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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'soperating12exempt machinery and equipment in acomputer 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'soperating exempt25machinery and equipment in acomputer 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'soperating30exempt machinery and equipment in acomputer 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'soperating18exempt machinery and equipment in acomputer 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 retailerin Illinoiswho 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.