102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4394

 

Introduced 1/21/2022, by Rep. Lawrence Walsh, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5
35 ILCS 110/3-5
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 credit for coal and aggregate exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment sunsets on July 1, 2028 (currently July 1, 2023). Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4394LRB102 22145 HLH 31274 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
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active
24exemption identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon
11a graphic arts product. Beginning on July 1, 2017, graphic
12arts machinery and equipment is included in the manufacturing
13and assembling machinery and equipment exemption under
14paragraph (18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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

 

 

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

 

 

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1stated on customers' bills for the purchase and consumption of
2food and beverages purchased at retail from a retailer, to the
3extent that the proceeds of the service charge are in fact
4turned over as tips or as a substitute for tips to the
5employees who participate directly in preparing, serving,
6hosting or cleaning up the food or beverage function with
7respect to which the service charge is imposed.
8    (14) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of
10rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
11pipe and tubular goods, including casing and drill strings,
12(iii) pumps and pump-jack units, (iv) storage tanks and flow
13lines, (v) any individual replacement part for oil field
14exploration, drilling, and production equipment, and (vi)
15machinery and equipment purchased for lease; but excluding
16motor vehicles required to be registered under the Illinois
17Vehicle Code.
18    (15) Photoprocessing machinery and equipment, including
19repair and replacement parts, both new and used, including
20that manufactured on special order, certified by the purchaser
21to be used primarily for photoprocessing, and including
22photoprocessing machinery and equipment purchased for lease.
23    (16) Until July 1, 2028 July 1, 2023, coal and aggregate
24exploration, mining, off-highway hauling, processing,
25maintenance, and reclamation equipment, including replacement
26parts and equipment, and including equipment purchased for

 

 

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1lease, but excluding motor vehicles required to be registered
2under the Illinois Vehicle Code. The changes made to this
3Section by Public Act 97-767 apply on and after July 1, 2003,
4but no claim for credit or refund is allowed on or after August
516, 2013 (the effective date of Public Act 98-456) for such
6taxes paid during the period beginning July 1, 2003 and ending
7on August 16, 2013 (the effective date of Public Act 98-456).
8    (17) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (18) Manufacturing and assembling machinery and equipment
15used primarily in the process of manufacturing or assembling
16tangible personal property for wholesale or retail sale or
17lease, whether that sale or lease is made directly by the
18manufacturer or by some other person, whether the materials
19used in the process are owned by the manufacturer or some other
20person, or whether that sale or lease is made apart from or as
21an incident to the seller's engaging in the service occupation
22of producing machines, tools, dies, jigs, patterns, gauges, or
23other similar items of no commercial value on special order
24for a particular purchaser. The exemption provided by this
25paragraph (18) includes production related tangible personal
26property, as defined in Section 3-50, purchased on or after

 

 

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1July 1, 2019. The exemption provided by this paragraph (18)
2does not include machinery and equipment used in (i) the
3generation of electricity for wholesale or retail sale; (ii)
4the generation or treatment of natural or artificial gas for
5wholesale or retail sale that is delivered to customers
6through pipes, pipelines, or mains; or (iii) the treatment of
7water for wholesale or retail sale that is delivered to
8customers through pipes, pipelines, or mains. The provisions
9of Public Act 98-583 are declaratory of existing law as to the
10meaning and scope of this exemption. Beginning on July 1,
112017, the exemption provided by this paragraph (18) includes,
12but is not limited to, graphic arts machinery and equipment,
13as defined in paragraph (6) of this Section.
14    (19) Personal property delivered to a purchaser or
15purchaser's donee inside Illinois when the purchase order for
16that personal property was received by a florist located
17outside Illinois who has a florist located inside Illinois
18deliver the personal property.
19    (20) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (21) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (21) is exempt from the

 

 

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1provisions of Section 3-90, and the exemption provided for
2under this item (21) applies for all periods beginning May 30,
31995, but no claim for credit or refund is allowed on or after
4January 1, 2008 for such taxes paid during the period
5beginning May 30, 2000 and ending on January 1, 2008.
6    (22) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Service Use Tax Act, as
18the case may be, based on the fair market value of the property
19at the time the non-qualifying use occurs. No lessor shall
20collect or attempt to collect an amount (however designated)
21that purports to reimburse that lessor for the tax imposed by
22this Act or the Service Use Tax Act, as the case may be, if the
23tax has not been paid by the lessor. If a lessor improperly
24collects any such amount from the lessee, the lessee shall
25have a legal right to claim a refund of that amount from the
26lessor. If, however, that amount is not refunded to the lessee

 

 

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1for any reason, the lessor is liable to pay that amount to the
2Department.
3    (23) Personal property purchased by a lessor who leases
4the property, under a lease of one year or longer executed or
5in effect at the time the lessor would otherwise be subject to
6the tax imposed by this Act, to a governmental body that has
7been issued an active sales tax exemption identification
8number by the Department under Section 1g of the Retailers'
9Occupation Tax Act. If the property is leased in a manner that
10does not qualify for this exemption or used in any other
11non-exempt manner, the lessor shall be liable for the tax
12imposed under this Act or the Service Use Tax Act, as the case
13may be, based on the fair market value of the property at the
14time the non-qualifying use occurs. No lessor shall collect or
15attempt to collect an amount (however designated) that
16purports to reimburse that lessor for the tax imposed by this
17Act or the Service Use Tax Act, as the case may be, if the tax
18has not been paid by the lessor. If a lessor improperly
19collects any such amount from the lessee, the lessee shall
20have a legal right to claim a refund of that amount from the
21lessor. If, however, that amount is not refunded to the lessee
22for any reason, the lessor is liable to pay that amount to the
23Department.
24    (24) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated

 

 

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1for disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (25) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in
11the performance of infrastructure repairs in this State,
12including but not limited to municipal roads and streets,
13access roads, bridges, sidewalks, waste disposal systems,
14water and sewer line extensions, water distribution and
15purification facilities, storm water drainage and retention
16facilities, and sewage treatment facilities, resulting from a
17State or federally declared disaster in Illinois or bordering
18Illinois when such repairs are initiated on facilities located
19in the declared disaster area within 6 months after the
20disaster.
21    (26) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-90.
6    (29) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and
9other items, and replacement parts for these machines.
10Beginning January 1, 2002 and through June 30, 2003, machines
11and parts for machines used in commercial, coin-operated
12amusement and vending business if a use or occupation tax is
13paid on the gross receipts derived from the use of the
14commercial, coin-operated amusement and vending machines. This
15paragraph is exempt from the provisions of Section 3-90.
16    (30) Beginning January 1, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19soft drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (31) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), computers and communications equipment
5utilized for any hospital purpose and equipment used in the
6diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other nonexempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Service Use Tax Act, as
16the case may be, based on the fair market value of the property
17at the time the nonqualifying use occurs. No lessor shall
18collect or attempt to collect an amount (however designated)
19that purports to reimburse that lessor for the tax imposed by
20this Act or the Service Use Tax Act, as the case may be, if the
21tax has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall
23have a legal right to claim a refund of that amount from the
24lessor. If, however, that amount is not refunded to the lessee
25for any reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

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1Section 3-90.
2    (32) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), personal property purchased by a lessor
4who leases the property, under a lease of one year or longer
5executed or in effect at the time the lessor would otherwise be
6subject to the tax imposed by this Act, to a governmental body
7that has been issued an active sales tax exemption
8identification number by the Department under Section 1g of
9the Retailers' Occupation Tax Act. If the property is leased
10in a manner that does not qualify for this exemption or used in
11any other nonexempt manner, the lessor shall be liable for the
12tax imposed under this Act or the Service Use Tax Act, as the
13case may be, based on the fair market value of the property at
14the time the nonqualifying use occurs. No lessor shall collect
15or attempt to collect an amount (however designated) that
16purports to reimburse that lessor for the tax imposed by this
17Act or the Service Use Tax Act, as the case may be, if the tax
18has not been paid by the lessor. If a lessor improperly
19collects any such amount from the lessee, the lessee shall
20have a legal right to claim a refund of that amount from the
21lessor. If, however, that amount is not refunded to the lessee
22for any reason, the lessor is liable to pay that amount to the
23Department. This paragraph is exempt from the provisions of
24Section 3-90.
25    (33) On and after July 1, 2003 and through June 30, 2004,
26the use in this State of motor vehicles of the second division

 

 

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1with a gross vehicle weight in excess of 8,000 pounds and that
2are subject to the commercial distribution fee imposed under
3Section 3-815.1 of the Illinois Vehicle Code. Beginning on
4July 1, 2004 and through June 30, 2005, the use in this State
5of motor vehicles of the second division: (i) with a gross
6vehicle weight rating in excess of 8,000 pounds; (ii) that are
7subject to the commercial distribution fee imposed under
8Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
9are primarily used for commercial purposes. Through June 30,
102005, this exemption applies to repair and replacement parts
11added after the initial purchase of such a motor vehicle if
12that motor vehicle is used in a manner that would qualify for
13the rolling stock exemption otherwise provided for in this
14Act. For purposes of this paragraph, the term "used for
15commercial purposes" means the transportation of persons or
16property in furtherance of any commercial or industrial
17enterprise, whether for-hire or not.
18    (34) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued
23under Title IV of the Environmental Protection Act. This
24paragraph is exempt from the provisions of Section 3-90.
25    (35) Beginning January 1, 2010 and continuing through
26December 31, 2024, materials, parts, equipment, components,

 

 

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1and furnishings incorporated into or upon an aircraft as part
2of the modification, refurbishment, completion, replacement,
3repair, or maintenance of the aircraft. This exemption
4includes consumable supplies used in the modification,
5refurbishment, completion, replacement, repair, and
6maintenance of aircraft, but excludes any materials, parts,
7equipment, components, and consumable supplies used in the
8modification, replacement, repair, and maintenance of aircraft
9engines or power plants, whether such engines or power plants
10are installed or uninstalled upon any such aircraft.
11"Consumable supplies" include, but are not limited to,
12adhesive, tape, sandpaper, general purpose lubricants,
13cleaning solution, latex gloves, and protective films. This
14exemption applies only to the use of qualifying tangible
15personal property by persons who modify, refurbish, complete,
16repair, replace, or maintain aircraft and who (i) hold an Air
17Agency Certificate and are empowered to operate an approved
18repair station by the Federal Aviation Administration, (ii)
19have a Class IV Rating, and (iii) conduct operations in
20accordance with Part 145 of the Federal Aviation Regulations.
21The exemption does not include aircraft operated by a
22commercial air carrier providing scheduled passenger air
23service pursuant to authority issued under Part 121 or Part
24129 of the Federal Aviation Regulations. The changes made to
25this paragraph (35) by Public Act 98-534 are declarative of
26existing law. It is the intent of the General Assembly that the

 

 

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1exemption under this paragraph (35) applies continuously from
2January 1, 2010 through December 31, 2024; however, no claim
3for credit or refund is allowed for taxes paid as a result of
4the disallowance of this exemption on or after January 1, 2015
5and prior to the effective date of this amendatory Act of the
6101st General Assembly.
7    (36) Tangible personal property purchased by a
8public-facilities corporation, as described in Section
911-65-10 of the Illinois Municipal Code, for purposes of
10constructing or furnishing a municipal convention hall, but
11only if the legal title to the municipal convention hall is
12transferred to the municipality without any further
13consideration by or on behalf of the municipality at the time
14of the completion of the municipal convention hall or upon the
15retirement or redemption of any bonds or other debt
16instruments issued by the public-facilities corporation in
17connection with the development of the municipal convention
18hall. This exemption includes existing public-facilities
19corporations as provided in Section 11-65-25 of the Illinois
20Municipal Code. This paragraph is exempt from the provisions
21of Section 3-90.
22    (37) Beginning January 1, 2017 and through December 31,
232026, menstrual pads, tampons, and menstrual cups.
24    (38) Merchandise that is subject to the Rental Purchase
25Agreement Occupation and Use Tax. The purchaser must certify
26that the item is purchased to be rented subject to a rental

 

 

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1purchase agreement, as defined in the Rental Purchase
2Agreement Act, and provide proof of registration under the
3Rental Purchase Agreement Occupation and Use Tax Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (39) Tangible personal property purchased by a purchaser
6who is exempt from the tax imposed by this Act by operation of
7federal law. This paragraph is exempt from the provisions of
8Section 3-90.
9    (40) Qualified tangible personal property used in the
10construction or operation of a data center that has been
11granted a certificate of exemption by the Department of
12Commerce and Economic Opportunity, whether that tangible
13personal property is purchased by the owner, operator, or
14tenant of the data center or by a contractor or subcontractor
15of the owner, operator, or tenant. Data centers that would
16have qualified for a certificate of exemption prior to January
171, 2020 had Public Act 101-31 been in effect may apply for and
18obtain an exemption for subsequent purchases of computer
19equipment or enabling software purchased or leased to upgrade,
20supplement, or replace computer equipment or enabling software
21purchased or leased in the original investment that would have
22qualified.
23    The Department of Commerce and Economic Opportunity shall
24grant a certificate of exemption under this item (40) to
25qualified data centers as defined by Section 605-1025 of the
26Department of Commerce and Economic Opportunity Law of the

 

 

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1Civil Administrative Code of Illinois.
2    For the purposes of this item (40):
3        "Data center" means a building or a series of
4    buildings rehabilitated or constructed to house working
5    servers in one physical location or multiple sites within
6    the State of Illinois.
7        "Qualified tangible personal property" means:
8    electrical systems and equipment; climate control and
9    chilling equipment and systems; mechanical systems and
10    equipment; monitoring and secure systems; emergency
11    generators; hardware; computers; servers; data storage
12    devices; network connectivity equipment; racks; cabinets;
13    telecommunications cabling infrastructure; raised floor
14    systems; peripheral components or systems; software;
15    mechanical, electrical, or plumbing systems; battery
16    systems; cooling systems and towers; temperature control
17    systems; other cabling; and other data center
18    infrastructure equipment and systems necessary to operate
19    qualified tangible personal property, including fixtures;
20    and component parts of any of the foregoing, including
21    installation, maintenance, repair, refurbishment, and
22    replacement of qualified tangible personal property to
23    generate, transform, transmit, distribute, or manage
24    electricity necessary to operate qualified tangible
25    personal property; and all other tangible personal
26    property that is essential to the operations of a computer

 

 

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1    data center. The term "qualified tangible personal
2    property" also includes building materials physically
3    incorporated in to the qualifying data center. To document
4    the exemption allowed under this Section, the retailer
5    must obtain from the purchaser a copy of the certificate
6    of eligibility issued by the Department of Commerce and
7    Economic Opportunity.
8    This item (40) is exempt from the provisions of Section
93-90.
10(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
11101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
126-17-21.)
 
13    Section 10. The Service Use Tax Act is amended by changing
14Section 3-5 as follows:
 
15    (35 ILCS 110/3-5)
16    Sec. 3-5. Exemptions. Use of the following tangible
17personal property is exempt from the tax imposed by this Act:
18    (1) Personal property purchased from a corporation,
19society, association, foundation, institution, or
20organization, other than a limited liability company, that is
21organized and operated as a not-for-profit service enterprise
22for the benefit of persons 65 years of age or older if the
23personal property was not purchased by the enterprise for the
24purpose of resale by the enterprise.

 

 

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1    (2) Personal property purchased by a non-profit Illinois
2county fair association for use in conducting, operating, or
3promoting the county fair.
4    (3) Personal property purchased by a not-for-profit arts
5or cultural organization that establishes, by proof required
6by the Department by rule, that it has received an exemption
7under Section 501(c)(3) of the Internal Revenue Code and that
8is organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after July 1, 2001 (the
15effective date of Public Act 92-35), however, an entity
16otherwise eligible for this exemption shall not make tax-free
17purchases unless it has an active identification number issued
18by the Department.
19    (4) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (5) Until July 1, 2003 and beginning again on September 1,
242004 through August 30, 2014, graphic arts machinery and
25equipment, including repair and replacement parts, both new
26and used, and including that manufactured on special order or

 

 

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1purchased for lease, certified by the purchaser to be used
2primarily for graphic arts production. Equipment includes
3chemicals or chemicals acting as catalysts but only if the
4chemicals or chemicals acting as catalysts effect a direct and
5immediate change upon a graphic arts product. Beginning on
6July 1, 2017, graphic arts machinery and equipment is included
7in the manufacturing and assembling machinery and equipment
8exemption under Section 2 of this Act.
9    (6) Personal property purchased from a teacher-sponsored
10student organization affiliated with an elementary or
11secondary school located in Illinois.
12    (7) Farm machinery and equipment, both new and used,
13including that manufactured on special order, certified by the
14purchaser to be used primarily for production agriculture or
15State or federal agricultural programs, including individual
16replacement parts for the machinery and equipment, including
17machinery and equipment purchased for lease, and including
18implements of husbandry defined in Section 1-130 of the
19Illinois Vehicle Code, farm machinery and agricultural
20chemical and fertilizer spreaders, and nurse wagons required
21to be registered under Section 3-809 of the Illinois Vehicle
22Code, but excluding other motor vehicles required to be
23registered under the Illinois Vehicle Code. Horticultural
24polyhouses or hoop houses used for propagating, growing, or
25overwintering plants shall be considered farm machinery and
26equipment under this item (7). Agricultural chemical tender

 

 

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1tanks and dry boxes shall include units sold separately from a
2motor vehicle required to be licensed and units sold mounted
3on a motor vehicle required to be licensed if the selling price
4of the tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals. This item (7) is exempt from the
20provisions of Section 3-75.
21    (8) Until June 30, 2013, fuel and petroleum products sold
22to or used by an air common carrier, certified by the carrier
23to be used for consumption, shipment, or storage in the
24conduct of its business as an air common carrier, for a flight
25destined for or returning from a location or locations outside
26the United States without regard to previous or subsequent

 

 

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

 

 

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1exploration, drilling, and production equipment, and (vi)
2machinery and equipment purchased for lease; but excluding
3motor vehicles required to be registered under the Illinois
4Vehicle Code.
5    (11) Proceeds from the sale of photoprocessing machinery
6and equipment, including repair and replacement parts, both
7new and used, including that manufactured on special order,
8certified by the purchaser to be used primarily for
9photoprocessing, and including photoprocessing machinery and
10equipment purchased for lease.
11    (12) Until July 1, 2028 July 1, 2023, coal and aggregate
12exploration, mining, off-highway hauling, processing,
13maintenance, and reclamation equipment, including replacement
14parts and equipment, and including equipment purchased for
15lease, but excluding motor vehicles required to be registered
16under the Illinois Vehicle Code. The changes made to this
17Section by Public Act 97-767 apply on and after July 1, 2003,
18but no claim for credit or refund is allowed on or after August
1916, 2013 (the effective date of Public Act 98-456) for such
20taxes paid during the period beginning July 1, 2003 and ending
21on August 16, 2013 (the effective date of Public Act 98-456).
22    (13) Semen used for artificial insemination of livestock
23for direct agricultural production.
24    (14) Horses, or interests in horses, registered with and
25meeting the requirements of any of the Arabian Horse Club
26Registry of America, Appaloosa Horse Club, American Quarter

 

 

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1Horse Association, United States Trotting Association, or
2Jockey Club, as appropriate, used for purposes of breeding or
3racing for prizes. This item (14) is exempt from the
4provisions of Section 3-75, and the exemption provided for
5under this item (14) applies for all periods beginning May 30,
61995, but no claim for credit or refund is allowed on or after
7January 1, 2008 (the effective date of Public Act 95-88) for
8such taxes paid during the period beginning May 30, 2000 and
9ending on January 1, 2008 (the effective date of Public Act
1095-88).
11    (15) Computers and communications equipment utilized for
12any hospital purpose and equipment used in the diagnosis,
13analysis, or treatment of hospital patients purchased by a
14lessor who leases the equipment, under a lease of one year or
15longer executed or in effect at the time the lessor would
16otherwise be subject to the tax imposed by this Act, to a
17hospital that has been issued an active tax exemption
18identification number by the Department under Section 1g of
19the Retailers' Occupation Tax Act. If the equipment is leased
20in a manner that does not qualify for this exemption or is used
21in any other non-exempt manner, the lessor shall be liable for
22the tax imposed under this Act or the Use Tax Act, as the case
23may be, based on the fair market value of the property at the
24time the non-qualifying use occurs. No lessor shall collect or
25attempt to collect an amount (however designated) that
26purports to reimburse that lessor for the tax imposed by this

 

 

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

 

 

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1is liable to pay that amount to the Department.
2    (17) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is donated
5for disaster relief to be used in a State or federally declared
6disaster area in Illinois or bordering Illinois by a
7manufacturer or retailer that is registered in this State to a
8corporation, society, association, foundation, or institution
9that has been issued a sales tax exemption identification
10number by the Department that assists victims of the disaster
11who reside within the declared disaster area.
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 used in
15the performance of infrastructure repairs in this State,
16including but not limited to municipal roads and streets,
17access roads, bridges, sidewalks, waste disposal systems,
18water and sewer line extensions, water distribution and
19purification facilities, storm water drainage and retention
20facilities, and sewage treatment facilities, resulting from a
21State or federally declared disaster in Illinois or bordering
22Illinois when such repairs are initiated on facilities located
23in the declared disaster area within 6 months after the
24disaster.
25    (19) Beginning July 1, 1999, game or game birds purchased
26at a "game breeding and hunting preserve area" as that term is

 

 

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1used in the Wildlife Code. This paragraph is exempt from the
2provisions of Section 3-75.
3    (20) A motor vehicle, as that term is defined in Section
41-146 of the Illinois Vehicle Code, that is donated to a
5corporation, limited liability company, society, association,
6foundation, or institution that is determined by the
7Department to be organized and operated exclusively for
8educational purposes. For purposes of this exemption, "a
9corporation, limited liability company, society, association,
10foundation, or institution organized and operated exclusively
11for educational purposes" means all tax-supported public
12schools, private schools that offer systematic instruction in
13useful branches of learning by methods common to public
14schools and that compare favorably in their scope and
15intensity with the course of study presented in tax-supported
16schools, and vocational or technical schools or institutes
17organized and operated exclusively to provide a course of
18study of not less than 6 weeks duration and designed to prepare
19individuals to follow a trade or to pursue a manual,
20technical, mechanical, industrial, business, or commercial
21occupation.
22    (21) Beginning January 1, 2000, personal property,
23including food, purchased through fundraising events for the
24benefit of a public or private elementary or secondary school,
25a group of those schools, or one or more school districts if
26the events are sponsored by an entity recognized by the school

 

 

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1district that consists primarily of volunteers and includes
2parents and teachers of the school children. This paragraph
3does not apply to fundraising events (i) for the benefit of
4private home instruction or (ii) for which the fundraising
5entity purchases the personal property sold at the events from
6another individual or entity that sold the property for the
7purpose of resale by the fundraising entity and that profits
8from the sale to the fundraising entity. This paragraph is
9exempt from the provisions of Section 3-75.
10    (22) Beginning January 1, 2000 and through December 31,
112001, new or used automatic vending machines that prepare and
12serve hot food and beverages, including coffee, soup, and
13other items, and replacement parts for these machines.
14Beginning January 1, 2002 and through June 30, 2003, machines
15and parts for machines used in commercial, coin-operated
16amusement and vending business if a use or occupation tax is
17paid on the gross receipts derived from the use of the
18commercial, coin-operated amusement and vending machines. This
19paragraph is exempt from the provisions of Section 3-75.
20    (23) Beginning August 23, 2001 and through June 30, 2016,
21food for human consumption that is to be consumed off the
22premises where it is sold (other than alcoholic beverages,
23soft drinks, and food that has been prepared for immediate
24consumption) and prescription and nonprescription medicines,
25drugs, medical appliances, and insulin, urine testing
26materials, syringes, and needles used by diabetics, for human

 

 

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1use, when purchased for use by a person receiving medical
2assistance under Article V of the Illinois Public Aid Code who
3resides in a licensed long-term care facility, as defined in
4the Nursing Home Care Act, or in a licensed facility as defined
5in the ID/DD Community Care Act, the MC/DD Act, or the
6Specialized Mental Health Rehabilitation Act of 2013.
7    (24) Beginning on August 2, 2001 (the effective date of
8Public Act 92-227), computers and communications equipment
9utilized for any hospital purpose and equipment used in the
10diagnosis, analysis, or treatment of hospital patients
11purchased by a lessor who leases the equipment, under a lease
12of one year or longer executed or in effect at the time the
13lessor would otherwise be subject to the tax imposed by this
14Act, to a hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16the Retailers' Occupation Tax Act. If the equipment is leased
17in a manner that does not qualify for this exemption or is used
18in any other nonexempt manner, the lessor shall be liable for
19the tax imposed under this Act or the Use Tax Act, as the case
20may be, based on the fair market value of the property at the
21time the nonqualifying use occurs. No lessor shall collect or
22attempt to collect an amount (however designated) that
23purports to reimburse that lessor for the tax imposed by this
24Act or the Use Tax Act, as the case may be, if the tax has not
25been paid by the lessor. If a lessor improperly collects any
26such amount from the lessee, the lessee shall have a legal

 

 

HB4394- 33 -LRB102 22145 HLH 31274 b

1right to claim a refund of that amount from the lessor. If,
2however, that amount is not refunded to the lessee for any
3reason, the lessor is liable to pay that amount to the
4Department. This paragraph is exempt from the provisions of
5Section 3-75.
6    (25) Beginning on August 2, 2001 (the effective date of
7Public Act 92-227), personal property purchased by a lessor
8who leases the property, under a lease of one year or longer
9executed or in effect at the time the lessor would otherwise be
10subject to the tax imposed by this Act, to a governmental body
11that has been issued an active tax exemption identification
12number by the Department under Section 1g of the Retailers'
13Occupation Tax Act. If the property is leased in a manner that
14does not qualify for this exemption or is used in any other
15nonexempt manner, the lessor shall be liable for the tax
16imposed under this Act or the Use Tax Act, as the case may be,
17based on the fair market value of the property at the time the
18nonqualifying use occurs. No lessor shall collect or attempt
19to collect an amount (however designated) that purports to
20reimburse that lessor for the tax imposed by this Act or the
21Use Tax Act, as the case may be, if the tax has not been paid
22by the lessor. If a lessor improperly collects any such amount
23from the lessee, the lessee shall have a legal right to claim a
24refund of that amount from the lessor. If, however, that
25amount is not refunded to the lessee for any reason, the lessor
26is liable to pay that amount to the Department. This paragraph

 

 

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1is exempt from the provisions of Section 3-75.
2    (26) Beginning January 1, 2008, tangible personal property
3used in the construction or maintenance of a community water
4supply, as defined under Section 3.145 of the Environmental
5Protection Act, that is operated by a not-for-profit
6corporation that holds a valid water supply permit issued
7under Title IV of the Environmental Protection Act. This
8paragraph is exempt from the provisions of Section 3-75.
9    (27) Beginning January 1, 2010 and continuing through
10December 31, 2024, materials, parts, equipment, components,
11and furnishings incorporated into or upon an aircraft as part
12of the modification, refurbishment, completion, replacement,
13repair, or maintenance of the aircraft. This exemption
14includes consumable supplies used in the modification,
15refurbishment, completion, replacement, repair, and
16maintenance of aircraft, but excludes any materials, parts,
17equipment, components, and consumable supplies used in the
18modification, replacement, repair, and maintenance of aircraft
19engines or power plants, whether such engines or power plants
20are installed or uninstalled upon any such aircraft.
21"Consumable supplies" include, but are not limited to,
22adhesive, tape, sandpaper, general purpose lubricants,
23cleaning solution, latex gloves, and protective films. This
24exemption applies only to the use of qualifying tangible
25personal property transferred incident to the modification,
26refurbishment, completion, replacement, repair, or maintenance

 

 

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1of aircraft by persons who (i) hold an Air Agency Certificate
2and are empowered to operate an approved repair station by the
3Federal Aviation Administration, (ii) have a Class IV Rating,
4and (iii) conduct operations in accordance with Part 145 of
5the Federal Aviation Regulations. The exemption does not
6include aircraft operated by a commercial air carrier
7providing scheduled passenger air service pursuant to
8authority issued under Part 121 or Part 129 of the Federal
9Aviation Regulations. The changes made to this paragraph (27)
10by Public Act 98-534 are declarative of existing law. It is the
11intent of the General Assembly that the exemption under this
12paragraph (27) applies continuously from January 1, 2010
13through December 31, 2024; however, no claim for credit or
14refund is allowed for taxes paid as a result of the
15disallowance of this exemption on or after January 1, 2015 and
16prior to the effective date of this amendatory Act of the 101st
17General Assembly.
18    (28) Tangible personal property purchased by a
19public-facilities corporation, as described in Section
2011-65-10 of the Illinois Municipal Code, for purposes of
21constructing or furnishing a municipal convention hall, but
22only if the legal title to the municipal convention hall is
23transferred to the municipality without any further
24consideration by or on behalf of the municipality at the time
25of the completion of the municipal convention hall or upon the
26retirement or redemption of any bonds or other debt

 

 

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1instruments issued by the public-facilities corporation in
2connection with the development of the municipal convention
3hall. This exemption includes existing public-facilities
4corporations as provided in Section 11-65-25 of the Illinois
5Municipal Code. This paragraph is exempt from the provisions
6of Section 3-75.
7    (29) Beginning January 1, 2017 and through December 31,
82026, menstrual pads, tampons, and menstrual cups.
9    (30) Tangible personal property transferred to a purchaser
10who is exempt from the tax imposed by this Act by operation of
11federal law. This paragraph is exempt from the provisions of
12Section 3-75.
13    (31) Qualified tangible personal property used in the
14construction or operation of a data center that has been
15granted a certificate of exemption by the Department of
16Commerce and Economic Opportunity, whether that tangible
17personal property is purchased by the owner, operator, or
18tenant of the data center or by a contractor or subcontractor
19of the owner, operator, or tenant. Data centers that would
20have qualified for a certificate of exemption prior to January
211, 2020 had this amendatory Act of the 101st General Assembly
22been in effect, may apply for and obtain an exemption for
23subsequent purchases of computer equipment or enabling
24software purchased or leased to upgrade, supplement, or
25replace computer equipment or enabling software purchased or
26leased in the original investment that would have qualified.

 

 

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1    The Department of Commerce and Economic Opportunity shall
2grant a certificate of exemption under this item (31) to
3qualified data centers as defined by Section 605-1025 of the
4Department of Commerce and Economic Opportunity Law of the
5Civil Administrative Code of Illinois.
6    For the purposes of this item (31):
7        "Data center" means a building or a series of
8    buildings rehabilitated or constructed to house working
9    servers in one physical location or multiple sites within
10    the State of Illinois.
11        "Qualified tangible personal property" means:
12    electrical systems and equipment; climate control and
13    chilling equipment and systems; mechanical systems and
14    equipment; monitoring and secure systems; emergency
15    generators; hardware; computers; servers; data storage
16    devices; network connectivity equipment; racks; cabinets;
17    telecommunications cabling infrastructure; raised floor
18    systems; peripheral components or systems; software;
19    mechanical, electrical, or plumbing systems; battery
20    systems; cooling systems and towers; temperature control
21    systems; other cabling; and other data center
22    infrastructure equipment and systems necessary to operate
23    qualified tangible personal property, including fixtures;
24    and component parts of any of the foregoing, including
25    installation, maintenance, repair, refurbishment, and
26    replacement of qualified tangible personal property to

 

 

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1    generate, transform, transmit, distribute, or manage
2    electricity necessary to operate qualified tangible
3    personal property; and all other tangible personal
4    property that is essential to the operations of a computer
5    data center. The term "qualified tangible personal
6    property" also includes building materials physically
7    incorporated in to the qualifying data center. To document
8    the exemption allowed under this Section, the retailer
9    must obtain from the purchaser a copy of the certificate
10    of eligibility issued by the Department of Commerce and
11    Economic Opportunity.
12    This item (31) is exempt from the provisions of Section
133-75.
14(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
15101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
16    Section 15. The Service Occupation Tax Act is amended by
17changing Section 3-5 as follows:
 
18    (35 ILCS 115/3-5)
19    Sec. 3-5. Exemptions. The following tangible personal
20property is exempt from the tax imposed by this Act:
21    (1) Personal property sold by a corporation, society,
22association, foundation, institution, or organization, other
23than a limited liability company, that is organized and
24operated as a not-for-profit service enterprise for the

 

 

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1benefit of persons 65 years of age or older if the personal
2property was not purchased by the enterprise for the purpose
3of resale by the enterprise.
4    (2) Personal property purchased by a not-for-profit
5Illinois county fair association for use in conducting,
6operating, or promoting the county fair.
7    (3) Personal property purchased by any not-for-profit arts
8or cultural organization that establishes, by proof required
9by the Department by rule, that it has received an exemption
10under Section 501(c)(3) of the Internal Revenue Code and that
11is organized and operated primarily for the presentation or
12support of arts or cultural programming, activities, or
13services. These organizations include, but are not limited to,
14music and dramatic arts organizations such as symphony
15orchestras and theatrical groups, arts and cultural service
16organizations, local arts councils, visual arts organizations,
17and media arts organizations. On and after July 1, 2001 (the
18effective date of Public Act 92-35), however, an entity
19otherwise eligible for this exemption shall not make tax-free
20purchases unless it has an active identification number issued
21by the Department.
22    (4) Legal tender, currency, medallions, or gold or silver
23coinage issued by the State of Illinois, the government of the
24United States of America, or the government of any foreign
25country, and bullion.
26    (5) Until July 1, 2003 and beginning again on September 1,

 

 

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12004 through August 30, 2014, graphic arts machinery and
2equipment, including repair and replacement parts, both new
3and used, and including that manufactured on special order or
4purchased for lease, certified by the purchaser to be used
5primarily for graphic arts production. Equipment includes
6chemicals or chemicals acting as catalysts but only if the
7chemicals or chemicals acting as catalysts effect a direct and
8immediate change upon a graphic arts product. Beginning on
9July 1, 2017, graphic arts machinery and equipment is included
10in the manufacturing and assembling machinery and equipment
11exemption under Section 2 of this Act.
12    (6) Personal property sold by a teacher-sponsored student
13organization affiliated with an elementary or secondary school
14located in Illinois.
15    (7) Farm machinery and equipment, both new and used,
16including that manufactured on special order, certified by the
17purchaser to be used primarily for production agriculture or
18State or federal agricultural programs, including individual
19replacement parts for the machinery and equipment, including
20machinery and equipment purchased for lease, and including
21implements of husbandry defined in Section 1-130 of the
22Illinois Vehicle Code, farm machinery and agricultural
23chemical and fertilizer spreaders, and nurse wagons required
24to be registered under Section 3-809 of the Illinois Vehicle
25Code, but excluding other motor vehicles required to be
26registered under the Illinois Vehicle Code. Horticultural

 

 

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

 

 

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

 

 

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1(iii) pumps and pump-jack units, (iv) storage tanks and flow
2lines, (v) any individual replacement part for oil field
3exploration, drilling, and production equipment, and (vi)
4machinery and equipment purchased for lease; but excluding
5motor vehicles required to be registered under the Illinois
6Vehicle Code.
7    (11) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including
9that manufactured on special order, certified by the purchaser
10to be used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (12) Until July 1, 2028 July 1, 2023, coal and aggregate
13exploration, mining, off-highway hauling, processing,
14maintenance, and reclamation equipment, including replacement
15parts and equipment, and including equipment purchased for
16lease, but excluding motor vehicles required to be registered
17under the Illinois Vehicle Code. The changes made to this
18Section by Public Act 97-767 apply on and after July 1, 2003,
19but no claim for credit or refund is allowed on or after August
2016, 2013 (the effective date of Public Act 98-456) for such
21taxes paid during the period beginning July 1, 2003 and ending
22on August 16, 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,
26soft drinks and food that has been prepared for immediate

 

 

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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
18provisions of Section 3-55, and the exemption provided for
19under this item (15) applies for all periods beginning May 30,
201995, but no claim for credit or refund is allowed on or after
21January 1, 2008 (the effective date of Public Act 95-88) for
22such taxes paid during the period beginning May 30, 2000 and
23ending on January 1, 2008 (the effective date of Public Act
2495-88).
25    (16) Computers and communications equipment utilized for
26any hospital purpose and equipment used in the diagnosis,

 

 

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1analysis, or treatment of hospital patients sold to a lessor
2who leases the equipment, under a lease of one year or longer
3executed or in effect at the time of the purchase, to a
4hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of
6the Retailers' Occupation Tax Act.
7    (17) Personal property sold to a lessor who leases the
8property, under a lease of one year or longer executed or in
9effect at the time of the purchase, to a governmental body that
10has been issued an active tax exemption identification number
11by the Department under Section 1g of the Retailers'
12Occupation Tax Act.
13    (18) Beginning with taxable years ending on or after
14December 31, 1995 and ending with taxable years ending on or
15before December 31, 2004, personal property that is donated
16for disaster relief to be used in a State or federally declared
17disaster area in Illinois or bordering Illinois by a
18manufacturer or retailer that is registered in this State to a
19corporation, society, association, foundation, or institution
20that has been issued a sales tax exemption identification
21number by the Department that assists victims of the disaster
22who reside within the declared disaster area.
23    (19) Beginning with taxable years ending on or after
24December 31, 1995 and ending with taxable years ending on or
25before December 31, 2004, personal property that is used in
26the performance of infrastructure repairs in this State,

 

 

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1including but not limited to municipal roads and streets,
2access roads, bridges, sidewalks, waste disposal systems,
3water and sewer line extensions, water distribution and
4purification facilities, storm water drainage and retention
5facilities, and sewage treatment facilities, resulting from a
6State or federally declared disaster in Illinois or bordering
7Illinois when such repairs are initiated on facilities located
8in the declared disaster area within 6 months after the
9disaster.
10    (20) Beginning July 1, 1999, game or game birds sold at a
11"game breeding and hunting preserve area" as that term is used
12in the Wildlife Code. This paragraph is exempt from the
13provisions of Section 3-55.
14    (21) A motor vehicle, as that term is defined in Section
151-146 of the Illinois Vehicle Code, that is donated to a
16corporation, limited liability company, society, association,
17foundation, or institution that is determined by the
18Department to be organized and operated exclusively for
19educational purposes. For purposes of this exemption, "a
20corporation, limited liability company, society, association,
21foundation, or institution organized and operated exclusively
22for educational purposes" means all tax-supported public
23schools, private schools that offer systematic instruction in
24useful branches of learning by methods common to public
25schools and that compare favorably in their scope and
26intensity with the course of study presented in tax-supported

 

 

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1schools, and vocational or technical schools or institutes
2organized and operated exclusively to provide a course of
3study of not less than 6 weeks duration and designed to prepare
4individuals to follow a trade or to pursue a manual,
5technical, mechanical, industrial, business, or commercial
6occupation.
7    (22) Beginning January 1, 2000, personal property,
8including food, purchased through fundraising events for the
9benefit of a public or private elementary or secondary school,
10a group of those schools, or one or more school districts if
11the events are sponsored by an entity recognized by the school
12district that consists primarily of volunteers and includes
13parents and teachers of the school children. This paragraph
14does not apply to fundraising events (i) for the benefit of
15private home instruction or (ii) for which the fundraising
16entity purchases the personal property sold at the events from
17another individual or entity that sold the property for the
18purpose of resale by the fundraising entity and that profits
19from the sale to the fundraising entity. This paragraph is
20exempt from the provisions of Section 3-55.
21    (23) Beginning January 1, 2000 and through December 31,
222001, new or used automatic vending machines that prepare and
23serve hot food and beverages, including coffee, soup, and
24other items, and replacement parts for these machines.
25Beginning January 1, 2002 and through June 30, 2003, machines
26and parts for machines used in commercial, coin-operated

 

 

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1amusement and vending business if a use or occupation tax is
2paid on the gross receipts derived from the use of the
3commercial, coin-operated amusement and vending machines. This
4paragraph is exempt from the provisions of Section 3-55.
5    (24) Beginning on August 2, 2001 (the effective date of
6Public Act 92-227), computers and communications equipment
7utilized for any hospital purpose and equipment used in the
8diagnosis, analysis, or treatment of hospital patients sold to
9a lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time of the purchase, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of
13the Retailers' Occupation Tax Act. This paragraph is exempt
14from the provisions of Section 3-55.
15    (25) Beginning on August 2, 2001 (the effective date of
16Public Act 92-227), personal property sold to a lessor who
17leases the property, under a lease of one year or longer
18executed or in effect at the time of the purchase, to a
19governmental body that has been issued an active tax exemption
20identification number by the Department under Section 1g of
21the Retailers' Occupation Tax Act. This paragraph is exempt
22from the provisions of Section 3-55.
23    (26) Beginning on January 1, 2002 and through June 30,
242016, tangible personal property purchased from an Illinois
25retailer by a taxpayer engaged in centralized purchasing
26activities in Illinois who will, upon receipt of the property

 

 

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

 

 

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1    (28) Tangible personal property sold to a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt
10instruments issued by the public-facilities corporation in
11connection with the development of the municipal convention
12hall. This exemption includes existing public-facilities
13corporations as provided in Section 11-65-25 of the Illinois
14Municipal Code. This paragraph is exempt from the provisions
15of Section 3-55.
16    (29) Beginning January 1, 2010 and continuing through
17December 31, 2024, materials, parts, equipment, components,
18and furnishings incorporated into or upon an aircraft as part
19of the modification, refurbishment, completion, replacement,
20repair, or maintenance of the aircraft. This exemption
21includes consumable supplies used in the modification,
22refurbishment, completion, replacement, repair, and
23maintenance of aircraft, but excludes any materials, parts,
24equipment, components, and consumable supplies used in the
25modification, replacement, repair, and maintenance of aircraft
26engines or power plants, whether such engines or power plants

 

 

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1are installed or uninstalled upon any such aircraft.
2"Consumable supplies" include, but are not limited to,
3adhesive, tape, sandpaper, general purpose lubricants,
4cleaning solution, latex gloves, and protective films. This
5exemption applies only to the transfer of qualifying tangible
6personal property incident to the modification, refurbishment,
7completion, replacement, repair, or maintenance of an aircraft
8by persons who (i) hold an Air Agency Certificate and are
9empowered to operate an approved repair station by the Federal
10Aviation Administration, (ii) have a Class IV Rating, and
11(iii) conduct operations in accordance with Part 145 of the
12Federal Aviation Regulations. The exemption does not include
13aircraft operated by a commercial air carrier providing
14scheduled passenger air service pursuant to authority issued
15under Part 121 or Part 129 of the Federal Aviation
16Regulations. The changes made to this paragraph (29) by Public
17Act 98-534 are declarative of existing law. It is the intent of
18the General Assembly that the exemption under this paragraph
19(29) applies continuously from January 1, 2010 through
20December 31, 2024; however, no claim for credit or refund is
21allowed for taxes paid as a result of the disallowance of this
22exemption on or after January 1, 2015 and prior to the
23effective date of this amendatory Act of the 101st General
24Assembly.
25    (30) Beginning January 1, 2017 and through December 31,
262026, menstrual pads, tampons, and menstrual cups.

 

 

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1    (31) Tangible personal property transferred to a purchaser
2who is exempt from tax by operation of federal law. This
3paragraph is exempt from the provisions of Section 3-55.
4    (32) Qualified tangible personal property used in the
5construction or operation of a data center that has been
6granted a certificate of exemption by the Department of
7Commerce and Economic Opportunity, whether that tangible
8personal property is purchased by the owner, operator, or
9tenant of the data center or by a contractor or subcontractor
10of the owner, operator, or tenant. Data centers that would
11have qualified for a certificate of exemption prior to January
121, 2020 had this amendatory Act of the 101st General Assembly
13been in effect, may apply for and obtain an exemption for
14subsequent purchases of computer equipment or enabling
15software purchased or leased to upgrade, supplement, or
16replace computer equipment or enabling software purchased or
17leased in the original investment that would have qualified.
18    The Department of Commerce and Economic Opportunity shall
19grant a certificate of exemption under this item (32) to
20qualified data centers as defined by Section 605-1025 of the
21Department of Commerce and Economic Opportunity Law of the
22Civil Administrative Code of Illinois.
23    For the purposes of this item (32):
24        "Data center" means a building or a series of
25    buildings rehabilitated or constructed to house working
26    servers in one physical location or multiple sites within

 

 

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1    the State of Illinois.
2        "Qualified tangible personal property" means:
3    electrical systems and equipment; climate control and
4    chilling equipment and systems; mechanical systems and
5    equipment; monitoring and secure systems; emergency
6    generators; hardware; computers; servers; data storage
7    devices; network connectivity equipment; racks; cabinets;
8    telecommunications cabling infrastructure; raised floor
9    systems; peripheral components or systems; software;
10    mechanical, electrical, or plumbing systems; battery
11    systems; cooling systems and towers; temperature control
12    systems; other cabling; and other data center
13    infrastructure equipment and systems necessary to operate
14    qualified tangible personal property, including fixtures;
15    and component parts of any of the foregoing, including
16    installation, maintenance, repair, refurbishment, and
17    replacement of qualified tangible personal property to
18    generate, transform, transmit, distribute, or manage
19    electricity necessary to operate qualified tangible
20    personal property; and all other tangible personal
21    property that is essential to the operations of a computer
22    data center. The term "qualified tangible personal
23    property" also includes building materials physically
24    incorporated in to the qualifying data center. To document
25    the exemption allowed under this Section, the retailer
26    must obtain from the purchaser a copy of the certificate

 

 

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1    of eligibility issued by the Department of Commerce and
2    Economic Opportunity.
3    This item (32) is exempt from the provisions of Section
43-55.
5(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
6101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
7    Section 20. The Retailers' Occupation Tax Act is amended
8by changing Section 2-5 as follows:
 
9    (35 ILCS 120/2-5)
10    Sec. 2-5. Exemptions. Gross receipts from proceeds from
11the sale of the following tangible personal property are
12exempt from the tax imposed by this Act:
13        (1) Farm chemicals.
14        (2) Farm machinery and equipment, both new and used,
15    including that manufactured on special order, certified by
16    the purchaser to be used primarily for production
17    agriculture or State or federal agricultural programs,
18    including individual replacement parts for the machinery
19    and equipment, including machinery and equipment purchased
20    for lease, and including implements of husbandry defined
21    in Section 1-130 of the Illinois Vehicle Code, farm
22    machinery and agricultural chemical and fertilizer
23    spreaders, and nurse wagons required to be registered
24    under Section 3-809 of the Illinois Vehicle Code, but

 

 

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1    excluding other motor vehicles required to be registered
2    under the Illinois Vehicle Code. Horticultural polyhouses
3    or hoop houses used for propagating, growing, or
4    overwintering plants shall be considered farm machinery
5    and equipment under this item (2). Agricultural chemical
6    tender tanks and dry boxes shall include units sold
7    separately from a motor vehicle required to be licensed
8    and units sold mounted on a motor vehicle required to be
9    licensed, if the selling price of the tender is separately
10    stated.
11        Farm machinery and equipment shall include precision
12    farming equipment that is installed or purchased to be
13    installed on farm machinery and equipment including, but
14    not limited to, tractors, harvesters, sprayers, planters,
15    seeders, or spreaders. Precision farming equipment
16    includes, but is not limited to, soil testing sensors,
17    computers, monitors, software, global positioning and
18    mapping systems, and other such equipment.
19        Farm machinery and equipment also includes computers,
20    sensors, software, and related equipment used primarily in
21    the computer-assisted operation of production agriculture
22    facilities, equipment, and activities such as, but not
23    limited to, the collection, monitoring, and correlation of
24    animal and crop data for the purpose of formulating animal
25    diets and agricultural chemicals. This item (2) is exempt
26    from the provisions of Section 2-70.

 

 

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

 

 

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1    secondary school located in Illinois.
2        (7) Until July 1, 2003, proceeds of that portion of
3    the selling price of a passenger car the sale of which is
4    subject to the Replacement Vehicle Tax.
5        (8) Personal property sold to an Illinois county fair
6    association for use in conducting, operating, or promoting
7    the county fair.
8        (9) Personal property sold to a not-for-profit arts or
9    cultural organization that establishes, by proof required
10    by the Department by rule, that it has received an
11    exemption under Section 501(c)(3) of the Internal Revenue
12    Code and that is organized and operated primarily for the
13    presentation or support of arts or cultural programming,
14    activities, or services. These organizations include, but
15    are not limited to, music and dramatic arts organizations
16    such as symphony orchestras and theatrical groups, arts
17    and cultural service organizations, local arts councils,
18    visual arts organizations, and media arts organizations.
19    On and after July 1, 2001 (the effective date of Public Act
20    92-35), however, an entity otherwise eligible for this
21    exemption shall not make tax-free purchases unless it has
22    an active identification number issued by the Department.
23        (10) Personal property sold by a corporation, society,
24    association, foundation, institution, or organization,
25    other than a limited liability company, that is organized
26    and operated as a not-for-profit service enterprise for

 

 

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1    the benefit of persons 65 years of age or older if the
2    personal property was not purchased by the enterprise for
3    the purpose of resale by the enterprise.
4        (11) Personal property sold to a governmental body, to
5    a corporation, society, association, foundation, or
6    institution organized and operated exclusively for
7    charitable, religious, or educational purposes, or to a
8    not-for-profit corporation, society, association,
9    foundation, institution, or organization that has no
10    compensated officers or employees and that is organized
11    and operated primarily for the recreation of persons 55
12    years of age or older. A limited liability company may
13    qualify for the exemption under this paragraph only if the
14    limited liability company is organized and operated
15    exclusively for educational purposes. On and after July 1,
16    1987, however, no entity otherwise eligible for this
17    exemption shall make tax-free purchases unless it has an
18    active identification number issued by the Department.
19        (12) (Blank).
20        (12-5) On and after July 1, 2003 and through June 30,
21    2004, motor vehicles of the second division with a gross
22    vehicle weight in excess of 8,000 pounds that are subject
23    to the commercial distribution fee imposed under Section
24    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
25    2004 and through June 30, 2005, the use in this State of
26    motor vehicles of the second division: (i) with a gross

 

 

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1    vehicle weight rating in excess of 8,000 pounds; (ii) that
2    are subject to the commercial distribution fee imposed
3    under Section 3-815.1 of the Illinois Vehicle Code; and
4    (iii) that are primarily used for commercial purposes.
5    Through June 30, 2005, this exemption applies to repair
6    and replacement parts added after the initial purchase of
7    such a motor vehicle if that motor vehicle is used in a
8    manner that would qualify for the rolling stock exemption
9    otherwise provided for in this Act. For purposes of this
10    paragraph, "used for commercial purposes" means the
11    transportation of persons or property in furtherance of
12    any commercial or industrial enterprise whether for-hire
13    or not.
14        (13) Proceeds from sales to owners, lessors, or
15    shippers of tangible personal property that is utilized by
16    interstate carriers for hire for use as rolling stock
17    moving in interstate commerce and equipment operated by a
18    telecommunications provider, licensed as a common carrier
19    by the Federal Communications Commission, which is
20    permanently installed in or affixed to aircraft moving in
21    interstate commerce.
22        (14) Machinery and equipment that will be used by the
23    purchaser, or a lessee of the purchaser, primarily in the
24    process of manufacturing or assembling tangible personal
25    property for wholesale or retail sale or lease, whether
26    the sale or lease is made directly by the manufacturer or

 

 

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1    by some other person, whether the materials used in the
2    process are owned by the manufacturer or some other
3    person, or whether the sale or lease is made apart from or
4    as an incident to the seller's engaging in the service
5    occupation of producing machines, tools, dies, jigs,
6    patterns, gauges, or other similar items of no commercial
7    value on special order for a particular purchaser. The
8    exemption provided by this paragraph (14) does not include
9    machinery and equipment used in (i) the generation of
10    electricity for wholesale or retail sale; (ii) the
11    generation or treatment of natural or artificial gas for
12    wholesale or retail sale that is delivered to customers
13    through pipes, pipelines, or mains; or (iii) the treatment
14    of water for wholesale or retail sale that is delivered to
15    customers through pipes, pipelines, or mains. The
16    provisions of Public Act 98-583 are declaratory of
17    existing law as to the meaning and scope of this
18    exemption. Beginning on July 1, 2017, the exemption
19    provided by this paragraph (14) includes, but is not
20    limited to, graphic arts machinery and equipment, as
21    defined in paragraph (4) of this Section.
22        (15) Proceeds of mandatory service charges separately
23    stated on customers' bills for purchase and consumption of
24    food and beverages, to the extent that the proceeds of the
25    service charge are in fact turned over as tips or as a
26    substitute for tips to the employees who participate

 

 

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1    directly in preparing, serving, hosting or cleaning up the
2    food or beverage function with respect to which the
3    service charge is imposed.
4        (16) Tangible personal property sold to a purchaser if
5    the purchaser is exempt from use tax by operation of
6    federal law. This paragraph is exempt from the provisions
7    of Section 2-70.
8        (17) Tangible personal property sold to a common
9    carrier by rail or motor that receives the physical
10    possession of the property in Illinois and that transports
11    the property, or shares with another common carrier in the
12    transportation of the property, out of Illinois on a
13    standard uniform bill of lading showing the seller of the
14    property as the shipper or consignor of the property to a
15    destination outside Illinois, for use outside Illinois.
16        (18) Legal tender, currency, medallions, or gold or
17    silver coinage issued by the State of Illinois, the
18    government of the United States of America, or the
19    government of any foreign country, and bullion.
20        (19) Until July 1, 2003, oil field exploration,
21    drilling, and production equipment, including (i) rigs and
22    parts of rigs, rotary rigs, cable tool rigs, and workover
23    rigs, (ii) pipe and tubular goods, including casing and
24    drill strings, (iii) pumps and pump-jack units, (iv)
25    storage tanks and flow lines, (v) any individual
26    replacement part for oil field exploration, drilling, and

 

 

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1    production equipment, and (vi) machinery and equipment
2    purchased for lease; but excluding motor vehicles required
3    to be registered under the Illinois Vehicle Code.
4        (20) Photoprocessing machinery and equipment,
5    including repair and replacement parts, both new and used,
6    including that manufactured on special order, certified by
7    the purchaser to be used primarily for photoprocessing,
8    and including photoprocessing machinery and equipment
9    purchased for lease.
10        (21) Until July 1, 2028 July 1, 2023, coal and
11    aggregate exploration, mining, off-highway hauling,
12    processing, maintenance, and reclamation equipment,
13    including replacement parts and equipment, and including
14    equipment purchased for lease, but excluding motor
15    vehicles required to be registered under the Illinois
16    Vehicle Code. The changes made to this Section by Public
17    Act 97-767 apply on and after July 1, 2003, but no claim
18    for credit or refund is allowed on or after August 16, 2013
19    (the effective date of Public Act 98-456) for such taxes
20    paid during the period beginning July 1, 2003 and ending
21    on August 16, 2013 (the effective date of Public Act
22    98-456).
23        (22) Until June 30, 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

 

 

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1    flight destined for or returning from a location or
2    locations outside the United States without regard to
3    previous or subsequent domestic stopovers.
4        Beginning July 1, 2013, fuel and petroleum products
5    sold to or used by an air carrier, certified by the carrier
6    to be used for consumption, shipment, or storage in the
7    conduct of its business as an air common carrier, for a
8    flight that (i) is engaged in foreign trade or is engaged
9    in trade between the United States and any of its
10    possessions and (ii) transports at least one individual or
11    package for hire from the city of origination to the city
12    of final destination on the same aircraft, without regard
13    to a change in the flight number of that aircraft.
14        (23) A transaction in which the purchase order is
15    received by a florist who is located outside Illinois, but
16    who has a florist located in Illinois deliver the property
17    to the purchaser or the purchaser's donee in Illinois.
18        (24) Fuel consumed or used in the operation of ships,
19    barges, or vessels that are used primarily in or for the
20    transportation of property or the conveyance of persons
21    for hire on rivers bordering on this State if the fuel is
22    delivered by the seller to the purchaser's barge, ship, or
23    vessel while it is afloat upon that bordering river.
24        (25) Except as provided in item (25-5) of this
25    Section, a motor vehicle sold in this State to a
26    nonresident even though the motor vehicle is delivered to

 

 

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1    the nonresident in this State, if the motor vehicle is not
2    to be titled in this State, and if a drive-away permit is
3    issued to the motor vehicle as provided in Section 3-603
4    of the Illinois Vehicle Code or if the nonresident
5    purchaser has vehicle registration plates to transfer to
6    the motor vehicle upon returning to his or her home state.
7    The issuance of the drive-away permit or having the
8    out-of-state registration plates to be transferred is
9    prima facie evidence that the motor vehicle will not be
10    titled in this State.
11        (25-5) The exemption under item (25) does not apply if
12    the state in which the motor vehicle will be titled does
13    not allow a reciprocal exemption for a motor vehicle sold
14    and delivered in that state to an Illinois resident but
15    titled in Illinois. The tax collected under this Act on
16    the sale of a motor vehicle in this State to a resident of
17    another state that does not allow a reciprocal exemption
18    shall be imposed at a rate equal to the state's rate of tax
19    on taxable property in the state in which the purchaser is
20    a resident, except that the tax shall not exceed the tax
21    that would otherwise be imposed under this Act. At the
22    time of the sale, the purchaser shall execute a statement,
23    signed under penalty of perjury, of his or her intent to
24    title the vehicle in the state in which the purchaser is a
25    resident within 30 days after the sale and of the fact of
26    the payment to the State of Illinois of tax in an amount

 

 

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1    equivalent to the state's rate of tax on taxable property
2    in his or her state of residence and shall submit the
3    statement to the appropriate tax collection agency in his
4    or her state of residence. In addition, the retailer must
5    retain a signed copy of the statement in his or her
6    records. Nothing in this item shall be construed to
7    require the removal of the vehicle from this state
8    following the filing of an intent to title the vehicle in
9    the purchaser's state of residence if the purchaser titles
10    the vehicle in his or her state of residence within 30 days
11    after the date of sale. The tax collected under this Act in
12    accordance with this item (25-5) shall be proportionately
13    distributed as if the tax were collected at the 6.25%
14    general rate imposed under this Act.
15        (25-7) Beginning on July 1, 2007, no tax is imposed
16    under this Act on the sale of an aircraft, as defined in
17    Section 3 of the Illinois Aeronautics Act, if all of the
18    following conditions are met:
19            (1) the aircraft leaves this State within 15 days
20        after the later of either the issuance of the final
21        billing for the sale of the aircraft, or the
22        authorized approval for return to service, completion
23        of the maintenance record entry, and completion of the
24        test flight and ground test for inspection, as
25        required by 14 C.F.R. 91.407;
26            (2) the aircraft is not based or registered in

 

 

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1        this State after the sale of the aircraft; and
2            (3) the seller retains in his or her books and
3        records and provides to the Department a signed and
4        dated certification from the purchaser, on a form
5        prescribed by the Department, certifying that the
6        requirements of this item (25-7) are met. The
7        certificate must also include the name and address of
8        the purchaser, the address of the location where the
9        aircraft is to be titled or registered, the address of
10        the primary physical location of the aircraft, and
11        other information that the Department may reasonably
12        require.
13        For purposes of this item (25-7):
14        "Based in this State" means hangared, stored, or
15    otherwise used, excluding post-sale customizations as
16    defined in this Section, for 10 or more days in each
17    12-month period immediately following the date of the sale
18    of the aircraft.
19        "Registered in this State" means an aircraft
20    registered with the Department of Transportation,
21    Aeronautics Division, or titled or registered with the
22    Federal Aviation Administration to an address located in
23    this State.
24        This paragraph (25-7) is exempt from the provisions of
25    Section 2-70.
26        (26) Semen used for artificial insemination of

 

 

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

 

 

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

 

 

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1    declared disaster area within 6 months after the disaster.
2        (32) Beginning July 1, 1999, game or game birds sold
3    at a "game breeding and hunting preserve area" as that
4    term is used in the Wildlife Code. This paragraph is
5    exempt from the provisions of Section 2-70.
6        (33) A motor vehicle, as that term is defined in
7    Section 1-146 of the Illinois Vehicle Code, that is
8    donated to a corporation, limited liability company,
9    society, association, foundation, or institution that is
10    determined by the Department to be organized and operated
11    exclusively for educational purposes. For purposes of this
12    exemption, "a corporation, limited liability company,
13    society, association, foundation, or institution organized
14    and operated exclusively for educational purposes" means
15    all tax-supported public schools, private schools that
16    offer systematic instruction in useful branches of
17    learning by methods common to public schools and that
18    compare favorably in their scope and intensity with the
19    course of study presented in tax-supported schools, and
20    vocational or technical schools or institutes organized
21    and operated exclusively to provide a course of study of
22    not less than 6 weeks duration and designed to prepare
23    individuals to follow a trade or to pursue a manual,
24    technical, mechanical, industrial, business, or commercial
25    occupation.
26        (34) Beginning January 1, 2000, personal property,

 

 

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

 

 

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

 

 

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

 

 

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1    the use and consumption of all such tangible personal
2    property outside of the State of Illinois.
3        (39) Beginning January 1, 2008, tangible personal
4    property used in the construction or maintenance of a
5    community water supply, as defined under Section 3.145 of
6    the Environmental Protection Act, that is operated by a
7    not-for-profit corporation that holds a valid water supply
8    permit issued under Title IV of the Environmental
9    Protection Act. This paragraph is exempt from the
10    provisions of Section 2-70.
11        (40) Beginning January 1, 2010 and continuing through
12    December 31, 2024, materials, parts, equipment,
13    components, and furnishings incorporated into or upon an
14    aircraft as part of the modification, refurbishment,
15    completion, replacement, repair, or maintenance of the
16    aircraft. This exemption includes consumable supplies used
17    in the modification, refurbishment, completion,
18    replacement, repair, and maintenance of aircraft, but
19    excludes any materials, parts, equipment, components, and
20    consumable supplies used in the modification, replacement,
21    repair, and maintenance of aircraft engines or power
22    plants, whether such engines or power plants are installed
23    or uninstalled upon any such aircraft. "Consumable
24    supplies" include, but are not limited to, adhesive, tape,
25    sandpaper, general purpose lubricants, cleaning solution,
26    latex gloves, and protective films. This exemption applies

 

 

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1    only to the sale of qualifying tangible personal property
2    to persons who modify, refurbish, complete, replace, or
3    maintain an aircraft and who (i) hold an Air Agency
4    Certificate and are empowered to operate an approved
5    repair station by the Federal Aviation Administration,
6    (ii) have a Class IV Rating, and (iii) conduct operations
7    in accordance with Part 145 of the Federal Aviation
8    Regulations. The exemption does not include aircraft
9    operated by a commercial air carrier providing scheduled
10    passenger air service pursuant to authority issued under
11    Part 121 or Part 129 of the Federal Aviation Regulations.
12    The changes made to this paragraph (40) by Public Act
13    98-534 are declarative of existing law. It is the intent
14    of the General Assembly that the exemption under this
15    paragraph (40) applies continuously from January 1, 2010
16    through December 31, 2024; however, no claim for credit or
17    refund is allowed for taxes paid as a result of the
18    disallowance of this exemption on or after January 1, 2015
19    and prior to the effective date of this amendatory Act of
20    the 101st General Assembly.
21        (41) Tangible personal property sold to a
22    public-facilities corporation, as described in Section
23    11-65-10 of the Illinois Municipal Code, for purposes of
24    constructing or furnishing a municipal convention hall,
25    but only if the legal title to the municipal convention
26    hall is transferred to the municipality without any

 

 

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1    further consideration by or on behalf of the municipality
2    at the time of the completion of the municipal convention
3    hall or upon the retirement or redemption of any bonds or
4    other debt instruments issued by the public-facilities
5    corporation in connection with the development of the
6    municipal convention hall. This exemption includes
7    existing public-facilities corporations as provided in
8    Section 11-65-25 of the Illinois Municipal Code. This
9    paragraph is exempt from the provisions of Section 2-70.
10        (42) Beginning January 1, 2017 and through December
11    31, 2026, menstrual pads, tampons, and menstrual cups.
12        (43) Merchandise that is subject to the Rental
13    Purchase Agreement Occupation and Use Tax. The purchaser
14    must certify that the item is purchased to be rented
15    subject to a rental purchase agreement, as defined in the
16    Rental Purchase Agreement Act, and provide proof of
17    registration under the Rental Purchase Agreement
18    Occupation and Use Tax Act. This paragraph is exempt from
19    the provisions of Section 2-70.
20        (44) Qualified tangible personal property used in the
21    construction or operation of a data center that has been
22    granted a certificate of exemption by the Department of
23    Commerce and Economic Opportunity, whether that tangible
24    personal property is purchased by the owner, operator, or
25    tenant of the data center or by a contractor or
26    subcontractor of the owner, operator, or tenant. Data

 

 

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1    centers that would have qualified for a certificate of
2    exemption prior to January 1, 2020 had this amendatory Act
3    of the 101st General Assembly been in effect, may apply
4    for and obtain an exemption for subsequent purchases of
5    computer equipment or enabling software purchased or
6    leased to upgrade, supplement, or replace computer
7    equipment or enabling software purchased or leased in the
8    original investment that would have qualified.
9        The Department of Commerce and Economic Opportunity
10    shall grant a certificate of exemption under this item
11    (44) to qualified data centers as defined by Section
12    605-1025 of the Department of Commerce and Economic
13    Opportunity Law of the Civil Administrative Code of
14    Illinois.
15        For the purposes of this item (44):
16            "Data center" means a building or a series of
17        buildings rehabilitated or constructed to house
18        working servers in one physical location or multiple
19        sites within the State of Illinois.
20            "Qualified tangible personal property" means:
21        electrical systems and equipment; climate control and
22        chilling equipment and systems; mechanical systems and
23        equipment; monitoring and secure systems; emergency
24        generators; hardware; computers; servers; data storage
25        devices; network connectivity equipment; racks;
26        cabinets; telecommunications cabling infrastructure;

 

 

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1        raised floor systems; peripheral components or
2        systems; software; mechanical, electrical, or plumbing
3        systems; battery systems; cooling systems and towers;
4        temperature control systems; other cabling; and other
5        data center infrastructure equipment and systems
6        necessary to operate qualified tangible personal
7        property, including fixtures; and component parts of
8        any of the foregoing, including installation,
9        maintenance, repair, refurbishment, and replacement of
10        qualified tangible personal property to generate,
11        transform, transmit, distribute, or manage electricity
12        necessary to operate qualified tangible personal
13        property; and all other tangible personal property
14        that is essential to the operations of a computer data
15        center. The term "qualified tangible personal
16        property" also includes building materials physically
17        incorporated into in to the qualifying data center. To
18        document the exemption allowed under this Section, the
19        retailer must obtain from the purchaser a copy of the
20        certificate of eligibility issued by the Department of
21        Commerce and Economic Opportunity.
22        This item (44) is exempt from the provisions of
23    Section 2-70.
24        (45) Beginning January 1, 2020 and through December
25    31, 2020, sales of tangible personal property made by a
26    marketplace seller over a marketplace for which tax is due

 

 

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1    under this Act but for which use tax has been collected and
2    remitted to the Department by a marketplace facilitator
3    under Section 2d of the Use Tax Act are exempt from tax
4    under this Act. A marketplace seller claiming this
5    exemption shall maintain books and records demonstrating
6    that the use tax on such sales has been collected and
7    remitted by a marketplace facilitator. Marketplace sellers
8    that have properly remitted tax under this Act on such
9    sales may file a claim for credit as provided in Section 6
10    of this Act. No claim is allowed, however, for such taxes
11    for which a credit or refund has been issued to the
12    marketplace facilitator under the Use Tax Act, or for
13    which the marketplace facilitator has filed a claim for
14    credit or refund under the Use Tax Act.
15(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
16101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
178-27-21; revised 11-9-21.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.