103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2720

 

Introduced 2/16/2023, by Rep. Aaron M. Ortiz

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 105/3-10
35 ILCS 120/1  from Ch. 120, par. 440
35 ILCS 120/2-10

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, with respect to the sale of a manufactured home, if the purchase is the first purchase of the manufactured home for use as a dwelling and the purchaser certifies that the manufactured home will be affixed to a permanent foundation in the State, then the tax imposed by the Acts applies to 50% of the selling price (in the case of the Use Tax Act) or 50% of the gross receipts from the sale (in the case of the Retailers' Occupation Tax Act). Effective immediately.


LRB103 29927 HLH 56342 b

 

 

A BILL FOR

 

HB2720LRB103 29927 HLH 56342 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 Sections
52 and 3-10 as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the
10ownership of that property, except that it does not include
11the sale of such property in any form as tangible personal
12property in the regular course of business to the extent that
13such property is not first subjected to a use for which it was
14purchased, and does not include the use of such property by its
15owner for demonstration purposes: Provided that the property
16purchased is deemed to be purchased for the purpose of resale,
17despite first being used, to the extent to which it is resold
18as an ingredient of an intentionally produced product or
19by-product of manufacturing. "Use" does not mean the
20demonstration use or interim use of tangible personal property
21by a retailer before he sells that tangible personal property.
22For watercraft or aircraft, if the period of demonstration use
23or interim use by the retailer exceeds 18 months, the retailer

 

 

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1shall pay on the retailers' original cost price the tax
2imposed by this Act, and no credit for that tax is permitted if
3the watercraft or aircraft is subsequently sold by the
4retailer. "Use" does not mean the physical incorporation of
5tangible personal property, to the extent not first subjected
6to a use for which it was purchased, as an ingredient or
7constituent, into other tangible personal property (a) which
8is sold in the regular course of business or (b) which the
9person incorporating such ingredient or constituent therein
10has undertaken at the time of such purchase to cause to be
11transported in interstate commerce to destinations outside the
12State of Illinois: Provided that the property purchased is
13deemed to be purchased for the purpose of resale, despite
14first being used, to the extent to which it is resold as an
15ingredient of an intentionally produced product or by-product
16of manufacturing.
17    "Watercraft" means a Class 2, Class 3, or Class 4
18watercraft as defined in Section 3-2 of the Boat Registration
19and Safety Act, a personal watercraft, or any boat equipped
20with an inboard motor.
21    "Purchase at retail" means the acquisition of the
22ownership of or title to tangible personal property through a
23sale at retail.
24    "Purchaser" means anyone who, through a sale at retail,
25acquires the ownership of tangible personal property for a
26valuable consideration.

 

 

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1    "Sale at retail" means any transfer of the ownership of or
2title to tangible personal property to a purchaser, for the
3purpose of use, and not for the purpose of resale in any form
4as tangible personal property to the extent not first
5subjected to a use for which it was purchased, for a valuable
6consideration: Provided that the property purchased is deemed
7to be purchased for the purpose of resale, despite first being
8used, to the extent to which it is resold as an ingredient of
9an intentionally produced product or by-product of
10manufacturing. For this purpose, slag produced as an incident
11to manufacturing pig iron or steel and sold is considered to be
12an intentionally produced by-product of manufacturing. "Sale
13at retail" includes any such transfer made for resale unless
14made in compliance with Section 2c of the Retailers'
15Occupation Tax Act, as incorporated by reference into Section
1612 of this Act. Transactions whereby the possession of the
17property is transferred but the seller retains the title as
18security for payment of the selling price are sales.
19    "Sale at retail" shall also be construed to include any
20Illinois florist's sales transaction in which the purchase
21order is received in Illinois by a florist and the sale is for
22use or consumption, but the Illinois florist has a florist in
23another state deliver the property to the purchaser or the
24purchaser's donee in such other state.
25    Nonreusable tangible personal property that is used by
26persons engaged in the business of operating a restaurant,

 

 

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1cafeteria, or drive-in is a sale for resale when it is
2transferred to customers in the ordinary course of business as
3part of the sale of food or beverages and is used to deliver,
4package, or consume food or beverages, regardless of where
5consumption of the food or beverages occurs. Examples of those
6items include, but are not limited to nonreusable, paper and
7plastic cups, plates, baskets, boxes, sleeves, buckets or
8other containers, utensils, straws, placemats, napkins, doggie
9bags, and wrapping or packaging materials that are transferred
10to customers as part of the sale of food or beverages in the
11ordinary course of business.
12    The purchase, employment and transfer of such tangible
13personal property as newsprint and ink for the primary purpose
14of conveying news (with or without other information) is not a
15purchase, use or sale of tangible personal property.
16    "Selling price" means the consideration for a sale valued
17in money whether received in money or otherwise, including
18cash, credits, property other than as hereinafter provided,
19and services, but, prior to January 1, 2020 and beginning
20again on January 1, 2022, not including the value of or credit
21given for traded-in tangible personal property where the item
22that is traded-in is of like kind and character as that which
23is being sold; beginning January 1, 2020 and until January 1,
242022, "selling price" includes the portion of the value of or
25credit given for traded-in motor vehicles of the First
26Division as defined in Section 1-146 of the Illinois Vehicle

 

 

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1Code of like kind and character as that which is being sold
2that exceeds $10,000. "Selling price" shall be determined
3without any deduction on account of the cost of the property
4sold, the cost of materials used, labor or service cost or any
5other expense whatsoever, but does not include interest or
6finance charges which appear as separate items on the bill of
7sale or sales contract nor charges that are added to prices by
8sellers on account of the seller's tax liability under the
9Retailers' Occupation Tax Act, or on account of the seller's
10duty to collect, from the purchaser, the tax that is imposed by
11this Act, or, except as otherwise provided with respect to any
12cigarette tax imposed by a home rule unit, on account of the
13seller's tax liability under any local occupation tax
14administered by the Department, or, except as otherwise
15provided with respect to any cigarette tax imposed by a home
16rule unit on account of the seller's duty to collect, from the
17purchasers, the tax that is imposed under any local use tax
18administered by the Department. Effective December 1, 1985,
19"selling price" shall include charges that are added to prices
20by sellers on account of the seller's tax liability under the
21Cigarette Tax Act, on account of the seller's duty to collect,
22from the purchaser, the tax imposed under the Cigarette Use
23Tax Act, and on account of the seller's duty to collect, from
24the purchaser, any cigarette tax imposed by a home rule unit.
25    Notwithstanding any law to the contrary, for any motor
26vehicle, as defined in Section 1-146 of the Vehicle Code, that

 

 

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1is sold on or after January 1, 2015 for the purpose of leasing
2the vehicle for a defined period that is longer than one year
3and (1) is a motor vehicle of the second division that: (A) is
4a self-contained motor vehicle designed or permanently
5converted to provide living quarters for recreational,
6camping, or travel use, with direct walk through access to the
7living quarters from the driver's seat; (B) is of the van
8configuration designed for the transportation of not less than
97 nor more than 16 passengers; or (C) has a gross vehicle
10weight rating of 8,000 pounds or less or (2) is a motor vehicle
11of the first division, "selling price" or "amount of sale"
12means the consideration received by the lessor pursuant to the
13lease contract, including amounts due at lease signing and all
14monthly or other regular payments charged over the term of the
15lease. Also included in the selling price is any amount
16received by the lessor from the lessee for the leased vehicle
17that is not calculated at the time the lease is executed,
18including, but not limited to, excess mileage charges and
19charges for excess wear and tear. For sales that occur in
20Illinois, with respect to any amount received by the lessor
21from the lessee for the leased vehicle that is not calculated
22at the time the lease is executed, the lessor who purchased the
23motor vehicle does not incur the tax imposed by the Use Tax Act
24on those amounts, and the retailer who makes the retail sale of
25the motor vehicle to the lessor is not required to collect the
26tax imposed by this Act or to pay the tax imposed by the

 

 

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1Retailers' Occupation Tax Act on those amounts. However, the
2lessor who purchased the motor vehicle assumes the liability
3for reporting and paying the tax on those amounts directly to
4the Department in the same form (Illinois Retailers'
5Occupation Tax, and local retailers' occupation taxes, if
6applicable) in which the retailer would have reported and paid
7such tax if the retailer had accounted for the tax to the
8Department. For amounts received by the lessor from the lessee
9that are not calculated at the time the lease is executed, the
10lessor must file the return and pay the tax to the Department
11by the due date otherwise required by this Act for returns
12other than transaction returns. If the retailer is entitled
13under this Act to a discount for collecting and remitting the
14tax imposed under this Act to the Department with respect to
15the sale of the motor vehicle to the lessor, then the right to
16the discount provided in this Act shall be transferred to the
17lessor with respect to the tax paid by the lessor for any
18amount received by the lessor from the lessee for the leased
19vehicle that is not calculated at the time the lease is
20executed; provided that the discount is only allowed if the
21return is timely filed and for amounts timely paid. The
22"selling price" of a motor vehicle that is sold on or after
23January 1, 2015 for the purpose of leasing for a defined period
24of longer than one year shall not be reduced by the value of or
25credit given for traded-in tangible personal property owned by
26the lessor, nor shall it be reduced by the value of or credit

 

 

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1given for traded-in tangible personal property owned by the
2lessee, regardless of whether the trade-in value thereof is
3assigned by the lessee to the lessor. In the case of a motor
4vehicle that is sold for the purpose of leasing for a defined
5period of longer than one year, the sale occurs at the time of
6the delivery of the vehicle, regardless of the due date of any
7lease payments. A lessor who incurs a Retailers' Occupation
8Tax liability on the sale of a motor vehicle coming off lease
9may not take a credit against that liability for the Use Tax
10the lessor paid upon the purchase of the motor vehicle (or for
11any tax the lessor paid with respect to any amount received by
12the lessor from the lessee for the leased vehicle that was not
13calculated at the time the lease was executed) if the selling
14price of the motor vehicle at the time of purchase was
15calculated using the definition of "selling price" as defined
16in this paragraph. Notwithstanding any other provision of this
17Act to the contrary, lessors shall file all returns and make
18all payments required under this paragraph to the Department
19by electronic means in the manner and form as required by the
20Department. This paragraph does not apply to leases of motor
21vehicles for which, at the time the lease is entered into, the
22term of the lease is not a defined period, including leases
23with a defined initial period with the option to continue the
24lease on a month-to-month or other basis beyond the initial
25defined period.
26    The phrase "like kind and character" shall be liberally

 

 

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1construed (including but not limited to any form of motor
2vehicle for any form of motor vehicle, or any kind of farm or
3agricultural implement for any other kind of farm or
4agricultural implement), while not including a kind of item
5which, if sold at retail by that retailer, would be exempt from
6retailers' occupation tax and use tax as an isolated or
7occasional sale.
8    "Department" means the Department of Revenue.
9    "Person" means any natural individual, firm, partnership,
10association, joint stock company, joint adventure, public or
11private corporation, limited liability company, or a receiver,
12executor, trustee, guardian or other representative appointed
13by order of any court.
14    "Retailer" means and includes every person engaged in the
15business of making sales at retail as defined in this Section.
16    A person who holds himself or herself out as being engaged
17(or who habitually engages) in selling tangible personal
18property at retail is a retailer hereunder with respect to
19such sales (and not primarily in a service occupation)
20notwithstanding the fact that such person designs and produces
21such tangible personal property on special order for the
22purchaser and in such a way as to render the property of value
23only to such purchaser, if such tangible personal property so
24produced on special order serves substantially the same
25function as stock or standard items of tangible personal
26property that are sold at retail.

 

 

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1    A person whose activities are organized and conducted
2primarily as a not-for-profit service enterprise, and who
3engages in selling tangible personal property at retail
4(whether to the public or merely to members and their guests)
5is a retailer with respect to such transactions, excepting
6only a person organized and operated exclusively for
7charitable, religious or educational purposes either (1), to
8the extent of sales by such person to its members, students,
9patients or inmates of tangible personal property to be used
10primarily for the purposes of such person, or (2), to the
11extent of sales by such person of tangible personal property
12which is not sold or offered for sale by persons organized for
13profit. The selling of school books and school supplies by
14schools at retail to students is not "primarily for the
15purposes of" the school which does such selling. This
16paragraph does not apply to nor subject to taxation occasional
17dinners, social or similar activities of a person organized
18and operated exclusively for charitable, religious or
19educational purposes, whether or not such activities are open
20to the public.
21    A person who is the recipient of a grant or contract under
22Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
23serves meals to participants in the federal Nutrition Program
24for the Elderly in return for contributions established in
25amount by the individual participant pursuant to a schedule of
26suggested fees as provided for in the federal Act is not a

 

 

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1retailer under this Act with respect to such transactions.
2    Persons who engage in the business of transferring
3tangible personal property upon the redemption of trading
4stamps are retailers hereunder when engaged in such business.
5    The isolated or occasional sale of tangible personal
6property at retail by a person who does not hold himself out as
7being engaged (or who does not habitually engage) in selling
8such tangible personal property at retail or a sale through a
9bulk vending machine does not make such person a retailer
10hereunder. However, any person who is engaged in a business
11which is not subject to the tax imposed by the Retailers'
12Occupation Tax Act because of involving the sale of or a
13contract to sell real estate or a construction contract to
14improve real estate, but who, in the course of conducting such
15business, transfers tangible personal property to users or
16consumers in the finished form in which it was purchased, and
17which does not become real estate, under any provision of a
18construction contract or real estate sale or real estate sales
19agreement entered into with some other person arising out of
20or because of such nontaxable business, is a retailer to the
21extent of the value of the tangible personal property so
22transferred. If, in such transaction, a separate charge is
23made for the tangible personal property so transferred, the
24value of such property, for the purposes of this Act, is the
25amount so separately charged, but not less than the cost of
26such property to the transferor; if no separate charge is

 

 

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1made, the value of such property, for the purposes of this Act,
2is the cost to the transferor of such tangible personal
3property.
4    "Retailer maintaining a place of business in this State",
5or any like term, means and includes any of the following
6retailers:
7        (1) A retailer having or maintaining within this
8    State, directly or by a subsidiary, an office,
9    distribution house, sales house, warehouse or other place
10    of business, or any agent or other representative
11    operating within this State under the authority of the
12    retailer or its subsidiary, irrespective of whether such
13    place of business or agent or other representative is
14    located here permanently or temporarily, or whether such
15    retailer or subsidiary is licensed to do business in this
16    State. However, the ownership of property that is located
17    at the premises of a printer with which the retailer has
18    contracted for printing and that consists of the final
19    printed product, property that becomes a part of the final
20    printed product, or copy from which the printed product is
21    produced shall not result in the retailer being deemed to
22    have or maintain an office, distribution house, sales
23    house, warehouse, or other place of business within this
24    State.
25        (1.1) A retailer having a contract with a person
26    located in this State under which the person, for a

 

 

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1    commission or other consideration based upon the sale of
2    tangible personal property by the retailer, directly or
3    indirectly refers potential customers to the retailer by
4    providing to the potential customers a promotional code or
5    other mechanism that allows the retailer to track
6    purchases referred by such persons. Examples of mechanisms
7    that allow the retailer to track purchases referred by
8    such persons include but are not limited to the use of a
9    link on the person's Internet website, promotional codes
10    distributed through the person's hand-delivered or mailed
11    material, and promotional codes distributed by the person
12    through radio or other broadcast media. The provisions of
13    this paragraph (1.1) shall apply only if the cumulative
14    gross receipts from sales of tangible personal property by
15    the retailer to customers who are referred to the retailer
16    by all persons in this State under such contracts exceed
17    $10,000 during the preceding 4 quarterly periods ending on
18    the last day of March, June, September, and December. A
19    retailer meeting the requirements of this paragraph (1.1)
20    shall be presumed to be maintaining a place of business in
21    this State but may rebut this presumption by submitting
22    proof that the referrals or other activities pursued
23    within this State by such persons were not sufficient to
24    meet the nexus standards of the United States Constitution
25    during the preceding 4 quarterly periods.
26        (1.2) Beginning July 1, 2011, a retailer having a

 

 

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1    contract with a person located in this State under which:
2            (A) the retailer sells the same or substantially
3        similar line of products as the person located in this
4        State and does so using an identical or substantially
5        similar name, trade name, or trademark as the person
6        located in this State; and
7            (B) the retailer provides a commission or other
8        consideration to the person located in this State
9        based upon the sale of tangible personal property by
10        the retailer.
11        The provisions of this paragraph (1.2) shall apply
12    only if the cumulative gross receipts from sales of
13    tangible personal property by the retailer to customers in
14    this State under all such contracts exceed $10,000 during
15    the preceding 4 quarterly periods ending on the last day
16    of March, June, September, and December.
17        (2) (Blank).
18        (3) (Blank).
19        (4) (Blank).
20        (5) (Blank).
21        (6) (Blank).
22        (7) (Blank).
23        (8) (Blank).
24        (9) Beginning October 1, 2018, a retailer making sales
25    of tangible personal property to purchasers in Illinois
26    from outside of Illinois if:

 

 

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1            (A) the cumulative gross receipts from sales of
2        tangible personal property to purchasers in Illinois
3        are $100,000 or more; or
4            (B) the retailer enters into 200 or more separate
5        transactions for the sale of tangible personal
6        property to purchasers in Illinois.
7        The retailer shall determine on a quarterly basis,
8    ending on the last day of March, June, September, and
9    December, whether he or she meets the criteria of either
10    subparagraph (A) or (B) of this paragraph (9) for the
11    preceding 12-month period. If the retailer meets the
12    threshold of either subparagraph (A) or (B) for a 12-month
13    period, he or she is considered a retailer maintaining a
14    place of business in this State and is required to collect
15    and remit the tax imposed under this Act and file returns
16    for one year. At the end of that one-year period, the
17    retailer shall determine whether he or she met the
18    threshold of either subparagraph (A) or (B) during the
19    preceding 12-month period. If the retailer met the
20    criteria in either subparagraph (A) or (B) for the
21    preceding 12-month period, he or she is considered a
22    retailer maintaining a place of business in this State and
23    is required to collect and remit the tax imposed under
24    this Act and file returns for the subsequent year. If at
25    the end of a one-year period a retailer that was required
26    to collect and remit the tax imposed under this Act

 

 

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1    determines that he or she did not meet the threshold in
2    either subparagraph (A) or (B) during the preceding
3    12-month period, the retailer shall subsequently determine
4    on a quarterly basis, ending on the last day of March,
5    June, September, and December, whether he or she meets the
6    threshold of either subparagraph (A) or (B) for the
7    preceding 12-month period.
8        Beginning January 1, 2020, neither the gross receipts
9    from nor the number of separate transactions for sales of
10    tangible personal property to purchasers in Illinois that
11    a retailer makes through a marketplace facilitator and for
12    which the retailer has received a certification from the
13    marketplace facilitator pursuant to Section 2d of this Act
14    shall be included for purposes of determining whether he
15    or she has met the thresholds of this paragraph (9).
16        (10) Beginning January 1, 2020, a marketplace
17    facilitator that meets a threshold set forth in subsection
18    (b) of Section 2d of this Act.
19    "Bulk vending machine" means a vending machine, containing
20unsorted confections, nuts, toys, or other items designed
21primarily to be used or played with by children which, when a
22coin or coins of a denomination not larger than $0.50 are
23inserted, are dispensed in equal portions, at random and
24without selection by the customer.
25    As used in Section 3-10, "manufactured home" means a
26factory-assembled, completely integrated structure designed

 

 

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1for permanent habitation that:
2        (1) is designed to be used as a single-family dwelling
3    which complies with the standards established under 42
4    U.S.C. 70;
5        (2) is transportable in one or more sections;
6        (3) is installed according to the manufacturer's
7    instructions and connected to residential utilities for
8    year-round occupancy; and
9        (4) contains an area of at least 320 square feet.
10(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 1-1-20;
11101-604, eff. 1-1-20; 102-353, eff. 1-1-22.)
 
12    (35 ILCS 105/3-10)
13    Sec. 3-10. Rate of tax. Unless otherwise provided in this
14Section, the tax imposed by this Act is at the rate of 6.25% of
15either the selling price or the fair market value, if any, of
16the tangible personal property. In all cases where property
17functionally used or consumed is the same as the property that
18was purchased at retail, then the tax is imposed on the selling
19price of the property. In all cases where property
20functionally used or consumed is a by-product or waste product
21that has been refined, manufactured, or produced from property
22purchased at retail, then the tax is imposed on the lower of
23the fair market value, if any, of the specific property so used
24in this State or on the selling price of the property purchased
25at retail. For purposes of this Section "fair market value"

 

 

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1means the price at which property would change hands between a
2willing buyer and a willing seller, neither being under any
3compulsion to buy or sell and both having reasonable knowledge
4of the relevant facts. The fair market value shall be
5established by Illinois sales by the taxpayer of the same
6property as that functionally used or consumed, or if there
7are no such sales by the taxpayer, then comparable sales or
8purchases of property of like kind and character in Illinois.
9    Beginning on July 1, 2000 and through December 31, 2000,
10with respect to motor fuel, as defined in Section 1.1 of the
11Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
12the Use Tax Act, the tax is imposed at the rate of 1.25%.
13    Beginning on August 6, 2010 through August 15, 2010, and
14beginning again on August 5, 2022 through August 14, 2022,
15with respect to sales tax holiday items as defined in Section
163-6 of this Act, the tax is imposed at the rate of 1.25%.
17    With respect to gasohol, the tax imposed by this Act
18applies to (i) 70% of the proceeds of sales made on or after
19January 1, 1990, and before July 1, 2003, (ii) 80% of the
20proceeds of sales made on or after July 1, 2003 and on or
21before July 1, 2017, and (iii) 100% of the proceeds of sales
22made thereafter. If, at any time, however, the tax under this
23Act on sales of gasohol is imposed at the rate of 1.25%, then
24the tax imposed by this Act applies to 100% of the proceeds of
25sales of gasohol made during that time.
26    With respect to majority blended ethanol fuel, the tax

 

 

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1imposed by this Act does not apply to the proceeds of sales
2made on or after July 1, 2003 and on or before December 31,
32023 but applies to 100% of the proceeds of sales made
4thereafter.
5    With respect to biodiesel blends with no less than 1% and
6no more than 10% biodiesel, the tax imposed by this Act applies
7to (i) 80% of the proceeds of sales made on or after July 1,
82003 and on or before December 31, 2018 and (ii) 100% of the
9proceeds of sales made after December 31, 2018 and before
10January 1, 2024. On and after January 1, 2024 and on or before
11December 31, 2030, the taxation of biodiesel, renewable
12diesel, and biodiesel blends shall be as provided in Section
133-5.1. If, at any time, however, the tax under this Act on
14sales of biodiesel blends with no less than 1% and no more than
1510% biodiesel is imposed at the rate of 1.25%, then the tax
16imposed by this Act applies to 100% of the proceeds of sales of
17biodiesel blends with no less than 1% and no more than 10%
18biodiesel made during that time.
19    With respect to biodiesel and biodiesel blends with more
20than 10% but no more than 99% biodiesel, the tax imposed by
21this Act does not apply to the proceeds of sales made on or
22after July 1, 2003 and on or before December 31, 2023. On and
23after January 1, 2024 and on or before December 31, 2030, the
24taxation of biodiesel, renewable diesel, and biodiesel blends
25shall be as provided in Section 3-5.1.
26    On and after January 1, 2024, with respect to the sale of a

 

 

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1manufactured home, as defined in Section 2, if the purchase is
2the first purchase of the manufactured home for use as a
3dwelling and the purchaser who will use the home as a dwelling
4certifies that the manufactured home will be affixed to a
5permanent foundation in the State so that the manufactured
6home is deemed to be real property under the Conveyance and
7Encumbrance of Manufactured Homes as Real Property and
8Severance Act, then the tax imposed by this Act applies to 50%
9of the selling price of the manufactured home. The seller,
10whether acting as a construction contractor or not, must
11retain the purchaser's certification in his or her books and
12records for a period of 7 years after the date of the sale.
13This paragraph is exempt from the provisions of Section 3-90.
14    Until July 1, 2022 and beginning again on July 1, 2023,
15with respect to food for human consumption that is to be
16consumed off the premises where it is sold (other than
17alcoholic beverages, food consisting of or infused with adult
18use cannabis, soft drinks, and food that has been prepared for
19immediate consumption), the tax is imposed at the rate of 1%.
20Beginning on July 1, 2022 and until July 1, 2023, with respect
21to food for human consumption that is to be consumed off the
22premises where it is sold (other than alcoholic beverages,
23food consisting of or infused with adult use cannabis, soft
24drinks, and food that has been prepared for immediate
25consumption), the tax is imposed at the rate of 0%.
26    With respect to prescription and nonprescription

 

 

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1medicines, drugs, medical appliances, products classified as
2Class III medical devices by the United States Food and Drug
3Administration that are used for cancer treatment pursuant to
4a prescription, as well as any accessories and components
5related to those devices, modifications to a motor vehicle for
6the purpose of rendering it usable by a person with a
7disability, and insulin, blood sugar testing materials,
8syringes, and needles used by human diabetics, the tax is
9imposed at the rate of 1%. For the purposes of this Section,
10until September 1, 2009: the term "soft drinks" means any
11complete, finished, ready-to-use, non-alcoholic drink, whether
12carbonated or not, including, but not limited to, soda water,
13cola, fruit juice, vegetable juice, carbonated water, and all
14other preparations commonly known as soft drinks of whatever
15kind or description that are contained in any closed or sealed
16bottle, can, carton, or container, regardless of size; but
17"soft drinks" does not include coffee, tea, non-carbonated
18water, infant formula, milk or milk products as defined in the
19Grade A Pasteurized Milk and Milk Products Act, or drinks
20containing 50% or more natural fruit or vegetable juice.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "soft drinks" means non-alcoholic
23beverages that contain natural or artificial sweeteners. "Soft
24drinks" does do not include beverages that contain milk or
25milk products, soy, rice or similar milk substitutes, or
26greater than 50% of vegetable or fruit juice by volume.

 

 

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1    Until August 1, 2009, and notwithstanding any other
2provisions of this Act, "food for human consumption that is to
3be consumed off the premises where it is sold" includes all
4food sold through a vending machine, except soft drinks and
5food products that are dispensed hot from a vending machine,
6regardless of the location of the vending machine. Beginning
7August 1, 2009, and notwithstanding any other provisions of
8this Act, "food for human consumption that is to be consumed
9off the premises where it is sold" includes all food sold
10through a vending machine, except soft drinks, candy, and food
11products that are dispensed hot from a vending machine,
12regardless of the location of the vending machine.
13    Notwithstanding any other provisions of this Act,
14beginning September 1, 2009, "food for human consumption that
15is to be consumed off the premises where it is sold" does not
16include candy. For purposes of this Section, "candy" means a
17preparation of sugar, honey, or other natural or artificial
18sweeteners in combination with chocolate, fruits, nuts or
19other ingredients or flavorings in the form of bars, drops, or
20pieces. "Candy" does not include any preparation that contains
21flour or requires refrigeration.
22    Notwithstanding any other provisions of this Act,
23beginning September 1, 2009, "nonprescription medicines and
24drugs" does not include grooming and hygiene products. For
25purposes of this Section, "grooming and hygiene products"
26includes, but is not limited to, soaps and cleaning solutions,

 

 

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1shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
2lotions and screens, unless those products are available by
3prescription only, regardless of whether the products meet the
4definition of "over-the-counter-drugs". For the purposes of
5this paragraph, "over-the-counter-drug" means a drug for human
6use that contains a label that identifies the product as a drug
7as required by 21 CFR C.F.R. § 201.66. The
8"over-the-counter-drug" label includes:
9        (A) a A "Drug Facts" panel; or
10        (B) a A statement of the "active ingredient(s)" with a
11    list of those ingredients contained in the compound,
12    substance or preparation.
13    Beginning on January 1, 2014 (the effective date of Public
14Act 98-122) this amendatory Act of the 98th General Assembly,
15"prescription and nonprescription medicines and drugs"
16includes medical cannabis purchased from a registered
17dispensing organization under the Compassionate Use of Medical
18Cannabis Program Act.
19    As used in this Section, "adult use cannabis" means
20cannabis subject to tax under the Cannabis Cultivation
21Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
22and does not include cannabis subject to tax under the
23Compassionate Use of Medical Cannabis Program Act.
24    If the property that is purchased at retail from a
25retailer is acquired outside Illinois and used outside
26Illinois before being brought to Illinois for use here and is

 

 

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1taxable under this Act, the "selling price" on which the tax is
2computed shall be reduced by an amount that represents a
3reasonable allowance for depreciation for the period of prior
4out-of-state use.
5(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
6102-4, eff. 4-27-21; 102-700, Article 20, Section 20-5, eff.
74-19-22; 102-700, Article 60, Section 60-15, eff. 4-19-22;
8102-700, Article 65, Section 65-5, eff. 4-19-22; revised
95-27-22.)
 
10    Section 10. The Retailers' Occupation Tax Act is amended
11by changing Sections 1 and 2-10 as follows:
 
12    (35 ILCS 120/1)  (from Ch. 120, par. 440)
13    Sec. 1. Definitions. "Sale at retail" means any transfer
14of the ownership of or title to tangible personal property to a
15purchaser, for the purpose of use or consumption, and not for
16the purpose of resale in any form as tangible personal
17property to the extent not first subjected to a use for which
18it was purchased, for a valuable consideration: Provided that
19the property purchased is deemed to be purchased for the
20purpose of resale, despite first being used, to the extent to
21which it is resold as an ingredient of an intentionally
22produced product or byproduct of manufacturing. For this
23purpose, slag produced as an incident to manufacturing pig
24iron or steel and sold is considered to be an intentionally

 

 

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1produced byproduct of manufacturing. Transactions whereby the
2possession of the property is transferred but the seller
3retains the title as security for payment of the selling price
4shall be deemed to be sales.
5    "Sale at retail" shall be construed to include any
6transfer of the ownership of or title to tangible personal
7property to a purchaser, for use or consumption by any other
8person to whom such purchaser may transfer the tangible
9personal property without a valuable consideration, and to
10include any transfer, whether made for or without a valuable
11consideration, for resale in any form as tangible personal
12property unless made in compliance with Section 2c of this
13Act.
14    Sales of tangible personal property, which property, to
15the extent not first subjected to a use for which it was
16purchased, as an ingredient or constituent, goes into and
17forms a part of tangible personal property subsequently the
18subject of a "Sale at retail", are not sales at retail as
19defined in this Act: Provided that the property purchased is
20deemed to be purchased for the purpose of resale, despite
21first being used, to the extent to which it is resold as an
22ingredient of an intentionally produced product or byproduct
23of manufacturing.
24    "Sale at retail" shall be construed to include any
25Illinois florist's sales transaction in which the purchase
26order is received in Illinois by a florist and the sale is for

 

 

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1use or consumption, but the Illinois florist has a florist in
2another state deliver the property to the purchaser or the
3purchaser's donee in such other state.
4    Nonreusable tangible personal property that is used by
5persons engaged in the business of operating a restaurant,
6cafeteria, or drive-in is a sale for resale when it is
7transferred to customers in the ordinary course of business as
8part of the sale of food or beverages and is used to deliver,
9package, or consume food or beverages, regardless of where
10consumption of the food or beverages occurs. Examples of those
11items include, but are not limited to nonreusable, paper and
12plastic cups, plates, baskets, boxes, sleeves, buckets or
13other containers, utensils, straws, placemats, napkins, doggie
14bags, and wrapping or packaging materials that are transferred
15to customers as part of the sale of food or beverages in the
16ordinary course of business.
17    The purchase, employment and transfer of such tangible
18personal property as newsprint and ink for the primary purpose
19of conveying news (with or without other information) is not a
20purchase, use or sale of tangible personal property.
21    A person whose activities are organized and conducted
22primarily as a not-for-profit service enterprise, and who
23engages in selling tangible personal property at retail
24(whether to the public or merely to members and their guests)
25is engaged in the business of selling tangible personal
26property at retail with respect to such transactions,

 

 

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1excepting only a person organized and operated exclusively for
2charitable, religious or educational purposes either (1), to
3the extent of sales by such person to its members, students,
4patients or inmates of tangible personal property to be used
5primarily for the purposes of such person, or (2), to the
6extent of sales by such person of tangible personal property
7which is not sold or offered for sale by persons organized for
8profit. The selling of school books and school supplies by
9schools at retail to students is not "primarily for the
10purposes of" the school which does such selling. The
11provisions of this paragraph shall not apply to nor subject to
12taxation occasional dinners, socials or similar activities of
13a person organized and operated exclusively for charitable,
14religious or educational purposes, whether or not such
15activities are open to the public.
16    A person who is the recipient of a grant or contract under
17Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
18serves meals to participants in the federal Nutrition Program
19for the Elderly in return for contributions established in
20amount by the individual participant pursuant to a schedule of
21suggested fees as provided for in the federal Act is not
22engaged in the business of selling tangible personal property
23at retail with respect to such transactions.
24    "Purchaser" means anyone who, through a sale at retail,
25acquires the ownership of or title to tangible personal
26property for a valuable consideration.

 

 

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1    "Reseller of motor fuel" means any person engaged in the
2business of selling or delivering or transferring title of
3motor fuel to another person other than for use or
4consumption. No person shall act as a reseller of motor fuel
5within this State without first being registered as a reseller
6pursuant to Section 2c or a retailer pursuant to Section 2a.
7    "Selling price" or the "amount of sale" means the
8consideration for a sale valued in money whether received in
9money or otherwise, including cash, credits, property, other
10than as hereinafter provided, and services, but, prior to
11January 1, 2020 and beginning again on January 1, 2022, not
12including the value of or credit given for traded-in tangible
13personal property where the item that is traded-in is of like
14kind and character as that which is being sold; beginning
15January 1, 2020 and until January 1, 2022, "selling price"
16includes the portion of the value of or credit given for
17traded-in motor vehicles of the First Division as defined in
18Section 1-146 of the Illinois Vehicle Code of like kind and
19character as that which is being sold that exceeds $10,000.
20"Selling price" shall be determined without any deduction on
21account of the cost of the property sold, the cost of materials
22used, labor or service cost or any other expense whatsoever,
23but does not include charges that are added to prices by
24sellers on account of the seller's tax liability under this
25Act, or on account of the seller's duty to collect, from the
26purchaser, the tax that is imposed by the Use Tax Act, or,

 

 

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1except as otherwise provided with respect to any cigarette tax
2imposed by a home rule unit, on account of the seller's tax
3liability under any local occupation tax administered by the
4Department, or, except as otherwise provided with respect to
5any cigarette tax imposed by a home rule unit on account of the
6seller's duty to collect, from the purchasers, the tax that is
7imposed under any local use tax administered by the
8Department. Effective December 1, 1985, "selling price" shall
9include charges that are added to prices by sellers on account
10of the seller's tax liability under the Cigarette Tax Act, on
11account of the sellers' duty to collect, from the purchaser,
12the tax imposed under the Cigarette Use Tax Act, and on account
13of the seller's duty to collect, from the purchaser, any
14cigarette tax imposed by a home rule unit.
15    Notwithstanding any law to the contrary, for any motor
16vehicle, as defined in Section 1-146 of the Vehicle Code, that
17is sold on or after January 1, 2015 for the purpose of leasing
18the vehicle for a defined period that is longer than one year
19and (1) is a motor vehicle of the second division that: (A) is
20a self-contained motor vehicle designed or permanently
21converted to provide living quarters for recreational,
22camping, or travel use, with direct walk through access to the
23living quarters from the driver's seat; (B) is of the van
24configuration designed for the transportation of not less than
257 nor more than 16 passengers; or (C) has a gross vehicle
26weight rating of 8,000 pounds or less or (2) is a motor vehicle

 

 

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1of the first division, "selling price" or "amount of sale"
2means the consideration received by the lessor pursuant to the
3lease contract, including amounts due at lease signing and all
4monthly or other regular payments charged over the term of the
5lease. Also included in the selling price is any amount
6received by the lessor from the lessee for the leased vehicle
7that is not calculated at the time the lease is executed,
8including, but not limited to, excess mileage charges and
9charges for excess wear and tear. For sales that occur in
10Illinois, with respect to any amount received by the lessor
11from the lessee for the leased vehicle that is not calculated
12at the time the lease is executed, the lessor who purchased the
13motor vehicle does not incur the tax imposed by the Use Tax Act
14on those amounts, and the retailer who makes the retail sale of
15the motor vehicle to the lessor is not required to collect the
16tax imposed by the Use Tax Act or to pay the tax imposed by
17this Act on those amounts. However, the lessor who purchased
18the motor vehicle assumes the liability for reporting and
19paying the tax on those amounts directly to the Department in
20the same form (Illinois Retailers' Occupation Tax, and local
21retailers' occupation taxes, if applicable) in which the
22retailer would have reported and paid such tax if the retailer
23had accounted for the tax to the Department. For amounts
24received by the lessor from the lessee that are not calculated
25at the time the lease is executed, the lessor must file the
26return and pay the tax to the Department by the due date

 

 

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1otherwise required by this Act for returns other than
2transaction returns. If the retailer is entitled under this
3Act to a discount for collecting and remitting the tax imposed
4under this Act to the Department with respect to the sale of
5the motor vehicle to the lessor, then the right to the discount
6provided in this Act shall be transferred to the lessor with
7respect to the tax paid by the lessor for any amount received
8by the lessor from the lessee for the leased vehicle that is
9not calculated at the time the lease is executed; provided
10that the discount is only allowed if the return is timely filed
11and for amounts timely paid. The "selling price" of a motor
12vehicle that is sold on or after January 1, 2015 for the
13purpose of leasing for a defined period of longer than one year
14shall not be reduced by the value of or credit given for
15traded-in tangible personal property owned by the lessor, nor
16shall it be reduced by the value of or credit given for
17traded-in tangible personal property owned by the lessee,
18regardless of whether the trade-in value thereof is assigned
19by the lessee to the lessor. In the case of a motor vehicle
20that is sold for the purpose of leasing for a defined period of
21longer than one year, the sale occurs at the time of the
22delivery of the vehicle, regardless of the due date of any
23lease payments. A lessor who incurs a Retailers' Occupation
24Tax liability on the sale of a motor vehicle coming off lease
25may not take a credit against that liability for the Use Tax
26the lessor paid upon the purchase of the motor vehicle (or for

 

 

HB2720- 32 -LRB103 29927 HLH 56342 b

1any tax the lessor paid with respect to any amount received by
2the lessor from the lessee for the leased vehicle that was not
3calculated at the time the lease was executed) if the selling
4price of the motor vehicle at the time of purchase was
5calculated using the definition of "selling price" as defined
6in this paragraph. Notwithstanding any other provision of this
7Act to the contrary, lessors shall file all returns and make
8all payments required under this paragraph to the Department
9by electronic means in the manner and form as required by the
10Department. This paragraph does not apply to leases of motor
11vehicles for which, at the time the lease is entered into, the
12term of the lease is not a defined period, including leases
13with a defined initial period with the option to continue the
14lease on a month-to-month or other basis beyond the initial
15defined period.
16    The phrase "like kind and character" shall be liberally
17construed (including but not limited to any form of motor
18vehicle for any form of motor vehicle, or any kind of farm or
19agricultural implement for any other kind of farm or
20agricultural implement), while not including a kind of item
21which, if sold at retail by that retailer, would be exempt from
22retailers' occupation tax and use tax as an isolated or
23occasional sale.
24    "Gross receipts" from the sales of tangible personal
25property at retail means the total selling price or the amount
26of such sales, as hereinbefore defined. In the case of charge

 

 

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1and time sales, the amount thereof shall be included only as
2and when payments are received by the seller. Receipts or
3other consideration derived by a seller from the sale,
4transfer or assignment of accounts receivable to a wholly
5owned subsidiary will not be deemed payments prior to the time
6the purchaser makes payment on such accounts.
7    "Department" means the Department of Revenue.
8    "Person" means any natural individual, firm, partnership,
9association, joint stock company, joint adventure, public or
10private corporation, limited liability company, or a receiver,
11executor, trustee, guardian or other representative appointed
12by order of any court.
13    The isolated or occasional sale of tangible personal
14property at retail by a person who does not hold himself out as
15being engaged (or who does not habitually engage) in selling
16such tangible personal property at retail, or a sale through a
17bulk vending machine, does not constitute engaging in a
18business of selling such tangible personal property at retail
19within the meaning of this Act; provided that any person who is
20engaged in a business which is not subject to the tax imposed
21by this Act because of involving the sale of or a contract to
22sell real estate or a construction contract to improve real
23estate or a construction contract to engineer, install, and
24maintain an integrated system of products, but who, in the
25course of conducting such business, transfers tangible
26personal property to users or consumers in the finished form

 

 

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1in which it was purchased, and which does not become real
2estate or was not engineered and installed, under any
3provision of a construction contract or real estate sale or
4real estate sales agreement entered into with some other
5person arising out of or because of such nontaxable business,
6is engaged in the business of selling tangible personal
7property at retail to the extent of the value of the tangible
8personal property so transferred. If, in such a transaction, a
9separate charge is made for the tangible personal property so
10transferred, the value of such property, for the purpose of
11this Act, shall be the amount so separately charged, but not
12less than the cost of such property to the transferor; if no
13separate charge is made, the value of such property, for the
14purposes of this Act, is the cost to the transferor of such
15tangible personal property. Construction contracts for the
16improvement of real estate consisting of engineering,
17installation, and maintenance of voice, data, video, security,
18and all telecommunication systems do not constitute engaging
19in a business of selling tangible personal property at retail
20within the meaning of this Act if they are sold at one
21specified contract price.
22    A person who holds himself or herself out as being engaged
23(or who habitually engages) in selling tangible personal
24property at retail is a person engaged in the business of
25selling tangible personal property at retail hereunder with
26respect to such sales (and not primarily in a service

 

 

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1occupation) notwithstanding the fact that such person designs
2and produces such tangible personal property on special order
3for the purchaser and in such a way as to render the property
4of value only to such purchaser, if such tangible personal
5property so produced on special order serves substantially the
6same function as stock or standard items of tangible personal
7property that are sold at retail.
8    Persons who engage in the business of transferring
9tangible personal property upon the redemption of trading
10stamps are engaged in the business of selling such property at
11retail and shall be liable for and shall pay the tax imposed by
12this Act on the basis of the retail value of the property
13transferred upon redemption of such stamps.
14    "Bulk vending machine" means a vending machine, containing
15unsorted confections, nuts, toys, or other items designed
16primarily to be used or played with by children which, when a
17coin or coins of a denomination not larger than $0.50 are
18inserted, are dispensed in equal portions, at random and
19without selection by the customer.
20    "Remote retailer" means a retailer that does not maintain
21within this State, directly or by a subsidiary, an office,
22distribution house, sales house, warehouse or other place of
23business, or any agent or other representative operating
24within this State under the authority of the retailer or its
25subsidiary, irrespective of whether such place of business or
26agent is located here permanently or temporarily or whether

 

 

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1such retailer or subsidiary is licensed to do business in this
2State.
3    "Marketplace" means a physical or electronic place, forum,
4platform, application, or other method by which a marketplace
5seller sells or offers to sell items.
6    "Marketplace facilitator" means a person who, pursuant to
7an agreement with an unrelated third-party marketplace seller,
8directly or indirectly through one or more affiliates
9facilitates a retail sale by an unrelated third party
10marketplace seller by:
11        (1) listing or advertising for sale by the marketplace
12    seller in a marketplace, tangible personal property that
13    is subject to tax under this Act; and
14        (2) either directly or indirectly, through agreements
15    or arrangements with third parties, collecting payment
16    from the customer and transmitting that payment to the
17    marketplace seller regardless of whether the marketplace
18    facilitator receives compensation or other consideration
19    in exchange for its services.
20    A person who provides advertising services, including
21listing products for sale, is not considered a marketplace
22facilitator, so long as the advertising service platform or
23forum does not engage, directly or indirectly through one or
24more affiliated persons, in the activities described in
25paragraph (2) of this definition of "marketplace facilitator".
26    "Marketplace facilitator" does not include any person

 

 

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1licensed under the Auction License Act. This exemption does
2not apply to any person who is an Internet auction listing
3service, as defined by the Auction License Act.
4    "Marketplace seller" means a person that makes sales
5through a marketplace operated by an unrelated third party
6marketplace facilitator.
7    As used in Section 2-10, "manufactured home" means a
8factory-assembled, completely integrated structure designed
9for permanent habitation that:
10        (1) is designed to be used as a single-family dwelling
11    which complies with the standards established under 42
12    U.S.C. 70;
13        (2) is transportable in one or more sections;
14        (3) is installed according to the manufacturer's
15    instructions and connected to residential utilities for
16    year-round occupancy; and
17        (4) contains an area of at least 320 square feet.
18(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20;
19102-353, eff. 1-1-22; 102-634, eff. 8-27-21; 102-813, eff.
205-13-22.)
 
21    (35 ILCS 120/2-10)
22    Sec. 2-10. Rate of tax. Unless otherwise provided in this
23Section, the tax imposed by this Act is at the rate of 6.25% of
24gross receipts from sales of tangible personal property made
25in the course of business.

 

 

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1    Beginning on July 1, 2000 and through December 31, 2000,
2with respect to motor fuel, as defined in Section 1.1 of the
3Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
4the Use Tax Act, the tax is imposed at the rate of 1.25%.
5    Beginning on August 6, 2010 through August 15, 2010, and
6beginning again on August 5, 2022 through August 14, 2022,
7with respect to sales tax holiday items as defined in Section
82-8 of this Act, the tax is imposed at the rate of 1.25%.
9    Within 14 days after July 1, 2000 (the effective date of
10Public Act 91-872) this amendatory Act of the 91st General
11Assembly, each retailer of motor fuel and gasohol shall cause
12the following notice to be posted in a prominently visible
13place on each retail dispensing device that is used to
14dispense motor fuel or gasohol in the State of Illinois: "As of
15July 1, 2000, the State of Illinois has eliminated the State's
16share of sales tax on motor fuel and gasohol through December
1731, 2000. The price on this pump should reflect the
18elimination of the tax." The notice shall be printed in bold
19print on a sign that is no smaller than 4 inches by 8 inches.
20The sign shall be clearly visible to customers. Any retailer
21who fails to post or maintain a required sign through December
2231, 2000 is guilty of a petty offense for which the fine shall
23be $500 per day per each retail premises where a violation
24occurs.
25    With respect to gasohol, as defined in the Use Tax Act, the
26tax imposed by this Act applies to (i) 70% of the proceeds of

 

 

HB2720- 39 -LRB103 29927 HLH 56342 b

1sales made on or after January 1, 1990, and before July 1,
22003, (ii) 80% of the proceeds of sales made on or after July
31, 2003 and on or before July 1, 2017, and (iii) 100% of the
4proceeds of sales made thereafter. If, at any time, however,
5the tax under this Act on sales of gasohol, as defined in the
6Use Tax Act, is imposed at the rate of 1.25%, then the tax
7imposed by this Act applies to 100% of the proceeds of sales of
8gasohol made during that time.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the proceeds of sales made on or after July 1, 2003 and on
12or before December 31, 2023 but applies to 100% of the proceeds
13of sales made thereafter.
14    With respect to biodiesel blends, as defined in the Use
15Tax Act, with no less than 1% and no more than 10% biodiesel,
16the tax imposed by this Act applies to (i) 80% of the proceeds
17of sales made on or after July 1, 2003 and on or before
18December 31, 2018 and (ii) 100% of the proceeds of sales made
19after December 31, 2018 and before January 1, 2024. On and
20after January 1, 2024 and on or before December 31, 2030, the
21taxation of biodiesel, renewable diesel, and biodiesel blends
22shall be as provided in Section 3-5.1 of the Use Tax Act. If,
23at any time, however, the tax under this Act on sales of
24biodiesel blends, as defined in the Use Tax Act, with no less
25than 1% and no more than 10% biodiesel is imposed at the rate
26of 1.25%, then the tax imposed by this Act applies to 100% of

 

 

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1the proceeds of sales of biodiesel blends with no less than 1%
2and no more than 10% biodiesel made during that time.
3    With respect to biodiesel, as defined in the Use Tax Act,
4and biodiesel blends, as defined in the Use Tax Act, with more
5than 10% but no more than 99% biodiesel, the tax imposed by
6this Act does not apply to the proceeds of sales made on or
7after July 1, 2003 and on or before December 31, 2023. On and
8after January 1, 2024 and on or before December 31, 2030, the
9taxation of biodiesel, renewable diesel, and biodiesel blends
10shall be as provided in Section 3-5.1 of the Use Tax Act.
11    On and after January 1, 2024, with respect to the sale of a
12manufactured home, as defined in Section 1, if the purchase is
13the first purchase of the manufactured home for use as a
14dwelling and the purchaser who will use the home as a dwelling
15certifies that the manufactured home will be affixed to a
16permanent foundation in the State so that the manufactured
17home is deemed to be real property under the Conveyance and
18Encumbrance of Manufactured Homes as Real Property and
19Severance Act, then the tax imposed by this Act applies to 50%
20of the gross receipts from the sale of the manufactured home.
21The seller, whether acting as a construction contractor or
22not, must retain the purchaser's certification in his or her
23books and records for a period of 7 years after the date of the
24sale. This paragraph is exempt from the provisions of Section
252-70.
26    Until July 1, 2022 and beginning again on July 1, 2023,

 

 

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1with respect to food for human consumption that is to be
2consumed off the premises where it is sold (other than
3alcoholic beverages, food consisting of or infused with adult
4use cannabis, soft drinks, and food that has been prepared for
5immediate consumption), the tax is imposed at the rate of 1%.
6Beginning July 1, 2022 and until July 1, 2023, with respect to
7food for human consumption that is to be consumed off the
8premises where it is sold (other than alcoholic beverages,
9food consisting of or infused with adult use cannabis, soft
10drinks, and food that has been prepared for immediate
11consumption), the tax is imposed at the rate of 0%.
12    With respect to prescription and nonprescription
13medicines, drugs, medical appliances, products classified as
14Class III medical devices by the United States Food and Drug
15Administration that are used for cancer treatment pursuant to
16a prescription, as well as any accessories and components
17related to those devices, modifications to a motor vehicle for
18the purpose of rendering it usable by a person with a
19disability, and insulin, blood sugar testing materials,
20syringes, and needles used by human diabetics, the tax is
21imposed at the rate of 1%. For the purposes of this Section,
22until September 1, 2009: the term "soft drinks" means any
23complete, finished, ready-to-use, non-alcoholic drink, whether
24carbonated or not, including, but not limited to, soda water,
25cola, fruit juice, vegetable juice, carbonated water, and all
26other preparations commonly known as soft drinks of whatever

 

 

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1kind or description that are contained in any closed or sealed
2bottle, can, carton, or container, regardless of size; but
3"soft drinks" does not include coffee, tea, non-carbonated
4water, infant formula, milk or milk products as defined in the
5Grade A Pasteurized Milk and Milk Products Act, or drinks
6containing 50% or more natural fruit or vegetable juice.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "soft drinks" means non-alcoholic
9beverages that contain natural or artificial sweeteners. "Soft
10drinks" does do not include beverages that contain milk or
11milk products, soy, rice or similar milk substitutes, or
12greater than 50% of vegetable or fruit juice by volume.
13    Until August 1, 2009, and notwithstanding any other
14provisions of this Act, "food for human consumption that is to
15be consumed off the premises where it is sold" includes all
16food sold through a vending machine, except soft drinks and
17food products that are dispensed hot from a vending machine,
18regardless of the location of the vending machine. Beginning
19August 1, 2009, and notwithstanding any other provisions of
20this Act, "food for human consumption that is to be consumed
21off the premises where it is sold" includes all food sold
22through a vending machine, except soft drinks, candy, and food
23products that are dispensed hot from a vending machine,
24regardless of the location of the vending machine.
25    Notwithstanding any other provisions of this Act,
26beginning September 1, 2009, "food for human consumption that

 

 

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1is to be consumed off the premises where it is sold" does not
2include candy. For purposes of this Section, "candy" means a
3preparation of sugar, honey, or other natural or artificial
4sweeteners in combination with chocolate, fruits, nuts or
5other ingredients or flavorings in the form of bars, drops, or
6pieces. "Candy" does not include any preparation that contains
7flour or requires refrigeration.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "nonprescription medicines and
10drugs" does not include grooming and hygiene products. For
11purposes of this Section, "grooming and hygiene products"
12includes, but is not limited to, soaps and cleaning solutions,
13shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
14lotions and screens, unless those products are available by
15prescription only, regardless of whether the products meet the
16definition of "over-the-counter-drugs". For the purposes of
17this paragraph, "over-the-counter-drug" means a drug for human
18use that contains a label that identifies the product as a drug
19as required by 21 CFR C.F.R. § 201.66. The
20"over-the-counter-drug" label includes:
21        (A) a A "Drug Facts" panel; or
22        (B) a A statement of the "active ingredient(s)" with a
23    list of those ingredients contained in the compound,
24    substance or preparation.
25    Beginning on January 1, 2014 (the effective date of Public
26Act 98-122) this amendatory Act of the 98th General Assembly,

 

 

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1"prescription and nonprescription medicines and drugs"
2includes medical cannabis purchased from a registered
3dispensing organization under the Compassionate Use of Medical
4Cannabis Program Act.
5    As used in this Section, "adult use cannabis" means
6cannabis subject to tax under the Cannabis Cultivation
7Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
8and does not include cannabis subject to tax under the
9Compassionate Use of Medical Cannabis Program Act.
10(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
11102-4, eff. 4-27-21; 102-700, Article 20, Section 20-20, eff.
124-19-22; 102-700, Article 60, Section 60-30, eff. 4-19-22;
13102-700, Article 65, Section 65-10, eff. 4-19-22; revised
146-1-22.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.