.
19 8-17-95; 89-495, eff. 6-24-96; 89-496, eff. 6-25-96; 89-626,
20 eff. 8-9-96; revised 8-21-96.)