101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5207

 

Introduced , by Rep. Keith R. Wheeler

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-55  from Ch. 120, par. 439.3-55
35 ILCS 110/3-45  from Ch. 120, par. 439.33-45
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois who will temporarily store the property in Illinois (i) for the purpose of subsequently transporting it outside this State for use or consumption solely outside this State or (ii) for the purpose of being processed, fabricated, or manufactured into, attached to, or incorporated into other tangible personal property to be transported outside this State and used or consumed solely outside this State sunsets on June 30, 2022 (currently, June 30, 2016). Effective immediately.


LRB101 17554 HLH 66972 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5207LRB101 17554 HLH 66972 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-55 as follows:
 
6    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
7    Sec. 3-55. Multistate exemption. To prevent actual or
8likely multistate taxation, the tax imposed by this Act does
9not apply to the use of tangible personal property in this
10State under the following circumstances:
11    (a) The use, in this State, of tangible personal property
12acquired outside this State by a nonresident individual and
13brought into this State by the individual for his or her own
14use while temporarily within this State or while passing
15through this State.
16    (b) (Blank).
17    (c) The use, in this State, by owners, lessors, or shippers
18of tangible personal property that is utilized by interstate
19carriers for hire for use as rolling stock moving in interstate
20commerce as long as so used by the interstate carriers for
21hire, and equipment operated by a telecommunications provider,
22licensed as a common carrier by the Federal Communications
23Commission, which is permanently installed in or affixed to

 

 

HB5207- 2 -LRB101 17554 HLH 66972 b

1aircraft moving in interstate commerce.
2    (d) The use, in this State, of tangible personal property
3that is acquired outside this State and caused to be brought
4into this State by a person who has already paid a tax in
5another State in respect to the sale, purchase, or use of that
6property, to the extent of the amount of the tax properly due
7and paid in the other State.
8    (e) The temporary storage, in this State, of tangible
9personal property that is acquired outside this State and that,
10after being brought into this State and stored here
11temporarily, is used solely outside this State or is physically
12attached to or incorporated into other tangible personal
13property that is used solely outside this State, or is altered
14by converting, fabricating, manufacturing, printing,
15processing, or shaping, and, as altered, is used solely outside
16this State.
17    (f) The temporary storage in this State of building
18materials and fixtures that are acquired either in this State
19or outside this State by an Illinois registered combination
20retailer and construction contractor, and that the purchaser
21thereafter uses outside this State by incorporating that
22property into real estate located outside this State.
23    (g) The use or purchase of tangible personal property by a
24common carrier by rail or motor that receives the physical
25possession of the property in Illinois, and that transports the
26property, or shares with another common carrier in the

 

 

HB5207- 3 -LRB101 17554 HLH 66972 b

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

 

 

HB5207- 4 -LRB101 17554 HLH 66972 b

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

 

 

HB5207- 5 -LRB101 17554 HLH 66972 b

1        after the later of either the issuance of the final
2        billing for the purchase of the aircraft or the
3        authorized approval for return to service, completion
4        of the maintenance record entry, and completion of the
5        test flight and ground test for inspection, as required
6        by 14 C.F.R. 91.407;
7            (B) the aircraft is not based or registered in this
8        State after the purchase of the aircraft; and
9            (C) the purchaser provides the Department with a
10        signed and dated certification, on a form prescribed by
11        the Department, certifying that the requirements of
12        this item (1) are met. The certificate must also
13        include the name and address of the purchaser, the
14        address of the location where the aircraft is to be
15        titled or registered, the address of the primary
16        physical location of the aircraft, and other
17        information that the Department may reasonably
18        require.
19        (2) Beginning on July 1, 2007, no tax is imposed under
20    this Act on the use of an aircraft, as defined in Section 3
21    of the Illinois Aeronautics Act, that is temporarily
22    located in this State for the purpose of a prepurchase
23    evaluation if all of the following conditions are met:
24            (A) the aircraft is not based or registered in this
25        State after the prepurchase evaluation; and
26            (B) the purchaser provides the Department with a

 

 

HB5207- 6 -LRB101 17554 HLH 66972 b

1        signed and dated certification, on a form prescribed by
2        the Department, certifying that the requirements of
3        this item (2) are met. The certificate must also
4        include the name and address of the purchaser, the
5        address of the location where the aircraft is to be
6        titled or registered, the address of the primary
7        physical location of the aircraft, and other
8        information that the Department may reasonably
9        require.
10        (3) Beginning on July 1, 2007, no tax is imposed under
11    this Act on the use of an aircraft, as defined in Section 3
12    of the Illinois Aeronautics Act, that is temporarily
13    located in this State for the purpose of a post-sale
14    customization if all of the following conditions are met:
15            (A) the aircraft leaves this State within 15 days
16        after the authorized approval for return to service,
17        completion of the maintenance record entry, and
18        completion of the test flight and ground test for
19        inspection, as required by 14 C.F.R. 91.407;
20            (B) the aircraft is not based or registered in this
21        State either before or after the post-sale
22        customization; and
23            (C) the purchaser provides the Department with a
24        signed and dated certification, on a form prescribed by
25        the Department, certifying that the requirements of
26        this item (3) are met. The certificate must also

 

 

HB5207- 7 -LRB101 17554 HLH 66972 b

1        include the name and address of the purchaser, the
2        address of the location where the aircraft is to be
3        titled or registered, the address of the primary
4        physical location of the aircraft, and other
5        information that the Department may reasonably
6        require.
7    If tax becomes due under this subsection (h-2) because of
8the purchaser's use of the aircraft in this State, the
9purchaser shall file a return with the Department and pay the
10tax on the fair market value of the aircraft. This return and
11payment of the tax must be made no later than 30 days after the
12aircraft is used in a taxable manner in this State. The tax is
13based on the fair market value of the aircraft on the date that
14it is first used in a taxable manner in this State.
15    For purposes of this subsection (h-2):
16    "Based in this State" means hangared, stored, or otherwise
17used, excluding post-sale customizations as defined in this
18Section, for 10 or more days in each 12-month period
19immediately following the date of the sale of the aircraft.
20    "Post-sale customization" means any improvement,
21maintenance, or repair that is performed on an aircraft
22following a transfer of ownership of the aircraft.
23    "Prepurchase evaluation" means an examination of an
24aircraft to provide a potential purchaser with information
25relevant to the potential purchase.
26    "Registered in this State" means an aircraft registered

 

 

HB5207- 8 -LRB101 17554 HLH 66972 b

1with the Department of Transportation, Aeronautics Division,
2or titled or registered with the Federal Aviation
3Administration to an address located in this State.
4    This subsection (h-2) is exempt from the provisions of
5Section 3-90.
6    (i) Beginning July 1, 1999, the use, in this State, of fuel
7acquired outside this State and brought into this State in the
8fuel supply tanks of locomotives engaged in freight hauling and
9passenger service for interstate commerce. This subsection is
10exempt from the provisions of Section 3-90.
11    (j) Beginning on January 1, 2002 and through June 30, 2022
12June 30, 2016, the use of tangible personal property purchased
13from an Illinois retailer by a taxpayer engaged in centralized
14purchasing activities in Illinois who will, upon receipt of the
15property in Illinois, temporarily store the property in
16Illinois (i) for the purpose of subsequently transporting it
17outside this State for use or consumption thereafter solely
18outside this State or (ii) for the purpose of being processed,
19fabricated, or manufactured into, attached to, or incorporated
20into other tangible personal property to be transported outside
21this State and thereafter used or consumed solely outside this
22State. The Director of Revenue shall, pursuant to rules adopted
23in accordance with the Illinois Administrative Procedure Act,
24issue a permit to any taxpayer in good standing with the
25Department who is eligible for the exemption under this
26subsection (j). The permit issued under this subsection (j)

 

 

HB5207- 9 -LRB101 17554 HLH 66972 b

1shall authorize the holder, to the extent and in the manner
2specified in the rules adopted under this Act, to purchase
3tangible personal property from a retailer exempt from the
4taxes imposed by this Act. Taxpayers shall maintain all
5necessary books and records to substantiate the use and
6consumption of all such tangible personal property outside of
7the State of Illinois.
8(Source: P.A. 100-321, eff. 8-24-17.)
 
9    Section 10. The Service Use Tax Act is amended by changing
10Section 3-45 as follows:
 
11    (35 ILCS 110/3-45)  (from Ch. 120, par. 439.33-45)
12    Sec. 3-45. Multistate exemption. To prevent actual or
13likely multistate taxation, the tax imposed by this Act does
14not apply to the use of tangible personal property in this
15State under the following circumstances:
16    (a) The use, in this State, of property acquired outside
17this State by a nonresident individual and brought into this
18State by the individual for his or her own use while
19temporarily within this State or while passing through this
20State.
21    (b) The use, in this State, of property that is acquired
22outside this State and that is moved into this State for use as
23rolling stock moving in interstate commerce.
24    (c) The use, in this State, of property that is acquired

 

 

HB5207- 10 -LRB101 17554 HLH 66972 b

1outside this State and caused to be brought into this State by
2a person who has already paid a tax in another state in respect
3to the sale, purchase, or use of that property, to the extent
4of the amount of the tax properly due and paid in the other
5state.
6    (d) The temporary storage, in this State, of property that
7is acquired outside this State and that after being brought
8into this State and stored here temporarily, is used solely
9outside this State or is physically attached to or incorporated
10into other property that is used solely outside this State, or
11is altered by converting, fabricating, manufacturing,
12printing, processing, or shaping, and, as altered, is used
13solely outside this State.
14    (e) Beginning July 1, 1999, the use, in this State, of fuel
15acquired outside this State and brought into this State in the
16fuel supply tanks of locomotives engaged in freight hauling and
17passenger service for interstate commerce. This subsection is
18exempt from the provisions of Section 3-75.
19    (f) Beginning on January 1, 2002 and through June 30, 2022
20June 30, 2016, the use of tangible personal property purchased
21from an Illinois retailer by a taxpayer engaged in centralized
22purchasing activities in Illinois who will, upon receipt of the
23property in Illinois, temporarily store the property in
24Illinois (i) for the purpose of subsequently transporting it
25outside this State for use or consumption thereafter solely
26outside this State or (ii) for the purpose of being processed,

 

 

HB5207- 11 -LRB101 17554 HLH 66972 b

1fabricated, or manufactured into, attached to, or incorporated
2into other tangible personal property to be transported outside
3this State and thereafter used or consumed solely outside this
4State. The Director of Revenue shall, pursuant to rules adopted
5in accordance with the Illinois Administrative Procedure Act,
6issue a permit to any taxpayer in good standing with the
7Department who is eligible for the exemption under this
8subsection (f). The permit issued under this subsection (f)
9shall authorize the holder, to the extent and in the manner
10specified in the rules adopted under this Act, to purchase
11tangible personal property from a retailer exempt from the
12taxes imposed by this Act. Taxpayers shall maintain all
13necessary books and records to substantiate the use and
14consumption of all such tangible personal property outside of
15the State of Illinois.
16(Source: P.A. 97-73, eff. 6-30-11.)
 
17    Section 15. The Service Occupation Tax Act is amended by
18changing Section 3-5 as follows:
 
19    (35 ILCS 115/3-5)
20    Sec. 3-5. Exemptions. The following tangible personal
21property is exempt from the tax imposed by this Act:
22    (1) Personal property sold by a corporation, society,
23association, foundation, institution, or organization, other
24than a limited liability company, that is organized and

 

 

HB5207- 12 -LRB101 17554 HLH 66972 b

1operated as a not-for-profit service enterprise for the benefit
2of persons 65 years of age or older if the personal property
3was not purchased by the enterprise for the purpose of resale
4by the enterprise.
5    (2) Personal property purchased by a not-for-profit
6Illinois county fair association for use in conducting,
7operating, or promoting the county fair.
8    (3) Personal property purchased by any not-for-profit arts
9or cultural organization that establishes, by proof required by
10the Department by rule, that it has received an exemption under
11Section 501(c)(3) of the Internal Revenue Code and that is
12organized and operated primarily for the presentation or
13support of arts or cultural programming, activities, or
14services. These organizations include, but are not limited to,
15music and dramatic arts organizations such as symphony
16orchestras and theatrical groups, arts and cultural service
17organizations, local arts councils, visual arts organizations,
18and media arts organizations. On and after July 1, 2001 (the
19effective date of Public Act 92-35), however, an entity
20otherwise eligible for this exemption shall not make tax-free
21purchases unless it has an active identification number issued
22by the Department.
23    (4) Legal tender, currency, medallions, or gold or silver
24coinage issued by the State of Illinois, the government of the
25United States of America, or the government of any foreign
26country, and bullion.

 

 

HB5207- 13 -LRB101 17554 HLH 66972 b

1    (5) Until July 1, 2003 and beginning again on September 1,
22004 through August 30, 2014, graphic arts machinery and
3equipment, including repair and replacement parts, both new and
4used, and including that manufactured on special order or
5purchased for lease, certified by the purchaser to be used
6primarily for graphic arts production. Equipment includes
7chemicals or chemicals acting as catalysts but only if the
8chemicals or chemicals acting as catalysts effect a direct and
9immediate change upon a graphic arts product. Beginning on July
101, 2017, graphic arts machinery and equipment is included in
11the manufacturing and assembling machinery and equipment
12exemption under Section 2 of this Act.
13    (6) Personal property sold by a teacher-sponsored student
14organization affiliated with an elementary or secondary school
15located in Illinois.
16    (7) Farm machinery and equipment, both new and used,
17including that manufactured on special order, certified by the
18purchaser to be used primarily for production agriculture or
19State or federal agricultural programs, including individual
20replacement parts for the machinery and equipment, including
21machinery and equipment purchased for lease, and including
22implements of husbandry defined in Section 1-130 of the
23Illinois Vehicle Code, farm machinery and agricultural
24chemical and fertilizer spreaders, and nurse wagons required to
25be registered under Section 3-809 of the Illinois Vehicle Code,
26but excluding other motor vehicles required to be registered

 

 

HB5207- 14 -LRB101 17554 HLH 66972 b

1under the Illinois Vehicle Code. Horticultural polyhouses or
2hoop houses used for propagating, growing, or overwintering
3plants shall be considered farm machinery and equipment under
4this item (7). Agricultural chemical tender tanks and dry boxes
5shall include units sold separately from a motor vehicle
6required to be licensed and units sold mounted on a motor
7vehicle required to be licensed if the selling price of the
8tender is separately stated.
9    Farm machinery and equipment shall include precision
10farming equipment that is installed or purchased to be
11installed on farm machinery and equipment including, but not
12limited to, tractors, harvesters, sprayers, planters, seeders,
13or spreaders. Precision farming equipment includes, but is not
14limited to, soil testing sensors, computers, monitors,
15software, global positioning and mapping systems, and other
16such equipment.
17    Farm machinery and equipment also includes computers,
18sensors, software, and related equipment used primarily in the
19computer-assisted operation of production agriculture
20facilities, equipment, and activities such as, but not limited
21to, the collection, monitoring, and correlation of animal and
22crop data for the purpose of formulating animal diets and
23agricultural chemicals. This item (7) is exempt from the
24provisions of Section 3-55.
25    (8) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air common carrier, certified by the carrier

 

 

HB5207- 15 -LRB101 17554 HLH 66972 b

1to be used for consumption, shipment, or storage in the conduct
2of its business as an air common carrier, for a flight destined
3for or returning from a location or locations outside the
4United States without regard to previous or subsequent domestic
5stopovers.
6    Beginning July 1, 2013, fuel and petroleum products sold to
7or used by an air carrier, certified by the carrier to be used
8for consumption, shipment, or storage in the conduct of its
9business as an air common carrier, for a flight that (i) is
10engaged in foreign trade or is engaged in trade between the
11United States and any of its possessions and (ii) transports at
12least one individual or package for hire from the city of
13origination to the city of final destination on the same
14aircraft, without regard to a change in the flight number of
15that aircraft.
16    (9) Proceeds of mandatory service charges separately
17stated on customers' bills for the purchase and consumption of
18food and beverages, to the extent that the proceeds of the
19service charge are in fact turned over as tips or as a
20substitute for tips to the employees who participate directly
21in preparing, serving, hosting or cleaning up the food or
22beverage function with respect to which the service charge is
23imposed.
24    (10) Until July 1, 2003, oil field exploration, drilling,
25and production equipment, including (i) rigs and parts of rigs,
26rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

 

 

HB5207- 16 -LRB101 17554 HLH 66972 b

1tubular goods, including casing and drill strings, (iii) pumps
2and pump-jack units, (iv) storage tanks and flow lines, (v) any
3individual replacement part for oil field exploration,
4drilling, and production equipment, and (vi) machinery and
5equipment purchased for lease; but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code.
7    (11) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including that
9manufactured on special order, certified by the purchaser to be
10used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (12) Until July 1, 2023, coal and aggregate exploration,
13mining, off-highway hauling, processing, maintenance, and
14reclamation equipment, including replacement parts and
15equipment, and including equipment purchased for lease, but
16excluding motor vehicles required to be registered under the
17Illinois Vehicle Code. The changes made to this Section by
18Public Act 97-767 apply on and after July 1, 2003, but no claim
19for credit or refund is allowed on or after August 16, 2013
20(the effective date of Public Act 98-456) for such taxes paid
21during the period beginning July 1, 2003 and ending on August
2216, 2013 (the effective date of Public Act 98-456).
23    (13) Beginning January 1, 1992 and through June 30, 2016,
24food for human consumption that is to be consumed off the
25premises where it is sold (other than alcoholic beverages, soft
26drinks and food that has been prepared for immediate

 

 

HB5207- 17 -LRB101 17554 HLH 66972 b

1consumption) and prescription and non-prescription medicines,
2drugs, medical appliances, and insulin, urine testing
3materials, syringes, and needles used by diabetics, for human
4use, when purchased for use by a person receiving medical
5assistance under Article V of the Illinois Public Aid Code who
6resides in a licensed long-term care facility, as defined in
7the Nursing Home Care Act, or in a licensed facility as defined
8in the ID/DD Community Care Act, the MC/DD Act, or the
9Specialized Mental Health Rehabilitation Act of 2013.
10    (14) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (15) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (15) is exempt from the provisions
18of Section 3-55, and the exemption provided for under this item
19(15) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 (the effective date of Public Act 95-88) for such taxes
22paid during the period beginning May 30, 2000 and ending on
23January 1, 2008 (the effective date of Public Act 95-88).
24    (16) Computers and communications equipment utilized for
25any hospital purpose and equipment used in the diagnosis,
26analysis, or treatment of hospital patients sold to a lessor

 

 

HB5207- 18 -LRB101 17554 HLH 66972 b

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

 

 

HB5207- 19 -LRB101 17554 HLH 66972 b

1bridges, sidewalks, waste disposal systems, water and sewer
2line extensions, water distribution and purification
3facilities, storm water drainage and retention facilities, and
4sewage treatment facilities, resulting from a State or
5federally declared disaster in Illinois or bordering Illinois
6when such repairs are initiated on facilities located in the
7declared disaster area within 6 months after the disaster.
8    (20) Beginning July 1, 1999, game or game birds sold at a
9"game breeding and hunting preserve area" as that term is used
10in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 3-55.
12    (21) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the Department
16to be organized and operated exclusively for educational
17purposes. For purposes of this exemption, "a corporation,
18limited liability company, society, association, foundation,
19or institution organized and operated exclusively for
20educational purposes" means all tax-supported public schools,
21private schools that offer systematic instruction in useful
22branches of learning by methods common to public schools and
23that compare favorably in their scope and intensity with the
24course of study presented in tax-supported schools, and
25vocational or technical schools or institutes organized and
26operated exclusively to provide a course of study of not less

 

 

HB5207- 20 -LRB101 17554 HLH 66972 b

1than 6 weeks duration and designed to prepare individuals to
2follow a trade or to pursue a manual, technical, mechanical,
3industrial, business, or commercial occupation.
4    (22) Beginning January 1, 2000, personal property,
5including food, purchased through fundraising events for the
6benefit of a public or private elementary or secondary school,
7a group of those schools, or one or more school districts if
8the events are sponsored by an entity recognized by the school
9district that consists primarily of volunteers and includes
10parents and teachers of the school children. This paragraph
11does not apply to fundraising events (i) for the benefit of
12private home instruction or (ii) for which the fundraising
13entity purchases the personal property sold at the events from
14another individual or entity that sold the property for the
15purpose of resale by the fundraising entity and that profits
16from the sale to the fundraising entity. This paragraph is
17exempt from the provisions of Section 3-55.
18    (23) Beginning January 1, 2000 and through December 31,
192001, new or used automatic vending machines that prepare and
20serve hot food and beverages, including coffee, soup, and other
21items, and replacement parts for these machines. Beginning
22January 1, 2002 and through June 30, 2003, machines and parts
23for machines used in commercial, coin-operated amusement and
24vending business if a use or occupation tax is paid on the
25gross receipts derived from the use of the commercial,
26coin-operated amusement and vending machines. This paragraph

 

 

HB5207- 21 -LRB101 17554 HLH 66972 b

1is exempt from the provisions of Section 3-55.
2    (24) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), computers and communications equipment
4utilized for any hospital purpose and equipment used in the
5diagnosis, analysis, or treatment of hospital patients sold to
6a lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time of the purchase, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of the
10Retailers' Occupation Tax Act. This paragraph is exempt from
11the provisions of Section 3-55.
12    (25) Beginning on August 2, 2001 (the effective date of
13Public Act 92-227), personal property sold to a lessor who
14leases the property, under a lease of one year or longer
15executed or in effect at the time of the purchase, to a
16governmental body that has been issued an active tax exemption
17identification number by the Department under Section 1g of the
18Retailers' Occupation Tax Act. This paragraph is exempt from
19the provisions of Section 3-55.
20    (26) Beginning on January 1, 2002 and through June 30, 2022
21June 30, 2016, tangible personal property purchased from an
22Illinois retailer by a taxpayer engaged in centralized
23purchasing activities in Illinois who will, upon receipt of the
24property in Illinois, temporarily store the property in
25Illinois (i) for the purpose of subsequently transporting it
26outside this State for use or consumption thereafter solely

 

 

HB5207- 22 -LRB101 17554 HLH 66972 b

1outside this State or (ii) for the purpose of being processed,
2fabricated, or manufactured into, attached to, or incorporated
3into other tangible personal property to be transported outside
4this State and thereafter used or consumed solely outside this
5State. The Director of Revenue shall, pursuant to rules adopted
6in accordance with the Illinois Administrative Procedure Act,
7issue a permit to any taxpayer in good standing with the
8Department who is eligible for the exemption under this
9paragraph (26). The permit issued under this paragraph (26)
10shall authorize the holder, to the extent and in the manner
11specified in the rules adopted under this Act, to purchase
12tangible personal property from a retailer exempt from the
13taxes imposed by this Act. Taxpayers shall maintain all
14necessary books and records to substantiate the use and
15consumption of all such tangible personal property outside of
16the State of Illinois.
17    (27) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued under
22Title IV of the Environmental Protection Act. This paragraph is
23exempt from the provisions of Section 3-55.
24    (28) Tangible personal property sold to a
25public-facilities corporation, as described in Section
2611-65-10 of the Illinois Municipal Code, for purposes of

 

 

HB5207- 23 -LRB101 17554 HLH 66972 b

1constructing or furnishing a municipal convention hall, but
2only if the legal title to the municipal convention hall is
3transferred to the municipality without any further
4consideration by or on behalf of the municipality at the time
5of the completion of the municipal convention hall or upon the
6retirement or redemption of any bonds or other debt instruments
7issued by the public-facilities corporation in connection with
8the development of the municipal convention hall. This
9exemption includes existing public-facilities corporations as
10provided in Section 11-65-25 of the Illinois Municipal Code.
11This paragraph is exempt from the provisions of Section 3-55.
12    (29) Beginning January 1, 2010 and continuing through
13December 31, 2024, materials, parts, equipment, components,
14and furnishings incorporated into or upon an aircraft as part
15of the modification, refurbishment, completion, replacement,
16repair, or maintenance of the aircraft. This exemption includes
17consumable supplies used in the modification, refurbishment,
18completion, replacement, repair, and maintenance of aircraft,
19but excludes any materials, parts, equipment, components, and
20consumable supplies used in the modification, replacement,
21repair, and maintenance of aircraft engines or power plants,
22whether such engines or power plants are installed or
23uninstalled upon any such aircraft. "Consumable supplies"
24include, but are not limited to, adhesive, tape, sandpaper,
25general purpose lubricants, cleaning solution, latex gloves,
26and protective films. This exemption applies only to the

 

 

HB5207- 24 -LRB101 17554 HLH 66972 b

1transfer of qualifying tangible personal property incident to
2the modification, refurbishment, completion, replacement,
3repair, or maintenance of an aircraft by persons who (i) hold
4an Air Agency Certificate and are empowered to operate an
5approved repair station by the Federal Aviation
6Administration, (ii) have a Class IV Rating, and (iii) conduct
7operations in accordance with Part 145 of the Federal Aviation
8Regulations. The exemption does not include aircraft operated
9by a commercial 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 (29) by Public Act 98-534 are declarative of existing
13law. It is the intent of the General Assembly that the
14exemption under this paragraph (29) applies continuously from
15January 1, 2010 through December 31, 2024; however, no claim
16for credit or refund is allowed for taxes paid as a result of
17the disallowance of this exemption on or after January 1, 2015
18and prior to the effective date of this amendatory Act of the
19101st General Assembly.
20    (30) Beginning January 1, 2017, menstrual pads, tampons,
21and menstrual cups.
22    (31) Tangible personal property transferred to a purchaser
23who is exempt from tax by operation of federal law. This
24paragraph is exempt from the provisions of Section 3-55.
25    (32) Qualified tangible personal property used in the
26construction or operation of a data center that has been

 

 

HB5207- 25 -LRB101 17554 HLH 66972 b

1granted a certificate of exemption by the Department of
2Commerce and Economic Opportunity, whether that tangible
3personal property is purchased by the owner, operator, or
4tenant of the data center or by a contractor or subcontractor
5of the owner, operator, or tenant. Data centers that would have
6qualified for a certificate of exemption prior to January 1,
72020 had this amendatory Act of the 101st General Assembly been
8in effect, may apply for and obtain an exemption for subsequent
9purchases of computer equipment or enabling software purchased
10or leased to upgrade, supplement, or replace computer equipment
11or enabling software purchased or leased in the original
12investment that would have qualified.
13    The Department of Commerce and Economic Opportunity shall
14grant a certificate of exemption under this item (32) to
15qualified data centers as defined by Section 605-1025 of the
16Department of Commerce and Economic Opportunity Law of the
17Civil Administrative Code of Illinois.
18    For the purposes of this item (32):
19        "Data center" means a building or a series of buildings
20    rehabilitated or constructed to house working servers in
21    one physical location or multiple sites within the State of
22    Illinois.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency

 

 

HB5207- 26 -LRB101 17554 HLH 66972 b

1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. The term "qualified tangible personal
18    property" also includes building materials physically
19    incorporated in to the qualifying data center. To document
20    the exemption allowed under this Section, the retailer must
21    obtain from the purchaser a copy of the certificate of
22    eligibility issued by the Department of Commerce and
23    Economic Opportunity.
24    This item (32) is exempt from the provisions of Section
253-55.
26(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;

 

 

HB5207- 27 -LRB101 17554 HLH 66972 b

1100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
27-12-19; 101-629, eff. 2-5-20.)
 
3    Section 20. The Retailers' Occupation Tax Act is amended by
4changing Section 2-5 as follows:
 
5    (35 ILCS 120/2-5)
6    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
7sale of the following tangible personal property are exempt
8from the tax imposed by this Act:
9        (1) Farm chemicals.
10        (2) Farm machinery and equipment, both new and used,
11    including that manufactured on special order, certified by
12    the purchaser to be used primarily for production
13    agriculture or State or federal agricultural programs,
14    including individual replacement parts for the machinery
15    and equipment, including machinery and equipment purchased
16    for lease, and including implements of husbandry defined in
17    Section 1-130 of the Illinois Vehicle Code, farm machinery
18    and agricultural chemical and fertilizer spreaders, and
19    nurse wagons required to be registered under Section 3-809
20    of the Illinois Vehicle Code, but excluding other motor
21    vehicles required to be registered under the Illinois
22    Vehicle Code. Horticultural polyhouses or hoop houses used
23    for propagating, growing, or overwintering plants shall be
24    considered farm machinery and equipment under this item

 

 

HB5207- 28 -LRB101 17554 HLH 66972 b

1    (2). Agricultural chemical tender tanks and dry boxes shall
2    include units sold separately from a motor vehicle required
3    to be licensed and units sold mounted on a motor vehicle
4    required to be licensed, if the selling price of the tender
5    is separately stated.
6        Farm machinery and equipment shall include precision
7    farming equipment that is installed or purchased to be
8    installed on farm machinery and equipment including, but
9    not limited to, tractors, harvesters, sprayers, planters,
10    seeders, or spreaders. Precision farming equipment
11    includes, but is not limited to, soil testing sensors,
12    computers, monitors, software, global positioning and
13    mapping systems, and other such equipment.
14        Farm machinery and equipment also includes computers,
15    sensors, software, and related equipment used primarily in
16    the computer-assisted operation of production agriculture
17    facilities, equipment, and activities such as, but not
18    limited to, the collection, monitoring, and correlation of
19    animal and crop data for the purpose of formulating animal
20    diets and agricultural chemicals. This item (2) is exempt
21    from the provisions of Section 2-70.
22        (3) Until July 1, 2003, distillation machinery and
23    equipment, sold as a unit or kit, assembled or installed by
24    the retailer, certified by the user to be used only for the
25    production of ethyl alcohol that will be used for
26    consumption as motor fuel or as a component of motor fuel

 

 

HB5207- 29 -LRB101 17554 HLH 66972 b

1    for the personal use of the user, and not subject to sale
2    or resale.
3        (4) Until July 1, 2003 and beginning again September 1,
4    2004 through August 30, 2014, graphic arts machinery and
5    equipment, including repair and replacement parts, both
6    new and used, and including that manufactured on special
7    order or purchased for lease, certified by the purchaser to
8    be used primarily for graphic arts production. Equipment
9    includes chemicals or chemicals acting as catalysts but
10    only if the chemicals or chemicals acting as catalysts
11    effect a direct and immediate change upon a graphic arts
12    product. Beginning on July 1, 2017, graphic arts machinery
13    and equipment is included in the manufacturing and
14    assembling machinery and equipment exemption under
15    paragraph (14).
16        (5) A motor vehicle that is used for automobile
17    renting, as defined in the Automobile Renting Occupation
18    and Use Tax Act. This paragraph is exempt from the
19    provisions of Section 2-70.
20        (6) Personal property sold by a teacher-sponsored
21    student organization affiliated with an elementary or
22    secondary school located in Illinois.
23        (7) Until July 1, 2003, proceeds of that portion of the
24    selling price of a passenger car the sale of which is
25    subject to the Replacement Vehicle Tax.
26        (8) Personal property sold to an Illinois county fair

 

 

HB5207- 30 -LRB101 17554 HLH 66972 b

1    association for use in conducting, operating, or promoting
2    the county fair.
3        (9) Personal property sold to a not-for-profit arts or
4    cultural organization that establishes, by proof required
5    by the Department by rule, that it has received an
6    exemption under Section 501(c)(3) of the Internal Revenue
7    Code and that is organized and operated primarily for the
8    presentation or support of arts or cultural programming,
9    activities, or services. These organizations include, but
10    are not limited to, music and dramatic arts organizations
11    such as symphony orchestras and theatrical groups, arts and
12    cultural service organizations, local arts councils,
13    visual arts organizations, and media arts organizations.
14    On and after July 1, 2001 (the effective date of Public Act
15    92-35), however, an entity otherwise eligible for this
16    exemption shall not make tax-free purchases unless it has
17    an active identification number issued by the Department.
18        (10) Personal property sold by a corporation, society,
19    association, foundation, institution, or organization,
20    other than a limited liability company, that is organized
21    and operated as a not-for-profit service enterprise for the
22    benefit of persons 65 years of age or older if the personal
23    property was not purchased by the enterprise for the
24    purpose of resale by the enterprise.
25        (11) Personal property sold to a governmental body, to
26    a corporation, society, association, foundation, or

 

 

HB5207- 31 -LRB101 17554 HLH 66972 b

1    institution organized and operated exclusively for
2    charitable, religious, or educational purposes, or to a
3    not-for-profit corporation, society, association,
4    foundation, institution, or organization that has no
5    compensated officers or employees and that is organized and
6    operated primarily for the recreation of persons 55 years
7    of age or older. A limited liability company may qualify
8    for the exemption under this paragraph only if the limited
9    liability company is organized and operated exclusively
10    for educational purposes. On and after July 1, 1987,
11    however, no entity otherwise eligible for this exemption
12    shall make tax-free purchases unless it has an active
13    identification number issued by the Department.
14        (12) (Blank).
15        (12-5) On and after July 1, 2003 and through June 30,
16    2004, motor vehicles of the second division with a gross
17    vehicle weight in excess of 8,000 pounds that are subject
18    to the commercial distribution fee imposed under Section
19    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
20    2004 and through June 30, 2005, the use in this State of
21    motor vehicles of the second division: (i) with a gross
22    vehicle weight rating in excess of 8,000 pounds; (ii) that
23    are subject to the commercial distribution fee imposed
24    under Section 3-815.1 of the Illinois Vehicle Code; and
25    (iii) that are primarily used for commercial purposes.
26    Through June 30, 2005, this exemption applies to repair and

 

 

HB5207- 32 -LRB101 17554 HLH 66972 b

1    replacement parts added after the initial purchase of such
2    a motor vehicle if that motor vehicle is used in a manner
3    that would qualify for the rolling stock exemption
4    otherwise provided for in this Act. For purposes of this
5    paragraph, "used for commercial purposes" means the
6    transportation of persons or property in furtherance of any
7    commercial or industrial enterprise whether for-hire or
8    not.
9        (13) Proceeds from sales to owners, lessors, or
10    shippers of tangible personal property that is utilized by
11    interstate carriers for hire for use as rolling stock
12    moving in interstate commerce and equipment operated by a
13    telecommunications provider, licensed as a common carrier
14    by the Federal Communications Commission, which is
15    permanently installed in or affixed to aircraft moving in
16    interstate commerce.
17        (14) Machinery and equipment that will be used by the
18    purchaser, or a lessee of the purchaser, primarily in the
19    process of manufacturing or assembling tangible personal
20    property for wholesale or retail sale or lease, whether the
21    sale or lease is made directly by the manufacturer or by
22    some other person, whether the materials used in the
23    process are owned by the manufacturer or some other person,
24    or whether the sale or lease is made apart from or as an
25    incident to the seller's engaging in the service occupation
26    of producing machines, tools, dies, jigs, patterns,

 

 

HB5207- 33 -LRB101 17554 HLH 66972 b

1    gauges, or other similar items of no commercial value on
2    special order for a particular purchaser. The exemption
3    provided by this paragraph (14) does not include machinery
4    and equipment used in (i) the generation of electricity for
5    wholesale or retail sale; (ii) the generation or treatment
6    of natural or artificial gas for wholesale or retail sale
7    that is delivered to customers through pipes, pipelines, or
8    mains; or (iii) the treatment of water for wholesale or
9    retail sale that is delivered to customers through pipes,
10    pipelines, or mains. The provisions of Public Act 98-583
11    are declaratory of existing law as to the meaning and scope
12    of this exemption. Beginning on July 1, 2017, the exemption
13    provided by this paragraph (14) includes, but is not
14    limited to, graphic arts machinery and equipment, as
15    defined in paragraph (4) of this Section.
16        (15) Proceeds of mandatory service charges separately
17    stated on customers' bills for purchase and consumption of
18    food and beverages, to the extent that the proceeds of the
19    service charge are in fact turned over as tips or as a
20    substitute for tips to the employees who participate
21    directly in preparing, serving, hosting or cleaning up the
22    food or beverage function with respect to which the service
23    charge is imposed.
24        (16) Tangible personal property sold to a purchaser if
25    the purchaser is exempt from use tax by operation of
26    federal law. This paragraph is exempt from the provisions

 

 

HB5207- 34 -LRB101 17554 HLH 66972 b

1    of Section 2-70.
2        (17) Tangible personal property sold to a common
3    carrier by rail or motor that receives the physical
4    possession of the property in Illinois and that transports
5    the property, or shares with another common carrier in the
6    transportation of the property, out of Illinois on a
7    standard uniform bill of lading showing the seller of the
8    property as the shipper or consignor of the property to a
9    destination outside Illinois, for use outside Illinois.
10        (18) Legal tender, currency, medallions, or gold or
11    silver coinage issued by the State of Illinois, the
12    government of the United States of America, or the
13    government of any foreign country, and bullion.
14        (19) Until July 1, 2003, oil field exploration,
15    drilling, and production equipment, including (i) rigs and
16    parts of rigs, rotary rigs, cable tool rigs, and workover
17    rigs, (ii) pipe and tubular goods, including casing and
18    drill strings, (iii) pumps and pump-jack units, (iv)
19    storage tanks and flow lines, (v) any individual
20    replacement part for oil field exploration, drilling, and
21    production equipment, and (vi) machinery and equipment
22    purchased for lease; but excluding motor vehicles required
23    to be registered under the Illinois Vehicle Code.
24        (20) Photoprocessing machinery and equipment,
25    including repair and replacement parts, both new and used,
26    including that manufactured on special order, certified by

 

 

HB5207- 35 -LRB101 17554 HLH 66972 b

1    the purchaser to be used primarily for photoprocessing, and
2    including photoprocessing machinery and equipment
3    purchased for lease.
4        (21) Until July 1, 2023, coal and aggregate
5    exploration, mining, off-highway hauling, processing,
6    maintenance, and reclamation equipment, including
7    replacement parts and equipment, and including equipment
8    purchased for lease, but excluding motor vehicles required
9    to be registered under the Illinois Vehicle Code. The
10    changes made to this Section by Public Act 97-767 apply on
11    and after July 1, 2003, but no claim for credit or refund
12    is allowed on or after August 16, 2013 (the effective date
13    of Public Act 98-456) for such taxes paid during the period
14    beginning July 1, 2003 and ending on August 16, 2013 (the
15    effective date of Public Act 98-456).
16        (22) Until June 30, 2013, fuel and petroleum products
17    sold to or used by an air carrier, certified by the carrier
18    to be used for consumption, shipment, or storage in the
19    conduct of its business as an air common carrier, for a
20    flight destined for or returning from a location or
21    locations outside the United States without regard to
22    previous or subsequent domestic stopovers.
23        Beginning July 1, 2013, fuel and petroleum products
24    sold to or used by an air carrier, certified by the carrier
25    to be used for consumption, shipment, or storage in the
26    conduct of its business as an air common carrier, for a

 

 

HB5207- 36 -LRB101 17554 HLH 66972 b

1    flight that (i) is engaged in foreign trade or is engaged
2    in trade between the United States and any of its
3    possessions and (ii) transports at least one individual or
4    package for hire from the city of origination to the city
5    of final destination on the same aircraft, without regard
6    to a change in the flight number of that aircraft.
7        (23) A transaction in which the purchase order is
8    received by a florist who is located outside Illinois, but
9    who has a florist located in Illinois deliver the property
10    to the purchaser or the purchaser's donee in Illinois.
11        (24) Fuel consumed or used in the operation of ships,
12    barges, or vessels that are used primarily in or for the
13    transportation of property or the conveyance of persons for
14    hire on rivers bordering on this State if the fuel is
15    delivered by the seller to the purchaser's barge, ship, or
16    vessel while it is afloat upon that bordering river.
17        (25) Except as provided in item (25-5) of this Section,
18    a motor vehicle sold in this State to a nonresident even
19    though the motor vehicle is delivered to the nonresident in
20    this State, if the motor vehicle is not to be titled in
21    this State, and if a drive-away permit is issued to the
22    motor vehicle as provided in Section 3-603 of the Illinois
23    Vehicle Code or if the nonresident purchaser has vehicle
24    registration plates to transfer to the motor vehicle upon
25    returning to his or her home state. The issuance of the
26    drive-away permit or having the out-of-state registration

 

 

HB5207- 37 -LRB101 17554 HLH 66972 b

1    plates to be transferred is prima facie evidence that the
2    motor vehicle will not be titled in this State.
3        (25-5) The exemption under item (25) does not apply if
4    the state in which the motor vehicle will be titled does
5    not allow a reciprocal exemption for a motor vehicle sold
6    and delivered in that state to an Illinois resident but
7    titled in Illinois. The tax collected under this Act on the
8    sale of a motor vehicle in this State to a resident of
9    another state that does not allow a reciprocal exemption
10    shall be imposed at a rate equal to the state's rate of tax
11    on taxable property in the state in which the purchaser is
12    a resident, except that the tax shall not exceed the tax
13    that would otherwise be imposed under this Act. At the time
14    of the sale, the purchaser shall execute a statement,
15    signed under penalty of perjury, of his or her intent to
16    title the vehicle in the state in which the purchaser is a
17    resident within 30 days after the sale and of the fact of
18    the payment to the State of Illinois of tax in an amount
19    equivalent to the state's rate of tax on taxable property
20    in his or her state of residence and shall submit the
21    statement to the appropriate tax collection agency in his
22    or her state of residence. In addition, the retailer must
23    retain a signed copy of the statement in his or her
24    records. Nothing in this item shall be construed to require
25    the removal of the vehicle from this state following the
26    filing of an intent to title the vehicle in the purchaser's

 

 

HB5207- 38 -LRB101 17554 HLH 66972 b

1    state of residence if the purchaser titles the vehicle in
2    his or her state of residence within 30 days after the date
3    of sale. The tax collected under this Act in accordance
4    with this item (25-5) shall be proportionately distributed
5    as if the tax were collected at the 6.25% general rate
6    imposed under this Act.
7        (25-7) Beginning on July 1, 2007, no tax is imposed
8    under this Act on the sale of an aircraft, as defined in
9    Section 3 of the Illinois Aeronautics Act, if all of the
10    following conditions are met:
11            (1) the aircraft leaves this State within 15 days
12        after the later of either the issuance of the final
13        billing for the sale of the aircraft, or the authorized
14        approval for return to service, completion of the
15        maintenance record entry, and completion of the test
16        flight and ground test for inspection, as required by
17        14 C.F.R. 91.407;
18            (2) the aircraft is not based or registered in this
19        State after the sale of the aircraft; and
20            (3) the seller retains in his or her books and
21        records and provides to the Department a signed and
22        dated certification from the purchaser, on a form
23        prescribed by the Department, certifying that the
24        requirements of this item (25-7) are met. The
25        certificate must also include the name and address of
26        the purchaser, the address of the location where the

 

 

HB5207- 39 -LRB101 17554 HLH 66972 b

1        aircraft is to be titled or registered, the address of
2        the primary physical location of the aircraft, and
3        other information that the Department may reasonably
4        require.
5        For purposes of this item (25-7):
6        "Based in this State" means hangared, stored, or
7    otherwise used, excluding post-sale customizations as
8    defined in this Section, for 10 or more days in each
9    12-month period immediately following the date of the sale
10    of the aircraft.
11        "Registered in this State" means an aircraft
12    registered with the Department of Transportation,
13    Aeronautics Division, or titled or registered with the
14    Federal Aviation Administration to an address located in
15    this State.
16        This paragraph (25-7) is exempt from the provisions of
17    Section 2-70.
18        (26) Semen used for artificial insemination of
19    livestock for direct agricultural production.
20        (27) Horses, or interests in horses, registered with
21    and meeting the requirements of any of the Arabian Horse
22    Club Registry of America, Appaloosa Horse Club, American
23    Quarter Horse Association, United States Trotting
24    Association, or Jockey Club, as appropriate, used for
25    purposes of breeding or racing for prizes. This item (27)
26    is exempt from the provisions of Section 2-70, and the

 

 

HB5207- 40 -LRB101 17554 HLH 66972 b

1    exemption provided for under this item (27) applies for all
2    periods beginning May 30, 1995, but no claim for credit or
3    refund is allowed on or after January 1, 2008 (the
4    effective date of Public Act 95-88) for such taxes paid
5    during the period beginning May 30, 2000 and ending on
6    January 1, 2008 (the effective date of Public Act 95-88).
7        (28) Computers and communications equipment utilized
8    for any hospital purpose and equipment used in the
9    diagnosis, analysis, or treatment of hospital patients
10    sold to a lessor who leases the equipment, under a lease of
11    one year or longer executed or in effect at the time of the
12    purchase, to a hospital that has been issued an active tax
13    exemption identification number by the Department under
14    Section 1g of this Act.
15        (29) Personal property sold to a lessor who leases the
16    property, under a lease of one year or longer executed or
17    in effect at the time of the purchase, to a governmental
18    body that has been issued an active tax exemption
19    identification number by the Department under Section 1g of
20    this Act.
21        (30) Beginning with taxable years ending on or after
22    December 31, 1995 and ending with taxable years ending on
23    or before December 31, 2004, personal property that is
24    donated for disaster relief to be used in a State or
25    federally declared disaster area in Illinois or bordering
26    Illinois by a manufacturer or retailer that is registered

 

 

HB5207- 41 -LRB101 17554 HLH 66972 b

1    in this State to a corporation, society, association,
2    foundation, or institution that has been issued a sales tax
3    exemption identification number by the Department that
4    assists victims of the disaster who reside within the
5    declared disaster area.
6        (31) Beginning with taxable years ending on or after
7    December 31, 1995 and ending with taxable years ending on
8    or before December 31, 2004, personal property that is used
9    in the performance of infrastructure repairs in this State,
10    including but not limited to municipal roads and streets,
11    access roads, bridges, sidewalks, waste disposal systems,
12    water and sewer line extensions, water distribution and
13    purification facilities, storm water drainage and
14    retention facilities, and sewage treatment facilities,
15    resulting from a State or federally declared disaster in
16    Illinois or bordering Illinois when such repairs are
17    initiated on facilities located in the declared disaster
18    area within 6 months after the disaster.
19        (32) Beginning July 1, 1999, game or game birds sold at
20    a "game breeding and hunting preserve area" as that term is
21    used in the Wildlife Code. This paragraph is exempt from
22    the provisions of Section 2-70.
23        (33) A motor vehicle, as that term is defined in
24    Section 1-146 of the Illinois Vehicle Code, that is donated
25    to a corporation, limited liability company, society,
26    association, foundation, or institution that is determined

 

 

HB5207- 42 -LRB101 17554 HLH 66972 b

1    by the Department to be organized and operated exclusively
2    for educational purposes. For purposes of this exemption,
3    "a corporation, limited liability company, society,
4    association, foundation, or institution organized and
5    operated exclusively for educational purposes" means all
6    tax-supported public schools, private schools that offer
7    systematic instruction in useful branches of learning by
8    methods common to public schools and that compare favorably
9    in their scope and intensity with the course of study
10    presented in tax-supported schools, and vocational or
11    technical schools or institutes organized and operated
12    exclusively to provide a course of study of not less than 6
13    weeks duration and designed to prepare individuals to
14    follow a trade or to pursue a manual, technical,
15    mechanical, industrial, business, or commercial
16    occupation.
17        (34) Beginning January 1, 2000, personal property,
18    including food, purchased through fundraising events for
19    the benefit of a public or private elementary or secondary
20    school, a group of those schools, or one or more school
21    districts if the events are sponsored by an entity
22    recognized by the school district that consists primarily
23    of volunteers and includes parents and teachers of the
24    school children. This paragraph does not apply to
25    fundraising events (i) for the benefit of private home
26    instruction or (ii) for which the fundraising entity

 

 

HB5207- 43 -LRB101 17554 HLH 66972 b

1    purchases the personal property sold at the events from
2    another individual or entity that sold the property for the
3    purpose of resale by the fundraising entity and that
4    profits from the sale to the fundraising entity. This
5    paragraph is exempt from the provisions of Section 2-70.
6        (35) Beginning January 1, 2000 and through December 31,
7    2001, new or used automatic vending machines that prepare
8    and serve hot food and beverages, including coffee, soup,
9    and other items, and replacement parts for these machines.
10    Beginning January 1, 2002 and through June 30, 2003,
11    machines and parts for machines used in commercial,
12    coin-operated amusement and vending business if a use or
13    occupation tax is paid on the gross receipts derived from
14    the use of the commercial, coin-operated amusement and
15    vending machines. This paragraph is exempt from the
16    provisions of Section 2-70.
17        (35-5) Beginning August 23, 2001 and through June 30,
18    2016, food for human consumption that is to be consumed off
19    the premises where it is sold (other than alcoholic
20    beverages, soft drinks, and food that has been prepared for
21    immediate consumption) and prescription and
22    nonprescription medicines, drugs, medical appliances, and
23    insulin, urine testing materials, syringes, and needles
24    used by diabetics, for human use, when purchased for use by
25    a person receiving medical assistance under Article V of
26    the Illinois Public Aid Code who resides in a licensed

 

 

HB5207- 44 -LRB101 17554 HLH 66972 b

1    long-term care facility, as defined in the Nursing Home
2    Care Act, or a licensed facility as defined in the ID/DD
3    Community Care Act, the MC/DD Act, or the Specialized
4    Mental Health Rehabilitation Act of 2013.
5        (36) Beginning August 2, 2001, computers and
6    communications equipment utilized for any hospital purpose
7    and equipment used in the diagnosis, analysis, or treatment
8    of hospital patients sold to a lessor who leases the
9    equipment, under a lease of one year or longer executed or
10    in effect at the time of the purchase, to a hospital that
11    has been issued an active tax exemption identification
12    number by the Department under Section 1g of this Act. This
13    paragraph is exempt from the provisions of Section 2-70.
14        (37) Beginning August 2, 2001, personal property sold
15    to a lessor who leases the property, under a lease of one
16    year or longer executed or in effect at the time of the
17    purchase, to a governmental body that has been issued an
18    active tax exemption identification number by the
19    Department under Section 1g of this Act. This paragraph is
20    exempt from the provisions of Section 2-70.
21        (38) Beginning on January 1, 2002 and through June 30,
22    2022 June 30, 2016, tangible personal property purchased
23    from an Illinois retailer by a taxpayer engaged in
24    centralized purchasing activities in Illinois who will,
25    upon receipt of the property in Illinois, temporarily store
26    the property in Illinois (i) for the purpose of

 

 

HB5207- 45 -LRB101 17554 HLH 66972 b

1    subsequently transporting it outside this State for use or
2    consumption thereafter solely outside this State or (ii)
3    for the purpose of being processed, fabricated, or
4    manufactured into, attached to, or incorporated into other
5    tangible personal property to be transported outside this
6    State and thereafter used or consumed solely outside this
7    State. The Director of Revenue shall, pursuant to rules
8    adopted in accordance with the Illinois Administrative
9    Procedure Act, issue a permit to any taxpayer in good
10    standing with the Department who is eligible for the
11    exemption under this paragraph (38). The permit issued
12    under this paragraph (38) shall authorize the holder, to
13    the extent and in the manner specified in the rules adopted
14    under this Act, to purchase tangible personal property from
15    a retailer exempt from the taxes imposed by this Act.
16    Taxpayers shall maintain all necessary books and records to
17    substantiate the use and consumption of all such tangible
18    personal property outside of the State of Illinois.
19        (39) Beginning January 1, 2008, tangible personal
20    property used in the construction or maintenance of a
21    community water supply, as defined under Section 3.145 of
22    the Environmental Protection Act, that is operated by a
23    not-for-profit corporation that holds a valid water supply
24    permit issued under Title IV of the Environmental
25    Protection Act. This paragraph is exempt from the
26    provisions of Section 2-70.

 

 

HB5207- 46 -LRB101 17554 HLH 66972 b

1        (40) Beginning January 1, 2010 and continuing through
2    December 31, 2024, materials, parts, equipment,
3    components, and furnishings incorporated into or upon an
4    aircraft as part of the modification, refurbishment,
5    completion, replacement, repair, or maintenance of the
6    aircraft. This exemption includes consumable supplies used
7    in the modification, refurbishment, completion,
8    replacement, repair, and maintenance of aircraft, but
9    excludes any materials, parts, equipment, components, and
10    consumable supplies used in the modification, replacement,
11    repair, and maintenance of aircraft engines or power
12    plants, whether such engines or power plants are installed
13    or uninstalled upon any such aircraft. "Consumable
14    supplies" include, but are not limited to, adhesive, tape,
15    sandpaper, general purpose lubricants, cleaning solution,
16    latex gloves, and protective films. This exemption applies
17    only to the sale of qualifying tangible personal property
18    to persons who modify, refurbish, complete, replace, or
19    maintain an aircraft and who (i) hold an Air Agency
20    Certificate and are empowered to operate an approved repair
21    station by the Federal Aviation Administration, (ii) have a
22    Class IV Rating, and (iii) conduct operations in accordance
23    with Part 145 of the Federal Aviation Regulations. The
24    exemption does not include aircraft operated by a
25    commercial air carrier providing scheduled passenger air
26    service pursuant to authority issued under Part 121 or Part

 

 

HB5207- 47 -LRB101 17554 HLH 66972 b

1    129 of the Federal Aviation Regulations. The changes made
2    to this paragraph (40) by Public Act 98-534 are declarative
3    of existing law. It is the intent of the General Assembly
4    that the exemption under this paragraph (40) applies
5    continuously from January 1, 2010 through December 31,
6    2024; however, no claim for credit or refund is allowed for
7    taxes paid as a result of the disallowance of this
8    exemption on or after January 1, 2015 and prior to the
9    effective date of this amendatory Act of the 101st General
10    Assembly.
11        (41) Tangible personal property sold to a
12    public-facilities corporation, as described in Section
13    11-65-10 of the Illinois Municipal Code, for purposes of
14    constructing or furnishing a municipal convention hall,
15    but only if the legal title to the municipal convention
16    hall is transferred to the municipality without any further
17    consideration by or on behalf of the municipality at the
18    time of the completion of the municipal convention hall or
19    upon the retirement or redemption of any bonds or other
20    debt instruments issued by the public-facilities
21    corporation in connection with the development of the
22    municipal convention hall. This exemption includes
23    existing public-facilities corporations as provided in
24    Section 11-65-25 of the Illinois Municipal Code. This
25    paragraph is exempt from the provisions of Section 2-70.
26        (42) Beginning January 1, 2017, menstrual pads,

 

 

HB5207- 48 -LRB101 17554 HLH 66972 b

1    tampons, and menstrual cups.
2        (43) Merchandise that is subject to the Rental Purchase
3    Agreement Occupation and Use Tax. The purchaser must
4    certify that the item is purchased to be rented subject to
5    a rental purchase agreement, as defined in the Rental
6    Purchase Agreement Act, and provide proof of registration
7    under the Rental Purchase Agreement Occupation and Use Tax
8    Act. This paragraph is exempt from the provisions of
9    Section 2-70.
10        (44) Qualified tangible personal property used in the
11    construction or operation of a data center that has been
12    granted a certificate of exemption by the Department of
13    Commerce and Economic Opportunity, whether that tangible
14    personal property is purchased by the owner, operator, or
15    tenant of the data center or by a contractor or
16    subcontractor of the owner, operator, or tenant. Data
17    centers that would have qualified for a certificate of
18    exemption prior to January 1, 2020 had this amendatory Act
19    of the 101st General Assembly been in effect, may apply for
20    and obtain an exemption for subsequent purchases of
21    computer equipment or enabling software purchased or
22    leased to upgrade, supplement, or replace computer
23    equipment or enabling software purchased or leased in the
24    original investment that would have qualified.
25        The Department of Commerce and Economic Opportunity
26    shall grant a certificate of exemption under this item (44)

 

 

HB5207- 49 -LRB101 17554 HLH 66972 b

1    to qualified data centers as defined by Section 605-1025 of
2    the Department of Commerce and Economic Opportunity Law of
3    the Civil Administrative Code of Illinois.
4        For the purposes of this item (44):
5            "Data center" means a building or a series of
6        buildings rehabilitated or constructed to house
7        working servers in one physical location or multiple
8        sites within the State of Illinois.
9            "Qualified tangible personal property" means:
10        electrical systems and equipment; climate control and
11        chilling equipment and systems; mechanical systems and
12        equipment; monitoring and secure systems; emergency
13        generators; hardware; computers; servers; data storage
14        devices; network connectivity equipment; racks;
15        cabinets; telecommunications cabling infrastructure;
16        raised floor systems; peripheral components or
17        systems; software; mechanical, electrical, or plumbing
18        systems; battery systems; cooling systems and towers;
19        temperature control systems; other cabling; and other
20        data center infrastructure equipment and systems
21        necessary to operate qualified tangible personal
22        property, including fixtures; and component parts of
23        any of the foregoing, including installation,
24        maintenance, repair, refurbishment, and replacement of
25        qualified tangible personal property to generate,
26        transform, transmit, distribute, or manage electricity

 

 

HB5207- 50 -LRB101 17554 HLH 66972 b

1        necessary to operate qualified tangible personal
2        property; and all other tangible personal property
3        that is essential to the operations of a computer data
4        center. The term "qualified tangible personal
5        property" also includes building materials physically
6        incorporated in to the qualifying data center. To
7        document the exemption allowed under this Section, the
8        retailer must obtain from the purchaser a copy of the
9        certificate of eligibility issued by the Department of
10        Commerce and Economic Opportunity.
11        This item (44) is exempt from the provisions of Section
12    2-70.
13(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
14100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.
158-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
16eff. 7-12-19; 101-629, eff. 2-5-20.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.