Public Act 90-0605 of the 90th General Assembly
Public Act 90-0605
HB2950 Enrolled LRB9008806KDcd
AN ACT in relation to taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 3. The Illinois Income Tax Act is amended by
changing Section 201 as follows:
(35 ILCS 5/201) (from Ch. 120, par. 2-201)
Sec. 201. Tax Imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate
for each taxable year ending after July 31, 1969 on the
privilege of earning or receiving income in or as a resident
of this State. Such tax shall be in addition to all other
occupation or privilege taxes imposed by this State or by any
municipal corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows:
(1) In the case of an individual, trust or estate,
for taxable years ending prior to July 1, 1989, an amount
equal to 2 1/2% of the taxpayer's net income for the
taxable year.
(2) In the case of an individual, trust or estate,
for taxable years beginning prior to July 1, 1989 and
ending after June 30, 1989, an amount equal to the sum of
(i) 2 1/2% of the taxpayer's net income for the period
prior to July 1, 1989, as calculated under Section 202.3,
and (ii) 3% of the taxpayer's net income for the period
after June 30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate,
for taxable years beginning after June 30, 1989, an
amount equal to 3% of the taxpayer's net income for the
taxable year.
(4) (Blank).
(5) (Blank).
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of
the taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years
beginning prior to July 1, 1989 and ending after June 30,
1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1,
1989, as calculated under Section 202.3, and (ii) 4.8% of
the taxpayer's net income for the period after June 30,
1989, as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, an amount equal to 4.8% of
the taxpayer's net income for the taxable year.
(c) Beginning on July 1, 1979 and thereafter, in
addition to such income tax, there is also hereby imposed the
Personal Property Tax Replacement Income Tax measured by net
income on every corporation (including Subchapter S
corporations), partnership and trust, for each taxable year
ending after June 30, 1979. Such taxes are imposed on the
privilege of earning or receiving income in or as a resident
of this State. The Personal Property Tax Replacement Income
Tax shall be in addition to the income tax imposed by
subsections (a) and (b) of this Section and in addition to
all other occupation or privilege taxes imposed by this State
or by any municipal corporation or political subdivision
thereof.
(d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation, shall be an additional amount equal to 2.85% of
such taxpayer's net income for the taxable year, except that
beginning on January 1, 1981, and thereafter, the rate of
2.85% specified in this subsection shall be reduced to 2.5%,
and in the case of a partnership, trust or a Subchapter S
corporation shall be an additional amount equal to 1.5% of
such taxpayer's net income for the taxable year.
(e) Investment credit. A taxpayer shall be allowed a
credit against the Personal Property Tax Replacement Income
Tax for investment in qualified property.
(1) A taxpayer shall be allowed a credit equal to
.5% of the basis of qualified property placed in service
during the taxable year, provided such property is placed
in service on or after July 1, 1984. There shall be
allowed an additional credit equal to .5% of the basis of
qualified property placed in service during the taxable
year, provided such property is placed in service on or
after July 1, 1986, and the taxpayer's base employment
within Illinois has increased by 1% or more over the
preceding year as determined by the taxpayer's employment
records filed with the Illinois Department of Employment
Security. Taxpayers who are new to Illinois shall be
deemed to have met the 1% growth in base employment for
the first year in which they file employment records with
the Illinois Department of Employment Security. The
provisions added to this Section by Public Act 85-1200
(and restored by Public Act 87-895) shall be construed as
declaratory of existing law and not as a new enactment.
If, in any year, the increase in base employment within
Illinois over the preceding year is less than 1%, the
additional credit shall be limited to that percentage
times a fraction, the numerator of which is .5% and the
denominator of which is 1%, but shall not exceed .5%.
The investment credit shall not be allowed to the extent
that it would reduce a taxpayer's liability in any tax
year below zero, nor may any credit for qualified
property be allowed for any year other than the year in
which the property was placed in service in Illinois. For
tax years ending on or after December 31, 1987, and on or
before December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability
or the liability as later amended, such excess may be
carried forward and applied to the tax liability of the 5
taxable years following the excess credit years if the
taxpayer (i) makes investments which cause the creation
of a minimum of 2,000 full-time equivalent jobs in
Illinois, (ii) is located in an enterprise zone
established pursuant to the Illinois Enterprise Zone Act
and (iii) is certified by the Department of Commerce and
Community Affairs as complying with the requirements
specified in clause (i) and (ii) by July 1, 1986. The
Department of Commerce and Community Affairs shall notify
the Department of Revenue of all such certifications
immediately. For tax years ending after December 31,
1988, the credit shall be allowed for the tax year in
which the property is placed in service, or, if the
amount of the credit exceeds the tax liability for that
year, whether it exceeds the original liability or the
liability as later amended, such excess may be carried
forward and applied to the tax liability of the 5 taxable
years following the excess credit years. The credit shall
be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, earlier credit
shall be applied first.
(2) The term "qualified property" means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings and signs that are real property, but not
including land or improvements to real property that
are not a structural component of a building such as
landscaping, sewer lines, local access roads,
fencing, parking lots, and other appurtenances;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (e);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in Illinois by a taxpayer who is
primarily engaged in manufacturing, or in mining
coal or fluorite, or in retailing; and
(E) has not previously been used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(e) or subsection (f).
(3) For purposes of this subsection (e),
"manufacturing" means the material staging and production
of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or
assembling which changes some existing material into new
shapes, new qualities, or new combinations. For purposes
of this subsection (e) the term "mining" shall have the
same meaning as the term "mining" in Section 613(c) of
the Internal Revenue Code. For purposes of this
subsection (e), the term "retailing" means the sale of
tangible personal property or services rendered in
conjunction with the sale of tangible consumer goods or
commodities.
(4) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(5) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in Illinois by the taxpayer, the amount
of such increase shall be deemed property placed in
service on the date of such increase in basis.
(6) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(7) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside Illinois
within 48 months after being placed in service, the
Personal Property Tax Replacement Income Tax for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation and, (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (7), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(8) Unless the investment credit is extended by
law, the basis of qualified property shall not include
costs incurred after December 31, 2003, except for costs
incurred pursuant to a binding contract entered into on
or before December 31, 2003.
(9) Each taxable year, a partnership may elect to
pass through to its partners the credits to which the
partnership is entitled under this subsection (e) for the
taxable year. A partner may use the credit allocated to
him or her under this paragraph only against the tax
imposed in subsections (c) and (d) of this Section. If
the partnership makes that election, those credits shall
be allocated among the partners in the partnership in
accordance with the rules set forth in Section 704(b) of
the Internal Revenue Code, and the rules promulgated
under that Section, and the allocated amount of the
credits shall be allowed to the partners for that taxable
year. The partnership shall make this election on its
Personal Property Tax Replacement Income Tax return for
that taxable year. The election to pass through the
credits shall be irrevocable.
(f) Investment credit; Enterprise Zone.
(1) A taxpayer shall be allowed a credit against
the tax imposed by subsections (a) and (b) of this
Section for investment in qualified property which is
placed in service in an Enterprise Zone created pursuant
to the Illinois Enterprise Zone Act. For partners and for
shareholders of Subchapter S corporations, there shall be
allowed a credit under this subsection (f) to be
determined in accordance with the determination of income
and distributive share of income under Sections 702 and
704 and Subchapter S of the Internal Revenue Code. The
credit shall be .5% of the basis for such property. The
credit shall be available only in the taxable year in
which the property is placed in service in the Enterprise
Zone and shall not be allowed to the extent that it would
reduce a taxpayer's liability for the tax imposed by
subsections (a) and (b) of this Section to below zero.
For tax years ending on or after December 31, 1985, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether
it exceeds the original liability or the liability as
later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, the credit
accruing first in time shall be applied first.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (f);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in the Enterprise Zone by the
taxpayer; and
(E) has not been previously used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(f) or subsection (e).
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in the Enterprise Zone by the taxpayer,
the amount of such increase shall be deemed property
placed in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside the
Enterprise Zone within 48 months after being placed in
service, the tax imposed under subsections (a) and (b) of
this Section for such taxable year shall be increased.
Such increase shall be determined by (i) recomputing the
investment credit which would have been allowed for the
year in which credit for such property was originally
allowed by eliminating such property from such
computation, and (ii) subtracting such recomputed credit
from the amount of credit previously allowed. For the
purposes of this paragraph (6), a reduction of the basis
of qualified property resulting from a redetermination of
the purchase price shall be deemed a disposition of
qualified property to the extent of such reduction.
(g) Jobs Tax Credit; Enterprise Zone and Foreign
Trade Zone or Sub-Zone.
(1) A taxpayer conducting a trade or business in an
enterprise zone or a High Impact Business designated by
the Department of Commerce and Community Affairs
conducting a trade or business in a federally designated
Foreign Trade Zone or Sub-Zone shall be allowed a credit
against the tax imposed by subsections (a) and (b) of
this Section in the amount of $500 per eligible employee
hired to work in the zone during the taxable year.
(2) To qualify for the credit:
(A) the taxpayer must hire 5 or more eligible
employees to work in an enterprise zone or federally
designated Foreign Trade Zone or Sub-Zone during the
taxable year;
(B) the taxpayer's total employment within the
enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone must increase by 5 or more
full-time employees beyond the total employed in
that zone at the end of the previous tax year for
which a jobs tax credit under this Section was
taken, or beyond the total employed by the taxpayer
as of December 31, 1985, whichever is later; and
(C) the eligible employees must be employed
180 consecutive days in order to be deemed hired for
purposes of this subsection.
(3) An "eligible employee" means an employee who
is:
(A) Certified by the Department of Commerce
and Community Affairs as "eligible for services"
pursuant to regulations promulgated in accordance
with Title II of the Job Training Partnership Act,
Training Services for the Disadvantaged or Title III
of the Job Training Partnership Act, Employment and
Training Assistance for Dislocated Workers Program.
(B) Hired after the enterprise zone or
federally designated Foreign Trade Zone or Sub-Zone
was designated or the trade or business was located
in that zone, whichever is later.
(C) Employed in the enterprise zone or Foreign
Trade Zone or Sub-Zone. An employee is employed in
an enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone if his services are rendered
there or it is the base of operations for the
services performed.
(D) A full-time employee working 30 or more
hours per week.
(4) For tax years ending on or after December 31,
1985 and prior to December 31, 1988, the credit shall be
allowed for the tax year in which the eligible employees
are hired. For tax years ending on or after December 31,
1988, the credit shall be allowed for the tax year
immediately following the tax year in which the eligible
employees are hired. If the amount of the credit exceeds
the tax liability for that year, whether it exceeds the
original liability or the liability as later amended,
such excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess
credit year. The credit shall be applied to the earliest
year for which there is a liability. If there is credit
from more than one tax year that is available to offset a
liability, earlier credit shall be applied first.
(5) The Department of Revenue shall promulgate such
rules and regulations as may be deemed necessary to carry
out the purposes of this subsection (g).
(6) The credit shall be available for eligible
employees hired on or after January 1, 1986.
(h) Investment credit; High Impact Business.
(1) Subject to subsection (b) of Section 5.5 of the
Illinois Enterprise Zone Act, a taxpayer shall be allowed
a credit against the tax imposed by subsections (a) and
(b) of this Section for investment in qualified property
which is placed in service by a Department of Commerce
and Community Affairs designated High Impact Business.
The credit shall be .5% of the basis for such property.
The credit shall not be available until the minimum
investments in qualified property set forth in Section
5.5 of the Illinois Enterprise Zone Act have been
satisfied and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed
by subsections (a) and (b) of this Section to below zero.
The credit applicable to such minimum investments shall
be taken in the taxable year in which such minimum
investments have been completed. The credit for
additional investments beyond the minimum investment by a
designated high impact business shall be available only
in the taxable year in which the property is placed in
service and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed
by subsections (a) and (b) of this Section to below zero.
For tax years ending on or after December 31, 1987, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether
it exceeds the original liability or the liability as
later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax
year that is available to offset a liability, the credit
accruing first in time shall be applied first.
Changes made in this subdivision (h)(1) by Public
Act 88-670 restore changes made by Public Act 85-1182 and
reflect existing law.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (h);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code; and
(D) is not eligible for the Enterprise Zone
Investment Credit provided by subsection (f) of this
Section.
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in a federally designated Foreign Trade
Zone or Sub-Zone located in Illinois by the taxpayer, the
amount of such increase shall be deemed property placed
in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year ending on or before
December 31, 1996, any property ceases to be qualified
property in the hands of the taxpayer within 48 months
after being placed in service, or the situs of any
qualified property is moved outside Illinois within 48
months after being placed in service, the tax imposed
under subsections (a) and (b) of this Section for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation, and (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (6), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(7) Beginning with tax years ending after December
31, 1996, if a taxpayer qualifies for the credit under
this subsection (h) and thereby is granted a tax
abatement and the taxpayer relocates its entire facility
in violation of the explicit terms and length of the
contract under Section 18-183 of the Property Tax Code,
the tax imposed under subsections (a) and (b) of this
Section shall be increased for the taxable year in which
the taxpayer relocated its facility by an amount equal to
the amount of credit received by the taxpayer under this
subsection (h).
(i) A credit shall be allowed against the tax imposed by
subsections (a) and (b) of this Section for the tax imposed
by subsections (c) and (d) of this Section. This credit
shall be computed by multiplying the tax imposed by
subsections (c) and (d) of this Section by a fraction, the
numerator of which is base income allocable to Illinois and
the denominator of which is Illinois base income, and further
multiplying the product by the tax rate imposed by
subsections (a) and (b) of this Section.
Any credit earned on or after December 31, 1986 under
this subsection which is unused in the year the credit is
computed because it exceeds the tax liability imposed by
subsections (a) and (b) for that year (whether it exceeds the
original liability or the liability as later amended) may be
carried forward and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following the
excess credit year. This credit shall be applied first to
the earliest year for which there is a liability. If there
is a credit under this subsection from more than one tax year
that is available to offset a liability the earliest credit
arising under this subsection shall be applied first.
If, during any taxable year ending on or after December
31, 1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsection (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such
taxable year to reduce the amount of credit claimed.
(j) Training expense credit. Beginning with tax years
ending on or after December 31, 1986, a taxpayer shall be
allowed a credit against the tax imposed by subsection (a)
and (b) under this Section for all amounts paid or accrued,
on behalf of all persons employed by the taxpayer in Illinois
or Illinois residents employed outside of Illinois by a
taxpayer, for educational or vocational training in
semi-technical or technical fields or semi-skilled or skilled
fields, which were deducted from gross income in the
computation of taxable income. The credit against the tax
imposed by subsections (a) and (b) shall be 1.6% of such
training expenses. For partners and for shareholders of
subchapter S corporations, there shall be allowed a credit
under this subsection (j) to be determined in accordance with
the determination of income and distributive share of income
under Sections 702 and 704 and subchapter S of the Internal
Revenue Code.
Any credit allowed under this subsection which is unused
in the year the credit is earned may be carried forward to
each of the 5 taxable years following the year for which the
credit is first computed until it is used. This credit shall
be applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from
more than one tax year that is available to offset a
liability the earliest credit arising under this subsection
shall be applied first.
(k) Research and development credit.
Beginning with tax years ending after July 1, 1990, a
taxpayer shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for increasing
research activities in this State. The credit allowed
against the tax imposed by subsections (a) and (b) shall be
equal to 6 1/2% of the qualifying expenditures for increasing
research activities in this State.
For purposes of this subsection, "qualifying
expenditures" means the qualifying expenditures as defined
for the federal credit for increasing research activities
which would be allowable under Section 41 of the Internal
Revenue Code and which are conducted in this State,
"qualifying expenditures for increasing research activities
in this State" means the excess of qualifying expenditures
for the taxable year in which incurred over qualifying
expenditures for the base period, "qualifying expenditures
for the base period" means the average of the qualifying
expenditures for each year in the base period, and "base
period" means the 3 taxable years immediately preceding the
taxable year for which the determination is being made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried
over as a credit against the tax liability for the following
5 taxable years or until it has been fully used, whichever
occurs first.
If an unused credit is carried forward to a given year
from 2 or more earlier years, that credit arising in the
earliest year will be applied first against the tax liability
for the given year. If a tax liability for the given year
still remains, the credit from the next earliest year will
then be applied, and so on, until all credits have been used
or no tax liability for the given year remains. Any
remaining unused credit or credits then will be carried
forward to the next following year in which a tax liability
is incurred, except that no credit can be carried forward to
a year which is more than 5 years after the year in which the
expense for which the credit is given was incurred.
Unless extended by law, the credit shall not include
costs incurred after December 31, 2004 1999, except for costs
incurred pursuant to a binding contract entered into on or
before December 31, 2004 1999.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997
and on or before December 31, 2001, a taxpayer shall be
allowed a credit against the tax imposed by subsections
(a) and (b) of this Section for certain amounts paid for
unreimbursed eligible remediation costs, as specified in
this subsection. For purposes of this Section,
"unreimbursed eligible remediation costs" means costs
approved by the Illinois Environmental Protection Agency
("Agency") under Section 58.14 of the Environmental
Protection Act that were paid in performing environmental
remediation at a site for which a No Further Remediation
Letter was issued by the Agency and recorded under
Section 58.10 of the Environmental Protection Act, and
does not mean approved eligible remediation costs that
are at any time deducted under the provisions of the
Internal Revenue Code. The credit must be claimed for
the taxable year in which Agency approval of the eligible
remediation costs is granted. In no event shall
unreimbursed eligible remediation costs include any costs
taken into account in calculating an environmental
remediation credit granted against a tax imposed under
the provisions of the Internal Revenue Code. The credit
is not available to any taxpayer if the taxpayer or any
related party caused or contributed to, in any material
respect, a release of regulated substances on, in, or
under the site that was identified and addressed by the
remedial action pursuant to the Site Remediation Program
of the Environmental Protection Act. After the Pollution
Control Board rules are adopted pursuant to the Illinois
Administrative Procedure Act for the administration and
enforcement of Section 58.9 of the Environmental
Protection Act, determinations as to credit availability
for purposes of this Section shall be made consistent
with those rules. For purposes of this Section,
"taxpayer" includes a person whose tax attributes the
taxpayer has succeeded to under Section 381 of the
Internal Revenue Code and "related party" includes the
persons disallowed a deduction for losses by paragraphs
(b), (c), and (f)(1) of Section 267 of the Internal
Revenue Code by virtue of being a related taxpayer, as
well as any of its partners. The credit allowed against
the tax imposed by subsections (a) and (b) shall be equal
to 25% of the unreimbursed eligible remediation costs in
excess of $100,000 per site, except that the $100,000
threshold shall not apply to any site contained in an
enterprise zone and located in a census tract that is
located in a minor civil division and place or county
that has been determined by the Department of Commerce
and Community Affairs to contain a majority of households
consisting of low and moderate income persons. The total
credit allowed shall not exceed $40,000 per year with a
maximum total of $150,000 per site. For partners and
shareholders of subchapter S corporations, there shall be
allowed a credit under this subsection to be determined
in accordance with the determination of income and
distributive share of income under Sections 702 and 704
of subchapter S of the Internal Revenue Code.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used.
The term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year
for which there is a liability. If there is a credit
under this subsection from more than one tax year that is
available to offset a liability, the earliest credit
arising under this subsection shall be applied first. A
credit allowed under this subsection may be sold to a
buyer as part of a sale of all or part of the remediation
site for which the credit was granted. The purchaser of
a remediation site and the tax credit shall succeed to
the unused credit and remaining carry-forward period of
the seller. To perfect the transfer, the assignor shall
record the transfer in the chain of title for the site
and provide written notice to the Director of the
Illinois Department of Revenue of the assignor's intent
to sell the remediation site and the amount of the tax
credit to be transferred as a portion of the sale. In no
event may a credit be transferred to any taxpayer if the
taxpayer or a related party would not be eligible under
the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(Source: P.A. 89-235, eff. 8-4-95; 89-519, eff. 7-18-96;
89-591, eff. 8-1-96; 90-123, eff. 7-21-97; 90-458, eff.
8-17-97; revised 10-16-97.)
Section 5. The Use Tax Act is amended by changing
Sections 3-5 and 3-10 as follows:
(35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit
music or dramatic arts organization that establishes, by
proof required by the Department by rule, that it has
received an exemption under Section 501(c)(3) of the Internal
Revenue Code and that is organized and operated for the
presentation of live public performances of musical or
theatrical works on a regular basis.
(4) Personal property purchased by a governmental body,
by a corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or by a
not-for-profit corporation, society, association, foundation,
institution, or organization that has no compensated officers
or employees and that is organized and operated primarily for
the recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active exemption identification number issued by the
Department.
(5) A passenger car that is a replacement vehicle to the
extent that the purchase price of the car is subject to the
Replacement Vehicle Tax.
(6) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order, certified by
the purchaser to be used primarily for graphic arts
production, and including machinery and equipment purchased
for lease.
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through to the living quarters from the driver's
seat, or a motor vehicle of the second division that is of
the van configuration designed for the transportation of not
less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(11) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
and including machinery and equipment purchased for lease,
and including implements of husbandry defined in Section
1-130 of the Illinois Vehicle Code, farm machinery and
agricultural chemical and fertilizer spreaders, and nurse
wagons required to be registered under Section 3-809 of the
Illinois Vehicle Code, but excluding other motor vehicles
required to be registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants shall be considered farm
machinery and equipment under this item (11) paragraph.
Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (11) is exempt
from the provisions of Section 3-90.
(12) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(13) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages purchased at retail from a retailer, to
the extent that the proceeds of the service charge are in
fact turned over as tips or as a substitute for tips to the
employees who participate directly in preparing, serving,
hosting or cleaning up the food or beverage function with
respect to which the service charge is imposed.
(14) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(15) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(16) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(17) Distillation machinery and equipment, sold as a
unit or kit, assembled or installed by the retailer,
certified by the user to be used only for the production of
ethyl alcohol that will be used for consumption as motor fuel
or as a component of motor fuel for the personal use of the
user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and
equipment used primarily in the process of manufacturing or
assembling tangible personal property for wholesale or retail
sale or lease, whether that sale or lease is made directly by
the manufacturer or by some other person, whether the
materials used in the process are owned by the manufacturer
or some other person, or whether that sale or lease is made
apart from or as an incident to the seller's engaging in the
service occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar items of no commercial
value on special order for a particular purchaser.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is
leased in a manner that does not qualify for this exemption
or is used in any other non-exempt manner, the lessor shall
be liable for the tax imposed under this Act or the Service
Use Tax Act, as the case may be, based on the fair market
value of the property at the time the non-qualifying use
occurs. No lessor shall collect or attempt to collect an
amount (however designated) that purports to reimburse that
lessor for the tax imposed by this Act or the Service Use Tax
Act, as the case may be, if the tax has not been paid by the
lessor. If a lessor improperly collects any such amount from
the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department.
(23) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed
or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental
body that has been issued an active sales tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the property is leased
in a manner that does not qualify for this exemption or used
in any other non-exempt manner, the lessor shall be liable
for the tax imposed under this Act or the Service Use Tax
Act, as the case may be, based on the fair market value of
the property at the time the non-qualifying use occurs. No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that lessor for the
tax imposed by this Act or the Service Use Tax Act, as the
case may be, if the tax has not been paid by the lessor. If
a lessor improperly collects any such amount from the lessee,
the lessee shall have a legal right to claim a refund of that
amount from the lessor. If, however, that amount is not
refunded to the lessee for any reason, the lessor is liable
to pay that amount to the Department.
(24) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)
(35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of either the selling price or the fair market value,
if any, of the tangible personal property. In all cases
where property functionally used or consumed is the same as
the property that was purchased at retail, then the tax is
imposed on the selling price of the property. In all cases
where property functionally used or consumed is a by-product
or waste product that has been refined, manufactured, or
produced from property purchased at retail, then the tax is
imposed on the lower of the fair market value, if any, of the
specific property so used in this State or on the selling
price of the property purchased at retail. For purposes of
this Section "fair market value" means the price at which
property would change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or
sell and both having reasonable knowledge of the relevant
facts. The fair market value shall be established by Illinois
sales by the taxpayer of the same property as that
functionally used or consumed, or if there are no such sales
by the taxpayer, then comparable sales or purchases of
property of like kind and character in Illinois.
With respect to gasohol, the tax imposed by this Act
applies to 70% of the proceeds of sales made on or after
January 1, 1990, and before July 1, 2003 1999, and to 100% of
the proceeds of sales made thereafter, except that from July
1, 1997 to July 1, 1999, the rate shall be 85% for gasohol
sold in this State during the 12 months beginning July 1
following any calendar year for which the Department has
determined that the percentages in Section 10 of the Gasohol
Fuels Tax Abatement Act have not been met.
With respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks, and food that has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For the purposes
of this Section, the term "soft drinks" means any complete,
finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold through a vending
machine, except soft drinks and food products that are
dispensed hot from a vending machine, regardless of the
location of the vending machine.
If the property that is purchased at retail from a
retailer is acquired outside Illinois and used outside
Illinois before being brought to Illinois for use here and is
taxable under this Act, the "selling price" on which the tax
is computed shall be reduced by an amount that represents a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 88-45; 89-359, eff. 8-17-95; 89-420, eff.
6-1-96; 89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)
Section 10. The Service Use Tax Act is amended by
changing Sections 3-5 and 3-10 as follows:
(35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a non-profit Illinois
county fair association for use in conducting, operating, or
promoting the county fair.
(3) Personal property purchased by a not-for-profit
music or dramatic arts organization that establishes, by
proof required by the Department by rule, that it has
received an exemption under Section 501(c)(3) of the Internal
Revenue Code and that is organized and operated for the
presentation of live public performances of musical or
theatrical works on a regular basis.
(4) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(5) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
and including machinery and equipment purchased for lease,
and including implements of husbandry defined in Section
1-130 of the Illinois Vehicle Code, farm machinery and
agricultural chemical and fertilizer spreaders, and nurse
wagons required to be registered under Section 3-809 of the
Illinois Vehicle Code, but excluding other motor vehicles
required to be registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants shall be considered farm
machinery and equipment under this item (7) paragraph.
Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 3-75.
(8) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages acquired as an incident to the purchase
of a service from a serviceman, to the extent that the
proceeds of the service charge are in fact turned over as
tips or as a substitute for tips to the employees who
participate directly in preparing, serving, hosting or
cleaning up the food or beverage function with respect to
which the service charge is imposed.
(10) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(11) Proceeds from the sale of photoprocessing machinery
and equipment, including repair and replacement parts, both
new and used, including that manufactured on special order,
certified by the purchaser to be used primarily for
photoprocessing, and including photoprocessing machinery and
equipment purchased for lease.
(12) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(13) Semen used for artificial insemination of livestock
for direct agricultural production.
(14) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(15) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is
used in any other non-exempt manner, the lessor shall be
liable for the tax imposed under this Act or the Use Tax Act,
as the case may be, based on the fair market value of the
property at the time the non-qualifying use occurs. No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that lessor for the
tax imposed by this Act or the Use Tax Act, as the case may
be, if the tax has not been paid by the lessor. If a lessor
improperly collects any such amount from the lessee, the
lessee shall have a legal right to claim a refund of that
amount from the lessor. If, however, that amount is not
refunded to the lessee for any reason, the lessor is liable
to pay that amount to the Department.
(16) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed or
in effect at the time the lessor would otherwise be subject
to the tax imposed by this Act, to a governmental body that
has been issued an active tax exemption identification number
by the Department under Section 1g of the Retailers'
Occupation Tax Act. If the property is leased in a manner
that does not qualify for this exemption or is used in any
other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act, as the case
may be, based on the fair market value of the property at the
time the non-qualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Use Tax Act, as the case may be, if the tax has
not been paid by the lessor. If a lessor improperly collects
any such amount from the lessee, the lessee shall have a
legal right to claim a refund of that amount from the lessor.
If, however, that amount is not refunded to the lessee for
any reason, the lessor is liable to pay that amount to the
Department.
(17) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of the selling price of tangible personal property
transferred as an incident to the sale of service, but, for
the purpose of computing this tax, in no event shall the
selling price be less than the cost price of the property to
the serviceman.
With respect to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act applies to 70% of the selling
price of property transferred as an incident to the sale of
service on or after January 1, 1990, and before July 1, 2003
1999, and to 100% of the selling price thereafter, except
that from July 1, 1997 to July 1, 1999, the rate shall be 85%
for gasohol sold in this State during the 12 months beginning
July 1 following any calendar year for which the Department
has determined that the percentages in Section 10 of the
Gasohol Fuels Tax Abatement Act have not been met.
At the election of any registered serviceman made for
each fiscal year, sales of service in which the aggregate
annual cost price of tangible personal property transferred
as an incident to the sales of service is less than 35%, or
75% in the case of servicemen transferring prescription drugs
or servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred as an incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food
prepared for immediate consumption and transferred incident
to a sale of service subject to this Act or the Service
Occupation Tax Act by an entity licensed under the Hospital
Licensing Act or the Nursing Home Care Act. The tax shall
also be imposed at the rate of 1% on food for human
consumption that is to be consumed off the premises where it
is sold (other than alcoholic beverages, soft drinks, and
food that has been prepared for immediate consumption and is
not otherwise included in this paragraph) and prescription
and nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use. For the purposes of this Section, the term "soft drinks"
means any complete, finished, ready-to-use, non-alcoholic
drink, whether carbonated or not, including but not limited
to soda water, cola, fruit juice, vegetable juice, carbonated
water, and all other preparations commonly known as soft
drinks of whatever kind or description that are contained in
any closed or sealed bottle, can, carton, or container,
regardless of size. "Soft drinks" does not include coffee,
tea, non-carbonated water, infant formula, milk or milk
products as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural fruit
or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold through a vending
machine, except soft drinks and food products that are
dispensed hot from a vending machine, regardless of the
location of the vending machine.
If the property that is acquired from a serviceman is
acquired outside Illinois and used outside Illinois before
being brought to Illinois for use here and is taxable under
this Act, the "selling price" on which the tax is computed
shall be reduced by an amount that represents a reasonable
allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 88-45; 89-359, eff. 8-17-95; 89-420, eff.
6-1-96; 89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)
Section 15. The Service Occupation Tax Act is amended by
changing Sections 3-5 and 3-10 as follows:
(35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:
(1) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by any not-for-profit
music or dramatic arts organization that establishes, by
proof required by the Department by rule, that it has
received an exemption under Section 501(c)(3) of the
Internal Revenue Code and that is organized and operated for
the presentation of live public performances of musical or
theatrical works on a regular basis.
(4) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(5) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
and including machinery and equipment purchased for lease,
and including implements of husbandry defined in Section
1-130 of the Illinois Vehicle Code, farm machinery and
agricultural chemical and fertilizer spreaders, and nurse
wagons required to be registered under Section 3-809 of the
Illinois Vehicle Code, but excluding other motor vehicles
required to be registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants shall be considered farm
machinery and equipment under this item (7) paragraph.
Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 3-75.
(8) Fuel and petroleum products sold to or used by an
air common carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption
of food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(11) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(12) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(13) Food for human consumption that is to be consumed
off the premises where it is sold (other than alcoholic
beverages, soft drinks and food that has been prepared for
immediate consumption) and prescription and non-prescription
medicines, drugs, medical appliances, and insulin, urine
testing materials, syringes, and needles used by diabetics,
for human use, when purchased for use by a person receiving
medical assistance under Article 5 of the Illinois Public Aid
Code who resides in a licensed long-term care facility, as
defined in the Nursing Home Care Act.
(14) Semen used for artificial insemination of livestock
for direct agricultural production.
(15) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(16) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act.
(17) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of the Retailers'
Occupation Tax Act.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(19) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)
(35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of the "selling price", as defined in Section 2 of the
Service Use Tax Act, of the tangible personal property. For
the purpose of computing this tax, in no event shall the
"selling price" be less than the cost price to the serviceman
of the tangible personal property transferred. The selling
price of each item of tangible personal property transferred
as an incident of a sale of service may be shown as a
distinct and separate item on the serviceman's billing to the
service customer. If the selling price is not so shown, the
selling price of the tangible personal property is deemed to
be 50% of the serviceman's entire billing to the service
customer. When, however, a serviceman contracts to design,
develop, and produce special order machinery or equipment,
the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred incident to the completion of the contract.
With respect to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act shall apply to 70% of the cost
price of property transferred as an incident to the sale of
service on or after January 1, 1990, and before July 1, 2003
1999, and to 100% of the cost price thereafter, except that
from July 1, 1997 to July 1, 1999, the rate shall be 85% for
gasohol sold in this State during the 12 months beginning
July 1 following any calendar year for which the Department
has determined that the percentages in Section 10 of the
Gasohol Fuels Tax Abatement Act have not been met.
At the election of any registered serviceman made for
each fiscal year, sales of service in which the aggregate
annual cost price of tangible personal property transferred
as an incident to the sales of service is less than 35%, or
75% in the case of servicemen transferring prescription drugs
or servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food
prepared for immediate consumption and transferred incident
to a sale of service subject to this Act or the Service
Occupation Tax Act by an entity licensed under the Hospital
Licensing Act or the Nursing Home Care Act. The tax shall
also be imposed at the rate of 1% on food for human
consumption that is to be consumed off the premises where it
is sold (other than alcoholic beverages, soft drinks, and
food that has been prepared for immediate consumption and is
not otherwise included in this paragraph) and prescription
and nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use. For the purposes of this Section, the term "soft
drinks" means any complete, finished, ready-to-use,
non-alcoholic drink, whether carbonated or not, including but
not limited to soda water, cola, fruit juice, vegetable
juice, carbonated water, and all other preparations commonly
known as soft drinks of whatever kind or description that are
contained in any closed or sealed can, carton, or container,
regardless of size. "Soft drinks" does not include coffee,
tea, non-carbonated water, infant formula, milk or milk
products as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural fruit
or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold through a vending
machine, except soft drinks and food products that are
dispensed hot from a vending machine, regardless of the
location of the vending machine.
(Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96;
89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Sections 2-5 and 2-10 as follows:
(35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
(Text of Section before amendment by P.A. 90-519)
Sec. 2-5. Exemptions. Gross receipts from proceeds from
the sale of the following tangible personal property are
exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
and including machinery and equipment purchased for lease,
and including implements of husbandry defined in Section
1-130 of the Illinois Vehicle Code, farm machinery and
agricultural chemical and fertilizer spreaders, and nurse
wagons required to be registered under Section 3-809 of the
Illinois Vehicle Code, but excluding other motor vehicles
required to be registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants shall be considered farm
machinery and equipment under this item (2) paragraph.
Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 3-75.
(3) Distillation machinery and equipment, sold as a unit
or kit, assembled or installed by the retailer, certified by
the user to be used only for the production of ethyl alcohol
that will be used for consumption as motor fuel or as a
component of motor fuel for the personal use of the user, and
not subject to sale or resale.
(4) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production.
(5) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through access to the living quarters from the
driver's seat, or a motor vehicle of the second division that
is of the van configuration designed for the transportation
of not less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Proceeds of that portion of the selling price of a
passenger car the sale of which is subject to the Replacement
Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit music or
dramatic arts organization that establishes, by proof
required by the Department by rule, that it has received an
exemption under Section 501(c) (3) of the Internal Revenue
Code and that is organized and operated for the presentation
of live public performances of musical or theatrical works on
a regular basis.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(11) Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or educational purposes, or to a not-for-profit corporation,
society, association, foundation, institution, or
organization that has no compensated officers or employees
and that is organized and operated primarily for the
recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
(12) Personal property sold to interstate carriers for
hire for use as rolling stock moving in interstate commerce
or to lessors under leases of one year or longer executed or
in effect at the time of purchase by interstate carriers for
hire for use as rolling stock moving in interstate commerce
and equipment operated by a telecommunications provider,
licensed as a common carrier by the Federal Communications
Commission, which is permanently installed in or affixed to
aircraft moving in interstate commerce.
(13) Proceeds from sales to owners, lessors, or shippers
of tangible personal property that is utilized by interstate
carriers for hire for use as rolling stock moving in
interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal
property for wholesale or retail sale or lease, whether the
sale or lease is made directly by the manufacturer or by some
other person, whether the materials used in the process are
owned by the manufacturer or some other person, or whether
the sale or lease is made apart from or as an incident to the
seller's engaging in the service occupation of producing
machines, tools, dies, jigs, patterns, gauges, or other
similar items of no commercial value on special order for a
particular purchaser.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(16) Petroleum products sold to a purchaser if the
seller is prohibited by federal law from charging tax to the
purchaser.
(17) Tangible personal property sold to a common carrier
by rail or motor that receives the physical possession of the
property in Illinois and that transports the property, or
shares with another common carrier in the transportation of
the property, out of Illinois on a standard uniform bill of
lading showing the seller of the property as the shipper or
consignor of the property to a destination outside Illinois,
for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(19) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(21) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(22) Fuel and petroleum products sold to or used by an
air carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property to
the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons for
hire on rivers bordering on this State if the fuel is
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) A motor vehicle sold in this State to a nonresident
even though the motor vehicle is delivered to the nonresident
in this State, if the motor vehicle is not to be titled in
this State, and if a driveaway decal permit is issued to the
motor vehicle as provided in Section 3-603 of the Illinois
Vehicle Code or if the nonresident purchaser has vehicle
registration plates to transfer to the motor vehicle upon
returning to his or her home state. The issuance of the
driveaway decal permit or having the out-of-state
registration plates to be transferred is prima facie evidence
that the motor vehicle will not be titled in this State.
(26) Semen used for artificial insemination of livestock
for direct agricultural production.
(27) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(28) Computers and communications equipment utilized
for any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
this Act.
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)
(Text of Section after amendment by P.A. 90-519)
Sec. 2-5. Exemptions. Gross receipts from proceeds from
the sale of the following tangible personal property are
exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production agriculture
or State or federal agricultural programs, including
individual replacement parts for the machinery and equipment,
and including machinery and equipment purchased for lease,
and including implements of husbandry defined in Section
1-130 of the Illinois Vehicle Code, farm machinery and
agricultural chemical and fertilizer spreaders, and nurse
wagons required to be registered under Section 3-809 of the
Illinois Vehicle Code, but excluding other motor vehicles
required to be registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants shall be considered farm
machinery and equipment under this item (2) paragraph.
Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed, if the selling price of the tender
is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment includes,
but is not limited to, soil testing sensors, computers,
monitors, software, global positioning and mapping systems,
and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (7) is exempt
from the provisions of Section 3-75.
(3) Distillation machinery and equipment, sold as a unit
or kit, assembled or installed by the retailer, certified by
the user to be used only for the production of ethyl alcohol
that will be used for consumption as motor fuel or as a
component of motor fuel for the personal use of the user, and
not subject to sale or resale.
(4) Graphic arts machinery and equipment, including
repair and replacement parts, both new and used, and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be used primarily for
graphic arts production.
(5) A motor vehicle of the first division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to provide living
quarters for recreational, camping, or travel use, with
direct walk through access to the living quarters from the
driver's seat, or a motor vehicle of the second division that
is of the van configuration designed for the transportation
of not less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as defined in the Automobile Renting
Occupation and Use Tax Act.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Proceeds of that portion of the selling price of a
passenger car the sale of which is subject to the Replacement
Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit music or
dramatic arts organization that establishes, by proof
required by the Department by rule, that it has received an
exemption under Section 501(c) (3) of the Internal Revenue
Code and that is organized and operated for the presentation
of live public performances of musical or theatrical works on
a regular basis.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(11) Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or educational purposes, or to a not-for-profit corporation,
society, association, foundation, institution, or
organization that has no compensated officers or employees
and that is organized and operated primarily for the
recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under this
paragraph only if the limited liability company is organized
and operated exclusively for educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
(12) Personal property sold to interstate carriers for
hire for use as rolling stock moving in interstate commerce
or to lessors under leases of one year or longer executed or
in effect at the time of purchase by interstate carriers for
hire for use as rolling stock moving in interstate commerce
and equipment operated by a telecommunications provider,
licensed as a common carrier by the Federal Communications
Commission, which is permanently installed in or affixed to
aircraft moving in interstate commerce.
(13) Proceeds from sales to owners, lessors, or shippers
of tangible personal property that is utilized by interstate
carriers for hire for use as rolling stock moving in
interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal
property for wholesale or retail sale or lease, whether the
sale or lease is made directly by the manufacturer or by some
other person, whether the materials used in the process are
owned by the manufacturer or some other person, or whether
the sale or lease is made apart from or as an incident to the
seller's engaging in the service occupation of producing
machines, tools, dies, jigs, patterns, gauges, or other
similar items of no commercial value on special order for a
particular purchaser.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(16) Petroleum products sold to a purchaser if the
seller is prohibited by federal law from charging tax to the
purchaser.
(17) Tangible personal property sold to a common carrier
by rail or motor that receives the physical possession of the
property in Illinois and that transports the property, or
shares with another common carrier in the transportation of
the property, out of Illinois on a standard uniform bill of
lading showing the seller of the property as the shipper or
consignor of the property to a destination outside Illinois,
for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the government
of any foreign country, and bullion.
(19) Oil field exploration, drilling, and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs, (ii) pipe and tubular
goods, including casing and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the
purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment purchased
for lease.
(21) Coal exploration, mining, offhighway hauling,
processing, maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
(22) Fuel and petroleum products sold to or used by an
air carrier, certified by the carrier to be used for
consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight destined for
or returning from a location or locations outside the United
States without regard to previous or subsequent domestic
stopovers.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property to
the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons for
hire on rivers bordering on this State if the fuel is
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) A motor vehicle sold in this State to a nonresident
even though the motor vehicle is delivered to the nonresident
in this State, if the motor vehicle is not to be titled in
this State, and if a driveaway decal permit is issued to the
motor vehicle as provided in Section 3-603 of the Illinois
Vehicle Code or if the nonresident purchaser has vehicle
registration plates to transfer to the motor vehicle upon
returning to his or her home state. The issuance of the
driveaway decal permit or having the out-of-state
registration plates to be transferred is prima facie evidence
that the motor vehicle will not be titled in this State.
(26) Semen used for artificial insemination of livestock
for direct agricultural production.
(27) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
(28) Computers and communications equipment utilized
for any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
this Act.
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to
a corporation, society, association, foundation, or
institution that has been issued a sales tax exemption
identification number by the Department that assists victims
of the disaster who reside within the declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities
located in the declared disaster area within 6 months after
the disaster.
(Source: P.A. 89-16, eff. 5-30-95; 89-115, eff. 1-1-96;
89-349, eff. 8-17-95; 89-495, eff. 6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-519,
eff. 6-1-98; 90-552, eff. 12-12-97.)
(35 ILCS 120/2-10) (from Ch. 120, par. 441-10)
Sec. 2-10. Rate of tax. Unless otherwise provided in
this Section, the tax imposed by this Act is at the rate of
6.25% of gross receipts from sales of tangible personal
property made in the course of business.
With respect to gasohol, as defined in the Use Tax Act,
the tax imposed by this Act applies to 70% of the proceeds of
sales made on or after January 1, 1990, and before July 1,
2003 1999, and to 100% of the proceeds of sales made
thereafter, except that from July 1, 1997 to July 1, 1999,
the rate shall be 85% for gasohol sold in this State during
the 12 months beginning July 1 following any calendar year
for which the Department has determined that the percentages
in Section 10 of the Gasohol Fuels Tax Abatement Act have not
been met.
With respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks, and food that has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For the purposes
of this Section, the term "soft drinks" means any complete,
finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold through a vending
machine, except soft drinks and food products that are
dispensed hot from a vending machine, regardless of the
location of the vending machine.
(Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96;
89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)
(35 ILCS 125/Act rep.)
Section 25. The Gasohol Fuels Tax Abatement Act is
repealed.
Section 95. No acceleration or delay. Where this Act
makes changes in a statute that is represented in this Act by
text that is not yet or no longer in effect (for example, a
Section represented by multiple versions), the use of that
text does not accelerate or delay the taking effect of (i)
the changes made by this Act or (ii) provisions derived from
any other Public Act.
Section 99. Effective date. This Act takes effect upon
becoming law.