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92_HB2950 LRB9204480SMdv 1 AN ACT regarding taxes. 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 arts 20 or cultural organization that establishes, by proof required 21 by the Department by rule, that it has received an exemption 22 under Section 501(c)(3) of the Internal Revenue Code and that 23 is organized and operated for the presentation or support of 24 arts or cultural programming, activities, or services. These 25 organizations include, but are not limited to, music and 26 dramatic arts organizations such as symphony orchestras and 27 theatrical groups, arts and cultural service organizations, 28 local arts councils, visual arts organizations, and media 29 arts organizations. 30 (4) Personal property purchased by a governmental body, 31 by a corporation, society, association, foundation, or -2- LRB9204480SMdv 1 institution organized and operated exclusively for 2 charitable, religious, or educational purposes, or by a 3 not-for-profit corporation, society, association, foundation, 4 institution, or organization that has no compensated officers 5 or employees and that is organized and operated primarily for 6 the recreation of persons 55 years of age or older. A limited 7 liability company may qualify for the exemption under this 8 paragraph only if the limited liability company is organized 9 and operated exclusively for educational purposes. On and 10 after July 1, 1987, however, no entity otherwise eligible for 11 this exemption shall make tax-free purchases unless it has an 12 active exemption identification number issued by the 13 Department. 14 (5) A passenger car that is a replacement vehicle to the 15 extent that the purchase price of the car is subject to the 16 Replacement Vehicle Tax. 17 (6) Graphic arts machinery and equipment, including 18 repair and replacement parts, both new and used, and 19 including that manufactured on special order, certified by 20 the purchaser to be used primarily for graphic arts 21 production, and including machinery and equipment purchased 22 for lease. 23 (7) Farm chemicals. 24 (8) Legal tender, currency, medallions, or gold or 25 silver coinage issued by the State of Illinois, the 26 government of the United States of America, or the government 27 of any foreign country, and bullion. 28 (9) Personal property purchased from a teacher-sponsored 29 student organization affiliated with an elementary or 30 secondary school located in Illinois. 31 (10) A motor vehicle of the first division, a motor 32 vehicle of the second division that is a self-contained motor 33 vehicle designed or permanently converted to provide living 34 quarters for recreational, camping, or travel use, with -3- LRB9204480SMdv 1 direct walk through to the living quarters from the driver's 2 seat, or a motor vehicle of the second division that is of 3 the van configuration designed for the transportation of not 4 less than 7 nor more than 16 passengers, as defined in 5 Section 1-146 of the Illinois Vehicle Code, that is used for 6 automobile renting, as defined in the Automobile Renting 7 Occupation and Use Tax Act. 8 (11) Farm machinery and equipment, both new and used, 9 including that manufactured on special order, certified by 10 the purchaser to be used primarily for production agriculture 11 or State or federal agricultural programs, including 12 individual replacement parts for the machinery and equipment, 13 including machinery and equipment purchased for lease, and 14 including implements of husbandry defined in Section 1-130 of 15 the Illinois Vehicle Code, farm machinery and agricultural 16 chemical and fertilizer spreaders, and nurse wagons required 17 to be registered under Section 3-809 of the Illinois Vehicle 18 Code, but excluding other motor vehicles required to be 19 registered under the Illinois Vehicle Code. Horticultural 20 polyhouses or hoop houses used for propagating, growing, or 21 overwintering plants shall be considered farm machinery and 22 equipment under this item (11). Agricultural chemical tender 23 tanks and dry boxes shall include units sold separately from 24 a motor vehicle required to be licensed and units sold 25 mounted on a motor vehicle required to be licensed if the 26 selling price of the tender is separately stated. 27 Farm machinery and equipment shall include precision 28 farming equipment that is installed or purchased to be 29 installed on farm machinery and equipment including, but not 30 limited to, tractors, harvesters, sprayers, planters, 31 seeders, or spreaders. Precision farming equipment includes, 32 but is not limited to, soil testing sensors, computers, 33 monitors, software, global positioning and mapping systems, 34 and other such equipment. -4- LRB9204480SMdv 1 Farm machinery and equipment also includes computers, 2 sensors, software, and related equipment used primarily in 3 the computer-assisted operation of production agriculture 4 facilities, equipment, and activities such as, but not 5 limited to, the collection, monitoring, and correlation of 6 animal and crop data for the purpose of formulating animal 7 diets and agricultural chemicals. This item (11) is exempt 8 from the provisions of Section 3-90. 9 (12) Fuel and petroleum products sold to or used by an 10 air common carrier, certified by the carrier to be used for 11 consumption, shipment, or storage in the conduct of its 12 business as an air common carrier, for a flight destined for 13 or returning from a location or locations outside the United 14 States without regard to previous or subsequent domestic 15 stopovers. 16 (13) Proceeds of mandatory service charges separately 17 stated on customers' bills for the purchase and consumption 18 of food and beverages purchased at retail from a retailer, to 19 the extent that the proceeds of the service charge are in 20 fact turned over as tips or as a substitute for tips to the 21 employees who participate directly in preparing, serving, 22 hosting or cleaning up the food or beverage function with 23 respect to which the service charge is imposed. 24 (14) Oil field exploration, drilling, and production 25 equipment, including (i) rigs and parts of rigs, rotary rigs, 26 cable tool rigs, and workover rigs, (ii) pipe and tubular 27 goods, including casing and drill strings, (iii) pumps and 28 pump-jack units, (iv) storage tanks and flow lines, (v) any 29 individual replacement part for oil field exploration, 30 drilling, and production equipment, and (vi) machinery and 31 equipment purchased for lease; but excluding motor vehicles 32 required to be registered under the Illinois Vehicle Code. 33 (15) Photoprocessing machinery and equipment, including 34 repair and replacement parts, both new and used, including -5- LRB9204480SMdv 1 that manufactured on special order, certified by the 2 purchaser to be used primarily for photoprocessing, and 3 including photoprocessing machinery and equipment purchased 4 for lease. 5 (16) Coal exploration, mining, offhighway hauling, 6 processing, maintenance, and reclamation equipment, including 7 replacement parts and equipment, and including equipment 8 purchased for lease, but excluding motor vehicles required to 9 be registered under the Illinois Vehicle Code. 10 (17) Distillation machinery and equipment, sold as a 11 unit or kit, assembled or installed by the retailer, 12 certified by the user to be used only for the production of 13 ethyl alcohol that will be used for consumption as motor fuel 14 or as a component of motor fuel for the personal use of the 15 user, and not subject to sale or resale. 16 (18) Manufacturing and assembling machinery and 17 equipment used primarily in the process of manufacturing or 18 assembling tangible personal property for wholesale or retail 19 sale or lease, whether that sale or lease is made directly by 20 the manufacturer or by some other person, whether the 21 materials used in the process are owned by the manufacturer 22 or some other person, or whether that sale or lease is made 23 apart from or as an incident to the seller's engaging in the 24 service occupation of producing machines, tools, dies, jigs, 25 patterns, gauges, or other similar items of no commercial 26 value on special order for a particular purchaser. 27 (19) Personal property delivered to a purchaser or 28 purchaser's donee inside Illinois when the purchase order for 29 that personal property was received by a florist located 30 outside Illinois who has a florist located inside Illinois 31 deliver the personal property. 32 (20) Semen used for artificial insemination of livestock 33 for direct agricultural production. 34 (21) Horses, or interests in horses, registered with and -6- LRB9204480SMdv 1 meeting the requirements of any of the Arabian Horse Club 2 Registry of America, Appaloosa Horse Club, American Quarter 3 Horse Association, United States Trotting Association, or 4 Jockey Club, as appropriate, used for purposes of breeding or 5 racing for prizes. 6 (22) Computers and communications equipment utilized for 7 any hospital purpose and equipment used in the diagnosis, 8 analysis, or treatment of hospital patients purchased by a 9 lessor who leases the equipment, under a lease of one year or 10 longer executed or in effect at the time the lessor would 11 otherwise be subject to the tax imposed by this Act, to a 12 hospital that has been issued an active tax exemption 13 identification number by the Department under Section 1g of 14 the Retailers' Occupation Tax Act. If the equipment is 15 leased in a manner that does not qualify for this exemption 16 or is used in any other non-exempt manner, the lessor shall 17 be liable for the tax imposed under this Act or the Service 18 Use Tax Act, as the case may be, based on the fair market 19 value of the property at the time the non-qualifying use 20 occurs. No lessor shall collect or attempt to collect an 21 amount (however designated) that purports to reimburse that 22 lessor for the tax imposed by this Act or the Service Use Tax 23 Act, as the case may be, if the tax has not been paid by the 24 lessor. If a lessor improperly collects any such amount from 25 the lessee, the lessee shall have a legal right to claim a 26 refund of that amount from the lessor. If, however, that 27 amount is not refunded to the lessee for any reason, the 28 lessor is liable to pay that amount to the Department. 29 (23) Personal property purchased by a lessor who leases 30 the property, under a lease of one year or longer executed 31 or in effect at the time the lessor would otherwise be 32 subject to the tax imposed by this Act, to a governmental 33 body that has been issued an active sales tax exemption 34 identification number by the Department under Section 1g of -7- LRB9204480SMdv 1 the Retailers' Occupation Tax Act. If the property is leased 2 in a manner that does not qualify for this exemption or used 3 in any other non-exempt manner, the lessor shall be liable 4 for the tax imposed under this Act or the Service Use Tax 5 Act, as the case may be, based on the fair market value of 6 the property at the time the non-qualifying use occurs. No 7 lessor shall collect or attempt to collect an amount (however 8 designated) that purports to reimburse that lessor for the 9 tax imposed by this Act or the Service Use Tax Act, as the 10 case may be, if the tax has not been paid by the lessor. If 11 a lessor improperly collects any such amount from the lessee, 12 the lessee shall have a legal right to claim a refund of that 13 amount from the lessor. If, however, that amount is not 14 refunded to the lessee for any reason, the lessor is liable 15 to pay that amount to the Department. 16 (24) Beginning with taxable years ending on or after 17 December 31, 1995 and ending with taxable years ending on or 18 before December 31, 2004, personal property that is donated 19 for disaster relief to be used in a State or federally 20 declared disaster area in Illinois or bordering Illinois by a 21 manufacturer or retailer that is registered in this State to 22 a corporation, society, association, foundation, or 23 institution that has been issued a sales tax exemption 24 identification number by the Department that assists victims 25 of the disaster who reside within the declared disaster area. 26 (25) Beginning with taxable years ending on or after 27 December 31, 1995 and ending with taxable years ending on or 28 before December 31, 2004, personal property that is used in 29 the performance of infrastructure repairs in this State, 30 including but not limited to municipal roads and streets, 31 access roads, bridges, sidewalks, waste disposal systems, 32 water and sewer line extensions, water distribution and 33 purification facilities, storm water drainage and retention 34 facilities, and sewage treatment facilities, resulting from a -8- LRB9204480SMdv 1 State or federally declared disaster in Illinois or bordering 2 Illinois when such repairs are initiated on facilities 3 located in the declared disaster area within 6 months after 4 the disaster. 5 (26) Beginning July 1, 1999, game or game birds 6 purchased at a "game breeding and hunting preserve area" or 7 an "exotic game hunting area" as those terms are used in the 8 Wildlife Code or at a hunting enclosure approved through 9 rules adopted by the Department of Natural Resources. This 10 paragraph is exempt from the provisions of Section 3-90. 11 (27) A motor vehicle, as that term is defined in Section 12 1-146 of the Illinois Vehicle Code, that is donated to a 13 corporation, limited liability company, society, association, 14 foundation, or institution that is determined by the 15 Department to be organized and operated exclusively for 16 educational purposes. For purposes of this exemption, "a 17 corporation, limited liability company, society, association, 18 foundation, or institution organized and operated exclusively 19 for educational purposes" means all tax-supported public 20 schools, private schools that offer systematic instruction in 21 useful branches of learning by methods common to public 22 schools and that compare favorably in their scope and 23 intensity with the course of study presented in tax-supported 24 schools, and vocational or technical schools or institutes 25 organized and operated exclusively to provide a course of 26 study of not less than 6 weeks duration and designed to 27 prepare individuals to follow a trade or to pursue a manual, 28 technical, mechanical, industrial, business, or commercial 29 occupation. 30 (28) Beginning January 1, 2000, personal property, 31 including food, purchased through fundraising events for the 32 benefit of a public or private elementary or secondary 33 school, a group of those schools, or one or more school 34 districts if the events are sponsored by an entity recognized -9- LRB9204480SMdv 1 by the school district that consists primarily of volunteers 2 and includes parents and teachers of the school children. 3 This paragraph does not apply to fundraising events (i) for 4 the benefit of private home instruction or (ii) for which the 5 fundraising entity purchases the personal property sold at 6 the events from another individual or entity that sold the 7 property for the purpose of resale by the fundraising entity 8 and that profits from the sale to the fundraising entity. 9 This paragraph is exempt from the provisions of Section 3-90. 10 (29) Beginning January 1, 2000, new or used automatic 11 vending machines that prepare and serve hot food and 12 beverages, including coffee, soup, and other items, and 13 replacement parts for these machines. This paragraph is 14 exempt from the provisions of Section 3-90. 15 (30) Food for human consumption that is to be consumed 16 off the premises where it is sold (other than alcoholic 17 beverages, soft drinks, and food that has been prepared for 18 immediate consumption) and prescription and nonprescription 19 medicines, drugs, medical appliances, and insulin, urine 20 testing materials, syringes, and needles used by diabetics, 21 for human use, when purchased for use by a person receiving 22 medical assistance under Article 5 of the Illinois Public Aid 23 Code who resides in a licensed long-term care facility, as 24 defined in the Nursing Home Care Act. 25 (31) Beginning January 1, 2002, gasohol, as defined in 26 Section 3-40. This paragraph (31) is exempt from the 27 provisions of Section 3-90. 28 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97; 29 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff. 30 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644, 31 eff. 8-20-99; 91-901, eff. 1-1-01.) 32 (35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10) 33 Sec. 3-10. Rate of tax. Unless otherwise provided in -10- LRB9204480SMdv 1 this Section, the tax imposed by this Act is at the rate of 2 6.25% of either the selling price or the fair market value, 3 if any, of the tangible personal property. In all cases 4 where property functionally used or consumed is the same as 5 the property that was purchased at retail, then the tax is 6 imposed on the selling price of the property. In all cases 7 where property functionally used or consumed is a by-product 8 or waste product that has been refined, manufactured, or 9 produced from property purchased at retail, then the tax is 10 imposed on the lower of the fair market value, if any, of the 11 specific property so used in this State or on the selling 12 price of the property purchased at retail. For purposes of 13 this Section "fair market value" means the price at which 14 property would change hands between a willing buyer and a 15 willing seller, neither being under any compulsion to buy or 16 sell and both having reasonable knowledge of the relevant 17 facts. The fair market value shall be established by Illinois 18 sales by the taxpayer of the same property as that 19 functionally used or consumed, or if there are no such sales 20 by the taxpayer, then comparable sales or purchases of 21 property of like kind and character in Illinois. 22 Beginning on July 1, 2000 and through December 31, 2000, 23 with respect to motor fuel, as defined in Section 1.1 of the 24 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 25 of the Use Tax Act, the tax is imposed at the rate of 1.25%. 26 With respect to gasohol, the tax imposed by this Act 27 applies to 70% of the proceeds of sales made on or after 28 January 1, 1990, and before January 1, 2002July 1, 2003, and 29 to 100% of the proceeds of sales made thereafter. 30 With respect to food for human consumption that is to be 31 consumed off the premises where it is sold (other than 32 alcoholic beverages, soft drinks, and food that has been 33 prepared for immediate consumption) and prescription and 34 nonprescription medicines, drugs, medical appliances, -11- LRB9204480SMdv 1 modifications to a motor vehicle for the purpose of rendering 2 it usable by a disabled person, and insulin, urine testing 3 materials, syringes, and needles used by diabetics, for human 4 use, the tax is imposed at the rate of 1%. For the purposes 5 of this Section, the term "soft drinks" means any complete, 6 finished, ready-to-use, non-alcoholic drink, whether 7 carbonated or not, including but not limited to soda water, 8 cola, fruit juice, vegetable juice, carbonated water, and all 9 other preparations commonly known as soft drinks of whatever 10 kind or description that are contained in any closed or 11 sealed bottle, can, carton, or container, regardless of size. 12 "Soft drinks" does not include coffee, tea, non-carbonated 13 water, infant formula, milk or milk products as defined in 14 the Grade A Pasteurized Milk and Milk Products Act, or drinks 15 containing 50% or more natural fruit or vegetable juice. 16 Notwithstanding any other provisions of this Act, "food 17 for human consumption that is to be consumed off the premises 18 where it is sold" includes all food sold through a vending 19 machine, except soft drinks and food products that are 20 dispensed hot from a vending machine, regardless of the 21 location of the vending machine. 22 If the property that is purchased at retail from a 23 retailer is acquired outside Illinois and used outside 24 Illinois before being brought to Illinois for use here and is 25 taxable under this Act, the "selling price" on which the tax 26 is computed shall be reduced by an amount that represents a 27 reasonable allowance for depreciation for the period of prior 28 out-of-state use. 29 (Source: P.A. 90-605, eff. 6-30-98; 90-606, eff. 6-30-98; 30 91-51, eff. 6-30-99; 91-872, eff. 7-1-00.) 31 Section 10. The Service Use Tax Act is amended by 32 changing Sections 3-5 and 3-10 as follows; -12- LRB9204480SMdv 1 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5) 2 Sec. 3-5. Exemptions. Use of the following tangible 3 personal property is exempt from the tax imposed by this Act: 4 (1) Personal property purchased from a corporation, 5 society, association, foundation, institution, or 6 organization, other than a limited liability company, that is 7 organized and operated as a not-for-profit service enterprise 8 for the benefit of persons 65 years of age or older if the 9 personal property was not purchased by the enterprise for the 10 purpose of resale by the enterprise. 11 (2) Personal property purchased by a non-profit Illinois 12 county fair association for use in conducting, operating, or 13 promoting the county fair. 14 (3) Personal property purchased by a not-for-profit arts 15 or cultural organization that establishes, by proof required 16 by the Department by rule, that it has received an exemption 17 under Section 501(c)(3) of the Internal Revenue Code and that 18 is organized and operated for the presentation or support of 19 arts or cultural programming, activities, or services. These 20 organizations include, but are not limited to, music and 21 dramatic arts organizations such as symphony orchestras and 22 theatrical groups, arts and cultural service organizations, 23 local arts councils, visual arts organizations, and media 24 arts organizations. 25 (4) Legal tender, currency, medallions, or gold or 26 silver coinage issued by the State of Illinois, the 27 government of the United States of America, or the government 28 of any foreign country, and bullion. 29 (5) Graphic arts machinery and equipment, including 30 repair and replacement parts, both new and used, and 31 including that manufactured on special order or purchased for 32 lease, certified by the purchaser to be used primarily for 33 graphic arts production. 34 (6) Personal property purchased from a teacher-sponsored -13- LRB9204480SMdv 1 student organization affiliated with an elementary or 2 secondary school located in Illinois. 3 (7) Farm machinery and equipment, both new and used, 4 including that manufactured on special order, certified by 5 the purchaser to be used primarily for production agriculture 6 or State or federal agricultural programs, including 7 individual replacement parts for the machinery and equipment, 8 including machinery and equipment purchased for lease, and 9 including implements of husbandry defined in Section 1-130 of 10 the Illinois Vehicle Code, farm machinery and agricultural 11 chemical and fertilizer spreaders, and nurse wagons required 12 to be registered under Section 3-809 of the Illinois Vehicle 13 Code, but excluding other motor vehicles required to be 14 registered under the Illinois Vehicle Code. Horticultural 15 polyhouses or hoop houses used for propagating, growing, or 16 overwintering plants shall be considered farm machinery and 17 equipment under this item (7). Agricultural chemical tender 18 tanks and dry boxes shall include units sold separately from 19 a motor vehicle required to be licensed and units sold 20 mounted on a motor vehicle required to be licensed if the 21 selling price of the tender is separately stated. 22 Farm machinery and equipment shall include precision 23 farming equipment that is installed or purchased to be 24 installed on farm machinery and equipment including, but not 25 limited to, tractors, harvesters, sprayers, planters, 26 seeders, or spreaders. Precision farming equipment includes, 27 but is not limited to, soil testing sensors, computers, 28 monitors, software, global positioning and mapping systems, 29 and other such equipment. 30 Farm machinery and equipment also includes computers, 31 sensors, software, and related equipment used primarily in 32 the computer-assisted operation of production agriculture 33 facilities, equipment, and activities such as, but not 34 limited to, the collection, monitoring, and correlation of -14- LRB9204480SMdv 1 animal and crop data for the purpose of formulating animal 2 diets and agricultural chemicals. This item (7) is exempt 3 from the provisions of Section 3-75. 4 (8) Fuel and petroleum products sold to or used by an 5 air common carrier, certified by the carrier to be used for 6 consumption, shipment, or storage in the conduct of its 7 business as an air common carrier, for a flight destined for 8 or returning from a location or locations outside the United 9 States without regard to previous or subsequent domestic 10 stopovers. 11 (9) Proceeds of mandatory service charges separately 12 stated on customers' bills for the purchase and consumption 13 of food and beverages acquired as an incident to the purchase 14 of a service from a serviceman, to the extent that the 15 proceeds of the service charge are in fact turned over as 16 tips or as a substitute for tips to the employees who 17 participate directly in preparing, serving, hosting or 18 cleaning up the food or beverage function with respect to 19 which the service charge is imposed. 20 (10) Oil field exploration, drilling, and production 21 equipment, including (i) rigs and parts of rigs, rotary rigs, 22 cable tool rigs, and workover rigs, (ii) pipe and tubular 23 goods, including casing and drill strings, (iii) pumps and 24 pump-jack units, (iv) storage tanks and flow lines, (v) any 25 individual replacement part for oil field exploration, 26 drilling, and production equipment, and (vi) machinery and 27 equipment purchased for lease; but excluding motor vehicles 28 required to be registered under the Illinois Vehicle Code. 29 (11) Proceeds from the sale of photoprocessing machinery 30 and equipment, including repair and replacement parts, both 31 new and used, including that manufactured on special order, 32 certified by the purchaser to be used primarily for 33 photoprocessing, and including photoprocessing machinery and 34 equipment purchased for lease. -15- LRB9204480SMdv 1 (12) Coal exploration, mining, offhighway hauling, 2 processing, maintenance, and reclamation equipment, including 3 replacement parts and equipment, and including equipment 4 purchased for lease, but excluding motor vehicles required to 5 be registered under the Illinois Vehicle Code. 6 (13) Semen used for artificial insemination of livestock 7 for direct agricultural production. 8 (14) Horses, or interests in horses, registered with and 9 meeting the requirements of any of the Arabian Horse Club 10 Registry of America, Appaloosa Horse Club, American Quarter 11 Horse Association, United States Trotting Association, or 12 Jockey Club, as appropriate, used for purposes of breeding or 13 racing for prizes. 14 (15) Computers and communications equipment utilized for 15 any hospital purpose and equipment used in the diagnosis, 16 analysis, or treatment of hospital patients purchased by a 17 lessor who leases the equipment, under a lease of one year or 18 longer executed or in effect at the time the lessor would 19 otherwise be subject to the tax imposed by this Act, 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. If the equipment is leased 23 in a manner that does not qualify for this exemption or is 24 used in any other non-exempt manner, the lessor shall be 25 liable for the tax imposed under this Act or the Use Tax Act, 26 as the case may be, based on the fair market value of the 27 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 Use Tax Act, as the case may 31 be, if the tax has not been paid by the lessor. If a lessor 32 improperly collects any such amount from the lessee, the 33 lessee shall have a legal right to claim a refund of that 34 amount from the lessor. If, however, that amount is not -16- LRB9204480SMdv 1 refunded to the lessee for any reason, the lessor is liable 2 to pay that amount to the Department. 3 (16) Personal property purchased by a lessor who leases 4 the property, under a lease of one year or longer executed or 5 in effect at the time the lessor would otherwise be subject 6 to the tax imposed by this Act, to a governmental body that 7 has been issued an active tax exemption identification number 8 by the Department under Section 1g of the Retailers' 9 Occupation Tax Act. If the property is leased in a manner 10 that does not qualify for this exemption or is used in any 11 other non-exempt manner, the lessor shall be liable for the 12 tax imposed under this Act or the Use Tax Act, as the case 13 may be, based on the fair market value of the property at the 14 time the non-qualifying use occurs. No lessor shall collect 15 or attempt to collect an amount (however designated) that 16 purports to reimburse that lessor for the tax imposed by this 17 Act or the Use Tax Act, as the case may be, if the tax has 18 not been paid by the lessor. If a lessor improperly collects 19 any such amount from the lessee, the lessee shall have a 20 legal right to claim a refund of that amount from the lessor. 21 If, however, that amount is not refunded to the lessee for 22 any reason, the lessor is liable to pay that amount to the 23 Department. 24 (17) Beginning with taxable years ending on or after 25 December 31, 1995 and ending with taxable years ending on or 26 before December 31, 2004, personal property that is donated 27 for disaster relief to be used in a State or federally 28 declared disaster area in Illinois or bordering Illinois by a 29 manufacturer or retailer that is registered in this State to 30 a corporation, society, association, foundation, or 31 institution that has been issued a sales tax exemption 32 identification number by the Department that assists victims 33 of the disaster who reside within the declared disaster area. 34 (18) Beginning with taxable years ending on or after -17- LRB9204480SMdv 1 December 31, 1995 and ending with taxable years ending on or 2 before December 31, 2004, personal property that is used in 3 the performance of infrastructure repairs in this State, 4 including but not limited to municipal roads and streets, 5 access roads, bridges, sidewalks, waste disposal systems, 6 water and sewer line extensions, water distribution and 7 purification facilities, storm water drainage and retention 8 facilities, and sewage treatment facilities, resulting from a 9 State or federally declared disaster in Illinois or bordering 10 Illinois when such repairs are initiated on facilities 11 located in the declared disaster area within 6 months after 12 the disaster. 13 (19) Beginning July 1, 1999, game or game birds 14 purchased at a "game breeding and hunting preserve area" or 15 an "exotic game hunting area" as those terms are used in the 16 Wildlife Code or at a hunting enclosure approved through 17 rules adopted by the Department of Natural Resources. This 18 paragraph is exempt from the provisions of Section 3-75. 19 (20)(19)A motor vehicle, as that term is defined in 20 Section 1-146 of the Illinois Vehicle Code, that is donated 21 to a corporation, limited liability company, society, 22 association, foundation, or institution that is determined by 23 the Department to be organized and operated exclusively for 24 educational purposes. For purposes of this exemption, "a 25 corporation, limited liability company, society, association, 26 foundation, or institution organized and operated exclusively 27 for educational purposes" means all tax-supported public 28 schools, private schools that offer systematic instruction in 29 useful branches of learning by methods common to public 30 schools and that compare favorably in their scope and 31 intensity with the course of study presented in tax-supported 32 schools, and vocational or technical schools or institutes 33 organized and operated exclusively to provide a course of 34 study of not less than 6 weeks duration and designed to -18- LRB9204480SMdv 1 prepare individuals to follow a trade or to pursue a manual, 2 technical, mechanical, industrial, business, or commercial 3 occupation. 4 (21)(20)Beginning January 1, 2000, personal property, 5 including food, purchased through fundraising events for the 6 benefit of a public or private elementary or secondary 7 school, a group of those schools, or one or more school 8 districts if the events are sponsored by an entity recognized 9 by the school district that consists primarily of volunteers 10 and includes parents and teachers of the school children. 11 This paragraph does not apply to fundraising events (i) for 12 the benefit of private home instruction or (ii) for which the 13 fundraising entity purchases the personal property sold at 14 the events from another individual or entity that sold the 15 property for the purpose of resale by the fundraising entity 16 and that profits from the sale to the fundraising entity. 17 This paragraph is exempt from the provisions of Section 3-75. 18 (22)(19)Beginning January 1, 2000, new or used 19 automatic vending machines that prepare and serve hot food 20 and beverages, including coffee, soup, and other items, and 21 replacement parts for these machines. This paragraph is 22 exempt from the provisions of Section 3-75. 23 (23) Beginning January 1, 2002, gasohol, as defined in 24 Section 3-40 of the Use Tax Act. This paragraph (23) is 25 exempt from the provisions of Section 3-75. 26 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97; 27 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff. 28 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644, 29 eff. 8-20-99; revised 9-29-99.) 30 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10) 31 Sec. 3-10. Rate of tax. Unless otherwise provided in 32 this Section, the tax imposed by this Act is at the rate of 33 6.25% of the selling price of tangible personal property -19- LRB9204480SMdv 1 transferred as an incident to the sale of service, but, for 2 the purpose of computing this tax, in no event shall the 3 selling price be less than the cost price of the property to 4 the serviceman. 5 Beginning on July 1, 2000 and through December 31, 2000, 6 with respect to motor fuel, as defined in Section 1.1 of the 7 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 8 of the Use Tax Act, the tax is imposed at the rate of 1.25%. 9 With respect to gasohol, as defined in the Use Tax Act, 10 the tax imposed by this Act applies to 70% of the selling 11 price of property transferred as an incident to the sale of 12 service on or after January 1, 1990, and before January 1, 13 2002July 1, 2003, and to 100% of the selling price 14 thereafter. 15 At the election of any registered serviceman made for 16 each fiscal year, sales of service in which the aggregate 17 annual cost price of tangible personal property transferred 18 as an incident to the sales of service is less than 35%, or 19 75% in the case of servicemen transferring prescription drugs 20 or servicemen engaged in graphic arts production, of the 21 aggregate annual total gross receipts from all sales of 22 service, the tax imposed by this Act shall be based on the 23 serviceman's cost price of the tangible personal property 24 transferred as an incident to the sale of those services. 25 The tax shall be imposed at the rate of 1% on food 26 prepared for immediate consumption and transferred incident 27 to a sale of service subject to this Act or the Service 28 Occupation Tax Act by an entity licensed under the Hospital 29 Licensing Act, the Nursing Home Care Act, or the Child Care 30 Act of 1969. The tax shall also be imposed at the rate of 1% 31 on food for human consumption that is to be consumed off the 32 premises where it is sold (other than alcoholic beverages, 33 soft drinks, and food that has been prepared for immediate 34 consumption and is not otherwise included in this paragraph) -20- LRB9204480SMdv 1 and prescription and nonprescription medicines, drugs, 2 medical appliances, modifications to a motor vehicle for the 3 purpose of rendering it usable by a disabled person, and 4 insulin, urine testing materials, syringes, and needles used 5 by diabetics, for human use. For the purposes of this 6 Section, the term "soft drinks" means any complete, finished, 7 ready-to-use, non-alcoholic drink, whether carbonated or not, 8 including but not limited to soda water, cola, fruit juice, 9 vegetable juice, carbonated water, and all other preparations 10 commonly known as soft drinks of whatever kind or description 11 that are contained in any closed or sealed bottle, can, 12 carton, or container, regardless of size. "Soft drinks" does 13 not include coffee, tea, non-carbonated water, infant 14 formula, milk or milk products as defined in the Grade A 15 Pasteurized Milk and Milk Products Act, or drinks containing 16 50% or more natural fruit or vegetable juice. 17 Notwithstanding any other provisions of this Act, "food 18 for human consumption that is to be consumed off the premises 19 where it is sold" includes all food sold through a vending 20 machine, except soft drinks and food products that are 21 dispensed hot from a vending machine, regardless of the 22 location of the vending machine. 23 If the property that is acquired from a serviceman is 24 acquired outside Illinois and used outside Illinois before 25 being brought to Illinois for use here and is taxable under 26 this Act, the "selling price" on which the tax is computed 27 shall be reduced by an amount that represents a reasonable 28 allowance for depreciation for the period of prior 29 out-of-state use. 30 (Source: P.A. 90-605, eff. 6-30-98; 90-606, eff. 6-30-98; 31 91-51, eff. 6-30-99; 91-541, eff. 8-13-99; 91-872, eff. 32 7-1-00.) 33 Section 15. The Service Occupation Tax Act is amended by -21- LRB9204480SMdv 1 changing Section 3-5 and 3-10 as follows: 2 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5) 3 Sec. 3-5. Exemptions. The following tangible personal 4 property is exempt from the tax imposed by this Act: 5 (1) Personal property sold by a corporation, society, 6 association, foundation, institution, or organization, other 7 than a limited liability company, that is organized and 8 operated as a not-for-profit service enterprise for the 9 benefit of persons 65 years of age or older if the personal 10 property was not purchased by the enterprise for the purpose 11 of resale by the enterprise. 12 (2) Personal property purchased by a not-for-profit 13 Illinois county fair association for use in conducting, 14 operating, or promoting the county fair. 15 (3) Personal property purchased by any not-for-profit 16 arts or cultural 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 or support of arts or cultural programming, activities, or 21 services. These organizations include, but are not limited 22 to, music and dramatic arts organizations such as symphony 23 orchestras and theatrical groups, arts and cultural service 24 organizations, local arts councils, visual arts 25 organizations, and media arts organizations. 26 (4) Legal tender, currency, medallions, or gold or 27 silver coinage issued by the State of Illinois, the 28 government of the United States of America, or the government 29 of any foreign country, and bullion. 30 (5) Graphic arts machinery and equipment, including 31 repair and replacement parts, both new and used, and 32 including that manufactured on special order or purchased for 33 lease, certified by the purchaser to be used primarily for -22- LRB9204480SMdv 1 graphic arts production. 2 (6) Personal property sold by a teacher-sponsored 3 student organization affiliated with an elementary or 4 secondary school located in Illinois. 5 (7) Farm machinery and equipment, both new and used, 6 including that manufactured on special order, certified by 7 the purchaser to be used primarily for production agriculture 8 or State or federal agricultural programs, including 9 individual replacement parts for the machinery and equipment, 10 including machinery and equipment purchased for lease, and 11 including implements of husbandry defined in Section 1-130 of 12 the Illinois Vehicle Code, farm machinery and agricultural 13 chemical and fertilizer spreaders, and nurse wagons required 14 to be registered under Section 3-809 of the Illinois Vehicle 15 Code, but excluding other motor vehicles required to be 16 registered under the Illinois Vehicle Code. Horticultural 17 polyhouses or hoop houses used for propagating, growing, or 18 overwintering plants shall be considered farm machinery and 19 equipment under this item (7). Agricultural chemical tender 20 tanks and dry boxes shall include units sold separately from 21 a motor vehicle required to be licensed and units sold 22 mounted on a motor vehicle required to be licensed if the 23 selling price of the tender is separately stated. 24 Farm machinery and equipment shall include precision 25 farming equipment that is installed or purchased to be 26 installed on farm machinery and equipment including, but not 27 limited to, tractors, harvesters, sprayers, planters, 28 seeders, or spreaders. Precision farming equipment includes, 29 but is not limited to, soil testing sensors, computers, 30 monitors, software, global positioning and mapping systems, 31 and other such equipment. 32 Farm machinery and equipment also includes computers, 33 sensors, software, and related equipment used primarily in 34 the computer-assisted operation of production agriculture -23- LRB9204480SMdv 1 facilities, equipment, and activities such as, but not 2 limited to, the collection, monitoring, and correlation of 3 animal and crop data for the purpose of formulating animal 4 diets and agricultural chemicals. This item (7) is exempt 5 from the provisions of Section 3-55. 6 (8) Fuel and petroleum products sold to or used by an 7 air common carrier, certified by the carrier to be used for 8 consumption, shipment, or storage in the conduct of its 9 business as an air common carrier, for a flight destined for 10 or returning from a location or locations outside the United 11 States without regard to previous or subsequent domestic 12 stopovers. 13 (9) Proceeds of mandatory service charges separately 14 stated on customers' bills for the purchase and consumption 15 of food and beverages, to the extent that the proceeds of the 16 service charge are in fact turned over as tips or as a 17 substitute for tips to the employees who participate directly 18 in preparing, serving, hosting or cleaning up the food or 19 beverage function with respect to which the service charge is 20 imposed. 21 (10) 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 (11) 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 -24- LRB9204480SMdv 1 for lease. 2 (12) 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 (13) Food for human consumption that is to be consumed 8 off the premises where it is sold (other than alcoholic 9 beverages, soft drinks and food that has been prepared for 10 immediate consumption) and prescription and non-prescription 11 medicines, drugs, medical appliances, and insulin, urine 12 testing materials, syringes, and needles used by diabetics, 13 for human use, when purchased for use by a person receiving 14 medical assistance under Article 5 of the Illinois Public Aid 15 Code who resides in a licensed long-term care facility, as 16 defined in the Nursing Home Care Act. 17 (14) Semen used for artificial insemination of livestock 18 for direct agricultural production. 19 (15) Horses, or interests in horses, registered with and 20 meeting the requirements of any of the Arabian Horse Club 21 Registry of America, Appaloosa Horse Club, American Quarter 22 Horse Association, United States Trotting Association, or 23 Jockey Club, as appropriate, used for purposes of breeding or 24 racing for prizes. 25 (16) Computers and communications equipment utilized for 26 any hospital purpose and equipment used in the diagnosis, 27 analysis, or treatment of hospital patients sold to a lessor 28 who leases the equipment, under a lease of one year or longer 29 executed or in effect at the time of the purchase, to a 30 hospital that has been issued an active tax exemption 31 identification number by the Department under Section 1g of 32 the Retailers' Occupation Tax Act. 33 (17) Personal property sold to a lessor who leases the 34 property, under a lease of one year or longer executed or in -25- LRB9204480SMdv 1 effect at the time of the purchase, to a governmental body 2 that has been issued an active tax exemption identification 3 number by the Department under Section 1g of the Retailers' 4 Occupation Tax Act. 5 (18) 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 donated 8 for disaster relief to be used in a State or federally 9 declared disaster area in Illinois or bordering Illinois by a 10 manufacturer or retailer that is registered in this State to 11 a corporation, society, association, foundation, or 12 institution that has been issued a sales tax exemption 13 identification number by the Department that assists victims 14 of the disaster who reside within the declared disaster area. 15 (19) Beginning with taxable years ending on or after 16 December 31, 1995 and ending with taxable years ending on or 17 before December 31, 2004, personal property that is used in 18 the performance of infrastructure repairs in this State, 19 including but not limited to municipal roads and streets, 20 access roads, bridges, sidewalks, waste disposal systems, 21 water and sewer line extensions, water distribution and 22 purification facilities, storm water drainage and retention 23 facilities, and sewage treatment facilities, resulting from a 24 State or federally declared disaster in Illinois or bordering 25 Illinois when such repairs are initiated on facilities 26 located in the declared disaster area within 6 months after 27 the disaster. 28 (20) Beginning July 1, 1999, game or game birds sold at 29 a "game breeding and hunting preserve area" or an "exotic 30 game hunting area" as those terms are used in the Wildlife 31 Code or at a hunting enclosure approved through rules adopted 32 by the Department of Natural Resources. This paragraph is 33 exempt from the provisions of Section 3-55. 34 (21)(20)A motor vehicle, as that term is defined in -26- LRB9204480SMdv 1 Section 1-146 of the Illinois Vehicle Code, that is donated 2 to a corporation, limited liability company, society, 3 association, foundation, or institution that is determined by 4 the Department to be organized and operated exclusively for 5 educational purposes. For purposes of this exemption, "a 6 corporation, limited liability company, society, association, 7 foundation, or institution organized and operated exclusively 8 for educational purposes" means all tax-supported public 9 schools, private schools that offer systematic instruction in 10 useful branches of learning by methods common to public 11 schools and that compare favorably in their scope and 12 intensity with the course of study presented in tax-supported 13 schools, and vocational or technical schools or institutes 14 organized and operated exclusively to provide a course of 15 study of not less than 6 weeks duration and designed to 16 prepare individuals to follow a trade or to pursue a manual, 17 technical, mechanical, industrial, business, or commercial 18 occupation. 19 (22)(21)Beginning January 1, 2000, personal property, 20 including food, purchased through fundraising events for the 21 benefit of a public or private elementary or secondary 22 school, a group of those schools, or one or more school 23 districts if the events are sponsored by an entity recognized 24 by the school district that consists primarily of volunteers 25 and includes parents and teachers of the school children. 26 This paragraph does not apply to fundraising events (i) for 27 the benefit of private home instruction or (ii) for which the 28 fundraising entity purchases the personal property sold at 29 the events from another individual or entity that sold the 30 property for the purpose of resale by the fundraising entity 31 and that profits from the sale to the fundraising entity. 32 This paragraph is exempt from the provisions of Section 3-55. 33 (23)(20)Beginning January 1, 2000, new or used 34 automatic vending machines that prepare and serve hot food -27- LRB9204480SMdv 1 and beverages, including coffee, soup, and other items, and 2 replacement parts for these machines. This paragraph is 3 exempt from the provisions of Section 3-55. 4 (24) Beginning January 1, 2002, gasohol, as defined in 5 Section 3-40 of the Use Tax Act. This paragraph (24) is 6 exempt from the provisions of Section 3-55. 7 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97; 8 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff. 9 7-20-99; 91-439, eff. 8-6-99; 91-533, eff. 8-13-99; 91-637, 10 eff. 8-20-99; 91-644, eff. 8-20-99; revised 9-29-99.) 11 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10) 12 Sec. 3-10. Rate of tax. Unless otherwise provided in 13 this Section, the tax imposed by this Act is at the rate of 14 6.25% of the "selling price", as defined in Section 2 of the 15 Service Use Tax Act, of the tangible personal property. For 16 the purpose of computing this tax, in no event shall the 17 "selling price" be less than the cost price to the serviceman 18 of the tangible personal property transferred. The selling 19 price of each item of tangible personal property transferred 20 as an incident of a sale of service may be shown as a 21 distinct and separate item on the serviceman's billing to the 22 service customer. If the selling price is not so shown, the 23 selling price of the tangible personal property is deemed to 24 be 50% of the serviceman's entire billing to the service 25 customer. When, however, a serviceman contracts to design, 26 develop, and produce special order machinery or equipment, 27 the tax imposed by this Act shall be based on the 28 serviceman's cost price of the tangible personal property 29 transferred incident to the completion of the contract. 30 Beginning on July 1, 2000 and through December 31, 2000, 31 with respect to motor fuel, as defined in Section 1.1 of the 32 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 33 of the Use Tax Act, the tax is imposed at the rate of 1.25%. -28- LRB9204480SMdv 1 With respect to gasohol, as defined in the Use Tax Act, 2 the tax imposed by this Act shall apply to 70% of the cost 3 price of property transferred as an incident to the sale of 4 service on or after January 1, 1990, and before January 1, 5 2002July 1, 2003, and to 100% of the cost price thereafter. 6 At the election of any registered serviceman made for 7 each fiscal year, sales of service in which the aggregate 8 annual cost price of tangible personal property transferred 9 as an incident to the sales of service is less than 35%, or 10 75% in the case of servicemen transferring prescription drugs 11 or servicemen engaged in graphic arts production, of the 12 aggregate annual total gross receipts from all sales of 13 service, the tax imposed by this Act shall be based on the 14 serviceman's cost price of the tangible personal property 15 transferred incident to the sale of those services. 16 The tax shall be imposed at the rate of 1% on food 17 prepared for immediate consumption and transferred incident 18 to a sale of service subject to this Act or the Service 19 Occupation Tax Act by an entity licensed under the Hospital 20 Licensing Act, the Nursing Home Care Act, or the Child Care 21 Act of 1969. The tax shall also be imposed at the rate of 1% 22 on food for human consumption that is to be consumed off the 23 premises where it is sold (other than alcoholic beverages, 24 soft drinks, and food that has been prepared for immediate 25 consumption and is not otherwise included in this paragraph) 26 and prescription and nonprescription medicines, drugs, 27 medical appliances, modifications to a motor vehicle for the 28 purpose of rendering it usable by a disabled person, and 29 insulin, urine testing materials, syringes, and needles used 30 by diabetics, for human use. For the purposes of this 31 Section, the term "soft drinks" means any complete, finished, 32 ready-to-use, non-alcoholic drink, whether carbonated or not, 33 including but not limited to soda water, cola, fruit juice, 34 vegetable juice, carbonated water, and all other preparations -29- LRB9204480SMdv 1 commonly known as soft drinks of whatever kind or description 2 that are contained in any closed or sealed can, carton, or 3 container, regardless of size. "Soft drinks" does not 4 include coffee, tea, non-carbonated water, infant formula, 5 milk or milk products as defined in the Grade A Pasteurized 6 Milk and Milk Products Act, or drinks containing 50% or more 7 natural fruit or vegetable juice. 8 Notwithstanding any other provisions of this Act, "food 9 for human consumption that is to be consumed off the premises 10 where it is sold" includes all food sold through a vending 11 machine, except soft drinks and food products that are 12 dispensed hot from a vending machine, regardless of the 13 location of the vending machine. 14 (Source: P.A. 90-605, eff. 6-30-98; 90-606, eff. 6-30-98; 15 91-51, 6-30-99; 91-541, eff. 8-13-99; 91-872, eff. 7-1-00.) 16 Section 20. The Retailers' Occupation Tax Act is amended 17 by changing Sections 2-5 and 2-20 as follows: 18 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5) 19 Sec. 2-5. Exemptions. Gross receipts from proceeds from 20 the sale of the following tangible personal property are 21 exempt from the tax imposed by this Act: 22 (1) Farm chemicals. 23 (2) Farm machinery and equipment, both new and used, 24 including that manufactured on special order, certified by 25 the purchaser to be used primarily for production agriculture 26 or State or federal agricultural programs, including 27 individual replacement parts for the machinery and equipment, 28 including machinery and equipment purchased for lease, and 29 including implements of husbandry defined in Section 1-130 of 30 the Illinois Vehicle Code, farm machinery and agricultural 31 chemical and fertilizer spreaders, and nurse wagons required 32 to be registered under Section 3-809 of the Illinois Vehicle -30- LRB9204480SMdv 1 Code, but excluding other motor vehicles required to be 2 registered under the Illinois Vehicle Code. Horticultural 3 polyhouses or hoop houses used for propagating, growing, or 4 overwintering plants shall be considered farm machinery and 5 equipment under this item (2). Agricultural chemical tender 6 tanks and dry boxes shall include units sold separately from 7 a motor vehicle required to be licensed and units sold 8 mounted on a motor vehicle required to be licensed, if the 9 selling price of the tender is separately stated. 10 Farm machinery and equipment shall include precision 11 farming equipment that is installed or purchased to be 12 installed on farm machinery and equipment including, but not 13 limited to, tractors, harvesters, sprayers, planters, 14 seeders, or spreaders. Precision farming equipment includes, 15 but is not limited to, soil testing sensors, computers, 16 monitors, software, global positioning and mapping systems, 17 and other such equipment. 18 Farm machinery and equipment also includes computers, 19 sensors, software, and related equipment used primarily in 20 the computer-assisted operation of production agriculture 21 facilities, equipment, and activities such as, but not 22 limited to, the collection, monitoring, and correlation of 23 animal and crop data for the purpose of formulating animal 24 diets and agricultural chemicals. This item (7) is exempt 25 from the provisions of Section 2-70. 26 (3) Distillation machinery and equipment, sold as a unit 27 or kit, assembled or installed by the retailer, certified by 28 the user to be used only for the production of ethyl alcohol 29 that will be used for consumption as motor fuel or as a 30 component of motor fuel for the personal use of the user, and 31 not subject to sale or resale. 32 (4) Graphic arts machinery and equipment, including 33 repair and replacement parts, both new and used, and 34 including that manufactured on special order or purchased for -31- LRB9204480SMdv 1 lease, certified by the purchaser to be used primarily for 2 graphic arts production. 3 (5) 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 access to the living quarters from the 8 driver's seat, or a motor vehicle of the second division that 9 is of the van configuration designed for the transportation 10 of not 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. 14 (6) Personal property sold by a teacher-sponsored 15 student organization affiliated with an elementary or 16 secondary school located in Illinois. 17 (7) Proceeds of that portion of the selling price of a 18 passenger car the sale of which is subject to the Replacement 19 Vehicle Tax. 20 (8) Personal property sold to an Illinois county fair 21 association for use in conducting, operating, or promoting 22 the county fair. 23 (9) Personal property sold to a not-for-profit arts or 24 cultural organization that establishes, by proof required by 25 the Department by rule, that it has received an exemption 26 under Section 501(c)(3) of the Internal Revenue Code and that 27 is organized and operated for the presentation or support of 28 arts or cultural programming, activities, or services. These 29 organizations include, but are not limited to, music and 30 dramatic arts organizations such as symphony orchestras and 31 theatrical groups, arts and cultural service organizations, 32 local arts councils, visual arts organizations, and media 33 arts organizations. 34 (10) Personal property sold by a corporation, society, -32- LRB9204480SMdv 1 association, foundation, institution, or organization, other 2 than a limited liability company, that is organized and 3 operated as a not-for-profit service enterprise for the 4 benefit of persons 65 years of age or older if the personal 5 property was not purchased by the enterprise for the purpose 6 of resale by the enterprise. 7 (11) Personal property sold to a governmental body, to a 8 corporation, society, association, foundation, or institution 9 organized and operated exclusively for charitable, religious, 10 or educational purposes, or to a not-for-profit corporation, 11 society, association, foundation, institution, or 12 organization that has no compensated officers or employees 13 and that is organized and operated primarily for the 14 recreation of persons 55 years of age or older. A limited 15 liability company may qualify for the exemption under this 16 paragraph only if the limited liability company is organized 17 and operated exclusively for educational purposes. On and 18 after July 1, 1987, however, no entity otherwise eligible for 19 this exemption shall make tax-free purchases unless it has an 20 active identification number issued by the Department. 21 (12) Personal property sold to interstate carriers for 22 hire for use as rolling stock moving in interstate commerce 23 or to lessors under leases of one year or longer executed or 24 in effect at the time of purchase by interstate carriers for 25 hire for use as rolling stock moving in interstate commerce 26 and equipment operated by a telecommunications provider, 27 licensed as a common carrier by the Federal Communications 28 Commission, which is permanently installed in or affixed to 29 aircraft moving in interstate commerce. 30 (13) Proceeds from sales to owners, lessors, or shippers 31 of tangible personal property that is utilized by interstate 32 carriers for hire for use as rolling stock moving in 33 interstate commerce and equipment operated by a 34 telecommunications provider, licensed as a common carrier by -33- LRB9204480SMdv 1 the Federal Communications Commission, which is permanently 2 installed in or affixed to aircraft moving in interstate 3 commerce. 4 (14) Machinery and equipment that will be used by the 5 purchaser, or a lessee of the purchaser, primarily in the 6 process of manufacturing or assembling tangible personal 7 property for wholesale or retail sale or lease, whether the 8 sale or lease is made directly by the manufacturer or by some 9 other person, whether the materials used in the process are 10 owned by the manufacturer or some other person, or whether 11 the sale or lease is made apart from or as an incident to the 12 seller's engaging in the service occupation of producing 13 machines, tools, dies, jigs, patterns, gauges, or other 14 similar items of no commercial value on special order for a 15 particular purchaser. 16 (15) Proceeds of mandatory service charges separately 17 stated on customers' bills for purchase and consumption of 18 food and beverages, to the extent that the proceeds of the 19 service charge are in fact turned over as tips or as a 20 substitute for tips to the employees who participate directly 21 in preparing, serving, hosting or cleaning up the food or 22 beverage function with respect to which the service charge is 23 imposed. 24 (16) Petroleum products sold to a purchaser if the 25 seller is prohibited by federal law from charging tax to the 26 purchaser. 27 (17) Tangible personal property sold to a common carrier 28 by rail or motor that receives the physical possession of the 29 property in Illinois and that transports the property, or 30 shares with another common carrier in the transportation of 31 the property, out of Illinois on a standard uniform bill of 32 lading showing the seller of the property as the shipper or 33 consignor of the property to a destination outside Illinois, 34 for use outside Illinois. -34- LRB9204480SMdv 1 (18) Legal tender, currency, medallions, or gold or 2 silver coinage issued by the State of Illinois, the 3 government of the United States of America, or the government 4 of any foreign country, and bullion. 5 (19) Oil field exploration, drilling, and production 6 equipment, including (i) rigs and parts of rigs, rotary rigs, 7 cable tool rigs, and workover rigs, (ii) pipe and tubular 8 goods, including casing and drill strings, (iii) pumps and 9 pump-jack units, (iv) storage tanks and flow lines, (v) any 10 individual replacement part for oil field exploration, 11 drilling, and production equipment, and (vi) machinery and 12 equipment purchased for lease; but excluding motor vehicles 13 required to be registered under the Illinois Vehicle Code. 14 (20) Photoprocessing machinery and equipment, including 15 repair and replacement parts, both new and used, including 16 that manufactured on special order, certified by the 17 purchaser to be used primarily for photoprocessing, and 18 including photoprocessing machinery and equipment purchased 19 for lease. 20 (21) Coal exploration, mining, offhighway hauling, 21 processing, maintenance, and reclamation equipment, including 22 replacement parts and equipment, and including equipment 23 purchased for lease, but excluding motor vehicles required to 24 be registered under the Illinois Vehicle Code. 25 (22) Fuel and petroleum products sold to or used by an 26 air carrier, certified by the carrier to be used for 27 consumption, shipment, or storage in the conduct of its 28 business as an air common carrier, for a flight destined for 29 or returning from a location or locations outside the United 30 States without regard to previous or subsequent domestic 31 stopovers. 32 (23) A transaction in which the purchase order is 33 received by a florist who is located outside Illinois, but 34 who has a florist located in Illinois deliver the property to -35- LRB9204480SMdv 1 the purchaser or the purchaser's donee in Illinois. 2 (24) Fuel consumed or used in the operation of ships, 3 barges, or vessels that are used primarily in or for the 4 transportation of property or the conveyance of persons for 5 hire on rivers bordering on this State if the fuel is 6 delivered by the seller to the purchaser's barge, ship, or 7 vessel while it is afloat upon that bordering river. 8 (25) A motor vehicle sold in this State to a nonresident 9 even though the motor vehicle is delivered to the nonresident 10 in this State, if the motor vehicle is not to be titled in 11 this State, and if a driveaway decal permit is issued to the 12 motor vehicle as provided in Section 3-603 of the Illinois 13 Vehicle Code or if the nonresident purchaser has vehicle 14 registration plates to transfer to the motor vehicle upon 15 returning to his or her home state. The issuance of the 16 driveaway decal permit or having the out-of-state 17 registration plates to be transferred is prima facie evidence 18 that the motor vehicle will not be titled in this State. 19 (26) Semen used for artificial insemination of livestock 20 for direct agricultural production. 21 (27) 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 (28) Computers and communications equipment utilized for 28 any hospital purpose and equipment used in the diagnosis, 29 analysis, or treatment of hospital patients sold to a lessor 30 who leases the equipment, under a lease of one year or longer 31 executed or in effect at the time of the purchase, to a 32 hospital that has been issued an active tax exemption 33 identification number by the Department under Section 1g of 34 this Act. -36- LRB9204480SMdv 1 (29) Personal property sold to a lessor who leases the 2 property, under a lease of one year or longer executed or in 3 effect at the time of the purchase, to a governmental body 4 that has been issued an active tax exemption identification 5 number by the Department under Section 1g of this Act. 6 (30) Beginning with taxable years ending on or after 7 December 31, 1995 and ending with taxable years ending on or 8 before December 31, 2004, personal property that is donated 9 for disaster relief to be used in a State or federally 10 declared disaster area in Illinois or bordering Illinois by a 11 manufacturer or retailer that is registered in this State to 12 a corporation, society, association, foundation, or 13 institution that has been issued a sales tax exemption 14 identification number by the Department that assists victims 15 of the disaster who reside within the declared disaster area. 16 (31) Beginning with taxable years ending on or after 17 December 31, 1995 and ending with taxable years ending on or 18 before December 31, 2004, personal property that is used in 19 the performance of infrastructure repairs in this State, 20 including but not limited to municipal roads and streets, 21 access roads, bridges, sidewalks, waste disposal systems, 22 water and sewer line extensions, water distribution and 23 purification facilities, storm water drainage and retention 24 facilities, and sewage treatment facilities, resulting from a 25 State or federally declared disaster in Illinois or bordering 26 Illinois when such repairs are initiated on facilities 27 located in the declared disaster area within 6 months after 28 the disaster. 29 (32) Beginning July 1, 1999, game or game birds sold at 30 a "game breeding and hunting preserve area" or an "exotic 31 game hunting area" as those terms are used in the Wildlife 32 Code or at a hunting enclosure approved through rules adopted 33 by the Department of Natural Resources. This paragraph is 34 exempt from the provisions of Section 2-70. -37- LRB9204480SMdv 1 (33)(32)A motor vehicle, as that term is defined in 2 Section 1-146 of the Illinois Vehicle Code, that is donated 3 to a corporation, limited liability company, society, 4 association, foundation, or institution that is determined by 5 the Department to be organized and operated exclusively for 6 educational purposes. For purposes of this exemption, "a 7 corporation, limited liability company, society, association, 8 foundation, or institution organized and operated exclusively 9 for educational purposes" means all tax-supported public 10 schools, private schools that offer systematic instruction in 11 useful branches of learning by methods common to public 12 schools and that compare favorably in their scope and 13 intensity with the course of study presented in tax-supported 14 schools, and vocational or technical schools or institutes 15 organized and operated exclusively to provide a course of 16 study of not less than 6 weeks duration and designed to 17 prepare individuals to follow a trade or to pursue a manual, 18 technical, mechanical, industrial, business, or commercial 19 occupation. 20 (34)(33)Beginning January 1, 2000, personal property, 21 including food, purchased through fundraising events for the 22 benefit of a public or private elementary or secondary 23 school, a group of those schools, or one or more school 24 districts if the events are sponsored by an entity recognized 25 by the school district that consists primarily of volunteers 26 and includes parents and teachers of the school children. 27 This paragraph does not apply to fundraising events (i) for 28 the benefit of private home instruction or (ii) for which the 29 fundraising entity purchases the personal property sold at 30 the events from another individual or entity that sold the 31 property for the purpose of resale by the fundraising entity 32 and that profits from the sale to the fundraising entity. 33 This paragraph is exempt from the provisions of Section 2-70. 34 (35)(32)Beginning January 1, 2000, new or used -38- LRB9204480SMdv 1 automatic vending machines that prepare and serve hot food 2 and beverages, including coffee, soup, and other items, and 3 replacement parts for these machines. This paragraph is 4 exempt from the provisions of Section 2-70. 5 (36) Beginning January 1, 2002, gasohol, as defined in 6 Section 3-40 of the Use Tax Act. This paragraph (36) is 7 exempt from the provisions of Section 2-70. 8 (Source: P.A. 90-14, eff. 7-1-97; 90-519, eff. 6-1-98; 9 90-552, eff. 12-12-97; 90-605, eff. 6-30-98; 91-51, eff. 10 6-30-99; 91-200, eff. 7-20-99; 91-439, eff. 8-6-99; 91-533, 11 eff. 8-13-99; 91-637, eff. 8-20-99; 91-644, eff. 8-20-99; 12 revised 9-28-99.) 13 (35 ILCS 120/2-10) (from Ch. 120, par. 441-10) 14 Sec. 2-10. Rate of tax. Unless otherwise provided in 15 this Section, the tax imposed by this Act is at the rate of 16 6.25% of gross receipts from sales of tangible personal 17 property made in the course of business. 18 Beginning on July 1, 2000 and through December 31, 2000, 19 with respect to motor fuel, as defined in Section 1.1 of the 20 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 21 of the Use Tax Act, the tax is imposed at the rate of 1.25%. 22 Within 14 days after the effective date of this 23 amendatory Act of the 91st General Assembly, each retailer of 24 motor fuel and gasohol shall cause the following notice to be 25 posted in a prominently visible place on each retail 26 dispensing device that is used to dispense motor fuel or 27 gasohol in the State of Illinois: "As of July 1, 2000, the 28 State of Illinois has eliminated the State's share of sales 29 tax on motor fuel and gasohol through December 31, 2000. The 30 price on this pump should reflect the elimination of the 31 tax." The notice shall be printed in bold print on a sign 32 that is no smaller than 4 inches by 8 inches. The sign shall 33 be clearly visible to customers. Any retailer who fails to -39- LRB9204480SMdv 1 post or maintain a required sign through December 31, 2000 is 2 guilty of a petty offense for which the fine shall be $500 3 per day per each retail premises where a violation occurs. 4 With respect to gasohol, as defined in the Use Tax Act, 5 the tax imposed by this Act applies to 70% of the proceeds of 6 sales made on or after January 1, 1990, and before January 1, 7 2002July 1, 2003, and to 100% of the proceeds of sales made 8 thereafter. 9 With respect to food for human consumption that is to be 10 consumed off the premises where it is sold (other than 11 alcoholic beverages, soft drinks, and food that has been 12 prepared for immediate consumption) and prescription and 13 nonprescription medicines, drugs, medical appliances, 14 modifications to a motor vehicle for the purpose of rendering 15 it usable by a disabled person, and insulin, urine testing 16 materials, syringes, and needles used by diabetics, for human 17 use, the tax is imposed at the rate of 1%. For the purposes 18 of this Section, the term "soft drinks" means any complete, 19 finished, ready-to-use, non-alcoholic drink, whether 20 carbonated or not, including but not limited to soda water, 21 cola, fruit juice, vegetable juice, carbonated water, and all 22 other preparations commonly known as soft drinks of whatever 23 kind or description that are contained in any closed or 24 sealed bottle, can, carton, or container, regardless of size. 25 "Soft drinks" does not include coffee, tea, non-carbonated 26 water, infant formula, milk or milk products as defined in 27 the Grade A Pasteurized Milk and Milk Products Act, or drinks 28 containing 50% or more natural fruit or vegetable juice. 29 Notwithstanding any other provisions of this Act, "food 30 for human consumption that is to be consumed off the premises 31 where it is sold" includes all food sold through a vending 32 machine, except soft drinks and food products that are 33 dispensed hot from a vending machine, regardless of the 34 location of the vending machine. -40- LRB9204480SMdv 1 (Source: P.A. 90-605, eff. 6-30-98; 90-606, eff. 6-30-98; 2 91-51, eff. 6-30-99; 91-872, eff. 7-1-00.) 3 Section 99. Effective date. This Act takes effect upon 4 becoming law.