102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB4057

 

Introduced 1/21/2022, by Sen. Ram Villivalam

 

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 diapers, baby wipes, and infant formula are exempt from the taxes imposed under the Acts.


LRB102 23669 HLH 32851 b

 

 

A BILL FOR

 

SB4057LRB102 23669 HLH 32851 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, 2023, coal and aggregate exploration,
24mining, off-highway hauling, processing, maintenance, and
25reclamation equipment, including replacement parts and
26equipment, and including equipment purchased for lease, but

 

 

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1excluding motor vehicles required to be registered under the
2Illinois Vehicle Code. The changes made to this Section by
3Public Act 97-767 apply on and after July 1, 2003, but no claim
4for credit or refund is allowed on or after August 16, 2013
5(the effective date of Public Act 98-456) for such taxes paid
6during the period beginning July 1, 2003 and ending on August
716, 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    (41) Diapers, baby wipes, and infant formula. This item
11(41) is exempt from the provisions of Section 3-90.
12(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
13101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.
146-17-21.)
 
15    Section 10. The Service Use Tax Act is amended by changing
16Section 3-5 as follows:
 
17    (35 ILCS 110/3-5)
18    Sec. 3-5. Exemptions. Use of the following tangible
19personal property is exempt from the tax imposed by this Act:
20    (1) Personal property purchased from a corporation,
21society, association, foundation, institution, or
22organization, other than a limited liability company, that is
23organized and operated as a not-for-profit service enterprise
24for the benefit of persons 65 years of age or older if the

 

 

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1personal property was not purchased by the enterprise for the
2purpose of resale by the enterprise.
3    (2) Personal property purchased by a non-profit Illinois
4county fair association for use in conducting, operating, or
5promoting the county fair.
6    (3) Personal property purchased by a not-for-profit arts
7or cultural organization that establishes, by proof required
8by the Department by rule, that it has received an exemption
9under Section 501(c)(3) of the Internal Revenue Code and that
10is organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after July 1, 2001 (the
17effective date of Public Act 92-35), however, an entity
18otherwise eligible for this exemption shall not make tax-free
19purchases unless it has an active identification number issued
20by the Department.
21    (4) Legal tender, currency, medallions, or gold or silver
22coinage issued by the State of Illinois, the government of the
23United States of America, or the government of any foreign
24country, and bullion.
25    (5) Until July 1, 2003 and beginning again on September 1,
262004 through August 30, 2014, graphic arts machinery and

 

 

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

 

 

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1overwintering plants shall be considered farm machinery and
2equipment under this item (7). Agricultural chemical tender
3tanks and dry boxes shall include units sold separately from a
4motor vehicle required to be licensed and units sold mounted
5on a motor vehicle required to be licensed if the selling price
6of the tender is separately stated.
7    Farm machinery and equipment shall include precision
8farming equipment that is installed or purchased to be
9installed on farm machinery and equipment including, but not
10limited to, tractors, harvesters, sprayers, planters, seeders,
11or spreaders. Precision farming equipment includes, but is not
12limited to, soil testing sensors, computers, monitors,
13software, global positioning and mapping systems, and other
14such equipment.
15    Farm machinery and equipment also includes computers,
16sensors, software, and related equipment used primarily in the
17computer-assisted operation of production agriculture
18facilities, equipment, and activities such as, but not limited
19to, the collection, monitoring, and correlation of animal and
20crop data for the purpose of formulating animal diets and
21agricultural chemicals. This item (7) is exempt from the
22provisions of Section 3-75.
23    (8) Until June 30, 2013, fuel and petroleum products sold
24to or used by an air common carrier, certified by the carrier
25to be used for consumption, shipment, or storage in the
26conduct of its business as an air common carrier, for a flight

 

 

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1destined for or returning from a location or locations outside
2the United States without regard to previous or subsequent
3domestic stopovers.
4    Beginning July 1, 2013, fuel and petroleum products sold
5to or used by an air carrier, certified by the carrier to be
6used for consumption, shipment, or storage in the conduct of
7its business as an air common carrier, for a flight that (i) is
8engaged in foreign trade or is engaged in trade between the
9United States and any of its possessions and (ii) transports
10at least one individual or package for hire from the city of
11origination to the city of final destination on the same
12aircraft, without regard to a change in the flight number of
13that aircraft.
14    (9) Proceeds of mandatory service charges separately
15stated on customers' bills for the purchase and consumption of
16food and beverages acquired as an incident to the purchase of a
17service from a serviceman, to the extent that the proceeds of
18the service 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) Proceeds from the sale of photoprocessing machinery
8and equipment, including repair and replacement parts, both
9new and used, including that manufactured on special order,
10certified by the purchaser to be used primarily for
11photoprocessing, and including photoprocessing machinery and
12equipment purchased for lease.
13    (12) Until July 1, 2023, coal and aggregate exploration,
14mining, off-highway hauling, processing, maintenance, and
15reclamation equipment, including replacement parts and
16equipment, and including equipment purchased for lease, but
17excluding motor vehicles required to be registered under the
18Illinois Vehicle Code. The changes made to this Section by
19Public Act 97-767 apply on and after July 1, 2003, but no claim
20for credit or refund is allowed on or after August 16, 2013
21(the effective date of Public Act 98-456) for such taxes paid
22during the period beginning July 1, 2003 and ending on August
2316, 2013 (the effective date of Public Act 98-456).
24    (13) Semen used for artificial insemination of livestock
25for direct agricultural production.
26    (14) Horses, or interests in horses, registered with and

 

 

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1meeting the requirements of any of the Arabian Horse Club
2Registry of America, Appaloosa Horse Club, American Quarter
3Horse Association, United States Trotting Association, or
4Jockey Club, as appropriate, used for purposes of breeding or
5racing for prizes. This item (14) is exempt from the
6provisions of Section 3-75, and the exemption provided for
7under this item (14) applies for all periods beginning May 30,
81995, but no claim for credit or refund is allowed on or after
9January 1, 2008 (the effective date of Public Act 95-88) for
10such taxes paid during the period beginning May 30, 2000 and
11ending on January 1, 2008 (the effective date of Public Act
1295-88).
13    (15) Computers and communications equipment utilized for
14any hospital purpose and equipment used in the diagnosis,
15analysis, or treatment of hospital patients purchased by a
16lessor who leases the equipment, under a lease of one year or
17longer executed or in effect at the time the lessor would
18otherwise be subject to the tax imposed by this Act, to a
19hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of
21the Retailers' Occupation Tax Act. If the equipment is leased
22in a manner that does not qualify for this exemption or is used
23in any other non-exempt manner, the lessor shall be liable for
24the tax imposed under this Act or the Use Tax Act, as the case
25may be, based on the fair market value of the property at the
26time the non-qualifying use occurs. No lessor shall collect or

 

 

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

 

 

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

 

 

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1    (19) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-75.
5    (20) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the
9Department to be organized and operated exclusively for
10educational purposes. For purposes of this exemption, "a
11corporation, limited liability company, society, association,
12foundation, or institution organized and operated exclusively
13for educational purposes" means all tax-supported public
14schools, private schools that offer systematic instruction in
15useful branches of learning by methods common to public
16schools and that compare favorably in their scope and
17intensity with the course of study presented in tax-supported
18schools, and vocational or technical schools or institutes
19organized and operated exclusively to provide a course of
20study of not less than 6 weeks duration and designed to prepare
21individuals to follow a trade or to pursue a manual,
22technical, mechanical, industrial, business, or commercial
23occupation.
24    (21) Beginning January 1, 2000, personal property,
25including food, purchased through fundraising events for the
26benefit of a public or private elementary or secondary school,

 

 

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1a group of those schools, or one or more school districts if
2the events are sponsored by an entity recognized by the school
3district that consists primarily of volunteers and includes
4parents and teachers of the school children. This paragraph
5does not apply to fundraising events (i) for the benefit of
6private home instruction or (ii) for which the fundraising
7entity purchases the personal property sold at the events from
8another individual or entity that sold the property for the
9purpose of resale by the fundraising entity and that profits
10from the sale to the fundraising entity. This paragraph is
11exempt from the provisions of Section 3-75.
12    (22) Beginning January 1, 2000 and through December 31,
132001, new or used automatic vending machines that prepare and
14serve hot food and beverages, including coffee, soup, and
15other items, and replacement parts for these machines.
16Beginning January 1, 2002 and through June 30, 2003, machines
17and parts for machines used in commercial, coin-operated
18amusement and vending business if a use or occupation tax is
19paid on the gross receipts derived from the use of the
20commercial, coin-operated amusement and vending machines. This
21paragraph is exempt from the provisions of Section 3-75.
22    (23) Beginning August 23, 2001 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages,
25soft drinks, and food that has been prepared for immediate
26consumption) and prescription and nonprescription medicines,

 

 

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

 

 

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

 

 

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

 

 

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1personal property transferred incident to the modification,
2refurbishment, completion, replacement, repair, or maintenance
3of aircraft by persons who (i) hold an Air Agency Certificate
4and are empowered to operate an approved repair station by the
5Federal Aviation Administration, (ii) have a Class IV Rating,
6and (iii) conduct operations in accordance with Part 145 of
7the Federal Aviation Regulations. The exemption does not
8include aircraft operated by a commercial air carrier
9providing scheduled passenger air service pursuant to
10authority issued under Part 121 or Part 129 of the Federal
11Aviation Regulations. The changes made to this paragraph (27)
12by Public Act 98-534 are declarative of existing law. It is the
13intent of the General Assembly that the exemption under this
14paragraph (27) applies continuously from January 1, 2010
15through December 31, 2024; however, no claim for credit or
16refund is allowed for taxes paid as a result of the
17disallowance of this exemption on or after January 1, 2015 and
18prior to the effective date of this amendatory Act of the 101st
19General Assembly.
20    (28) Tangible personal property purchased by a
21public-facilities corporation, as described in Section
2211-65-10 of the Illinois Municipal Code, for purposes of
23constructing or furnishing a municipal convention hall, but
24only if the legal title to the municipal convention hall is
25transferred to the municipality without any further
26consideration by or on behalf of the municipality at the time

 

 

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1of the completion of the municipal convention hall or upon the
2retirement or redemption of any bonds or other debt
3instruments issued by the public-facilities corporation in
4connection with the development of the municipal convention
5hall. This exemption includes existing public-facilities
6corporations as provided in Section 11-65-25 of the Illinois
7Municipal Code. This paragraph is exempt from the provisions
8of Section 3-75.
9    (29) Beginning January 1, 2017 and through December 31,
102026, menstrual pads, tampons, and menstrual cups.
11    (30) Tangible personal property transferred to a purchaser
12who is exempt from the tax imposed by this Act by operation of
13federal law. This paragraph is exempt from the provisions of
14Section 3-75.
15    (31) Qualified tangible personal property used in the
16construction or operation of a data center that has been
17granted a certificate of exemption by the Department of
18Commerce and Economic Opportunity, whether that tangible
19personal property is purchased by the owner, operator, or
20tenant of the data center or by a contractor or subcontractor
21of the owner, operator, or tenant. Data centers that would
22have qualified for a certificate of exemption prior to January
231, 2020 had this amendatory Act of the 101st General Assembly
24been in effect, may apply for and obtain an exemption for
25subsequent purchases of computer equipment or enabling
26software purchased or leased to upgrade, supplement, or

 

 

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

 

 

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1    installation, maintenance, repair, refurbishment, and
2    replacement of qualified tangible personal property to
3    generate, transform, transmit, distribute, or manage
4    electricity necessary to operate qualified tangible
5    personal property; and all other tangible personal
6    property that is essential to the operations of a computer
7    data center. The term "qualified tangible personal
8    property" also includes building materials physically
9    incorporated in to the qualifying data center. To document
10    the exemption allowed under this Section, the retailer
11    must obtain from the purchaser a copy of the certificate
12    of eligibility issued by the Department of Commerce and
13    Economic Opportunity.
14    This item (31) is exempt from the provisions of Section
153-75.
16    (32) Diapers, baby wipes, and infant formula. This item
17(32) is exempt from the provisions of Section 3-75.
18(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
19101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
20    Section 15. The Service Occupation Tax Act is amended by
21changing Section 3-5 as follows:
 
22    (35 ILCS 115/3-5)
23    Sec. 3-5. Exemptions. The following tangible personal
24property is exempt from the tax imposed by this Act:

 

 

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

 

 

SB4057- 40 -LRB102 23669 HLH 32851 b

1coinage issued by the State of Illinois, the government of the
2United States of America, or the government of any foreign
3country, and bullion.
4    (5) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new
7and used, and including that manufactured on special order or
8purchased for lease, certified by the purchaser to be used
9primarily for graphic arts production. Equipment includes
10chemicals or chemicals acting as catalysts but only if the
11chemicals or chemicals acting as catalysts effect a direct and
12immediate change upon a graphic arts product. Beginning on
13July 1, 2017, graphic arts machinery and equipment is included
14in the manufacturing and assembling machinery and equipment
15exemption under Section 2 of this Act.
16    (6) Personal property sold by a teacher-sponsored student
17organization affiliated with an elementary or secondary school
18located in Illinois.
19    (7) Farm machinery and equipment, both new and used,
20including that manufactured on special order, certified by the
21purchaser to be used primarily for production agriculture or
22State or federal agricultural programs, including individual
23replacement parts for the machinery and equipment, including
24machinery and equipment purchased for lease, and including
25implements of husbandry defined in Section 1-130 of the
26Illinois Vehicle Code, farm machinery and agricultural

 

 

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

 

 

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1provisions of Section 3-55.
2    (8) Until June 30, 2013, fuel and petroleum products sold
3to or used by an air common carrier, certified by the carrier
4to be used for consumption, shipment, or storage in the
5conduct of its business as an air common carrier, for a flight
6destined for or returning from a location or locations outside
7the United States without regard to previous or subsequent
8domestic stopovers.
9    Beginning July 1, 2013, fuel and petroleum products sold
10to or used by an air carrier, certified by the carrier to be
11used for consumption, shipment, or storage in the conduct of
12its business as an air common carrier, for a flight that (i) is
13engaged in foreign trade or is engaged in trade between the
14United States and any of its possessions and (ii) transports
15at least one individual or package for hire from the city of
16origination to the city of final destination on the same
17aircraft, without regard to a change in the flight number of
18that aircraft.
19    (9) Proceeds of mandatory service charges separately
20stated on customers' bills for the purchase and consumption of
21food and beverages, to the extent that the proceeds of the
22service charge are in fact turned over as tips or as a
23substitute for tips to the employees who participate directly
24in preparing, serving, hosting or cleaning up the food or
25beverage function with respect to which the service charge is
26imposed.

 

 

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1    (10) Until July 1, 2003, oil field exploration, drilling,
2and production equipment, including (i) rigs and parts of
3rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
4pipe and tubular goods, including casing and drill strings,
5(iii) pumps and pump-jack units, (iv) storage tanks and flow
6lines, (v) any individual replacement part for oil field
7exploration, drilling, and production equipment, and (vi)
8machinery and equipment purchased for lease; but excluding
9motor vehicles required to be registered under the Illinois
10Vehicle Code.
11    (11) Photoprocessing machinery and equipment, including
12repair and replacement parts, both new and used, including
13that manufactured on special order, certified by the purchaser
14to be used primarily for photoprocessing, and including
15photoprocessing machinery and equipment purchased for lease.
16    (12) Until July 1, 2023, coal and aggregate exploration,
17mining, off-highway hauling, processing, maintenance, and
18reclamation equipment, including replacement parts and
19equipment, and including equipment purchased for lease, but
20excluding motor vehicles required to be registered under the
21Illinois Vehicle Code. The changes made to this Section by
22Public Act 97-767 apply on and after July 1, 2003, but no claim
23for credit or refund is allowed on or after August 16, 2013
24(the effective date of Public Act 98-456) for such taxes paid
25during the period beginning July 1, 2003 and ending on August
2616, 2013 (the effective date of Public Act 98-456).

 

 

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1    (13) Beginning January 1, 1992 and through June 30, 2016,
2food for human consumption that is to be consumed off the
3premises where it is sold (other than alcoholic beverages,
4soft drinks and food that has been prepared for immediate
5consumption) and prescription and non-prescription medicines,
6drugs, medical appliances, and insulin, urine testing
7materials, syringes, and needles used by diabetics, for human
8use, when purchased for use by a person receiving medical
9assistance under Article V of the Illinois Public Aid Code who
10resides in a licensed long-term care facility, as defined in
11the Nursing Home Care Act, or in a licensed facility as defined
12in the ID/DD Community Care Act, the MC/DD Act, or the
13Specialized Mental Health Rehabilitation Act of 2013.
14    (14) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (15) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (15) is exempt from the
22provisions of Section 3-55, and the exemption provided for
23under this item (15) applies for all periods beginning May 30,
241995, but no claim for credit or refund is allowed on or after
25January 1, 2008 (the effective date of Public Act 95-88) for
26such taxes paid during the period beginning May 30, 2000 and

 

 

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1ending on January 1, 2008 (the effective date of Public Act
295-88).
3    (16) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients sold to a lessor
6who leases the equipment, under a lease of one year or longer
7executed or in effect at the time of the purchase, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10the Retailers' Occupation Tax Act.
11    (17) Personal property sold to a lessor who leases the
12property, under a lease of one year or longer executed or in
13effect at the time of the purchase, to a governmental body that
14has been issued an active tax exemption identification number
15by the Department under Section 1g of the Retailers'
16Occupation Tax Act.
17    (18) Beginning with taxable years ending on or after
18December 31, 1995 and ending with taxable years ending on or
19before December 31, 2004, personal property that is donated
20for disaster relief to be used in a State or federally declared
21disaster area in Illinois or bordering Illinois by a
22manufacturer or retailer that is registered in this State to a
23corporation, society, association, foundation, or institution
24that has been issued a sales tax exemption identification
25number by the Department that assists victims of the disaster
26who reside within the declared disaster area.

 

 

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1    (19) Beginning with taxable years ending on or after
2December 31, 1995 and ending with taxable years ending on or
3before December 31, 2004, personal property that is used in
4the performance of infrastructure repairs in this State,
5including but not limited to municipal roads and streets,
6access roads, bridges, sidewalks, waste disposal systems,
7water and sewer line extensions, water distribution and
8purification facilities, storm water drainage and retention
9facilities, and sewage treatment facilities, resulting from a
10State or federally declared disaster in Illinois or bordering
11Illinois when such repairs are initiated on facilities located
12in the declared disaster area within 6 months after the
13disaster.
14    (20) Beginning July 1, 1999, game or game birds sold at a
15"game breeding and hunting preserve area" as that term is used
16in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-55.
18    (21) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the
22Department to be organized and operated exclusively for
23educational purposes. For purposes of this exemption, "a
24corporation, limited liability company, society, association,
25foundation, or institution organized and operated exclusively
26for educational purposes" means all tax-supported public

 

 

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1schools, private schools that offer systematic instruction in
2useful branches of learning by methods common to public
3schools and that compare favorably in their scope and
4intensity with the course of study presented in tax-supported
5schools, and vocational or technical schools or institutes
6organized and operated exclusively to provide a course of
7study of not less than 6 weeks duration and designed to prepare
8individuals to follow a trade or to pursue a manual,
9technical, mechanical, industrial, business, or commercial
10occupation.
11    (22) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 3-55.
25    (23) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

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1serve hot food and beverages, including coffee, soup, and
2other items, and replacement parts for these machines.
3Beginning January 1, 2002 and through June 30, 2003, machines
4and parts for machines used in commercial, coin-operated
5amusement and vending business if a use or occupation tax is
6paid on the gross receipts derived from the use of the
7commercial, coin-operated amusement and vending machines. This
8paragraph is exempt from the provisions of Section 3-55.
9    (24) Beginning on August 2, 2001 (the effective date of
10Public Act 92-227), computers and communications equipment
11utilized for any hospital purpose and equipment used in the
12diagnosis, analysis, or treatment of hospital patients sold to
13a lessor who leases the equipment, under a lease of one year or
14longer executed or in effect at the time of the purchase, to a
15hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of
17the Retailers' Occupation Tax Act. This paragraph is exempt
18from the provisions of Section 3-55.
19    (25) Beginning on August 2, 2001 (the effective date of
20Public Act 92-227), personal property sold to a lessor who
21leases the property, under a lease of one year or longer
22executed or in effect at the time of the purchase, to a
23governmental body that has been issued an active tax exemption
24identification number by the Department under Section 1g of
25the Retailers' Occupation Tax Act. This paragraph is exempt
26from the provisions of Section 3-55.

 

 

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1    (26) Beginning on January 1, 2002 and through June 30,
22016, tangible personal property purchased from an Illinois
3retailer by a taxpayer engaged in centralized purchasing
4activities in Illinois who will, upon receipt of the property
5in Illinois, temporarily store the property in Illinois (i)
6for the purpose of subsequently transporting it outside this
7State for use or consumption thereafter solely outside this
8State or (ii) for the purpose of being processed, fabricated,
9or manufactured into, attached to, or incorporated into other
10tangible personal property to be transported outside this
11State and thereafter used or consumed solely outside this
12State. The Director of Revenue shall, pursuant to rules
13adopted in accordance with the Illinois Administrative
14Procedure Act, issue a permit to any taxpayer in good standing
15with the Department who is eligible for the exemption under
16this paragraph (26). The permit issued under this paragraph
17(26) shall authorize the holder, to the extent and in the
18manner specified in the rules adopted under this Act, to
19purchase tangible personal property from a retailer exempt
20from the taxes imposed by this Act. Taxpayers shall maintain
21all necessary books and records to substantiate the use and
22consumption of all such tangible personal property outside of
23the State of Illinois.
24    (27) Beginning January 1, 2008, tangible personal property
25used in the construction or maintenance of a community water
26supply, as defined under Section 3.145 of the Environmental

 

 

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1Protection Act, that is operated by a not-for-profit
2corporation that holds a valid water supply permit issued
3under Title IV of the Environmental Protection Act. This
4paragraph is exempt from the provisions of Section 3-55.
5    (28) Tangible personal property sold to a
6public-facilities corporation, as described in Section
711-65-10 of the Illinois Municipal Code, for purposes of
8constructing or furnishing a municipal convention hall, but
9only if the legal title to the municipal convention hall is
10transferred to the municipality without any further
11consideration by or on behalf of the municipality at the time
12of the completion of the municipal convention hall or upon the
13retirement or redemption of any bonds or other debt
14instruments issued by the public-facilities corporation in
15connection with the development of the municipal convention
16hall. This exemption includes existing public-facilities
17corporations as provided in Section 11-65-25 of the Illinois
18Municipal Code. This paragraph is exempt from the provisions
19of Section 3-55.
20    (29) Beginning January 1, 2010 and continuing through
21December 31, 2024, materials, parts, equipment, components,
22and furnishings incorporated into or upon an aircraft as part
23of the modification, refurbishment, completion, replacement,
24repair, or maintenance of the aircraft. This exemption
25includes consumable supplies used in the modification,
26refurbishment, completion, replacement, repair, and

 

 

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1maintenance of aircraft, but excludes any materials, parts,
2equipment, components, and consumable supplies used in the
3modification, replacement, repair, and maintenance of aircraft
4engines or power plants, whether such engines or power plants
5are installed or uninstalled upon any such aircraft.
6"Consumable supplies" include, but are not limited to,
7adhesive, tape, sandpaper, general purpose lubricants,
8cleaning solution, latex gloves, and protective films. This
9exemption applies only to the transfer of qualifying tangible
10personal property incident to the modification, refurbishment,
11completion, replacement, repair, or maintenance of an aircraft
12by persons who (i) hold an Air Agency Certificate and are
13empowered to operate an approved repair station by the Federal
14Aviation Administration, (ii) have a Class IV Rating, and
15(iii) conduct operations in accordance with Part 145 of the
16Federal Aviation Regulations. The exemption does not include
17aircraft operated by a commercial air carrier providing
18scheduled passenger air service pursuant to authority issued
19under Part 121 or Part 129 of the Federal Aviation
20Regulations. The changes made to this paragraph (29) by Public
21Act 98-534 are declarative of existing law. It is the intent of
22the General Assembly that the exemption under this paragraph
23(29) applies continuously from January 1, 2010 through
24December 31, 2024; however, no claim for credit or refund is
25allowed for taxes paid as a result of the disallowance of this
26exemption on or after January 1, 2015 and prior to the

 

 

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1effective date of this amendatory Act of the 101st General
2Assembly.
3    (30) Beginning January 1, 2017 and through December 31,
42026, menstrual pads, tampons, and menstrual cups.
5    (31) Tangible personal property transferred to a purchaser
6who is exempt from tax by operation of federal law. This
7paragraph is exempt from the provisions of Section 3-55.
8    (32) Qualified tangible personal property used in the
9construction or operation of a data center that has been
10granted a certificate of exemption by the Department of
11Commerce and Economic Opportunity, whether that tangible
12personal property is purchased by the owner, operator, or
13tenant of the data center or by a contractor or subcontractor
14of the owner, operator, or tenant. Data centers that would
15have qualified for a certificate of exemption prior to January
161, 2020 had this amendatory Act of the 101st General Assembly
17been in effect, may apply for and obtain an exemption for
18subsequent purchases of computer equipment or enabling
19software purchased or leased to upgrade, supplement, or
20replace computer equipment or enabling software purchased or
21leased in the original investment that would have qualified.
22    The Department of Commerce and Economic Opportunity shall
23grant a certificate of exemption under this item (32) to
24qualified data centers as defined by Section 605-1025 of the
25Department of Commerce and Economic Opportunity Law of the
26Civil Administrative Code of Illinois.

 

 

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1    For the purposes of this item (32):
2        "Data center" means a building or a series of
3    buildings rehabilitated or constructed to house working
4    servers in one physical location or multiple sites within
5    the State of Illinois.
6        "Qualified tangible personal property" means:
7    electrical systems and equipment; climate control and
8    chilling equipment and systems; mechanical systems and
9    equipment; monitoring and secure systems; emergency
10    generators; hardware; computers; servers; data storage
11    devices; network connectivity equipment; racks; cabinets;
12    telecommunications cabling infrastructure; raised floor
13    systems; peripheral components or systems; software;
14    mechanical, electrical, or plumbing systems; battery
15    systems; cooling systems and towers; temperature control
16    systems; other cabling; and other data center
17    infrastructure equipment and systems necessary to operate
18    qualified tangible personal property, including fixtures;
19    and component parts of any of the foregoing, including
20    installation, maintenance, repair, refurbishment, and
21    replacement of qualified tangible personal property to
22    generate, transform, transmit, distribute, or manage
23    electricity necessary to operate qualified tangible
24    personal property; and all other tangible personal
25    property that is essential to the operations of a computer
26    data center. The term "qualified tangible personal

 

 

SB4057- 54 -LRB102 23669 HLH 32851 b

1    property" also includes building materials physically
2    incorporated in to the qualifying data center. To document
3    the exemption allowed under this Section, the retailer
4    must obtain from the purchaser a copy of the certificate
5    of eligibility issued by the Department of Commerce and
6    Economic Opportunity.
7    This item (32) is exempt from the provisions of Section
83-55.
9    (33) Diapers, baby wipes, and infant formula. This item
10(33) is exempt from the provisions of Section 3-55.
11(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
12101-629, eff. 2-5-20; 102-16, eff. 6-17-21.)
 
13    Section 20. The Retailers' Occupation Tax Act is amended
14by changing Section 2-5 as follows:
 
15    (35 ILCS 120/2-5)
16    Sec. 2-5. Exemptions. Gross receipts from proceeds from
17the sale of the following tangible personal property are
18exempt from the tax imposed by this Act:
19        (1) Farm chemicals.
20        (2) Farm machinery and equipment, both new and used,
21    including that manufactured on special order, certified by
22    the purchaser to be used primarily for production
23    agriculture or State or federal agricultural programs,
24    including individual replacement parts for the machinery

 

 

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

 

 

SB4057- 56 -LRB102 23669 HLH 32851 b

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

 

 

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1        (5) A motor vehicle that is used for automobile
2    renting, as defined in the Automobile Renting Occupation
3    and Use Tax Act. This paragraph is exempt from the
4    provisions of Section 2-70.
5        (6) Personal property sold by a teacher-sponsored
6    student organization affiliated with an elementary or
7    secondary school located in Illinois.
8        (7) Until July 1, 2003, proceeds of that portion of
9    the selling price of a passenger car the sale of which is
10    subject to the Replacement Vehicle Tax.
11        (8) Personal property sold to an Illinois county fair
12    association for use in conducting, operating, or promoting
13    the county fair.
14        (9) Personal property sold to a not-for-profit arts or
15    cultural organization that establishes, by proof required
16    by the Department by rule, that it has received an
17    exemption under Section 501(c)(3) of the Internal Revenue
18    Code and that is organized and operated primarily for the
19    presentation or support of arts or cultural programming,
20    activities, or services. These organizations include, but
21    are not limited to, music and dramatic arts organizations
22    such as symphony orchestras and theatrical groups, arts
23    and cultural service organizations, local arts councils,
24    visual arts organizations, and media arts organizations.
25    On and after July 1, 2001 (the effective date of Public Act
26    92-35), however, an entity otherwise eligible for this

 

 

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1    exemption shall not make tax-free purchases unless it has
2    an active identification number issued by the Department.
3        (10) Personal property sold by a corporation, society,
4    association, foundation, institution, or organization,
5    other than a limited liability company, that is organized
6    and operated as a not-for-profit service enterprise for
7    the benefit of persons 65 years of age or older if the
8    personal property was not purchased by the enterprise for
9    the purpose of resale by the enterprise.
10        (11) Personal property sold to a governmental body, to
11    a corporation, society, association, foundation, or
12    institution organized and operated exclusively for
13    charitable, religious, or educational purposes, or to a
14    not-for-profit corporation, society, association,
15    foundation, institution, or organization that has no
16    compensated officers or employees and that is organized
17    and operated primarily for the recreation of persons 55
18    years of age or older. A limited liability company may
19    qualify for the exemption under this paragraph only if the
20    limited liability company is organized and operated
21    exclusively for educational purposes. On and after July 1,
22    1987, however, no entity otherwise eligible for this
23    exemption shall make tax-free purchases unless it has an
24    active identification number issued by the Department.
25        (12) (Blank).
26        (12-5) On and after July 1, 2003 and through June 30,

 

 

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1    2004, motor vehicles of the second division with a gross
2    vehicle weight in excess of 8,000 pounds that are subject
3    to the commercial distribution fee imposed under Section
4    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
5    2004 and through June 30, 2005, the use in this State of
6    motor vehicles of the second division: (i) with a gross
7    vehicle weight rating in excess of 8,000 pounds; (ii) that
8    are subject to the commercial distribution fee imposed
9    under Section 3-815.1 of the Illinois Vehicle Code; and
10    (iii) that are primarily used for commercial purposes.
11    Through June 30, 2005, this exemption applies to repair
12    and replacement parts added after the initial purchase of
13    such a motor vehicle if that motor vehicle is used in a
14    manner that would qualify for the rolling stock exemption
15    otherwise provided for in this Act. For purposes of this
16    paragraph, "used for commercial purposes" means the
17    transportation of persons or property in furtherance of
18    any commercial or industrial enterprise whether for-hire
19    or not.
20        (13) Proceeds from sales to owners, lessors, or
21    shippers of tangible personal property that is utilized by
22    interstate carriers for hire for use as rolling stock
23    moving in interstate commerce and equipment operated by a
24    telecommunications provider, licensed as a common carrier
25    by the Federal Communications Commission, which is
26    permanently installed in or affixed to aircraft moving in

 

 

SB4057- 60 -LRB102 23669 HLH 32851 b

1    interstate commerce.
2        (14) Machinery and equipment that will be used by the
3    purchaser, or a lessee of the purchaser, primarily in the
4    process of manufacturing or assembling tangible personal
5    property for wholesale or retail sale or lease, whether
6    the sale or lease is made directly by the manufacturer or
7    by some other person, whether the materials used in the
8    process are owned by the manufacturer or some other
9    person, or whether the sale or lease is made apart from or
10    as an incident to the seller's engaging in the service
11    occupation of producing machines, tools, dies, jigs,
12    patterns, gauges, or other similar items of no commercial
13    value on special order for a particular purchaser. The
14    exemption provided by this paragraph (14) does not include
15    machinery and equipment used in (i) the generation of
16    electricity for wholesale or retail sale; (ii) the
17    generation or treatment of natural or artificial gas for
18    wholesale or retail sale that is delivered to customers
19    through pipes, pipelines, or mains; or (iii) the treatment
20    of water for wholesale or retail sale that is delivered to
21    customers through pipes, pipelines, or mains. The
22    provisions of Public Act 98-583 are declaratory of
23    existing law as to the meaning and scope of this
24    exemption. Beginning on July 1, 2017, the exemption
25    provided by this paragraph (14) includes, but is not
26    limited to, graphic arts machinery and equipment, as

 

 

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1    defined in paragraph (4) of this Section.
2        (15) Proceeds of mandatory service charges separately
3    stated on customers' bills for purchase and consumption of
4    food and beverages, to the extent that the proceeds of the
5    service charge are in fact turned over as tips or as a
6    substitute for tips to the employees who participate
7    directly in preparing, serving, hosting or cleaning up the
8    food or beverage function with respect to which the
9    service charge is imposed.
10        (16) Tangible personal property sold to a purchaser if
11    the purchaser is exempt from use tax by operation of
12    federal law. This paragraph is exempt from the provisions
13    of Section 2-70.
14        (17) Tangible personal property sold to a common
15    carrier by rail or motor that receives the physical
16    possession of the property in Illinois and that transports
17    the property, or shares with another common carrier in the
18    transportation of the property, out of Illinois on a
19    standard uniform bill of lading showing the seller of the
20    property as the shipper or consignor of the property to a
21    destination outside Illinois, for use outside Illinois.
22        (18) Legal tender, currency, medallions, or gold or
23    silver coinage issued by the State of Illinois, the
24    government of the United States of America, or the
25    government of any foreign country, and bullion.
26        (19) Until July 1, 2003, oil field exploration,

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    distribution and purification facilities, storm water
2    drainage and retention facilities, and sewage treatment
3    facilities, resulting from a State or federally declared
4    disaster in Illinois or bordering Illinois when such
5    repairs are initiated on facilities located in the
6    declared disaster area within 6 months after the disaster.
7        (32) Beginning July 1, 1999, game or game birds sold
8    at a "game breeding and hunting preserve area" as that
9    term is used in the Wildlife Code. This paragraph is
10    exempt from the provisions of Section 2-70.
11        (33) A motor vehicle, as that term is defined in
12    Section 1-146 of the Illinois Vehicle Code, that is
13    donated to a corporation, limited liability company,
14    society, association, foundation, or institution that is
15    determined by the Department to be organized and operated
16    exclusively for educational purposes. For purposes of this
17    exemption, "a corporation, limited liability company,
18    society, association, foundation, or institution organized
19    and operated exclusively for educational purposes" means
20    all tax-supported public schools, private schools that
21    offer systematic instruction in useful branches of
22    learning by methods common to public schools and that
23    compare favorably in their scope and intensity with the
24    course of study presented in tax-supported schools, and
25    vocational or technical schools or institutes organized
26    and operated exclusively to provide a course of study of

 

 

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

 

 

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

 

 

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

 

 

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1    (38) shall authorize the holder, to the extent and in the
2    manner specified in the rules adopted under this Act, to
3    purchase tangible personal property from a retailer exempt
4    from the taxes imposed by this Act. Taxpayers shall
5    maintain all necessary books and records to substantiate
6    the use and consumption of all such tangible personal
7    property outside of the State of Illinois.
8        (39) Beginning January 1, 2008, tangible personal
9    property used in the construction or maintenance of a
10    community water supply, as defined under Section 3.145 of
11    the Environmental Protection Act, that is operated by a
12    not-for-profit corporation that holds a valid water supply
13    permit issued under Title IV of the Environmental
14    Protection Act. This paragraph is exempt from the
15    provisions of Section 2-70.
16        (40) Beginning January 1, 2010 and continuing through
17    December 31, 2024, materials, parts, equipment,
18    components, and furnishings incorporated into or upon an
19    aircraft as part of the modification, refurbishment,
20    completion, replacement, repair, or maintenance of the
21    aircraft. This exemption includes consumable supplies used
22    in the modification, refurbishment, completion,
23    replacement, repair, and maintenance of aircraft, but
24    excludes any materials, parts, equipment, components, and
25    consumable supplies used in the modification, replacement,
26    repair, and maintenance of aircraft engines or power

 

 

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1    plants, whether such engines or power plants are installed
2    or uninstalled upon any such aircraft. "Consumable
3    supplies" include, but are not limited to, adhesive, tape,
4    sandpaper, general purpose lubricants, cleaning solution,
5    latex gloves, and protective films. This exemption applies
6    only to the sale of qualifying tangible personal property
7    to persons who modify, refurbish, complete, replace, or
8    maintain an aircraft and who (i) hold an Air Agency
9    Certificate and are empowered to operate an approved
10    repair station by the Federal Aviation Administration,
11    (ii) have a Class IV Rating, and (iii) conduct operations
12    in accordance with Part 145 of the Federal Aviation
13    Regulations. The exemption does not include aircraft
14    operated by a commercial air carrier providing scheduled
15    passenger air service pursuant to authority issued under
16    Part 121 or Part 129 of the Federal Aviation Regulations.
17    The changes made to this paragraph (40) by Public Act
18    98-534 are declarative of existing law. It is the intent
19    of the General Assembly that the exemption under this
20    paragraph (40) applies continuously from January 1, 2010
21    through December 31, 2024; however, no claim for credit or
22    refund is allowed for taxes paid as a result of the
23    disallowance of this exemption on or after January 1, 2015
24    and prior to the effective date of this amendatory Act of
25    the 101st General Assembly.
26        (41) Tangible personal property sold to a

 

 

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1    public-facilities corporation, as described in Section
2    11-65-10 of the Illinois Municipal Code, for purposes of
3    constructing or furnishing a municipal convention hall,
4    but only if the legal title to the municipal convention
5    hall is transferred to the municipality without any
6    further consideration by or on behalf of the municipality
7    at the time of the completion of the municipal convention
8    hall or upon the retirement or redemption of any bonds or
9    other debt instruments issued by the public-facilities
10    corporation in connection with the development of the
11    municipal convention hall. This exemption includes
12    existing public-facilities corporations as provided in
13    Section 11-65-25 of the Illinois Municipal Code. This
14    paragraph is exempt from the provisions of Section 2-70.
15        (42) Beginning January 1, 2017 and through December
16    31, 2026, menstrual pads, tampons, and menstrual cups.
17        (43) Merchandise that is subject to the Rental
18    Purchase Agreement Occupation and Use Tax. The purchaser
19    must certify that the item is purchased to be rented
20    subject to a rental purchase agreement, as defined in the
21    Rental Purchase Agreement Act, and provide proof of
22    registration under the Rental Purchase Agreement
23    Occupation and Use Tax Act. This paragraph is exempt from
24    the provisions of Section 2-70.
25        (44) Qualified tangible personal property used in the
26    construction or operation of a data center that has been

 

 

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

 

 

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

 

 

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1        This item (44) is exempt from the provisions of
2    Section 2-70.
3        (45) Beginning January 1, 2020 and through December
4    31, 2020, sales of tangible personal property made by a
5    marketplace seller over a marketplace for which tax is due
6    under this Act but for which use tax has been collected and
7    remitted to the Department by a marketplace facilitator
8    under Section 2d of the Use Tax Act are exempt from tax
9    under this Act. A marketplace seller claiming this
10    exemption shall maintain books and records demonstrating
11    that the use tax on such sales has been collected and
12    remitted by a marketplace facilitator. Marketplace sellers
13    that have properly remitted tax under this Act on such
14    sales may file a claim for credit as provided in Section 6
15    of this Act. No claim is allowed, however, for such taxes
16    for which a credit or refund has been issued to the
17    marketplace facilitator under the Use Tax Act, or for
18    which the marketplace facilitator has filed a claim for
19    credit or refund under the Use Tax Act.
20        (46) Diapers, baby wipes, and infant formula. This
21    item (46) is exempt from the provisions of Section 2-70.
22(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
23101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
248-27-21; revised 11-9-21.)