103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5659

 

Introduced 2/20/2024, by Rep. Daniel Didech

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 605/605-1025.1 new
35 ILCS 5/241 new
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5

    Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that the Department of Commerce and Economic Opportunity may award credits to qualifying microfiber filtration manufacturers against the taxes imposed by the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and the Illinois Income Tax Act. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and the Illinois Income Tax Act to make conforming changes. Effective immediately.


LRB103 39344 HLH 69507 b

 

 

A BILL FOR

 

HB5659LRB103 39344 HLH 69507 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 Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois
6is amended by adding Section 605-1025.1 as follows:
 
7    (20 ILCS 605/605-1025.1 new)
8    Sec. 605-1025.1. Microfiber filtration manufacturing
9investment.
10    (a) As used in this Section:
11    "Full-time equivalent job" means a job in which a new
12employee works for a microfiber filtration manufacturer, or
13for a corporation under contract with a microfiber filtration
14manufacturer, at a microfiber filtration manufacturing center
15for at least 35 hours per week. A microfiber filtration
16manufacturer who employs labor or services at a specific site
17or facility under contract with another may declare one
18full-time, permanent job for every 1,820 hours worked per year
19under that contract. Vacations, paid holidays, and sick time
20are included in this computation. Overtime is not considered a
21part of regular hours.
22    "Microfiber" means a synthetic fiber that is composed of
23microplastic, is intentionally embedded into a textile, and is

 

 

HB5659- 2 -LRB103 39344 HLH 69507 b

1shed from the textile when washed.
2    "Microfiber filter" means a washing machine filter that
3(i) is capable of reducing by at least 90% the mass of
4microfibers that would otherwise be emitted by the washing
5machine as a result of the operation of the washing machine and
6(ii) has a mesh size of 100 microns or less.
7    "Microplastic" means a plastic piece that is less than 5
8millimeters in diameter.
9    "Plastic" has the meaning given to that term in subsection
10(a) of Sec. 52.5 of the Environmental Protection Act.
11    "Qualifying microfiber filtration manufacturer" means an
12entity that operates a qualifying microfiber filtration
13manufacturing center and that:
14        (1) made a capital investment of at least $200,000 in
15    the qualifying microfiber filtration manufacturing center
16    on or after January 1, 2019 and before the effective date
17    of this amendatory Act of the 103rd General Assembly; or
18        (2) pledges to make a capital investment of at least
19    $200,000 in the qualifying microfiber filtration
20    manufacturing center on or after the effective date of
21    this amendatory Act of the 103rd General Assembly and
22    before January 1, 2029; capital investments made on or
23    after January 1, 2019 and before the effective date of
24    this amendatory Act of the 103rd General Assembly may be
25    combined with capital investments made on or after the
26    effective date of this amendatory Act of the 103rd General

 

 

HB5659- 3 -LRB103 39344 HLH 69507 b

1    Assembly when determining the total amount of the
2    taxpayer's capital investment under this paragraph (2);
3    and
4        (3) pledges to create at least 5 full-time or
5    full-time equivalent new jobs at the qualifying microfiber
6    filtration manufacturing center over a period of 60 months
7    after the certificate is issued to the manufacturer by the
8    Department; those jobs must have a total compensation
9    equal to or greater than 120% of the average wage paid to
10    full-time employees in the county where the microfiber
11    filtration manufacturing center is located, as determined
12    by the U.S. Bureau of Labor Statistics.
13    "Qualifying microfiber filtration manufacturing center"
14means a facility that is primarily used for the manufacture of
15microfiber filters and that is located in the State of
16Illinois.
17    "Qualified tangible personal property" means electrical
18systems and equipment; hardware; computers; servers; racks;
19cabinets; telecommunications cabling infrastructure;
20peripheral components or systems; software; mechanical,
21electrical, or plumbing systems; battery systems; and other
22microfiber filtration manufacturing infrastructure equipment
23and systems necessary to operate qualified tangible personal
24property, including fixtures; and component parts of any of
25the foregoing, including parts necessary for installation,
26maintenance, repair, refurbishment, and replacement of the

 

 

HB5659- 4 -LRB103 39344 HLH 69507 b

1qualified tangible personal property to generate, transform,
2transmit, distribute, or manage electricity necessary to
3operate qualified tangible personal property; and all other
4tangible personal property that is essential to the operations
5of a microfiber filtration manufacturer or manufacturing
6center. "Qualified tangible personal property" also includes
7building materials physically incorporated into the qualifying
8microfiber filtration manufacturing center.
9    (b) On and after January 1, 2025, the Department shall
10issue to qualifying microfiber filtration manufacturers
11certificates of exemption from the Use Tax Act, the Service
12Use Tax Act, the Service Occupation Tax Act, the Retailers'
13Occupation Tax Act, all locally imposed retailers' occupation
14taxes administered and collected by the Department, and the
15Chicago non-titled use tax for qualified tangible personal
16property used in the construction or operation of a qualifying
17microfiber filtration manufacturing center. To document the
18exemption allowed under this Section, the retailer or
19serviceman must obtain from the qualifying microfiber
20filtration manufacturer a copy of the certificate of exemption
21issued by the Department.
22    (c) For taxable years beginning on or after January 1,
232025, the Department shall award credits against the taxes
24imposed under subsections (a) and (b) of Section 201 of the
25Illinois Income Tax Act as provided in Section 241 of the
26Illinois Income Tax Act and issue tax credit certificates for

 

 

HB5659- 5 -LRB103 39344 HLH 69507 b

1those credits.
2    Microfiber filtration manufacturers seeking a certificate
3of exemption for a qualifying microfiber filtration
4manufacturing center shall apply to the Department in the
5manner specified by the Department. The Department shall
6determine the duration of the certificate of exemption awarded
7under this Act. The duration of the certificate of exemption
8may not exceed 20 calendar years. The Department and any
9microfiber filtration manufacturer seeking an exemption under
10this Section must enter into a memorandum of understanding
11that, at a minimum, provides:
12        (1) the details for determining the capital investment
13    to be made;
14        (2) the number of new full-time equivalent jobs
15    created;
16        (3) the timeline for achieving the capital investment
17    and new job goals;
18        (4) the repayment obligation should the job creation
19    and capital investment goals not be achieved and any
20    conditions under which repayment by the qualifying
21    microfiber filtration manufacturer claiming the exemption
22    is required;
23        (5) the duration of the exemption; and
24        (6) any other provisions as deemed necessary by the
25    Department.
26    (e) By July 1, 2025, and by July 1 of each year thereafter,

 

 

HB5659- 6 -LRB103 39344 HLH 69507 b

1the Department shall deliver to the Governor and the General
2Assembly a report on the outcomes and effectiveness of this
3amendatory Act of the 103rd General Assembly, which shall
4include the following:
5        (1) the name of each recipient business;
6        (2) the location of the project;
7        (3) the estimated value of the credit;
8        (4) the number of new full-time equivalent jobs and,
9    if applicable, retained full-time equivalent jobs pledged
10    as a result of the project; and
11        (5) whether the project is located in an underserved
12    area.
13    (f) Microfiber filtration manufacturers seeking a
14certificate of exemption related to the rehabilitation or
15construction of microfiber filtration manufacturing centers in
16the State shall require the contractor and all subcontractors
17to comply with the requirements of Section 30-22 of the
18Illinois Procurement Code with respect to that rehabilitation
19or construction as those requirements apply to responsible
20bidders and to present satisfactory evidence of that
21compliance to the Department.
22    (g) Microfiber filtration manufacturers seeking a
23certificate of exemption for the rehabilitation or
24construction of microfiber filtration manufacturers and
25manufacturing centers in the State shall require the
26contractor to enter into a project labor agreement approved by

 

 

HB5659- 7 -LRB103 39344 HLH 69507 b

1the Department.
2    (h) Any qualifying microfiber filtration manufacturers and
3manufacturing center issued a certificate of exemption under
4this Section must annually report to the Department the total
5benefits that are received by the business under this Act.
6Reports under this subsection (h) are due by no later than May
731 of each year and shall cover the previous calendar year. The
8first report is for the 2025 calendar year and is due no later
9than May 31, 2026.
10    To the extent that a business issued a certificate of
11exemption under this Section has obtained an Enterprise Zone
12Building Materials Exemption Certificate or a High Impact
13Business Building Materials Exemption Certificate, no
14additional reporting for those building materials exemption
15benefits is required under this Section.
16    Failure to file a report under this subsection may result
17in suspension or revocation of the certificate of exemption.
18Factors to be considered in determining whether a microfiber
19filtration manufacturer's certificate of exemption shall be
20suspended or revoked include, but are not limited to, prior
21compliance with the reporting requirements, cooperation in
22discontinuing and correcting violations, the extent of the
23violation, and whether the violation was willful or
24inadvertent.
25    (i) Notwithstanding any other provision of law, the
26Department shall not issue any new certificates of exemption

 

 

HB5659- 8 -LRB103 39344 HLH 69507 b

1under the provisions of this Section after July 1, 2034. This
2sunset shall not affect any existing certificates of exemption
3in effect on July 1, 2034.
4    (j) The Department shall adopt rules to implement and
5administer this Section.
 
6    Section 10. The Illinois Income Tax Act is amended by
7adding Section 241 as follows:
 
8    (35 ILCS 5/241 new)
9    Sec. 241. Microfiber filtration manufacturer employment
10tax credit.
11    (a) As used in this Section:
12    "Microfiber" means a synthetic fiber that is composed of
13microplastic, is intentionally embedded into a textile, and is
14shed from the textile when washed.
15    "Microfiber filter" means a washing machine filter that
16(i) is capable of reducing by at least 90% the mass of
17microfibers that would otherwise be emitted by the washing
18machine as a result of the operation of the washing machine and
19(ii) has a mesh size of 100 microns or less.
20    "Microplastic" means a plastic piece that is less than 5
21millimeters in diameter.
22    "Plastic" has the meaning given to that term in subsection
23(a) of Sec. 52.5 of the Environmental Protection Act.
24    (b) A taxpayer who has been awarded a credit by the

 

 

HB5659- 9 -LRB103 39344 HLH 69507 b

1Department of Commerce and Economic Opportunity under Section
2605-1025.1 of the Department of Commerce and Economic
3Opportunity Law of the Civil Administrative Code of Illinois
4is entitled to a credit against the taxes imposed under
5subsections (a) and (b) of Section 201 as provided in that Act.
6The amount of the credit shall be 20% of the wages paid during
7the taxable year to each full-time or part-time employee of
8the microfiber filtration manufacturer who is employed at a
9microfiber filtration manufacturing center and is primarily
10engaged in the process of manufacturing microfiber filters in
11a geographic area that meets any one of the following
12criteria:
13        (1) the area has a poverty rate of at least 20%,
14    according to the United States Census Bureau American
15    Community Survey 5-Year Estimates;
16        (2) 75% or more of the children in the area
17    participate in the federal free lunch program, according
18    to reported statistics from the State Board of Education;
19        (3) 20% or more of the households in the area receive
20    assistance under the Supplemental Nutrition Assistance
21    Program (SNAP), according to data from the U.S. Census
22    Bureau American Community Survey 5-year Estimates; or
23        (4) the area has an average unemployment rate, as
24    determined by the Department of Employment Security, that
25    is more than 120% of the national unemployment average, as
26    determined by the U.S. Department of Labor, for a period

 

 

HB5659- 10 -LRB103 39344 HLH 69507 b

1    of at least 2 consecutive calendar years preceding the
2    date of the application.
3    If the taxpayer is a partnership or a Subchapter S
4corporation, then the provisions of Section 251 apply. The
5Department, in cooperation with the Department of Commerce and
6Economic Opportunity, shall adopt rules to enforce and
7administer this Section.
8    This Section is exempt from the provisions of Section 250
9of this Act.
10    (c) In no event shall a credit under this Section reduce
11the taxpayer's liability to less than zero. If the amount of
12the credit exceeds the tax liability for the year, the excess
13may be carried forward and applied to the tax liability of the
145 taxable years following the excess credit year. The tax
15credit shall be applied to the earliest year for which there is
16a tax liability. If there are credits for more than one year
17that are available to offset a liability, the earlier credit
18shall be applied first.
19    (d) No credit shall be allowed with respect to any
20certification for any taxable year ending after the revocation
21of the certification by the Department of Commerce and
22Economic Opportunity. Upon receiving notification by the
23Department of Commerce and Economic Opportunity of the
24revocation of certification, the Department shall notify the
25taxpayer that no credit is allowed for any taxable year ending
26after the revocation date, as stated in such notification. If

 

 

HB5659- 11 -LRB103 39344 HLH 69507 b

1any credit has been allowed with respect to a certification
2for a taxable year ending after the revocation date, any
3refund paid to the taxpayer for that taxable year shall, to the
4extent of that credit allowed, be an erroneous refund within
5the meaning of Section 912 of this Act.
 
6    Section 15. The Use Tax Act is amended by changing Section
73-5 as follows:
 
8    (35 ILCS 105/3-5)
9    Sec. 3-5. Exemptions. Use of the following tangible
10personal property is exempt from the tax imposed by this Act:
11    (1) Personal property purchased from a corporation,
12society, association, foundation, institution, or
13organization, other than a limited liability company, that is
14organized and operated as a not-for-profit service enterprise
15for the benefit of persons 65 years of age or older if the
16personal property was not purchased by the enterprise for the
17purpose of resale by the enterprise.
18    (2) Personal property purchased by a not-for-profit
19Illinois county fair association for use in conducting,
20operating, or promoting the county fair.
21    (3) Personal property purchased by a not-for-profit arts
22or cultural organization that establishes, by proof required
23by the Department by rule, that it has received an exemption
24under Section 501(c)(3) of the Internal Revenue Code and that

 

 

HB5659- 12 -LRB103 39344 HLH 69507 b

1is organized and operated primarily for the presentation or
2support of arts or cultural programming, activities, or
3services. These organizations include, but are not limited to,
4music and dramatic arts organizations such as symphony
5orchestras and theatrical groups, arts and cultural service
6organizations, local arts councils, visual arts organizations,
7and media arts organizations. On and after July 1, 2001 (the
8effective date of Public Act 92-35), however, an entity
9otherwise eligible for this exemption shall not make tax-free
10purchases unless it has an active identification number issued
11by the Department.
12    (4) Except as otherwise provided in this Act, personal
13property purchased by a governmental body, by a corporation,
14society, association, foundation, or institution organized and
15operated exclusively for charitable, religious, or educational
16purposes, or by a not-for-profit corporation, society,
17association, foundation, institution, or organization that has
18no compensated officers or employees and that is organized and
19operated primarily for the recreation of persons 55 years of
20age or older. A limited liability company may qualify for the
21exemption under this paragraph only if the limited liability
22company is organized and operated exclusively for educational
23purposes. On and after July 1, 1987, however, no entity
24otherwise eligible for this exemption shall make tax-free
25purchases unless it has an active exemption identification
26number issued by the Department.

 

 

HB5659- 13 -LRB103 39344 HLH 69507 b

1    (5) Until July 1, 2003, a passenger car that is a
2replacement vehicle to the extent that the purchase price of
3the car is subject to the Replacement Vehicle Tax.
4    (6) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new
7and used, and including that manufactured on special order,
8certified by the purchaser to be used primarily for graphic
9arts production, and including machinery and equipment
10purchased for lease. Equipment includes chemicals or chemicals
11acting as catalysts but only if the chemicals or chemicals
12acting as catalysts effect a direct and immediate change upon
13a graphic arts product. Beginning on July 1, 2017, graphic
14arts machinery and equipment is included in the manufacturing
15and assembling machinery and equipment exemption under
16paragraph (18).
17    (7) Farm chemicals.
18    (8) Legal tender, currency, medallions, or gold or silver
19coinage issued by the State of Illinois, the government of the
20United States of America, or the government of any foreign
21country, and bullion.
22    (9) Personal property purchased from a teacher-sponsored
23student organization affiliated with an elementary or
24secondary school located in Illinois.
25    (10) A motor vehicle that is used for automobile renting,
26as defined in the Automobile Renting Occupation and Use Tax

 

 

HB5659- 14 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 15 -LRB103 39344 HLH 69507 b

1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals.
10    Beginning on January 1, 2024, farm machinery and equipment
11also includes electrical power generation equipment used
12primarily for production agriculture.
13    This item (11) is exempt from the provisions of Section
143-90.
15    (12) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the
18conduct of its business as an air common carrier, for a flight
19destined for or returning from a location or locations outside
20the United States without regard to previous or subsequent
21domestic stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold
23to or used by an air carrier, certified by the carrier to be
24used for consumption, shipment, or storage in the conduct of
25its business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

 

 

HB5659- 16 -LRB103 39344 HLH 69507 b

1United States and any of its possessions and (ii) transports
2at least one individual or package for hire from the city of
3origination to the city of final destination on the same
4aircraft, without regard to a change in the flight number of
5that aircraft.
6    (13) Proceeds of mandatory service charges separately
7stated on customers' bills for the purchase and consumption of
8food and beverages purchased at retail from a retailer, to the
9extent that the proceeds of the service charge are in fact
10turned over as tips or as a substitute for tips to the
11employees who participate directly in preparing, serving,
12hosting or cleaning up the food or beverage function with
13respect to which the service charge is imposed.
14    (14) Until July 1, 2003, oil field exploration, drilling,
15and production equipment, including (i) rigs and parts of
16rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
17pipe and tubular goods, including casing and drill strings,
18(iii) pumps and pump-jack units, (iv) storage tanks and flow
19lines, (v) any individual replacement part for oil field
20exploration, drilling, and production equipment, and (vi)
21machinery and equipment purchased for lease; but excluding
22motor vehicles required to be registered under the Illinois
23Vehicle Code.
24    (15) Photoprocessing machinery and equipment, including
25repair and replacement parts, both new and used, including
26that manufactured on special order, certified by the purchaser

 

 

HB5659- 17 -LRB103 39344 HLH 69507 b

1to be used primarily for photoprocessing, and including
2photoprocessing machinery and equipment purchased for lease.
3    (16) Until July 1, 2028, coal and aggregate exploration,
4mining, off-highway hauling, processing, maintenance, and
5reclamation equipment, including replacement parts and
6equipment, and including equipment purchased for lease, but
7excluding motor vehicles required to be registered under the
8Illinois Vehicle Code. The changes made to this Section by
9Public Act 97-767 apply on and after July 1, 2003, but no claim
10for credit or refund is allowed on or after August 16, 2013
11(the effective date of Public Act 98-456) for such taxes paid
12during the period beginning July 1, 2003 and ending on August
1316, 2013 (the effective date of Public Act 98-456).
14    (17) Until July 1, 2003, distillation machinery and
15equipment, sold as a unit or kit, assembled or installed by the
16retailer, certified by the user to be used only for the
17production of ethyl alcohol that will be used for consumption
18as motor fuel or as a component of motor fuel for the personal
19use of the user, and not subject to sale or resale.
20    (18) Manufacturing and assembling machinery and equipment
21used primarily in the process of manufacturing or assembling
22tangible personal property for wholesale or retail sale or
23lease, whether that sale or lease is made directly by the
24manufacturer or by some other person, whether the materials
25used in the process are owned by the manufacturer or some other
26person, or whether that sale or lease is made apart from or as

 

 

HB5659- 18 -LRB103 39344 HLH 69507 b

1an incident to the seller's engaging in the service occupation
2of producing machines, tools, dies, jigs, patterns, gauges, or
3other similar items of no commercial value on special order
4for a particular purchaser. The exemption provided by this
5paragraph (18) includes production related tangible personal
6property, as defined in Section 3-50, purchased on or after
7July 1, 2019. The exemption provided by this paragraph (18)
8does not include machinery and equipment used in (i) the
9generation of electricity for wholesale or retail sale; (ii)
10the generation or treatment of natural or artificial gas for
11wholesale or retail sale that is delivered to customers
12through pipes, pipelines, or mains; or (iii) the treatment of
13water for wholesale or retail sale that is delivered to
14customers through pipes, pipelines, or mains. The provisions
15of Public Act 98-583 are declaratory of existing law as to the
16meaning and scope of this exemption. Beginning on July 1,
172017, the exemption provided by this paragraph (18) includes,
18but is not limited to, graphic arts machinery and equipment,
19as defined in paragraph (6) of this Section.
20    (19) Personal property delivered to a purchaser or
21purchaser's donee inside Illinois when the purchase order for
22that personal property was received by a florist located
23outside Illinois who has a florist located inside Illinois
24deliver the personal property.
25    (20) Semen used for artificial insemination of livestock
26for direct agricultural production.

 

 

HB5659- 19 -LRB103 39344 HLH 69507 b

1    (21) Horses, or interests in horses, registered with and
2meeting the requirements of any of the Arabian Horse Club
3Registry of America, Appaloosa Horse Club, American Quarter
4Horse Association, United States Trotting Association, or
5Jockey Club, as appropriate, used for purposes of breeding or
6racing for prizes. This item (21) is exempt from the
7provisions of Section 3-90, and the exemption provided for
8under this item (21) applies for all periods beginning May 30,
91995, but no claim for credit or refund is allowed on or after
10January 1, 2008 for such taxes paid during the period
11beginning May 30, 2000 and ending on January 1, 2008.
12    (22) Computers and communications equipment utilized for
13any hospital purpose and equipment used in the diagnosis,
14analysis, or treatment of hospital patients purchased by a
15lessor who leases the equipment, under a lease of one year or
16longer executed or in effect at the time the lessor would
17otherwise be subject to the tax imposed by this Act, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20the Retailers' Occupation Tax Act. If the equipment is leased
21in a manner that does not qualify for this exemption or is used
22in any other non-exempt manner, the lessor shall be liable for
23the tax imposed under this Act or the Service Use Tax Act, as
24the case may be, based on the fair market value of the property
25at the time the non-qualifying use occurs. No lessor shall
26collect or attempt to collect an amount (however designated)

 

 

HB5659- 20 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 21 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 22 -LRB103 39344 HLH 69507 b

1    (26) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-90.
5    (27) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the
9Department to be organized and operated exclusively for
10educational purposes. For purposes of this exemption, "a
11corporation, limited liability company, society, association,
12foundation, or institution organized and operated exclusively
13for educational purposes" means all tax-supported public
14schools, private schools that offer systematic instruction in
15useful branches of learning by methods common to public
16schools and that compare favorably in their scope and
17intensity with the course of study presented in tax-supported
18schools, and vocational or technical schools or institutes
19organized and operated exclusively to provide a course of
20study of not less than 6 weeks duration and designed to prepare
21individuals to follow a trade or to pursue a manual,
22technical, mechanical, industrial, business, or commercial
23occupation.
24    (28) Beginning January 1, 2000, personal property,
25including food, purchased through fundraising events for the
26benefit of a public or private elementary or secondary school,

 

 

HB5659- 23 -LRB103 39344 HLH 69507 b

1a group of those schools, or one or more school districts if
2the events are sponsored by an entity recognized by the school
3district that consists primarily of volunteers and includes
4parents and teachers of the school children. This paragraph
5does not apply to fundraising events (i) for the benefit of
6private home instruction or (ii) for which the fundraising
7entity purchases the personal property sold at the events from
8another individual or entity that sold the property for the
9purpose of resale by the fundraising entity and that profits
10from the sale to the fundraising entity. This paragraph is
11exempt from the provisions of Section 3-90.
12    (29) Beginning January 1, 2000 and through December 31,
132001, new or used automatic vending machines that prepare and
14serve hot food and beverages, including coffee, soup, and
15other items, and replacement parts for these machines.
16Beginning January 1, 2002 and through June 30, 2003, machines
17and parts for machines used in commercial, coin-operated
18amusement and vending business if a use or occupation tax is
19paid on the gross receipts derived from the use of the
20commercial, coin-operated amusement and vending machines. This
21paragraph is exempt from the provisions of Section 3-90.
22    (30) Beginning January 1, 2001 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages,
25soft drinks, and food that has been prepared for immediate
26consumption) and prescription and nonprescription medicines,

 

 

HB5659- 24 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 25 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 26 -LRB103 39344 HLH 69507 b

1lessor. If, however, that amount is not refunded to the lessee
2for any reason, the lessor is liable to pay that amount to the
3Department. This paragraph is exempt from the provisions of
4Section 3-90.
5    (33) On and after July 1, 2003 and through June 30, 2004,
6the use in this State of motor vehicles of the second division
7with a gross vehicle weight in excess of 8,000 pounds and that
8are subject to the commercial distribution fee imposed under
9Section 3-815.1 of the Illinois Vehicle Code. Beginning on
10July 1, 2004 and through June 30, 2005, the use in this State
11of motor vehicles of the second division: (i) with a gross
12vehicle weight rating in excess of 8,000 pounds; (ii) that are
13subject to the commercial distribution fee imposed under
14Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
15are primarily used for commercial purposes. Through June 30,
162005, this exemption applies to repair and replacement parts
17added after the initial purchase of such a motor vehicle if
18that motor vehicle is used in a manner that would qualify for
19the rolling stock exemption otherwise provided for in this
20Act. For purposes of this paragraph, the term "used for
21commercial purposes" means the transportation of persons or
22property in furtherance of any commercial or industrial
23enterprise, whether for-hire or not.
24    (34) Beginning January 1, 2008, tangible personal property
25used in the construction or maintenance of a community water
26supply, as defined under Section 3.145 of the Environmental

 

 

HB5659- 27 -LRB103 39344 HLH 69507 b

1Protection Act, that is operated by a not-for-profit
2corporation that holds a valid water supply permit issued
3under Title IV of the Environmental Protection Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (35) Beginning January 1, 2010 and continuing through
6December 31, 2029, materials, parts, equipment, components,
7and furnishings incorporated into or upon an aircraft as part
8of the modification, refurbishment, completion, replacement,
9repair, or maintenance of the aircraft. This exemption
10includes consumable supplies used in the modification,
11refurbishment, completion, replacement, repair, and
12maintenance of aircraft. However, until January 1, 2024, this
13exemption excludes any materials, parts, equipment,
14components, and consumable supplies used in the modification,
15replacement, repair, and maintenance of aircraft engines or
16power plants, whether such engines or power plants are
17installed or uninstalled upon any such aircraft. "Consumable
18supplies" include, but are not limited to, adhesive, tape,
19sandpaper, general purpose lubricants, cleaning solution,
20latex gloves, and protective films.
21    Beginning January 1, 2010 and continuing through December
2231, 2023, this exemption applies only to the use of qualifying
23tangible personal property by persons who modify, refurbish,
24complete, repair, replace, or maintain aircraft and who (i)
25hold an Air Agency Certificate and are empowered to operate an
26approved repair station by the Federal Aviation

 

 

HB5659- 28 -LRB103 39344 HLH 69507 b

1Administration, (ii) have a Class IV Rating, and (iii) conduct
2operations in accordance with Part 145 of the Federal Aviation
3Regulations. From January 1, 2024 through December 31, 2029,
4this exemption applies only to the use of qualifying tangible
5personal property by: (A) persons who modify, refurbish,
6complete, repair, replace, or maintain aircraft and who (i)
7hold an Air Agency Certificate and are empowered to operate an
8approved repair station by the Federal Aviation
9Administration, (ii) have a Class IV Rating, and (iii) conduct
10operations in accordance with Part 145 of the Federal Aviation
11Regulations; and (B) persons who engage in the modification,
12replacement, repair, and maintenance of aircraft engines or
13power plants without regard to whether or not those persons
14meet the qualifications of item (A).
15    The exemption does not include aircraft operated by a
16commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part
18129 of the Federal Aviation Regulations. The changes made to
19this paragraph (35) by Public Act 98-534 are declarative of
20existing law. It is the intent of the General Assembly that the
21exemption under this paragraph (35) applies continuously from
22January 1, 2010 through December 31, 2024; however, no claim
23for credit or refund is allowed for taxes paid as a result of
24the disallowance of this exemption on or after January 1, 2015
25and prior to February 5, 2020 (the effective date of Public Act
26101-629).

 

 

HB5659- 29 -LRB103 39344 HLH 69507 b

1    (36) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt
10instruments issued by the public-facilities corporation in
11connection with the development of the municipal convention
12hall. This exemption includes existing public-facilities
13corporations as provided in Section 11-65-25 of the Illinois
14Municipal Code. This paragraph is exempt from the provisions
15of Section 3-90.
16    (37) Beginning January 1, 2017 and through December 31,
172026, menstrual pads, tampons, and menstrual cups.
18    (38) Merchandise that is subject to the Rental Purchase
19Agreement Occupation and Use Tax. The purchaser must certify
20that the item is purchased to be rented subject to a
21rental-purchase rental purchase agreement, as defined in the
22Rental-Purchase Rental Purchase Agreement Act, and provide
23proof of registration under the Rental Purchase Agreement
24Occupation and Use Tax Act. This paragraph is exempt from the
25provisions of Section 3-90.
26    (39) Tangible personal property purchased by a purchaser

 

 

HB5659- 30 -LRB103 39344 HLH 69507 b

1who is exempt from the tax imposed by this Act by operation of
2federal law. This paragraph is exempt from the provisions of
3Section 3-90.
4    (40) Qualified tangible personal property used in the
5construction or operation of a data center that has been
6granted a certificate of exemption by the Department of
7Commerce and Economic Opportunity, whether that tangible
8personal property is purchased by the owner, operator, or
9tenant of the data center or by a contractor or subcontractor
10of the owner, operator, or tenant. Data centers that would
11have qualified for a certificate of exemption prior to January
121, 2020 had Public Act 101-31 been in effect may apply for and
13obtain an exemption for subsequent purchases of computer
14equipment or enabling software purchased or leased to upgrade,
15supplement, or replace computer equipment or enabling software
16purchased or leased in the original investment that would have
17qualified.
18    The Department of Commerce and Economic Opportunity shall
19grant a certificate of exemption under this item (40) to
20qualified data centers as defined by Section 605-1025 of the
21Department of Commerce and Economic Opportunity Law of the
22Civil Administrative Code of Illinois.
23    For the purposes of this item (40):
24        "Data center" means a building or a series of
25    buildings rehabilitated or constructed to house working
26    servers in one physical location or multiple sites within

 

 

HB5659- 31 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 32 -LRB103 39344 HLH 69507 b

1    certificate of eligibility issued by the Department of
2    Commerce and Economic Opportunity.
3    This item (40) is exempt from the provisions of Section
43-90.
5    (41) Beginning July 1, 2022, breast pumps, breast pump
6collection and storage supplies, and breast pump kits. This
7item (41) is exempt from the provisions of Section 3-90. As
8used in this item (41):
9        "Breast pump" means an electrically controlled or
10    manually controlled pump device designed or marketed to be
11    used to express milk from a human breast during lactation,
12    including the pump device and any battery, AC adapter, or
13    other power supply unit that is used to power the pump
14    device and is packaged and sold with the pump device at the
15    time of sale.
16        "Breast pump collection and storage supplies" means
17    items of tangible personal property designed or marketed
18    to be used in conjunction with a breast pump to collect
19    milk expressed from a human breast and to store collected
20    milk until it is ready for consumption.
21        "Breast pump collection and storage supplies"
22    includes, but is not limited to: breast shields and breast
23    shield connectors; breast pump tubes and tubing adapters;
24    breast pump valves and membranes; backflow protectors and
25    backflow protector adaptors; bottles and bottle caps
26    specific to the operation of the breast pump; and breast

 

 

HB5659- 33 -LRB103 39344 HLH 69507 b

1    milk storage bags.
2        "Breast pump collection and storage supplies" does not
3    include: (1) bottles and bottle caps not specific to the
4    operation of the breast pump; (2) breast pump travel bags
5    and other similar carrying accessories, including ice
6    packs, labels, and other similar products; (3) breast pump
7    cleaning supplies; (4) nursing bras, bra pads, breast
8    shells, and other similar products; and (5) creams,
9    ointments, and other similar products that relieve
10    breastfeeding-related symptoms or conditions of the
11    breasts or nipples, unless sold as part of a breast pump
12    kit that is pre-packaged by the breast pump manufacturer
13    or distributor.
14        "Breast pump kit" means a kit that: (1) contains no
15    more than a breast pump, breast pump collection and
16    storage supplies, a rechargeable battery for operating the
17    breast pump, a breastmilk cooler, bottle stands, ice
18    packs, and a breast pump carrying case; and (2) is
19    pre-packaged as a breast pump kit by the breast pump
20    manufacturer or distributor.
21    (42) Tangible personal property sold by or on behalf of
22the State Treasurer pursuant to the Revised Uniform Unclaimed
23Property Act. This item (42) is exempt from the provisions of
24Section 3-90.
25    (43) Beginning on January 1, 2024, tangible personal
26property purchased by an active duty member of the armed

 

 

HB5659- 34 -LRB103 39344 HLH 69507 b

1forces of the United States who presents valid military
2identification and purchases the property using a form of
3payment where the federal government is the payor. The member
4of the armed forces must complete, at the point of sale, a form
5prescribed by the Department of Revenue documenting that the
6transaction is eligible for the exemption under this
7paragraph. Retailers must keep the form as documentation of
8the exemption in their records for a period of not less than 6
9years. "Armed forces of the United States" means the United
10States Army, Navy, Air Force, Marine Corps, or Coast Guard.
11This paragraph is exempt from the provisions of Section 3-90.
12    (44) Qualified tangible personal property used in the
13construction or operation of a qualifying microfiber
14filtration manufacturing center that has been granted a
15certificate of exemption by the Department of Commerce and
16Economic Opportunity under Section 605-1025.1 of the
17Department of Commerce and Economic Opportunity Law of the
18Civil Administrative Code of Illinois. As used in this
19paragraph (44), "qualified tangible personal property" has the
20meaning given to that term in Section 605-1025.1 of the
21Department of Commerce and Economic Opportunity Law of the
22Civil Administrative Code of Illinois. This paragraph is
23exempt from the provisions of Section 3-90.
24(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
25Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
26eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,

 

 

HB5659- 35 -LRB103 39344 HLH 69507 b

1Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
2eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
3revised 12-12-23.)
 
4    Section 20. The Service Use Tax Act is amended by changing
5Section 3-5 as follows:
 
6    (35 ILCS 110/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a non-profit Illinois
17county fair association for use in conducting, operating, or
18promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or
24support of arts or cultural programming, activities, or

 

 

HB5659- 36 -LRB103 39344 HLH 69507 b

1services. These organizations include, but are not limited to,
2music and dramatic arts organizations such as symphony
3orchestras and theatrical groups, arts and cultural service
4organizations, local arts councils, visual arts organizations,
5and media arts organizations. On and after July 1, 2001 (the
6effective date of Public Act 92-35), however, an entity
7otherwise eligible for this exemption shall not make tax-free
8purchases unless it has an active identification number issued
9by the Department.
10    (4) Legal tender, currency, medallions, or gold or silver
11coinage issued by the State of Illinois, the government of the
12United States of America, or the government of any foreign
13country, and bullion.
14    (5) Until July 1, 2003 and beginning again on September 1,
152004 through August 30, 2014, graphic arts machinery and
16equipment, including repair and replacement parts, both new
17and used, and including that manufactured on special order or
18purchased for lease, certified by the purchaser to be used
19primarily for graphic arts production. Equipment includes
20chemicals or chemicals acting as catalysts but only if the
21chemicals or chemicals acting as catalysts effect a direct and
22immediate change upon a graphic arts product. Beginning on
23July 1, 2017, graphic arts machinery and equipment is included
24in the manufacturing and assembling machinery and equipment
25exemption under Section 2 of this Act.
26    (6) Personal property purchased from a teacher-sponsored

 

 

HB5659- 37 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 38 -LRB103 39344 HLH 69507 b

1limited to, soil testing sensors, computers, monitors,
2software, global positioning and mapping systems, and other
3such equipment.
4    Farm machinery and equipment also includes computers,
5sensors, software, and related equipment used primarily in the
6computer-assisted operation of production agriculture
7facilities, equipment, and activities such as, but not limited
8to, the collection, monitoring, and correlation of animal and
9crop data for the purpose of formulating animal diets and
10agricultural chemicals.
11    Beginning on January 1, 2024, farm machinery and equipment
12also includes electrical power generation equipment used
13primarily for production agriculture.
14    This item (7) is exempt from the provisions of Section
153-75.
16    (8) Until June 30, 2013, fuel and petroleum products sold
17to or used by an air common carrier, certified by the carrier
18to be used for consumption, shipment, or storage in the
19conduct of its business as an air common carrier, for a flight
20destined for or returning from a location or locations outside
21the United States without regard to previous or subsequent
22domestic stopovers.
23    Beginning July 1, 2013, fuel and petroleum products sold
24to or used by an air carrier, certified by the carrier to be
25used for consumption, shipment, or storage in the conduct of
26its business as an air common carrier, for a flight that (i) is

 

 

HB5659- 39 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 40 -LRB103 39344 HLH 69507 b

1and equipment, including repair and replacement parts, both
2new and used, including that manufactured on special order,
3certified by the purchaser to be used primarily for
4photoprocessing, and including photoprocessing machinery and
5equipment purchased for lease.
6    (12) Until July 1, 2028, coal and aggregate exploration,
7mining, off-highway hauling, processing, maintenance, and
8reclamation equipment, including replacement parts and
9equipment, and including equipment purchased for lease, but
10excluding motor vehicles required to be registered under the
11Illinois Vehicle Code. The changes made to this Section by
12Public Act 97-767 apply on and after July 1, 2003, but no claim
13for credit or refund is allowed on or after August 16, 2013
14(the effective date of Public Act 98-456) for such taxes paid
15during the period beginning July 1, 2003 and ending on August
1616, 2013 (the effective date of Public Act 98-456).
17    (13) Semen used for artificial insemination of livestock
18for direct agricultural production.
19    (14) Horses, or interests in horses, registered with and
20meeting the requirements of any of the Arabian Horse Club
21Registry of America, Appaloosa Horse Club, American Quarter
22Horse Association, United States Trotting Association, or
23Jockey Club, as appropriate, used for purposes of breeding or
24racing for prizes. This item (14) is exempt from the
25provisions of Section 3-75, and the exemption provided for
26under this item (14) applies for all periods beginning May 30,

 

 

HB5659- 41 -LRB103 39344 HLH 69507 b

11995, but no claim for credit or refund is allowed on or after
2January 1, 2008 (the effective date of Public Act 95-88) for
3such taxes paid during the period beginning May 30, 2000 and
4ending on January 1, 2008 (the effective date of Public Act
595-88).
6    (15) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients purchased by a
9lessor who leases the equipment, under a lease of one year or
10longer executed or in effect at the time the lessor would
11otherwise be subject to the tax imposed by this Act, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. If the equipment is leased
15in a manner that does not qualify for this exemption or is used
16in any other non-exempt manner, the lessor shall be liable for
17the tax imposed under this Act or the Use Tax Act, as the case
18may be, based on the fair market value of the property at the
19time the non-qualifying use occurs. No lessor shall collect or
20attempt to collect an amount (however designated) that
21purports to reimburse that lessor for the tax imposed by this
22Act or the Use Tax Act, as the case may be, if the tax has not
23been paid by the lessor. If a lessor improperly collects any
24such amount from the lessee, the lessee shall have a legal
25right to claim a refund of that amount from the lessor. If,
26however, that amount is not refunded to the lessee for any

 

 

HB5659- 42 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 43 -LRB103 39344 HLH 69507 b

1disaster area in Illinois or bordering Illinois by a
2manufacturer or retailer that is registered in this State to a
3corporation, society, association, foundation, or institution
4that has been issued a sales tax exemption identification
5number by the Department that assists victims of the disaster
6who reside within the declared disaster area.
7    (18) Beginning with taxable years ending on or after
8December 31, 1995 and ending with taxable years ending on or
9before December 31, 2004, personal property that is used in
10the performance of infrastructure repairs in this State,
11including, but not limited to, municipal roads and streets,
12access roads, bridges, sidewalks, waste disposal systems,
13water and sewer line extensions, water distribution and
14purification facilities, storm water drainage and retention
15facilities, and sewage treatment facilities, resulting from a
16State or federally declared disaster in Illinois or bordering
17Illinois when such repairs are initiated on facilities located
18in the declared disaster area within 6 months after the
19disaster.
20    (19) Beginning July 1, 1999, game or game birds purchased
21at a "game breeding and hunting preserve area" as that term is
22used in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 3-75.
24    (20) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

HB5659- 44 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 45 -LRB103 39344 HLH 69507 b

1another individual or entity that sold the property for the
2purpose of resale by the fundraising entity and that profits
3from the sale to the fundraising entity. This paragraph is
4exempt from the provisions of Section 3-75.
5    (22) Beginning January 1, 2000 and through December 31,
62001, new or used automatic vending machines that prepare and
7serve hot food and beverages, including coffee, soup, and
8other items, and replacement parts for these machines.
9Beginning January 1, 2002 and through June 30, 2003, machines
10and parts for machines used in commercial, coin-operated
11amusement and vending business if a use or occupation tax is
12paid on the gross receipts derived from the use of the
13commercial, coin-operated amusement and vending machines. This
14paragraph is exempt from the provisions of Section 3-75.
15    (23) Beginning August 23, 2001 and through June 30, 2016,
16food for human consumption that is to be consumed off the
17premises where it is sold (other than alcoholic beverages,
18soft drinks, and food that has been prepared for immediate
19consumption) and prescription and nonprescription medicines,
20drugs, medical appliances, and insulin, urine testing
21materials, syringes, and needles used by diabetics, for human
22use, when purchased for use by a person receiving medical
23assistance under Article V of the Illinois Public Aid Code who
24resides in a licensed long-term care facility, as defined in
25the Nursing Home Care Act, or in a licensed facility as defined
26in the ID/DD Community Care Act, the MC/DD Act, or the

 

 

HB5659- 46 -LRB103 39344 HLH 69507 b

1Specialized Mental Health Rehabilitation Act of 2013.
2    (24) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), computers and communications equipment
4utilized for any hospital purpose and equipment used in the
5diagnosis, analysis, or treatment of hospital patients
6purchased by a lessor who leases the equipment, under a lease
7of one year or longer executed or in effect at the time the
8lessor would otherwise be subject to the tax imposed by this
9Act, to a hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of
11the Retailers' Occupation Tax Act. If the equipment is leased
12in a manner that does not qualify for this exemption or is used
13in any other nonexempt manner, the lessor shall be liable for
14the tax imposed under this Act or the Use Tax Act, as the case
15may be, based on the fair market value of the property at the
16time the nonqualifying use occurs. No lessor shall collect or
17attempt to collect an amount (however designated) that
18purports to reimburse that lessor for the tax imposed by this
19Act or the Use Tax Act, as the case may be, if the tax has not
20been paid by the lessor. If a lessor improperly collects any
21such amount from the lessee, the lessee shall have a legal
22right to claim a refund of that amount from the lessor. If,
23however, that amount is not refunded to the lessee for any
24reason, the lessor is liable to pay that amount to the
25Department. This paragraph is exempt from the provisions of
26Section 3-75.

 

 

HB5659- 47 -LRB103 39344 HLH 69507 b

1    (25) Beginning on August 2, 2001 (the effective date of
2Public Act 92-227), personal property purchased by a lessor
3who leases the property, under a lease of one year or longer
4executed or in effect at the time the lessor would otherwise be
5subject to the tax imposed by this Act, to a governmental body
6that has been issued an active tax exemption identification
7number by the Department under Section 1g of the Retailers'
8Occupation Tax Act. If the property is leased in a manner that
9does not qualify for this exemption or is used in any other
10nonexempt manner, the lessor shall be liable for the tax
11imposed under this Act or the Use Tax Act, as the case may be,
12based on the fair market value of the property at the time the
13nonqualifying use occurs. No lessor shall collect or attempt
14to collect an amount (however designated) that purports to
15reimburse that lessor for the tax imposed by this Act or the
16Use Tax Act, as the case may be, if the tax has not been paid
17by the lessor. If a lessor improperly collects any such amount
18from the lessee, the lessee shall have a legal right to claim a
19refund of that amount from the lessor. If, however, that
20amount is not refunded to the lessee for any reason, the lessor
21is liable to pay that amount to the Department. This paragraph
22is exempt from the provisions of Section 3-75.
23    (26) Beginning January 1, 2008, tangible personal property
24used in the construction or maintenance of a community water
25supply, as defined under Section 3.145 of the Environmental
26Protection Act, that is operated by a not-for-profit

 

 

HB5659- 48 -LRB103 39344 HLH 69507 b

1corporation that holds a valid water supply permit issued
2under Title IV of the Environmental Protection Act. This
3paragraph is exempt from the provisions of Section 3-75.
4    (27) Beginning January 1, 2010 and continuing through
5December 31, 2029, materials, parts, equipment, components,
6and furnishings incorporated into or upon an aircraft as part
7of the modification, refurbishment, completion, replacement,
8repair, or maintenance of the aircraft. This exemption
9includes consumable supplies used in the modification,
10refurbishment, completion, replacement, repair, and
11maintenance of aircraft. However, until January 1, 2024, this
12exemption excludes any materials, parts, equipment,
13components, and consumable supplies used in the modification,
14replacement, repair, and maintenance of aircraft engines or
15power plants, whether such engines or power plants are
16installed or uninstalled upon any such aircraft. "Consumable
17supplies" include, but are not limited to, adhesive, tape,
18sandpaper, general purpose lubricants, cleaning solution,
19latex gloves, and protective films.
20    Beginning January 1, 2010 and continuing through December
2131, 2023, this exemption applies only to the use of qualifying
22tangible personal property transferred incident to the
23modification, refurbishment, completion, replacement, repair,
24or maintenance of aircraft by persons who (i) hold an Air
25Agency Certificate and are empowered to operate an approved
26repair station by the Federal Aviation Administration, (ii)

 

 

HB5659- 49 -LRB103 39344 HLH 69507 b

1have a Class IV Rating, and (iii) conduct operations in
2accordance with Part 145 of the Federal Aviation Regulations.
3From January 1, 2024 through December 31, 2029, this exemption
4applies only to the use of qualifying tangible personal
5property by: (A) persons who modify, refurbish, complete,
6repair, replace, or maintain aircraft and who (i) hold an Air
7Agency Certificate and are empowered to operate an approved
8repair station by the Federal Aviation Administration, (ii)
9have a Class IV Rating, and (iii) conduct operations in
10accordance with Part 145 of the Federal Aviation Regulations;
11and (B) persons who engage in the modification, replacement,
12repair, and maintenance of aircraft engines or power plants
13without regard to whether or not those persons meet the
14qualifications of item (A).
15    The exemption does not include aircraft operated by a
16commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part
18129 of the Federal Aviation Regulations. The changes made to
19this paragraph (27) by Public Act 98-534 are declarative of
20existing law. It is the intent of the General Assembly that the
21exemption under this paragraph (27) applies continuously from
22January 1, 2010 through December 31, 2024; however, no claim
23for credit or refund is allowed for taxes paid as a result of
24the disallowance of this exemption on or after January 1, 2015
25and prior to February 5, 2020 (the effective date of Public Act
26101-629).

 

 

HB5659- 50 -LRB103 39344 HLH 69507 b

1    (28) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt
10instruments issued by the public-facilities corporation in
11connection with the development of the municipal convention
12hall. This exemption includes existing public-facilities
13corporations as provided in Section 11-65-25 of the Illinois
14Municipal Code. This paragraph is exempt from the provisions
15of Section 3-75.
16    (29) Beginning January 1, 2017 and through December 31,
172026, menstrual pads, tampons, and menstrual cups.
18    (30) Tangible personal property transferred to a purchaser
19who is exempt from the tax imposed by this Act by operation of
20federal law. This paragraph is exempt from the provisions of
21Section 3-75.
22    (31) Qualified tangible personal property used in the
23construction or operation of a data center that has been
24granted a certificate of exemption by the Department of
25Commerce and Economic Opportunity, whether that tangible
26personal property is purchased by the owner, operator, or

 

 

HB5659- 51 -LRB103 39344 HLH 69507 b

1tenant of the data center or by a contractor or subcontractor
2of the owner, operator, or tenant. Data centers that would
3have qualified for a certificate of exemption prior to January
41, 2020 had Public Act 101-31 been in effect, may apply for and
5obtain an exemption for subsequent purchases of computer
6equipment or enabling software purchased or leased to upgrade,
7supplement, or replace computer equipment or enabling software
8purchased or leased in the original investment that would have
9qualified.
10    The Department of Commerce and Economic Opportunity shall
11grant a certificate of exemption under this item (31) to
12qualified data centers as defined by Section 605-1025 of the
13Department of Commerce and Economic Opportunity Law of the
14Civil Administrative Code of Illinois.
15    For the purposes of this item (31):
16        "Data center" means a building or a series of
17    buildings rehabilitated or constructed to house working
18    servers in one physical location or multiple sites within
19    the State of Illinois.
20        "Qualified tangible personal property" means:
21    electrical systems and equipment; climate control and
22    chilling equipment and systems; mechanical systems and
23    equipment; monitoring and secure systems; emergency
24    generators; hardware; computers; servers; data storage
25    devices; network connectivity equipment; racks; cabinets;
26    telecommunications cabling infrastructure; raised floor

 

 

HB5659- 52 -LRB103 39344 HLH 69507 b

1    systems; peripheral components or systems; software;
2    mechanical, electrical, or plumbing systems; battery
3    systems; cooling systems and towers; temperature control
4    systems; other cabling; and other data center
5    infrastructure equipment and systems necessary to operate
6    qualified tangible personal property, including fixtures;
7    and component parts of any of the foregoing, including
8    installation, maintenance, repair, refurbishment, and
9    replacement of qualified tangible personal property to
10    generate, transform, transmit, distribute, or manage
11    electricity necessary to operate qualified tangible
12    personal property; and all other tangible personal
13    property that is essential to the operations of a computer
14    data center. The term "qualified tangible personal
15    property" also includes building materials physically
16    incorporated into in to the qualifying data center. To
17    document the exemption allowed under this Section, the
18    retailer must obtain from the purchaser a copy of the
19    certificate of eligibility issued by the Department of
20    Commerce and Economic Opportunity.
21    This item (31) is exempt from the provisions of Section
223-75.
23    (32) Beginning July 1, 2022, breast pumps, breast pump
24collection and storage supplies, and breast pump kits. This
25item (32) is exempt from the provisions of Section 3-75. As
26used in this item (32):

 

 

HB5659- 53 -LRB103 39344 HLH 69507 b

1        "Breast pump" means an electrically controlled or
2    manually controlled pump device designed or marketed to be
3    used to express milk from a human breast during lactation,
4    including the pump device and any battery, AC adapter, or
5    other power supply unit that is used to power the pump
6    device and is packaged and sold with the pump device at the
7    time of sale.
8        "Breast pump collection and storage supplies" means
9    items of tangible personal property designed or marketed
10    to be used in conjunction with a breast pump to collect
11    milk expressed from a human breast and to store collected
12    milk until it is ready for consumption.
13        "Breast pump collection and storage supplies"
14    includes, but is not limited to: breast shields and breast
15    shield connectors; breast pump tubes and tubing adapters;
16    breast pump valves and membranes; backflow protectors and
17    backflow protector adaptors; bottles and bottle caps
18    specific to the operation of the breast pump; and breast
19    milk storage bags.
20        "Breast pump collection and storage supplies" does not
21    include: (1) bottles and bottle caps not specific to the
22    operation of the breast pump; (2) breast pump travel bags
23    and other similar carrying accessories, including ice
24    packs, labels, and other similar products; (3) breast pump
25    cleaning supplies; (4) nursing bras, bra pads, breast
26    shells, and other similar products; and (5) creams,

 

 

HB5659- 54 -LRB103 39344 HLH 69507 b

1    ointments, and other similar products that relieve
2    breastfeeding-related symptoms or conditions of the
3    breasts or nipples, unless sold as part of a breast pump
4    kit that is pre-packaged by the breast pump manufacturer
5    or distributor.
6        "Breast pump kit" means a kit that: (1) contains no
7    more than a breast pump, breast pump collection and
8    storage supplies, a rechargeable battery for operating the
9    breast pump, a breastmilk cooler, bottle stands, ice
10    packs, and a breast pump carrying case; and (2) is
11    pre-packaged as a breast pump kit by the breast pump
12    manufacturer or distributor.
13    (33) Tangible personal property sold by or on behalf of
14the State Treasurer pursuant to the Revised Uniform Unclaimed
15Property Act. This item (33) is exempt from the provisions of
16Section 3-75.
17    (34) Beginning on January 1, 2024, tangible personal
18property purchased by an active duty member of the armed
19forces of the United States who presents valid military
20identification and purchases the property using a form of
21payment where the federal government is the payor. The member
22of the armed forces must complete, at the point of sale, a form
23prescribed by the Department of Revenue documenting that the
24transaction is eligible for the exemption under this
25paragraph. Retailers must keep the form as documentation of
26the exemption in their records for a period of not less than 6

 

 

HB5659- 55 -LRB103 39344 HLH 69507 b

1years. "Armed forces of the United States" means the United
2States Army, Navy, Air Force, Marine Corps, or Coast Guard.
3This paragraph is exempt from the provisions of Section 3-75.
4    (35) Qualified tangible personal property used in the
5construction or operation of a qualifying microfiber
6filtration manufacturing center that has been granted a
7certificate of exemption by the Department of Commerce and
8Economic Opportunity under Section 605-1025.1 of the
9Department of Commerce and Economic Opportunity Law of the
10Civil Administrative Code of Illinois. As used in this
11paragraph (35), "qualified tangible personal property" has the
12meaning given to that term in Section 605-1025.1 of the
13Department of Commerce and Economic Opportunity Law of the
14Civil Administrative Code of Illinois. This paragraph is
15exempt from the provisions of Section 3-75.
16(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
17Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
1875-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
19Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
20eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
21revised 12-12-23.)
 
22    Section 25. The Service Occupation Tax Act is amended by
23changing Section 3-5 as follows:
 
24    (35 ILCS 115/3-5)

 

 

HB5659- 56 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 57 -LRB103 39344 HLH 69507 b

1by the Department.
2    (4) Legal tender, currency, medallions, or gold or silver
3coinage issued by the State of Illinois, the government of the
4United States of America, or the government of any foreign
5country, and bullion.
6    (5) Until July 1, 2003 and beginning again on September 1,
72004 through August 30, 2014, graphic arts machinery and
8equipment, including repair and replacement parts, both new
9and used, and including that manufactured on special order or
10purchased for lease, certified by the purchaser to be used
11primarily for graphic arts production. Equipment includes
12chemicals or chemicals acting as catalysts but only if the
13chemicals or chemicals acting as catalysts effect a direct and
14immediate change upon a graphic arts product. Beginning on
15July 1, 2017, graphic arts machinery and equipment is included
16in the manufacturing and assembling machinery and equipment
17exemption under Section 2 of this Act.
18    (6) Personal property sold by a teacher-sponsored student
19organization affiliated with an elementary or secondary school
20located in Illinois.
21    (7) Farm machinery and equipment, both new and used,
22including that manufactured on special order, certified by the
23purchaser to be used primarily for production agriculture or
24State or federal agricultural programs, including individual
25replacement parts for the machinery and equipment, including
26machinery and equipment purchased for lease, and including

 

 

HB5659- 58 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 59 -LRB103 39344 HLH 69507 b

1crop data for the purpose of formulating animal diets and
2agricultural chemicals.
3    Beginning on January 1, 2024, farm machinery and equipment
4also includes electrical power generation equipment used
5primarily for production agriculture.
6    This item (7) is exempt from the provisions of Section
73-55.
8    (8) Until June 30, 2013, fuel and petroleum products sold
9to or used by an air common carrier, certified by the carrier
10to be used for consumption, shipment, or storage in the
11conduct of its business as an air common carrier, for a flight
12destined for or returning from a location or locations outside
13the United States without regard to previous or subsequent
14domestic stopovers.
15    Beginning July 1, 2013, fuel and petroleum products sold
16to or used by an air carrier, certified by the carrier to be
17used for consumption, shipment, or storage in the conduct of
18its business as an air common carrier, for a flight that (i) is
19engaged in foreign trade or is engaged in trade between the
20United States and any of its possessions and (ii) transports
21at least one individual or package for hire from the city of
22origination to the city of final destination on the same
23aircraft, without regard to a change in the flight number of
24that aircraft.
25    (9) Proceeds of mandatory service charges separately
26stated on customers' bills for the purchase and consumption of

 

 

HB5659- 60 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 61 -LRB103 39344 HLH 69507 b

1Illinois Vehicle Code. The changes made to this Section by
2Public Act 97-767 apply on and after July 1, 2003, but no claim
3for credit or refund is allowed on or after August 16, 2013
4(the effective date of Public Act 98-456) for such taxes paid
5during the period beginning July 1, 2003 and ending on August
616, 2013 (the effective date of Public Act 98-456).
7    (13) Beginning January 1, 1992 and through June 30, 2016,
8food for human consumption that is to be consumed off the
9premises where it is sold (other than alcoholic beverages,
10soft drinks and food that has been prepared for immediate
11consumption) and prescription and non-prescription medicines,
12drugs, medical appliances, and insulin, urine testing
13materials, syringes, and needles used by diabetics, for human
14use, when purchased for use by a person receiving medical
15assistance under Article V of the Illinois Public Aid Code who
16resides in a licensed long-term care facility, as defined in
17the Nursing Home Care Act, or in a licensed facility as defined
18in the ID/DD Community Care Act, the MC/DD Act, or the
19Specialized Mental Health Rehabilitation Act of 2013.
20    (14) Semen used for artificial insemination of livestock
21for direct agricultural production.
22    (15) Horses, or interests in horses, registered with and
23meeting the requirements of any of the Arabian Horse Club
24Registry of America, Appaloosa Horse Club, American Quarter
25Horse Association, United States Trotting Association, or
26Jockey Club, as appropriate, used for purposes of breeding or

 

 

HB5659- 62 -LRB103 39344 HLH 69507 b

1racing for prizes. This item (15) is exempt from the
2provisions of Section 3-55, and the exemption provided for
3under this item (15) applies for all periods beginning May 30,
41995, but no claim for credit or refund is allowed on or after
5January 1, 2008 (the effective date of Public Act 95-88) for
6such taxes paid during the period beginning May 30, 2000 and
7ending on January 1, 2008 (the effective date of Public Act
895-88).
9    (16) Computers and communications equipment utilized for
10any hospital purpose and equipment used in the diagnosis,
11analysis, or treatment of hospital patients sold to a lessor
12who leases the equipment, under a lease of one year or longer
13executed or in effect at the time of the purchase, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of
16the Retailers' Occupation Tax Act.
17    (17) Personal property sold to a lessor who leases the
18property, under a lease of one year or longer executed or in
19effect at the time of the purchase, to a governmental body that
20has been issued an active tax exemption identification number
21by the Department under Section 1g of the Retailers'
22Occupation Tax Act.
23    (18) Beginning with taxable years ending on or after
24December 31, 1995 and ending with taxable years ending on or
25before December 31, 2004, personal property that is donated
26for disaster relief to be used in a State or federally declared

 

 

HB5659- 63 -LRB103 39344 HLH 69507 b

1disaster area in Illinois or bordering Illinois by a
2manufacturer or retailer that is registered in this State to a
3corporation, society, association, foundation, or institution
4that has been issued a sales tax exemption identification
5number by the Department that assists victims of the disaster
6who reside within the declared disaster area.
7    (19) Beginning with taxable years ending on or after
8December 31, 1995 and ending with taxable years ending on or
9before December 31, 2004, personal property that is used in
10the performance of infrastructure repairs in this State,
11including, but not limited to, municipal roads and streets,
12access roads, bridges, sidewalks, waste disposal systems,
13water and sewer line extensions, water distribution and
14purification facilities, storm water drainage and retention
15facilities, and sewage treatment facilities, resulting from a
16State or federally declared disaster in Illinois or bordering
17Illinois when such repairs are initiated on facilities located
18in the declared disaster area within 6 months after the
19disaster.
20    (20) Beginning July 1, 1999, game or game birds sold at a
21"game breeding and hunting preserve area" as that term is used
22in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 3-55.
24    (21) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

HB5659- 64 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 65 -LRB103 39344 HLH 69507 b

1another individual or entity that sold the property for the
2purpose of resale by the fundraising entity and that profits
3from the sale to the fundraising entity. This paragraph is
4exempt from the provisions of Section 3-55.
5    (23) Beginning January 1, 2000 and through December 31,
62001, new or used automatic vending machines that prepare and
7serve hot food and beverages, including coffee, soup, and
8other items, and replacement parts for these machines.
9Beginning January 1, 2002 and through June 30, 2003, machines
10and parts for machines used in commercial, coin-operated
11amusement and vending business if a use or occupation tax is
12paid on the gross receipts derived from the use of the
13commercial, coin-operated amusement and vending machines. This
14paragraph is exempt from the provisions of Section 3-55.
15    (24) Beginning on August 2, 2001 (the effective date of
16Public Act 92-227), computers and communications equipment
17utilized for any hospital purpose and equipment used in the
18diagnosis, analysis, or treatment of hospital patients sold to
19a lessor who leases the equipment, under a lease of one year or
20longer executed or in effect at the time of the purchase, to a
21hospital that has been issued an active tax exemption
22identification number by the Department under Section 1g of
23the Retailers' Occupation Tax Act. This paragraph is exempt
24from the provisions of Section 3-55.
25    (25) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227), personal property sold to a lessor who

 

 

HB5659- 66 -LRB103 39344 HLH 69507 b

1leases the property, under a lease of one year or longer
2executed or in effect at the time of the purchase, to a
3governmental body that has been issued an active tax exemption
4identification number by the Department under Section 1g of
5the Retailers' Occupation Tax Act. This paragraph is exempt
6from the provisions of Section 3-55.
7    (26) Beginning on January 1, 2002 and through June 30,
82016, tangible personal property purchased from an Illinois
9retailer by a taxpayer engaged in centralized purchasing
10activities in Illinois who will, upon receipt of the property
11in Illinois, temporarily store the property in Illinois (i)
12for the purpose of subsequently transporting it outside this
13State for use or consumption thereafter solely outside this
14State or (ii) for the purpose of being processed, fabricated,
15or manufactured into, attached to, or incorporated into other
16tangible personal property to be transported outside this
17State and thereafter used or consumed solely outside this
18State. The Director of Revenue shall, pursuant to rules
19adopted in accordance with the Illinois Administrative
20Procedure Act, issue a permit to any taxpayer in good standing
21with the Department who is eligible for the exemption under
22this paragraph (26). The permit issued under this paragraph
23(26) shall authorize the holder, to the extent and in the
24manner specified in the rules adopted under this Act, to
25purchase tangible personal property from a retailer exempt
26from the taxes imposed by this Act. Taxpayers shall maintain

 

 

HB5659- 67 -LRB103 39344 HLH 69507 b

1all necessary books and records to substantiate the use and
2consumption of all such tangible personal property outside of
3the State of Illinois.
4    (27) Beginning January 1, 2008, tangible personal property
5used in the construction or maintenance of a community water
6supply, as defined under Section 3.145 of the Environmental
7Protection Act, that is operated by a not-for-profit
8corporation that holds a valid water supply permit issued
9under Title IV of the Environmental Protection Act. This
10paragraph is exempt from the provisions of Section 3-55.
11    (28) Tangible personal property sold to a
12public-facilities corporation, as described in Section
1311-65-10 of the Illinois Municipal Code, for purposes of
14constructing or furnishing a municipal convention hall, but
15only if the legal title to the municipal convention hall is
16transferred to the municipality without any further
17consideration by or on behalf of the municipality at the time
18of the completion of the municipal convention hall or upon the
19retirement or redemption of any bonds or other debt
20instruments issued by the public-facilities corporation in
21connection with the development of the municipal convention
22hall. This exemption includes existing public-facilities
23corporations as provided in Section 11-65-25 of the Illinois
24Municipal Code. This paragraph is exempt from the provisions
25of Section 3-55.
26    (29) Beginning January 1, 2010 and continuing through

 

 

HB5659- 68 -LRB103 39344 HLH 69507 b

1December 31, 2029, materials, parts, equipment, components,
2and furnishings incorporated into or upon an aircraft as part
3of the modification, refurbishment, completion, replacement,
4repair, or maintenance of the aircraft. This exemption
5includes consumable supplies used in the modification,
6refurbishment, completion, replacement, repair, and
7maintenance of aircraft. However, until January 1, 2024, this
8exemption excludes any materials, parts, equipment,
9components, and consumable supplies used in the modification,
10replacement, repair, and maintenance of aircraft engines or
11power plants, whether such engines or power plants are
12installed or uninstalled upon any such aircraft. "Consumable
13supplies" include, but are not limited to, adhesive, tape,
14sandpaper, general purpose lubricants, cleaning solution,
15latex gloves, and protective films.
16    Beginning January 1, 2010 and continuing through December
1731, 2023, this exemption applies only to the transfer of
18qualifying tangible personal property incident to the
19modification, refurbishment, completion, replacement, repair,
20or maintenance of an aircraft by persons who (i) hold an Air
21Agency Certificate and are empowered to operate an approved
22repair station by the Federal Aviation Administration, (ii)
23have a Class IV Rating, and (iii) conduct operations in
24accordance with Part 145 of the Federal Aviation Regulations.
25The exemption does not include aircraft operated by a
26commercial air carrier providing scheduled passenger air

 

 

HB5659- 69 -LRB103 39344 HLH 69507 b

1service pursuant to authority issued under Part 121 or Part
2129 of the Federal Aviation Regulations. From January 1, 2024
3through December 31, 2029, this exemption applies only to the
4use of qualifying tangible personal property by: (A) persons
5who modify, refurbish, complete, repair, replace, or maintain
6aircraft and who (i) hold an Air Agency Certificate and are
7empowered to operate an approved repair station by the Federal
8Aviation Administration, (ii) have a Class IV Rating, and
9(iii) conduct operations in accordance with Part 145 of the
10Federal Aviation Regulations; and (B) persons who engage in
11the modification, replacement, repair, and maintenance of
12aircraft engines or power plants without regard to whether or
13not those persons meet the qualifications of item (A).
14    The changes made to this paragraph (29) by Public Act
1598-534 are declarative of existing law. It is the intent of the
16General Assembly that the exemption under this paragraph (29)
17applies continuously from January 1, 2010 through December 31,
182024; however, no claim for credit or refund is allowed for
19taxes paid as a result of the disallowance of this exemption on
20or after January 1, 2015 and prior to February 5, 2020 (the
21effective date of Public Act 101-629).
22    (30) Beginning January 1, 2017 and through December 31,
232026, menstrual pads, tampons, and menstrual cups.
24    (31) Tangible personal property transferred to a purchaser
25who is exempt from tax by operation of federal law. This
26paragraph is exempt from the provisions of Section 3-55.

 

 

HB5659- 70 -LRB103 39344 HLH 69507 b

1    (32) Qualified tangible personal property used in the
2construction or operation of a data center that has been
3granted a certificate of exemption by the Department of
4Commerce and Economic Opportunity, whether that tangible
5personal property is purchased by the owner, operator, or
6tenant of the data center or by a contractor or subcontractor
7of the owner, operator, or tenant. Data centers that would
8have qualified for a certificate of exemption prior to January
91, 2020 had Public Act 101-31 been in effect, may apply for and
10obtain an exemption for subsequent purchases of computer
11equipment or enabling software purchased or leased to upgrade,
12supplement, or replace computer equipment or enabling software
13purchased or leased in the original investment that would have
14qualified.
15    The Department of Commerce and Economic Opportunity shall
16grant a certificate of exemption under this item (32) to
17qualified data centers as defined by Section 605-1025 of the
18Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois.
20    For the purposes of this item (32):
21        "Data center" means a building or a series of
22    buildings rehabilitated or constructed to house working
23    servers in one physical location or multiple sites within
24    the State of Illinois.
25        "Qualified tangible personal property" means:
26    electrical systems and equipment; climate control and

 

 

HB5659- 71 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 72 -LRB103 39344 HLH 69507 b

13-55.
2    (33) Beginning July 1, 2022, breast pumps, breast pump
3collection and storage supplies, and breast pump kits. This
4item (33) is exempt from the provisions of Section 3-55. As
5used in this item (33):
6        "Breast pump" means an electrically controlled or
7    manually controlled pump device designed or marketed to be
8    used to express milk from a human breast during lactation,
9    including the pump device and any battery, AC adapter, or
10    other power supply unit that is used to power the pump
11    device and is packaged and sold with the pump device at the
12    time of sale.
13        "Breast pump collection and storage supplies" means
14    items of tangible personal property designed or marketed
15    to be used in conjunction with a breast pump to collect
16    milk expressed from a human breast and to store collected
17    milk until it is ready for consumption.
18        "Breast pump collection and storage supplies"
19    includes, but is not limited to: breast shields and breast
20    shield connectors; breast pump tubes and tubing adapters;
21    breast pump valves and membranes; backflow protectors and
22    backflow protector adaptors; bottles and bottle caps
23    specific to the operation of the breast pump; and breast
24    milk storage bags.
25        "Breast pump collection and storage supplies" does not
26    include: (1) bottles and bottle caps not specific to the

 

 

HB5659- 73 -LRB103 39344 HLH 69507 b

1    operation of the breast pump; (2) breast pump travel bags
2    and other similar carrying accessories, including ice
3    packs, labels, and other similar products; (3) breast pump
4    cleaning supplies; (4) nursing bras, bra pads, breast
5    shells, and other similar products; and (5) creams,
6    ointments, and other similar products that relieve
7    breastfeeding-related symptoms or conditions of the
8    breasts or nipples, unless sold as part of a breast pump
9    kit that is pre-packaged by the breast pump manufacturer
10    or distributor.
11        "Breast pump kit" means a kit that: (1) contains no
12    more than a breast pump, breast pump collection and
13    storage supplies, a rechargeable battery for operating the
14    breast pump, a breastmilk cooler, bottle stands, ice
15    packs, and a breast pump carrying case; and (2) is
16    pre-packaged as a breast pump kit by the breast pump
17    manufacturer or distributor.
18    (34) Tangible personal property sold by or on behalf of
19the State Treasurer pursuant to the Revised Uniform Unclaimed
20Property Act. This item (34) is exempt from the provisions of
21Section 3-55.
22    (35) Beginning on January 1, 2024, tangible personal
23property purchased by an active duty member of the armed
24forces of the United States who presents valid military
25identification and purchases the property using a form of
26payment where the federal government is the payor. The member

 

 

HB5659- 74 -LRB103 39344 HLH 69507 b

1of the armed forces must complete, at the point of sale, a form
2prescribed by the Department of Revenue documenting that the
3transaction is eligible for the exemption under this
4paragraph. Retailers must keep the form as documentation of
5the exemption in their records for a period of not less than 6
6years. "Armed forces of the United States" means the United
7States Army, Navy, Air Force, Marine Corps, or Coast Guard.
8This paragraph is exempt from the provisions of Section 3-55.
9    (36) Qualified tangible personal property used in the
10construction or operation of a qualifying microfiber
11filtration manufacturing center that has been granted a
12certificate of exemption by the Department of Commerce and
13Economic Opportunity under Section 605-1025.1 of the
14Department of Commerce and Economic Opportunity Law of the
15Civil Administrative Code of Illinois. As used in this
16paragraph (36), "qualified tangible personal property" has the
17meaning given to that term in Section 605-1025.1 of the
18Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois. This paragraph is
20exempt from the provisions of Section 3-55.
21(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
22Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
2375-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
24Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
25eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
26revised 12-12-23.)
 

 

 

HB5659- 75 -LRB103 39344 HLH 69507 b

1    Section 30. The Retailers' Occupation Tax Act is amended
2by changing Section 2-5 as follows:
 
3    (35 ILCS 120/2-5)
4    Sec. 2-5. Exemptions. Gross receipts from proceeds from
5the sale of the following tangible personal property are
6exempt from the tax imposed by this Act:
7        (1) Farm chemicals.
8        (2) Farm machinery and equipment, both new and used,
9    including that manufactured on special order, certified by
10    the purchaser to be used primarily for production
11    agriculture or State or federal agricultural programs,
12    including individual replacement parts for the machinery
13    and equipment, including machinery and equipment purchased
14    for lease, and including implements of husbandry defined
15    in Section 1-130 of the Illinois Vehicle Code, farm
16    machinery and agricultural chemical and fertilizer
17    spreaders, and nurse wagons required to be registered
18    under Section 3-809 of the Illinois Vehicle Code, but
19    excluding other motor vehicles required to be registered
20    under the Illinois Vehicle Code. Horticultural polyhouses
21    or hoop houses used for propagating, growing, or
22    overwintering plants shall be considered farm machinery
23    and equipment under this item (2). Agricultural chemical
24    tender tanks and dry boxes shall include units sold

 

 

HB5659- 76 -LRB103 39344 HLH 69507 b

1    separately from a motor vehicle required to be licensed
2    and units sold mounted on a motor vehicle required to be
3    licensed, if the selling price of the tender is separately
4    stated.
5        Farm machinery and equipment shall include precision
6    farming equipment that is installed or purchased to be
7    installed on farm machinery and equipment including, but
8    not limited to, tractors, harvesters, sprayers, planters,
9    seeders, or spreaders. Precision farming equipment
10    includes, but is not limited to, soil testing sensors,
11    computers, monitors, software, global positioning and
12    mapping systems, and other such equipment.
13        Farm machinery and equipment also includes computers,
14    sensors, software, and related equipment used primarily in
15    the computer-assisted operation of production agriculture
16    facilities, equipment, and activities such as, but not
17    limited to, the collection, monitoring, and correlation of
18    animal and crop data for the purpose of formulating animal
19    diets and agricultural chemicals.
20        Beginning on January 1, 2024, farm machinery and
21    equipment also includes electrical power generation
22    equipment used primarily for production agriculture.
23        This item (2) is exempt from the provisions of Section
24    2-70.
25        (3) Until July 1, 2003, distillation machinery and
26    equipment, sold as a unit or kit, assembled or installed

 

 

HB5659- 77 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 78 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 79 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 80 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 81 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 82 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 83 -LRB103 39344 HLH 69507 b

1    purchased for lease; but excluding motor vehicles required
2    to be registered under the Illinois Vehicle Code.
3        (20) Photoprocessing machinery and equipment,
4    including repair and replacement parts, both new and used,
5    including that manufactured on special order, certified by
6    the purchaser to be used primarily for photoprocessing,
7    and including photoprocessing machinery and equipment
8    purchased for lease.
9        (21) Until July 1, 2028, coal and aggregate
10    exploration, mining, off-highway hauling, processing,
11    maintenance, and reclamation equipment, including
12    replacement parts and equipment, and including equipment
13    purchased for lease, but excluding motor vehicles required
14    to be registered under the Illinois Vehicle Code. The
15    changes made to this Section by Public Act 97-767 apply on
16    and after July 1, 2003, but no claim for credit or refund
17    is allowed on or after August 16, 2013 (the effective date
18    of Public Act 98-456) for such taxes paid during the
19    period beginning July 1, 2003 and ending on August 16,
20    2013 (the effective date of Public Act 98-456).
21        (22) Until June 30, 2013, fuel and petroleum products
22    sold to or used by an air carrier, certified by the carrier
23    to be used for consumption, shipment, or storage in the
24    conduct of its business as an air common carrier, for a
25    flight destined for or returning from a location or
26    locations outside the United States without regard to

 

 

HB5659- 84 -LRB103 39344 HLH 69507 b

1    previous or subsequent domestic stopovers.
2        Beginning July 1, 2013, fuel and petroleum products
3    sold to or used by an air carrier, certified by the carrier
4    to be used for consumption, shipment, or storage in the
5    conduct of its business as an air common carrier, for a
6    flight that (i) is engaged in foreign trade or is engaged
7    in trade between the United States and any of its
8    possessions and (ii) transports at least one individual or
9    package for hire from the city of origination to the city
10    of final destination on the same aircraft, without regard
11    to a change in the flight number of that aircraft.
12        (23) A transaction in which the purchase order is
13    received by a florist who is located outside Illinois, but
14    who has a florist located in Illinois deliver the property
15    to the purchaser or the purchaser's donee in Illinois.
16        (24) Fuel consumed or used in the operation of ships,
17    barges, or vessels that are used primarily in or for the
18    transportation of property or the conveyance of persons
19    for hire on rivers bordering on this State if the fuel is
20    delivered by the seller to the purchaser's barge, ship, or
21    vessel while it is afloat upon that bordering river.
22        (25) Except as provided in item (25-5) of this
23    Section, a motor vehicle sold in this State to a
24    nonresident even though the motor vehicle is delivered to
25    the nonresident in this State, if the motor vehicle is not
26    to be titled in this State, and if a drive-away permit is

 

 

HB5659- 85 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 86 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 87 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 88 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 89 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 90 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 91 -LRB103 39344 HLH 69507 b

1    school, a group of those schools, or one or more school
2    districts if the events are sponsored by an entity
3    recognized by the school district that consists primarily
4    of volunteers and includes parents and teachers of the
5    school children. This paragraph does not apply to
6    fundraising events (i) for the benefit of private home
7    instruction or (ii) for which the fundraising entity
8    purchases the personal property sold at the events from
9    another individual or entity that sold the property for
10    the purpose of resale by the fundraising entity and that
11    profits from the sale to the fundraising entity. This
12    paragraph is exempt from the provisions of Section 2-70.
13        (35) Beginning January 1, 2000 and through December
14    31, 2001, new or used automatic vending machines that
15    prepare and serve hot food and beverages, including
16    coffee, soup, and other items, and replacement parts for
17    these machines. Beginning January 1, 2002 and through June
18    30, 2003, machines and parts for machines used in
19    commercial, coin-operated amusement and vending business
20    if a use or occupation tax is paid on the gross receipts
21    derived from the use of the commercial, coin-operated
22    amusement and vending machines. This paragraph is exempt
23    from the provisions of Section 2-70.
24        (35-5) Beginning August 23, 2001 and through June 30,
25    2016, food for human consumption that is to be consumed
26    off the premises where it is sold (other than alcoholic

 

 

HB5659- 92 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 93 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 94 -LRB103 39344 HLH 69507 b

1        (39) Beginning January 1, 2008, tangible personal
2    property used in the construction or maintenance of a
3    community water supply, as defined under Section 3.145 of
4    the Environmental Protection Act, that is operated by a
5    not-for-profit corporation that holds a valid water supply
6    permit issued under Title IV of the Environmental
7    Protection Act. This paragraph is exempt from the
8    provisions of Section 2-70.
9        (40) Beginning January 1, 2010 and continuing through
10    December 31, 2029, materials, parts, equipment,
11    components, and furnishings incorporated into or upon an
12    aircraft as part of the modification, refurbishment,
13    completion, replacement, repair, or maintenance of the
14    aircraft. This exemption includes consumable supplies used
15    in the modification, refurbishment, completion,
16    replacement, repair, and maintenance of aircraft. However,
17    until January 1, 2024, this exemption excludes any
18    materials, parts, equipment, components, and consumable
19    supplies used in the modification, replacement, repair,
20    and maintenance of aircraft engines or power plants,
21    whether such engines or power plants are installed or
22    uninstalled upon any such aircraft. "Consumable supplies"
23    include, but are not limited to, adhesive, tape,
24    sandpaper, general purpose lubricants, cleaning solution,
25    latex gloves, and protective films.
26        Beginning January 1, 2010 and continuing through

 

 

HB5659- 95 -LRB103 39344 HLH 69507 b

1    December 31, 2023, this exemption applies only to the sale
2    of qualifying tangible personal property to persons who
3    modify, refurbish, complete, replace, or maintain an
4    aircraft and who (i) hold an Air Agency Certificate and
5    are empowered to operate an approved repair station by the
6    Federal Aviation Administration, (ii) have a Class IV
7    Rating, and (iii) conduct operations in accordance with
8    Part 145 of the Federal Aviation Regulations. The
9    exemption does not include aircraft operated by a
10    commercial air carrier providing scheduled passenger air
11    service pursuant to authority issued under Part 121 or
12    Part 129 of the Federal Aviation Regulations. From January
13    1, 2024 through December 31, 2029, this exemption applies
14    only to the use of qualifying tangible personal property
15    by: (A) persons who modify, refurbish, complete, repair,
16    replace, or maintain aircraft and who (i) hold an Air
17    Agency Certificate and are empowered to operate an
18    approved repair station by the Federal Aviation
19    Administration, (ii) have a Class IV Rating, and (iii)
20    conduct operations in accordance with Part 145 of the
21    Federal Aviation Regulations; and (B) persons who engage
22    in the modification, replacement, repair, and maintenance
23    of aircraft engines or power plants without regard to
24    whether or not those persons meet the qualifications of
25    item (A).
26        The changes made to this paragraph (40) by Public Act

 

 

HB5659- 96 -LRB103 39344 HLH 69507 b

1    98-534 are declarative of existing law. It is the intent
2    of the General Assembly that the exemption under this
3    paragraph (40) applies continuously from January 1, 2010
4    through December 31, 2024; however, no claim for credit or
5    refund is allowed for taxes paid as a result of the
6    disallowance of this exemption on or after January 1, 2015
7    and prior to February 5, 2020 (the effective date of
8    Public Act 101-629).
9        (41) Tangible personal property sold to a
10    public-facilities corporation, as described in Section
11    11-65-10 of the Illinois Municipal Code, for purposes of
12    constructing or furnishing a municipal convention hall,
13    but only if the legal title to the municipal convention
14    hall is transferred to the municipality without any
15    further consideration by or on behalf of the municipality
16    at the time of the completion of the municipal convention
17    hall or upon the retirement or redemption of any bonds or
18    other debt instruments issued by the public-facilities
19    corporation in connection with the development of the
20    municipal convention hall. This exemption includes
21    existing public-facilities corporations as provided in
22    Section 11-65-25 of the Illinois Municipal Code. This
23    paragraph is exempt from the provisions of Section 2-70.
24        (42) Beginning January 1, 2017 and through December
25    31, 2026, menstrual pads, tampons, and menstrual cups.
26        (43) Merchandise that is subject to the Rental

 

 

HB5659- 97 -LRB103 39344 HLH 69507 b

1    Purchase Agreement Occupation and Use Tax. The purchaser
2    must certify that the item is purchased to be rented
3    subject to a rental-purchase rental purchase agreement, as
4    defined in the Rental-Purchase Rental Purchase Agreement
5    Act, and provide proof of registration under the Rental
6    Purchase Agreement Occupation and Use Tax Act. This
7    paragraph is exempt from the provisions of Section 2-70.
8        (44) Qualified tangible personal property used in the
9    construction or operation of a data center that has been
10    granted a certificate of exemption by the Department of
11    Commerce and Economic Opportunity, whether that tangible
12    personal property is purchased by the owner, operator, or
13    tenant of the data center or by a contractor or
14    subcontractor of the owner, operator, or tenant. Data
15    centers that would have qualified for a certificate of
16    exemption prior to January 1, 2020 had Public Act 101-31
17    been in effect, may apply for and obtain an exemption for
18    subsequent purchases of computer equipment or enabling
19    software purchased or leased to upgrade, supplement, or
20    replace computer equipment or enabling software purchased
21    or leased in the original investment that would have
22    qualified.
23        The Department of Commerce and Economic Opportunity
24    shall grant a certificate of exemption under this item
25    (44) to qualified data centers as defined by Section
26    605-1025 of the Department of Commerce and Economic

 

 

HB5659- 98 -LRB103 39344 HLH 69507 b

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

 

 

HB5659- 99 -LRB103 39344 HLH 69507 b

1        property; and all other tangible personal property
2        that is essential to the operations of a computer data
3        center. The term "qualified tangible personal
4        property" also includes building materials physically
5        incorporated into the qualifying data center. To
6        document the exemption allowed under this Section, the
7        retailer must obtain from the purchaser a copy of the
8        certificate of eligibility issued by the Department of
9        Commerce and Economic Opportunity.
10        This item (44) is exempt from the provisions of
11    Section 2-70.
12        (45) Beginning January 1, 2020 and through December
13    31, 2020, sales of tangible personal property made by a
14    marketplace seller over a marketplace for which tax is due
15    under this Act but for which use tax has been collected and
16    remitted to the Department by a marketplace facilitator
17    under Section 2d of the Use Tax Act are exempt from tax
18    under this Act. A marketplace seller claiming this
19    exemption shall maintain books and records demonstrating
20    that the use tax on such sales has been collected and
21    remitted by a marketplace facilitator. Marketplace sellers
22    that have properly remitted tax under this Act on such
23    sales may file a claim for credit as provided in Section 6
24    of this Act. No claim is allowed, however, for such taxes
25    for which a credit or refund has been issued to the
26    marketplace facilitator under the Use Tax Act, or for

 

 

HB5659- 100 -LRB103 39344 HLH 69507 b

1    which the marketplace facilitator has filed a claim for
2    credit or refund under the Use Tax Act.
3        (46) Beginning July 1, 2022, breast pumps, breast pump
4    collection and storage supplies, and breast pump kits.
5    This item (46) is exempt from the provisions of Section
6    2-70. As used in this item (46):
7        "Breast pump" means an electrically controlled or
8    manually controlled pump device designed or marketed to be
9    used to express milk from a human breast during lactation,
10    including the pump device and any battery, AC adapter, or
11    other power supply unit that is used to power the pump
12    device and is packaged and sold with the pump device at the
13    time of sale.
14        "Breast pump collection and storage supplies" means
15    items of tangible personal property designed or marketed
16    to be used in conjunction with a breast pump to collect
17    milk expressed from a human breast and to store collected
18    milk until it is ready for consumption.
19        "Breast pump collection and storage supplies"
20    includes, but is not limited to: breast shields and breast
21    shield connectors; breast pump tubes and tubing adapters;
22    breast pump valves and membranes; backflow protectors and
23    backflow protector adaptors; bottles and bottle caps
24    specific to the operation of the breast pump; and breast
25    milk storage bags.
26        "Breast pump collection and storage supplies" does not

 

 

HB5659- 101 -LRB103 39344 HLH 69507 b

1    include: (1) bottles and bottle caps not specific to the
2    operation of the breast pump; (2) breast pump travel bags
3    and other similar carrying accessories, including ice
4    packs, labels, and other similar products; (3) breast pump
5    cleaning supplies; (4) nursing bras, bra pads, breast
6    shells, and other similar products; and (5) creams,
7    ointments, and other similar products that relieve
8    breastfeeding-related symptoms or conditions of the
9    breasts or nipples, unless sold as part of a breast pump
10    kit that is pre-packaged by the breast pump manufacturer
11    or distributor.
12        "Breast pump kit" means a kit that: (1) contains no
13    more than a breast pump, breast pump collection and
14    storage supplies, a rechargeable battery for operating the
15    breast pump, a breastmilk cooler, bottle stands, ice
16    packs, and a breast pump carrying case; and (2) is
17    pre-packaged as a breast pump kit by the breast pump
18    manufacturer or distributor.
19        (47) Tangible personal property sold by or on behalf
20    of the State Treasurer pursuant to the Revised Uniform
21    Unclaimed Property Act. This item (47) is exempt from the
22    provisions of Section 2-70.
23        (48) Beginning on January 1, 2024, tangible personal
24    property purchased by an active duty member of the armed
25    forces of the United States who presents valid military
26    identification and purchases the property using a form of

 

 

HB5659- 102 -LRB103 39344 HLH 69507 b

1    payment where the federal government is the payor. The
2    member of the armed forces must complete, at the point of
3    sale, a form prescribed by the Department of Revenue
4    documenting that the transaction is eligible for the
5    exemption under this paragraph. Retailers must keep the
6    form as documentation of the exemption in their records
7    for a period of not less than 6 years. "Armed forces of the
8    United States" means the United States Army, Navy, Air
9    Force, Marine Corps, or Coast Guard. This paragraph is
10    exempt from the provisions of Section 2-70.
11        (49) Qualified tangible personal property used in the
12    construction or operation of a qualifying microfiber
13    filtration manufacturing center that has been granted a
14    certificate of exemption by the Department of Commerce and
15    Economic Opportunity under Section 605-1025.1 of the
16    Department of Commerce and Economic Opportunity Law of the
17    Civil Administrative Code of Illinois. As used in this
18    paragraph (49), "qualified tangible personal property" has
19    the meaning given to that term in Section 605-1025.1 of
20    the Department of Commerce and Economic Opportunity Law of
21    the Civil Administrative Code of Illinois. This paragraph
22    is exempt from the provisions of Section 2-70.
23(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
24102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
25Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
265-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section

 

 

HB5659- 103 -LRB103 39344 HLH 69507 b

15-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
26-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
312-12-23.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.