State of Illinois
90th General Assembly
Legislation

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[ Engrossed ][ Enrolled ][ House Amendment 001 ]

90_HB0605

      35 ILCS 105/2             from Ch. 120, par. 439.2
      35 ILCS 120/1             from Ch. 120, par. 440
          Amends the Use Tax Act and the Retailers' Occupation  Tax
      Act.  Provides that the sale of nonreusable tangible personal
      property  used in delivering, packaging, or consuming food to
      persons operating a restaurant, cafeteria,  or  drive-in  and
      transferred  by  the  restaurant,  cafeteria,  or drive-in to
      customers in the ordinary course of business as part  of  the
      sale  of  food, food products, and beverages is not a sale at
      retail but is a sale for resale for  purposes  of  the  Acts.
      Effective immediately.
                                                     LRB9003075KDks
                                               LRB9003075KDks
 1        AN ACT in relation to taxes, amending named Acts.
 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:
 4        Section 5.  The  Use  Tax  Act  is  amended  by  changing
 5    Section 2 as follows:
 6        (35 ILCS 105/2) (from Ch. 120, par. 439.2)
 7        Sec.  2.   "Use"  means the exercise by any person of any
 8    right or power over tangible personal  property  incident  to
 9    the  ownership  of  that  property,  except  that it does not
10    include the sale of such property in  any  form  as  tangible
11    personal  property  in  the regular course of business to the
12    extent that such property is not first subjected to a use for
13    which it was purchased, and does not include the use of  such
14    property  by  its  owner for demonstration purposes: Provided
15    that the property purchased is deemed to be purchased for the
16    purpose of resale, despite first being used, to the extent to
17    which it is resold  as  an  ingredient  of  an  intentionally
18    produced  product or by-product of manufacturing.  "Use" does
19    not mean the demonstration use or  interim  use  of  tangible
20    personal property by a retailer before he sells that tangible
21    personal property.  For watercraft or aircraft, if the period
22    of  demonstration  use or interim use by the retailer exceeds
23    18 months, the retailer shall pay on the retailers'  original
24    cost  price  the  tax  imposed by this Act, and no credit for
25    that tax is  permitted  if  the  watercraft  or  aircraft  is
26    subsequently  sold  by the retailer.  "Use" does not mean the
27    physical incorporation of tangible personal property, to  the
28    extent  not  first  subjected  to  a  use  for  which  it was
29    purchased,  as  an  ingredient  or  constituent,  into  other
30    tangible personal property (a) which is sold in  the  regular
31    course of business or (b) which the person incorporating such
                            -2-                LRB9003075KDks
 1    ingredient  or constituent therein has undertaken at the time
 2    of such purchase to cause to  be  transported  in  interstate
 3    commerce  to  destinations  outside  the  State  of Illinois:
 4    Provided  that  the  property  purchased  is  deemed  to   be
 5    purchased  for  the  purpose  of  resale, despite first being
 6    used, to the extent to which it is resold as an ingredient of
 7    an  intentionally   produced   product   or   by-product   of
 8    manufacturing.
 9        "Watercraft"  means  a  Class  2,  Class  3,  or  Class 4
10    watercraft as defined in Section 3-2 of the Boat Registration
11    and Safety Act, a personal watercraft, or any  boat  equipped
12    with an inboard motor.
13        "Purchase   at  retail"  means  the  acquisition  of  the
14    ownership of or title to tangible personal property through a
15    sale at retail.
16        "Purchaser" means anyone who, through a sale  at  retail,
17    acquires  the  ownership  of tangible personal property for a
18    valuable consideration.
19        "Sale at retail" means any transfer of the  ownership  of
20    or  title  to  tangible personal property to a purchaser, for
21    the purpose of use, and not for the purpose of resale in  any
22    form  as  tangible  personal property to the extent not first
23    subjected to a use for which it was purchased, for a valuable
24    consideration: Provided that the property purchased is deemed
25    to be purchased for the  purpose  of  resale,  despite  first
26    being  used,  to  the  extent  to  which  it  is resold as an
27    ingredient of an intentionally produced product or by-product
28    of manufacturing.  For this  purpose,  slag  produced  as  an
29    incident  to  manufacturing  pig  iron  or  steel and sold is
30    considered to be  an  intentionally  produced  by-product  of
31    manufacturing.   "Sale  at retail" includes any such transfer
32    made for resale unless made in compliance with Section 2c  of
33    the   Retailers'  Occupation  Tax  Act,  as  incorporated  by
34    reference into Section 12 of this Act.  Transactions  whereby
                            -3-                LRB9003075KDks
 1    the  possession of the property is transferred but the seller
 2    retains the title as security  for  payment  of  the  selling
 3    price are sales.
 4        "Sale  at  retail" shall also be construed to include any
 5    Illinois florist's sales transaction in  which  the  purchase
 6    order  is  received  in Illinois by a florist and the sale is
 7    for use or  consumption,  but  the  Illinois  florist  has  a
 8    florist   in  another  state  deliver  the  property  to  the
 9    purchaser or the purchaser's donee in such other state.
10        The sale to persons engaged in the business of  operating
11    a  restaurant, cafeteria, or drive-in of nonreusable tangible
12    personal  property  employed  in  delivering,  packaging,  or
13    consuming food, including, but  not  limited  to,  paper  and
14    plastic  cups,  plates,  baskets, boxes, sleeves, buckets, or
15    other  containers,  utensils,  straws,  placemats,   napkins,
16    doggie  bags,  and  wrapping  or  packaging  material that is
17    transferred by the restaurant, cafeteria, or drive-in in  the
18    ordinary  course of business to customers as part of the sale
19    of food, food products, and beverages, is a sale  for  resale
20    and  not  a  sale at retail, whether consumption occurs on or
21    off the premises.
22        The purchase, employment and transfer  of  such  tangible
23    personal  property  as  newsprint  and  ink  for  the primary
24    purpose of conveying news (with or without other information)
25    is not a purchase, use or sale of tangible personal property.
26        "Selling price" means the consideration for a sale valued
27    in money whether received in money  or  otherwise,  including
28    cash,  credits,  property other than as hereinafter provided,
29    and services, but not including the value of or credit  given
30    for  traded-in tangible personal property where the item that
31    is traded-in is of like kind and character as that  which  is
32    being  sold, and shall be determined without any deduction on
33    account of the  cost  of  the  property  sold,  the  cost  of
34    materials  used,  labor  or service cost or any other expense
                            -4-                LRB9003075KDks
 1    whatsoever, but does not include interest or finance  charges
 2    which  appear  as separate items on the bill of sale or sales
 3    contract nor charges that are added to prices by  sellers  on
 4    account  of  the seller's tax liability under the "Retailers'
 5    Occupation Tax Act", or on account of the  seller's  duty  to
 6    collect,  from the purchaser, the tax that is imposed by this
 7    Act, or on  account  of  the  seller's  tax  liability  under
 8    Section  8-11-1 of the Illinois Municipal Code, as heretofore
 9    and hereafter amended, or on  account  of  the  seller's  tax
10    liability  under  the "County Retailers' Occupation Tax Act".
11    Effective December 1, 1985,  "selling  price"  shall  include
12    charges that are added to prices by sellers on account of the
13    seller's  tax  liability  under  the  Cigarette  Tax  Act, on
14    account of the seller's duty to collect, from the  purchaser,
15    the  tax  imposed  under  the  Cigarette  Use Tax Act, and on
16    account of the seller's duty to collect, from the  purchaser,
17    any cigarette tax imposed by a home rule unit.
18        The  phrase  "like kind and character" shall be liberally
19    construed (including but not limited to  any  form  of  motor
20    vehicle for any form of motor vehicle, or any kind of farm or
21    agricultural   implement  for  any  other  kind  of  farm  or
22    agricultural implement), while not including a kind  of  item
23    which,  if  sold  at retail by that retailer, would be exempt
24    from retailers' occupation tax and use tax as an isolated  or
25    occasional sale.
26        "Department" means the Department of Revenue.
27        "Person" means any natural individual, firm, partnership,
28    association,  joint stock company, joint adventure, public or
29    private  corporation,  limited  liability   company,   or   a
30    receiver, executor, trustee, guardian or other representative
31    appointed by order of any court.
32        "Retailer" means and includes every person engaged in the
33    business  of  making  sales  at  retail  as  defined  in this
34    Section.
                            -5-                LRB9003075KDks
 1        A person who  holds  himself  or  herself  out  as  being
 2    engaged  (or  who  habitually  engages)  in  selling tangible
 3    personal property at retail  is  a  retailer  hereunder  with
 4    respect  to  such  sales  (and  not  primarily  in  a service
 5    occupation) notwithstanding the fact that such person designs
 6    and produces such tangible personal property on special order
 7    for the purchaser and in such a way as to render the property
 8    of value only to such purchaser, if  such  tangible  personal
 9    property  so  produced  on special order serves substantially
10    the same function as stock  or  standard  items  of  tangible
11    personal property that are sold at retail.
12        A  person  whose  activities  are organized and conducted
13    primarily as a not-for-profit  service  enterprise,  and  who
14    engages  in  selling  tangible  personal  property  at retail
15    (whether to the public or merely to members and their guests)
16    is a retailer with respect to  such  transactions,  excepting
17    only   a   person  organized  and  operated  exclusively  for
18    charitable, religious or educational purposes either (1),  to
19    the  extent of sales by such person to its members, students,
20    patients or inmates of tangible personal property to be  used
21    primarily  for  the  purposes  of such person, or (2), to the
22    extent of sales by such person of tangible personal  property
23    which  is  not  sold or offered for sale by persons organized
24    for profit.  The selling of school books and school  supplies
25    by  schools  at  retail to students is not "primarily for the
26    purposes of"  the  school  which  does  such  selling.   This
27    paragraph   does   not  apply  to  nor  subject  to  taxation
28    occasional dinners, social or similar activities of a  person
29    organized  and operated exclusively for charitable, religious
30    or educational purposes, whether or not such  activities  are
31    open to the public.
32        A  person  who  is  the  recipient of a grant or contract
33    under Title VII of the Older  Americans  Act  of  1965  (P.L.
34    92-258)  and  serves  meals  to  participants  in the federal
                            -6-                LRB9003075KDks
 1    Nutrition Program for the Elderly in return for contributions
 2    established in amount by the individual participant  pursuant
 3    to  a  schedule  of  suggested  fees  as  provided for in the
 4    federal Act is not a retailer under this Act with respect  to
 5    such transactions.
 6        Persons  who  engage  in  the  business  of  transferring
 7    tangible  personal  property  upon  the redemption of trading
 8    stamps are retailers hereunder when engaged in such business.
 9        The isolated or  occasional  sale  of  tangible  personal
10    property  at retail by a person who does not hold himself out
11    as being engaged (or  who  does  not  habitually  engage)  in
12    selling  such  tangible personal property at retail or a sale
13    through a bulk vending machine does not make  such  person  a
14    retailer  hereunder.  However, any person who is engaged in a
15    business which is not subject  to  the  tax  imposed  by  the
16    "Retailers' Occupation Tax Act" because of involving the sale
17    of  or  a  contract  to  sell  real  estate or a construction
18    contract to improve real estate, but who, in  the  course  of
19    conducting   such   business,   transfers  tangible  personal
20    property to users or consumers in the finished form in  which
21    it  was  purchased,  and  which  does not become real estate,
22    under any provision of a construction contract or real estate
23    sale or real estate sales agreement entered  into  with  some
24    other  person  arising  out  of or because of such nontaxable
25    business, is a retailer to the extent of  the  value  of  the
26    tangible  personal  property  so  transferred.   If,  in such
27    transaction, a separate  charge  is  made  for  the  tangible
28    personal property so transferred, the value of such property,
29    for  the  purposes  of  this Act, is the amount so separately
30    charged, but not less than the cost of such property  to  the
31    transferor;  if no separate charge is made, the value of such
32    property, for the purposes of this Act, is the  cost  to  the
33    transferor of such tangible personal property.
34        "Retailer maintaining a place of business in this State",
                            -7-                LRB9003075KDks
 1    or  any  like  term,  means and includes any of the following
 2    retailers:
 3             1.  A retailer having  or  maintaining  within  this
 4        State,   directly   or   by   a  subsidiary,  an  office,
 5        distribution house, sales house, warehouse or other place
 6        of  business,  or  any  agent  or  other   representative
 7        operating  within  this  State under the authority of the
 8        retailer or its subsidiary, irrespective of whether  such
 9        place  of  business  or  agent or other representative is
10        located here permanently or temporarily, or whether  such
11        retailer or subsidiary is licensed to do business in this
12        State. However, the ownership of property that is located
13        at  the premises of a printer with which the retailer has
14        contracted for printing and that consists  of  the  final
15        printed  product,  property  that  becomes  a part of the
16        final printed product, or copy  from  which  the  printed
17        product  is  produced  shall  not  result in the retailer
18        being deemed to have or maintain an office,  distribution
19        house, sales house, warehouse, or other place of business
20        within this State.
21             2.  A   retailer   soliciting  orders  for  tangible
22        personal property by  means  of  a  telecommunication  or
23        television  shopping  system  (which  utilizes  toll free
24        numbers)  which  is  intended  by  the  retailer  to   be
25        broadcast   by   cable   television  or  other  means  of
26        broadcasting, to consumers located in this State.
27             3.  A  retailer,  pursuant  to  a  contract  with  a
28        broadcaster  or  publisher   located   in   this   State,
29        soliciting orders for tangible personal property by means
30        of   advertising   which  is  disseminated  primarily  to
31        consumers located in this State and only  secondarily  to
32        bordering jurisdictions.
33             4.  A   retailer   soliciting  orders  for  tangible
34        personal  property  by  mail  if  the  solicitations  are
                            -8-                LRB9003075KDks
 1        substantial and recurring and if  the  retailer  benefits
 2        from    any    banking,   financing,   debt   collection,
 3        telecommunication, or marketing activities  occurring  in
 4        this State or benefits from the location in this State of
 5        authorized installation, servicing, or repair facilities.
 6             5.  A  retailer  that  is owned or controlled by the
 7        same interests that own or control any retailer  engaging
 8        in  business  in  the same or similar line of business in
 9        this State.
10             6.  A  retailer  having  a  franchisee  or  licensee
11        operating under its  trade  name  if  the  franchisee  or
12        licensee  is  required  to  collect  the  tax  under this
13        Section.
14             7.  A retailer, pursuant to a contract with a  cable
15        television  operator  located  in  this State, soliciting
16        orders  for  tangible  personal  property  by  means   of
17        advertising  which  is  transmitted or distributed over a
18        cable television system in this State.
19             8.  A retailer engaging in activities  in  Illinois,
20        which  activities  in  the  state  in  which  the  retail
21        business  engaging  in  such  activities is located would
22        constitute maintaining a place of business in that state.
23        "Bulk vending machine" means a  nonelectrically  operated
24    vending  machine,  containing  unsorted  confections, nuts or
25    other merchandise which, when a coin of  a  denomination  not
26    larger  than  one  cent  is  inserted, are dispensed in equal
27    portions, at random and without selection by the customer.
28    (Source: P.A. 88-194; 88-361; 88-480; 88-660,  eff.  9-16-94;
29    88-669, eff. 11-29-94; 88-670, eff. 12-2-94.)
30        Section 10.  The Retailers' Occupation Tax Act is amended
31    by changing Section 1 as follows:
32        (35 ILCS 120/1) (from Ch. 120, par. 440)
                            -9-                LRB9003075KDks
 1        Sec.   1.   Definitions.   "Sale  at  retail"  means  any
 2    transfer of the ownership of or title  to  tangible  personal
 3    property   to   a  purchaser,  for  the  purpose  of  use  or
 4    consumption, and not for the purpose of resale in any form as
 5    tangible personal property to the extent not first  subjected
 6    to  a  use  for  which  it  was  purchased,  for  a  valuable
 7    consideration:   Provided  that  the  property  purchased  is
 8    deemed  to  be  purchased  for the purpose of resale, despite
 9    first being used, to the extent to which it is resold  as  an
10    ingredient  of an intentionally produced product or byproduct
11    of manufacturing.  For this  purpose,  slag  produced  as  an
12    incident  to  manufacturing  pig  iron  or  steel and sold is
13    considered to  be  an  intentionally  produced  byproduct  of
14    manufacturing.   Transactions  whereby  the possession of the
15    property is transferred but the seller retains the  title  as
16    security  for payment of the selling price shall be deemed to
17    be sales.
18        "Sale at  retail"  shall  be  construed  to  include  any
19    transfer  of  the  ownership of or title to tangible personal
20    property to a purchaser, for use or consumption by any  other
21    person  to  whom  such  purchaser  may  transfer the tangible
22    personal property without a valuable  consideration,  and  to
23    include  any transfer, whether made for or without a valuable
24    consideration, for resale in any form  as  tangible  personal
25    property  unless  made  in compliance with Section 2c of this
26    Act.
27        Sales of tangible personal property, which  property,  to
28    the  extent  not  first  subjected  to a use for which it was
29    purchased, as an ingredient or  constituent,  goes  into  and
30    forms  a  part of tangible personal property subsequently the
31    subject of a "Sale at retail", are not  sales  at  retail  as
32    defined in this Act:  Provided that the property purchased is
33    deemed  to  be  purchased  for the purpose of resale, despite
34    first being used, to the extent to which it is resold  as  an
                            -10-               LRB9003075KDks
 1    ingredient  of an intentionally produced product or byproduct
 2    of manufacturing.
 3        "Sale at  retail"  shall  be  construed  to  include  any
 4    Illinois  florist's  sales  transaction in which the purchase
 5    order is received in Illinois by a florist and  the  sale  is
 6    for  use  or  consumption,  but  the  Illinois  florist has a
 7    florist  in  another  state  deliver  the  property  to   the
 8    purchaser or the purchaser's donee in such other state.
 9        The  sale to persons engaged in the business of operating
10    a restaurant, cafeteria, or drive-in of nonreusable  tangible
11    personal  property  employed  in  delivering,  packaging,  or
12    consuming  food,  including,  but  not  limited to, paper and
13    plastic cups, plates, baskets, boxes,  sleeves,  buckets,  or
14    other   containers,  utensils,  straws,  placemats,  napkins,
15    doggie bags, and  wrapping  or  packaging  material  that  is
16    transferred  by the restaurant, cafeteria, or drive-in in the
17    ordinary course of business to customers as part of the  sale
18    of  food,  food products, and beverages, is a sale for resale
19    and not a sale at retail, whether consumption  occurs  on  or
20    off the premises.
21        The  purchase,  employment  and transfer of such tangible
22    personal property  as  newsprint  and  ink  for  the  primary
23    purpose of conveying news (with or without other information)
24    is not a purchase, use or sale of tangible personal property.
25        A  person  whose  activities  are organized and conducted
26    primarily as a not-for-profit  service  enterprise,  and  who
27    engages  in  selling  tangible  personal  property  at retail
28    (whether to the public or merely to members and their guests)
29    is engaged in  the  business  of  selling  tangible  personal
30    property   at  retail  with  respect  to  such  transactions,
31    excepting only a person organized  and  operated  exclusively
32    for charitable, religious or educational purposes either (1),
33    to  the  extent  of  sales  by  such  person  to its members,
34    students, patients or inmates of tangible  personal  property
                            -11-               LRB9003075KDks
 1    to be used primarily for the purposes of such person, or (2),
 2    to  the  extent  of sales by such person of tangible personal
 3    property which is not sold or offered  for  sale  by  persons
 4    organized for profit.  The selling of school books and school
 5    supplies  by  schools at retail to students is not "primarily
 6    for the purposes of" the school which does such selling.  The
 7    provisions of this paragraph shall not apply to  nor  subject
 8    to taxation occasional dinners, socials or similar activities
 9    of   a   person   organized   and  operated  exclusively  for
10    charitable, religious or educational purposes, whether or not
11    such activities are open to the public.
12        A person who is the recipient  of  a  grant  or  contract
13    under  Title  VII  of  the  Older Americans Act of 1965 (P.L.
14    92-258) and serves  meals  to  participants  in  the  federal
15    Nutrition Program for the Elderly in return for contributions
16    established  in amount by the individual participant pursuant
17    to a schedule of  suggested  fees  as  provided  for  in  the
18    federal  Act  is  not  engaged  in  the  business  of selling
19    tangible personal property at retail  with  respect  to  such
20    transactions.
21        "Purchaser"  means  anyone who, through a sale at retail,
22    acquires the ownership  of  or  title  to  tangible  personal
23    property for a valuable consideration.
24        "Reseller  of motor fuel" means any person engaged in the
25    business of selling or delivering or  transferring  title  of
26    motor   fuel   to  another  person  other  than  for  use  or
27    consumption. No person shall act as a reseller of motor  fuel
28    within  this  State  without  first  being  registered  as  a
29    reseller  pursuant  to  Section  2c or a retailer pursuant to
30    Section 2a.
31        "Selling  price"  or  the  "amount  of  sale"  means  the
32    consideration for a sale valued in money whether received  in
33    money  or otherwise, including cash, credits, property, other
34    than as hereinafter provided, and services, but not including
                            -12-               LRB9003075KDks
 1    the value of or credit given for traded-in tangible  personal
 2    property where the item that is traded-in is of like kind and
 3    character   as  that  which  is  being  sold,  and  shall  be
 4    determined without any deduction on account of  the  cost  of
 5    the  property  sold,  the  cost  of  materials used, labor or
 6    service cost or any other expense whatsoever,  but  does  not
 7    include  charges  that  are  added  to  prices  by sellers on
 8    account of the seller's tax liability under this Act,  or  on
 9    account  of the seller's duty to collect, from the purchaser,
10    the tax that is imposed by the Use Tax Act, or on account  of
11    the  seller's  tax  liability  under  Section  8-11-1  of the
12    Illinois Municipal Code, as heretofore and hereafter amended,
13    or on account of the seller's tax liability under the  County
14    Retailers'  Occupation Tax Act, or on account of the seller's
15    tax liability  under  the  Home  Rule  Municipal  Soft  Drink
16    Retailers'  Occupation Tax, or on account of the seller's tax
17    liability  under  any  tax  imposed   under   the   "Regional
18    Transportation  Authority  Act",  approved December 12, 1973.
19    Effective December 1, 1985,  "selling  price"  shall  include
20    charges that are added to prices by sellers on account of the
21    seller's  tax  liability  under  the  Cigarette  Tax  Act, on
22    account of the sellers' duty to collect, from the  purchaser,
23    the  tax  imposed  under  the  Cigarette  Use Tax Act, and on
24    account of the seller's duty to collect, from the  purchaser,
25    any cigarette tax imposed by a home rule unit.
26        The  phrase  "like kind and character" shall be liberally
27    construed (including but not limited to  any  form  of  motor
28    vehicle for any form of motor vehicle, or any kind of farm or
29    agricultural   implement  for  any  other  kind  of  farm  or
30    agricultural implement), while not including a kind  of  item
31    which,  if  sold  at retail by that retailer, would be exempt
32    from retailers' occupation tax and use tax as an isolated  or
33    occasional sale.
34        "Gross  receipts"  from  the  sales  of tangible personal
                            -13-               LRB9003075KDks
 1    property at retail means  the  total  selling  price  or  the
 2    amount  of  such sales, as hereinbefore defined.  In the case
 3    of charge  and  time  sales,  the  amount  thereof  shall  be
 4    included  only  as  and  when  payments  are  received by the
 5    seller. Receipts or other consideration derived by  a  seller
 6    from  the sale, transfer or assignment of accounts receivable
 7    to a wholly owned subsidiary  will  not  be  deemed  payments
 8    prior  to  the  time  the  purchaser  makes  payment  on such
 9    accounts.
10        "Department" means the Department of Revenue.
11        "Person" means any natural individual, firm, partnership,
12    association, joint stock company, joint adventure, public  or
13    private   corporation,   limited   liability  company,  or  a
14    receiver, executor, trustee, guardian or other representative
15    appointed by order of any court.
16        The isolated or  occasional  sale  of  tangible  personal
17    property  at retail by a person who does not hold himself out
18    as being engaged (or  who  does  not  habitually  engage)  in
19    selling  such tangible personal property at retail, or a sale
20    through a bulk vending machine, does not constitute  engaging
21    in  a  business of selling such tangible personal property at
22    retail within the meaning of  this  Act;  provided  that  any
23    person  who  is engaged in a business which is not subject to
24    the tax imposed by this Act because of involving the sale  of
25    or  a contract to sell real estate or a construction contract
26    to  improve  real  estate  or  a  construction  contract   to
27    engineer,  install,  and  maintain  an  integrated  system of
28    products, but who, in the course of conducting such business,
29    transfers tangible personal property to users or consumers in
30    the finished form in which it was purchased, and  which  does
31    not  become  real estate or was not engineered and installed,
32    under any provision of a construction contract or real estate
33    sale or real estate sales agreement entered  into  with  some
34    other  person  arising  out  of or because of such nontaxable
                            -14-               LRB9003075KDks
 1    business, is engaged in  the  business  of  selling  tangible
 2    personal property at retail to the extent of the value of the
 3    tangible  personal  property  so  transferred.  If, in such a
 4    transaction, a separate  charge  is  made  for  the  tangible
 5    personal property so transferred, the value of such property,
 6    for  the  purpose  of  this  Act,  shall  be  the  amount  so
 7    separately  charged,  but  not  less  than  the  cost of such
 8    property to the transferor; if no separate  charge  is  made,
 9    the  value of such property, for the purposes of this Act, is
10    the  cost  to  the  transferor  of  such  tangible   personal
11    property.  Construction contracts for the improvement of real
12    estate   consisting   of   engineering,   installation,   and
13    maintenance  of  voice,  data,  video,  security,   and   all
14    telecommunication  systems  do  not  constitute engaging in a
15    business of selling  tangible  personal  property  at  retail
16    within  the  meaning  of  this  Act  if  they are sold at one
17    specified contract price.
18        A person who  holds  himself  or  herself  out  as  being
19    engaged  (or  who  habitually  engages)  in  selling tangible
20    personal property at  retail  is  a  person  engaged  in  the
21    business  of  selling  tangible  personal  property at retail
22    hereunder with respect to such sales (and not primarily in  a
23    service occupation) notwithstanding the fact that such person
24    designs  and  produces  such  tangible  personal  property on
25    special order for the purchaser and  in  such  a  way  as  to
26    render  the property of value only to such purchaser, if such
27    tangible personal  property  so  produced  on  special  order
28    serves  substantially  the same function as stock or standard
29    items of tangible personal property that are sold at retail.
30        Persons  who  engage  in  the  business  of  transferring
31    tangible personal property upon  the  redemption  of  trading
32    stamps  are  engaged in the business of selling such property
33    at retail and shall be liable  for  and  shall  pay  the  tax
34    imposed  by  this Act on the basis of the retail value of the
                            -15-               LRB9003075KDks
 1    property transferred upon redemption of such stamps.
 2        "Bulk vending machine" means a  nonelectrically  operated
 3    vending  machine,  containing  unsorted  confections, nuts or
 4    other merchandise which, when a coin of  a  denomination  not
 5    larger  than  one  cent  is  inserted, are dispensed in equal
 6    portions, at random and without selection by the customer.
 7    (Source: P.A. 88-420; 88-480; 88-507; 88-670, eff. 12-2-94.)
 8        Section 99.  Effective date.  This Act takes effect  upon
 9    becoming law.

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