103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4307

 

Introduced 1/16/2024, by Rep. Paul Jacobs

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-10
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reduces the rate of tax on diapers and baby wipes to 1% (currently, 6.25%). Makes various formatting changes.


LRB103 35634 HLH 65709 b

 

 

A BILL FOR

 

HB4307LRB103 35634 HLH 65709 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
53-10 as follows:
 
6    (35 ILCS 105/3-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9either the selling price or the fair market value, if any, of
10the tangible personal property. In all cases where property
11functionally used or consumed is the same as the property that
12was purchased at retail, then the tax is imposed on the selling
13price of the property. In all cases where property
14functionally used or consumed is a by-product or waste product
15that has been refined, manufactured, or produced from property
16purchased at retail, then the tax is imposed on the lower of
17the fair market value, if any, of the specific property so used
18in this State or on the selling price of the property purchased
19at retail. For purposes of this Section "fair market value"
20means the price at which property would change hands between a
21willing buyer and a willing seller, neither being under any
22compulsion to buy or sell and both having reasonable knowledge
23of the relevant facts. The fair market value shall be

 

 

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1established by Illinois sales by the taxpayer of the same
2property as that functionally used or consumed, or if there
3are no such sales by the taxpayer, then comparable sales or
4purchases of property of like kind and character in Illinois.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning on August 6, 2010 through August 15, 2010, and
10beginning again on August 5, 2022 through August 14, 2022,
11with respect to sales tax holiday items as defined in Section
123-6 of this Act, the tax is imposed at the rate of 1.25%.
13    With respect to gasohol, the tax imposed by this Act
14applies to (i) 70% of the proceeds of sales made on or after
15January 1, 1990, and before July 1, 2003, (ii) 80% of the
16proceeds of sales made on or after July 1, 2003 and on or
17before July 1, 2017, (iii) 100% of the proceeds of sales made
18after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
19the proceeds of sales made on or after January 1, 2024 and on
20or before December 31, 2028, and (v) 100% of the proceeds of
21sales made after December 31, 2028. If, at any time, however,
22the tax under this Act on sales of gasohol is imposed at the
23rate of 1.25%, then the tax imposed by this Act applies to 100%
24of the proceeds of sales of gasohol made during that time.
25    With respect to mid-range ethanol blends, the tax imposed
26by this Act applies to (i) 80% of the proceeds of sales made on

 

 

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1or after January 1, 2024 and on or before December 31, 2028 and
2(ii) 100% of the proceeds of sales made thereafter. If, at any
3time, however, the tax under this Act on sales of mid-range
4ethanol blends is imposed at the rate of 1.25%, then the tax
5imposed by this Act applies to 100% of the proceeds of sales of
6mid-range ethanol blends made during that time.
7    With respect to majority blended ethanol fuel, the tax
8imposed by this Act does not apply to the proceeds of sales
9made on or after July 1, 2003 and on or before December 31,
102028 but applies to 100% of the proceeds of sales made
11thereafter.
12    With respect to biodiesel blends with no less than 1% and
13no more than 10% biodiesel, the tax imposed by this Act applies
14to (i) 80% of the proceeds of sales made on or after July 1,
152003 and on or before December 31, 2018 and (ii) 100% of the
16proceeds of sales made after December 31, 2018 and before
17January 1, 2024. On and after January 1, 2024 and on or before
18December 31, 2030, the taxation of biodiesel, renewable
19diesel, and biodiesel blends shall be as provided in Section
203-5.1. If, at any time, however, the tax under this Act on
21sales of biodiesel blends with no less than 1% and no more than
2210% biodiesel is imposed at the rate of 1.25%, then the tax
23imposed by this Act applies to 100% of the proceeds of sales of
24biodiesel blends with no less than 1% and no more than 10%
25biodiesel made during that time.
26    With respect to biodiesel and biodiesel blends with more

 

 

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1than 10% but no more than 99% biodiesel, the tax imposed by
2this Act does not apply to the proceeds of sales made on or
3after July 1, 2003 and on or before December 31, 2023. On and
4after January 1, 2024 and on or before December 31, 2030, the
5taxation of biodiesel, renewable diesel, and biodiesel blends
6shall be as provided in Section 3-5.1.
7    Until July 1, 2022 and beginning again on July 1, 2023,
8with respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, food consisting of or infused with adult
11use cannabis, soft drinks, and food that has been prepared for
12immediate consumption), the tax is imposed at the rate of 1%.
13Beginning on July 1, 2022 and until July 1, 2023, with respect
14to food for human consumption that is to be consumed off the
15premises where it is sold (other than alcoholic beverages,
16food consisting of or infused with adult use cannabis, soft
17drinks, and food that has been prepared for immediate
18consumption), the tax is imposed at the rate of 0%.
19    With respect to prescription and nonprescription
20medicines, drugs, medical appliances, products classified as
21Class III medical devices by the United States Food and Drug
22Administration that are used for cancer treatment pursuant to
23a prescription, as well as any accessories and components
24related to those devices, modifications to a motor vehicle for
25the purpose of rendering it usable by a person with a
26disability, and insulin, blood sugar testing materials,

 

 

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

 

 

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1commonly known as soft drinks of whatever kind or description
2that are contained in any closed or sealed bottle, can,
3carton, or container, regardless of size; but "soft drinks"
4does not include coffee, tea, non-carbonated water, infant
5formula, milk or milk products as defined in the Grade A
6Pasteurized Milk and Milk Products Act, or drinks containing
750% or more natural fruit or vegetable juice.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "soft drinks" means non-alcoholic
10beverages that contain natural or artificial sweeteners. "Soft
11drinks" does not include beverages that contain milk or milk
12products, soy, rice or similar milk substitutes, or greater
13than 50% of vegetable or fruit juice by volume.
14    Until August 1, 2009, and notwithstanding any other
15provisions of this Act, "food for human consumption that is to
16be consumed off the premises where it is sold" includes all
17food sold through a vending machine, except soft drinks and
18food products that are dispensed hot from a vending machine,
19regardless of the location of the vending machine. Beginning
20August 1, 2009, and notwithstanding any other provisions of
21this Act, "food for human consumption that is to be consumed
22off the premises where it is sold" includes all food sold
23through a vending machine, except soft drinks, candy, and food
24products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine.
26    Notwithstanding any other provisions of this Act,

 

 

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

 

 

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1Act 98-122), "prescription and nonprescription medicines and
2drugs" includes 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    If the property that is purchased at retail from a
11retailer is acquired outside Illinois and used outside
12Illinois before being brought to Illinois for use here and is
13taxable under this Act, the "selling price" on which the tax is
14computed shall be reduced by an amount that represents a
15reasonable allowance for depreciation for the period of prior
16out-of-state use.
17(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
18Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
1960-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
204-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 
21    Section 10. The Service Use Tax Act is amended by changing
22Section 3-10 as follows:
 
23    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
24    Sec. 3-10. Rate of tax. Unless otherwise provided in this

 

 

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1Section, the tax imposed by this Act is at the rate of 6.25% of
2the selling price of tangible personal property transferred as
3an incident to the sale of service, but, for the purpose of
4computing this tax, in no event shall the selling price be less
5than the cost price of the property to the serviceman.
6    Beginning on July 1, 2000 and through December 31, 2000,
7with respect to motor fuel, as defined in Section 1.1 of the
8Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
9the Use Tax Act, the tax is imposed at the rate of 1.25%.
10    With respect to gasohol, as defined in the Use Tax Act, the
11tax imposed by this Act applies to (i) 70% of the selling price
12of property transferred as an incident to the sale of service
13on or after January 1, 1990, and before July 1, 2003, (ii) 80%
14of the selling price of property transferred as an incident to
15the sale of service on or after July 1, 2003 and on or before
16July 1, 2017, (iii) 100% of the selling price of property
17transferred as an incident to the sale of service after July 1,
182017 and before January 1, 2024, (iv) 90% of the selling price
19of property transferred as an incident to the sale of service
20on or after January 1, 2024 and on or before December 31, 2028,
21and (v) 100% of the selling price of property transferred as an
22incident to the sale of service after December 31, 2028. If, at
23any time, however, the tax under this Act on sales of gasohol,
24as defined in the Use Tax Act, is imposed at the rate of 1.25%,
25then the tax imposed by this Act applies to 100% of the
26proceeds of sales of gasohol made during that time.

 

 

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1    With respect to mid-range ethanol blends, as defined in
2Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
3applies to (i) 80% of the selling price of property
4transferred as an incident to the sale of service on or after
5January 1, 2024 and on or before December 31, 2028 and (ii)
6100% of the selling price of property transferred as an
7incident to the sale of service after December 31, 2028. If, at
8any time, however, the tax under this Act on sales of mid-range
9ethanol blends is imposed at the rate of 1.25%, then the tax
10imposed by this Act applies to 100% of the selling price of
11mid-range ethanol blends transferred as an incident to the
12sale of service during that time.
13    With respect to majority blended ethanol fuel, as defined
14in the Use Tax Act, the tax imposed by this Act does not apply
15to the selling price of property transferred as an incident to
16the sale of service on or after July 1, 2003 and on or before
17December 31, 2028 but applies to 100% of the selling price
18thereafter.
19    With respect to biodiesel blends, as defined in the Use
20Tax Act, with no less than 1% and no more than 10% biodiesel,
21the tax imposed by this Act applies to (i) 80% of the selling
22price of property transferred as an incident to the sale of
23service on or after July 1, 2003 and on or before December 31,
242018 and (ii) 100% of the proceeds of the selling price after
25December 31, 2018 and before January 1, 2024. On and after
26January 1, 2024 and on or before December 31, 2030, the

 

 

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1taxation of biodiesel, renewable diesel, and biodiesel blends
2shall be as provided in Section 3-5.1 of the Use Tax Act. If,
3at any time, however, the tax under this Act on sales of
4biodiesel blends, as defined in the Use Tax Act, with no less
5than 1% and no more than 10% biodiesel is imposed at the rate
6of 1.25%, then the tax imposed by this Act applies to 100% of
7the proceeds of sales of biodiesel blends with no less than 1%
8and no more than 10% biodiesel made during that time.
9    With respect to biodiesel, as defined in the Use Tax Act,
10and biodiesel blends, as defined in the Use Tax Act, with more
11than 10% but no more than 99% biodiesel, the tax imposed by
12this Act does not apply to the proceeds of the selling price of
13property transferred as an incident to the sale of service on
14or after July 1, 2003 and on or before December 31, 2023. On
15and after January 1, 2024 and on or before December 31, 2030,
16the taxation of biodiesel, renewable diesel, and biodiesel
17blends shall be as provided in Section 3-5.1 of the Use Tax
18Act.
19    At the election of any registered serviceman made for each
20fiscal year, sales of service in which the aggregate annual
21cost price of tangible personal property transferred as an
22incident to the sales of service is less than 35%, or 75% in
23the case of servicemen transferring prescription drugs or
24servicemen engaged in graphic arts production, of the
25aggregate annual total gross receipts from all sales of
26service, the tax imposed by this Act shall be based on the

 

 

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1serviceman's cost price of the tangible personal property
2transferred as an incident to the sale of those services.
3    Until July 1, 2022 and beginning again on July 1, 2023, the
4tax shall be imposed at the rate of 1% on food prepared for
5immediate consumption and transferred incident to a sale of
6service subject to this Act or the Service Occupation Tax Act
7by an entity licensed under the Hospital Licensing Act, the
8Nursing Home Care Act, the Assisted Living and Shared Housing
9Act, the ID/DD Community Care Act, the MC/DD Act, the
10Specialized Mental Health Rehabilitation Act of 2013, or the
11Child Care Act of 1969, or an entity that holds a permit issued
12pursuant to the Life Care Facilities Act. Until July 1, 2022
13and beginning again on July 1, 2023, the tax shall also be
14imposed at the rate of 1% on food for human consumption that is
15to be consumed off the premises where it is sold (other than
16alcoholic beverages, food consisting of or infused with adult
17use cannabis, soft drinks, and food that has been prepared for
18immediate consumption and is not otherwise included in this
19paragraph).
20    Beginning on July 1, 2022 and until July 1, 2023, the tax
21shall be imposed at the rate of 0% on food prepared for
22immediate consumption and transferred incident to a sale of
23service subject to this Act or the Service Occupation Tax Act
24by an entity licensed under the Hospital Licensing Act, the
25Nursing Home Care Act, the Assisted Living and Shared Housing
26Act, the ID/DD Community Care Act, the MC/DD Act, the

 

 

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1Specialized Mental Health Rehabilitation Act of 2013, or the
2Child Care Act of 1969, or an entity that holds a permit issued
3pursuant to the Life Care Facilities Act. Beginning on July 1,
42022 and until July 1, 2023, the tax shall also be imposed at
5the rate of 0% on food for human consumption that is to be
6consumed off the premises where it is sold (other than
7alcoholic beverages, food consisting of or infused with adult
8use cannabis, soft drinks, and food that has been prepared for
9immediate consumption and is not otherwise included in this
10paragraph).
11    The tax shall also be imposed at the rate of 1% on
12prescription and nonprescription medicines, drugs, medical
13appliances, products classified as Class III medical devices
14by the United States Food and Drug Administration that are
15used for cancer treatment pursuant to a prescription, as well
16as any accessories and components related to those devices,
17modifications to a motor vehicle for the purpose of rendering
18it usable by a person with a disability, and insulin, blood
19sugar testing materials, syringes, and needles used by human
20diabetics.
21    With respect to the following items, the tax is imposed at
22the rate of 1%:
23        (1) food prepared for immediate consumption and
24    transferred incident to a sale of service subject to this
25    Act or the Service Occupation Tax Act by an entity
26    licensed under the Hospital Licensing Act, the Nursing

 

 

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1    Home Care Act, the Assisted Living and Shared Housing Act,
2    the ID/DD Community Care Act, the MC/DD Act, the
3    Specialized Mental Health Rehabilitation Act of 2013, or
4    the Child Care Act of 1969, or an entity that holds a
5    permit issued pursuant to the Life Care Facilities Act;
6        (2) food for human consumption that is to be consumed
7    off the premises where it is sold (other than alcoholic
8    beverages, food consisting of or infused with adult use
9    cannabis, soft drinks, and food that has been prepared for
10    immediate consumption);
11        (3) prescription and nonprescription medicines, drugs,
12    and medical appliances;
13        (4) products classified as Class III medical devices
14    by the United States Food and Drug Administration that are
15    used for cancer treatment pursuant to a prescription, as
16    well as any accessories and components related to those
17    devices;
18        (5) modifications to a motor vehicle for the purpose
19    of rendering it usable by a person with a disability;
20        (6) insulin, blood sugar testing materials, syringes,
21    and needles used by human diabetics; and
22        (7) diapers and baby wipes.
23    For the purposes of this Section, until September 1, 2009:
24the term "soft drinks" means any complete, finished,
25ready-to-use, non-alcoholic drink, whether carbonated or not,
26including, but not limited to, soda water, cola, fruit juice,

 

 

HB4307- 15 -LRB103 35634 HLH 65709 b

1vegetable juice, carbonated water, and all other preparations
2commonly known as soft drinks of whatever kind or description
3that are contained in any closed or sealed bottle, can,
4carton, or container, regardless of size; but "soft drinks"
5does not include coffee, tea, non-carbonated water, infant
6formula, milk or milk products as defined in the Grade A
7Pasteurized Milk and Milk Products Act, or drinks containing
850% or more natural fruit or vegetable juice.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "soft drinks" means non-alcoholic
11beverages that contain natural or artificial sweeteners. "Soft
12drinks" does not include beverages that contain milk or milk
13products, soy, rice or similar milk substitutes, or greater
14than 50% of vegetable or fruit juice by volume.
15    Until August 1, 2009, and notwithstanding any other
16provisions of this Act, "food for human consumption that is to
17be consumed off the premises where it is sold" includes all
18food sold through a vending machine, except soft drinks and
19food products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine. Beginning
21August 1, 2009, and notwithstanding any other provisions of
22this Act, "food for human consumption that is to be consumed
23off the premises where it is sold" includes all food sold
24through a vending machine, except soft drinks, candy, and food
25products that are dispensed hot from a vending machine,
26regardless of the location of the vending machine.

 

 

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

 

 

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1    Beginning on January 1, 2014 (the effective date of Public
2Act 98-122), "prescription and nonprescription medicines and
3drugs" includes medical cannabis purchased from a registered
4dispensing organization under the Compassionate Use of Medical
5Cannabis Program Act.
6    As used in this Section, "adult use cannabis" means
7cannabis subject to tax under the Cannabis Cultivation
8Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
9and does not include cannabis subject to tax under the
10Compassionate Use of Medical Cannabis Program Act.
11    If the property that is acquired from a serviceman is
12acquired outside Illinois and used outside Illinois before
13being brought to Illinois for use here and is taxable under
14this Act, the "selling price" on which the tax is computed
15shall be reduced by an amount that represents a reasonable
16allowance for depreciation for the period of prior
17out-of-state use.
18(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
19102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
20Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
21103-154, eff. 6-30-23.)
 
22    Section 15. The Service Occupation Tax Act is amended by
23changing Section 3-10 as follows:
 
24    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)

 

 

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1    Sec. 3-10. Rate of tax. Unless otherwise provided in this
2Section, the tax imposed by this Act is at the rate of 6.25% of
3the "selling price", as defined in Section 2 of the Service Use
4Tax Act, of the tangible personal property. For the purpose of
5computing this tax, in no event shall the "selling price" be
6less than the cost price to the serviceman of the tangible
7personal property transferred. The selling price of each item
8of tangible personal property transferred as an incident of a
9sale of service may be shown as a distinct and separate item on
10the serviceman's billing to the service customer. If the
11selling price is not so shown, the selling price of the
12tangible personal property is deemed to be 50% of the
13serviceman's entire billing to the service customer. When,
14however, a serviceman contracts to design, develop, and
15produce special order machinery or equipment, the tax imposed
16by this Act shall be based on the serviceman's cost price of
17the tangible personal property transferred incident to the
18completion of the contract.
19    Beginning on July 1, 2000 and through December 31, 2000,
20with respect to motor fuel, as defined in Section 1.1 of the
21Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
22the Use Tax Act, the tax is imposed at the rate of 1.25%.
23    With respect to gasohol, as defined in the Use Tax Act, the
24tax imposed by this Act shall apply to (i) 70% of the cost
25price of property transferred as an incident to the sale of
26service on or after January 1, 1990, and before July 1, 2003,

 

 

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1(ii) 80% of the selling price of property transferred as an
2incident to the sale of service on or after July 1, 2003 and on
3or before July 1, 2017, (iii) 100% of the selling price of
4property transferred as an incident to the sale of service
5after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
6the selling price of property transferred as an incident to
7the sale of service on or after January 1, 2024 and on or
8before December 31, 2028, and (v) 100% of the selling price of
9property transferred as an incident to the sale of service
10after December 31, 2028. If, at any time, however, the tax
11under this Act on sales of gasohol, as defined in the Use Tax
12Act, is imposed at the rate of 1.25%, then the tax imposed by
13this Act applies to 100% of the proceeds of sales of gasohol
14made during that time.
15    With respect to mid-range ethanol blends, as defined in
16Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
17applies to (i) 80% of the selling price of property
18transferred as an incident to the sale of service on or after
19January 1, 2024 and on or before December 31, 2028 and (ii)
20100% of the selling price of property transferred as an
21incident to the sale of service after December 31, 2028. If, at
22any time, however, the tax under this Act on sales of mid-range
23ethanol blends is imposed at the rate of 1.25%, then the tax
24imposed by this Act applies to 100% of the selling price of
25mid-range ethanol blends transferred as an incident to the
26sale of service during that time.

 

 

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1    With respect to majority blended ethanol fuel, as defined
2in the Use Tax Act, the tax imposed by this Act does not apply
3to the selling price of property transferred as an incident to
4the sale of service on or after July 1, 2003 and on or before
5December 31, 2028 but applies to 100% of the selling price
6thereafter.
7    With respect to biodiesel blends, as defined in the Use
8Tax Act, with no less than 1% and no more than 10% biodiesel,
9the tax imposed by this Act applies to (i) 80% of the selling
10price of property transferred as an incident to the sale of
11service on or after July 1, 2003 and on or before December 31,
122018 and (ii) 100% of the proceeds of the selling price after
13December 31, 2018 and before January 1, 2024. On and after
14January 1, 2024 and on or before December 31, 2030, the
15taxation of biodiesel, renewable diesel, and biodiesel blends
16shall be as provided in Section 3-5.1 of the Use Tax Act. If,
17at any time, however, the tax under this Act on sales of
18biodiesel blends, as defined in the Use Tax Act, with no less
19than 1% and no more than 10% biodiesel is imposed at the rate
20of 1.25%, then the tax imposed by this Act applies to 100% of
21the proceeds of sales of biodiesel blends with no less than 1%
22and no more than 10% biodiesel made during that time.
23    With respect to biodiesel, as defined in the Use Tax Act,
24and biodiesel blends, as defined in the Use Tax Act, with more
25than 10% but no more than 99% biodiesel material, the tax
26imposed by this Act does not apply to the proceeds of the

 

 

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1selling price of property transferred as an incident to the
2sale of service on or after July 1, 2003 and on or before
3December 31, 2023. On and after January 1, 2024 and on or
4before December 31, 2030, the taxation of biodiesel, renewable
5diesel, and biodiesel blends shall be as provided in Section
63-5.1 of the Use Tax Act.
7    At the election of any registered serviceman made for each
8fiscal year, sales of service in which the aggregate annual
9cost price of tangible personal property transferred as an
10incident to the sales of service is less than 35%, or 75% in
11the case of servicemen transferring prescription drugs or
12servicemen engaged in graphic arts production, of the
13aggregate annual total gross receipts from all sales of
14service, the tax imposed by this Act shall be based on the
15serviceman's cost price of the tangible personal property
16transferred incident to the sale of those services.
17    Until July 1, 2022 and beginning again on July 1, 2023, the
18tax shall be imposed at the rate of 1% on food prepared for
19immediate consumption and transferred incident to a sale of
20service subject to this Act or the Service Use Tax Act by an
21entity licensed under the Hospital Licensing Act, the Nursing
22Home Care Act, the Assisted Living and Shared Housing Act, the
23ID/DD Community Care Act, the MC/DD Act, the Specialized
24Mental Health Rehabilitation Act of 2013, or the Child Care
25Act of 1969, or an entity that holds a permit issued pursuant
26to the Life Care Facilities Act. Until July 1, 2022 and

 

 

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1beginning again on July 1, 2023, the tax shall also be imposed
2at the rate of 1% on food for human consumption that is to be
3consumed off the premises where it is sold (other than
4alcoholic beverages, food consisting of or infused with adult
5use cannabis, soft drinks, and food that has been prepared for
6immediate consumption and is not otherwise included in this
7paragraph).
8    Beginning on July 1, 2022 and until July 1, 2023, the tax
9shall be imposed at the rate of 0% on food prepared for
10immediate consumption and transferred incident to a sale of
11service subject to this Act or the Service Use Tax Act by an
12entity licensed under the Hospital Licensing Act, the Nursing
13Home Care Act, the Assisted Living and Shared Housing Act, the
14ID/DD Community Care Act, the MC/DD Act, the Specialized
15Mental Health Rehabilitation Act of 2013, or the Child Care
16Act of 1969, or an entity that holds a permit issued pursuant
17to the Life Care Facilities Act. Beginning July 1, 2022 and
18until July 1, 2023, the tax shall also be imposed at the rate
19of 0% on food for human consumption that is to be consumed off
20the premises where it is sold (other than alcoholic beverages,
21food consisting of or infused with adult use cannabis, soft
22drinks, and food that has been prepared for immediate
23consumption and is not otherwise included in this paragraph).
24    The tax shall also be imposed at the rate of 1% on
25prescription and nonprescription medicines, drugs, medical
26appliances, products classified as Class III medical devices

 

 

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1by the United States Food and Drug Administration that are
2used for cancer treatment pursuant to a prescription, as well
3as any accessories and components related to those devices,
4modifications to a motor vehicle for the purpose of rendering
5it usable by a person with a disability, and insulin, blood
6sugar testing materials, syringes, and needles used by human
7diabetics.
8    With respect to the following items, the tax is imposed at
9the rate of 1%:
10        (1) food prepared for immediate consumption and
11    transferred incident to a sale of service subject to this
12    Act or the Service Occupation Tax Act by an entity
13    licensed under the Hospital Licensing Act, the Nursing
14    Home Care Act, the Assisted Living and Shared Housing Act,
15    the ID/DD Community Care Act, the MC/DD Act, the
16    Specialized Mental Health Rehabilitation Act of 2013, or
17    the Child Care Act of 1969, or an entity that holds a
18    permit issued pursuant to the Life Care Facilities Act;
19        (2) food for human consumption that is to be consumed
20    off the premises where it is sold (other than alcoholic
21    beverages, food consisting of or infused with adult use
22    cannabis, soft drinks, and food that has been prepared for
23    immediate consumption);
24        (3) prescription and nonprescription medicines, drugs,
25    and medical appliances;
26        (4) products classified as Class III medical devices

 

 

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

 

 

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1than 50% of vegetable or fruit juice by volume.
2    Until August 1, 2009, and notwithstanding any other
3provisions of this Act, "food for human consumption that is to
4be consumed off the premises where it is sold" includes all
5food sold through a vending machine, except soft drinks and
6food products that are dispensed hot from a vending machine,
7regardless of the location of the vending machine. Beginning
8August 1, 2009, and notwithstanding any other provisions of
9this Act, "food for human consumption that is to be consumed
10off the premises where it is sold" includes all food sold
11through a vending machine, except soft drinks, candy, and food
12products that are dispensed hot from a vending machine,
13regardless of the location of the vending machine.
14    Notwithstanding any other provisions of this Act,
15beginning September 1, 2009, "food for human consumption that
16is to be consumed off the premises where it is sold" does not
17include candy. For purposes of this Section, "candy" means a
18preparation of sugar, honey, or other natural or artificial
19sweeteners in combination with chocolate, fruits, nuts or
20other ingredients or flavorings in the form of bars, drops, or
21pieces. "Candy" does not include any preparation that contains
22flour or requires refrigeration.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "nonprescription medicines and
25drugs" does not include grooming and hygiene products. For
26purposes of this Section, "grooming and hygiene products"

 

 

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1includes, but is not limited to, soaps and cleaning solutions,
2shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
3lotions and screens, unless those products are available by
4prescription only, regardless of whether the products meet the
5definition of "over-the-counter-drugs". For the purposes of
6this paragraph, "over-the-counter-drug" means a drug for human
7use that contains a label that identifies the product as a drug
8as required by 21 CFR 201.66. The "over-the-counter-drug"
9label includes:
10        (A) a "Drug Facts" panel; or
11        (B) a statement of the "active ingredient(s)" with a
12    list of those ingredients contained in the compound,
13    substance or preparation.
14    Beginning on January 1, 2014 (the effective date of Public
15Act 98-122), "prescription and nonprescription medicines and
16drugs" includes 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(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
25102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
26Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;

 

 

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1103-154, eff. 6-30-23.)
 
2    Section 20. The Retailers' Occupation Tax Act is amended
3by changing Section 2-10 as follows:
 
4    (35 ILCS 120/2-10)
5    Sec. 2-10. Rate of tax. Unless otherwise provided in this
6Section, the tax imposed by this Act is at the rate of 6.25% of
7gross receipts from sales of tangible personal property made
8in the course of business.
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
162-8 of this Act, the tax is imposed at the rate of 1.25%.
17    Within 14 days after July 1, 2000 (the effective date of
18Public Act 91-872), each retailer of motor fuel and gasohol
19shall cause the following notice to be posted in a prominently
20visible place on each retail dispensing device that is used to
21dispense motor fuel or gasohol in the State of Illinois: "As of
22July 1, 2000, the State of Illinois has eliminated the State's
23share of sales tax on motor fuel and gasohol through December
2431, 2000. The price on this pump should reflect the

 

 

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1elimination of the tax." The notice shall be printed in bold
2print on a sign that is no smaller than 4 inches by 8 inches.
3The sign shall be clearly visible to customers. Any retailer
4who fails to post or maintain a required sign through December
531, 2000 is guilty of a petty offense for which the fine shall
6be $500 per day per each retail premises where a violation
7occurs.
8    With respect to gasohol, as defined in the Use Tax Act, the
9tax imposed by this Act applies to (i) 70% of the proceeds of
10sales made on or after January 1, 1990, and before July 1,
112003, (ii) 80% of the proceeds of sales made on or after July
121, 2003 and on or before July 1, 2017, (iii) 100% of the
13proceeds of sales made after July 1, 2017 and prior to January
141, 2024, (iv) 90% of the proceeds of sales made on or after
15January 1, 2024 and on or before December 31, 2028, and (v)
16100% of the proceeds of sales made after December 31, 2028. If,
17at any time, however, the tax under this Act on sales of
18gasohol, as defined in the Use Tax Act, is imposed at the rate
19of 1.25%, then the tax imposed by this Act applies to 100% of
20the proceeds of sales of gasohol made during that time.
21    With respect to mid-range ethanol blends, as defined in
22Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
23applies to (i) 80% of the proceeds of sales made on or after
24January 1, 2024 and on or before December 31, 2028 and (ii)
25100% of the proceeds of sales made after December 31, 2028. If,
26at any time, however, the tax under this Act on sales of

 

 

HB4307- 29 -LRB103 35634 HLH 65709 b

1mid-range ethanol blends is imposed at the rate of 1.25%, then
2the tax imposed by this Act applies to 100% of the proceeds of
3sales of mid-range ethanol blends made during that time.
4    With respect to majority blended ethanol fuel, as defined
5in the Use Tax Act, the tax imposed by this Act does not apply
6to the proceeds of sales made on or after July 1, 2003 and on
7or before December 31, 2028 but applies to 100% of the proceeds
8of sales made thereafter.
9    With respect to biodiesel blends, as defined in the Use
10Tax Act, with no less than 1% and no more than 10% biodiesel,
11the tax imposed by this Act applies to (i) 80% of the proceeds
12of sales made on or after July 1, 2003 and on or before
13December 31, 2018 and (ii) 100% of the proceeds of sales made
14after December 31, 2018 and before January 1, 2024. On and
15after January 1, 2024 and on or before December 31, 2030, the
16taxation of biodiesel, renewable diesel, and biodiesel blends
17shall be as provided in Section 3-5.1 of the Use Tax Act. If,
18at any time, however, the tax under this Act on sales of
19biodiesel blends, as defined in the Use Tax Act, with no less
20than 1% and no more than 10% biodiesel is imposed at the rate
21of 1.25%, then the tax imposed by this Act applies to 100% of
22the proceeds of sales of biodiesel blends with no less than 1%
23and no more than 10% biodiesel made during that time.
24    With respect to biodiesel, as defined in the Use Tax Act,
25and biodiesel blends, as defined in the Use Tax Act, with more
26than 10% but no more than 99% biodiesel, the tax imposed by

 

 

HB4307- 30 -LRB103 35634 HLH 65709 b

1this Act does not apply to the proceeds of sales made on or
2after July 1, 2003 and on or before December 31, 2023. On and
3after January 1, 2024 and on or before December 31, 2030, the
4taxation of biodiesel, renewable diesel, and biodiesel blends
5shall be as provided in Section 3-5.1 of the Use Tax Act.
6    Until July 1, 2022 and beginning again on July 1, 2023,
7with respect to food for human consumption that is to be
8consumed off the premises where it is sold (other than
9alcoholic beverages, food consisting of or infused with adult
10use cannabis, soft drinks, and food that has been prepared for
11immediate consumption), the tax is imposed at the rate of 1%.
12Beginning July 1, 2022 and until July 1, 2023, with respect to
13food for human consumption that is to be consumed off the
14premises where it is sold (other than alcoholic beverages,
15food consisting of or infused with adult use cannabis, soft
16drinks, and food that has been prepared for immediate
17consumption), the tax is imposed at the rate of 0%.
18    With respect to prescription and nonprescription
19medicines, drugs, medical appliances, products classified as
20Class III medical devices by the United States Food and Drug
21Administration that are used for cancer treatment pursuant to
22a prescription, as well as any accessories and components
23related to those devices, modifications to a motor vehicle for
24the purpose of rendering it usable by a person with a
25disability, and insulin, blood sugar testing materials,
26syringes, and needles used by human diabetics, the tax is

 

 

HB4307- 31 -LRB103 35634 HLH 65709 b

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

 

 

HB4307- 32 -LRB103 35634 HLH 65709 b

1that are contained in any closed or sealed bottle, can,
2carton, or container, regardless of size; but "soft drinks"
3does not include coffee, tea, non-carbonated water, infant
4formula, milk or milk products as defined in the Grade A
5Pasteurized Milk and Milk Products Act, or drinks containing
650% 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 not include beverages that contain milk or milk
11products, soy, rice or similar milk substitutes, or greater
12than 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

 

 

HB4307- 33 -LRB103 35634 HLH 65709 b

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 201.66. The "over-the-counter-drug"
20label includes:
21        (A) a "Drug Facts" panel; or
22        (B) 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), "prescription and nonprescription medicines and

 

 

HB4307- 34 -LRB103 35634 HLH 65709 b

1drugs" includes medical cannabis purchased from a registered
2dispensing organization under the Compassionate Use of Medical
3Cannabis Program Act.
4    As used in this Section, "adult use cannabis" means
5cannabis subject to tax under the Cannabis Cultivation
6Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
7and does not include cannabis subject to tax under the
8Compassionate Use of Medical Cannabis Program Act.
9(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
10Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
1160-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
124-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)