100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4878

 

Introduced , by Rep. Dave Severin

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that if an in-State retailer or serviceman bids on a purchase order or contract to provide materials, equipment, or supplies to a municipality with a population under 1,000,000, and that purchase order or contract involves an amount in excess of $25,000, then the municipality may apply to the Department of Revenue for a certificate of exemption from the taxes imposed under specified local provisions of the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act for the in-State retailer or serviceman, or a third-party supplier of the retailer or serviceman, with respect to the materials, equipment, or supplies covered by the bid if: at least one other bid is received from an out-of-State retailer or serviceman; the in-State retailer or serviceman demonstrates the necessity of the exemption in order to submit the lowest responsible bid, including substantive proof furnished by the retailer or serviceman to the municipality or the Department of Revenue; and the in-State retailer provides an itemized estimate of cost to the corporate authorities of the municipality. Defines terms. Makes confirming changes in the following Acts and Codes: the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Counties Code, the Illinois Municipal Code, the Salem Civic Center Law of 1997 of the Civic Center Code, the Metropolitan Pier and Exposition Authority Act, the Flood Prevention District Act, the Metro-East Park and Recreation District Act, the Local Mass Transit District Act, the Regional Transportation Authority Act, and the Water Commission Act of 1985. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4878LRB100 17141 AWJ 36037 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by adding Section
62505-805 as follows:
 
7    (20 ILCS 2505/2505-805 new)
8    Sec. 2505-805. Exemption for materials, equipment, or
9supplies of a bid.
10    (a) As used in this Section:
11    "In-State retailer or serviceman" means a retailer or
12serviceman with a principal place of business located in the
13State.
14    "Local provisions of the Use Tax Act, the Service Use Tax
15Act, the Service Occupation Tax Act, and the Retailers'
16Occupation Tax Act" means use taxes or occupation taxes imposed
17under the Counties Code, the Illinois Municipal Code, the Salem
18Civic Center Law of 1997 of the Civic Center Code, the
19Metropolitan Pier and Exposition Authority Act, the Flood
20Prevention District Act, the Metro-East Park and Recreation
21District Act, the Local Mass Transit District Act, the Regional
22Transportation Authority Act, and the Water Commission Act of
231985.

 

 

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1    "Out-of-State retailer or serviceman" means a retailer or
2serviceman with a principal place of business located outside
3of the State.
4    (b) If an in-State retailer or serviceman bids on a
5purchase order or contract to provide materials, equipment, or
6supplies to a municipality with a population of less than
71,000,000, and that purchase order or contract involves an
8amount in excess of $25,000, then the municipality may apply to
9the Department of Revenue for a certificate of exemption from
10the taxes imposed under local provisions of the Use Tax Act,
11the Service Use Tax Act, the Service Occupation Tax Act, and
12the Retailers' Occupation Tax Act for the in-State retailer or
13serviceman, or a third-party supplier of the in-State retailer
14or serviceman, with respect to the materials, equipment, or
15supplies covered by the bid if all of the following conditions
16apply:
17        (1) at least one other bid is received from an
18    out-of-State retailer or serviceman;
19        (2) the in-State retailer or serviceman demonstrates
20    the necessity of the exemption in order to submit the
21    lowest responsible bid under the guidelines provided under
22    Section 8-9-1, including substantive proof furnished by
23    the retailer or serviceman to the municipality or the
24    Department of Revenue; and
25        (3) the in-State retailer provides an itemized
26    estimate of cost to the corporate authorities of the

 

 

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1    municipality.
 
2    Section 10. The Use Tax Act is amended by changing Section
33-5 as follows:
 
4    (35 ILCS 105/3-5)
5    Sec. 3-5. Exemptions. Use of the following tangible
6personal property is exempt from the tax imposed by this Act:
7    (1) Personal property purchased from a corporation,
8society, association, foundation, institution, or
9organization, other than a limited liability company, that is
10organized and operated as a not-for-profit service enterprise
11for the benefit of persons 65 years of age or older if the
12personal property was not purchased by the enterprise for the
13purpose of resale by the enterprise.
14    (2) Personal property purchased by a not-for-profit
15Illinois county fair association for use in conducting,
16operating, or promoting the county fair.
17    (3) Personal property purchased by a not-for-profit arts or
18cultural organization that establishes, by proof required by
19the Department by rule, that it has received an exemption under
20Section 501(c)(3) of the Internal Revenue Code and that is
21organized and operated primarily for the presentation or
22support of arts or cultural programming, activities, or
23services. These organizations include, but are not limited to,
24music and dramatic arts organizations such as symphony

 

 

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1orchestras and theatrical groups, arts and cultural service
2organizations, local arts councils, visual arts organizations,
3and media arts organizations. On and after July 1, 2001 (the
4effective date of Public Act 92-35) this amendatory Act of the
592nd General Assembly, however, an entity otherwise eligible
6for this exemption shall not make tax-free purchases unless it
7has an active identification number issued by the Department.
8    (4) Personal property purchased by a governmental body, by
9a corporation, society, association, foundation, or
10institution organized and operated exclusively for charitable,
11religious, or educational purposes, or by a not-for-profit
12corporation, society, association, foundation, institution, or
13organization that has no compensated officers or employees and
14that is organized and operated primarily for the recreation of
15persons 55 years of age or older. A limited liability company
16may qualify for the exemption under this paragraph only if the
17limited liability company is organized and operated
18exclusively for educational purposes. On and after July 1,
191987, however, no entity otherwise eligible for this exemption
20shall make tax-free purchases unless it has an active exemption
21identification number issued by the Department.
22    (5) Until July 1, 2003, a passenger car that is a
23replacement vehicle to the extent that the purchase price of
24the car is subject to the Replacement Vehicle Tax.
25    (6) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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1equipment, including repair and replacement parts, both new and
2used, and including that manufactured on special order,
3certified by the purchaser to be used primarily for graphic
4arts production, and including machinery and equipment
5purchased for lease. Equipment includes chemicals or chemicals
6acting as catalysts but only if the chemicals or chemicals
7acting as catalysts effect a direct and immediate change upon a
8graphic arts product. Beginning on July 1, 2017, graphic arts
9machinery and equipment is included in the manufacturing and
10assembling machinery and equipment exemption under paragraph
11(18).
12    (7) Farm chemicals.
13    (8) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (9) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (10) A motor vehicle that is used for automobile renting,
21as defined in the Automobile Renting Occupation and Use Tax
22Act.
23    (11) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the
25purchaser to be used primarily for production agriculture or
26State or federal agricultural programs, including individual

 

 

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1replacement parts for the machinery and equipment, including
2machinery and equipment purchased for lease, and including
3implements of husbandry defined in Section 1-130 of the
4Illinois Vehicle Code, farm machinery and agricultural
5chemical and fertilizer spreaders, and nurse wagons required to
6be registered under Section 3-809 of the Illinois Vehicle Code,
7but excluding other motor vehicles required to be registered
8under the Illinois Vehicle Code. Horticultural polyhouses or
9hoop houses used for propagating, growing, or overwintering
10plants shall be considered farm machinery and equipment under
11this item (11). Agricultural chemical tender tanks and dry
12boxes shall include units sold separately from a motor vehicle
13required to be licensed and units sold mounted on a motor
14vehicle required to be licensed if the selling price of the
15tender is separately stated.
16    Farm machinery and equipment shall include precision
17farming equipment that is installed or purchased to be
18installed on farm machinery and equipment including, but not
19limited to, tractors, harvesters, sprayers, planters, seeders,
20or spreaders. Precision farming equipment includes, but is not
21limited to, soil testing sensors, computers, monitors,
22software, global positioning and mapping systems, and other
23such equipment.
24    Farm machinery and equipment also includes computers,
25sensors, software, and related equipment used primarily in the
26computer-assisted operation of production agriculture

 

 

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1facilities, equipment, and activities such as, but not limited
2to, the collection, monitoring, and correlation of animal and
3crop data for the purpose of formulating animal diets and
4agricultural chemicals. This item (11) is exempt from the
5provisions of Section 3-90.
6    (12) Until June 30, 2013, fuel and petroleum products sold
7to or used by an air common carrier, certified by the carrier
8to be used for consumption, shipment, or storage in the conduct
9of its business as an air common carrier, for a flight destined
10for or returning from a location or locations outside the
11United States without regard to previous or subsequent domestic
12stopovers.
13    Beginning July 1, 2013, fuel and petroleum products sold to
14or used by an air carrier, certified by the carrier to be used
15for consumption, shipment, or storage in the conduct of its
16business as an air common carrier, for a flight that (i) is
17engaged in foreign trade or is engaged in trade between the
18United States and any of its possessions and (ii) transports at
19least one individual or package for hire from the city of
20origination to the city of final destination on the same
21aircraft, without regard to a change in the flight number of
22that aircraft.
23    (13) Proceeds of mandatory service charges separately
24stated on customers' bills for the purchase and consumption of
25food and beverages purchased at retail from a retailer, to the
26extent that the proceeds of the service charge are in fact

 

 

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1turned over as tips or as a substitute for tips to the
2employees who participate directly in preparing, serving,
3hosting or cleaning up the food or beverage function with
4respect to which the service charge is imposed.
5    (14) Until July 1, 2003, oil field exploration, drilling,
6and production equipment, including (i) rigs and parts of rigs,
7rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
8tubular goods, including casing and drill strings, (iii) pumps
9and pump-jack units, (iv) storage tanks and flow lines, (v) any
10individual replacement part for oil field exploration,
11drilling, and production equipment, and (vi) machinery and
12equipment purchased for lease; but excluding motor vehicles
13required to be registered under the Illinois Vehicle Code.
14    (15) Photoprocessing machinery and equipment, including
15repair and replacement parts, both new and used, including that
16manufactured on special order, certified by the purchaser to be
17used primarily for photoprocessing, and including
18photoprocessing machinery and equipment purchased for lease.
19    (16) Coal and aggregate exploration, mining, off-highway
20hauling, processing, maintenance, and reclamation equipment,
21including replacement parts and equipment, and including
22equipment purchased for lease, but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code. The
24changes made to this Section by Public Act 97-767 apply on and
25after July 1, 2003, but no claim for credit or refund is
26allowed on or after August 16, 2013 (the effective date of

 

 

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1Public Act 98-456) for such taxes paid during the period
2beginning July 1, 2003 and ending on August 16, 2013 (the
3effective date of Public Act 98-456).
4    (17) Until July 1, 2003, distillation machinery and
5equipment, sold as a unit or kit, assembled or installed by the
6retailer, certified by the user to be used only for the
7production of ethyl alcohol that will be used for consumption
8as motor fuel or as a component of motor fuel for the personal
9use of the user, and not subject to sale or resale.
10    (18) Manufacturing and assembling machinery and equipment
11used primarily in the process of manufacturing or assembling
12tangible personal property for wholesale or retail sale or
13lease, whether that sale or lease is made directly by the
14manufacturer or by some other person, whether the materials
15used in the process are owned by the manufacturer or some other
16person, or whether that sale or lease is made apart from or as
17an incident to the seller's engaging in the service occupation
18of producing machines, tools, dies, jigs, patterns, gauges, or
19other similar items of no commercial value on special order for
20a particular purchaser. The exemption provided by this
21paragraph (18) does not include machinery and equipment used in
22(i) the generation of electricity for wholesale or retail sale;
23(ii) the generation or treatment of natural or artificial gas
24for wholesale or retail sale that is delivered to customers
25through pipes, pipelines, or mains; or (iii) the treatment of
26water for wholesale or retail sale that is delivered to

 

 

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1customers through pipes, pipelines, or mains. The provisions of
2Public Act 98-583 are declaratory of existing law as to the
3meaning and scope of this exemption. Beginning on July 1, 2017,
4the exemption provided by this paragraph (18) includes, but is
5not limited to, graphic arts machinery and equipment, as
6defined in paragraph (6) of this Section.
7    (19) Personal property delivered to a purchaser or
8purchaser's donee inside Illinois when the purchase order for
9that personal property was received by a florist located
10outside Illinois who has a florist located inside Illinois
11deliver the personal property.
12    (20) Semen used for artificial insemination of livestock
13for direct agricultural production.
14    (21) Horses, or interests in horses, registered with and
15meeting the requirements of any of the Arabian Horse Club
16Registry of America, Appaloosa Horse Club, American Quarter
17Horse Association, United States Trotting Association, or
18Jockey Club, as appropriate, used for purposes of breeding or
19racing for prizes. This item (21) is exempt from the provisions
20of Section 3-90, and the exemption provided for under this item
21(21) applies for all periods beginning May 30, 1995, but no
22claim for credit or refund is allowed on or after January 1,
232008 for such taxes paid during the period beginning May 30,
242000 and ending on January 1, 2008.
25    (22) Computers and communications equipment utilized for
26any hospital purpose and equipment used in the diagnosis,

 

 

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1analysis, or treatment of hospital patients purchased by a
2lessor who leases the equipment, under a lease of one year or
3longer executed or in effect at the time the lessor would
4otherwise be subject to the tax imposed by this Act, to a
5hospital that has been issued an active tax exemption
6identification number by the Department under Section 1g of the
7Retailers' Occupation Tax Act. If the equipment is leased in a
8manner that does not qualify for this exemption or is used in
9any other non-exempt manner, the lessor shall be liable for the
10tax imposed under this Act or the Service Use Tax Act, as the
11case may be, based on the fair market value of the property at
12the time the non-qualifying use occurs. No lessor shall collect
13or attempt to collect an amount (however designated) that
14purports to reimburse that lessor for the tax imposed by this
15Act or the Service Use Tax Act, as the case may be, if the tax
16has not been paid by the lessor. If a lessor improperly
17collects any such amount from the lessee, the lessee shall have
18a legal right to claim a refund of that amount from the lessor.
19If, however, that amount is not refunded to the lessee for any
20reason, the lessor is liable to pay that amount to the
21Department.
22    (23) Personal property purchased by a lessor who leases the
23property, under a lease of one year or longer executed or in
24effect at the time the lessor would otherwise be subject to the
25tax imposed by this Act, to a governmental body that has been
26issued an active sales tax exemption identification number by

 

 

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1the Department under Section 1g of the Retailers' Occupation
2Tax Act. If the property is leased in a manner that does not
3qualify for this exemption or used in any other non-exempt
4manner, the lessor shall be liable for the tax imposed under
5this Act or the Service Use Tax Act, as the case may be, based
6on the fair market value of the property at the time the
7non-qualifying use occurs. No lessor shall collect or attempt
8to collect an amount (however designated) that purports to
9reimburse that lessor for the tax imposed by this Act or the
10Service Use Tax Act, as the case may be, if the tax has not been
11paid by the lessor. If a lessor improperly collects any such
12amount from the lessee, the lessee shall have a legal right to
13claim a refund of that amount from the lessor. If, however,
14that amount is not refunded to the lessee for any reason, the
15lessor is liable to pay that amount to the Department.
16    (24) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is donated for
19disaster relief to be used in a State or federally declared
20disaster area in Illinois or bordering Illinois by a
21manufacturer or retailer that is registered in this State to a
22corporation, society, association, foundation, or institution
23that has been issued a sales tax exemption identification
24number by the Department that assists victims of the disaster
25who reside within the declared disaster area.
26    (25) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in the
3performance of infrastructure repairs in this State, including
4but not limited to municipal roads and streets, access roads,
5bridges, sidewalks, waste disposal systems, water and sewer
6line extensions, water distribution and purification
7facilities, storm water drainage and retention facilities, and
8sewage treatment facilities, resulting from a State or
9federally declared disaster in Illinois or bordering Illinois
10when such repairs are initiated on facilities located in the
11declared disaster area within 6 months after the disaster.
12    (26) Beginning July 1, 1999, game or game birds purchased
13at a "game breeding and hunting preserve area" as that term is
14used in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 3-90.
16    (27) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the Department
20to be organized and operated exclusively for educational
21purposes. For purposes of this exemption, "a corporation,
22limited liability company, society, association, foundation,
23or institution organized and operated exclusively for
24educational purposes" means all tax-supported public schools,
25private schools that offer systematic instruction in useful
26branches of learning by methods common to public schools and

 

 

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1that compare favorably in their scope and intensity with the
2course of study presented in tax-supported schools, and
3vocational or technical schools or institutes organized and
4operated exclusively to provide a course of study of not less
5than 6 weeks duration and designed to prepare individuals to
6follow a trade or to pursue a manual, technical, mechanical,
7industrial, business, or commercial occupation.
8    (28) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 3-90.
22    (29) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and other
25items, and replacement parts for these machines. Beginning
26January 1, 2002 and through June 30, 2003, machines and parts

 

 

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1for machines used in commercial, coin-operated amusement and
2vending business if a use or occupation tax is paid on the
3gross receipts derived from the use of the commercial,
4coin-operated amusement and vending machines. This paragraph
5is exempt from the provisions of Section 3-90.
6    (30) Beginning January 1, 2001 and through June 30, 2016,
7food for human consumption that is to be consumed off the
8premises where it is sold (other than alcoholic beverages, soft
9drinks, and food that has been prepared for immediate
10consumption) and prescription and nonprescription medicines,
11drugs, medical appliances, and insulin, urine testing
12materials, syringes, and needles used by diabetics, for human
13use, when purchased for use by a person receiving medical
14assistance under Article V of the Illinois Public Aid Code who
15resides in a licensed long-term care facility, as defined in
16the Nursing Home Care Act, or in a licensed facility as defined
17in the ID/DD Community Care Act, the MC/DD Act, or the
18Specialized Mental Health Rehabilitation Act of 2013.
19    (31) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227) this amendatory Act of the 92nd General
21Assembly, computers and communications equipment utilized for
22any hospital purpose and equipment used in the diagnosis,
23analysis, or treatment of hospital patients purchased by a
24lessor who leases the equipment, under a lease of one year or
25longer executed or in effect at the time the lessor would
26otherwise be subject to the tax imposed by this Act, to a

 

 

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1hospital that has been issued an active tax exemption
2identification number by the Department under Section 1g of the
3Retailers' Occupation Tax Act. If the equipment is leased in a
4manner that does not qualify for this exemption or is used in
5any other nonexempt manner, the lessor shall be liable for the
6tax imposed under this Act or the Service Use Tax Act, as the
7case may be, based on the fair market value of the property at
8the time the nonqualifying use occurs. No lessor shall collect
9or attempt to collect an amount (however designated) that
10purports to reimburse that lessor for the tax imposed by this
11Act or the Service Use Tax Act, as the case may be, if the tax
12has not been paid by the lessor. If a lessor improperly
13collects any such amount from the lessee, the lessee shall have
14a legal right to claim a refund of that amount from the lessor.
15If, however, that amount is not refunded to the lessee for any
16reason, the lessor is liable to pay that amount to the
17Department. This paragraph is exempt from the provisions of
18Section 3-90.
19    (32) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227) this amendatory Act of the 92nd General
21Assembly, personal property purchased by a lessor who leases
22the property, under a lease of one year or longer executed or
23in effect at the time the lessor would otherwise be subject to
24the tax imposed by this Act, to a governmental body that has
25been issued an active sales tax exemption identification number
26by the Department under Section 1g of the Retailers' Occupation

 

 

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1Tax Act. If the property is leased in a manner that does not
2qualify for this exemption or used in any other nonexempt
3manner, the lessor shall be liable for the tax imposed under
4this Act or the Service Use Tax Act, as the case may be, based
5on the fair market value of the property at the time the
6nonqualifying use occurs. No lessor shall collect or attempt to
7collect an amount (however designated) that purports to
8reimburse that lessor for the tax imposed by this Act or the
9Service Use Tax Act, as the case may be, if the tax has not been
10paid by the lessor. If a lessor improperly collects any such
11amount from the lessee, the lessee shall have a legal right to
12claim a refund of that amount from the lessor. If, however,
13that amount is not refunded to the lessee for any reason, the
14lessor is liable to pay that amount to the Department. This
15paragraph is exempt from the provisions of Section 3-90.
16    (33) On and after July 1, 2003 and through June 30, 2004,
17the use in this State of motor vehicles of the second division
18with a gross vehicle weight in excess of 8,000 pounds and that
19are subject to the commercial distribution fee imposed under
20Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
211, 2004 and through June 30, 2005, the use in this State of
22motor vehicles of the second division: (i) with a gross vehicle
23weight rating in excess of 8,000 pounds; (ii) that are subject
24to the commercial distribution fee imposed under Section
253-815.1 of the Illinois Vehicle Code; and (iii) that are
26primarily used for commercial purposes. Through June 30, 2005,

 

 

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1this exemption applies to repair and replacement parts added
2after the initial purchase of such a motor vehicle if that
3motor vehicle is used in a manner that would qualify for the
4rolling stock exemption otherwise provided for in this Act. For
5purposes of this paragraph, the term "used for commercial
6purposes" means the transportation of persons or property in
7furtherance of any commercial or industrial enterprise,
8whether for-hire or not.
9    (34) Beginning January 1, 2008, tangible personal property
10used in the construction or maintenance of a community water
11supply, as defined under Section 3.145 of the Environmental
12Protection Act, that is operated by a not-for-profit
13corporation that holds a valid water supply permit issued under
14Title IV of the Environmental Protection Act. This paragraph is
15exempt from the provisions of Section 3-90.
16    (35) Beginning January 1, 2010, materials, parts,
17equipment, components, and furnishings incorporated into or
18upon an aircraft as part of the modification, refurbishment,
19completion, replacement, repair, or maintenance of the
20aircraft. This exemption includes consumable supplies used in
21the modification, refurbishment, completion, replacement,
22repair, and maintenance of aircraft, but excludes any
23materials, parts, equipment, components, and consumable
24supplies used in the modification, replacement, repair, and
25maintenance of aircraft engines or power plants, whether such
26engines or power plants are installed or uninstalled upon any

 

 

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1such aircraft. "Consumable supplies" include, but are not
2limited to, adhesive, tape, sandpaper, general purpose
3lubricants, cleaning solution, latex gloves, and protective
4films. This exemption applies only to the use of qualifying
5tangible personal property by persons who modify, refurbish,
6complete, repair, replace, or maintain aircraft and who (i)
7hold an Air Agency Certificate and are empowered to operate an
8approved repair station by the Federal Aviation
9Administration, (ii) have a Class IV Rating, and (iii) conduct
10operations in accordance with Part 145 of the Federal Aviation
11Regulations. The exemption does not include aircraft operated
12by a commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (35) by Public Act 98-534 are declarative of existing
16law.
17    (36) Tangible personal property purchased by a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

HB4878- 20 -LRB100 17141 AWJ 36037 b

1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 3-90.
5    (37) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7    (38) Merchandise that is subject to the Rental Purchase
8Agreement Occupation and Use Tax. The purchaser must certify
9that the item is purchased to be rented subject to a rental
10purchase agreement, as defined in the Rental Purchase Agreement
11Act, and provide proof of registration under the Rental
12Purchase Agreement Occupation and Use Tax Act. This paragraph
13is exempt from the provisions of Section 3-90.
14    (39) Tangible personal property for which a certificate of
15exemption has been issued under Section 2505-805 of the
16Department of Revenue Law of the Civil Administrative Code of
17Illinois. This paragraph is exempt from the provisions of
18Section 3-90.
19(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
20100-22, eff. 7-6-17; 100-437, eff. 1-1-18; revised 9-27-17.)
 
21    Section 15. The Service Use Tax Act is amended by changing
22Section 3-5 as follows:
 
23    (35 ILCS 110/3-5)
24    Sec. 3-5. Exemptions. Use of the following tangible

 

 

HB4878- 21 -LRB100 17141 AWJ 36037 b

1personal property is exempt from the tax imposed by this Act:
2    (1) Personal property purchased from a corporation,
3society, association, foundation, institution, or
4organization, other than a limited liability company, that is
5organized and operated as a not-for-profit service enterprise
6for the benefit of persons 65 years of age or older if the
7personal property was not purchased by the enterprise for the
8purpose of resale by the enterprise.
9    (2) Personal property purchased by a non-profit Illinois
10county fair association for use in conducting, operating, or
11promoting the county fair.
12    (3) Personal property purchased by a not-for-profit arts or
13cultural organization that establishes, by proof required by
14the Department by rule, that it has received an exemption under
15Section 501(c)(3) of the Internal Revenue Code and that is
16organized and operated primarily for the presentation or
17support of arts or cultural programming, activities, or
18services. These organizations include, but are not limited to,
19music and dramatic arts organizations such as symphony
20orchestras and theatrical groups, arts and cultural service
21organizations, local arts councils, visual arts organizations,
22and media arts organizations. On and after the effective date
23of this amendatory Act of the 92nd General Assembly, however,
24an entity otherwise eligible for this exemption shall not make
25tax-free purchases unless it has an active identification
26number issued by the Department.

 

 

HB4878- 22 -LRB100 17141 AWJ 36037 b

1    (4) Legal tender, currency, medallions, or gold or silver
2coinage issued by the State of Illinois, the government of the
3United States of America, or the government of any foreign
4country, and bullion.
5    (5) Until July 1, 2003 and beginning again on September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order or
9purchased for lease, certified by the purchaser to be used
10primarily for graphic arts production. Equipment includes
11chemicals or chemicals acting as catalysts but only if the
12chemicals or chemicals acting as catalysts effect a direct and
13immediate change upon a graphic arts product. Beginning on July
141, 2017, graphic arts machinery and equipment is included in
15the manufacturing and assembling machinery and equipment
16exemption under Section 2 of this Act.
17    (6) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20    (7) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including
25machinery and equipment purchased for lease, and including
26implements of husbandry defined in Section 1-130 of the

 

 

HB4878- 23 -LRB100 17141 AWJ 36037 b

1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (7). Agricultural chemical tender tanks and dry boxes
9shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

HB4878- 24 -LRB100 17141 AWJ 36037 b

1agricultural chemicals. This item (7) is exempt from the
2provisions of Section 3-75.
3    (8) Until June 30, 2013, fuel and petroleum products sold
4to or used by an air common carrier, certified by the carrier
5to be used for consumption, shipment, or storage in the conduct
6of its business as an air common carrier, for a flight destined
7for or returning from a location or locations outside the
8United States without regard to previous or subsequent domestic
9stopovers.
10    Beginning July 1, 2013, fuel and petroleum products sold to
11or used by an air carrier, certified by the carrier to be used
12for consumption, shipment, or storage in the conduct of its
13business as an air common carrier, for a flight that (i) is
14engaged in foreign trade or is engaged in trade between the
15United States and any of its possessions and (ii) transports at
16least one individual or package for hire from the city of
17origination to the city of final destination on the same
18aircraft, without regard to a change in the flight number of
19that aircraft.
20    (9) Proceeds of mandatory service charges separately
21stated on customers' bills for the purchase and consumption of
22food and beverages acquired as an incident to the purchase of a
23service from a serviceman, to the extent that the proceeds of
24the service charge are in fact turned over as tips or as a
25substitute for tips to the employees who participate directly
26in preparing, serving, hosting or cleaning up the food or

 

 

HB4878- 25 -LRB100 17141 AWJ 36037 b

1beverage function with respect to which the service charge is
2imposed.
3    (10) Until July 1, 2003, oil field exploration, drilling,
4and production equipment, including (i) rigs and parts of rigs,
5rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
6tubular goods, including casing and drill strings, (iii) pumps
7and pump-jack units, (iv) storage tanks and flow lines, (v) any
8individual replacement part for oil field exploration,
9drilling, and production equipment, and (vi) machinery and
10equipment purchased for lease; but excluding motor vehicles
11required to be registered under the Illinois Vehicle Code.
12    (11) Proceeds from the sale of photoprocessing machinery
13and equipment, including repair and replacement parts, both new
14and used, including that manufactured on special order,
15certified by the purchaser to be used primarily for
16photoprocessing, and including photoprocessing machinery and
17equipment purchased for lease.
18    (12) Coal and aggregate exploration, mining, off-highway
19hauling, processing, maintenance, and reclamation equipment,
20including replacement parts and equipment, and including
21equipment purchased for lease, but excluding motor vehicles
22required to be registered under the Illinois Vehicle Code. The
23changes made to this Section by Public Act 97-767 apply on and
24after July 1, 2003, but no claim for credit or refund is
25allowed on or after August 16, 2013 (the effective date of
26Public Act 98-456) for such taxes paid during the period

 

 

HB4878- 26 -LRB100 17141 AWJ 36037 b

1beginning July 1, 2003 and ending on August 16, 2013 (the
2effective date of Public Act 98-456).
3    (13) Semen used for artificial insemination of livestock
4for direct agricultural production.
5    (14) Horses, or interests in horses, registered with and
6meeting the requirements of any of the Arabian Horse Club
7Registry of America, Appaloosa Horse Club, American Quarter
8Horse Association, United States Trotting Association, or
9Jockey Club, as appropriate, used for purposes of breeding or
10racing for prizes. This item (14) is exempt from the provisions
11of Section 3-75, and the exemption provided for under this item
12(14) applies for all periods beginning May 30, 1995, but no
13claim for credit or refund is allowed on or after the effective
14date of this amendatory Act of the 95th General Assembly for
15such taxes paid during the period beginning May 30, 2000 and
16ending on the effective date of this amendatory Act of the 95th
17General Assembly.
18    (15) Computers and communications equipment utilized for
19any hospital purpose and equipment used in the diagnosis,
20analysis, or treatment of hospital patients purchased by a
21lessor who leases the equipment, under a lease of one year or
22longer executed or in effect at the time the lessor would
23otherwise be subject to the tax imposed by this Act, to a
24hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of the
26Retailers' Occupation Tax Act. If the equipment is leased in a

 

 

HB4878- 27 -LRB100 17141 AWJ 36037 b

1manner that does not qualify for this exemption or is used in
2any other non-exempt manner, the lessor shall be liable for the
3tax imposed under this Act or the Use Tax Act, as the case may
4be, based on the fair market value of the property at the time
5the non-qualifying use occurs. No lessor shall collect or
6attempt to collect an amount (however designated) that purports
7to reimburse that lessor for the tax imposed by this Act or the
8Use Tax Act, as the case may be, if the tax has not been paid by
9the lessor. If a lessor improperly collects any such amount
10from the lessee, the lessee shall have a legal right to claim a
11refund of that amount from the lessor. If, however, that amount
12is not refunded to the lessee for any reason, the lessor is
13liable to pay that amount to the Department.
14    (16) Personal property purchased by a lessor who leases the
15property, under a lease of one year or longer executed or in
16effect at the time the lessor would otherwise be subject to the
17tax imposed by this Act, to a governmental body that has been
18issued an active tax exemption identification number by the
19Department under Section 1g of the Retailers' Occupation Tax
20Act. If the property is leased in a manner that does not
21qualify for this exemption or is used in any other non-exempt
22manner, the lessor shall be liable for the tax imposed under
23this Act or the Use Tax Act, as the case may be, based on the
24fair market value of the property at the time the
25non-qualifying use occurs. No lessor shall collect or attempt
26to collect an amount (however designated) that purports to

 

 

HB4878- 28 -LRB100 17141 AWJ 36037 b

1reimburse that lessor for the tax imposed by this Act or the
2Use Tax Act, as the case may be, if the tax has not been paid by
3the lessor. If a lessor improperly collects any such amount
4from the lessee, the lessee shall have a legal right to claim a
5refund of that amount from the lessor. If, however, that amount
6is not refunded to the lessee for any reason, the lessor is
7liable to pay that amount to the Department.
8    (17) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is donated for
11disaster relief to be used in a State or federally declared
12disaster area in Illinois or bordering Illinois by a
13manufacturer or retailer that is registered in this State to a
14corporation, society, association, foundation, or institution
15that has been issued a sales tax exemption identification
16number by the Department that assists victims of the disaster
17who reside within the declared disaster area.
18    (18) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is used in the
21performance of infrastructure repairs in this State, including
22but not limited to municipal roads and streets, access roads,
23bridges, sidewalks, waste disposal systems, water and sewer
24line extensions, water distribution and purification
25facilities, storm water drainage and retention facilities, and
26sewage treatment facilities, resulting from a State or

 

 

HB4878- 29 -LRB100 17141 AWJ 36037 b

1federally declared disaster in Illinois or bordering Illinois
2when such repairs are initiated on facilities located in the
3declared disaster area within 6 months after the disaster.
4    (19) Beginning July 1, 1999, game or game birds purchased
5at a "game breeding and hunting preserve area" as that term is
6used in the Wildlife Code. This paragraph is exempt from the
7provisions of Section 3-75.
8    (20) A motor vehicle, as that term is defined in Section
91-146 of the Illinois Vehicle Code, that is donated to a
10corporation, limited liability company, society, association,
11foundation, or institution that is determined by the Department
12to be organized and operated exclusively for educational
13purposes. For purposes of this exemption, "a corporation,
14limited liability company, society, association, foundation,
15or institution organized and operated exclusively for
16educational purposes" means all tax-supported public schools,
17private schools that offer systematic instruction in useful
18branches of learning by methods common to public schools and
19that compare favorably in their scope and intensity with the
20course of study presented in tax-supported schools, and
21vocational or technical schools or institutes organized and
22operated exclusively to provide a course of study of not less
23than 6 weeks duration and designed to prepare individuals to
24follow a trade or to pursue a manual, technical, mechanical,
25industrial, business, or commercial occupation.
26    (21) Beginning January 1, 2000, personal property,

 

 

HB4878- 30 -LRB100 17141 AWJ 36037 b

1including food, purchased through fundraising events for the
2benefit of a public or private elementary or secondary school,
3a group of those schools, or one or more school districts if
4the events are sponsored by an entity recognized by the school
5district that consists primarily of volunteers and includes
6parents and teachers of the school children. This paragraph
7does not apply to fundraising events (i) for the benefit of
8private home instruction or (ii) for which the fundraising
9entity purchases the personal property sold at the events from
10another individual or entity that sold the property for the
11purpose of resale by the fundraising entity and that profits
12from the sale to the fundraising entity. This paragraph is
13exempt from the provisions of Section 3-75.
14    (22) Beginning January 1, 2000 and through December 31,
152001, new or used automatic vending machines that prepare and
16serve hot food and beverages, including coffee, soup, and other
17items, and replacement parts for these machines. Beginning
18January 1, 2002 and through June 30, 2003, machines and parts
19for machines used in commercial, coin-operated amusement and
20vending business if a use or occupation tax is paid on the
21gross receipts derived from the use of the commercial,
22coin-operated amusement and vending machines. This paragraph
23is exempt from the provisions of Section 3-75.
24    (23) Beginning August 23, 2001 and through June 30, 2016,
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages, soft

 

 

HB4878- 31 -LRB100 17141 AWJ 36037 b

1drinks, and food that has been prepared for immediate
2consumption) and prescription and nonprescription medicines,
3drugs, medical appliances, and insulin, urine testing
4materials, syringes, and needles used by diabetics, for human
5use, when purchased for use by a person receiving medical
6assistance under Article V of the Illinois Public Aid Code who
7resides in a licensed long-term care facility, as defined in
8the Nursing Home Care Act, or in a licensed facility as defined
9in the ID/DD Community Care Act, the MC/DD Act, or the
10Specialized Mental Health Rehabilitation Act of 2013.
11    (24) Beginning on the effective date of this amendatory Act
12of the 92nd General Assembly, computers and communications
13equipment utilized for any hospital purpose and equipment used
14in the diagnosis, analysis, or treatment of hospital patients
15purchased by a lessor who leases the equipment, under a lease
16of one year or longer executed or in effect at the time the
17lessor would otherwise be subject to the tax imposed by this
18Act, to a hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of the
20Retailers' Occupation Tax Act. If the equipment is leased in a
21manner that does not qualify for this exemption or is used in
22any other nonexempt manner, the lessor shall be liable for the
23tax imposed under this Act or the Use Tax Act, as the case may
24be, based on the fair market value of the property at the time
25the nonqualifying use occurs. No lessor shall collect or
26attempt to collect an amount (however designated) that purports

 

 

HB4878- 32 -LRB100 17141 AWJ 36037 b

1to reimburse that lessor for the tax imposed by this Act or the
2Use Tax Act, as the case may be, if the tax has not been paid by
3the lessor. If a lessor improperly collects any such amount
4from the lessee, the lessee shall have a legal right to claim a
5refund of that amount from the lessor. If, however, that amount
6is not refunded to the lessee for any reason, the lessor is
7liable to pay that amount to the Department. This paragraph is
8exempt from the provisions of Section 3-75.
9    (25) Beginning on the effective date of this amendatory Act
10of the 92nd General Assembly, personal property purchased by a
11lessor who leases the property, under a lease of one year or
12longer executed or in effect at the time the lessor would
13otherwise be subject to the tax imposed by this Act, to a
14governmental body that has been issued an active tax exemption
15identification number by the Department under Section 1g of the
16Retailers' Occupation Tax Act. If the property is leased in a
17manner that does not qualify for this exemption or is used in
18any other nonexempt manner, the lessor shall be liable for the
19tax imposed under this Act or the Use Tax Act, as the case may
20be, based on the fair market value of the property at the time
21the nonqualifying use occurs. No lessor shall collect or
22attempt to collect an amount (however designated) that purports
23to reimburse that lessor for the tax imposed by this Act or the
24Use Tax Act, as the case may be, if the tax has not been paid by
25the lessor. If a lessor improperly collects any such amount
26from the lessee, the lessee shall have a legal right to claim a

 

 

HB4878- 33 -LRB100 17141 AWJ 36037 b

1refund of that amount from the lessor. If, however, that amount
2is not refunded to the lessee for any reason, the lessor is
3liable to pay that amount to the Department. This paragraph is
4exempt from the provisions of Section 3-75.
5    (26) Beginning January 1, 2008, tangible personal property
6used in the construction or maintenance of a community water
7supply, as defined under Section 3.145 of the Environmental
8Protection Act, that is operated by a not-for-profit
9corporation that holds a valid water supply permit issued under
10Title IV of the Environmental Protection Act. This paragraph is
11exempt from the provisions of Section 3-75.
12    (27) Beginning January 1, 2010, materials, parts,
13equipment, components, and furnishings incorporated into or
14upon an aircraft as part of the modification, refurbishment,
15completion, replacement, repair, or maintenance of the
16aircraft. This exemption includes consumable supplies used in
17the modification, refurbishment, completion, replacement,
18repair, and maintenance of aircraft, but excludes any
19materials, parts, equipment, components, and consumable
20supplies used in the modification, replacement, repair, and
21maintenance of aircraft engines or power plants, whether such
22engines or power plants are installed or uninstalled upon any
23such aircraft. "Consumable supplies" include, but are not
24limited to, adhesive, tape, sandpaper, general purpose
25lubricants, cleaning solution, latex gloves, and protective
26films. This exemption applies only to the use of qualifying

 

 

HB4878- 34 -LRB100 17141 AWJ 36037 b

1tangible personal property transferred incident to the
2modification, refurbishment, completion, replacement, repair,
3or maintenance of aircraft by persons who (i) hold an Air
4Agency Certificate and are empowered to operate an approved
5repair station by the Federal Aviation Administration, (ii)
6have a Class IV Rating, and (iii) conduct operations in
7accordance with Part 145 of the Federal Aviation Regulations.
8The exemption does not include aircraft operated by a
9commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (27) by Public Act 98-534 are declarative of existing
13law.
14    (28) Tangible personal property purchased by a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

 

 

HB4878- 35 -LRB100 17141 AWJ 36037 b

1This paragraph is exempt from the provisions of Section 3-75.
2    (29) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4    (30) Tangible personal property for which a certificate of
5exemption has been issued under Section 2505-805 of the
6Department of Revenue Law of the Civil Administrative Code of
7Illinois. This paragraph is exempt from the provisions of
8Section 3-75.
9(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
10100-22, eff. 7-6-17.)
 
11    Section 20. The Service Occupation Tax Act is amended by
12changing Section 3-5 as follows:
 
13    (35 ILCS 115/3-5)
14    Sec. 3-5. Exemptions. The following tangible personal
15property is exempt from the tax imposed by this Act:
16    (1) Personal property sold by a corporation, society,
17association, foundation, institution, or organization, other
18than a limited liability company, that is organized and
19operated as a not-for-profit service enterprise for the benefit
20of persons 65 years of age or older if the personal property
21was not purchased by the enterprise for the purpose of resale
22by the enterprise.
23    (2) Personal property purchased by a not-for-profit
24Illinois county fair association for use in conducting,

 

 

HB4878- 36 -LRB100 17141 AWJ 36037 b

1operating, or promoting the county fair.
2    (3) Personal property purchased by any not-for-profit arts
3or cultural organization that establishes, by proof required by
4the Department by rule, that it has received an exemption under
5Section 501(c)(3) of the Internal Revenue Code and that is
6organized and operated primarily for the presentation or
7support of arts or cultural programming, activities, or
8services. These organizations include, but are not limited to,
9music and dramatic arts organizations such as symphony
10orchestras and theatrical groups, arts and cultural service
11organizations, local arts councils, visual arts organizations,
12and media arts organizations. On and after the effective date
13of this amendatory Act of the 92nd General Assembly, however,
14an entity otherwise eligible for this exemption shall not make
15tax-free purchases unless it has an active identification
16number issued by the Department.
17    (4) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21    (5) Until July 1, 2003 and beginning again on September 1,
222004 through August 30, 2014, graphic arts machinery and
23equipment, including repair and replacement parts, both new and
24used, and including that manufactured on special order or
25purchased for lease, certified by the purchaser to be used
26primarily for graphic arts production. Equipment includes

 

 

HB4878- 37 -LRB100 17141 AWJ 36037 b

1chemicals or chemicals acting as catalysts but only if the
2chemicals or chemicals acting as catalysts effect a direct and
3immediate change upon a graphic arts product. Beginning on July
41, 2017, graphic arts machinery and equipment is included in
5the manufacturing and assembling machinery and equipment
6exemption under Section 2 of this Act.
7    (6) Personal property sold by a teacher-sponsored student
8organization affiliated with an elementary or secondary school
9located in Illinois.
10    (7) Farm machinery and equipment, both new and used,
11including that manufactured on special order, certified by the
12purchaser to be used primarily for production agriculture or
13State or federal agricultural programs, including individual
14replacement parts for the machinery and equipment, including
15machinery and equipment purchased for lease, and including
16implements of husbandry defined in Section 1-130 of the
17Illinois Vehicle Code, farm machinery and agricultural
18chemical and fertilizer spreaders, and nurse wagons required to
19be registered under Section 3-809 of the Illinois Vehicle Code,
20but excluding other motor vehicles required to be registered
21under the Illinois Vehicle Code. Horticultural polyhouses or
22hoop houses used for propagating, growing, or overwintering
23plants shall be considered farm machinery and equipment under
24this item (7). Agricultural chemical tender tanks and dry boxes
25shall include units sold separately from a motor vehicle
26required to be licensed and units sold mounted on a motor

 

 

HB4878- 38 -LRB100 17141 AWJ 36037 b

1vehicle required to be licensed if the selling price of the
2tender is separately stated.
3    Farm machinery and equipment shall include precision
4farming equipment that is installed or purchased to be
5installed on farm machinery and equipment including, but not
6limited to, tractors, harvesters, sprayers, planters, seeders,
7or spreaders. Precision farming equipment includes, but is not
8limited to, soil testing sensors, computers, monitors,
9software, global positioning and mapping systems, and other
10such equipment.
11    Farm machinery and equipment also includes computers,
12sensors, software, and related equipment used primarily in the
13computer-assisted operation of production agriculture
14facilities, equipment, and activities such as, but not limited
15to, the collection, monitoring, and correlation of animal and
16crop data for the purpose of formulating animal diets and
17agricultural chemicals. This item (7) is exempt from the
18provisions of Section 3-55.
19    (8) Until June 30, 2013, fuel and petroleum products sold
20to or used by an air common carrier, certified by the carrier
21to be used for consumption, shipment, or storage in the conduct
22of its business as an air common carrier, for a flight destined
23for or returning from a location or locations outside the
24United States without regard to previous or subsequent domestic
25stopovers.
26    Beginning July 1, 2013, fuel and petroleum products sold to

 

 

HB4878- 39 -LRB100 17141 AWJ 36037 b

1or used by an air carrier, certified by the carrier to be used
2for consumption, shipment, or storage in the conduct of its
3business as an air common carrier, for a flight that (i) is
4engaged in foreign trade or is engaged in trade between the
5United States and any of its possessions and (ii) transports at
6least one individual or package for hire from the city of
7origination to the city of final destination on the same
8aircraft, without regard to a change in the flight number of
9that aircraft.
10    (9) Proceeds of mandatory service charges separately
11stated on customers' bills for the purchase and consumption of
12food and beverages, to the extent that the proceeds of the
13service charge are in fact turned over as tips or as a
14substitute for tips to the employees who participate directly
15in preparing, serving, hosting or cleaning up the food or
16beverage function with respect to which the service charge is
17imposed.
18    (10) Until July 1, 2003, oil field exploration, drilling,
19and production equipment, including (i) rigs and parts of rigs,
20rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
21tubular goods, including casing and drill strings, (iii) pumps
22and pump-jack units, (iv) storage tanks and flow lines, (v) any
23individual replacement part for oil field exploration,
24drilling, and production equipment, and (vi) machinery and
25equipment purchased for lease; but excluding motor vehicles
26required to be registered under the Illinois Vehicle Code.

 

 

HB4878- 40 -LRB100 17141 AWJ 36037 b

1    (11) Photoprocessing machinery and equipment, including
2repair and replacement parts, both new and used, including that
3manufactured on special order, certified by the purchaser to be
4used primarily for photoprocessing, and including
5photoprocessing machinery and equipment purchased for lease.
6    (12) Coal and aggregate exploration, mining, off-highway
7hauling, processing, maintenance, and reclamation equipment,
8including replacement parts and equipment, and including
9equipment purchased for lease, but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code. The
11changes made to this Section by Public Act 97-767 apply on and
12after July 1, 2003, but no claim for credit or refund is
13allowed on or after August 16, 2013 (the effective date of
14Public Act 98-456) for such taxes paid during the period
15beginning July 1, 2003 and ending on August 16, 2013 (the
16effective date of Public Act 98-456).
17    (13) Beginning January 1, 1992 and through June 30, 2016,
18food for human consumption that is to be consumed off the
19premises where it is sold (other than alcoholic beverages, soft
20drinks and food that has been prepared for immediate
21consumption) and prescription and non-prescription medicines,
22drugs, medical appliances, and insulin, urine testing
23materials, syringes, and needles used by diabetics, for human
24use, when purchased for use by a person receiving medical
25assistance under Article V of the Illinois Public Aid Code who
26resides in a licensed long-term care facility, as defined in

 

 

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1the Nursing Home Care Act, or in a licensed facility as defined
2in the ID/DD Community Care Act, the MC/DD Act, or the
3Specialized Mental Health Rehabilitation Act of 2013.
4    (14) Semen used for artificial insemination of livestock
5for direct agricultural production.
6    (15) Horses, or interests in horses, registered with and
7meeting the requirements of any of the Arabian Horse Club
8Registry of America, Appaloosa Horse Club, American Quarter
9Horse Association, United States Trotting Association, or
10Jockey Club, as appropriate, used for purposes of breeding or
11racing for prizes. This item (15) is exempt from the provisions
12of Section 3-55, and the exemption provided for under this item
13(15) applies for all periods beginning May 30, 1995, but no
14claim for credit or refund is allowed on or after January 1,
152008 (the effective date of Public Act 95-88) for such taxes
16paid during the period beginning May 30, 2000 and ending on
17January 1, 2008 (the effective date of Public Act 95-88).
18    (16) Computers and communications equipment utilized for
19any hospital purpose and equipment used in the diagnosis,
20analysis, or treatment of hospital patients sold to a lessor
21who leases the equipment, under a lease of one year or longer
22executed or in effect at the time of the purchase, to a
23hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act.
26    (17) Personal property sold to a lessor who leases the

 

 

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1property, under a lease of one year or longer executed or in
2effect at the time of the purchase, to a governmental body that
3has been issued an active tax exemption identification number
4by the Department under Section 1g of the Retailers' Occupation
5Tax Act.
6    (18) Beginning with taxable years ending on or after
7December 31, 1995 and ending with taxable years ending on or
8before December 31, 2004, personal property that is donated for
9disaster relief to be used in a State or federally declared
10disaster area in Illinois or bordering Illinois by a
11manufacturer or retailer that is registered in this State to a
12corporation, society, association, foundation, or institution
13that has been issued a sales tax exemption identification
14number by the Department that assists victims of the disaster
15who reside within the declared disaster area.
16    (19) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is used in the
19performance of infrastructure repairs in this State, including
20but not limited to municipal roads and streets, access roads,
21bridges, sidewalks, waste disposal systems, water and sewer
22line extensions, water distribution and purification
23facilities, storm water drainage and retention facilities, and
24sewage treatment facilities, resulting from a State or
25federally declared disaster in Illinois or bordering Illinois
26when such repairs are initiated on facilities located in the

 

 

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1declared disaster area within 6 months after the disaster.
2    (20) Beginning July 1, 1999, game or game birds sold at a
3"game breeding and hunting preserve area" as that term is used
4in the Wildlife Code. This paragraph is exempt from the
5provisions of Section 3-55.
6    (21) A motor vehicle, as that term is defined in Section
71-146 of the Illinois Vehicle Code, that is donated to a
8corporation, limited liability company, society, association,
9foundation, or institution that is determined by the Department
10to be organized and operated exclusively for educational
11purposes. For purposes of this exemption, "a corporation,
12limited liability company, society, association, foundation,
13or institution organized and operated exclusively for
14educational purposes" means all tax-supported public schools,
15private schools that offer systematic instruction in useful
16branches of learning by methods common to public schools and
17that compare favorably in their scope and intensity with the
18course of study presented in tax-supported schools, and
19vocational or technical schools or institutes organized and
20operated exclusively to provide a course of study of not less
21than 6 weeks duration and designed to prepare individuals to
22follow a trade or to pursue a manual, technical, mechanical,
23industrial, business, or commercial occupation.
24    (22) Beginning January 1, 2000, personal property,
25including food, purchased through fundraising events for the
26benefit of a public or private elementary or secondary school,

 

 

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1a group of those schools, or one or more school districts if
2the events are sponsored by an entity recognized by the school
3district that consists primarily of volunteers and includes
4parents and teachers of the school children. This paragraph
5does not apply to fundraising events (i) for the benefit of
6private home instruction or (ii) for which the fundraising
7entity purchases the personal property sold at the events from
8another individual or entity that sold the property for the
9purpose of resale by the fundraising entity and that profits
10from the sale to the fundraising entity. This paragraph is
11exempt from the provisions of Section 3-55.
12    (23) Beginning January 1, 2000 and through December 31,
132001, new or used automatic vending machines that prepare and
14serve hot food and beverages, including coffee, soup, and other
15items, and replacement parts for these machines. Beginning
16January 1, 2002 and through June 30, 2003, machines and parts
17for machines used in commercial, coin-operated amusement and
18vending business if a use or occupation tax is paid on the
19gross receipts derived from the use of the commercial,
20coin-operated amusement and vending machines. This paragraph
21is exempt from the provisions of Section 3-55.
22    (24) Beginning on the effective date of this amendatory Act
23of the 92nd General Assembly, computers and communications
24equipment utilized for any hospital purpose and equipment used
25in the diagnosis, analysis, or treatment of hospital patients
26sold to a lessor who leases the equipment, under a lease of one

 

 

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1year or longer executed or in effect at the time of the
2purchase, to a hospital that has been issued an active tax
3exemption identification number by the Department under
4Section 1g of the Retailers' Occupation Tax Act. This paragraph
5is exempt from the provisions of Section 3-55.
6    (25) Beginning on the effective date of this amendatory Act
7of the 92nd General Assembly, personal property sold to a
8lessor who leases the property, under a lease of one year or
9longer executed or in effect at the time of the purchase, to a
10governmental body that has been issued an active tax exemption
11identification number by the Department under Section 1g of the
12Retailers' Occupation Tax Act. This paragraph is exempt from
13the provisions of Section 3-55.
14    (26) Beginning on January 1, 2002 and through June 30,
152016, tangible personal property purchased from an Illinois
16retailer by a taxpayer engaged in centralized purchasing
17activities in Illinois who will, upon receipt of the property
18in Illinois, temporarily store the property in Illinois (i) for
19the purpose of subsequently transporting it outside this State
20for use or consumption thereafter solely outside this State or
21(ii) for the purpose of being processed, fabricated, or
22manufactured into, attached to, or incorporated into other
23tangible personal property to be transported outside this State
24and thereafter used or consumed solely outside this State. The
25Director of Revenue shall, pursuant to rules adopted in
26accordance with the Illinois Administrative Procedure Act,

 

 

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1issue a permit to any taxpayer in good standing with the
2Department who is eligible for the exemption under this
3paragraph (26). The permit issued under this paragraph (26)
4shall authorize the holder, to the extent and in the manner
5specified in the rules adopted under this Act, to purchase
6tangible personal property from a retailer exempt from the
7taxes imposed by this Act. Taxpayers shall maintain all
8necessary books and records to substantiate the use and
9consumption of all such tangible personal property outside of
10the State of Illinois.
11    (27) Beginning January 1, 2008, tangible personal property
12used in the construction or maintenance of a community water
13supply, as defined under Section 3.145 of the Environmental
14Protection Act, that is operated by a not-for-profit
15corporation that holds a valid water supply permit issued under
16Title IV of the Environmental Protection Act. This paragraph is
17exempt from the provisions of Section 3-55.
18    (28) Tangible personal property sold to a
19public-facilities corporation, as described in Section
2011-65-10 of the Illinois Municipal Code, for purposes of
21constructing or furnishing a municipal convention hall, but
22only if the legal title to the municipal convention hall is
23transferred to the municipality without any further
24consideration by or on behalf of the municipality at the time
25of the completion of the municipal convention hall or upon the
26retirement or redemption of any bonds or other debt instruments

 

 

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1issued by the public-facilities corporation in connection with
2the development of the municipal convention hall. This
3exemption includes existing public-facilities corporations as
4provided in Section 11-65-25 of the Illinois Municipal Code.
5This paragraph is exempt from the provisions of Section 3-55.
6    (29) Beginning January 1, 2010, materials, parts,
7equipment, components, and furnishings incorporated into or
8upon an aircraft as part of the modification, refurbishment,
9completion, replacement, repair, or maintenance of the
10aircraft. This exemption includes consumable supplies used in
11the modification, refurbishment, completion, replacement,
12repair, and maintenance of aircraft, but excludes any
13materials, parts, equipment, components, and consumable
14supplies used in the modification, replacement, repair, and
15maintenance of aircraft engines or power plants, whether such
16engines or power plants are installed or uninstalled upon any
17such aircraft. "Consumable supplies" include, but are not
18limited to, adhesive, tape, sandpaper, general purpose
19lubricants, cleaning solution, latex gloves, and protective
20films. This exemption applies only to the transfer of
21qualifying tangible personal property incident to the
22modification, refurbishment, completion, replacement, repair,
23or maintenance of an aircraft by persons who (i) hold an Air
24Agency Certificate and are empowered to operate an approved
25repair station by the Federal Aviation Administration, (ii)
26have a Class IV Rating, and (iii) conduct operations in

 

 

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1accordance with Part 145 of the Federal Aviation Regulations.
2The exemption does not include aircraft operated by a
3commercial air carrier providing scheduled passenger air
4service pursuant to authority issued under Part 121 or Part 129
5of the Federal Aviation Regulations. The changes made to this
6paragraph (29) by Public Act 98-534 are declarative of existing
7law.
8    (30) Beginning January 1, 2017, menstrual pads, tampons,
9and menstrual cups.
10    (31) Tangible personal property for which a certificate of
11exemption has been issued under Section 2505-805 of the
12Department of Revenue Law of the Civil Administrative Code of
13Illinois. This paragraph is exempt from the provisions of
14Section 3-55.
15(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
16100-22, eff. 7-6-17.)
 
17    Section 25. The Retailers' Occupation Tax Act is amended by
18changing Section 2-5 as follows:
 
19    (35 ILCS 120/2-5)
20    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
21sale of the following tangible personal property are exempt
22from the tax imposed by this Act:
23        (1) Farm chemicals.
24        (2) Farm machinery and equipment, both new and used,

 

 

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1    including that manufactured on special order, certified by
2    the purchaser to be used primarily for production
3    agriculture or State or federal agricultural programs,
4    including individual replacement parts for the machinery
5    and equipment, including machinery and equipment purchased
6    for lease, and including implements of husbandry defined in
7    Section 1-130 of the Illinois Vehicle Code, farm machinery
8    and agricultural chemical and fertilizer spreaders, and
9    nurse wagons required to be registered under Section 3-809
10    of the Illinois Vehicle Code, but excluding other motor
11    vehicles required to be registered under the Illinois
12    Vehicle Code. Horticultural polyhouses or hoop houses used
13    for propagating, growing, or overwintering plants shall be
14    considered farm machinery and equipment under this item
15    (2). Agricultural chemical tender tanks and dry boxes shall
16    include units sold separately from a motor vehicle required
17    to be licensed and units sold mounted on a motor vehicle
18    required to be licensed, if the selling price of the tender
19    is separately stated.
20        Farm machinery and equipment shall include precision
21    farming equipment that is installed or purchased to be
22    installed on farm machinery and equipment including, but
23    not limited to, tractors, harvesters, sprayers, planters,
24    seeders, or spreaders. Precision farming equipment
25    includes, but is not limited to, soil testing sensors,
26    computers, monitors, software, global positioning and

 

 

HB4878- 50 -LRB100 17141 AWJ 36037 b

1    mapping systems, and other such equipment.
2        Farm machinery and equipment also includes computers,
3    sensors, software, and related equipment used primarily in
4    the computer-assisted operation of production agriculture
5    facilities, equipment, and activities such as, but not
6    limited to, the collection, monitoring, and correlation of
7    animal and crop data for the purpose of formulating animal
8    diets and agricultural chemicals. This item (2) is exempt
9    from the provisions of Section 2-70.
10        (3) Until July 1, 2003, distillation machinery and
11    equipment, sold as a unit or kit, assembled or installed by
12    the retailer, certified by the user to be used only for the
13    production of ethyl alcohol that will be used for
14    consumption as motor fuel or as a component of motor fuel
15    for the personal use of the user, and not subject to sale
16    or resale.
17        (4) Until July 1, 2003 and beginning again September 1,
18    2004 through August 30, 2014, graphic arts machinery and
19    equipment, including repair and replacement parts, both
20    new and used, and including that manufactured on special
21    order or purchased for lease, certified by the purchaser to
22    be used primarily for graphic arts production. Equipment
23    includes chemicals or chemicals acting as catalysts but
24    only if the chemicals or chemicals acting as catalysts
25    effect a direct and immediate change upon a graphic arts
26    product. Beginning on July 1, 2017, graphic arts machinery

 

 

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1    and equipment is included in the manufacturing and
2    assembling machinery and equipment exemption under
3    paragraph (14).
4        (5) A motor vehicle that is used for automobile
5    renting, as defined in the Automobile Renting Occupation
6    and Use Tax Act. This paragraph is exempt from the
7    provisions of Section 2-70.
8        (6) Personal property sold by a teacher-sponsored
9    student organization affiliated with an elementary or
10    secondary school located in Illinois.
11        (7) Until July 1, 2003, proceeds of that portion of the
12    selling price of a passenger car the sale of which is
13    subject to the Replacement Vehicle Tax.
14        (8) Personal property sold to an Illinois county fair
15    association for use in conducting, operating, or promoting
16    the county fair.
17        (9) Personal property sold to a not-for-profit arts or
18    cultural organization that establishes, by proof required
19    by the Department by rule, that it has received an
20    exemption under Section 501(c)(3) of the Internal Revenue
21    Code and that is organized and operated primarily for the
22    presentation or support of arts or cultural programming,
23    activities, or services. These organizations include, but
24    are not limited to, music and dramatic arts organizations
25    such as symphony orchestras and theatrical groups, arts and
26    cultural service organizations, local arts councils,

 

 

HB4878- 52 -LRB100 17141 AWJ 36037 b

1    visual arts organizations, and media arts organizations.
2    On and after July 1, 2001 (the effective date of Public Act
3    92-35) this amendatory Act of the 92nd General Assembly,
4    however, an entity otherwise eligible for this exemption
5    shall not make tax-free purchases unless it has an active
6    identification number issued by the Department.
7        (10) Personal property sold by a corporation, society,
8    association, foundation, institution, or organization,
9    other than a limited liability company, that is organized
10    and operated as a not-for-profit service enterprise for the
11    benefit of persons 65 years of age or older if the personal
12    property was not purchased by the enterprise for the
13    purpose of resale by the enterprise.
14        (11) Personal property sold to a governmental body, to
15    a corporation, society, association, foundation, or
16    institution organized and operated exclusively for
17    charitable, religious, or educational purposes, or to a
18    not-for-profit corporation, society, association,
19    foundation, institution, or organization that has no
20    compensated officers or employees and that is organized and
21    operated primarily for the recreation of persons 55 years
22    of age or older. A limited liability company may qualify
23    for the exemption under this paragraph only if the limited
24    liability company is organized and operated exclusively
25    for educational purposes. On and after July 1, 1987,
26    however, no entity otherwise eligible for this exemption

 

 

HB4878- 53 -LRB100 17141 AWJ 36037 b

1    shall make tax-free purchases unless it has an active
2    identification number issued by the Department.
3        (12) (Blank).
4        (12-5) On and after July 1, 2003 and through June 30,
5    2004, motor vehicles of the second division with a gross
6    vehicle weight in excess of 8,000 pounds that are subject
7    to the commercial distribution fee imposed under Section
8    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
9    2004 and through June 30, 2005, the use in this State of
10    motor vehicles of the second division: (i) with a gross
11    vehicle weight rating in excess of 8,000 pounds; (ii) that
12    are subject to the commercial distribution fee imposed
13    under Section 3-815.1 of the Illinois Vehicle Code; and
14    (iii) that are primarily used for commercial purposes.
15    Through June 30, 2005, this exemption applies to repair and
16    replacement parts added after the initial purchase of such
17    a motor vehicle if that motor vehicle is used in a manner
18    that would qualify for the rolling stock exemption
19    otherwise provided for in this Act. For purposes of this
20    paragraph, "used for commercial purposes" means the
21    transportation of persons or property in furtherance of any
22    commercial or industrial enterprise whether for-hire or
23    not.
24        (13) Proceeds from sales to owners, lessors, or
25    shippers of tangible personal property that is utilized by
26    interstate carriers for hire for use as rolling stock

 

 

HB4878- 54 -LRB100 17141 AWJ 36037 b

1    moving in interstate commerce and equipment operated by a
2    telecommunications provider, licensed as a common carrier
3    by the Federal Communications Commission, which is
4    permanently installed in or affixed to aircraft moving in
5    interstate commerce.
6        (14) Machinery and equipment that will be used by the
7    purchaser, or a lessee of the purchaser, primarily in the
8    process of manufacturing or assembling tangible personal
9    property for wholesale or retail sale or lease, whether the
10    sale or lease is made directly by the manufacturer or by
11    some other person, whether the materials used in the
12    process are owned by the manufacturer or some other person,
13    or whether the sale or lease is made apart from or as an
14    incident to the seller's engaging in the service occupation
15    of producing machines, tools, dies, jigs, patterns,
16    gauges, or other similar items of no commercial value on
17    special order for a particular purchaser. The exemption
18    provided by this paragraph (14) does not include machinery
19    and equipment used in (i) the generation of electricity for
20    wholesale or retail sale; (ii) the generation or treatment
21    of natural or artificial gas for wholesale or retail sale
22    that is delivered to customers through pipes, pipelines, or
23    mains; or (iii) the treatment of water for wholesale or
24    retail sale that is delivered to customers through pipes,
25    pipelines, or mains. The provisions of Public Act 98-583
26    are declaratory of existing law as to the meaning and scope

 

 

HB4878- 55 -LRB100 17141 AWJ 36037 b

1    of this exemption. Beginning on July 1, 2017, the exemption
2    provided by this paragraph (14) includes, but is not
3    limited to, graphic arts machinery and equipment, as
4    defined in paragraph (4) of this Section.
5        (15) Proceeds of mandatory service charges separately
6    stated on customers' bills for purchase and consumption of
7    food and beverages, to the extent that the proceeds of the
8    service charge are in fact turned over as tips or as a
9    substitute for tips to the employees who participate
10    directly in preparing, serving, hosting or cleaning up the
11    food or beverage function with respect to which the service
12    charge is imposed.
13        (16) Petroleum products sold to a purchaser if the
14    seller is prohibited by federal law from charging tax to
15    the purchaser.
16        (17) Tangible personal property sold to a common
17    carrier by rail or motor that receives the physical
18    possession of the property in Illinois and that transports
19    the property, or shares with another common carrier in the
20    transportation of the property, out of Illinois on a
21    standard uniform bill of lading showing the seller of the
22    property as the shipper or consignor of the property to a
23    destination outside Illinois, for use outside Illinois.
24        (18) Legal tender, currency, medallions, or gold or
25    silver coinage issued by the State of Illinois, the
26    government of the United States of America, or the

 

 

HB4878- 56 -LRB100 17141 AWJ 36037 b

1    government of any foreign country, and bullion.
2        (19) Until July 1, 2003, oil field exploration,
3    drilling, and production equipment, including (i) rigs and
4    parts of rigs, rotary rigs, cable tool rigs, and workover
5    rigs, (ii) pipe and tubular goods, including casing and
6    drill strings, (iii) pumps and pump-jack units, (iv)
7    storage tanks and flow lines, (v) any individual
8    replacement part for oil field exploration, drilling, and
9    production equipment, and (vi) machinery and equipment
10    purchased for lease; but excluding motor vehicles required
11    to be registered under the Illinois Vehicle Code.
12        (20) Photoprocessing machinery and equipment,
13    including repair and replacement parts, both new and used,
14    including that manufactured on special order, certified by
15    the purchaser to be used primarily for photoprocessing, and
16    including photoprocessing machinery and equipment
17    purchased for lease.
18        (21) Coal and aggregate exploration, mining,
19    off-highway hauling, processing, maintenance, and
20    reclamation equipment, including replacement parts and
21    equipment, and including equipment purchased for lease,
22    but excluding motor vehicles required to be registered
23    under the Illinois Vehicle Code. The changes made to this
24    Section by Public Act 97-767 apply on and after July 1,
25    2003, but no claim for credit or refund is allowed on or
26    after August 16, 2013 (the effective date of Public Act

 

 

HB4878- 57 -LRB100 17141 AWJ 36037 b

1    98-456) for such taxes paid during the period beginning
2    July 1, 2003 and ending on August 16, 2013 (the effective
3    date of Public Act 98-456).
4        (22) Until June 30, 2013, fuel and petroleum products
5    sold to or used by an air carrier, certified by the carrier
6    to be used for consumption, shipment, or storage in the
7    conduct of its business as an air common carrier, for a
8    flight destined for or returning from a location or
9    locations outside the United States without regard to
10    previous or subsequent domestic stopovers.
11        Beginning July 1, 2013, fuel and petroleum products
12    sold to or used by an air carrier, certified by the carrier
13    to be used for consumption, shipment, or storage in the
14    conduct of its business as an air common carrier, for a
15    flight that (i) is engaged in foreign trade or is engaged
16    in trade between the United States and any of its
17    possessions and (ii) transports at least one individual or
18    package for hire from the city of origination to the city
19    of final destination on the same aircraft, without regard
20    to a change in the flight number of that aircraft.
21        (23) A transaction in which the purchase order is
22    received by a florist who is located outside Illinois, but
23    who has a florist located in Illinois deliver the property
24    to the purchaser or the purchaser's donee in Illinois.
25        (24) Fuel consumed or used in the operation of ships,
26    barges, or vessels that are used primarily in or for the

 

 

HB4878- 58 -LRB100 17141 AWJ 36037 b

1    transportation of property or the conveyance of persons for
2    hire on rivers bordering on this State if the fuel is
3    delivered by the seller to the purchaser's barge, ship, or
4    vessel while it is afloat upon that bordering river.
5        (25) Except as provided in item (25-5) of this Section,
6    a motor vehicle sold in this State to a nonresident even
7    though the motor vehicle is delivered to the nonresident in
8    this State, if the motor vehicle is not to be titled in
9    this State, and if a drive-away permit is issued to the
10    motor vehicle as provided in Section 3-603 of the Illinois
11    Vehicle Code or if the nonresident purchaser has vehicle
12    registration plates to transfer to the motor vehicle upon
13    returning to his or her home state. The issuance of the
14    drive-away permit or having the out-of-state registration
15    plates to be transferred is prima facie evidence that the
16    motor vehicle will not be titled in this State.
17        (25-5) The exemption under item (25) does not apply if
18    the state in which the motor vehicle will be titled does
19    not allow a reciprocal exemption for a motor vehicle sold
20    and delivered in that state to an Illinois resident but
21    titled in Illinois. The tax collected under this Act on the
22    sale of a motor vehicle in this State to a resident of
23    another state that does not allow a reciprocal exemption
24    shall be imposed at a rate equal to the state's rate of tax
25    on taxable property in the state in which the purchaser is
26    a resident, except that the tax shall not exceed the tax

 

 

HB4878- 59 -LRB100 17141 AWJ 36037 b

1    that would otherwise be imposed under this Act. At the time
2    of the sale, the purchaser shall execute a statement,
3    signed under penalty of perjury, of his or her intent to
4    title the vehicle in the state in which the purchaser is a
5    resident within 30 days after the sale and of the fact of
6    the payment to the State of Illinois of tax in an amount
7    equivalent to the state's rate of tax on taxable property
8    in his or her state of residence and shall submit the
9    statement to the appropriate tax collection agency in his
10    or her state of residence. In addition, the retailer must
11    retain a signed copy of the statement in his or her
12    records. Nothing in this item shall be construed to require
13    the removal of the vehicle from this state following the
14    filing of an intent to title the vehicle in the purchaser's
15    state of residence if the purchaser titles the vehicle in
16    his or her state of residence within 30 days after the date
17    of sale. The tax collected under this Act in accordance
18    with this item (25-5) shall be proportionately distributed
19    as if the tax were collected at the 6.25% general rate
20    imposed under this Act.
21        (25-7) Beginning on July 1, 2007, no tax is imposed
22    under this Act on the sale of an aircraft, as defined in
23    Section 3 of the Illinois Aeronautics Act, if all of the
24    following conditions are met:
25            (1) the aircraft leaves this State within 15 days
26        after the later of either the issuance of the final

 

 

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1        billing for the sale of the aircraft, or the authorized
2        approval for return to service, completion of the
3        maintenance record entry, and completion of the test
4        flight and ground test for inspection, as required by
5        14 C.F.R. 91.407;
6            (2) the aircraft is not based or registered in this
7        State after the sale of the aircraft; and
8            (3) the seller retains in his or her books and
9        records and provides to the Department a signed and
10        dated certification from the purchaser, on a form
11        prescribed by the Department, certifying that the
12        requirements of this item (25-7) are met. The
13        certificate must also include the name and address of
14        the purchaser, the address of the location where the
15        aircraft is to be titled or registered, the address of
16        the primary physical location of the aircraft, and
17        other information that the Department may reasonably
18        require.
19        For purposes of this item (25-7):
20        "Based in this State" means hangared, stored, or
21    otherwise used, excluding post-sale customizations as
22    defined in this Section, for 10 or more days in each
23    12-month period immediately following the date of the sale
24    of the aircraft.
25        "Registered in this State" means an aircraft
26    registered with the Department of Transportation,

 

 

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1    Aeronautics Division, or titled or registered with the
2    Federal Aviation Administration to an address located in
3    this State.
4        This paragraph (25-7) is exempt from the provisions of
5    Section 2-70.
6        (26) Semen used for artificial insemination of
7    livestock for direct agricultural production.
8        (27) Horses, or interests in horses, registered with
9    and meeting the requirements of any of the Arabian Horse
10    Club Registry of America, Appaloosa Horse Club, American
11    Quarter Horse Association, United States Trotting
12    Association, or Jockey Club, as appropriate, used for
13    purposes of breeding or racing for prizes. This item (27)
14    is exempt from the provisions of Section 2-70, and the
15    exemption provided for under this item (27) applies for all
16    periods beginning May 30, 1995, but no claim for credit or
17    refund is allowed on or after January 1, 2008 (the
18    effective date of Public Act 95-88) for such taxes paid
19    during the period beginning May 30, 2000 and ending on
20    January 1, 2008 (the effective date of Public Act 95-88).
21        (28) Computers and communications equipment utilized
22    for any hospital purpose and equipment used in the
23    diagnosis, analysis, or treatment of hospital patients
24    sold to a lessor who leases the equipment, under a lease of
25    one year or longer executed or in effect at the time of the
26    purchase, to a hospital that has been issued an active tax

 

 

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1    exemption identification number by the Department under
2    Section 1g of this Act.
3        (29) Personal property sold to a lessor who leases the
4    property, under a lease of one year or longer executed or
5    in effect at the time of the purchase, to a governmental
6    body that has been issued an active tax exemption
7    identification number by the Department under Section 1g of
8    this Act.
9        (30) Beginning with taxable years ending on or after
10    December 31, 1995 and ending with taxable years ending on
11    or before December 31, 2004, personal property that is
12    donated for disaster relief to be used in a State or
13    federally declared disaster area in Illinois or bordering
14    Illinois by a manufacturer or retailer that is registered
15    in this State to a corporation, society, association,
16    foundation, or institution that has been issued a sales tax
17    exemption identification number by the Department that
18    assists victims of the disaster who reside within the
19    declared disaster area.
20        (31) Beginning with taxable years ending on or after
21    December 31, 1995 and ending with taxable years ending on
22    or before December 31, 2004, personal property that is used
23    in the performance of infrastructure repairs in this State,
24    including but not limited to municipal roads and streets,
25    access roads, bridges, sidewalks, waste disposal systems,
26    water and sewer line extensions, water distribution and

 

 

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1    purification facilities, storm water drainage and
2    retention facilities, and sewage treatment facilities,
3    resulting from a State or federally declared disaster in
4    Illinois or bordering Illinois when such repairs are
5    initiated on facilities located in the declared disaster
6    area within 6 months after the disaster.
7        (32) Beginning July 1, 1999, game or game birds sold at
8    a "game breeding and hunting preserve area" as that term is
9    used in the Wildlife Code. This paragraph is exempt from
10    the provisions of Section 2-70.
11        (33) A motor vehicle, as that term is defined in
12    Section 1-146 of the Illinois Vehicle Code, that is donated
13    to a corporation, limited liability company, society,
14    association, foundation, or institution that is determined
15    by the Department to be organized and operated exclusively
16    for educational purposes. For purposes of this exemption,
17    "a corporation, limited liability company, society,
18    association, foundation, or institution organized and
19    operated exclusively for educational purposes" means all
20    tax-supported public schools, private schools that offer
21    systematic instruction in useful branches of learning by
22    methods common to public schools and that compare favorably
23    in their scope and intensity with the course of study
24    presented in tax-supported schools, and vocational or
25    technical schools or institutes organized and operated
26    exclusively to provide a course of study of not less than 6

 

 

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1    weeks duration and designed to prepare individuals to
2    follow a trade or to pursue a manual, technical,
3    mechanical, industrial, business, or commercial
4    occupation.
5        (34) Beginning January 1, 2000, personal property,
6    including food, purchased through fundraising events for
7    the benefit of a public or private elementary or secondary
8    school, a group of those schools, or one or more school
9    districts if the events are sponsored by an entity
10    recognized by the school district that consists primarily
11    of volunteers and includes parents and teachers of the
12    school children. This paragraph does not apply to
13    fundraising events (i) for the benefit of private home
14    instruction or (ii) for which the fundraising entity
15    purchases the personal property sold at the events from
16    another individual or entity that sold the property for the
17    purpose of resale by the fundraising entity and that
18    profits from the sale to the fundraising entity. This
19    paragraph is exempt from the provisions of Section 2-70.
20        (35) Beginning January 1, 2000 and through December 31,
21    2001, new or used automatic vending machines that prepare
22    and serve hot food and beverages, including coffee, soup,
23    and other items, and replacement parts for these machines.
24    Beginning January 1, 2002 and through June 30, 2003,
25    machines and parts for machines used in commercial,
26    coin-operated amusement and vending business if a use or

 

 

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1    occupation tax is paid on the gross receipts derived from
2    the use of the commercial, coin-operated amusement and
3    vending machines. This paragraph is exempt from the
4    provisions of Section 2-70.
5        (35-5) Beginning August 23, 2001 and through June 30,
6    2016, food for human consumption that is to be consumed off
7    the premises where it is sold (other than alcoholic
8    beverages, soft drinks, and food that has been prepared for
9    immediate consumption) and prescription and
10    nonprescription medicines, drugs, medical appliances, and
11    insulin, urine testing materials, syringes, and needles
12    used by diabetics, for human use, when purchased for use by
13    a person receiving medical assistance under Article V of
14    the Illinois Public Aid Code who resides in a licensed
15    long-term care facility, as defined in the Nursing Home
16    Care Act, or a licensed facility as defined in the ID/DD
17    Community Care Act, the MC/DD Act, or the Specialized
18    Mental Health Rehabilitation Act of 2013.
19        (36) Beginning August 2, 2001, computers and
20    communications equipment utilized for any hospital purpose
21    and equipment used in the diagnosis, analysis, or treatment
22    of hospital patients sold to a lessor who leases the
23    equipment, under a lease of one year or longer executed or
24    in effect at the time of the purchase, to a hospital that
25    has been issued an active tax exemption identification
26    number by the Department under Section 1g of this Act. This

 

 

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1    paragraph is exempt from the provisions of Section 2-70.
2        (37) Beginning August 2, 2001, personal property sold
3    to a lessor who leases the property, under a lease of one
4    year or longer executed or in effect at the time of the
5    purchase, to a governmental body that has been issued an
6    active tax exemption identification number by the
7    Department under Section 1g of this Act. This paragraph is
8    exempt from the provisions of Section 2-70.
9        (38) Beginning on January 1, 2002 and through June 30,
10    2016, tangible personal property purchased from an
11    Illinois retailer by a taxpayer engaged in centralized
12    purchasing activities in Illinois who will, upon receipt of
13    the property in Illinois, temporarily store the property in
14    Illinois (i) for the purpose of subsequently transporting
15    it outside this State for use or consumption thereafter
16    solely outside this State or (ii) for the purpose of being
17    processed, fabricated, or manufactured into, attached to,
18    or incorporated into other tangible personal property to be
19    transported outside this State and thereafter used or
20    consumed solely outside this State. The Director of Revenue
21    shall, pursuant to rules adopted in accordance with the
22    Illinois Administrative Procedure Act, issue a permit to
23    any taxpayer in good standing with the Department who is
24    eligible for the exemption under this paragraph (38). The
25    permit issued under this paragraph (38) shall authorize the
26    holder, to the extent and in the manner specified in the

 

 

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1    rules adopted under this Act, to purchase tangible personal
2    property from a retailer exempt from the taxes imposed by
3    this Act. Taxpayers shall maintain all necessary books and
4    records to substantiate the use and consumption of all such
5    tangible personal property outside of the State of
6    Illinois.
7        (39) Beginning January 1, 2008, tangible personal
8    property used in the construction or maintenance of a
9    community water supply, as defined under Section 3.145 of
10    the Environmental Protection Act, that is operated by a
11    not-for-profit corporation that holds a valid water supply
12    permit issued under Title IV of the Environmental
13    Protection Act. This paragraph is exempt from the
14    provisions of Section 2-70.
15        (40) Beginning January 1, 2010, materials, parts,
16    equipment, components, and furnishings incorporated into
17    or upon an aircraft as part of the modification,
18    refurbishment, completion, replacement, repair, or
19    maintenance of the aircraft. This exemption includes
20    consumable supplies used in the modification,
21    refurbishment, completion, replacement, repair, and
22    maintenance of aircraft, but excludes any materials,
23    parts, equipment, components, and consumable supplies used
24    in the modification, replacement, repair, and maintenance
25    of aircraft engines or power plants, whether such engines
26    or power plants are installed or uninstalled upon any such

 

 

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1    aircraft. "Consumable supplies" include, but are not
2    limited to, adhesive, tape, sandpaper, general purpose
3    lubricants, cleaning solution, latex gloves, and
4    protective films. This exemption applies only to the sale
5    of qualifying tangible personal property to persons who
6    modify, refurbish, complete, replace, or maintain an
7    aircraft and who (i) hold an Air Agency Certificate and are
8    empowered to operate an approved repair station by the
9    Federal Aviation Administration, (ii) have a Class IV
10    Rating, and (iii) conduct operations in accordance with
11    Part 145 of the Federal Aviation Regulations. The exemption
12    does not include aircraft operated by a commercial air
13    carrier providing scheduled passenger air service pursuant
14    to authority issued under Part 121 or Part 129 of the
15    Federal Aviation Regulations. The changes made to this
16    paragraph (40) by Public Act 98-534 are declarative of
17    existing law.
18        (41) Tangible personal property sold to a
19    public-facilities corporation, as described in Section
20    11-65-10 of the Illinois Municipal Code, for purposes of
21    constructing or furnishing a municipal convention hall,
22    but only if the legal title to the municipal convention
23    hall is transferred to the municipality without any further
24    consideration by or on behalf of the municipality at the
25    time of the completion of the municipal convention hall or
26    upon the retirement or redemption of any bonds or other

 

 

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1    debt instruments issued by the public-facilities
2    corporation in connection with the development of the
3    municipal convention hall. This exemption includes
4    existing public-facilities corporations as provided in
5    Section 11-65-25 of the Illinois Municipal Code. This
6    paragraph is exempt from the provisions of Section 2-70.
7        (42) Beginning January 1, 2017, menstrual pads,
8    tampons, and menstrual cups.
9        (43) Merchandise that is subject to the Rental Purchase
10    Agreement Occupation and Use Tax. The purchaser must
11    certify that the item is purchased to be rented subject to
12    a rental purchase agreement, as defined in the Rental
13    Purchase Agreement Act, and provide proof of registration
14    under the Rental Purchase Agreement Occupation and Use Tax
15    Act. This paragraph is exempt from the provisions of
16    Section 2-70.
17        (44) Tangible personal property for which a
18    certificate of exemption has been issued under Section
19    2505-805 of the Department of Revenue Law of the Civil
20    Administrative Code of Illinois. This paragraph is exempt
21    from the provisions of Section 2-70.
22(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
23100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
241-1-18; revised 9-26-17.)
 
25    Section 30. The Counties Code is amended by adding Section

 

 

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15-1184 as follows:
 
2    (55 ILCS 5/5-1184 new)
3    Sec. 5-1184. Exemption for materials, equipment, or
4supplies of a bid. Tangible personal property for which a
5certificate of exemption has been issued under Section 2505-805
6of the Department of Revenue Law of the Civil Administrative
7Code of Illinois is exempt from any use or occupation tax
8imposed by a county under this Code.
 
9    Section 35. The Illinois Municipal Code is amended by
10adding Section 8-1-19 as follows:
 
11    (65 ILCS 5/8-1-19 new)
12    Sec. 8-1-19. Exemption for materials, equipment, or
13supplies of a bid. Tangible personal property for which a
14certificate of exemption has been issued under Section 2505-805
15of the Department of Revenue Law of the Civil Administrative
16Code of Illinois is exempt from any use or occupation tax
17imposed by a municipality under this Code.
 
18    Section 40. The Civic Center Code is amended by adding
19Section 245-13 as follows:
 
20    (70 ILCS 200/245-13 new)
21    Sec. 245-13. Exemption for materials, equipment, or

 

 

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1supplies of a bid. Tangible personal property for which a
2certificate of exemption has been issued under Section 2505-805
3of the Department of Revenue Law of the Civil Administrative
4Code of Illinois is exempt from any use or occupation tax
5imposed under this Article.
 
6    Section 45. The Metropolitan Pier and Exposition Authority
7Act is amended by adding Section 13.4 as follows:
 
8    (70 ILCS 210/13.4 new)
9    Sec. 13.4. Exemption for materials, equipment, or supplies
10of a bid. Tangible personal property for which a certificate of
11exemption has been issued under Section 2505-805 of the
12Department of Revenue Law of the Civil Administrative Code of
13Illinois is exempt from any use or occupation tax imposed under
14this Act.
 
15    Section 50. The Flood Prevention District Act is amended by
16adding Section 27 as follows:
 
17    (70 ILCS 750/27 new)
18    Sec. 27. Exemption for materials, equipment, or supplies of
19a bid. Tangible personal property for which a certificate of
20exemption has been issued under Section 2505-805 of the
21Department of Revenue Law of the Civil Administrative Code of
22Illinois is exempt from any use or occupation tax imposed under

 

 

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1this Act.
 
2    Section 55. The Metro-East Park and Recreation District Act
3is amended by adding Section 32 as follows:
 
4    (70 ILCS 1605/32 new)
5    Sec. 32. Exemption for materials, equipment, or supplies of
6a bid. Tangible personal property for which a certificate of
7exemption has been issued under Section 2505-805 of the
8Department of Revenue Law of the Civil Administrative Code of
9Illinois is exempt from any use or occupation tax imposed under
10this Act.
 
11    Section 60. The Local Mass Transit District Act is amended
12by adding Section 5.7 as follows:
 
13    (70 ILCS 3610/5.7 new)
14    Sec. 5.7. Exemption for materials, equipment, or supplies
15of a bid. Tangible personal property for which a certificate of
16exemption has been issued under Section 2505-805 of the
17Department of Revenue Law of the Civil Administrative Code of
18Illinois is exempt from any use or occupation tax imposed under
19this Act.
 
20    Section 65. The Regional Transportation Authority Act is
21amended by adding Section 4.17 as follows:
 

 

 

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1    (70 ILCS 3615/4.17 new)
2    Sec. 4.17. Exemption for materials, equipment, or supplies
3of a bid. Tangible personal property for which a certificate of
4exemption has been issued under Section 2505-805 of the
5Department of Revenue Law of the Civil Administrative Code of
6Illinois is exempt from any use or occupation tax imposed under
7this Act.
 
8    Section 70. The Water Commission Act of 1985 is amended by
9adding Section 4.5 as follows:
 
10    (70 ILCS 3720/4.5 new)
11    Sec. 4.5. Exemption for materials, equipment, or supplies
12of a bid. Tangible personal property for which a certificate of
13exemption has been issued under Section 2505-805 of the
14Department of Revenue Law of the Civil Administrative Code of
15Illinois is exempt from any use or occupation tax imposed under
16this Act.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.

 

 

HB4878- 74 -LRB100 17141 AWJ 36037 b

1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 2505/2505-805 new
4    35 ILCS 105/3-5
5    35 ILCS 110/3-5
6    35 ILCS 115/3-5
7    35 ILCS 120/2-5
8    55 ILCS 5/5-1184 new
9    65 ILCS 5/8-1-19 new
10    70 ILCS 200/245-13 new
11    70 ILCS 210/13.4 new
12    70 ILCS 750/27 new
13    70 ILCS 1605/32 new
14    70 ILCS 3610/5.7 new
15    70 ILCS 3615/4.17 new
16    70 ILCS 3720/4.5 new