State of Illinois
90th General Assembly
Legislation

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90_HB3336

      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.   Exempts  the  amount,  if  any, of tax that is imposed
      under Section 4051 of the Internal Revenue Code  of  1986  on
      heavy  trucks and trailers from the taxes imposed under those
      Acts.  Provides that these exemptions are not subject to  the
      sunset provisions.  Effective immediately.
                                                     LRB9010636KDks
                                               LRB9010636KDks
 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 3-5 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
                            -2-                LRB9010636KDks
 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
                            -3-                LRB9010636KDks
 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.
15        (12)  Fuel and petroleum products sold to or used  by  an
16    air  common  carrier, certified by the carrier to be used for
17    consumption, shipment, or  storage  in  the  conduct  of  its
18    business  as an air common carrier, for a flight destined for
19    or returning from a location or locations outside the  United
20    States  without  regard  to  previous  or subsequent domestic
21    stopovers.
22        (13)  Proceeds of mandatory  service  charges  separately
23    stated  on  customers' bills for the purchase and consumption
24    of food and beverages purchased at retail from a retailer, to
25    the extent that the proceeds of the  service  charge  are  in
26    fact  turned  over as tips or as a substitute for tips to the
27    employees who participate  directly  in  preparing,  serving,
28    hosting  or  cleaning  up  the food or beverage function with
29    respect to which the service charge is imposed.
30        (14)  Oil field  exploration,  drilling,  and  production
31    equipment, including (i) rigs and parts of rigs, rotary rigs,
32    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
33    goods, including casing and drill strings,  (iii)  pumps  and
34    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
                            -4-                LRB9010636KDks
 1    individual  replacement  part  for  oil  field   exploration,
 2    drilling,  and  production  equipment, and (vi) machinery and
 3    equipment purchased for lease; but excluding  motor  vehicles
 4    required to be registered under the Illinois Vehicle Code.
 5        (15)  Photoprocessing  machinery and equipment, including
 6    repair and replacement parts, both new  and  used,  including
 7    that   manufactured   on  special  order,  certified  by  the
 8    purchaser to  be  used  primarily  for  photoprocessing,  and
 9    including  photoprocessing  machinery and equipment purchased
10    for lease.
11        (16)  Coal  exploration,  mining,   offhighway   hauling,
12    processing, maintenance, and reclamation equipment, including
13    replacement  parts  and  equipment,  and  including equipment
14    purchased for lease, but excluding motor vehicles required to
15    be registered under the Illinois Vehicle Code.
16        (17)  Distillation machinery and  equipment,  sold  as  a
17    unit   or  kit,  assembled  or  installed  by  the  retailer,
18    certified by the user to be used only for the  production  of
19    ethyl alcohol that will be used for consumption as motor fuel
20    or  as  a component of motor fuel for the personal use of the
21    user, and not subject to sale or resale.
22        (18)  Manufacturing   and   assembling   machinery    and
23    equipment  used  primarily in the process of manufacturing or
24    assembling tangible personal property for wholesale or retail
25    sale or lease, whether that sale or lease is made directly by
26    the  manufacturer  or  by  some  other  person,  whether  the
27    materials used in the process are owned by  the  manufacturer
28    or  some  other person, or whether that sale or lease is made
29    apart from or as an incident to the seller's engaging in  the
30    service  occupation of producing machines, tools, dies, jigs,
31    patterns, gauges, or other similar  items  of  no  commercial
32    value on special order for a particular purchaser.
33        (19)  Personal  property  delivered  to  a  purchaser  or
34    purchaser's donee inside Illinois when the purchase order for
                            -5-                LRB9010636KDks
 1    that  personal  property  was  received  by a florist located
 2    outside Illinois who has a florist  located  inside  Illinois
 3    deliver the personal property.
 4        (20)  Semen used for artificial insemination of livestock
 5    for direct agricultural production.
 6        (21)  Horses, or interests in horses, registered with and
 7    meeting  the  requirements  of  any of the Arabian Horse Club
 8    Registry of America, Appaloosa Horse Club,  American  Quarter
 9    Horse  Association,  United  States  Trotting Association, or
10    Jockey Club, as appropriate, used for purposes of breeding or
11    racing for prizes.
12        (22)  Computers and communications equipment utilized for
13    any hospital purpose and equipment  used  in  the  diagnosis,
14    analysis,  or  treatment  of hospital patients purchased by a
15    lessor who leases the equipment, under a lease of one year or
16    longer executed or in effect at the  time  the  lessor  would
17    otherwise  be  subject  to  the tax imposed by this Act, to a
18    hospital  that  has  been  issued  an  active  tax  exemption
19    identification  number  by the Department under Section 1g of
20    the Retailers' Occupation  Tax  Act.   If  the  equipment  is
21    leased  in  a manner that does not qualify for this exemption
22    or is used in any other non-exempt manner, the  lessor  shall
23    be  liable  for the tax imposed under this Act or the Service
24    Use Tax Act, as the case may be, based  on  the  fair  market
25    value  of  the  property  at  the time the non-qualifying use
26    occurs.  No lessor shall collect or  attempt  to  collect  an
27    amount  (however  designated) that purports to reimburse that
28    lessor for the tax imposed by this Act or the Service Use Tax
29    Act, as the case may be, if the tax has not been paid by  the
30    lessor.  If a lessor improperly collects any such amount from
31    the  lessee,  the  lessee shall have a legal right to claim a
32    refund of that amount from the  lessor.   If,  however,  that
33    amount  is  not  refunded  to  the lessee for any reason, the
34    lessor is liable to pay that amount to the Department.
                            -6-                LRB9010636KDks
 1        (23)  Personal property purchased by a lessor who  leases
 2    the  property,  under a lease of  one year or longer executed
 3    or in effect at  the  time  the  lessor  would  otherwise  be
 4    subject  to  the  tax  imposed by this Act, to a governmental
 5    body that has been  issued  an  active  sales  tax  exemption
 6    identification  number  by the Department under Section 1g of
 7    the Retailers' Occupation Tax Act. If the property is  leased
 8    in  a manner that does not qualify for this exemption or used
 9    in any other non-exempt manner, the lessor  shall  be  liable
10    for  the  tax  imposed  under this Act or the Service Use Tax
11    Act, as the case may be, based on the fair  market  value  of
12    the  property  at the time the non-qualifying use occurs.  No
13    lessor shall collect or attempt to collect an amount (however
14    designated) that purports to reimburse that  lessor  for  the
15    tax  imposed  by  this Act or the Service Use Tax Act, as the
16    case may be, if the tax has not been paid by the lessor.   If
17    a lessor improperly collects any such amount from the lessee,
18    the lessee shall have a legal right to claim a refund of that
19    amount  from  the  lessor.   If,  however, that amount is not
20    refunded to the lessee for any reason, the lessor  is  liable
21    to pay that amount to the Department.
22        (24)  Beginning  with  taxable  years  ending on or after
23    December 31, 1995 and ending with taxable years ending on  or
24    before  December  31, 2004, personal property that is donated
25    for disaster relief to  be  used  in  a  State  or  federally
26    declared disaster area in Illinois or bordering Illinois by a
27    manufacturer  or retailer that is registered in this State to
28    a   corporation,   society,   association,   foundation,   or
29    institution that  has  been  issued  a  sales  tax  exemption
30    identification  number by the Department that assists victims
31    of the disaster who reside within the declared disaster area.
32        (25)  Beginning with taxable years  ending  on  or  after
33    December  31, 1995 and ending with taxable years ending on or
34    before December 31, 2004, personal property that is  used  in
                            -7-                LRB9010636KDks
 1    the  performance  of  infrastructure  repairs  in this State,
 2    including but not limited to  municipal  roads  and  streets,
 3    access  roads,  bridges,  sidewalks,  waste disposal systems,
 4    water and  sewer  line  extensions,  water  distribution  and
 5    purification  facilities,  storm water drainage and retention
 6    facilities, and sewage treatment facilities, resulting from a
 7    State or federally declared disaster in Illinois or bordering
 8    Illinois  when  such  repairs  are  initiated  on  facilities
 9    located in the declared disaster area within 6  months  after
10    the disaster.
11        (26)  Beginning  with  taxable  years  ending on or after
12    December 31, 1998, the amount, if any, of tax that is imposed
13    under Section 4051 of the Internal Revenue Code  of  1986  on
14    heavy trucks and trailers.  This paragraph is exempt from the
15    provisions of Section 3-90.
16    (Source:  P.A.  89-16,  eff.  5-30-95;  89-115,  eff. 1-1-96;
17    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
18    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
19    eff. 12-12-97.)
20        Section 10.  The  Service  Use  Tax  Act  is  amended  by
21    changing Section 3-5 as follows:
22        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
23        Sec.  3-5.   Exemptions.   Use  of the following tangible
24    personal property is exempt from the tax imposed by this Act:
25        (1)  Personal  property  purchased  from  a  corporation,
26    society,    association,    foundation,    institution,    or
27    organization, other than a limited liability company, that is
28    organized and operated as a not-for-profit service enterprise
29    for the benefit of persons 65 years of age or  older  if  the
30    personal property was not purchased by the enterprise for the
31    purpose of resale by the enterprise.
32        (2)  Personal property purchased by a non-profit Illinois
                            -8-                LRB9010636KDks
 1    county  fair association for use in conducting, operating, or
 2    promoting the county fair.
 3        (3)  Personal  property  purchased  by  a  not-for-profit
 4    music or dramatic  arts  organization  that  establishes,  by
 5    proof  required  by  the  Department  by  rule,  that  it has
 6    received an exemption under Section 501(c)(3) of the Internal
 7    Revenue Code and that  is  organized  and  operated  for  the
 8    presentation  of  live  public  performances  of  musical  or
 9    theatrical works on a regular basis.
10        (4)  Legal  tender,  currency,  medallions,  or  gold  or
11    silver   coinage   issued  by  the  State  of  Illinois,  the
12    government of the United States of America, or the government
13    of any foreign country, and bullion.
14        (5)  Graphic  arts  machinery  and  equipment,  including
15    repair  and  replacement  parts,  both  new  and  used,   and
16    including that manufactured on special order or purchased for
17    lease,  certified  by  the purchaser to be used primarily for
18    graphic arts production.
19        (6)  Personal property purchased from a teacher-sponsored
20    student  organization  affiliated  with  an   elementary   or
21    secondary school located in Illinois.
22        (7)  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. Horticultural polyhouses  or  hoop
30    houses used for propagating, growing, or overwintering plants
31    shall  be  considered farm machinery and equipment under this
32    paragraph.
33        (8)  Fuel and petroleum products sold to or  used  by  an
34    air  common  carrier, certified by the carrier to be used for
                            -9-                LRB9010636KDks
 1    consumption, shipment, or  storage  in  the  conduct  of  its
 2    business  as an air common carrier, for a flight destined for
 3    or returning from a location or locations outside the  United
 4    States  without  regard  to  previous  or subsequent domestic
 5    stopovers.
 6        (9)  Proceeds of  mandatory  service  charges  separately
 7    stated  on  customers' bills for the purchase and consumption
 8    of food and beverages acquired as an incident to the purchase
 9    of a service from  a  serviceman,  to  the  extent  that  the
10    proceeds  of  the  service  charge are in fact turned over as
11    tips or as  a  substitute  for  tips  to  the  employees  who
12    participate   directly  in  preparing,  serving,  hosting  or
13    cleaning up the food or beverage  function  with  respect  to
14    which the service charge is imposed.
15        (10)  Oil  field  exploration,  drilling,  and production
16    equipment, including (i) rigs and parts of rigs, rotary rigs,
17    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
18    goods,  including  casing  and drill strings, (iii) pumps and
19    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
20    individual   replacement  part  for  oil  field  exploration,
21    drilling, and production equipment, and  (vi)  machinery  and
22    equipment  purchased  for lease; but excluding motor vehicles
23    required to be registered under the Illinois Vehicle Code.
24        (11)  Proceeds from the sale of photoprocessing machinery
25    and equipment, including repair and replacement  parts,  both
26    new  and  used, including that manufactured on special order,
27    certified  by  the  purchaser  to  be  used   primarily   for
28    photoprocessing,  and including photoprocessing machinery and
29    equipment purchased for lease.
30        (12)  Coal  exploration,  mining,   offhighway   hauling,
31    processing, maintenance, and reclamation equipment, including
32    replacement  parts  and  equipment,  and  including equipment
33    purchased for lease, but excluding motor vehicles required to
34    be registered under the Illinois Vehicle Code.
                            -10-               LRB9010636KDks
 1        (13)  Semen used for artificial insemination of livestock
 2    for direct agricultural production.
 3        (14)  Horses, or interests in horses, registered with and
 4    meeting the requirements of any of  the  Arabian  Horse  Club
 5    Registry  of  America, Appaloosa Horse Club, American Quarter
 6    Horse Association, United  States  Trotting  Association,  or
 7    Jockey Club, as appropriate, used for purposes of breeding or
 8    racing for prizes.
 9        (15)  Computers and communications equipment utilized for
10    any  hospital  purpose  and  equipment used in the diagnosis,
11    analysis, or treatment of hospital patients  purchased  by  a
12    lessor who leases the equipment, under a lease of one year or
13    longer  executed  or  in  effect at the time the lessor would
14    otherwise be subject to the tax imposed by  this  Act,  to  a
15    hospital  that  has  been  issued  an  active  tax  exemption
16    identification  number  by the Department under Section 1g of
17    the Retailers' Occupation Tax Act. If the equipment is leased
18    in a manner that does not qualify for this  exemption  or  is
19    used  in  any  other  non-exempt  manner, the lessor shall be
20    liable for the tax imposed under this Act or the Use Tax Act,
21    as the case may be, based on the fair  market  value  of  the
22    property  at  the  time  the  non-qualifying  use occurs.  No
23    lessor shall collect or attempt to collect an amount (however
24    designated) that purports to reimburse that  lessor  for  the
25    tax  imposed  by this Act or the Use Tax Act, as the case may
26    be, if the tax has not been paid by the lessor.  If a  lessor
27    improperly  collects  any  such  amount  from the lessee, the
28    lessee shall have a legal right to claim  a  refund  of  that
29    amount  from  the  lessor.   If,  however, that amount is not
30    refunded to the lessee for any reason, the lessor  is  liable
31    to pay that amount to the Department.
32        (16)  Personal  property purchased by a lessor who leases
33    the property, under a lease of one year or longer executed or
34    in effect at the time the lessor would otherwise  be  subject
                            -11-               LRB9010636KDks
 1    to  the  tax imposed by this Act, to a governmental body that
 2    has been issued an active tax exemption identification number
 3    by  the  Department  under  Section  1g  of  the   Retailers'
 4    Occupation  Tax  Act.   If the property is leased in a manner
 5    that does not qualify for this exemption or is  used  in  any
 6    other  non-exempt  manner, the lessor shall be liable for the
 7    tax imposed under this Act or the Use Tax Act,  as  the  case
 8    may be, based on the fair market value of the property at the
 9    time  the non-qualifying use occurs.  No lessor shall collect
10    or attempt to collect an  amount  (however  designated)  that
11    purports to reimburse that lessor for the tax imposed by this
12    Act  or  the  Use Tax Act, as the case may be, if the tax has
13    not been paid by the lessor.  If a lessor improperly collects
14    any such amount from the lessee,  the  lessee  shall  have  a
15    legal right to claim a refund of that amount from the lessor.
16    If,  however,  that  amount is not refunded to the lessee for
17    any reason, the lessor is liable to pay that  amount  to  the
18    Department.
19        (17)  Beginning  with  taxable  years  ending on or after
20    December 31, 1995 and ending with taxable years ending on  or
21    before  December  31, 2004, personal property that is donated
22    for disaster relief to  be  used  in  a  State  or  federally
23    declared disaster area in Illinois or bordering Illinois by a
24    manufacturer  or retailer that is registered in this State to
25    a   corporation,   society,   association,   foundation,   or
26    institution that  has  been  issued  a  sales  tax  exemption
27    identification  number by the Department that assists victims
28    of the disaster who reside within the declared disaster area.
29        (18)  Beginning with taxable years  ending  on  or  after
30    December  31, 1995 and ending with taxable years ending on or
31    before December 31, 2004, personal property that is  used  in
32    the  performance  of  infrastructure  repairs  in this State,
33    including but not limited to  municipal  roads  and  streets,
34    access  roads,  bridges,  sidewalks,  waste disposal systems,
                            -12-               LRB9010636KDks
 1    water and  sewer  line  extensions,  water  distribution  and
 2    purification  facilities,  storm water drainage and retention
 3    facilities, and sewage treatment facilities, resulting from a
 4    State or federally declared disaster in Illinois or bordering
 5    Illinois  when  such  repairs  are  initiated  on  facilities
 6    located in the declared disaster area within 6  months  after
 7    the disaster.
 8        (19)  Beginning  with  taxable  years  ending on or after
 9    December 31, 1998, the amount, if any, of tax that is imposed
10    under Section 4051 of the Internal Revenue Code  of  1986  on
11    heavy  trucks and trailers. This paragraph is exempt from the
12    provisions of Section 3-75.
13    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
14    89-349,  eff.  8-17-95;  89-495,  eff.  6-24-96; 89-496, eff.
15    6-25-96; 89-626, eff. 8-9-96;  90-14,  eff.  7-1-97;  90-552,
16    eff. 12-12-97.)
17        Section 15.  The Service Occupation Tax Act is amended by
18    changing Section 3-5 as follows:
19        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
20        Sec.  3-5.   Exemptions.  The following tangible personal
21    property is exempt from the tax imposed by this Act:
22        (1)  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        (2)  Personal  property  purchased  by  a  not-for-profit
30    Illinois county  fair  association  for  use  in  conducting,
31    operating, or promoting the county fair.
32        (3)  Personal  property  purchased  by any not-for-profit
                            -13-               LRB9010636KDks
 1    music or dramatic  arts  organization  that  establishes,  by
 2    proof  required  by  the  Department  by  rule,  that  it has
 3    received  an  exemption   under  Section  501(c)(3)  of   the
 4    Internal  Revenue Code and that is organized and operated for
 5    the presentation of live public performances  of  musical  or
 6    theatrical works on a regular basis.
 7        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 8    silver   coinage   issued  by  the  State  of  Illinois,  the
 9    government of the United States of America, or the government
10    of any foreign country, and bullion.
11        (5)  Graphic  arts  machinery  and  equipment,  including
12    repair  and  replacement  parts,  both  new  and  used,   and
13    including that manufactured on special order or purchased for
14    lease,  certified  by  the purchaser to be used primarily for
15    graphic arts production.
16        (6)  Personal  property  sold  by   a   teacher-sponsored
17    student   organization   affiliated  with  an  elementary  or
18    secondary school located in Illinois.
19        (7)  Farm machinery and equipment,  both  new  and  used,
20    including  that  manufactured  on special order, certified by
21    the purchaser to be used primarily for production agriculture
22    or  State  or  federal   agricultural   programs,   including
23    individual replacement parts for the machinery and equipment,
24    and  including  machinery  and equipment purchased for lease,
25    but excluding motor vehicles required to be registered  under
26    the  Illinois  Vehicle Code. Horticultural polyhouses or hoop
27    houses used for propagating, growing, or overwintering plants
28    shall be considered farm machinery and equipment  under  this
29    paragraph.
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
                            -14-               LRB9010636KDks
 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, to the extent that the proceeds of the
 6    service  charge  are  in  fact  turned  over  as tips or as a
 7    substitute for tips to the employees who participate directly
 8    in preparing, serving, hosting or cleaning  up  the  food  or
 9    beverage function with respect to which the service charge is
10    imposed.
11        (10)  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        (11)  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        (12)  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        (13)  Food  for  human consumption that is to be consumed
32    off the premises where  it  is  sold  (other  than  alcoholic
33    beverages,  soft  drinks  and food that has been prepared for
34    immediate consumption) and prescription and  non-prescription
                            -15-               LRB9010636KDks
 1    medicines,  drugs,  medical  appliances,  and  insulin, urine
 2    testing materials, syringes, and needles used  by  diabetics,
 3    for  human  use, when purchased for use by a person receiving
 4    medical assistance under Article 5 of the Illinois Public Aid
 5    Code who resides in a licensed long-term  care  facility,  as
 6    defined in the Nursing Home Care Act.
 7        (14)  Semen used for artificial insemination of livestock
 8    for direct agricultural production.
 9        (15)  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        (16)  Computers and communications equipment utilized for
16    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    the Retailers' Occupation Tax Act.
23        (17)  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  the  Retailers'
28    Occupation Tax Act.
29        (18)  Beginning  with  taxable  years  ending on or after
30    December 31, 1995 and ending with taxable years ending on  or
31    before  December  31, 2004, personal property that is donated
32    for disaster relief to  be  used  in  a  State  or  federally
33    declared disaster area in Illinois or bordering Illinois by a
34    manufacturer  or retailer that is registered in this State to
                            -16-               LRB9010636KDks
 1    a   corporation,   society,   association,   foundation,   or
 2    institution that  has  been  issued  a  sales  tax  exemption
 3    identification  number by the Department that assists victims
 4    of the disaster who reside within the declared disaster area.
 5        (19)  Beginning with taxable years  ending  on  or  after
 6    December  31, 1995 and ending with taxable years ending on or
 7    before December 31, 2004, personal property that is  used  in
 8    the  performance  of  infrastructure  repairs  in this State,
 9    including but not limited to  municipal  roads  and  streets,
10    access  roads,  bridges,  sidewalks,  waste disposal systems,
11    water and  sewer  line  extensions,  water  distribution  and
12    purification  facilities,  storm water drainage and retention
13    facilities, and sewage treatment facilities, resulting from a
14    State or federally declared disaster in Illinois or bordering
15    Illinois  when  such  repairs  are  initiated  on  facilities
16    located in the declared disaster area within 6  months  after
17    the disaster.
18        (20)  Beginning  with  taxable  years  ending on or after
19    December 31, 1998, the amount, if any, of tax that is imposed
20    under Section 4051 of the Internal Revenue Code  of  1986  on
21    heavy  trucks and trailers. This paragraph is exempt from the
22    provisions of Section 3-55.
23    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
24    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
25    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
26    eff. 12-12-97.)
27        Section 20.  The Retailers' Occupation Tax Act is amended
28    by changing Section 2-5 as follows: 1t+2
29        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
30        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
31    the sale of the  following  tangible  personal  property  are
32    exempt from the tax imposed by this Act:
33        (1)  Farm chemicals.
                            -17-               LRB9010636KDks
 1        (2)  Farm  machinery  and  equipment,  both new and used,
 2    including that manufactured on special  order,  certified  by
 3    the purchaser to be used primarily for production agriculture
 4    or   State   or   federal  agricultural  programs,  including
 5    individual replacement parts for the machinery and equipment,
 6    and including machinery and equipment  purchased  for  lease,
 7    but  excluding motor vehicles required to be registered under
 8    the Illinois Vehicle Code.  Horticultural polyhouses or  hoop
 9    houses used for propagating, growing, or overwintering plants
10    shall  be  considered farm machinery and equipment under this
11    paragraph.
12        (3)  Distillation machinery and equipment, sold as a unit
13    or kit, assembled or installed by the retailer, certified  by
14    the  user to be used only for the production of ethyl alcohol
15    that will be used for consumption  as  motor  fuel  or  as  a
16    component of motor fuel for the personal use of the user, and
17    not subject to sale or resale.
18        (4)  Graphic  arts  machinery  and  equipment,  including
19    repair   and  replacement  parts,  both  new  and  used,  and
20    including that manufactured on special order or purchased for
21    lease, certified by the purchaser to be  used  primarily  for
22    graphic arts production.
23        (5)  A  motor  vehicle  of  the  first  division, a motor
24    vehicle of the second division that is a self-contained motor
25    vehicle designed or permanently converted to  provide  living
26    quarters  for  recreational,  camping,  or  travel  use, with
27    direct walk through access to the living  quarters  from  the
28    driver's seat, or a motor vehicle of the second division that
29    is  of  the van configuration designed for the transportation
30    of not less than 7 nor more than 16 passengers, as defined in
31    Section 1-146 of the Illinois Vehicle Code, that is used  for
32    automobile  renting,  as  defined  in  the Automobile Renting
33    Occupation and Use Tax Act.
34        (6)  Personal  property  sold  by   a   teacher-sponsored
                            -18-               LRB9010636KDks
 1    student   organization   affiliated  with  an  elementary  or
 2    secondary school located in Illinois.
 3        (7)  Proceeds of that portion of the selling price  of  a
 4    passenger car the sale of which is subject to the Replacement
 5    Vehicle Tax.
 6        (8)  Personal  property  sold  to an Illinois county fair
 7    association for use in conducting,  operating,  or  promoting
 8    the county fair.
 9        (9)  Personal  property sold to a not-for-profit music or
10    dramatic  arts  organization  that  establishes,   by   proof
11    required  by  the Department by rule, that it has received an
12    exemption under Section 501(c) (3) of  the  Internal  Revenue
13    Code  and that is organized and operated for the presentation
14    of live public performances of musical or theatrical works on
15    a regular basis.
16        (10)  Personal property sold by a  corporation,  society,
17    association,  foundation, institution, or organization, other
18    than a limited  liability  company,  that  is  organized  and
19    operated  as  a  not-for-profit  service  enterprise  for the
20    benefit of persons 65 years of age or older if  the  personal
21    property  was not purchased by the enterprise for the purpose
22    of resale by the enterprise.
23        (11)  Personal property sold to a governmental body, to a
24    corporation, society, association, foundation, or institution
25    organized and operated exclusively for charitable, religious,
26    or educational purposes, or to a not-for-profit  corporation,
27    society,    association,    foundation,    institution,    or
28    organization  that  has  no compensated officers or employees
29    and  that  is  organized  and  operated  primarily  for   the
30    recreation  of  persons  55  years of age or older. A limited
31    liability company may qualify for the  exemption  under  this
32    paragraph  only if the limited liability company is organized
33    and operated exclusively for  educational  purposes.  On  and
34    after July 1, 1987, however, no entity otherwise eligible for
                            -19-               LRB9010636KDks
 1    this exemption shall make tax-free purchases unless it has an
 2    active identification number issued by the Department.
 3        (12)  Personal  property  sold to interstate carriers for
 4    hire for use as rolling stock moving in  interstate  commerce
 5    or  to lessors under leases of one year or longer executed or
 6    in effect at the time of purchase by interstate carriers  for
 7    hire  for  use as rolling stock moving in interstate commerce
 8    and equipment  operated  by  a  telecommunications  provider,
 9    licensed  as  a  common carrier by the Federal Communications
10    Commission, which is permanently installed in or  affixed  to
11    aircraft moving in interstate commerce.
12        (13)  Proceeds from sales to owners, lessors, or shippers
13    of  tangible personal property that is utilized by interstate
14    carriers  for  hire  for  use  as  rolling  stock  moving  in
15    interstate   commerce   and   equipment   operated    by    a
16    telecommunications  provider, licensed as a common carrier by
17    the Federal Communications Commission, which  is  permanently
18    installed  in  or  affixed  to  aircraft moving in interstate
19    commerce.
20        (14)  Machinery and equipment that will be  used  by  the
21    purchaser,  or  a  lessee  of the purchaser, primarily in the
22    process of  manufacturing  or  assembling  tangible  personal
23    property  for  wholesale or retail sale or lease, whether the
24    sale or lease is made directly by the manufacturer or by some
25    other person, whether the materials used in the  process  are
26    owned  by  the  manufacturer or some other person, or whether
27    the sale or lease is made apart from or as an incident to the
28    seller's engaging in  the  service  occupation  of  producing
29    machines,  tools,  dies,  jigs,  patterns,  gauges,  or other
30    similar items of no commercial value on special order  for  a
31    particular purchaser.
32        (15)  Proceeds  of  mandatory  service charges separately
33    stated on customers' bills for purchase  and  consumption  of
34    food  and  beverages,  to the extent that the proceeds of the
                            -20-               LRB9010636KDks
 1    service charge are in fact  turned  over  as  tips  or  as  a
 2    substitute for tips to the employees who participate directly
 3    in  preparing,  serving,  hosting  or cleaning up the food or
 4    beverage function with respect to which the service charge is
 5    imposed.
 6        (16)  Petroleum products  sold  to  a  purchaser  if  the
 7    seller  is prohibited by federal law from charging tax to the
 8    purchaser.
 9        (17)  Tangible personal property sold to a common carrier
10    by rail or motor that receives the physical possession of the
11    property in Illinois and that  transports  the  property,  or
12    shares  with  another common carrier in the transportation of
13    the property, out of Illinois on a standard uniform  bill  of
14    lading  showing  the seller of the property as the shipper or
15    consignor of the property to a destination outside  Illinois,
16    for use outside Illinois.
17        (18)  Legal  tender,  currency,  medallions,  or  gold or
18    silver  coinage  issued  by  the  State  of   Illinois,   the
19    government of the United States of America, or the government
20    of any foreign country, and bullion.
21        (19)  Oil  field  exploration,  drilling,  and production
22    equipment, including (i) rigs and parts of rigs, rotary rigs,
23    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
24    goods,  including  casing  and drill strings, (iii) pumps and
25    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
26    individual   replacement  part  for  oil  field  exploration,
27    drilling, and production equipment, and  (vi)  machinery  and
28    equipment  purchased  for lease; but excluding motor vehicles
29    required to be registered under the Illinois Vehicle Code.
30        (20)  Photoprocessing machinery and equipment,  including
31    repair  and  replacement  parts, both new and used, including
32    that  manufactured  on  special  order,  certified   by   the
33    purchaser  to  be  used  primarily  for  photoprocessing, and
34    including photoprocessing machinery and  equipment  purchased
                            -21-               LRB9010636KDks
 1    for lease.
 2        (21)  Coal   exploration,   mining,  offhighway  hauling,
 3    processing, maintenance, and reclamation equipment, including
 4    replacement parts  and  equipment,  and  including  equipment
 5    purchased for lease, but excluding motor vehicles required to
 6    be registered under the Illinois Vehicle Code.
 7        (22)  Fuel  and  petroleum products sold to or used by an
 8    air  carrier,  certified  by  the  carrier  to  be  used  for
 9    consumption, shipment, or  storage  in  the  conduct  of  its
10    business  as an air common carrier, for a flight destined for
11    or returning from a location or locations outside the  United
12    States  without  regard  to  previous  or subsequent domestic
13    stopovers.
14        (23)  A  transaction  in  which  the  purchase  order  is
15    received by a florist who is located  outside  Illinois,  but
16    who has a florist located in Illinois deliver the property to
17    the purchaser or the purchaser's donee in Illinois.
18        (24)  Fuel  consumed  or  used in the operation of ships,
19    barges, or vessels that are used  primarily  in  or  for  the
20    transportation  of  property or the conveyance of persons for
21    hire on rivers  bordering  on  this  State  if  the  fuel  is
22    delivered  by  the  seller to the purchaser's barge, ship, or
23    vessel while it is afloat upon that bordering river.
24        (25)  A motor vehicle sold in this State to a nonresident
25    even though the motor vehicle is delivered to the nonresident
26    in this State, if the motor vehicle is not to  be  titled  in
27    this  State, and if a driveaway decal permit is issued to the
28    motor vehicle as provided in Section 3-603  of  the  Illinois
29    Vehicle  Code  or  if  the  nonresident purchaser has vehicle
30    registration plates to transfer to  the  motor  vehicle  upon
31    returning  to  his  or  her  home state.  The issuance of the
32    driveaway   decal   permit   or   having   the   out-of-state
33    registration plates to be transferred is prima facie evidence
34    that the motor vehicle will not be titled in this State.
                            -22-               LRB9010636KDks
 1        (26)  Semen used for artificial insemination of livestock
 2    for direct agricultural production.
 3        (27)  Horses, or interests in horses, registered with and
 4    meeting the requirements of any of  the  Arabian  Horse  Club
 5    Registry  of  America, Appaloosa Horse Club, American Quarter
 6    Horse Association, United  States  Trotting  Association,  or
 7    Jockey Club, as appropriate, used for purposes of breeding or
 8    racing for prizes.
 9        (28)  Computers and communications equipment utilized for
10    any  hospital  purpose  and  equipment used in the diagnosis,
11    analysis, or treatment of hospital patients sold to a  lessor
12    who leases the equipment, under a lease of one year or longer
13    executed  or  in  effect  at  the  time of the purchase, to a
14    hospital  that  has  been  issued  an  active  tax  exemption
15    identification number by the Department under Section  1g  of
16    this Act.
17        (29)  Personal  property  sold to a lessor who leases the
18    property, under a lease of one year or longer executed or  in
19    effect  at  the  time of the purchase, to a governmental body
20    that has been issued an active tax  exemption  identification
21    number by the Department under Section 1g of this Act.
22        (30)  Beginning  with  taxable  years  ending on or after
23    December 31, 1995 and ending with taxable years ending on  or
24    before  December  31, 2004, personal property that is donated
25    for disaster relief to  be  used  in  a  State  or  federally
26    declared disaster area in Illinois or bordering Illinois by a
27    manufacturer  or retailer that is registered in this State to
28    a   corporation,   society,   association,   foundation,   or
29    institution that  has  been  issued  a  sales  tax  exemption
30    identification  number by the Department that assists victims
31    of the disaster who reside within the declared disaster area.
32        (31)  Beginning with taxable years  ending  on  or  after
33    December  31, 1995 and ending with taxable years ending on or
34    before December 31, 2004, personal property that is  used  in
                            -23-               LRB9010636KDks
 1    the  performance  of  infrastructure  repairs  in this State,
 2    including but not limited to  municipal  roads  and  streets,
 3    access  roads,  bridges,  sidewalks,  waste disposal systems,
 4    water and  sewer  line  extensions,  water  distribution  and
 5    purification  facilities,  storm water drainage and retention
 6    facilities, and sewage treatment facilities, resulting from a
 7    State or federally declared disaster in Illinois or bordering
 8    Illinois  when  such  repairs  are  initiated  on  facilities
 9    located in the declared disaster area within 6  months  after
10    the disaster.
11        (32)  Beginning  with  taxable  years  ending on or after
12    December 31, 1998, the amount, if any, of tax that is imposed
13    under Section 4051 of the Internal Revenue Code  of  1986  on
14    heavy  trucks and trailers. This paragraph is exempt from the
15    provisions of Section 2-70.
16    (Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
17    89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
18    6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-519,
19    eff. 6-1-98; 90-552, eff. 12-12-97.)
20        Section 99.  Effective date.  This Act takes effect  upon
21    becoming law.

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