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90_HB0753
35 ILCS 105/3-60 from Ch. 120, par. 439.3-60
35 ILCS 110/3-50 from Ch. 120, par. 439.33-50
35 ILCS 115/2 from Ch. 120, par. 439.102
35 ILCS 120/2-50 from Ch. 120, par. 441-50
Amends the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act. Provides that for tax years beginning on or after
January 1, 1997 and ending on or before December 30, 2002,
the rolling stock exemption shall apply to any taxi equipment
that can verify at least 25% of its annual business for
shipments across state lines.
LRB9003710KDks
LRB9003710KDks
1 AN ACT in relation to taxes, 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 3-60 as follows:
6 (35 ILCS 105/3-60) (from Ch. 120, par. 439.3-60)
7 Sec. 3-60. Rolling stock exemption. The rolling stock
8 exemption applies to rolling stock used by an interstate
9 carrier for hire, even just between points in Illinois, if
10 the rolling stock transports, for hire, persons whose
11 journeys or property whose shipments originate or terminate
12 outside Illinois. Notwithstanding any provision to the
13 contrary, for tax years beginning on or after January 1, 1997
14 and ending on or before December 30, 2002, the exemption
15 provided by this Section shall apply to any taxi equipment
16 that can verify at least 25% of its annual business for
17 shipments across state lines.
18 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
19 86-953; 86-1394; 86-1475.)
20 Section 10. The Service Use Tax Act is amended by
21 changing Section 3-50 as follows:
22 (35 ILCS 110/3-50) (from Ch. 120, par. 439.33-50)
23 Sec. 3-50. Rolling stock exemption. The rolling stock
24 exemption applies to rolling stock used by an interstate
25 carrier for hire, even just between points in Illinois, if
26 the rolling stock transports, for hire, persons whose
27 journeys or property whose shipments originate or terminate
28 outside Illinois. Notwithstanding any provision to the
29 contrary, for tax years beginning on or after January 1, 1997
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1 and ending on or before December 30, 2002, the exemption
2 provided by this Section shall apply to any taxi equipment
3 that can verify at least 25% of its annual business for
4 shipments across state lines.
5 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
6 86-1028; 86-1475.)
7 Section 15. The Service Occupation Tax Act is amended by
8 changing Section 2 as follows:
9 (35 ILCS 115/2) (from Ch. 120, par. 439.102)
10 Sec. 2. "Transfer" means any transfer of the title to
11 property or of the ownership of property whether or not the
12 transferor retains title as security for the payment of
13 amounts due him from the transferee.
14 "Cost Price" means the consideration paid by the
15 serviceman for a purchase valued in money, whether paid in
16 money or otherwise, including cash, credits and services, and
17 shall be determined without any deduction on account of the
18 supplier's cost of the property sold or on account of any
19 other expense incurred by the supplier. When a serviceman
20 contracts out part or all of the services required in his
21 sale of service, it shall be presumed that the cost price to
22 the serviceman of the property transferred to him by his or
23 her subcontractor is equal to 50% of the subcontractor's
24 charges to the serviceman in the absence of proof of the
25 consideration paid by the subcontractor for the purchase of
26 such property.
27 "Department" means the Department of Revenue.
28 "Person" means any natural individual, firm, partnership,
29 association, joint stock company, joint venture, public or
30 private corporation, limited liability company, and any
31 receiver, executor, trustee, guardian or other representative
32 appointed by order of any court.
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1 "Sale of Service" means any transaction except:
2 (a) A retail sale of tangible personal property taxable
3 under the Retailers' Occupation Tax Act or under the Use Tax
4 Act.
5 (b) A sale of tangible personal property for the purpose
6 of resale made in compliance with Section 2c of the
7 Retailers' Occupation Tax Act.
8 (c) Except as hereinafter provided, a sale or transfer
9 of tangible personal property as an incident to the rendering
10 of service for or by any governmental body or for or by any
11 corporation, society, association, foundation or institution
12 organized and operated exclusively for charitable, religious
13 or educational purposes or any not-for-profit corporation,
14 society, association, foundation, institution or organization
15 which has no compensated officers or employees and which is
16 organized and operated primarily for the recreation of
17 persons 55 years of age or older. A limited liability company
18 may qualify for the exemption under this paragraph only if
19 the limited liability company is organized and operated
20 exclusively for educational purposes.
21 (d) A sale or transfer of tangible personal property as
22 an incident to the rendering of service for interstate
23 carriers for hire for use as rolling stock moving in
24 interstate commerce or lessors under leases of one year or
25 longer, executed or in effect at the time of purchase, to
26 interstate carriers for hire for use as rolling stock moving
27 in interstate commerce, and equipment operated by a
28 telecommunications provider, licensed as a common carrier by
29 the Federal Communications Commission, which is permanently
30 installed in or affixed to aircraft moving in interstate
31 commerce.
32 (d-1) A sale or transfer of tangible personal property
33 as an incident to the rendering of service for owners,
34 lessors or shippers of tangible personal property which is
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1 utilized by interstate carriers for hire for use as rolling
2 stock moving in interstate commerce, and equipment operated
3 by a telecommunications provider, licensed as a common
4 carrier by the Federal Communications Commission, which is
5 permanently installed in or affixed to aircraft moving in
6 interstate commerce.
7 (d-2) The repairing, reconditioning or remodeling, for a
8 common carrier by rail, of tangible personal property which
9 belongs to such carrier for hire, and as to which such
10 carrier receives the physical possession of the repaired,
11 reconditioned or remodeled item of tangible personal property
12 in Illinois, and which such carrier transports, or shares
13 with another common carrier in the transportation of such
14 property, out of Illinois on a standard uniform bill of
15 lading showing the person who repaired, reconditioned or
16 remodeled the property as the shipper or consignor of such
17 property to a destination outside Illinois, for use outside
18 Illinois.
19 (d-3) A sale or transfer of tangible personal property
20 which is produced by the seller thereof on special order in
21 such a way as to have made the applicable tax the Service
22 Occupation Tax or the Service Use Tax, rather than the
23 Retailers' Occupation Tax or the Use Tax, for an interstate
24 carrier by rail which receives the physical possession of
25 such property in Illinois, and which transports such
26 property, or shares with another common carrier in the
27 transportation of such property, out of Illinois on a
28 standard uniform bill of lading showing the seller of the
29 property as the shipper or consignor of such property to a
30 destination outside Illinois, for use outside Illinois.
31 (d-4) Until January 1, 1997, a sale, by a registered
32 serviceman paying tax under this Act to the Department, of
33 special order printed materials delivered outside Illinois
34 and which are not returned to this State, if delivery is made
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1 by the seller or agent of the seller, including an agent who
2 causes the product to be delivered outside Illinois by a
3 common carrier or the U.S. postal service.
4 (e) A sale or transfer of machinery and equipment used
5 primarily in the process of the manufacturing or assembling,
6 either in an existing, an expanded or a new manufacturing
7 facility, of tangible personal property for wholesale or
8 retail sale or lease, whether such sale or lease is made
9 directly by the manufacturer or by some other person, whether
10 the materials used in the process are owned by the
11 manufacturer or some other person, or whether such sale or
12 lease is made apart from or as an incident to the seller's
13 engaging in a service occupation and the applicable tax is a
14 Service Occupation Tax or Service Use Tax, rather than
15 Retailers' Occupation Tax or Use Tax.
16 (f) The sale or transfer of distillation machinery and
17 equipment, sold as a unit or kit and assembled or installed
18 by the retailer, which machinery and equipment is certified
19 by the user to be used only for the production of ethyl
20 alcohol that will be used for consumption as motor fuel or as
21 a component of motor fuel for the personal use of such user
22 and not subject to sale or resale.
23 (g) At the election of any serviceman not required to be
24 otherwise registered as a retailer under Section 2a of the
25 Retailers' Occupation Tax Act, made for each fiscal year
26 sales of service in which the aggregate annual cost price of
27 tangible personal property transferred as an incident to the
28 sales of service is less than 35% (75% in the case of
29 servicemen transferring prescription drugs or servicemen
30 engaged in graphic arts production) of the aggregate annual
31 total gross receipts from all sales of service. The purchase
32 of such tangible personal property by the serviceman shall be
33 subject to tax under the Retailers' Occupation Tax Act and
34 the Use Tax Act. However, if a primary serviceman who has
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1 made the election described in this paragraph subcontracts
2 service work to a secondary serviceman who has also made the
3 election described in this paragraph, the primary serviceman
4 does not incur a Use Tax liability if the secondary
5 serviceman (i) has paid or will pay Use Tax on his or her
6 cost price of any tangible personal property transferred to
7 the primary serviceman and (ii) certifies that fact in
8 writing to the primary serviceman.
9 Tangible personal property transferred incident to the
10 completion of a maintenance agreement is exempt from the tax
11 imposed pursuant to this Act.
12 Exemption (e) also includes machinery and equipment used
13 in the general maintenance or repair of such exempt machinery
14 and equipment or for in-house manufacture of exempt machinery
15 and equipment. For the purposes of exemption (e), each of
16 these terms shall have the following meanings: (1)
17 "manufacturing process" shall mean the production of any
18 article of tangible personal property, whether such article
19 is a finished product or an article for use in the process of
20 manufacturing or assembling a different article of tangible
21 personal property, by procedures commonly regarded as
22 manufacturing, processing, fabricating, or refining which
23 changes some existing material or materials into a material
24 with a different form, use or name. In relation to a
25 recognized integrated business composed of a series of
26 operations which collectively constitute manufacturing, or
27 individually constitute manufacturing operations, the
28 manufacturing process shall be deemed to commence with the
29 first operation or stage of production in the series, and
30 shall not be deemed to end until the completion of the final
31 product in the last operation or stage of production in the
32 series; and further for purposes of exemption (e),
33 photoprocessing is deemed to be a manufacturing process of
34 tangible personal property for wholesale or retail sale; (2)
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1 "assembling process" shall mean the production of any article
2 of tangible personal property, whether such article is a
3 finished product or an article for use in the process of
4 manufacturing or assembling a different article of tangible
5 personal property, by the combination of existing materials
6 in a manner commonly regarded as assembling which results in
7 a material of a different form, use or name; (3) "machinery"
8 shall mean major mechanical machines or major components of
9 such machines contributing to a manufacturing or assembling
10 process; and (4) "equipment" shall include any independent
11 device or tool separate from any machinery but essential to
12 an integrated manufacturing or assembly process; including
13 computers used primarily in operating exempt machinery and
14 equipment in a computer assisted design, computer assisted
15 manufacturing (CAD/CAM) system; or any subunit or assembly
16 comprising a component of any machinery or auxiliary, adjunct
17 or attachment parts of machinery, such as tools, dies, jigs,
18 fixtures, patterns and molds; or any parts which require
19 periodic replacement in the course of normal operation; but
20 shall not include hand tools. The purchaser of such machinery
21 and equipment who has an active resale registration number
22 shall furnish such number to the seller at the time of
23 purchase. The purchaser of such machinery and equipment and
24 tools without an active resale registration number shall
25 furnish to the seller a certificate of exemption for each
26 transaction stating facts establishing the exemption for that
27 transaction, which certificate shall be available to the
28 Department for inspection or audit.
29 The rolling stock exemption applies to rolling stock used
30 by an interstate carrier for hire, even just between points
31 in Illinois, if such rolling stock transports, for hire,
32 persons whose journeys or property whose shipments originate
33 or terminate outside Illinois. Notwithstanding any provision
34 to the contrary, for tax years beginning on or after January
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1 1, 1997 and ending on or before December 30, 2002, the
2 exemption provided by this paragraph shall apply to any taxi
3 equipment that can verify at least 25% of its annual business
4 for shipments across state lines.
5 Any informal rulings, opinions or letters issued by the
6 Department in response to an inquiry or request for any
7 opinion from any person regarding the coverage and
8 applicability of exemption (e) to specific devices shall be
9 published, maintained as a public record, and made available
10 for public inspection and copying. If the informal ruling,
11 opinion or letter contains trade secrets or other
12 confidential information, where possible the Department shall
13 delete such information prior to publication. Whenever such
14 informal rulings, opinions, or letters contain any policy of
15 general applicability, the Department shall formulate and
16 adopt such policy as a rule in accordance with the provisions
17 of the Illinois Administrative Procedure Act.
18 On and after July 1, 1987, no entity otherwise eligible
19 under exemption (c) of this Section shall make tax free
20 purchases unless it has an active exemption identification
21 number issued by the Department.
22 "Serviceman" means any person who is engaged in the
23 occupation of making sales of service.
24 "Sale at Retail" means "sale at retail" as defined in the
25 Retailers' Occupation Tax Act.
26 "Supplier" means any person who makes sales of tangible
27 personal property to servicemen for the purpose of resale as
28 an incident to a sale of service.
29 (Source: P.A. 88-480; 88-505; 88-526; 88-547; 88-670, eff.
30 12-2-94; 89-675, eff. 8-14-96.)
31 Section 20. The Retailers' Occupation Tax Act is amended
32 by changing Section 2-50 as follows:
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1 (35 ILCS 120/2-50) (from Ch. 120, par. 441-50)
2 Sec. 2-50. Rolling stock exemption. The rolling stock
3 exemption applies to rolling stock used by an interstate
4 carrier for hire, even just between points in Illinois, if
5 the rolling stock transports, for hire, persons whose
6 journeys or property whose shipments originate or terminate
7 outside Illinois. Notwithstanding any provision to the
8 contrary, for tax years beginning on or after January 1, 1997
9 and ending on or before December 30, 2002, the exemption
10 provided by this Section shall apply to any taxi equipment
11 that can verify at least 25% of its annual business for
12 shipments across state lines.
13 (Source: P.A. 86-44; 86-244; 86-252; 86-444; 86-820; 86-905;
14 86-928; 86-953; 86-1394; 86-1475.)