State of Illinois
92^nd General Assembly
Legislation

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92_HB3289enr

 
HB3289 Enrolled                                LRB9205821SMdv

 1        AN ACT concerning 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    Sections  3-5,  3-45  and  3-50  and adding Section 3-10.5 as
 6    follows:

 7        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 8        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
 9    personal property is exempt from the tax imposed by this Act:
10        (1)  Personal  property  purchased  from  a  corporation,
11    society,    association,    foundation,    institution,    or
12    organization, other than a limited liability company, that is
13    organized and operated as a not-for-profit service enterprise
14    for  the  benefit  of persons 65 years of age or older if the
15    personal property was not purchased by the enterprise for the
16    purpose of resale by the enterprise.
17        (2)  Personal  property  purchased  by  a  not-for-profit
18    Illinois county  fair  association  for  use  in  conducting,
19    operating, or promoting the county fair.
20        (3)  Personal property purchased by a not-for-profit arts
21    or  cultural organization that establishes, by proof required
22    by the Department by rule, that it has received an  exemption
23    under Section 501(c)(3) of the Internal Revenue Code and that
24    is  organized and operated for the presentation or support of
25    arts or cultural programming, activities, or services.  These
26    organizations include, but are  not  limited  to,  music  and
27    dramatic  arts  organizations such as symphony orchestras and
28    theatrical groups, arts and cultural  service  organizations,
29    local  arts  councils,  visual  arts organizations, and media
30    arts organizations.
31        (4)  Personal property purchased by a governmental  body,
 
HB3289 Enrolled          -2-                   LRB9205821SMdv
 1    by   a  corporation,  society,  association,  foundation,  or
 2    institution   organized   and   operated   exclusively    for
 3    charitable,  religious,  or  educational  purposes,  or  by a
 4    not-for-profit corporation, society, association, foundation,
 5    institution, or organization that has no compensated officers
 6    or employees and that is organized and operated primarily for
 7    the recreation of persons 55 years of age or older. A limited
 8    liability company may qualify for the  exemption  under  this
 9    paragraph  only if the limited liability company is organized
10    and operated exclusively for  educational  purposes.  On  and
11    after July 1, 1987, however, no entity otherwise eligible for
12    this exemption shall make tax-free purchases unless it has an
13    active   exemption   identification   number  issued  by  the
14    Department.
15        (5)  A passenger car that is a replacement vehicle to the
16    extent that the purchase price of the car is subject  to  the
17    Replacement Vehicle Tax.
18        (6)  Graphic  arts  machinery  and  equipment,  including
19    repair   and  replacement  parts,  both  new  and  used,  and
20    including that manufactured on special  order,  certified  by
21    the   purchaser   to  be  used  primarily  for  graphic  arts
22    production, and including machinery and  equipment  purchased
23    for  lease.  Equipment includes chemicals or chemicals acting
24    as catalysts but only if the chemicals or chemicals acting as
25    catalysts effect a direct and immediate change upon a graphic
26    arts product.
27        (7)  Farm chemicals.
28        (8)  Legal  tender,  currency,  medallions,  or  gold  or
29    silver  coinage  issued  by  the  State  of   Illinois,   the
30    government of the United States of America, or the government
31    of any foreign country, and bullion.
32        (9)  Personal property purchased from a teacher-sponsored
33    student   organization   affiliated  with  an  elementary  or
34    secondary school located in Illinois.
 
HB3289 Enrolled          -3-                   LRB9205821SMdv
 1        (10)  A motor vehicle of  the  first  division,  a  motor
 2    vehicle of the second division that is a self-contained motor
 3    vehicle  designed  or permanently converted to provide living
 4    quarters for  recreational,  camping,  or  travel  use,  with
 5    direct  walk through to the living quarters from the driver's
 6    seat, or a motor vehicle of the second division  that  is  of
 7    the  van configuration designed for the transportation of not
 8    less than 7 nor  more  than  16  passengers,  as  defined  in
 9    Section  1-146 of the Illinois Vehicle Code, that is used for
10    automobile renting, as  defined  in  the  Automobile  Renting
11    Occupation and Use Tax Act.
12        (11)  Farm  machinery  and  equipment, both new and used,
13    including that manufactured on special  order,  certified  by
14    the purchaser to be used primarily for production agriculture
15    or   State   or   federal  agricultural  programs,  including
16    individual replacement parts for the machinery and equipment,
17    including machinery and equipment purchased  for  lease,  and
18    including implements of husbandry defined in Section 1-130 of
19    the  Illinois  Vehicle  Code, farm machinery and agricultural
20    chemical and fertilizer spreaders, and nurse wagons  required
21    to  be registered under Section 3-809 of the Illinois Vehicle
22    Code, but excluding  other  motor  vehicles  required  to  be
23    registered  under  the  Illinois  Vehicle Code. Horticultural
24    polyhouses or hoop houses used for propagating,  growing,  or
25    overwintering  plants  shall be considered farm machinery and
26    equipment under this item (11). Agricultural chemical  tender
27    tanks  and dry boxes shall include units sold separately from
28    a motor vehicle  required  to  be  licensed  and  units  sold
29    mounted  on  a  motor  vehicle required to be licensed if the
30    selling price of the tender is separately stated.
31        Farm machinery  and  equipment  shall  include  precision
32    farming  equipment  that  is  installed  or  purchased  to be
33    installed on farm machinery and equipment including, but  not
34    limited   to,   tractors,   harvesters,  sprayers,  planters,
 
HB3289 Enrolled          -4-                   LRB9205821SMdv
 1    seeders, or spreaders. Precision farming equipment  includes,
 2    but  is  not  limited  to,  soil  testing sensors, computers,
 3    monitors, software, global positioning and  mapping  systems,
 4    and other such equipment.
 5        Farm  machinery  and  equipment  also includes computers,
 6    sensors, software, and related equipment  used  primarily  in
 7    the  computer-assisted  operation  of  production agriculture
 8    facilities,  equipment,  and  activities  such  as,  but  not
 9    limited to, the collection, monitoring,  and  correlation  of
10    animal  and  crop  data for the purpose of formulating animal
11    diets and agricultural chemicals.  This item (11)  is  exempt
12    from the provisions of Section 3-90.
13        (12)  Fuel  and  petroleum products sold to or used by an
14    air common carrier, certified by the carrier to be  used  for
15    consumption,  shipment,  or  storage  in  the  conduct of its
16    business as an air common carrier, for a flight destined  for
17    or  returning from a location or locations outside the United
18    States without regard  to  previous  or  subsequent  domestic
19    stopovers.
20        (13)  Proceeds  of  mandatory  service charges separately
21    stated on customers' bills for the purchase  and  consumption
22    of food and beverages purchased at retail from a retailer, to
23    the  extent  that  the  proceeds of the service charge are in
24    fact turned over as tips or as a substitute for tips  to  the
25    employees  who  participate  directly  in preparing, serving,
26    hosting or cleaning up the food  or  beverage  function  with
27    respect to which the service charge is imposed.
28        (14)  Oil  field  exploration,  drilling,  and production
29    equipment, including (i) rigs and parts of rigs, rotary rigs,
30    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
31    goods,  including  casing  and drill strings, (iii) pumps and
32    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
33    individual   replacement  part  for  oil  field  exploration,
34    drilling, and production equipment, and  (vi)  machinery  and
 
HB3289 Enrolled          -5-                   LRB9205821SMdv
 1    equipment  purchased  for lease; but excluding motor vehicles
 2    required to be registered under the Illinois Vehicle Code.
 3        (15)  Photoprocessing machinery and equipment,  including
 4    repair  and  replacement  parts, both new and used, including
 5    that  manufactured  on  special  order,  certified   by   the
 6    purchaser  to  be  used  primarily  for  photoprocessing, and
 7    including photoprocessing machinery and  equipment  purchased
 8    for lease.
 9        (16)  Coal   exploration,   mining,  offhighway  hauling,
10    processing, maintenance, and reclamation equipment, including
11    replacement parts  and  equipment,  and  including  equipment
12    purchased for lease, but excluding motor vehicles required to
13    be registered under the Illinois Vehicle Code.
14        (17)  Distillation  machinery  and  equipment,  sold as a
15    unit  or  kit,  assembled  or  installed  by  the   retailer,
16    certified  by  the user to be used only for the production of
17    ethyl alcohol that will be used for consumption as motor fuel
18    or as a component of motor fuel for the personal use  of  the
19    user, and not subject to sale or resale.
20        (18)  Manufacturing    and   assembling   machinery   and
21    equipment used primarily in the process of  manufacturing  or
22    assembling tangible personal property for wholesale or retail
23    sale or lease, whether that sale or lease is made directly by
24    the  manufacturer  or  by  some  other  person,  whether  the
25    materials  used  in the process are owned by the manufacturer
26    or some other person, or whether that sale or lease  is  made
27    apart  from or as an incident to the seller's engaging in the
28    service occupation of producing machines, tools, dies,  jigs,
29    patterns,  gauges,  or  other  similar items of no commercial
30    value on special order for a particular purchaser.
31        (19)  Personal  property  delivered  to  a  purchaser  or
32    purchaser's donee inside Illinois when the purchase order for
33    that personal property was  received  by  a  florist  located
34    outside  Illinois  who  has a florist located inside Illinois
 
HB3289 Enrolled          -6-                   LRB9205821SMdv
 1    deliver the personal property.
 2        (20)  Semen used for artificial insemination of livestock
 3    for direct agricultural production.
 4        (21)  Horses, or interests in horses, registered with and
 5    meeting the requirements of any of  the  Arabian  Horse  Club
 6    Registry  of  America, Appaloosa Horse Club, American Quarter
 7    Horse Association, United  States  Trotting  Association,  or
 8    Jockey Club, as appropriate, used for purposes of breeding or
 9    racing for prizes.
10        (22)  Computers and communications equipment utilized for
11    any  hospital  purpose  and  equipment used in the diagnosis,
12    analysis, or treatment of hospital patients  purchased  by  a
13    lessor who leases the equipment, under a lease of one year or
14    longer  executed  or  in  effect at the time the lessor would
15    otherwise be subject to the tax imposed by  this  Act,  to  a
16    hospital    that  has  been  issued  an  active tax exemption
17    identification number by the Department under Section  1g  of
18    the  Retailers'  Occupation  Tax  Act.   If  the equipment is
19    leased in a manner that does not qualify for  this  exemption
20    or  is  used in any other non-exempt manner, the lessor shall
21    be liable for the tax imposed under this Act or  the  Service
22    Use  Tax  Act,  as  the case may be, based on the fair market
23    value of the property at  the  time  the  non-qualifying  use
24    occurs.   No  lessor  shall  collect or attempt to collect an
25    amount (however designated) that purports to  reimburse  that
26    lessor for the tax imposed by this Act or the Service Use Tax
27    Act,  as the case may be, if the tax has not been paid by the
28    lessor.  If a lessor improperly collects any such amount from
29    the lessee, the lessee shall have a legal right  to  claim  a
30    refund  of  that  amount  from the lessor.  If, however, that
31    amount is not refunded to the  lessee  for  any  reason,  the
32    lessor is liable to pay that amount to the Department.
33        (23)  Personal  property purchased by a lessor who leases
34    the property, under a lease of  one year or  longer  executed
 
HB3289 Enrolled          -7-                   LRB9205821SMdv
 1    or  in  effect  at  the  time  the  lessor would otherwise be
 2    subject to the tax imposed by this  Act,  to  a  governmental
 3    body  that  has  been  issued  an  active sales tax exemption
 4    identification number by the Department under Section  1g  of
 5    the  Retailers' Occupation Tax Act. If the property is leased
 6    in a manner that does not qualify for this exemption or  used
 7    in  any  other  non-exempt manner, the lessor shall be liable
 8    for the tax imposed under this Act or  the  Service  Use  Tax
 9    Act,  as  the  case may be, based on the fair market value of
10    the property at the time the non-qualifying use  occurs.   No
11    lessor shall collect or attempt to collect an amount (however
12    designated)  that  purports  to reimburse that lessor for the
13    tax imposed by this Act or the Service Use Tax  Act,  as  the
14    case  may be, if the tax has not been paid by the lessor.  If
15    a lessor improperly collects any such amount from the lessee,
16    the lessee shall have a legal right to claim a refund of that
17    amount from the lessor.  If,  however,  that  amount  is  not
18    refunded  to  the lessee for any reason, the lessor is liable
19    to pay that amount to the Department.
20        (24)  Beginning with taxable years  ending  on  or  after
21    December  31, 1995 and ending with taxable years ending on or
22    before December 31, 2004, personal property that  is  donated
23    for  disaster  relief  to  be  used  in  a State or federally
24    declared disaster area in Illinois or bordering Illinois by a
25    manufacturer or retailer that is registered in this State  to
26    a   corporation,   society,   association,   foundation,   or
27    institution  that  has  been  issued  a  sales  tax exemption
28    identification number by the Department that assists  victims
29    of the disaster who reside within the declared disaster area.
30        (25)  Beginning  with  taxable  years  ending on or after
31    December 31, 1995 and ending with taxable years ending on  or
32    before  December  31, 2004, personal property that is used in
33    the performance of  infrastructure  repairs  in  this  State,
34    including  but  not  limited  to municipal roads and streets,
 
HB3289 Enrolled          -8-                   LRB9205821SMdv
 1    access roads, bridges,  sidewalks,  waste  disposal  systems,
 2    water  and  sewer  line  extensions,  water  distribution and
 3    purification facilities, storm water drainage  and  retention
 4    facilities, and sewage treatment facilities, resulting from a
 5    State or federally declared disaster in Illinois or bordering
 6    Illinois  when  such  repairs  are  initiated  on  facilities
 7    located  in  the declared disaster area within 6 months after
 8    the disaster.
 9        (26)  Beginning  July  1,  1999,  game  or   game   birds
10    purchased  at  a "game breeding and hunting preserve area" or
11    an "exotic game hunting area" as those terms are used in  the
12    Wildlife  Code  or  at  a  hunting enclosure approved through
13    rules adopted by the Department of Natural  Resources.   This
14    paragraph is exempt from the provisions of Section 3-90.
15        (27)  A motor vehicle, as that term is defined in Section
16    1-146  of  the  Illinois  Vehicle  Code, that is donated to a
17    corporation, limited liability company, society, association,
18    foundation,  or  institution  that  is  determined   by   the
19    Department  to  be  organized  and  operated  exclusively for
20    educational purposes.  For purposes  of  this  exemption,  "a
21    corporation, limited liability company, society, association,
22    foundation, or institution organized and operated exclusively
23    for  educational  purposes"  means  all  tax-supported public
24    schools, private schools that offer systematic instruction in
25    useful branches of  learning  by  methods  common  to  public
26    schools  and  that  compare  favorably  in  their  scope  and
27    intensity with the course of study presented in tax-supported
28    schools,  and  vocational  or technical schools or institutes
29    organized and operated exclusively to  provide  a  course  of
30    study  of  not  less  than  6  weeks duration and designed to
31    prepare individuals to follow a trade or to pursue a  manual,
32    technical,  mechanical,  industrial,  business, or commercial
33    occupation.
34        (28)  Beginning  January  1,  2000,   personal  property,
 
HB3289 Enrolled          -9-                   LRB9205821SMdv
 1    including food, purchased through fundraising events for  the
 2    benefit  of  a  public  or  private  elementary  or secondary
 3    school, a group of those  schools,  or  one  or  more  school
 4    districts if the events are sponsored by an entity recognized
 5    by  the school district that consists primarily of volunteers
 6    and includes parents and teachers  of  the  school  children.
 7    This  paragraph  does not apply to fundraising events (i) for
 8    the benefit of private home instruction or (ii) for which the
 9    fundraising entity purchases the personal  property  sold  at
10    the  events  from  another individual or entity that sold the
11    property for the purpose of resale by the fundraising  entity
12    and  that  profits  from  the sale to the fundraising entity.
13    This paragraph is exempt from the provisions of Section 3-90.
14        (29)  Beginning January 1, 2000, new  or  used  automatic
15    vending   machines  that  prepare  and  serve  hot  food  and
16    beverages, including  coffee,  soup,  and  other  items,  and
17    replacement  parts  for  these  machines.   This paragraph is
18    exempt from the provisions of Section 3-90.
19        (30)  Food for human consumption that is to  be  consumed
20    off  the  premises  where  it  is  sold (other than alcoholic
21    beverages, soft drinks, and food that has been  prepared  for
22    immediate  consumption)  and prescription and nonprescription
23    medicines, drugs,  medical  appliances,  and  insulin,  urine
24    testing  materials,  syringes, and needles used by diabetics,
25    for human use, when purchased for use by a  person  receiving
26    medical assistance under Article 5 of the Illinois Public Aid
27    Code  who  resides  in a licensed long-term care facility, as
28    defined in the Nursing Home Care Act.
29    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
30    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
31    7-20-99; 91-439, eff. 8-6-99; 91-637, eff.  8-20-99;  91-644,
32    eff. 8-20-99; 91-901, eff. 1-1-01.)

33        (35 ILCS 105/3-10.5 new)
 
HB3289 Enrolled          -10-                  LRB9205821SMdv
 1        Sec.  3-10.5. Direct payment of retailers' occupation tax
 2    and applicable local retailers' occupation tax by  purchaser;
 3    purchaser  relieved  of  paying  use tax and local retailers'
 4    occupation tax reimbursement liabilities to retailer.
 5        (a)  A retailer who  makes  a  retail  sale  of  tangible
 6    personal  property  to  a purchaser who provides the retailer
 7    with a copy of the purchaser's valid Direct Pay Permit issued
 8    under Section 2-10.5 of the Retailers' Occupation Tax Act  is
 9    not  required  under  Section 3-45 of this Act to collect the
10    tax imposed by this Act on that sale.
11        (b)  A purchaser who makes a purchase from a retailer who
12    would otherwise incur retailers' occupation tax liability  on
13    the  transaction and who provides the retailer with a copy of
14    a valid Direct Pay Permit issued under Section 2-10.5 of  the
15    Retailers'  Occupation Tax Act does not incur the tax imposed
16    by this Act on  the  purchase.   The  purchaser  assumes  the
17    retailer's  obligation  to  pay the retailers' occupation tax
18    directly to the Department, including  all  local  retailers'
19    occupation tax liabilities applicable to that retail sale.
20        (c)  A purchaser who makes a purchase from a retailer who
21    would  not  incur  retailers' occupation tax liability on the
22    transaction and who provides the retailer with a  copy  of  a
23    valid  Direct  Pay  Permit issued under Section 2-10.5 of the
24    Retailers' Occupation Tax Act incurs the tax imposed by  this
25    Act on the purchase.  If, on any transaction, the retailer is
26    entitled  under  this  Act  to  a discount for collecting and
27    remitting the tax imposed under this Act to  the  Department,
28    the  right  to the discount provided in Section 9 of this Act
29    shall be transferred to the Permit holder.   If the  retailer
30    would  not be entitled to a discount as provided in Section 9
31    of this Act, then the Permit holder  is  not  entitled  to  a
32    discount.

33        (35 ILCS 105/3-45) (from Ch. 120, par. 439.3-45)
 
HB3289 Enrolled          -11-                  LRB9205821SMdv
 1        Sec.  3-45.   Collection.   The  tax  imposed by this Act
 2    shall  be  collected  from  the  purchaser  by   a   retailer
 3    maintaining  a  place of business in this State or a retailer
 4    authorized by the Department under Section 6 of this Act, and
 5    shall be remitted to the Department as provided in Section  9
 6    of  this  Act,  except  as provided in Section 3-10.5 of this
 7    Act.
 8        The tax imposed by  this  Act  that  is  not  paid  to  a
 9    retailer  under  this Section shall be paid to the Department
10    directly by any person using the property within  this  State
11    as provided in Section 10 of this Act.
12        Retailers  shall collect the tax from users by adding the
13    tax to the selling price of tangible personal property,  when
14    sold  for  use,  in  the manner prescribed by the Department.
15    The Department may adopt and promulgate reasonable rules  and
16    regulations for the adding of the tax by retailers to selling
17    prices  by  prescribing  bracket  systems  for the purpose of
18    enabling  the  retailers  to  add  and  collect,  as  far  as
19    practicable, the amount of the tax.
20        If a seller collects use tax measured  by  receipts  that
21    are not subject to use tax, or if a seller, in collecting use
22    tax  measured  by receipts that are subject to tax under this
23    Act, collects more  from  the  purchaser  than  the  required
24    amount of the use tax on the transaction, the purchaser shall
25    have  a legal right to claim a refund of that amount from the
26    seller.  If, however, that amount  is  not  refunded  to  the
27    purchaser  for  any  reason, the seller is liable to pay that
28    amount to the Department.  This paragraph does not  apply  to
29    an amount collected by the seller as use tax on receipts that
30    are  subject  to tax under this Act as long as the collection
31    is made  in  compliance  with  the  tax  collection  brackets
32    prescribed by the Department in its rules and regulations.
33    (Source: P.A. 91-51, eff. 6-30-99.)
 
HB3289 Enrolled          -12-                  LRB9205821SMdv
 1        (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
 2        Sec.  3-50.   Manufacturing  and  assembly exemption. The
 3    manufacturing  and   assembling   machinery   and   equipment
 4    exemption  includes  machinery  and  equipment  that replaces
 5    machinery and equipment in an existing manufacturing facility
 6    as well as machinery and equipment that are  for  use  in  an
 7    expanded  or  new  manufacturing  facility. The machinery and
 8    equipment exemption also  includes  machinery  and  equipment
 9    used in the general maintenance or repair of exempt machinery
10    and equipment or for in-house manufacture of exempt machinery
11    and equipment. For the purposes of this exemption, terms have
12    the following meanings:
13             (1)  "Manufacturing process" means the production of
14        an  article  of  tangible  personal property, whether the
15        article is a finished product or an article  for  use  in
16        the  process  of  manufacturing or assembling a different
17        article of tangible personal  property,  by  a  procedure
18        commonly    regarded    as   manufacturing,   processing,
19        fabricating,  or  refining  that  changes  some  existing
20        material into a material with a different form,  use,  or
21        name.   In  relation  to a recognized integrated business
22        composed of a  series  of  operations  that  collectively
23        constitute   manufacturing,  or  individually  constitute
24        manufacturing  operations,  the   manufacturing   process
25        commences with the first operation or stage of production
26        in  the  series  and does not end until the completion of
27        the final product in  the  last  operation  or  stage  of
28        production   in   the   series.   For  purposes  of  this
29        exemption, photoprocessing is a manufacturing process  of
30        tangible personal property for wholesale or retail sale.
31             (2)  "Assembling process" means the production of an
32        article   of  tangible  personal  property,  whether  the
33        article is a finished product or an article  for  use  in
34        the  process  of  manufacturing or assembling a different
 
HB3289 Enrolled          -13-                  LRB9205821SMdv
 1        article of tangible personal property, by the combination
 2        of existing materials in a manner  commonly  regarded  as
 3        assembling  that  results  in an article or material of a
 4        different form, use, or name.
 5             (3)  "Machinery" means major mechanical machines  or
 6        major  components  of  those  machines  contributing to a
 7        manufacturing or assembling process.
 8             (4)  "Equipment" includes an independent  device  or
 9        tool   separate   from  machinery  but  essential  to  an
10        integrated manufacturing or assembly  process;  including
11        computers  used  primarily  in a manufacturer's operating
12        exempt machinery and equipment  in  a  computer  assisted
13        design, computer assisted manufacturing (CAD/CAM) system;
14        any  subunit  or  assembly  comprising a component of any
15        machinery or auxiliary, adjunct, or attachment  parts  of
16        machinery, such as tools, dies, jigs, fixtures, patterns,
17        and   molds;   and   any   parts  that  require  periodic
18        replacement in the course of normal operation;  but  does
19        not  include  hand tools. Equipment includes chemicals or
20        chemicals acting as catalysts but only if  the  chemicals
21        or  chemicals  acting  as  catalysts  effect a direct and
22        immediate change upon a  product  being  manufactured  or
23        assembled for wholesale or retail sale or lease.
24        The  manufacturing and assembling machinery and equipment
25    exemption includes the sale of materials to a  purchaser  who
26    produces exempted types of machinery, equipment, or tools and
27    who  rents or leases that machinery, equipment, or tools to a
28    manufacturer of tangible personal property.   This  exemption
29    also  includes  the  sale  of  materials  to  a purchaser who
30    manufactures  those  materials  into  an  exempted  type   of
31    machinery,  equipment,  or  tools  that  the  purchaser  uses
32    himself  or herself in the manufacturing of tangible personal
33    property.  This exemption includes the sale of exempted types
34    of machinery or equipment to  a  purchaser  who  is  not  the
 
HB3289 Enrolled          -14-                  LRB9205821SMdv
 1    manufacturer, but who rents or leases the use of the property
 2    to  a  manufacturer.  The  purchaser  of  the  machinery  and
 3    equipment  who has an active resale registration number shall
 4    furnish that number to the seller at the time of purchase.  A
 5    user of the machinery, equipment, or tools without an  active
 6    resale  registration  number  shall  prepare a certificate of
 7    exemption for each transaction stating facts establishing the
 8    exemption for that transaction, and that certificate shall be
 9    available to the Department  for  inspection  or  audit.  The
10    Department  shall  prescribe  the  form  of  the certificate.
11    Informal  rulings,  opinions,  or  letters  issued   by   the
12    Department  in  response  to  an  inquiry  or  request for an
13    opinion  from  any  person   regarding   the   coverage   and
14    applicability  of this exemption to specific devices shall be
15    published, maintained as a public record, and made  available
16    for  public  inspection and copying.  If the informal ruling,
17    opinion,  or  letter  contains   trade   secrets   or   other
18    confidential  information,  where  possible,  the  Department
19    shall  delete  that information before publication.  Whenever
20    informal rulings, opinions, or letters contain  a  policy  of
21    general  applicability,  the  Department  shall formulate and
22    adopt that policy as a rule in accordance with  the  Illinois
23    Administrative Procedure Act.
24    (Source: P.A. 91-51, eff. 6-30-99.)

25        Section  10.   The  Service  Use  Tax  Act  is amended by
26    changing Sections 2 and 3-5 as follows:

27        (35 ILCS 110/2) (from Ch. 120, par. 439.32)
28        Sec. 2. "Use" means the exercise by  any  person  of  any
29    right  or  power  over tangible personal property incident to
30    the ownership of that property, but does not include the sale
31    or use for demonstration by him of that property in any  form
32    as  tangible  personal  property  in  the  regular  course of
 
HB3289 Enrolled          -15-                  LRB9205821SMdv
 1    business. "Use" does not mean the  interim  use  of  tangible
 2    personal  property nor the physical incorporation of tangible
 3    personal property, as  an  ingredient  or  constituent,  into
 4    other  tangible  personal  property, (a) which is sold in the
 5    regular  course  of  business  or  (b)   which   the   person
 6    incorporating  such  ingredient  or  constituent  therein has
 7    undertaken at the time  of  such  purchase  to  cause  to  be
 8    transported  in  interstate  commerce to destinations outside
 9    the State of Illinois.
10        "Purchased from a serviceman" means  the  acquisition  of
11    the  ownership  of,  or  title to, tangible personal property
12    through a sale of service.
13        "Purchaser" means any  person  who,  through  a  sale  of
14    service, acquires the ownership of, or title to, any tangible
15    personal property.
16        "Cost   price"   means  the  consideration  paid  by  the
17    serviceman for a purchase valued in money,  whether  paid  in
18    money or otherwise, including cash, credits and services, and
19    shall  be  determined without any deduction on account of the
20    supplier's cost of the property sold or  on  account  of  any
21    other  expense  incurred  by  the supplier. When a serviceman
22    contracts out part or all of the  services  required  in  his
23    sale  of service, it shall be presumed that the cost price to
24    the serviceman of the property transferred to him or  her  by
25    his   or   her   subcontractor   is   equal  to  50%  of  the
26    subcontractor's charges to the serviceman in the  absence  of
27    proof  of the consideration paid by the subcontractor for the
28    purchase of such property.
29        "Selling price" means the consideration for a sale valued
30    in money whether received in money  or  otherwise,  including
31    cash,  credits  and  service, and shall be determined without
32    any deduction on account of  the  serviceman's  cost  of  the
33    property  sold,  the cost of materials used, labor or service
34    cost or any other expense whatsoever, but  does  not  include
 
HB3289 Enrolled          -16-                  LRB9205821SMdv
 1    interest or finance charges which appear as separate items on
 2    the bill of sale or sales contract nor charges that are added
 3    to  prices  by  sellers  on  account  of the seller's duty to
 4    collect, from the purchaser, the tax that is imposed by  this
 5    Act.
 6        "Department" means the Department of Revenue.
 7        "Person" means any natural individual, firm, partnership,
 8    association,  joint  stock  company, joint venture, public or
 9    private  corporation,  limited  liability  company,  and  any
10    receiver, executor, trustee, guardian or other representative
11    appointed by order of any court.
12        "Sale of service" means any transaction except:
13             (1)  a retail sale  of  tangible  personal  property
14        taxable  under the Retailers' Occupation Tax Act or under
15        the Use Tax Act.
16             (2)  a sale of tangible personal  property  for  the
17        purpose  of  resale made in compliance with Section 2c of
18        the Retailers' Occupation Tax Act.
19             (3)  except  as  hereinafter  provided,  a  sale  or
20        transfer of tangible personal property as an incident  to
21        the rendering of service for or by any governmental body,
22        or  for  or  by  any  corporation,  society, association,
23        foundation  or   institution   organized   and   operated
24        exclusively  for  charitable,  religious  or  educational
25        purposes  or  any  not-for-profit  corporation,  society,
26        association,   foundation,  institution  or  organization
27        which has no compensated officers or employees and  which
28        is organized and operated primarily for the recreation of
29        persons  55  years  of  age or older. A limited liability
30        company  may  qualify  for  the  exemption   under   this
31        paragraph  only  if  the  limited  liability  company  is
32        organized   and   operated  exclusively  for  educational
33        purposes.
34             (4)  a  sale  or  transfer  of   tangible   personal
 
HB3289 Enrolled          -17-                  LRB9205821SMdv
 1        property  as  an incident to the rendering of service for
 2        interstate carriers for hire for  use  as  rolling  stock
 3        moving in interstate commerce or by lessors under a lease
 4        of  one year or longer, executed or in effect at the time
 5        of purchase of personal property, to interstate  carriers
 6        for  hire  for  use as rolling stock moving in interstate
 7        commerce so long as so used by such  interstate  carriers
 8        for  hire, and equipment operated by a telecommunications
 9        provider, licensed as a common  carrier  by  the  Federal
10        Communications Commission, which is permanently installed
11        in or affixed to aircraft moving in interstate commerce.
12             (4a)  a   sale  or  transfer  of  tangible  personal
13        property as an incident to the rendering of  service  for
14        owners,   lessors,   or  shippers  of  tangible  personal
15        property which is utilized  by  interstate  carriers  for
16        hire  for  use  as  rolling  stock  moving  in interstate
17        commerce so long as so used by  interstate  carriers  for
18        hire,  and  equipment  operated  by  a telecommunications
19        provider, licensed as a common  carrier  by  the  Federal
20        Communications Commission, which is permanently installed
21        in or affixed to aircraft moving in interstate commerce.
22             (5)  a  sale  or transfer of machinery and equipment
23        used primarily in the process  of  the  manufacturing  or
24        assembling,  either  in an existing, an expanded or a new
25        manufacturing facility, of tangible personal property for
26        wholesale or retail sale or lease, whether such  sale  or
27        lease  is  made  directly  by the manufacturer or by some
28        other person, whether the materials used in  the  process
29        are  owned  by  the manufacturer or some other person, or
30        whether such sale or lease is made apart from  or  as  an
31        incident to the seller's engaging in a service occupation
32        and  the  applicable  tax is a Service Use Tax or Service
33        Occupation  Tax,  rather  than  Use  Tax  or   Retailers'
34        Occupation Tax.
 
HB3289 Enrolled          -18-                  LRB9205821SMdv
 1             (5a)  the  repairing,  reconditioning or remodeling,
 2        for a  common  carrier  by  rail,  of  tangible  personal
 3        property  which  belongs to such carrier for hire, and as
 4        to which such carrier receives the physical possession of
 5        the repaired, reconditioned or remodeled item of tangible
 6        personal property in Illinois,  and  which  such  carrier
 7        transports,  or shares with another common carrier in the
 8        transportation of such property, out  of  Illinois  on  a
 9        standard  uniform  bill  of lading showing the person who
10        repaired, reconditioned or remodeled the  property  to  a
11        destination outside Illinois, for use outside Illinois.
12             (5b)  a   sale  or  transfer  of  tangible  personal
13        property which is  produced  by  the  seller  thereof  on
14        special  order  in  such  a  way  as  to  have  made  the
15        applicable  tax the Service Occupation Tax or the Service
16        Use Tax, rather than the Retailers' Occupation Tax or the
17        Use Tax, for an interstate carrier by rail which receives
18        the physical possession of such property in Illinois, and
19        which transports such property, or  shares  with  another
20        common  carrier  in  the transportation of such property,
21        out of Illinois on a  standard  uniform  bill  of  lading
22        showing  the  seller  of  the  property as the shipper or
23        consignor of  such  property  to  a  destination  outside
24        Illinois, for use outside Illinois.
25             (6)  a  sale  or  transfer of distillation machinery
26        and equipment, sold as a unit or  kit  and  assembled  or
27        installed  by the retailer, which machinery and equipment
28        is certified  by  the  user  to  be  used  only  for  the
29        production  of  ethyl  alcohol  that  will  be  used  for
30        consumption as motor fuel or as a component of motor fuel
31        for the personal use of such user and not subject to sale
32        or resale.
33             (7)  at  the election of any serviceman not required
34        to be otherwise registered as a retailer under Section 2a
 
HB3289 Enrolled          -19-                  LRB9205821SMdv
 1        of the Retailers'  Occupation  Tax  Act,  made  for  each
 2        fiscal  year  sales  of  service  in  which the aggregate
 3        annual  cost  price   of   tangible   personal   property
 4        transferred  as  an  incident  to the sales of service is
 5        less  than  35%,  or  75%  in  the  case  of   servicemen
 6        transferring  prescription drugs or servicemen engaged in
 7        graphic arts production, of the  aggregate  annual  total
 8        gross receipts from all sales of service. The purchase of
 9        such  tangible  personal property by the serviceman shall
10        be subject to tax under the Retailers' Occupation Tax Act
11        and the Use Tax Act.  However, if  a  primary  serviceman
12        who  has  made  the  election described in this paragraph
13        subcontracts service work to a secondary  serviceman  who
14        has  also  made the election described in this paragraph,
15        the primary serviceman does not incur a Use Tax liability
16        if the secondary serviceman (i) has paid or will pay  Use
17        Tax  on  his  or  her cost price of any tangible personal
18        property transferred to the primary serviceman  and  (ii)
19        certifies that fact in writing to the primary serviceman.
20        Tangible  personal  property  transferred incident to the
21    completion of a maintenance agreement is exempt from the  tax
22    imposed pursuant to this Act.
23        Exemption  (5) also includes machinery and equipment used
24    in the general maintenance or repair of such exempt machinery
25    and equipment or for in-house manufacture of exempt machinery
26    and equipment. For the purposes of  exemption  (5),  each  of
27    these   terms   shall   have  the  following  meanings:   (1)
28    "manufacturing process" shall  mean  the  production  of  any
29    article  of  tangible personal property, whether such article
30    is a finished product or an article for use in the process of
31    manufacturing or assembling a different article  of  tangible
32    personal   property,   by  procedures  commonly  regarded  as
33    manufacturing, processing,  fabricating,  or  refining  which
34    changes  some  existing material or materials into a material
 
HB3289 Enrolled          -20-                  LRB9205821SMdv
 1    with a different  form,  use  or  name.   In  relation  to  a
 2    recognized  integrated  business  composed  of  a  series  of
 3    operations  which  collectively  constitute manufacturing, or
 4    individually   constitute   manufacturing   operations,   the
 5    manufacturing process shall be deemed to  commence  with  the
 6    first  operation  or  stage  of production in the series, and
 7    shall not be deemed to end until the completion of the  final
 8    product  in  the last operation or stage of production in the
 9    series;  and  further,  for  purposes   of   exemption   (5),
10    photoprocessing  is  deemed  to be a manufacturing process of
11    tangible personal property for wholesale or retail sale;  (2)
12    "assembling process" shall mean the production of any article
13    of  tangible  personal  property,  whether  such article is a
14    finished product or an article for  use  in  the  process  of
15    manufacturing  or  assembling a different article of tangible
16    personal property, by the combination of  existing  materials
17    in  a manner commonly regarded as assembling which results in
18    a material of a different form, use or name; (3)  "machinery"
19    shall  mean  major mechanical machines or major components of
20    such machines contributing to a manufacturing  or  assembling
21    process;  and  (4)  "equipment" shall include any independent
22    device or tool separate from any machinery but  essential  to
23    an  integrated  manufacturing  or assembly process; including
24    computers used primarily in a manufacturer's operating exempt
25    machinery  and  equipment  in  a  computer  assisted  design,
26    computer assisted  manufacturing  (CAD/CAM)  system;  or  any
27    subunit  or  assembly comprising a component of any machinery
28    or auxiliary, adjunct or attachment parts of machinery,  such
29    as  tools,  dies,  jigs, fixtures, patterns and molds; or any
30    parts which require periodic replacement  in  the  course  of
31    normal operation; but shall not include hand tools. Equipment
32    includes  chemicals or chemicals acting as catalysts but only
33    if the chemicals or chemicals acting as  catalysts  effect  a
34    direct and immediate change upon a product being manufactured
 
HB3289 Enrolled          -21-                  LRB9205821SMdv
 1    or  assembled  for  wholesale  or  retail  sale or lease. The
 2    purchaser of such machinery and equipment who has  an  active
 3    resale  registration  number shall furnish such number to the
 4    seller at the time of purchase. The user  of  such  machinery
 5    and equipment and tools without an active resale registration
 6    number  shall  prepare  a  certificate  of exemption for each
 7    transaction stating facts establishing the exemption for that
 8    transaction, which certificate  shall  be  available  to  the
 9    Department  for  inspection  or  audit.  The Department shall
10    prescribe the form of the certificate.
11        Any informal rulings, opinions or letters issued  by  the
12    Department  in  response  to  an  inquiry  or request for any
13    opinion  from  any  person   regarding   the   coverage   and
14    applicability  of  exemption (5) to specific devices shall be
15    published, maintained as a public record, and made  available
16    for  public  inspection and copying.  If the informal ruling,
17    opinion  or  letter   contains   trade   secrets   or   other
18    confidential information, where possible the Department shall
19    delete  such information prior to publication.  Whenever such
20    informal rulings, opinions, or letters contain any policy  of
21    general  applicability,  the  Department  shall formulate and
22    adopt such policy as a rule in accordance with the provisions
23    of the Illinois Administrative Procedure Act.
24        On and after July 1, 1987, no entity  otherwise  eligible
25    under  exemption  (3)  of  this  Section  shall make tax free
26    purchases unless it has an  active  exemption  identification
27    number issued by the Department.
28        The  purchase,  employment  and transfer of such tangible
29    personal property  as  newsprint  and  ink  for  the  primary
30    purpose of conveying news (with or without other information)
31    is  not  a  purchase,  use  or sale of service or of tangible
32    personal property within the meaning of this Act.
33        "Serviceman" means any  person  who  is  engaged  in  the
34    occupation of making sales of service.
 
HB3289 Enrolled          -22-                  LRB9205821SMdv
 1        "Sale at retail" means "sale at retail" as defined in the
 2    Retailers' Occupation Tax Act.
 3        "Supplier"  means  any person who makes sales of tangible
 4    personal property to servicemen for the purpose of resale  as
 5    an incident to a sale of service.
 6        "Serviceman  maintaining  a  place  of  business  in this
 7    State", or any like term, means and includes any serviceman:
 8             1.  having  or  maintaining   within   this   State,
 9        directly  or  by  a  subsidiary,  an office, distribution
10        house, sales house, warehouse or other place of business,
11        or any agent or  other  representative  operating  within
12        this  State  under the authority of the serviceman or its
13        subsidiary,  irrespective  of  whether  such   place   of
14        business or agent or other representative is located here
15        permanently or temporarily, or whether such serviceman or
16        subsidiary is licensed to do business in this State;
17             2.  soliciting orders for tangible personal property
18        by  means  of  a telecommunication or television shopping
19        system  (which  utilizes  toll  free  numbers)  which  is
20        intended  by  the  retailer  to  be  broadcast  by  cable
21        television or other means of broadcasting,  to  consumers
22        located in this State;
23             3.  pursuant  to  a  contract  with a broadcaster or
24        publisher located in this State,  soliciting  orders  for
25        tangible  personal property by means of advertising which
26        is disseminated primarily to consumers  located  in  this
27        State and only secondarily to bordering jurisdictions;
28             4.  soliciting orders for tangible personal property
29        by   mail   if  the  solicitations  are  substantial  and
30        recurring and if the retailer benefits from any  banking,
31        financing,   debt   collection,   telecommunication,   or
32        marketing  activities occurring in this State or benefits
33        from  the  location   in   this   State   of   authorized
34        installation, servicing, or repair facilities;
 
HB3289 Enrolled          -23-                  LRB9205821SMdv
 1             5.  being  owned or controlled by the same interests
 2        which own or control any retailer engaging in business in
 3        the same or similar line of business in this State;
 4             6.  having a franchisee or licensee operating  under
 5        its  trade name if the franchisee or licensee is required
 6        to collect the tax under this Section;
 7             7.  pursuant to a contract with a  cable  television
 8        operator  located  in  this  State, soliciting orders for
 9        tangible personal property by means of advertising  which
10        is  transmitted  or  distributed  over a cable television
11        system in this State; or
12             8.  engaging  in  activities  in   Illinois,   which
13        activities  in  the  state  in  which the supply business
14        engaging in such activities is located  would  constitute
15        maintaining a place of business in that state.
16    (Source: P.A. 91-51, eff. 6-30-99.)

17        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
18        Sec.  3-5.   Exemptions.   Use  of the following tangible
19    personal property is exempt from the tax imposed by this Act:
20        (1)  Personal  property  purchased  from  a  corporation,
21    society,    association,    foundation,    institution,    or
22    organization, other than a limited liability company, that is
23    organized and operated as a not-for-profit service enterprise
24    for the benefit of persons 65 years of age or  older  if  the
25    personal property was not purchased by the enterprise for the
26    purpose of resale by the enterprise.
27        (2)  Personal property purchased by a non-profit Illinois
28    county  fair association for use in conducting, operating, or
29    promoting the county fair.
30        (3)  Personal property purchased by a not-for-profit arts
31    or cultural organization that establishes, by proof  required
32    by  the Department by rule, that it has received an exemption
33    under Section 501(c)(3) of the Internal Revenue Code and that
 
HB3289 Enrolled          -24-                  LRB9205821SMdv
 1    is organized and operated for the presentation or support  of
 2    arts or cultural programming, activities, or services.  These
 3    organizations  include,  but  are  not  limited to, music and
 4    dramatic arts organizations such as symphony  orchestras  and
 5    theatrical  groups,  arts and cultural service organizations,
 6    local arts councils, visual  arts  organizations,  and  media
 7    arts organizations.
 8        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 9    silver   coinage   issued  by  the  State  of  Illinois,  the
10    government of the United States of America, or the government
11    of any foreign country, and bullion.
12        (5)  Graphic  arts  machinery  and  equipment,  including
13    repair  and  replacement  parts,  both  new  and  used,   and
14    including that manufactured on special order or purchased for
15    lease,  certified  by  the purchaser to be used primarily for
16    graphic arts  production.  Equipment  includes  chemicals  or
17    chemicals  acting  as  catalysts but only if the chemicals or
18    chemicals acting as catalysts effect a direct  and  immediate
19    change upon a graphic arts product.
20        (6)  Personal property purchased from a teacher-sponsored
21    student   organization   affiliated  with  an  elementary  or
22    secondary school located in Illinois.
23        (7)  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
33    Code,  but  excluding  other  motor  vehicles  required to be
34    registered under the  Illinois  Vehicle  Code.  Horticultural
 
HB3289 Enrolled          -25-                  LRB9205821SMdv
 1    polyhouses  or  hoop houses used for propagating, growing, or
 2    overwintering plants shall be considered farm  machinery  and
 3    equipment  under  this item (7). Agricultural chemical tender
 4    tanks and dry boxes shall include units sold separately  from
 5    a  motor  vehicle  required  to  be  licensed  and units sold
 6    mounted on a motor vehicle required to  be  licensed  if  the
 7    selling price of the tender is separately stated.
 8        Farm  machinery  and  equipment  shall  include precision
 9    farming equipment  that  is  installed  or  purchased  to  be
10    installed  on farm machinery and equipment including, but not
11    limited  to,  tractors,   harvesters,   sprayers,   planters,
12    seeders,  or spreaders. Precision farming equipment includes,
13    but is not  limited  to,  soil  testing  sensors,  computers,
14    monitors,  software,  global positioning and mapping systems,
15    and other such equipment.
16        Farm machinery and  equipment  also  includes  computers,
17    sensors,  software,  and  related equipment used primarily in
18    the computer-assisted  operation  of  production  agriculture
19    facilities,  equipment,  and  activities  such  as,  but  not
20    limited  to,  the  collection, monitoring, and correlation of
21    animal and crop data for the purpose  of  formulating  animal
22    diets  and  agricultural  chemicals.  This item (7) is exempt
23    from the provisions of Section 3-75.
24        (8)  Fuel and petroleum products sold to or  used  by  an
25    air  common  carrier, certified by the carrier to be used for
26    consumption, shipment, or  storage  in  the  conduct  of  its
27    business  as an air common carrier, for a flight destined for
28    or returning from a location or locations outside the  United
29    States  without  regard  to  previous  or subsequent domestic
30    stopovers.
31        (9)  Proceeds of  mandatory  service  charges  separately
32    stated  on  customers' bills for the purchase and consumption
33    of food and beverages acquired as an incident to the purchase
34    of a service from  a  serviceman,  to  the  extent  that  the
 
HB3289 Enrolled          -26-                  LRB9205821SMdv
 1    proceeds  of  the  service  charge are in fact turned over as
 2    tips or as  a  substitute  for  tips  to  the  employees  who
 3    participate   directly  in  preparing,  serving,  hosting  or
 4    cleaning up the food or beverage  function  with  respect  to
 5    which the service charge is imposed.
 6        (10)  Oil  field  exploration,  drilling,  and production
 7    equipment, including (i) rigs and parts of rigs, rotary rigs,
 8    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
 9    goods,  including  casing  and drill strings, (iii) pumps and
10    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
11    individual   replacement  part  for  oil  field  exploration,
12    drilling, and production equipment, and  (vi)  machinery  and
13    equipment  purchased  for lease; but excluding motor vehicles
14    required to be registered under the Illinois Vehicle Code.
15        (11)  Proceeds from the sale of photoprocessing machinery
16    and equipment, including repair and replacement  parts,  both
17    new  and  used, including that manufactured on special order,
18    certified  by  the  purchaser  to  be  used   primarily   for
19    photoprocessing,  and including photoprocessing machinery and
20    equipment purchased for lease.
21        (12)  Coal  exploration,  mining,   offhighway   hauling,
22    processing, maintenance, and reclamation equipment, including
23    replacement  parts  and  equipment,  and  including equipment
24    purchased for lease, but excluding motor vehicles required to
25    be registered under the Illinois Vehicle Code.
26        (13)  Semen used for artificial insemination of livestock
27    for direct agricultural production.
28        (14)  Horses, or interests in horses, registered with and
29    meeting the requirements of any of  the  Arabian  Horse  Club
30    Registry  of  America, Appaloosa Horse Club, American Quarter
31    Horse Association, United  States  Trotting  Association,  or
32    Jockey Club, as appropriate, used for purposes of breeding or
33    racing for prizes.
34        (15)  Computers and communications equipment utilized for
 
HB3289 Enrolled          -27-                  LRB9205821SMdv
 1    any  hospital  purpose  and  equipment used in the diagnosis,
 2    analysis, or treatment of hospital patients  purchased  by  a
 3    lessor who leases the equipment, under a lease of one year or
 4    longer  executed  or  in  effect at the time the lessor would
 5    otherwise be subject to the tax imposed by  this  Act,  to  a
 6    hospital  that  has  been  issued  an  active  tax  exemption
 7    identification  number  by the Department under Section 1g of
 8    the Retailers' Occupation Tax Act. If the equipment is leased
 9    in a manner that does not qualify for this  exemption  or  is
10    used  in  any  other  non-exempt  manner, the lessor shall be
11    liable for the tax imposed under this Act or the Use Tax Act,
12    as the case may be, based on the fair  market  value  of  the
13    property  at  the  time  the  non-qualifying  use occurs.  No
14    lessor shall collect or attempt to collect an amount (however
15    designated) that purports to reimburse that  lessor  for  the
16    tax  imposed  by this Act or the Use Tax Act, as the case may
17    be, if the tax has not been paid by the lessor.  If a  lessor
18    improperly  collects  any  such  amount  from the lessee, the
19    lessee shall have a legal right to claim  a  refund  of  that
20    amount  from  the  lessor.   If,  however, that amount is not
21    refunded to the lessee for any reason, the lessor  is  liable
22    to pay that amount to the Department.
23        (16)  Personal  property purchased by a lessor who leases
24    the property, under a lease of one year or longer executed or
25    in effect at the time the lessor would otherwise  be  subject
26    to  the  tax imposed by this Act, to a governmental body that
27    has been issued an active tax exemption identification number
28    by  the  Department  under  Section  1g  of  the   Retailers'
29    Occupation  Tax  Act.   If the property is leased in a manner
30    that does not qualify for this exemption or is  used  in  any
31    other  non-exempt  manner, the lessor shall be liable for the
32    tax imposed under this Act or the Use Tax Act,  as  the  case
33    may be, based on the fair market value of the property at the
34    time  the non-qualifying use occurs.  No lessor shall collect
 
HB3289 Enrolled          -28-                  LRB9205821SMdv
 1    or attempt to collect an  amount  (however  designated)  that
 2    purports to reimburse that lessor for the tax imposed by this
 3    Act  or  the  Use Tax Act, as the case may be, if the tax has
 4    not been paid by the lessor.  If a lessor improperly collects
 5    any such amount from the lessee,  the  lessee  shall  have  a
 6    legal right to claim a refund of that amount from the lessor.
 7    If,  however,  that  amount is not refunded to the lessee for
 8    any reason, the lessor is liable to pay that  amount  to  the
 9    Department.
10        (17)  Beginning  with  taxable  years  ending on or after
11    December 31, 1995 and ending with taxable years ending on  or
12    before  December  31, 2004, personal property that is donated
13    for disaster relief to  be  used  in  a  State  or  federally
14    declared disaster area in Illinois or bordering Illinois by a
15    manufacturer  or retailer that is registered in this State to
16    a   corporation,   society,   association,   foundation,   or
17    institution that  has  been  issued  a  sales  tax  exemption
18    identification  number by the Department that assists victims
19    of the disaster who reside within the declared disaster area.
20        (18)  Beginning with taxable years  ending  on  or  after
21    December  31, 1995 and ending with taxable years ending on or
22    before December 31, 2004, personal property that is  used  in
23    the  performance  of  infrastructure  repairs  in this State,
24    including but not limited to  municipal  roads  and  streets,
25    access  roads,  bridges,  sidewalks,  waste disposal systems,
26    water and  sewer  line  extensions,  water  distribution  and
27    purification  facilities,  storm water drainage and retention
28    facilities, and sewage treatment facilities, resulting from a
29    State or federally declared disaster in Illinois or bordering
30    Illinois  when  such  repairs  are  initiated  on  facilities
31    located in the declared disaster area within 6  months  after
32    the disaster.
33        (19)  Beginning   July   1,  1999,  game  or  game  birds
34    purchased at a "game breeding and hunting preserve  area"  or
 
HB3289 Enrolled          -29-                  LRB9205821SMdv
 1    an  "exotic game hunting area" as those terms are used in the
 2    Wildlife Code or at  a  hunting  enclosure  approved  through
 3    rules  adopted  by the Department of Natural Resources.  This
 4    paragraph is exempt from the provisions of Section 3-75.
 5        (20) (19)  A motor vehicle, as that term  is  defined  in
 6    Section  1-146  of the Illinois Vehicle Code, that is donated
 7    to  a  corporation,  limited  liability   company,   society,
 8    association, foundation, or institution that is determined by
 9    the  Department  to be organized and operated exclusively for
10    educational purposes.  For purposes  of  this  exemption,  "a
11    corporation, limited liability company, society, association,
12    foundation, or institution organized and operated exclusively
13    for  educational  purposes"  means  all  tax-supported public
14    schools, private schools that offer systematic instruction in
15    useful branches of  learning  by  methods  common  to  public
16    schools  and  that  compare  favorably  in  their  scope  and
17    intensity with the course of study presented in tax-supported
18    schools,  and  vocational  or technical schools or institutes
19    organized and operated exclusively to  provide  a  course  of
20    study  of  not  less  than  6  weeks duration and designed to
21    prepare individuals to follow a trade or to pursue a  manual,
22    technical,  mechanical,  industrial,  business, or commercial
23    occupation.
24        (21) (20)  Beginning January 1, 2000,  personal property,
25    including food, purchased through fundraising events for  the
26    benefit  of  a  public  or  private  elementary  or secondary
27    school, a group of those  schools,  or  one  or  more  school
28    districts if the events are sponsored by an entity recognized
29    by  the school district that consists primarily of volunteers
30    and includes parents and teachers  of  the  school  children.
31    This  paragraph  does not apply to fundraising events (i) for
32    the benefit of private home instruction or (ii) for which the
33    fundraising entity purchases the personal  property  sold  at
34    the  events  from  another individual or entity that sold the
 
HB3289 Enrolled          -30-                  LRB9205821SMdv
 1    property for the purpose of resale by the fundraising  entity
 2    and  that  profits  from  the sale to the fundraising entity.
 3    This paragraph is exempt from the provisions of Section 3-75.
 4        (22)  (19)  Beginning  January  1,  2000,  new  or   used
 5    automatic  vending  machines  that prepare and serve hot food
 6    and beverages, including coffee, soup, and other  items,  and
 7    replacement  parts  for  these  machines.   This paragraph is
 8    exempt from the provisions of Section 3-75.
 9        (23) Food for human consumption that is  to  be  consumed
10    off  the  premises  where  it  is  sold (other than alcoholic
11    beverages, soft drinks, and food that has been  prepared  for
12    immediate  consumption)  and prescription and nonprescription
13    medicines, drugs,  medical  appliances,  and  insulin,  urine
14    testing  materials,  syringes, and needles used by diabetics,
15    for human use, when purchased for use by a  person  receiving
16    medical assistance under Article 5 of the Illinois Public Aid
17    Code  who  resides  in a licensed long-term care facility, as
18    defined in the Nursing Home Care Act.
19    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
20    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
21    7-20-99; 91-439, eff. 8-6-99; 91-637, eff.  8-20-99;  91-644,
22    eff. 8-20-99; revised 9-29-99.)

23        Section 12.  The Service Occupation Tax Act is amended by
24    changing Sections 2 and 3-5 as follows:

25        (35 ILCS 115/2) (from Ch. 120, par. 439.102)
26        Sec.  2.  "Transfer"  means  any transfer of the title to
27    property or of the ownership of property whether or  not  the
28    transferor  retains  title  as  security  for  the payment of
29    amounts due him from the transferee.
30        "Cost  Price"  means  the  consideration  paid   by   the
31    serviceman  for  a  purchase valued in money, whether paid in
32    money or otherwise, including cash, credits and services, and
 
HB3289 Enrolled          -31-                  LRB9205821SMdv
 1    shall be determined without any deduction on account  of  the
 2    supplier's  cost  of  the  property sold or on account of any
 3    other expense incurred by the  supplier.  When  a  serviceman
 4    contracts  out  part  or  all of the services required in his
 5    sale of service, it shall be presumed that the cost price  to
 6    the  serviceman  of the property transferred to him by his or
 7    her subcontractor is equal  to  50%  of  the  subcontractor's
 8    charges  to  the  serviceman  in  the absence of proof of the
 9    consideration paid by the subcontractor for the  purchase  of
10    such property.
11        "Department" means the Department of Revenue.
12        "Person" means any natural individual, firm, partnership,
13    association,  joint  stock  company, joint venture, public or
14    private  corporation,  limited  liability  company,  and  any
15    receiver, executor, trustee, guardian or other representative
16    appointed by order of any court.
17        "Sale of Service" means any transaction except:
18        (a)  A retail sale of tangible personal property  taxable
19    under  the Retailers' Occupation Tax Act or under the Use Tax
20    Act.
21        (b)  A sale of tangible personal property for the purpose
22    of  resale  made  in  compliance  with  Section  2c  of   the
23    Retailers' Occupation Tax Act.
24        (c)  Except  as  hereinafter provided, a sale or transfer
25    of tangible personal property as an incident to the rendering
26    of service for or by any governmental body or for or  by  any
27    corporation,  society, association, foundation or institution
28    organized and operated exclusively for charitable,  religious
29    or  educational  purposes  or any not-for-profit corporation,
30    society, association, foundation, institution or organization
31    which has no compensated officers or employees and  which  is
32    organized  and  operated  primarily  for  the  recreation  of
33    persons 55 years of age or older. A limited liability company
34    may  qualify  for  the exemption under this paragraph only if
 
HB3289 Enrolled          -32-                  LRB9205821SMdv
 1    the limited  liability  company  is  organized  and  operated
 2    exclusively for educational purposes.
 3        (d)  A  sale or transfer of tangible personal property as
 4    an incident  to  the  rendering  of  service  for  interstate
 5    carriers  for  hire  for  use  as  rolling  stock  moving  in
 6    interstate  commerce  or  lessors under leases of one year or
 7    longer, executed or in effect at the  time  of  purchase,  to
 8    interstate  carriers for hire for use as rolling stock moving
 9    in  interstate  commerce,  and  equipment   operated   by   a
10    telecommunications  provider, licensed as a common carrier by
11    the Federal Communications Commission, which  is  permanently
12    installed  in  or  affixed  to  aircraft moving in interstate
13    commerce.
14        (d-1)  A sale or transfer of tangible  personal  property
15    as  an  incident  to  the  rendering  of  service for owners,
16    lessors or shippers of tangible personal  property  which  is
17    utilized  by  interstate carriers for hire for use as rolling
18    stock moving in interstate commerce, and  equipment  operated
19    by  a  telecommunications  provider,  licensed  as  a  common
20    carrier  by  the  Federal Communications Commission, which is
21    permanently installed in or affixed  to  aircraft  moving  in
22    interstate commerce.
23        (d-2)  The repairing, reconditioning or remodeling, for a
24    common  carrier  by rail, of tangible personal property which
25    belongs to such carrier  for  hire,  and  as  to  which  such
26    carrier  receives  the  physical  possession of the repaired,
27    reconditioned or remodeled item of tangible personal property
28    in Illinois, and which such  carrier  transports,  or  shares
29    with  another  common  carrier  in the transportation of such
30    property, out of Illinois  on  a  standard  uniform  bill  of
31    lading  showing  the  person  who  repaired, reconditioned or
32    remodeled the property as the shipper or  consignor  of  such
33    property  to  a destination outside Illinois, for use outside
34    Illinois.
 
HB3289 Enrolled          -33-                  LRB9205821SMdv
 1        (d-3)  A sale or transfer of tangible  personal  property
 2    which  is  produced by the seller thereof on special order in
 3    such a way as to have made the  applicable  tax  the  Service
 4    Occupation  Tax  or  the  Service  Use  Tax,  rather than the
 5    Retailers' Occupation Tax or the Use Tax, for  an  interstate
 6    carrier  by  rail  which  receives the physical possession of
 7    such  property  in  Illinois,  and  which   transports   such
 8    property,  or  shares  with  another  common  carrier  in the
 9    transportation  of  such  property,  out  of  Illinois  on  a
10    standard uniform bill of lading showing  the  seller  of  the
11    property  as  the  shipper or consignor of such property to a
12    destination outside Illinois, for use outside Illinois.
13        (d-4)  Until January 1, 1997, a  sale,  by  a  registered
14    serviceman  paying  tax  under this Act to the Department, of
15    special order printed materials  delivered  outside  Illinois
16    and which are not returned to this State, if delivery is made
17    by  the seller or agent of the seller, including an agent who
18    causes the product to be  delivered  outside  Illinois  by  a
19    common carrier or the U.S. postal service.
20        (e)  A  sale  or transfer of machinery and equipment used
21    primarily in the process of the manufacturing or  assembling,
22    either  in  an  existing,  an expanded or a new manufacturing
23    facility, of tangible  personal  property  for  wholesale  or
24    retail  sale  or  lease,  whether  such sale or lease is made
25    directly by the manufacturer or by some other person, whether
26    the  materials  used  in  the  process  are  owned   by   the
27    manufacturer  or  some  other person, or whether such sale or
28    lease is made apart from or as an incident  to  the  seller's
29    engaging  in a service occupation and the applicable tax is a
30    Service Occupation  Tax  or  Service  Use  Tax,  rather  than
31    Retailers' Occupation Tax or Use Tax.
32        (f)  The  sale  or transfer of distillation machinery and
33    equipment, sold as a unit or kit and assembled  or  installed
34    by  the  retailer, which machinery and equipment is certified
 
HB3289 Enrolled          -34-                  LRB9205821SMdv
 1    by the user to be used  only  for  the  production  of  ethyl
 2    alcohol that will be used for consumption as motor fuel or as
 3    a  component  of motor fuel for the personal use of such user
 4    and not subject to sale or resale.
 5        (g)  At the election of any serviceman not required to be
 6    otherwise registered as a retailer under Section  2a  of  the
 7    Retailers'  Occupation  Tax  Act,  made  for each fiscal year
 8    sales of service in which the aggregate annual cost price  of
 9    tangible  personal property transferred as an incident to the
10    sales of service is  less  than  35%  (75%  in  the  case  of
11    servicemen  transferring  prescription  drugs  or  servicemen
12    engaged  in  graphic arts production) of the aggregate annual
13    total gross receipts from all sales of service. The  purchase
14    of such tangible personal property by the serviceman shall be
15    subject  to  tax  under the Retailers' Occupation Tax Act and
16    the Use Tax Act. However, if a  primary  serviceman  who  has
17    made  the  election  described in this paragraph subcontracts
18    service work to a secondary serviceman who has also made  the
19    election  described in this paragraph, the primary serviceman
20    does  not  incur  a  Use  Tax  liability  if  the   secondary
21    serviceman  (i)  has  paid  or will pay Use Tax on his or her
22    cost price of any tangible personal property  transferred  to
23    the  primary  serviceman  and  (ii)  certifies  that  fact in
24    writing to the primary serviceman.
25        Tangible personal property transferred  incident  to  the
26    completion  of a maintenance agreement is exempt from the tax
27    imposed pursuant to this Act.
28        Exemption (e) also includes machinery and equipment  used
29    in the general maintenance or repair of such exempt machinery
30    and equipment or for in-house manufacture of exempt machinery
31    and  equipment.  For  the  purposes of exemption (e), each of
32    these  terms  shall  have  the   following   meanings:    (1)
33    "manufacturing  process"  shall  mean  the  production of any
34    article of tangible personal property, whether  such  article
 
HB3289 Enrolled          -35-                  LRB9205821SMdv
 1    is a finished product or an article for use in the process of
 2    manufacturing  or  assembling a different article of tangible
 3    personal  property,  by  procedures  commonly   regarded   as
 4    manufacturing,  processing,  fabricating,  or  refining which
 5    changes some existing material or materials into  a  material
 6    with  a  different  form,  use  or  name.   In  relation to a
 7    recognized  integrated  business  composed  of  a  series  of
 8    operations which collectively  constitute  manufacturing,  or
 9    individually   constitute   manufacturing   operations,   the
10    manufacturing  process  shall  be deemed to commence with the
11    first operation or stage of production  in  the  series,  and
12    shall  not be deemed to end until the completion of the final
13    product in the last operation or stage of production  in  the
14    series;   and   further   for   purposes  of  exemption  (e),
15    photoprocessing is deemed to be a  manufacturing  process  of
16    tangible  personal property for wholesale or retail sale; (2)
17    "assembling process" shall mean the production of any article
18    of tangible personal property,  whether  such  article  is  a
19    finished  product  or  an  article  for use in the process of
20    manufacturing or assembling a different article  of  tangible
21    personal  property,  by the combination of existing materials
22    in a manner commonly regarded as assembling which results  in
23    a  material of a different form, use or name; (3) "machinery"
24    shall mean major mechanical machines or major  components  of
25    such  machines  contributing to a manufacturing or assembling
26    process; and (4) "equipment" shall  include  any  independent
27    device  or  tool separate from any machinery but essential to
28    an integrated manufacturing or  assembly  process;  including
29    computers  used  primarily  in  a  manufacuturer's  operating
30    exempt machinery and equipment in a computer assisted design,
31    computer  assisted  manufacturing  (CAD/CAM)  system;  or any
32    subunit or assembly comprising a component of  any  machinery
33    or  auxiliary, adjunct or attachment parts of machinery, such
34    as tools, dies, jigs, fixtures, patterns and  molds;  or  any
 
HB3289 Enrolled          -36-                  LRB9205821SMdv
 1    parts  which  require  periodic  replacement in the course of
 2    normal operation; but shall not include hand tools. Equipment
 3    includes chemicals or chemicals acting as catalysts but  only
 4    if  the  chemicals  or chemicals acting as catalysts effect a
 5    direct and immediate change upon a product being manufactured
 6    or assembled for wholesale  or  retail  sale  or  lease.  The
 7    purchaser  of  such machinery and equipment who has an active
 8    resale registration number shall furnish such number  to  the
 9    seller  at  the  time  of  purchase.  The  purchaser  of such
10    machinery and equipment and tools without  an  active  resale
11    registration number shall furnish to the seller a certificate
12    of  exemption for each transaction stating facts establishing
13    the exemption for that transaction, which  certificate  shall
14    be available to the Department for inspection or audit.
15        The rolling stock exemption applies to rolling stock used
16    by  an  interstate carrier for hire, even just between points
17    in Illinois, if such  rolling  stock  transports,  for  hire,
18    persons  whose journeys or property whose shipments originate
19    or terminate outside Illinois.
20        Any informal rulings, opinions or letters issued  by  the
21    Department  in  response  to  an  inquiry  or request for any
22    opinion  from  any  person   regarding   the   coverage   and
23    applicability  of  exemption (e) to specific devices shall be
24    published, maintained as a public record, and made  available
25    for  public  inspection and copying.  If the informal ruling,
26    opinion  or  letter   contains   trade   secrets   or   other
27    confidential information, where possible the Department shall
28    delete  such information prior to publication.  Whenever such
29    informal rulings, opinions, or letters contain any policy  of
30    general  applicability,  the  Department  shall formulate and
31    adopt such policy as a rule in accordance with the provisions
32    of the Illinois Administrative Procedure Act.
33        On and after July 1, 1987, no entity  otherwise  eligible
34    under  exemption  (c)  of  this  Section  shall make tax free
 
HB3289 Enrolled          -37-                  LRB9205821SMdv
 1    purchases unless it has an  active  exemption  identification
 2    number issued by the Department.
 3        "Serviceman"  means  any  person  who  is  engaged in the
 4    occupation of making sales of service.
 5        "Sale at Retail" means "sale at retail" as defined in the
 6    Retailers' Occupation Tax Act.
 7        "Supplier" means any person who makes sales  of  tangible
 8    personal  property to servicemen for the purpose of resale as
 9    an incident to a sale of service.
10    (Source: P.A. 91-51, eff. 6-30-99.)

11        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
12        Sec. 3-5.  Exemptions.  The following  tangible  personal
13    property is exempt from the tax imposed by this Act:
14        (1)  Personal  property  sold  by a corporation, society,
15    association, foundation, institution, or organization,  other
16    than  a  limited  liability  company,  that  is organized and
17    operated as  a  not-for-profit  service  enterprise  for  the
18    benefit  of  persons 65 years of age or older if the personal
19    property was not purchased by the enterprise for the  purpose
20    of resale by the enterprise.
21        (2)  Personal  property  purchased  by  a  not-for-profit
22    Illinois  county  fair  association  for  use  in conducting,
23    operating, or promoting the county fair.
24        (3)  Personal property purchased  by  any  not-for-profit
25    arts  or  cultural  organization  that  establishes, by proof
26    required by the Department by rule, that it has  received  an
27    exemption   under  Section  501(c)(3) of the Internal Revenue
28    Code and that is organized and operated for the  presentation
29    or  support  of  arts or cultural programming, activities, or
30    services.  These organizations include, but are  not  limited
31    to,  music  and  dramatic arts organizations such as symphony
32    orchestras and theatrical groups, arts and  cultural  service
33    organizations,    local    arts    councils,    visual   arts
 
HB3289 Enrolled          -38-                  LRB9205821SMdv
 1    organizations, and media arts organizations.
 2        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 3    silver  coinage  issued  by  the  State  of   Illinois,   the
 4    government of the United States of America, or the government
 5    of any foreign country, and bullion.
 6        (5)  Graphic  arts  machinery  and  equipment,  including
 7    repair   and  replacement  parts,  both  new  and  used,  and
 8    including that manufactured on special order or purchased for
 9    lease, certified by the purchaser to be  used  primarily  for
10    graphic  arts  production.  Equipment  includes  chemicals or
11    chemicals acting as catalysts but only if  the  chemicals  or
12    chemicals  acting  as catalysts effect a direct and immediate
13    change upon a graphic arts product.
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)  Farm machinery and equipment,  both  new  and  used,
18    including  that  manufactured  on special order, certified by
19    the purchaser to be used primarily for production agriculture
20    or  State  or  federal   agricultural   programs,   including
21    individual replacement parts for the machinery and equipment,
22    including  machinery  and  equipment purchased for lease, and
23    including implements of husbandry defined in Section 1-130 of
24    the Illinois Vehicle Code, farm  machinery  and  agricultural
25    chemical  and fertilizer spreaders, and nurse wagons required
26    to be registered under Section 3-809 of the Illinois  Vehicle
27    Code,  but  excluding  other  motor  vehicles  required to be
28    registered under the  Illinois  Vehicle  Code.  Horticultural
29    polyhouses  or  hoop houses used for propagating, growing, or
30    overwintering plants shall be considered farm  machinery  and
31    equipment  under  this item (7). Agricultural chemical tender
32    tanks and dry boxes shall include units sold separately  from
33    a  motor  vehicle  required  to  be  licensed  and units sold
34    mounted on a motor vehicle required to  be  licensed  if  the
 
HB3289 Enrolled          -39-                  LRB9205821SMdv
 1    selling price of the tender is separately stated.
 2        Farm  machinery  and  equipment  shall  include precision
 3    farming equipment  that  is  installed  or  purchased  to  be
 4    installed  on farm machinery and equipment including, but not
 5    limited  to,  tractors,   harvesters,   sprayers,   planters,
 6    seeders,  or spreaders. Precision farming equipment includes,
 7    but is not  limited  to,  soil  testing  sensors,  computers,
 8    monitors,  software,  global positioning and mapping systems,
 9    and other such equipment.
10        Farm machinery and  equipment  also  includes  computers,
11    sensors,  software,  and  related equipment used primarily in
12    the computer-assisted  operation  of  production  agriculture
13    facilities,  equipment,  and  activities  such  as,  but  not
14    limited  to,  the  collection, monitoring, and correlation of
15    animal and crop data for the purpose  of  formulating  animal
16    diets  and  agricultural  chemicals.  This item (7) is exempt
17    from the provisions of Section 3-55.
18        (8)  Fuel and petroleum products sold to or  used  by  an
19    air  common  carrier, certified by the carrier to be used for
20    consumption, shipment, or  storage  in  the  conduct  of  its
21    business  as an air common carrier, for a flight destined for
22    or returning from a location or locations outside the  United
23    States  without  regard  to  previous  or subsequent domestic
24    stopovers.
25        (9)  Proceeds of  mandatory  service  charges  separately
26    stated  on  customers' bills for the purchase and consumption
27    of food and beverages, to the extent that the proceeds of the
28    service charge are in fact  turned  over  as  tips  or  as  a
29    substitute for tips to the employees who participate directly
30    in  preparing,  serving,  hosting  or cleaning up the food or
31    beverage function with respect to which the service charge is
32    imposed.
33        (10)  Oil field  exploration,  drilling,  and  production
34    equipment, including (i) rigs and parts of rigs, rotary rigs,
 
HB3289 Enrolled          -40-                  LRB9205821SMdv
 1    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 2    goods, including casing and drill strings,  (iii)  pumps  and
 3    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
 4    individual  replacement  part  for  oil  field   exploration,
 5    drilling,  and  production  equipment, and (vi) machinery and
 6    equipment purchased for lease; but excluding  motor  vehicles
 7    required to be registered under the Illinois Vehicle Code.
 8        (11)  Photoprocessing  machinery and equipment, including
 9    repair and replacement parts, both new  and  used,  including
10    that   manufactured   on  special  order,  certified  by  the
11    purchaser to  be  used  primarily  for  photoprocessing,  and
12    including  photoprocessing  machinery and equipment purchased
13    for lease.
14        (12)  Coal  exploration,  mining,   offhighway   hauling,
15    processing, maintenance, and reclamation equipment, including
16    replacement  parts  and  equipment,  and  including equipment
17    purchased for lease, but excluding motor vehicles required to
18    be registered under the Illinois Vehicle Code.
19        (13)  Food for human consumption that is to  be  consumed
20    off  the  premises  where  it  is  sold (other than alcoholic
21    beverages, soft drinks and food that has  been  prepared  for
22    immediate  consumption) and prescription and non-prescription
23    medicines, drugs,  medical  appliances,  and  insulin,  urine
24    testing  materials,  syringes, and needles used by diabetics,
25    for human use, when purchased for use by a  person  receiving
26    medical assistance under Article 5 of the Illinois Public Aid
27    Code  who  resides  in a licensed long-term care facility, as
28    defined in the Nursing Home Care Act.
29        (14)  Semen used for artificial insemination of livestock
30    for direct agricultural production.
31        (15)  Horses, or interests in horses, registered with and
32    meeting the requirements of any of  the  Arabian  Horse  Club
33    Registry  of  America, Appaloosa Horse Club, American Quarter
34    Horse Association, United  States  Trotting  Association,  or
 
HB3289 Enrolled          -41-                  LRB9205821SMdv
 1    Jockey Club, as appropriate, used for purposes of breeding or
 2    racing for prizes.
 3        (16)  Computers and communications equipment utilized for
 4    any  hospital  purpose  and  equipment used in the diagnosis,
 5    analysis, or treatment of hospital patients sold to a  lessor
 6    who leases the equipment, under a lease of one year or longer
 7    executed  or  in  effect  at  the  time of the purchase, to a
 8    hospital  that  has  been  issued  an  active  tax  exemption
 9    identification number by the Department under Section  1g  of
10    the Retailers' Occupation Tax Act.
11        (17)  Personal  property  sold to a lessor who leases the
12    property, under a lease of one year or longer executed or  in
13    effect  at  the  time of the purchase, to a governmental body
14    that has been issued an active tax  exemption  identification
15    number  by  the Department under Section 1g of the Retailers'
16    Occupation Tax Act.
17        (18)  Beginning with taxable years  ending  on  or  after
18    December  31, 1995 and ending with taxable years ending on or
19    before December 31, 2004, personal property that  is  donated
20    for  disaster  relief  to  be  used  in  a State or federally
21    declared disaster area in Illinois or bordering Illinois by a
22    manufacturer or retailer that is registered in this State  to
23    a   corporation,   society,   association,   foundation,   or
24    institution  that  has  been  issued  a  sales  tax exemption
25    identification number by the Department that assists  victims
26    of the disaster who reside within the declared disaster area.
27        (19)  Beginning  with  taxable  years  ending on or after
28    December 31, 1995 and ending with taxable years ending on  or
29    before  December  31, 2004, personal property that is used in
30    the performance of  infrastructure  repairs  in  this  State,
31    including  but  not  limited  to municipal roads and streets,
32    access roads, bridges,  sidewalks,  waste  disposal  systems,
33    water  and  sewer  line  extensions,  water  distribution and
34    purification facilities, storm water drainage  and  retention
 
HB3289 Enrolled          -42-                  LRB9205821SMdv
 1    facilities, and sewage treatment facilities, resulting from a
 2    State or federally declared disaster in Illinois or bordering
 3    Illinois  when  such  repairs  are  initiated  on  facilities
 4    located  in  the declared disaster area within 6 months after
 5    the disaster.
 6        (20)  Beginning July 1, 1999, game or game birds sold  at
 7    a  "game  breeding  and  hunting preserve area" or an "exotic
 8    game hunting area" as those terms are used  in  the  Wildlife
 9    Code or at a hunting enclosure approved through rules adopted
10    by  the  Department  of Natural Resources.  This paragraph is
11    exempt from the provisions of Section 3-55.
12        (21) (20)  A motor vehicle, as that term  is  defined  in
13    Section  1-146  of the Illinois Vehicle Code, that is donated
14    to  a  corporation,  limited  liability   company,   society,
15    association, foundation, or institution that is determined by
16    the  Department  to be organized and operated exclusively for
17    educational purposes.  For purposes  of  this  exemption,  "a
18    corporation, limited liability company, society, association,
19    foundation, or institution organized and operated exclusively
20    for  educational  purposes"  means  all  tax-supported public
21    schools, private schools that offer systematic instruction in
22    useful branches of  learning  by  methods  common  to  public
23    schools  and  that  compare  favorably  in  their  scope  and
24    intensity with the course of study presented in tax-supported
25    schools,  and  vocational  or technical schools or institutes
26    organized and operated exclusively to  provide  a  course  of
27    study  of  not  less  than  6  weeks duration and designed to
28    prepare individuals to follow a trade or to pursue a  manual,
29    technical,  mechanical,  industrial,  business, or commercial
30    occupation.
31        (22) (21)  Beginning January 1, 2000,  personal property,
32    including food, purchased through fundraising events for  the
33    benefit  of  a  public  or  private  elementary  or secondary
34    school, a group of those  schools,  or  one  or  more  school
 
HB3289 Enrolled          -43-                  LRB9205821SMdv
 1    districts if the events are sponsored by an entity recognized
 2    by  the school district that consists primarily of volunteers
 3    and includes parents and teachers  of  the  school  children.
 4    This  paragraph  does not apply to fundraising events (i) for
 5    the benefit of private home instruction or (ii) for which the
 6    fundraising entity purchases the personal  property  sold  at
 7    the  events  from  another individual or entity that sold the
 8    property for the purpose of resale by the fundraising  entity
 9    and  that  profits  from  the sale to the fundraising entity.
10    This paragraph is exempt from the provisions of Section 3-55.
11        (23)  (20)  Beginning  January  1,  2000,  new  or   used
12    automatic  vending  machines  that prepare and serve hot food
13    and beverages, including coffee, soup, and other  items,  and
14    replacement  parts  for  these  machines.   This paragraph is
15    exempt from the provisions of Section 3-55.
16    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
17    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
18    7-20-99; 91-439, eff. 8-6-99; 91-533, eff.  8-13-99;  91-637,
19    eff. 8-20-99; 91-644, eff. 8-20-99; revised 9-29-99.)

20        Section 15.  The Retailers' Occupation Tax Act is amended
21    by  changing  Sections  2-5,  2-45,  3,  and 5k and by adding
22    Section 2-10.5 as follows:

23        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
24        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
25    the sale of the  following  tangible  personal  property  are
26    exempt from the tax imposed by this Act:
27        (1)  Farm chemicals.
28        (2)  Farm  machinery  and  equipment,  both new and used,
29    including that manufactured on special  order,  certified  by
30    the purchaser to be used primarily for production agriculture
31    or   State   or   federal  agricultural  programs,  including
32    individual replacement parts for the machinery and equipment,
 
HB3289 Enrolled          -44-                  LRB9205821SMdv
 1    including machinery and equipment purchased  for  lease,  and
 2    including implements of husbandry defined in Section 1-130 of
 3    the  Illinois  Vehicle  Code, farm machinery and agricultural
 4    chemical and fertilizer spreaders, and nurse wagons  required
 5    to  be registered under Section 3-809 of the Illinois Vehicle
 6    Code, but excluding  other  motor  vehicles  required  to  be
 7    registered  under  the  Illinois  Vehicle Code. Horticultural
 8    polyhouses or hoop houses used for propagating,  growing,  or
 9    overwintering  plants  shall be considered farm machinery and
10    equipment under this item (2). Agricultural  chemical  tender
11    tanks  and dry boxes shall include units sold separately from
12    a motor vehicle  required  to  be  licensed  and  units  sold
13    mounted  on  a  motor vehicle required to be licensed, if the
14    selling price of the tender is separately stated.
15        Farm machinery  and  equipment  shall  include  precision
16    farming  equipment  that  is  installed  or  purchased  to be
17    installed on farm machinery and equipment including, but  not
18    limited   to,   tractors,   harvesters,  sprayers,  planters,
19    seeders, or spreaders. Precision farming equipment  includes,
20    but  is  not  limited  to,  soil  testing sensors, computers,
21    monitors, software, global positioning and  mapping  systems,
22    and other such equipment.
23        Farm  machinery  and  equipment  also includes computers,
24    sensors, software, and related equipment  used  primarily  in
25    the  computer-assisted  operation  of  production agriculture
26    facilities,  equipment,  and  activities  such  as,  but  not
27    limited to, the collection, monitoring,  and  correlation  of
28    animal  and  crop  data for the purpose of formulating animal
29    diets and agricultural chemicals.  This item  (7)  is  exempt
30    from the provisions of Section 2-70.
31        (3)  Distillation machinery and equipment, sold as a unit
32    or  kit, assembled or installed by the retailer, certified by
33    the user to be used only for the production of ethyl  alcohol
34    that  will  be  used  for  consumption  as motor fuel or as a
 
HB3289 Enrolled          -45-                  LRB9205821SMdv
 1    component of motor fuel for the personal use of the user, and
 2    not subject to sale or resale.
 3        (4)  Graphic  arts  machinery  and  equipment,  including
 4    repair  and  replacement  parts,  both  new  and  used,   and
 5    including that manufactured on special order or purchased for
 6    lease,  certified  by  the purchaser to be used primarily for
 7    graphic arts  production.  Equipment  includes  chemicals  or
 8    chemicals  acting  as  catalysts but only if the chemicals or
 9    chemicals acting as catalysts effect a direct  and  immediate
10    change upon a graphic arts product.
11        (5)  A  motor  vehicle  of  the  first  division, a motor
12    vehicle of the second division that is a self-contained motor
13    vehicle designed or permanently converted to  provide  living
14    quarters  for  recreational,  camping,  or  travel  use, with
15    direct walk through access to the living  quarters  from  the
16    driver's seat, or a motor vehicle of the second division that
17    is  of  the van configuration designed for the transportation
18    of not less than 7 nor more than 16 passengers, as defined in
19    Section 1-146 of the Illinois Vehicle Code, that is used  for
20    automobile  renting,  as  defined  in  the Automobile Renting
21    Occupation and Use Tax Act.
22        (6)  Personal  property  sold  by   a   teacher-sponsored
23    student   organization   affiliated  with  an  elementary  or
24    secondary school located in Illinois.
25        (7)  Proceeds of that portion of the selling price  of  a
26    passenger car the sale of which is subject to the Replacement
27    Vehicle Tax.
28        (8)  Personal  property  sold  to an Illinois county fair
29    association for use in conducting,  operating,  or  promoting
30    the county fair.
31        (9)  Personal  property  sold to a not-for-profit arts or
32    cultural organization that establishes, by proof required  by
33    the  Department  by  rule,  that it has received an exemption
34    under Section 501(c)(3) of the Internal Revenue Code and that
 
HB3289 Enrolled          -46-                  LRB9205821SMdv
 1    is organized and operated for the presentation or support  of
 2    arts or cultural programming, activities, or services.  These
 3    organizations  include,  but  are  not  limited to, music and
 4    dramatic arts organizations such as symphony  orchestras  and
 5    theatrical  groups,  arts and cultural service organizations,
 6    local arts councils, visual  arts  organizations,  and  media
 7    arts organizations.
 8        (10)  Personal  property  sold by a corporation, society,
 9    association, foundation, institution, or organization,  other
10    than  a  limited  liability  company,  that  is organized and
11    operated as  a  not-for-profit  service  enterprise  for  the
12    benefit  of  persons 65 years of age or older if the personal
13    property was not purchased by the enterprise for the  purpose
14    of resale by the enterprise.
15        (11)  Personal property sold to a governmental body, to a
16    corporation, society, association, foundation, or institution
17    organized and operated exclusively for charitable, religious,
18    or  educational purposes, or to a not-for-profit corporation,
19    society,    association,    foundation,    institution,    or
20    organization that has no compensated  officers  or  employees
21    and   that  is  organized  and  operated  primarily  for  the
22    recreation of persons 55 years of age  or  older.  A  limited
23    liability  company  may  qualify for the exemption under this
24    paragraph only if the limited liability company is  organized
25    and  operated  exclusively  for  educational purposes. On and
26    after July 1, 1987, however, no entity otherwise eligible for
27    this exemption shall make tax-free purchases unless it has an
28    active identification number issued by the Department.
29        (12)  Personal property sold to interstate  carriers  for
30    hire  for  use as rolling stock moving in interstate commerce
31    or to lessors under leases of one year or longer executed  or
32    in  effect at the time of purchase by interstate carriers for
33    hire for use as rolling stock moving in  interstate  commerce
34    and  equipment  operated  by  a  telecommunications provider,
 
HB3289 Enrolled          -47-                  LRB9205821SMdv
 1    licensed as a common carrier by  the  Federal  Communications
 2    Commission,  which  is permanently installed in or affixed to
 3    aircraft moving in interstate commerce.
 4        (13)  Proceeds from sales to owners, lessors, or shippers
 5    of tangible personal property that is utilized by  interstate
 6    carriers  for  hire  for  use  as  rolling  stock  moving  in
 7    interstate    commerce    and   equipment   operated   by   a
 8    telecommunications provider, licensed as a common carrier  by
 9    the  Federal  Communications Commission, which is permanently
10    installed in or affixed  to  aircraft  moving  in  interstate
11    commerce.
12        (14)  Machinery  and  equipment  that will be used by the
13    purchaser, or a lessee of the  purchaser,  primarily  in  the
14    process  of  manufacturing  or  assembling  tangible personal
15    property for wholesale or retail sale or lease,  whether  the
16    sale or lease is made directly by the manufacturer or by some
17    other  person,  whether the materials used in the process are
18    owned by the manufacturer or some other  person,  or  whether
19    the sale or lease is made apart from or as an incident to the
20    seller's  engaging  in  the  service  occupation of producing
21    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
22    similar  items  of no commercial value on special order for a
23    particular purchaser.
24        (15)  Proceeds of mandatory  service  charges  separately
25    stated  on  customers'  bills for purchase and consumption of
26    food and beverages, to the extent that the  proceeds  of  the
27    service  charge  are  in  fact  turned  over  as tips or as a
28    substitute for tips to the employees who participate directly
29    in preparing, serving, hosting or cleaning  up  the  food  or
30    beverage function with respect to which the service charge is
31    imposed.
32        (16)  Petroleum  products  sold  to  a  purchaser  if the
33    seller is prohibited by federal law from charging tax to  the
34    purchaser.
 
HB3289 Enrolled          -48-                  LRB9205821SMdv
 1        (17)  Tangible personal property sold to a common carrier
 2    by rail or motor that receives the physical possession of the
 3    property  in  Illinois  and  that transports the property, or
 4    shares with another common carrier in the  transportation  of
 5    the  property,  out of Illinois on a standard uniform bill of
 6    lading showing the seller of the property as the  shipper  or
 7    consignor  of the property to a destination outside Illinois,
 8    for use outside Illinois.
 9        (18)  Legal tender,  currency,  medallions,  or  gold  or
10    silver   coinage   issued  by  the  State  of  Illinois,  the
11    government of the United States of America, or the government
12    of any foreign country, and bullion.
13        (19)  Oil field  exploration,  drilling,  and  production
14    equipment, including (i) rigs and parts of rigs, rotary rigs,
15    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
16    goods, including casing and drill strings,  (iii)  pumps  and
17    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
18    individual  replacement  part  for  oil  field   exploration,
19    drilling,  and  production  equipment, and (vi) machinery and
20    equipment purchased for lease; but excluding  motor  vehicles
21    required to be registered under the Illinois Vehicle Code.
22        (20)  Photoprocessing  machinery and equipment, including
23    repair and replacement parts, both new  and  used,  including
24    that   manufactured   on  special  order,  certified  by  the
25    purchaser to  be  used  primarily  for  photoprocessing,  and
26    including  photoprocessing  machinery and equipment purchased
27    for lease.
28        (21)  Coal  exploration,  mining,   offhighway   hauling,
29    processing, maintenance, and reclamation equipment, including
30    replacement  parts  and  equipment,  and  including equipment
31    purchased for lease, but excluding motor vehicles required to
32    be registered under the Illinois Vehicle Code.
33        (22)  Fuel and petroleum products sold to or used  by  an
34    air  carrier,  certified  by  the  carrier  to  be  used  for
 
HB3289 Enrolled          -49-                  LRB9205821SMdv
 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        (23)  A  transaction  in  which  the  purchase  order  is
 7    received  by  a  florist who is located outside Illinois, but
 8    who has a florist located in Illinois deliver the property to
 9    the purchaser or the purchaser's donee in Illinois.
10        (24)  Fuel consumed or used in the  operation  of  ships,
11    barges,  or  vessels  that  are  used primarily in or for the
12    transportation of property or the conveyance of  persons  for
13    hire  on  rivers  bordering  on  this  State  if  the fuel is
14    delivered by the seller to the purchaser's  barge,  ship,  or
15    vessel while it is afloat upon that bordering river.
16        (25)  A motor vehicle sold in this State to a nonresident
17    even though the motor vehicle is delivered to the nonresident
18    in  this  State,  if the motor vehicle is not to be titled in
19    this State, and if a driveaway decal permit is issued to  the
20    motor  vehicle  as  provided in Section 3-603 of the Illinois
21    Vehicle Code or if  the  nonresident  purchaser  has  vehicle
22    registration  plates  to  transfer  to the motor vehicle upon
23    returning to his or her home  state.   The  issuance  of  the
24    driveaway   decal   permit   or   having   the   out-of-state
25    registration plates to be transferred is prima facie evidence
26    that the motor vehicle will not be titled in this State.
27        (26)  Semen used for artificial insemination of livestock
28    for direct agricultural production.
29        (27)  Horses, or interests in horses, registered with and
30    meeting  the  requirements  of  any of the Arabian Horse Club
31    Registry of America, Appaloosa Horse Club,  American  Quarter
32    Horse  Association,  United  States  Trotting Association, or
33    Jockey Club, as appropriate, used for purposes of breeding or
34    racing for prizes.
 
HB3289 Enrolled          -50-                  LRB9205821SMdv
 1        (28)  Computers and communications equipment utilized for
 2    any hospital purpose and equipment  used  in  the  diagnosis,
 3    analysis,  or treatment of hospital patients sold to a lessor
 4    who leases the equipment, under a lease of one year or longer
 5    executed or in effect at the  time  of  the  purchase,  to  a
 6    hospital  that  has  been  issued  an  active  tax  exemption
 7    identification  number  by the Department under Section 1g of
 8    this Act.
 9        (29)  Personal property sold to a lessor who  leases  the
10    property,  under a lease of one year or longer executed or in
11    effect at the time of the purchase, to  a  governmental  body
12    that  has  been issued an active tax exemption identification
13    number by the Department under Section 1g of this Act.
14        (30)  Beginning with taxable years  ending  on  or  after
15    December  31, 1995 and ending with taxable years ending on or
16    before December 31, 2004, personal property that  is  donated
17    for  disaster  relief  to  be  used  in  a State or federally
18    declared disaster area in Illinois or bordering Illinois by a
19    manufacturer or retailer that is registered in this State  to
20    a   corporation,   society,   association,   foundation,   or
21    institution  that  has  been  issued  a  sales  tax exemption
22    identification number by the Department that assists  victims
23    of the disaster who reside within the declared disaster area.
24        (31)  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 used in
27    the performance of  infrastructure  repairs  in  this  State,
28    including  but  not  limited  to municipal roads and streets,
29    access roads, bridges,  sidewalks,  waste  disposal  systems,
30    water  and  sewer  line  extensions,  water  distribution and
31    purification facilities, storm water drainage  and  retention
32    facilities, and sewage treatment facilities, resulting from a
33    State or federally declared disaster in Illinois or bordering
34    Illinois  when  such  repairs  are  initiated  on  facilities
 
HB3289 Enrolled          -51-                  LRB9205821SMdv
 1    located  in  the declared disaster area within 6 months after
 2    the disaster.
 3        (32)  Beginning July 1, 1999, game or game birds sold  at
 4    a  "game  breeding  and  hunting preserve area" or an "exotic
 5    game hunting area" as those terms are used  in  the  Wildlife
 6    Code or at a hunting enclosure approved through rules adopted
 7    by  the  Department  of Natural Resources.  This paragraph is
 8    exempt from the provisions of Section 2-70.
 9        (33) (32)  A motor vehicle, as that term  is  defined  in
10    Section  1-146  of the Illinois Vehicle Code, that is donated
11    to  a  corporation,  limited  liability   company,   society,
12    association, foundation, or institution that is determined by
13    the  Department  to be organized and operated exclusively for
14    educational purposes.  For purposes  of  this  exemption,  "a
15    corporation, limited liability company, society, association,
16    foundation, or institution organized and operated exclusively
17    for  educational  purposes"  means  all  tax-supported public
18    schools, private schools that offer systematic instruction in
19    useful branches of  learning  by  methods  common  to  public
20    schools  and  that  compare  favorably  in  their  scope  and
21    intensity with the course of study presented in tax-supported
22    schools,  and  vocational  or technical schools or institutes
23    organized and operated exclusively to  provide  a  course  of
24    study  of  not  less  than  6  weeks duration and designed to
25    prepare individuals to follow a trade or to pursue a  manual,
26    technical,  mechanical,  industrial,  business, or commercial
27    occupation.
28        (34) (33)  Beginning January 1, 2000,  personal property,
29    including food, purchased through fundraising events for  the
30    benefit  of  a  public  or  private  elementary  or secondary
31    school, a group of those  schools,  or  one  or  more  school
32    districts if the events are sponsored by an entity recognized
33    by  the school district that consists primarily of volunteers
34    and includes parents and teachers  of  the  school  children.
 
HB3289 Enrolled          -52-                  LRB9205821SMdv
 1    This  paragraph  does not apply to fundraising events (i) for
 2    the benefit of private home instruction or (ii) for which the
 3    fundraising entity purchases the personal  property  sold  at
 4    the  events  from  another individual or entity that sold the
 5    property for the purpose of resale by the fundraising  entity
 6    and  that  profits  from  the sale to the fundraising entity.
 7    This paragraph is exempt from the provisions of Section 2-70.
 8        (35)  (32)  Beginning  January  1,  2000,  new  or   used
 9    automatic  vending  machines  that prepare and serve hot food
10    and beverages, including coffee, soup, and other  items,  and
11    replacement  parts  for  these  machines.   This paragraph is
12    exempt from the provisions of Section 2-70.
13        (36)  Food for human consumption that is to  be  consumed
14    off  the  premises  where  it  is  sold (other than alcoholic
15    beverages, soft drinks, and food that has been  prepared  for
16    immediate  consumption)  and prescription and nonprescription
17    medicines, drugs,  medical  appliances,  and  insulin,  urine
18    testing  materials,  syringes, and needles used by diabetics,
19    for human use, when purchased for use by a  person  receiving
20    medical assistance under Article 5 of the Illinois Public Aid
21    Code  who  resides  in a licensed long-term care facility, as
22    defined in the Nursing Home Care Act.
23    (Source: P.A.  90-14,  eff.  7-1-97;  90-519,  eff.   6-1-98;
24    90-552,  eff.  12-12-97;  90-605,  eff.  6-30-98; 91-51, eff.
25    6-30-99; 91-200, eff. 7-20-99; 91-439, eff.  8-6-99;  91-533,
26    eff.  8-13-99;  91-637,  eff.  8-20-99; 91-644, eff. 8-20-99;
27    revised 9-28-99.)

28        (35 ILCS 120/2-10.5 new)
29        Sec.  2-10.5.   Direct   payment   program;   purchaser's
30    providing   of  permit  to  retailer;  retailer  relieved  of
31    collecting  use  tax  and  local  retailers'  occupation  tax
32    reimbursements from purchaser; direct payment  of  retailers'
33    occupation   tax  and  local  retailers'  occupation  tax  by
 
HB3289 Enrolled          -53-                  LRB9205821SMdv
 1    purchaser.
 2        (a)  Beginning on July 1, 2001 there  is  established  in
 3    this State a Direct Payment Program to be administered by the
 4    Department.   The  Department shall issue a Direct Pay Permit
 5    to applicants who have been approved to  participate  in  the
 6    Direct  Payment Program.  Each person applying to participate
 7    in the  Direct  Payment  Program  must  demonstrate  (1)  the
 8    applicant's  ability to comply with the retailers' occupation
 9    tax laws and the use tax laws in effect  in  this  State  and
10    that  the  applicant's  accounting  system  will  reflect the
11    proper amount of tax due, (2) that the applicant has a  valid
12    business  purpose  for  participating  in  the Direct Payment
13    Program, and (3) how the  applicant's  participation  in  the
14    Direct   Payment   Program   will   benefit  tax  compliance.
15    Application shall be made on forms provided by the Department
16    and  shall  contain  information  as   the   Department   may
17    reasonably  require.  The Department shall approve or deny an
18    applicant within 90 days after the  Department's  receipt  of
19    the  application,  unless  the  Department  makes  a  written
20    request for additional information from the applicant.
21        (b)  A  person  who  has  been  approved  for  the Direct
22    Payment Program and who has been issued a Direct  Pay  Permit
23    by  the  Department  is  relieved of paying tax to a retailer
24    when  purchasing  tangible  personal  property  for  use   or
25    consumption,   except  as  provided  in  subsection  (d),  by
26    providing that retailer a copy of that Direct Pay Permit.   A
27    retailer who accepts a copy of a customer's Direct Pay Permit
28    is relieved of the obligation to remit  the  tax  imposed  by
29    this  Act  on the transaction.  References in this Section to
30    "the tax imposed by this Act" include  any  local  occupation
31    taxes  administered  by the Department that would be incurred
32    on the retail sale.
33        (c)  Once the holder of a Direct  Pay  Permit  uses  that
34    Permit  to  relieve  the  Permit  holder from paying tax to a
 
HB3289 Enrolled          -54-                  LRB9205821SMdv
 1    particular retailer, the holder must use its Permit  for  all
 2    purchases,  except  as  provided in subsection (d), from that
 3    retailer for so long as the Permit is valid.
 4        (d)  Direct Pay Permits are not valid and  shall  not  be
 5    used for sales or purchases of:
 6             (1)  food or beverage;
 7             (2)  tangible   personal  property  required  to  be
 8        titled or registered with an agency of government; or
 9             (3)  any  transactions  subject   to   the   Service
10        Occupation Tax Act or Service Use Tax Act.
11        (e)  Direct  Pay  Permits  are not assignable and are not
12    transferable.  As an illustration, a construction  contractor
13    shall  not  make  purchases  using  a  customer's  Direct Pay
14    Permit.
15        (f)  A Direct Pay Permit is valid until it is revoked  by
16    the Department or until the holder notifies the Department in
17    writing  that  the  holder  is  withdrawing  from  the Direct
18    Payment Program.  A Direct Pay Permit can be revoked  by  the
19    Department,  after notice and hearing, if the holder violates
20    any provision of this Act, any provision of the Illinois  Use
21    Tax  Act,  or  any  provision  of  any  Act  imposing a local
22    retailers' occupation tax administered by the Department.
23        (g)  The holder of a  Direct  Pay  Permit  who  has  been
24    relieved of paying tax to a retailer on a purchase for use or
25    consumption  by  representing  to that retailer that it would
26    pay all applicable taxes directly to the Department shall pay
27    those taxes to the Department not later than the 20th day  of
28    the month following the month in which the purchase was made.
29    Permit  holders  making  such  purchases  are  subject to all
30    provisions of this Act, and the tax must be reported and paid
31    as retailers' occupation tax in  the  same  manner  that  the
32    retailer  from  whom  the  purchases  were  made  would  have
33    reported   and   paid  it,  including  any  local  retailers'
34    occupation   taxes   applicable   to   that   retail    sale.
 
HB3289 Enrolled          -55-                  LRB9205821SMdv
 1    Notwithstanding  any  other  provision  of  this  Act, Permit
 2    holders shall make all payments to the Department through the
 3    use of electronic funds transfer.

 4        (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
 5        Sec. 2-45.  Manufacturing and  assembly  exemption.   The
 6    manufacturing  and assembly machinery and equipment exemption
 7    includes machinery and equipment that replaces machinery  and
 8    equipment  in  an  existing manufacturing facility as well as
 9    machinery and equipment that are for use in  an  expanded  or
10    new manufacturing facility.
11        The  machinery  and  equipment  exemption  also  includes
12    machinery  and  equipment  used in the general maintenance or
13    repair of exempt machinery  and  equipment  or  for  in-house
14    manufacture  of  exempt  machinery  and  equipment.  For  the
15    purposes   of   this  exemption,  terms  have  the  following
16    meanings:
17             (1)  "Manufacturing process" means the production of
18        an article of tangible  personal  property,  whether  the
19        article  is  a  finished product or an article for use in
20        the process of manufacturing or  assembling  a  different
21        article  of  tangible  personal  property, by a procedure
22        commonly   regarded   as    manufacturing,    processing,
23        fabricating,  or  refining  that  changes  some  existing
24        material  or  materials  into a material with a different
25        form,  use,  or  name.   In  relation  to  a   recognized
26        integrated  business  composed  of a series of operations
27        that   collectively    constitute    manufacturing,    or
28        individually  constitute  manufacturing  operations,  the
29        manufacturing  process commences with the first operation
30        or stage of production in the series  and  does  not  end
31        until  the  completion  of  the final product in the last
32        operation or stage of  production  in  the  series.   For
33        purposes   of   this   exemption,  photoprocessing  is  a
 
HB3289 Enrolled          -56-                  LRB9205821SMdv
 1        manufacturing process of tangible personal  property  for
 2        wholesale or retail sale.
 3             (2)  "Assembling process" means the production of an
 4        article   of  tangible  personal  property,  whether  the
 5        article is a finished product or an article  for  use  in
 6        the  process  of  manufacturing or assembling a different
 7        article of tangible personal property, by the combination
 8        of existing materials in a manner  commonly  regarded  as
 9        assembling  that  results  in  a  material of a different
10        form, use, or name.
11             (3)  "Machinery" means major mechanical machines  or
12        major  components  of  those  machines  contributing to a
13        manufacturing or assembling process.
14             (4)  "Equipment" includes an independent  device  or
15        tool   separate   from  machinery  but  essential  to  an
16        integrated manufacturing or assembly  process;  including
17        computers  used  primarily  in a manufacturer's operating
18        exempt machinery and equipment  in  a  computer  assisted
19        design, computer assisted manufacturing (CAD/CAM) system;
20        any  subunit  or  assembly  comprising a component of any
21        machinery or auxiliary, adjunct, or attachment  parts  of
22        machinery, such as tools, dies, jigs, fixtures, patterns,
23        and   molds;   and   any   parts  that  require  periodic
24        replacement in the course of normal operation;  but  does
25        not  include  hand tools. Equipment includes chemicals or
26        chemicals acting as catalysts but only if  the  chemicals
27        or  chemicals  acting  as  catalysts  effect a direct and
28        immediate change upon a  product  being  manufactured  or
29        assembled for wholesale or retail sale or lease.
30        The  manufacturing and assembling machinery and equipment
31    exemption includes the sale of materials to a  purchaser  who
32    produces exempted types of machinery, equipment, or tools and
33    who  rents or leases that machinery, equipment, or tools to a
34    manufacturer of tangible personal property.   This  exemption
 
HB3289 Enrolled          -57-                  LRB9205821SMdv
 1    also  includes  the  sale  of  materials  to  a purchaser who
 2    manufactures  those  materials  into  an  exempted  type   of
 3    machinery,  equipment,  or  tools  that  the  purchaser  uses
 4    himself  or herself in the manufacturing of tangible personal
 5    property.  The purchaser of the machinery and  equipment  who
 6    has  an  active resale registration number shall furnish that
 7    number to the seller at the time of purchase.  A purchaser of
 8    the machinery, equipment, and tools without an active  resale
 9    registration number shall furnish to the seller a certificate
10    of  exemption for each transaction stating facts establishing
11    the exemption for  that  transaction,  and  that  certificate
12    shall be available to the Department for inspection or audit.
13    Informal   rulings,   opinions,  or  letters  issued  by  the
14    Department in response  to  an  inquiry  or  request  for  an
15    opinion   from   any   person   regarding  the  coverage  and
16    applicability of this exemption to specific devices shall  be
17    published,  maintained as a public record, and made available
18    for public inspection and copying.  If the  informal  ruling,
19    opinion,   or   letter   contains   trade  secrets  or  other
20    confidential  information,  where  possible,  the  Department
21    shall delete that information before  publication.   Whenever
22    informal  rulings,  opinions,  or letters contain a policy of
23    general applicability, the  Department  shall  formulate  and
24    adopt  that  policy as a rule in accordance with the Illinois
25    Administrative Procedure Act.
26    (Source: P.A. 91-51, eff. 6-30-99.)

27        (35 ILCS 120/3) (from Ch. 120, par. 442)
28        Sec. 3.  Except as provided in this Section, on or before
29    the twentieth  day  of  each  calendar  month,  every  person
30    engaged in the business of selling tangible personal property
31    at  retail  in this State during the preceding calendar month
32    shall file a return with the Department, stating:
33             1.  The name of the seller;
 
HB3289 Enrolled          -58-                  LRB9205821SMdv
 1             2.  His residence address and  the  address  of  his
 2        principal  place  of  business  and  the  address  of the
 3        principal place of  business  (if  that  is  a  different
 4        address) from which he engages in the business of selling
 5        tangible personal property at retail in this State;
 6             3.  Total  amount of receipts received by him during
 7        the preceding calendar month or quarter, as the case  may
 8        be,  from  sales  of tangible personal property, and from
 9        services furnished, by him during such preceding calendar
10        month or quarter;
11             4.  Total  amount  received  by   him   during   the
12        preceding  calendar  month  or quarter on charge and time
13        sales of tangible personal property,  and  from  services
14        furnished, by him prior to the month or quarter for which
15        the return is filed;
16             5.  Deductions allowed by law;
17             6.  Gross receipts which were received by him during
18        the  preceding  calendar  month  or  quarter and upon the
19        basis of which the tax is imposed;
20             7.  The amount of credit provided in Section  2d  of
21        this Act;
22             8.  The amount of tax due;
23             9.  The signature of the taxpayer; and
24             10.  Such   other   reasonable  information  as  the
25        Department may require.
26        If a taxpayer fails to sign a return within 30 days after
27    the proper notice and demand for signature by the Department,
28    the return shall be considered valid and any amount shown  to
29    be due on the return shall be deemed assessed.
30        Each  return  shall  be  accompanied  by the statement of
31    prepaid tax issued pursuant to Section 2e for which credit is
32    claimed.
33        A retailer may accept a  Manufacturer's  Purchase  Credit
34    certification  from a purchaser in satisfaction of Use Tax as
 
HB3289 Enrolled          -59-                  LRB9205821SMdv
 1    provided in Section 3-85 of the Use Tax Act if the  purchaser
 2    provides the appropriate documentation as required by Section
 3    3-85  of  the  Use Tax Act.  A Manufacturer's Purchase Credit
 4    certification, accepted by a retailer as provided in  Section
 5    3-85  of  the  Use  Tax  Act, may be used by that retailer to
 6    satisfy Retailers' Occupation Tax  liability  in  the  amount
 7    claimed  in  the  certification,  not  to exceed 6.25% of the
 8    receipts subject to tax from a qualifying purchase.
 9        The Department may require  returns  to  be  filed  on  a
10    quarterly  basis.  If so required, a return for each calendar
11    quarter shall be filed on or before the twentieth day of  the
12    calendar  month  following  the end of such calendar quarter.
13    The taxpayer shall also file a return with the Department for
14    each of the first two months of each calendar quarter, on  or
15    before  the  twentieth  day  of the following calendar month,
16    stating:
17             1.  The name of the seller;
18             2.  The address of the principal place  of  business
19        from which he engages in the business of selling tangible
20        personal property at retail in this State;
21             3.  The total amount of taxable receipts received by
22        him  during  the  preceding  calendar month from sales of
23        tangible personal property by him during  such  preceding
24        calendar  month,  including receipts from charge and time
25        sales, but less all deductions allowed by law;
26             4.  The amount of credit provided in Section  2d  of
27        this Act;
28             5.  The amount of tax due; and
29             6.  Such   other   reasonable   information  as  the
30        Department may require.
31        If a total amount of less than $1 is payable,  refundable
32    or creditable, such amount shall be disregarded if it is less
33    than  50 cents and shall be increased to $1 if it is 50 cents
34    or more.
 
HB3289 Enrolled          -60-                  LRB9205821SMdv
 1        Beginning October 1, 1993, a taxpayer who has an  average
 2    monthly  tax  liability  of  $150,000  or more shall make all
 3    payments required by rules of the  Department  by  electronic
 4    funds  transfer.   Beginning  October 1, 1994, a taxpayer who
 5    has an average monthly tax  liability  of  $100,000  or  more
 6    shall  make  all payments required by rules of the Department
 7    by electronic funds transfer.  Beginning October 1,  1995,  a
 8    taxpayer  who has an average monthly tax liability of $50,000
 9    or more shall make all payments  required  by  rules  of  the
10    Department  by  electronic funds transfer.  Beginning October
11    1, 2000, a taxpayer  who  has  an  annual  tax  liability  of
12    $200,000 or more shall make all payments required by rules of
13    the  Department  by  electronic  funds  transfer.   The  term
14    "annual  tax  liability"  shall  be the sum of the taxpayer's
15    liabilities under this Act, and under  all  other  State  and
16    local  occupation  and  use  tax  laws  administered  by  the
17    Department,  for the immediately preceding calendar year. The
18    term "average monthly tax liability" shall be the sum of  the
19    taxpayer's  liabilities  under  this Act, and under all other
20    State and local occupation and use tax laws  administered  by
21    the  Department,  for the immediately preceding calendar year
22    divided by 12.
23        Before August 1 of  each  year  beginning  in  1993,  the
24    Department  shall  notify  all  taxpayers  required  to  make
25    payments   by   electronic  funds  transfer.   All  taxpayers
26    required to make payments by electronic funds transfer  shall
27    make  those  payments  for a minimum of one year beginning on
28    October 1.
29        Any taxpayer not required to make payments by  electronic
30    funds transfer may make payments by electronic funds transfer
31    with the permission of the Department.
32        All  taxpayers  required  to  make  payment by electronic
33    funds transfer and any taxpayers  authorized  to  voluntarily
34    make  payments  by electronic funds transfer shall make those
 
HB3289 Enrolled          -61-                  LRB9205821SMdv
 1    payments in the manner authorized by the Department.
 2        The Department shall adopt such rules as are necessary to
 3    effectuate a program of electronic  funds  transfer  and  the
 4    requirements of this Section.
 5        Any  amount  which is required to be shown or reported on
 6    any return or other document under this Act  shall,  if  such
 7    amount  is  not  a  whole-dollar  amount, be increased to the
 8    nearest whole-dollar amount in any case where the  fractional
 9    part  of  a  dollar is 50 cents or more, and decreased to the
10    nearest whole-dollar amount where the fractional  part  of  a
11    dollar is less than 50 cents.
12        If  the  retailer is otherwise required to file a monthly
13    return and if the retailer's average monthly tax liability to
14    the Department does  not  exceed  $200,  the  Department  may
15    authorize  his returns to be filed on a quarter annual basis,
16    with the return for January, February and March  of  a  given
17    year  being due by April 20 of such year; with the return for
18    April, May and June of a given year being due by July  20  of
19    such  year; with the return for July, August and September of
20    a given year being due by October 20 of such year,  and  with
21    the return for October, November and December of a given year
22    being due by January 20 of the following year.
23        If  the  retailer is otherwise required to file a monthly
24    or quarterly return and if the retailer's average monthly tax
25    liability with  the  Department  does  not  exceed  $50,  the
26    Department may authorize his returns to be filed on an annual
27    basis,  with the return for a given year being due by January
28    20 of the following year.
29        Such quarter annual and annual returns, as  to  form  and
30    substance,  shall  be  subject  to  the  same requirements as
31    monthly returns.
32        Notwithstanding  any  other   provision   in   this   Act
33    concerning  the  time  within  which  a retailer may file his
34    return, in the case of any retailer who ceases to engage in a
 
HB3289 Enrolled          -62-                  LRB9205821SMdv
 1    kind of business  which  makes  him  responsible  for  filing
 2    returns  under  this  Act,  such  retailer shall file a final
 3    return under this Act with the Department not more  than  one
 4    month after discontinuing such business.
 5        Where   the  same  person  has  more  than  one  business
 6    registered with the Department under  separate  registrations
 7    under  this Act, such person may not file each return that is
 8    due  as  a  single  return  covering  all   such   registered
 9    businesses,  but  shall  file  separate returns for each such
10    registered business.
11        In addition, with respect to motor vehicles,  watercraft,
12    aircraft,  and  trailers  that  are required to be registered
13    with an agency of this State,  every  retailer  selling  this
14    kind  of  tangible  personal  property  shall  file, with the
15    Department, upon a form to be prescribed and supplied by  the
16    Department,  a separate return for each such item of tangible
17    personal property which the retailer sells, except  that  if,
18    in   the  same  transaction,  (i)  a  retailer  of  aircraft,
19    watercraft, motor vehicles or trailers  transfers  more  than
20    one aircraft, watercraft, motor vehicle or trailer to another
21    aircraft,  watercraft,  motor  vehicle  retailer  or  trailer
22    retailer  for  the  purpose  of  resale or (ii) a retailer of
23    aircraft, watercraft, motor vehicles, or  trailers  transfers
24    more than one aircraft, watercraft, motor vehicle, or trailer
25    to  a  purchaser  for  use  as  a qualifying rolling stock as
26    provided in Section 2-5 of this Act,  then  that  seller  may
27    report  the  transfer  of  all  aircraft,  watercraft,  motor
28    vehicles  or  trailers  involved  in  that transaction to the
29    Department on the same uniform invoice-transaction  reporting
30    return  form.   For  purposes  of  this Section, "watercraft"
31    means a Class 2, Class 3, or Class 4 watercraft as defined in
32    Section 3-2 of  the  Boat  Registration  and  Safety  Act,  a
33    personal  watercraft,  or  any  boat equipped with an inboard
34    motor.
 
HB3289 Enrolled          -63-                  LRB9205821SMdv
 1        Any retailer who sells only motor  vehicles,  watercraft,
 2    aircraft, or trailers that are required to be registered with
 3    an  agency  of  this State, so that all retailers' occupation
 4    tax liability is required to be reported, and is reported, on
 5    such transaction reporting returns and who is  not  otherwise
 6    required  to file monthly or quarterly returns, need not file
 7    monthly or quarterly returns.  However, those retailers shall
 8    be required to file returns on an annual basis.
 9        The transaction reporting return, in the  case  of  motor
10    vehicles  or trailers that are required to be registered with
11    an agency of this State, shall be the same  document  as  the
12    Uniform  Invoice referred to in Section 5-402 of The Illinois
13    Vehicle Code and must  show  the  name  and  address  of  the
14    seller;  the name and address of the purchaser; the amount of
15    the  selling  price  including  the  amount  allowed  by  the
16    retailer for traded-in property, if any; the  amount  allowed
17    by the retailer for the traded-in tangible personal property,
18    if  any,  to the extent to which Section 1 of this Act allows
19    an exemption for the value of traded-in property; the balance
20    payable after deducting  such  trade-in  allowance  from  the
21    total  selling price; the amount of tax due from the retailer
22    with respect to such transaction; the amount of tax collected
23    from the purchaser by the retailer on  such  transaction  (or
24    satisfactory  evidence  that  such  tax  is  not  due in that
25    particular instance, if that is claimed to be the fact);  the
26    place  and  date  of the sale; a sufficient identification of
27    the property sold; such other information as is  required  in
28    Section  5-402  of  The Illinois Vehicle Code, and such other
29    information as the Department may reasonably require.
30        The  transaction  reporting  return  in   the   case   of
31    watercraft  or aircraft must show the name and address of the
32    seller; the name and address of the purchaser; the amount  of
33    the  selling  price  including  the  amount  allowed  by  the
34    retailer  for  traded-in property, if any; the amount allowed
 
HB3289 Enrolled          -64-                  LRB9205821SMdv
 1    by the retailer for the traded-in tangible personal property,
 2    if any, to the extent to which Section 1 of this  Act  allows
 3    an exemption for the value of traded-in property; the balance
 4    payable  after  deducting  such  trade-in  allowance from the
 5    total selling price; the amount of tax due from the  retailer
 6    with respect to such transaction; the amount of tax collected
 7    from  the  purchaser  by the retailer on such transaction (or
 8    satisfactory evidence that  such  tax  is  not  due  in  that
 9    particular  instance, if that is claimed to be the fact); the
10    place and date of the sale, a  sufficient  identification  of
11    the   property  sold,  and  such  other  information  as  the
12    Department may reasonably require.
13        Such transaction reporting  return  shall  be  filed  not
14    later than 20 days after the day of delivery of the item that
15    is  being  sold, but may be filed by the retailer at any time
16    sooner than that if he chooses to  do  so.   The  transaction
17    reporting  return  and  tax  remittance or proof of exemption
18    from  the  Illinois  use  tax  may  be  transmitted  to   the
19    Department  by  way  of the State agency with which, or State
20    officer with whom the  tangible  personal  property  must  be
21    titled or registered (if titling or registration is required)
22    if  the Department and such agency or State officer determine
23    that  this  procedure  will  expedite   the   processing   of
24    applications for title or registration.
25        With each such transaction reporting return, the retailer
26    shall  remit  the  proper  amount of tax due (or shall submit
27    satisfactory evidence that the sale is not taxable if that is
28    the case), to the Department or  its  agents,  whereupon  the
29    Department  shall  issue,  in the purchaser's name, a use tax
30    receipt (or a certificate of exemption if the  Department  is
31    satisfied  that the particular sale is tax exempt) which such
32    purchaser may submit to  the  agency  with  which,  or  State
33    officer  with  whom,  he  must title or register the tangible
34    personal  property  that   is   involved   (if   titling   or
 
HB3289 Enrolled          -65-                  LRB9205821SMdv
 1    registration  is  required)  in  support  of such purchaser's
 2    application for an Illinois certificate or other evidence  of
 3    title or registration to such tangible personal property.
 4        No  retailer's failure or refusal to remit tax under this
 5    Act precludes a user, who has paid  the  proper  tax  to  the
 6    retailer,  from  obtaining  his certificate of title or other
 7    evidence of title or registration (if titling or registration
 8    is required) upon satisfying the Department  that  such  user
 9    has paid the proper tax (if tax is due) to the retailer.  The
10    Department  shall  adopt  appropriate  rules to carry out the
11    mandate of this paragraph.
12        If the user who would otherwise pay tax to  the  retailer
13    wants  the transaction reporting return filed and the payment
14    of the tax or proof  of  exemption  made  to  the  Department
15    before the retailer is willing to take these actions and such
16    user  has  not  paid  the  tax to the retailer, such user may
17    certify to the fact of such delay by  the  retailer  and  may
18    (upon  the  Department  being  satisfied of the truth of such
19    certification)  transmit  the  information  required  by  the
20    transaction reporting return and the remittance  for  tax  or
21    proof  of exemption directly to the Department and obtain his
22    tax receipt or exemption determination, in  which  event  the
23    transaction  reporting  return  and  tax remittance (if a tax
24    payment was required) shall be credited by the Department  to
25    the  proper  retailer's  account  with  the  Department,  but
26    without  the  2.1%  or  1.75%  discount  provided for in this
27    Section being allowed.  When the user pays the  tax  directly
28    to  the  Department,  he shall pay the tax in the same amount
29    and in the same form in which it would be remitted if the tax
30    had been remitted to the Department by the retailer.
31        Refunds made by the seller during  the  preceding  return
32    period   to  purchasers,  on  account  of  tangible  personal
33    property returned to  the  seller,  shall  be  allowed  as  a
34    deduction  under  subdivision  5  of his monthly or quarterly
 
HB3289 Enrolled          -66-                  LRB9205821SMdv
 1    return,  as  the  case  may  be,  in  case  the  seller   had
 2    theretofore  included  the  receipts  from  the  sale of such
 3    tangible personal property in a return filed by him  and  had
 4    paid  the  tax  imposed  by  this  Act  with  respect to such
 5    receipts.
 6        Where the seller is a corporation, the  return  filed  on
 7    behalf  of such corporation shall be signed by the president,
 8    vice-president, secretary or treasurer  or  by  the  properly
 9    accredited agent of such corporation.
10        Where  the  seller  is  a  limited liability company, the
11    return filed on behalf of the limited liability company shall
12    be signed by a manager, member, or properly accredited  agent
13    of the limited liability company.
14        Except  as  provided in this Section, the retailer filing
15    the return under this Section shall, at the  time  of  filing
16    such  return, pay to the Department the amount of tax imposed
17    by this Act less a discount of 2.1% prior to January 1,  1990
18    and  1.75%  on  and after January 1, 1990, or $5 per calendar
19    year, whichever is greater, which is allowed to reimburse the
20    retailer  for  the  expenses  incurred  in  keeping  records,
21    preparing and filing returns, remitting the tax and supplying
22    data to the  Department  on  request.   Any  prepayment  made
23    pursuant  to  Section 2d of this Act shall be included in the
24    amount on which such 2.1% or 1.75% discount is computed.   In
25    the  case  of  retailers  who  report  and  pay  the tax on a
26    transaction  by  transaction  basis,  as  provided  in   this
27    Section,  such  discount  shall  be  taken with each such tax
28    remittance instead of when such retailer files  his  periodic
29    return.
30        Before October 1, 2000, if the taxpayer's average monthly
31    tax  liability  to the Department under this Act, the Use Tax
32    Act, the Service Occupation Tax Act, and the Service Use  Tax
33    Act,  excluding  any  liability  for  prepaid sales tax to be
34    remitted in accordance with  Section  2d  of  this  Act,  was
 
HB3289 Enrolled          -67-                  LRB9205821SMdv
 1    $10,000  or  more  during  the  preceding 4 complete calendar
 2    quarters, he shall file a return  with  the  Department  each
 3    month  by  the 20th day of the month next following the month
 4    during which such tax liability is incurred  and  shall  make
 5    payments  to  the Department on or before the 7th, 15th, 22nd
 6    and last day of the month  during  which  such  liability  is
 7    incurred.  On  and  after  October 1, 2000, if the taxpayer's
 8    average monthly tax liability to the  Department  under  this
 9    Act, the Use Tax Act, the Service Occupation Tax Act, and the
10    Service  Use  Tax  Act,  excluding  any liability for prepaid
11    sales tax to be remitted in accordance  with  Section  2d  of
12    this Act, was $20,000 or more during the preceding 4 complete
13    calendar quarters, he shall file a return with the Department
14    each  month  by  the 20th day of the month next following the
15    month during which such tax liability is incurred  and  shall
16    make  payment  to  the Department on or before the 7th, 15th,
17    22nd and last day of the month during which such liability is
18    incurred.  If the month during which such  tax  liability  is
19    incurred  began  prior to January 1, 1985, each payment shall
20    be in an  amount  equal  to  1/4  of  the  taxpayer's  actual
21    liability  for  the  month or an amount set by the Department
22    not to exceed 1/4 of the average  monthly  liability  of  the
23    taxpayer  to  the  Department  for  the  preceding 4 complete
24    calendar quarters (excluding the month of  highest  liability
25    and  the month of lowest liability in such 4 quarter period).
26    If the month during which  such  tax  liability  is  incurred
27    begins  on  or  after January 1, 1985 and prior to January 1,
28    1987, each payment shall be in an amount equal  to  22.5%  of
29    the taxpayer's actual liability for the month or 27.5% of the
30    taxpayer's  liability  for  the  same  calendar  month of the
31    preceding year.  If the month during which such tax liability
32    is incurred begins on or after January 1, 1987 and  prior  to
33    January  1, 1988, each payment shall be in an amount equal to
34    22.5% of the taxpayer's actual liability  for  the  month  or
 
HB3289 Enrolled          -68-                  LRB9205821SMdv
 1    26.25%  of  the  taxpayer's  liability  for the same calendar
 2    month of the preceding year.  If the month during which  such
 3    tax liability is incurred begins on or after January 1, 1988,
 4    and  prior  to January 1, 1989, or begins on or after January
 5    1, 1996, each payment shall be in an amount equal to 22.5% of
 6    the taxpayer's actual liability for the month or 25%  of  the
 7    taxpayer's  liability  for  the  same  calendar  month of the
 8    preceding year. If the month during which such tax  liability
 9    is  incurred begins on or after January 1, 1989, and prior to
10    January 1, 1996, each payment shall be in an amount equal  to
11    22.5% of the taxpayer's actual liability for the month or 25%
12    of  the  taxpayer's  liability for the same calendar month of
13    the preceding year or 100% of the taxpayer's actual liability
14    for the quarter monthly reporting period.  The amount of such
15    quarter monthly payments shall be credited against the  final
16    tax  liability  of  the  taxpayer's  return  for  that month.
17    Before October 1, 2000, once applicable, the  requirement  of
18    the  making  of quarter monthly payments to the Department by
19    taxpayers having an average monthly tax liability of  $10,000
20    or  more  as  determined  in  the manner provided above shall
21    continue until such taxpayer's average monthly  liability  to
22    the  Department  during  the  preceding  4  complete calendar
23    quarters (excluding the month of highest  liability  and  the
24    month of lowest liability) is less than $9,000, or until such
25    taxpayer's  average  monthly  liability  to the Department as
26    computed  for  each  calendar  quarter  of  the  4  preceding
27    complete  calendar  quarter  period  is  less  than  $10,000.
28    However, if  a  taxpayer  can  show  the  Department  that  a
29    substantial  change  in  the taxpayer's business has occurred
30    which causes the taxpayer  to  anticipate  that  his  average
31    monthly  tax  liability for the reasonably foreseeable future
32    will fall below the $10,000 threshold stated above, then such
33    taxpayer may petition the Department for  a  change  in  such
34    taxpayer's  reporting  status.  On and after October 1, 2000,
 
HB3289 Enrolled          -69-                  LRB9205821SMdv
 1    once applicable, the requirement of  the  making  of  quarter
 2    monthly  payments  to  the  Department by taxpayers having an
 3    average  monthly  tax  liability  of  $20,000  or   more   as
 4    determined  in the manner provided above shall continue until
 5    such taxpayer's average monthly liability to  the  Department
 6    during  the preceding 4 complete calendar quarters (excluding
 7    the month of  highest  liability  and  the  month  of  lowest
 8    liability)  is  less  than  $19,000  or until such taxpayer's
 9    average monthly liability to the Department as  computed  for
10    each  calendar  quarter  of the 4 preceding complete calendar
11    quarter period is less than $20,000.  However, if a  taxpayer
12    can  show  the  Department  that  a substantial change in the
13    taxpayer's business has occurred which causes the taxpayer to
14    anticipate that his average monthly  tax  liability  for  the
15    reasonably  foreseeable  future  will  fall below the $20,000
16    threshold stated above, then such taxpayer may  petition  the
17    Department  for a change in such taxpayer's reporting status.
18    The Department shall change such taxpayer's reporting  status
19    unless  it  finds  that such change is seasonal in nature and
20    not likely to be long term.   If  any  such  quarter  monthly
21    payment  is not paid at the time or in the amount required by
22    this Section, then the taxpayer shall be liable for penalties
23    and interest on the difference between the minimum amount due
24    as a payment and the amount of such quarter  monthly  payment
25    actually  and timely paid, except insofar as the taxpayer has
26    previously made payments for that month to the Department  in
27    excess  of the minimum payments previously due as provided in
28    this Section. The Department shall make reasonable rules  and
29    regulations  to govern the quarter monthly payment amount and
30    quarter monthly payment dates for taxpayers who file on other
31    than a calendar monthly basis.
32        The provisions of this paragraph apply before October  1,
33    2001.  Without  regard  to  whether a taxpayer is required to
34    make  quarter  monthly  payments  as  specified  above,   any
 
HB3289 Enrolled          -70-                  LRB9205821SMdv
 1    taxpayer who is required by Section 2d of this Act to collect
 2    and remit prepaid taxes and has collected prepaid taxes which
 3    average in excess of $25,000 per month during the preceding 2
 4    complete  calendar  quarters,  shall  file  a return with the
 5    Department as required by Section 2f and shall make  payments
 6    to  the  Department on or before the 7th, 15th, 22nd and last
 7    day of the month during which such liability is incurred.  If
 8    the month during which such tax liability is  incurred  began
 9    prior  to  the effective date of this amendatory Act of 1985,
10    each payment shall be in an amount not less than 22.5% of the
11    taxpayer's actual liability under Section 2d.  If  the  month
12    during  which  such  tax  liability  is incurred begins on or
13    after January 1, 1986, each payment shall  be  in  an  amount
14    equal  to  22.5%  of  the taxpayer's actual liability for the
15    month or 27.5% of  the  taxpayer's  liability  for  the  same
16    calendar  month of the preceding calendar year.  If the month
17    during which such tax liability  is  incurred  begins  on  or
18    after  January  1,  1987,  each payment shall be in an amount
19    equal to 22.5% of the taxpayer's  actual  liability  for  the
20    month  or  26.25%  of  the  taxpayer's liability for the same
21    calendar month of the preceding year.   The  amount  of  such
22    quarter  monthly payments shall be credited against the final
23    tax liability of the taxpayer's return for that  month  filed
24    under  this  Section or Section 2f, as the case may be.  Once
25    applicable, the requirement of the making of quarter  monthly
26    payments  to  the Department pursuant to this paragraph shall
27    continue until such taxpayer's average  monthly  prepaid  tax
28    collections during the preceding 2 complete calendar quarters
29    is  $25,000  or less.  If any such quarter monthly payment is
30    not paid at the time or in the amount required, the  taxpayer
31    shall   be   liable   for  penalties  and  interest  on  such
32    difference, except insofar as  the  taxpayer  has  previously
33    made  payments  for  that  month  in  excess  of  the minimum
34    payments previously due.
 
HB3289 Enrolled          -71-                  LRB9205821SMdv
 1        The provisions of  this  paragraph  apply  on  and  after
 2    October  1,  2001.    Without regard to whether a taxpayer is
 3    required to make quarter monthly payments as specified above,
 4    any taxpayer who is required by Section 2d  of  this  Act  to
 5    collect  and  remit  prepaid  taxes and has collected prepaid
 6    taxes that average in excess of $20,000 per month during  the
 7    preceding  4  complete  calendar quarters shall file a return
 8    with the Department as required by Section 2f and shall  make
 9    payments  to  the Department on or before the 7th, 15th, 22nd
10    and last day of the  month  during  which  the  liability  is
11    incurred.   Each payment shall be in an amount equal to 22.5%
12    of the taxpayer's actual liability for the month  or  25%  of
13    the  taxpayer's  liability for the same calendar month of the
14    preceding year.  The amount of the quarter  monthly  payments
15    shall  be  credited  against  the  final tax liability of the
16    taxpayer's return for that month filed under this Section  or
17    Section  2f,  as  the  case  may  be.   Once  applicable, the
18    requirement of the making of quarter monthly payments to  the
19    Department  pursuant  to  this paragraph shall continue until
20    the taxpayer's average monthly prepaid tax collections during
21    the preceding 4 complete  calendar  quarters  (excluding  the
22    month of highest liability and the month of lowest liability)
23    is less than $19,000 or until such taxpayer's average monthly
24    liability  to  the  Department  as computed for each calendar
25    quarter of the 4 preceding complete calendar quarters is less
26    than $20,000.  If any such quarter  monthly  payment  is  not
27    paid  at  the  time  or  in the amount required, the taxpayer
28    shall  be  liable  for  penalties  and   interest   on   such
29    difference,  except  insofar  as  the taxpayer has previously
30    made payments  for  that  month  in  excess  of  the  minimum
31    payments previously due.
32        If  any  payment provided for in this Section exceeds the
33    taxpayer's liabilities under this Act, the Use Tax  Act,  the
34    Service  Occupation  Tax  Act and the Service Use Tax Act, as
 
HB3289 Enrolled          -72-                  LRB9205821SMdv
 1    shown on an original monthly return, the Department shall, if
 2    requested by the taxpayer, issue to  the  taxpayer  a  credit
 3    memorandum  no  later than 30 days after the date of payment.
 4    The  credit  evidenced  by  such  credit  memorandum  may  be
 5    assigned by the taxpayer to a  similar  taxpayer  under  this
 6    Act,  the  Use Tax Act, the Service Occupation Tax Act or the
 7    Service Use Tax Act, in accordance with reasonable rules  and
 8    regulations  to  be prescribed by the Department.  If no such
 9    request is made, the taxpayer may credit such excess  payment
10    against  tax  liability  subsequently  to  be remitted to the
11    Department under this Act,  the  Use  Tax  Act,  the  Service
12    Occupation  Tax Act or the Service Use Tax Act, in accordance
13    with reasonable  rules  and  regulations  prescribed  by  the
14    Department.   If  the Department subsequently determined that
15    all or any part of the credit taken was not actually  due  to
16    the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount
17    shall  be  reduced by 2.1% or 1.75% of the difference between
18    the credit taken and that actually  due,  and  that  taxpayer
19    shall   be   liable   for  penalties  and  interest  on  such
20    difference.
21        If a retailer of motor fuel is entitled to a credit under
22    Section 2d of this Act which exceeds the taxpayer's liability
23    to the Department under this Act  for  the  month  which  the
24    taxpayer  is  filing a return, the Department shall issue the
25    taxpayer a credit memorandum for the excess.
26        Beginning January 1,  1990,  each  month  the  Department
27    shall  pay into the Local Government Tax Fund, a special fund
28    in the State  treasury  which  is  hereby  created,  the  net
29    revenue  realized  for the preceding month from the 1% tax on
30    sales of food for human consumption which is to  be  consumed
31    off  the  premises  where  it  is  sold (other than alcoholic
32    beverages, soft drinks and food which has been  prepared  for
33    immediate  consumption)  and prescription and nonprescription
34    medicines,  drugs,  medical  appliances  and  insulin,  urine
 
HB3289 Enrolled          -73-                  LRB9205821SMdv
 1    testing materials, syringes and needles used by diabetics.
 2        Beginning January 1,  1990,  each  month  the  Department
 3    shall  pay  into the County and Mass Transit District Fund, a
 4    special fund in the State treasury which is  hereby  created,
 5    4%  of  the net revenue realized for the preceding month from
 6    the 6.25% general rate.
 7        Beginning August 1, 2000, each month the Department shall
 8    pay into the County and Mass Transit District Fund 20% of the
 9    net revenue realized for the preceding month from  the  1.25%
10    rate on the selling price of motor fuel and gasohol.
11        Beginning  January  1,  1990,  each  month the Department
12    shall pay into the Local Government Tax Fund 16% of  the  net
13    revenue  realized  for  the  preceding  month  from the 6.25%
14    general rate  on  the  selling  price  of  tangible  personal
15    property.
16        Beginning August 1, 2000, each month the Department shall
17    pay into the Local Government Tax Fund 80% of the net revenue
18    realized  for  the preceding month from the 1.25% rate on the
19    selling price of motor fuel and gasohol.
20        Of the remainder of the moneys received by the Department
21    pursuant to this Act, (a) 1.75% thereof shall  be  paid  into
22    the  Build  Illinois Fund and (b) prior to July 1, 1989, 2.2%
23    and on and after July 1, 1989, 3.8%  thereof  shall  be  paid
24    into  the  Build Illinois Fund; provided, however, that if in
25    any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
26    as the case may be, of the moneys received by the  Department
27    and required to be paid into the Build Illinois Fund pursuant
28    to  this  Act, Section 9 of the Use Tax Act, Section 9 of the
29    Service Use Tax Act, and Section 9 of the Service  Occupation
30    Tax  Act,  such  Acts being hereinafter called the "Tax Acts"
31    and such aggregate of 2.2% or 3.8%, as the case  may  be,  of
32    moneys being hereinafter called the "Tax Act Amount", and (2)
33    the  amount  transferred  to the Build Illinois Fund from the
34    State and Local Sales Tax Reform Fund shall be less than  the
 
HB3289 Enrolled          -74-                  LRB9205821SMdv
 1    Annual  Specified  Amount (as hereinafter defined), an amount
 2    equal to the difference shall be immediately  paid  into  the
 3    Build  Illinois  Fund  from  other  moneys  received  by  the
 4    Department  pursuant  to  the Tax Acts; the "Annual Specified
 5    Amount" means the amounts specified below  for  fiscal  years
 6    1986 through 1993:
 7             Fiscal Year              Annual Specified Amount
 8                 1986                       $54,800,000
 9                 1987                       $76,650,000
10                 1988                       $80,480,000
11                 1989                       $88,510,000
12                 1990                       $115,330,000
13                 1991                       $145,470,000
14                 1992                       $182,730,000
15                 1993                      $206,520,000;
16    and  means  the Certified Annual Debt Service Requirement (as
17    defined in Section 13 of the Build Illinois Bond Act) or  the
18    Tax  Act  Amount,  whichever is greater, for fiscal year 1994
19    and each fiscal year thereafter; and further  provided,  that
20    if  on  the last business day of any month the sum of (1) the
21    Tax Act Amount  required  to  be  deposited  into  the  Build
22    Illinois  Bond Account in the Build Illinois Fund during such
23    month and (2) the amount transferred to  the  Build  Illinois
24    Fund  from  the  State  and Local Sales Tax Reform Fund shall
25    have been less than 1/12 of the Annual Specified  Amount,  an
26    amount equal to the difference shall be immediately paid into
27    the  Build  Illinois  Fund  from other moneys received by the
28    Department pursuant to the Tax Acts; and,  further  provided,
29    that  in  no  event  shall  the  payments  required under the
30    preceding proviso result in aggregate payments into the Build
31    Illinois Fund pursuant to this clause (b) for any fiscal year
32    in excess of the greater of (i) the Tax Act  Amount  or  (ii)
33    the  Annual  Specified  Amount  for  such  fiscal  year.  The
34    amounts payable into the Build Illinois Fund under clause (b)
 
HB3289 Enrolled          -75-                  LRB9205821SMdv
 1    of the first sentence in this paragraph shall be payable only
 2    until such time as the aggregate amount on deposit under each
 3    trust  indenture  securing  Bonds  issued   and   outstanding
 4    pursuant to the Build Illinois Bond Act is sufficient, taking
 5    into  account any future investment income, to fully provide,
 6    in accordance with such indenture, for the defeasance  of  or
 7    the  payment  of  the  principal  of,  premium,  if  any, and
 8    interest on the Bonds secured by such indenture  and  on  any
 9    Bonds expected to be issued thereafter and all fees and costs
10    payable  with  respect  thereto,  all  as  certified  by  the
11    Director  of  the  Bureau  of  the  Budget.   If  on the last
12    business day of any month  in  which  Bonds  are  outstanding
13    pursuant  to  the  Build  Illinois Bond Act, the aggregate of
14    moneys deposited in the Build Illinois Bond  Account  in  the
15    Build  Illinois  Fund  in  such  month shall be less than the
16    amount required to be transferred  in  such  month  from  the
17    Build  Illinois  Bond  Account  to  the  Build  Illinois Bond
18    Retirement and Interest Fund pursuant to Section  13  of  the
19    Build  Illinois  Bond Act, an amount equal to such deficiency
20    shall be immediately paid from other moneys received  by  the
21    Department  pursuant  to  the  Tax Acts to the Build Illinois
22    Fund; provided, however, that any amounts paid to  the  Build
23    Illinois  Fund  in  any fiscal year pursuant to this sentence
24    shall be deemed to constitute payments pursuant to clause (b)
25    of the first sentence of this paragraph and shall reduce  the
26    amount  otherwise  payable  for  such fiscal year pursuant to
27    that clause (b).   The  moneys  received  by  the  Department
28    pursuant  to  this  Act and required to be deposited into the
29    Build Illinois Fund are subject  to  the  pledge,  claim  and
30    charge  set  forth  in  Section 12 of the Build Illinois Bond
31    Act.
32        Subject to payment of amounts  into  the  Build  Illinois
33    Fund  as  provided  in  the  preceding  paragraph  or  in any
34    amendment thereto hereafter enacted, the following  specified
 
HB3289 Enrolled          -76-                  LRB9205821SMdv
 1    monthly   installment   of   the   amount  requested  in  the
 2    certificate of the Chairman  of  the  Metropolitan  Pier  and
 3    Exposition  Authority  provided  under  Section  8.25f of the
 4    State Finance Act, but not in excess of  sums  designated  as
 5    "Total  Deposit",  shall  be  deposited in the aggregate from
 6    collections under Section 9 of the Use Tax Act, Section 9  of
 7    the  Service Use Tax Act, Section 9 of the Service Occupation
 8    Tax Act, and Section 3 of the Retailers' Occupation  Tax  Act
 9    into  the  McCormick  Place  Expansion  Project  Fund  in the
10    specified fiscal years.
11             Fiscal Year                   Total Deposit
12                 1993                            $0
13                 1994                        53,000,000
14                 1995                        58,000,000
15                 1996                        61,000,000
16                 1997                        64,000,000
17                 1998                        68,000,000
18                 1999                        71,000,000
19                 2000                        75,000,000
20                 2001                        80,000,000
21                 2002                        84,000,000
22                 2003                        89,000,000
23                 2004                        93,000,000
24                 2005                        97,000,000
25                 2006                       102,000,000
26                 2007                       108,000,000
27                 2008                       115,000,000
28                 2009                       120,000,000
29                 2010                       126,000,000
30                 2011                       132,000,000
31                 2012                       138,000,000
32                 2013 and                   145,000,000
33        each fiscal year
34        thereafter that bonds
 
HB3289 Enrolled          -77-                  LRB9205821SMdv
 1        are outstanding under
 2        Section 13.2 of the
 3        Metropolitan Pier and
 4        Exposition Authority
 5        Act, but not after fiscal year 2029.
 6        Beginning July 20, 1993 and in each month of each  fiscal
 7    year  thereafter,  one-eighth  of the amount requested in the
 8    certificate of the Chairman  of  the  Metropolitan  Pier  and
 9    Exposition  Authority  for  that fiscal year, less the amount
10    deposited into the McCormick Place Expansion Project Fund  by
11    the  State Treasurer in the respective month under subsection
12    (g) of Section 13 of the  Metropolitan  Pier  and  Exposition
13    Authority  Act,  plus cumulative deficiencies in the deposits
14    required under this Section for previous  months  and  years,
15    shall be deposited into the McCormick Place Expansion Project
16    Fund,  until  the  full amount requested for the fiscal year,
17    but not in excess of the amount  specified  above  as  "Total
18    Deposit", has been deposited.
19        Subject  to  payment  of  amounts into the Build Illinois
20    Fund and the McCormick Place Expansion Project Fund  pursuant
21    to  the  preceding  paragraphs  or  in  any amendment thereto
22    hereafter enacted, each month the Department shall  pay  into
23    the  Local  Government  Distributive  Fund  0.4%  of  the net
24    revenue realized for the preceding month from the 5%  general
25    rate  or  0.4%  of  80%  of  the net revenue realized for the
26    preceding month from the 6.25% general rate, as the case  may
27    be,  on the selling price of tangible personal property which
28    amount shall, subject to  appropriation,  be  distributed  as
29    provided  in  Section 2 of the State Revenue Sharing Act.  No
30    payments or distributions pursuant to this paragraph shall be
31    made if the  tax  imposed  by  this  Act  on  photoprocessing
32    products  is  declared  unconstitutional,  or if the proceeds
33    from such tax are unavailable  for  distribution  because  of
34    litigation.
 
HB3289 Enrolled          -78-                  LRB9205821SMdv
 1        Subject  to  payment  of  amounts into the Build Illinois
 2    Fund, the McCormick Place Expansion  Project  Fund,  and  the
 3    Local  Government Distributive Fund pursuant to the preceding
 4    paragraphs or in any amendments  thereto  hereafter  enacted,
 5    beginning  July  1, 1993, the Department shall each month pay
 6    into the Illinois Tax Increment Fund 0.27% of 80% of the  net
 7    revenue  realized  for  the  preceding  month  from the 6.25%
 8    general rate  on  the  selling  price  of  tangible  personal
 9    property.
10        Of the remainder of the moneys received by the Department
11    pursuant  to  this  Act,  75%  thereof shall be paid into the
12    State Treasury and 25% shall be reserved in a special account
13    and used only for the transfer to the Common School  Fund  as
14    part of the monthly transfer from the General Revenue Fund in
15    accordance with Section 8a of the State Finance Act.
16        The  Department  may,  upon  separate written notice to a
17    taxpayer, require the taxpayer to prepare and file  with  the
18    Department  on a form prescribed by the Department within not
19    less than 60 days after  receipt  of  the  notice  an  annual
20    information  return for the tax year specified in the notice.
21    Such  annual  return  to  the  Department  shall  include   a
22    statement  of  gross receipts as shown by the retailer's last
23    Federal income tax return.  If  the  total  receipts  of  the
24    business  as reported in the Federal income tax return do not
25    agree with the gross receipts reported to the  Department  of
26    Revenue for the same period, the retailer shall attach to his
27    annual  return  a  schedule showing a reconciliation of the 2
28    amounts and the reasons for the difference.   The  retailer's
29    annual  return to the Department shall also disclose the cost
30    of goods sold by the retailer during the year covered by such
31    return, opening and closing inventories  of  such  goods  for
32    such year, costs of goods used from stock or taken from stock
33    and  given  away  by  the  retailer during such year, payroll
34    information of the retailer's business during such  year  and
 
HB3289 Enrolled          -79-                  LRB9205821SMdv
 1    any  additional  reasonable  information which the Department
 2    deems would be helpful in determining  the  accuracy  of  the
 3    monthly,  quarterly  or annual returns filed by such retailer
 4    as provided for in this Section.
 5        If the annual information return required by this Section
 6    is not filed when and as  required,  the  taxpayer  shall  be
 7    liable as follows:
 8             (i)  Until  January  1,  1994, the taxpayer shall be
 9        liable for a penalty equal to 1/6 of 1% of  the  tax  due
10        from such taxpayer under this Act during the period to be
11        covered  by  the annual return for each month or fraction
12        of a month until such return is filed  as  required,  the
13        penalty  to  be assessed and collected in the same manner
14        as any other penalty provided for in this Act.
15             (ii)  On and after January  1,  1994,  the  taxpayer
16        shall be liable for a penalty as described in Section 3-4
17        of the Uniform Penalty and Interest Act.
18        The chief executive officer, proprietor, owner or highest
19    ranking  manager  shall sign the annual return to certify the
20    accuracy of the information contained therein.    Any  person
21    who  willfully  signs  the  annual return containing false or
22    inaccurate  information  shall  be  guilty  of  perjury   and
23    punished  accordingly.   The annual return form prescribed by
24    the Department  shall  include  a  warning  that  the  person
25    signing the return may be liable for perjury.
26        The  provisions  of this Section concerning the filing of
27    an annual information return do not apply to a  retailer  who
28    is  not required to file an income tax return with the United
29    States Government.
30        As soon as possible after the first day  of  each  month,
31    upon   certification   of  the  Department  of  Revenue,  the
32    Comptroller shall order transferred and the  Treasurer  shall
33    transfer  from the General Revenue Fund to the Motor Fuel Tax
34    Fund an amount equal to  1.7%  of  80%  of  the  net  revenue
 
HB3289 Enrolled          -80-                  LRB9205821SMdv
 1    realized  under  this  Act  for  the  second preceding month.
 2    Beginning April 1, 2000, this transfer is no longer  required
 3    and shall not be made.
 4        Net  revenue  realized  for  a month shall be the revenue
 5    collected by the State pursuant to this Act, less the  amount
 6    paid  out  during  that  month  as  refunds  to taxpayers for
 7    overpayment of liability.
 8        For greater simplicity of administration,  manufacturers,
 9    importers  and  wholesalers whose products are sold at retail
10    in Illinois by numerous retailers, and who wish to do so, may
11    assume the responsibility for accounting and  paying  to  the
12    Department  all  tax  accruing under this Act with respect to
13    such sales, if the retailers who are  affected  do  not  make
14    written objection to the Department to this arrangement.
15        Any  person  who  promotes,  organizes,  provides  retail
16    selling  space  for concessionaires or other types of sellers
17    at the Illinois State Fair, DuQuoin State Fair, county fairs,
18    local fairs, art shows, flea markets and similar  exhibitions
19    or  events,  including  any  transient merchant as defined by
20    Section 2 of the Transient Merchant Act of 1987, is  required
21    to  file  a  report with the Department providing the name of
22    the merchant's business, the name of the  person  or  persons
23    engaged  in  merchant's  business,  the permanent address and
24    Illinois Retailers Occupation Tax Registration Number of  the
25    merchant,  the  dates  and  location  of  the event and other
26    reasonable information that the Department may require.   The
27    report must be filed not later than the 20th day of the month
28    next  following  the month during which the event with retail
29    sales was held.  Any  person  who  fails  to  file  a  report
30    required  by  this  Section commits a business offense and is
31    subject to a fine not to exceed $250.
32        Any person engaged in the business  of  selling  tangible
33    personal property at retail as a concessionaire or other type
34    of  seller  at  the  Illinois  State  Fair, county fairs, art
 
HB3289 Enrolled          -81-                  LRB9205821SMdv
 1    shows, flea markets and similar exhibitions or events, or any
 2    transient merchants, as defined by Section 2 of the Transient
 3    Merchant Act of 1987, may be required to make a daily  report
 4    of  the  amount of such sales to the Department and to make a
 5    daily payment of the full amount of tax due.  The  Department
 6    shall  impose  this requirement when it finds that there is a
 7    significant risk of loss of revenue to the State at  such  an
 8    exhibition  or  event.   Such  a  finding  shall  be based on
 9    evidence that a  substantial  number  of  concessionaires  or
10    other  sellers  who  are  not  residents  of Illinois will be
11    engaging  in  the  business  of  selling  tangible   personal
12    property  at  retail  at  the  exhibition  or event, or other
13    evidence of a significant risk of  loss  of  revenue  to  the
14    State.  The Department shall notify concessionaires and other
15    sellers  affected  by the imposition of this requirement.  In
16    the  absence  of  notification   by   the   Department,   the
17    concessionaires and other sellers shall file their returns as
18    otherwise required in this Section.
19    (Source: P.A.  90-491,  eff.  1-1-99;  90-612,  eff.  7-8-98;
20    91-37,   eff.  7-1-99;  91-51,  eff.  6-30-99;  91-101,  eff.
21    7-12-99; 91-541, eff. 8-13-99; 91-872, eff.  7-1-00;  91-901,
22    eff. 1-1-01; revised 1-15-01.)

23        (35 ILCS 120/5k) (from Ch. 120, par. 444k)
24        (Text of Section before amendment by P.A. 91-954)
25        Sec.  5k.  Each retailer whose place a business is within
26    a county or municipality which has established an  Enterprise
27    Zone  pursuant  to the "Illinois Enterprise Zone Act" and who
28    makes a sale of building materials to  be  incorporated  into
29    real   estate   in   such   enterprise  zone  by  remodeling,
30    rehabilitation or new construction, may deduct receipts  from
31    such sales when calculating the tax imposed by this Act.  The
32    deduction  allowed  by  this Section for the sale of building
33    materials  may  be  limited,  to  the  extent  authorized  by
 
HB3289 Enrolled          -82-                  LRB9205821SMdv
 1    ordinance,  adopted  after  the  effective   date   of   this
 2    amendatory  Act  of  1992, by the municipality or county that
 3    created the enterprise zone.  The  corporate  authorities  of
 4    any  municipality  or  county  that  adopts  an  ordinance or
 5    resolution  imposing  or  changing  any  limitation  on   the
 6    enterprise   zone  exemption  for  building  materials  shall
 7    transmit to the Department of Revenue on or not later than  5
 8    days  after publication, as provided by law, a certified copy
 9    of the ordinance or resolution  imposing  or  changing  those
10    limitations,   whereupon  the  Department  of  Revenue  shall
11    proceed to administer and enforce those limitations effective
12    the first day of the second  calendar  month  next  following
13    date  of receipt by the Department of the certified ordinance
14    or resolution.
15    (Source: P.A. 91-51, eff. 6-30-99.)

16        (Text of Section after amendment by P.A. 91-954)
17        Sec. 5k.  Each retailer in Illinois who makes a  sale  of
18    building  materials to be incorporated into real estate in an
19    enterprise zone established by a county or municipality under
20    the   Illinois   Enterprise   Zone   Act    by    remodeling,
21    rehabilitation  or new construction, may deduct receipts from
22    such sales when calculating the tax imposed by this Act.  The
23    deduction allowed by this Section for the  sale  of  building
24    materials  may  be  limited,  to  the  extent  authorized  by
25    ordinance,   adopted   after   the  effective  date  of  this
26    amendatory Act of 1992, by the municipality  or  county  that
27    created  the enterprise zone in which the retailer's place of
28    business  is  located.  The  corporate  authorities  of   any
29    municipality or county that adopts an ordinance or resolution
30    imposing  or  changing  any limitation on the enterprise zone
31    exemption  for  building  materials  shall  transmit  to  the
32    Department of Revenue on or  not  later  than  5  days  after
33    publication,  as  provided  by  law,  a certified copy of the
34    ordinance  or   resolution   imposing   or   changing   those
 
HB3289 Enrolled          -83-                  LRB9205821SMdv
 1    limitations,   whereupon  the  Department  of  Revenue  shall
 2    proceed to administer and enforce those limitations effective
 3    the first day of the second  calendar  month  next  following
 4    date  of receipt by the Department of the certified ordinance
 5    or resolution.  The provisions of  this  Section  are  exempt
 6    from Section 2-70.
 7    (Source: P.A. 91-51, eff. 6-30-99; 91-954, eff. 1-1-02.)

 8        Section  95.   No  acceleration or delay.  Where this Act
 9    makes changes in a statute that is represented in this Act by
10    text that is not yet or no longer in effect (for  example,  a
11    Section  represented  by  multiple versions), the use of that
12    text does not accelerate or delay the taking  effect  of  (i)
13    the  changes made by this Act or (ii) provisions derived from
14    any other Public Act.

15        Section 99.  Effective date.  This Act takes effect  upon
16    becoming law.

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