093_SB0841enr

 
SB841 Enrolled                       LRB093 02887 SJM 02903 b

 1        AN ACT concerning taxes.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  2.  The  Illinois  Income  Tax Act is amended by
 5    adding Section 215 as follows:

 6        (35 ILCS 5/215 new)
 7        Sec. 215. Transportation Employee Credit.
 8        (a)  For each taxable year beginning on or after  January
 9    1,  2004,  a  qualified  employer  shall  be allowed a credit
10    against the tax imposed by subsections (a) and (b) of Section
11    201 of this Act in  the  amount  of  $50  for  each  eligible
12    employee  employed  by the taxpayer as of the last day of the
13    taxable year.
14        (b)  For purposes of this Section,  "qualified  employer"
15    means:
16             (1)  any employer who pays a commercial distribution
17        fee  under  Section  3-815.1 of the Illinois Vehicle Code
18        during the taxable year; or
19             (2)  any employer who, as of the end of the  taxable
20        year,  has  one  or  more employees whose compensation is
21        subject to tax only by the employee's state of  residence
22        pursuant to 49 U.S.C 14503(a)(1).
23        (c)  For purposes of this Section, "employee" includes an
24    individual  who  is  treated  as  an employee of the taxpayer
25    under Section 401(c) of the Internal Revenue Code  and  whose
26    actual  assigned duties are such that, if the individual were
27    a common-law employee performing such duties  in  2  or  more
28    states, the individual's compensation would be subject to tax
29    only  by  the  individual's state of residence pursuant to 49
30    U.S.C. 14503(a)(1).
31        (d)  An employee is an "eligible employee" only if all of
 
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 1    the following criteria are met:
 2             (1)  The employee is an operator of a motor vehicle;
 3             (2)  The employee's  compensation,  pursuant  to  49
 4        U.S.C.  14503(a)(1),  is  subject  to  tax  only  by  the
 5        employee's state of residence, or would be subject to tax
 6        only   by  the  employee's  state  of  residence  if  the
 7        employee's actual duties were  performed  in  2  or  more
 8        states;
 9             (3)  As of the end of the taxable year for which the
10        credit  is  claimed,  the  employee is a resident of this
11        State for purposes of this Act and 49 U.S.C. 14503(a)(1);
12        and
13             (4)  The employee is a full-time employee working 30
14        or more hours per week for 180 consecutive days; provided
15        that such 180-day period may be completed after  the  end
16        of  the  taxable  year  for  which  the credit under this
17        Section is claimed.
18        (e)  For   partners,   shareholders   of   subchapter   S
19    corporations, and owners of limited liability  companies,  if
20    the limited liability company is treated as a partnership for
21    purposes of federal and State income taxation, there shall be
22    allowed  a  credit  under  this  Section  to be determined in
23    accordance with the determination of income and  distributive
24    share  of  income under Sections 702 and 704 and subchapter S
25    of the Internal Revenue Code.
26        (f)  Any credit  allowed  under  this  Section  which  is
27    unused  in  the  year  the  credit  is  earned may be carried
28    forward to each of the 5 taxable years following the year for
29    which the credit is first computed until  it  is  used.  This
30    credit  shall be applied first to the earliest year for which
31    there is a liability. If there is a credit under this Section
32    from more than one tax year that is  available  to  offset  a
33    liability,  the  earliest  credit  arising under this Section
34    shall be applied first.
 
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 1        (g)  This  Section  is  exempt  from  the  provisions  of
 2    Section 250 of this Act.
 3        (h)  The Department  of  Revenue  shall  promulgate  such
 4    rules and regulations as may be deemed necessary to carry out
 5    the purposes of this Section.

 6        Section  5.  The  Use  Tax  Act  is  amended  by changing
 7    Sections 3-5, 3-55, 3-60, and 3-61 as follows:

 8        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 9        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
10    personal property is exempt from the tax imposed by this Act:
11        (1)  Personal  property  purchased  from  a  corporation,
12    society,    association,    foundation,    institution,    or
13    organization, other than a limited liability company, that is
14    organized and operated as a not-for-profit service enterprise
15    for  the  benefit  of persons 65 years of age or older if the
16    personal property was not purchased by the enterprise for the
17    purpose of resale by the enterprise.
18        (2)  Personal  property  purchased  by  a  not-for-profit
19    Illinois county  fair  association  for  use  in  conducting,
20    operating, or promoting the county fair.
21        (3)  Personal property purchased by a not-for-profit arts
22    or  cultural organization that establishes, by proof required
23    by the Department by rule, that it has received an  exemption
24    under Section 501(c)(3) of the Internal Revenue Code and that
25    is  organized  and operated primarily for the presentation or
26    support of  arts  or  cultural  programming,  activities,  or
27    services.   These  organizations include, but are not limited
28    to, music and dramatic arts organizations  such  as  symphony
29    orchestras  and  theatrical groups, arts and cultural service
30    organizations,   local    arts    councils,    visual    arts
31    organizations, and media arts organizations. On and after the
32    effective  date  of  this  amendatory Act of the 92nd General
 
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 1    Assembly, however, an  entity  otherwise  eligible  for  this
 2    exemption  shall not make tax-free purchases unless it has an
 3    active identification number issued by the Department.
 4        (4)  Personal property purchased by a governmental  body,
 5    by   a  corporation,  society,  association,  foundation,  or
 6    institution   organized   and   operated   exclusively    for
 7    charitable,  religious,  or  educational  purposes,  or  by a
 8    not-for-profit corporation, society, association, foundation,
 9    institution, or organization that has no compensated officers
10    or employees and that is organized and operated primarily for
11    the recreation of persons 55 years of age or older. A limited
12    liability company may qualify for the  exemption  under  this
13    paragraph  only if the limited liability company is organized
14    and operated exclusively for  educational  purposes.  On  and
15    after July 1, 1987, however, no entity otherwise eligible for
16    this exemption shall make tax-free purchases unless it has an
17    active   exemption   identification   number  issued  by  the
18    Department.
19        (5)  A passenger car that is a replacement vehicle to the
20    extent that the purchase price of the car is subject  to  the
21    Replacement Vehicle Tax.
22        (6)  Graphic  arts  machinery  and  equipment,  including
23    repair   and  replacement  parts,  both  new  and  used,  and
24    including that manufactured on special  order,  certified  by
25    the   purchaser   to  be  used  primarily  for  graphic  arts
26    production, and including machinery and  equipment  purchased
27    for  lease.  Equipment includes chemicals or chemicals acting
28    as catalysts but only if the chemicals or chemicals acting as
29    catalysts effect a direct and immediate change upon a graphic
30    arts product.
31        (7)  Farm chemicals.
32        (8)  Legal  tender,  currency,  medallions,  or  gold  or
33    silver  coinage  issued  by  the  State  of   Illinois,   the
34    government of the United States of America, or the government
 
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 1    of any foreign country, and bullion.
 2        (9)  Personal property purchased from a teacher-sponsored
 3    student   organization   affiliated  with  an  elementary  or
 4    secondary school located in Illinois.
 5        (10)  A motor vehicle of  the  first  division,  a  motor
 6    vehicle of the second division that is a self-contained motor
 7    vehicle  designed  or permanently converted to provide living
 8    quarters for  recreational,  camping,  or  travel  use,  with
 9    direct  walk through to the living quarters from the driver's
10    seat, or a motor vehicle of the second division  that  is  of
11    the  van configuration designed for the transportation of not
12    less than 7 nor  more  than  16  passengers,  as  defined  in
13    Section  1-146 of the Illinois Vehicle Code, that is used for
14    automobile renting, as  defined  in  the  Automobile  Renting
15    Occupation and Use Tax Act.
16        (11)  Farm  machinery  and  equipment, both new and used,
17    including that manufactured on special  order,  certified  by
18    the purchaser to be used primarily for production agriculture
19    or   State   or   federal  agricultural  programs,  including
20    individual replacement parts for the machinery and equipment,
21    including machinery and equipment purchased  for  lease,  and
22    including implements of husbandry defined in Section 1-130 of
23    the  Illinois  Vehicle  Code, farm machinery and agricultural
24    chemical and fertilizer spreaders, and nurse wagons  required
25    to  be registered under Section 3-809 of the Illinois Vehicle
26    Code, but excluding  other  motor  vehicles  required  to  be
27    registered  under  the  Illinois  Vehicle Code. Horticultural
28    polyhouses or hoop houses used for propagating,  growing,  or
29    overwintering  plants  shall be considered farm machinery and
30    equipment under this item (11). Agricultural chemical  tender
31    tanks  and dry boxes shall include units sold separately from
32    a motor vehicle  required  to  be  licensed  and  units  sold
33    mounted  on  a  motor  vehicle required to be licensed if the
34    selling price of the tender is separately stated.
 
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 1        Farm machinery  and  equipment  shall  include  precision
 2    farming  equipment  that  is  installed  or  purchased  to be
 3    installed on farm machinery and equipment including, but  not
 4    limited   to,   tractors,   harvesters,  sprayers,  planters,
 5    seeders, or spreaders. Precision farming equipment  includes,
 6    but  is  not  limited  to,  soil  testing sensors, computers,
 7    monitors, software, global positioning and  mapping  systems,
 8    and other such equipment.
 9        Farm  machinery  and  equipment  also includes computers,
10    sensors, software, and related equipment  used  primarily  in
11    the  computer-assisted  operation  of  production agriculture
12    facilities,  equipment,  and  activities  such  as,  but  not
13    limited to, the collection, monitoring,  and  correlation  of
14    animal  and  crop  data for the purpose of formulating animal
15    diets and agricultural chemicals.  This item (11)  is  exempt
16    from the provisions of Section 3-90.
17        (12)  Fuel  and  petroleum products sold to or used by an
18    air common carrier, certified by the carrier to be  used  for
19    consumption,  shipment,  or  storage  in  the  conduct of its
20    business as an air common carrier, for a flight destined  for
21    or  returning from a location or locations outside the United
22    States without regard  to  previous  or  subsequent  domestic
23    stopovers.
24        (13)  Proceeds  of  mandatory  service charges separately
25    stated on customers' bills for the purchase  and  consumption
26    of food and beverages purchased at retail from a retailer, to
27    the  extent  that  the  proceeds of the service charge are in
28    fact turned over as tips or as a substitute for tips  to  the
29    employees  who  participate  directly  in preparing, serving,
30    hosting or cleaning up the food  or  beverage  function  with
31    respect to which the service charge is imposed.
32        (14)  Oil  field  exploration,  drilling,  and production
33    equipment, including (i) rigs and parts of rigs, rotary rigs,
34    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
 
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 1    goods,  including  casing  and drill strings, (iii) pumps and
 2    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
 3    individual   replacement  part  for  oil  field  exploration,
 4    drilling, and production equipment, and  (vi)  machinery  and
 5    equipment  purchased  for lease; but excluding motor vehicles
 6    required to be registered under the Illinois Vehicle Code.
 7        (15)  Photoprocessing machinery and equipment,  including
 8    repair  and  replacement  parts, both new and used, including
 9    that  manufactured  on  special  order,  certified   by   the
10    purchaser  to  be  used  primarily  for  photoprocessing, and
11    including photoprocessing machinery and  equipment  purchased
12    for lease.
13        (16)  Coal   exploration,   mining,  offhighway  hauling,
14    processing, maintenance, and reclamation equipment, including
15    replacement parts  and  equipment,  and  including  equipment
16    purchased for lease, but excluding motor vehicles required to
17    be registered under the Illinois Vehicle Code.
18        (17)  Distillation  machinery  and  equipment,  sold as a
19    unit  or  kit,  assembled  or  installed  by  the   retailer,
20    certified  by  the user to be used only for the production of
21    ethyl alcohol that will be used for consumption as motor fuel
22    or as a component of motor fuel for the personal use  of  the
23    user, and not subject to sale or resale.
24        (18)  Manufacturing    and   assembling   machinery   and
25    equipment used primarily in the process of  manufacturing  or
26    assembling tangible personal property for wholesale or retail
27    sale or lease, whether that sale or lease is made directly by
28    the  manufacturer  or  by  some  other  person,  whether  the
29    materials  used  in the process are owned by the manufacturer
30    or some other person, or whether that sale or lease  is  made
31    apart  from or as an incident to the seller's engaging in the
32    service occupation of producing machines, tools, dies,  jigs,
33    patterns,  gauges,  or  other  similar items of no commercial
34    value on special order for a particular purchaser.
 
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 1        (19)  Personal  property  delivered  to  a  purchaser  or
 2    purchaser's donee inside Illinois when the purchase order for
 3    that personal property was  received  by  a  florist  located
 4    outside  Illinois  who  has a florist located inside Illinois
 5    deliver the personal property.
 6        (20)  Semen used for artificial insemination of livestock
 7    for direct agricultural production.
 8        (21)  Horses, or interests in horses, registered with and
 9    meeting the requirements of any of  the  Arabian  Horse  Club
10    Registry  of  America, Appaloosa Horse Club, American Quarter
11    Horse Association, United  States  Trotting  Association,  or
12    Jockey Club, as appropriate, used for purposes of breeding or
13    racing for prizes.
14        (22)  Computers and communications equipment utilized for
15    any  hospital  purpose  and  equipment used in the diagnosis,
16    analysis, or treatment of hospital patients  purchased  by  a
17    lessor who leases the equipment, under a lease of one year or
18    longer  executed  or  in  effect at the time the lessor would
19    otherwise be subject to the tax imposed by  this  Act,  to  a
20    hospital    that  has  been  issued  an  active tax exemption
21    identification number by the Department under Section  1g  of
22    the  Retailers'  Occupation  Tax  Act.   If  the equipment is
23    leased in a manner that does not qualify for  this  exemption
24    or  is  used in any other non-exempt manner, the lessor shall
25    be liable for the tax imposed under this Act or  the  Service
26    Use  Tax  Act,  as  the case may be, based on the fair market
27    value of the property at  the  time  the  non-qualifying  use
28    occurs.   No  lessor  shall  collect or attempt to collect an
29    amount (however designated) that purports to  reimburse  that
30    lessor for the tax imposed by this Act or the Service Use Tax
31    Act,  as the case may be, if the tax has not been paid by the
32    lessor.  If a lessor improperly collects any such amount from
33    the lessee, the lessee shall have a legal right  to  claim  a
34    refund  of  that  amount  from the lessor.  If, however, that
 
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 1    amount is not refunded to the  lessee  for  any  reason,  the
 2    lessor is liable to pay that amount to the Department.
 3        (23)  Personal  property purchased by a lessor who leases
 4    the property, under a lease of  one year or  longer  executed
 5    or  in  effect  at  the  time  the  lessor would otherwise be
 6    subject to the tax imposed by this  Act,  to  a  governmental
 7    body  that  has  been  issued  an  active sales tax exemption
 8    identification number by the Department under Section  1g  of
 9    the  Retailers' Occupation Tax Act. If the property is leased
10    in a manner that does not qualify for this exemption or  used
11    in  any  other  non-exempt manner, the lessor shall be liable
12    for the tax imposed under this Act or  the  Service  Use  Tax
13    Act,  as  the  case may be, based on the fair market value of
14    the property at the time the non-qualifying use  occurs.   No
15    lessor shall collect or attempt to collect an amount (however
16    designated)  that  purports  to reimburse that lessor for the
17    tax imposed by this Act or the Service Use Tax  Act,  as  the
18    case  may be, if the tax has not been paid by the lessor.  If
19    a lessor improperly collects any such amount from the lessee,
20    the lessee shall have a legal right to claim a refund of that
21    amount from the lessor.  If,  however,  that  amount  is  not
22    refunded  to  the lessee for any reason, the lessor is liable
23    to pay that amount to the Department.
24        (24)  Beginning with taxable years  ending  on  or  after
25    December  31, 1995 and ending with taxable years ending on or
26    before December 31, 2004, personal property that  is  donated
27    for  disaster  relief  to  be  used  in  a State or federally
28    declared disaster area in Illinois or bordering Illinois by a
29    manufacturer or retailer that is registered in this State  to
30    a   corporation,   society,   association,   foundation,   or
31    institution  that  has  been  issued  a  sales  tax exemption
32    identification number by the Department that assists  victims
33    of the disaster who reside within the declared disaster area.
34        (25)  Beginning  with  taxable  years  ending on or after
 
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 1    December 31, 1995 and ending with taxable years ending on  or
 2    before  December  31, 2004, personal property that is used in
 3    the performance of  infrastructure  repairs  in  this  State,
 4    including  but  not  limited  to municipal roads and streets,
 5    access roads, bridges,  sidewalks,  waste  disposal  systems,
 6    water  and  sewer  line  extensions,  water  distribution and
 7    purification facilities, storm water drainage  and  retention
 8    facilities, and sewage treatment facilities, resulting from a
 9    State or federally declared disaster in Illinois or bordering
10    Illinois  when  such  repairs  are  initiated  on  facilities
11    located  in  the declared disaster area within 6 months after
12    the disaster.
13        (26)  Beginning  July  1,  1999,  game  or   game   birds
14    purchased  at  a "game breeding and hunting preserve area" or
15    an "exotic game hunting area" as those terms are used in  the
16    Wildlife  Code  or  at  a  hunting enclosure approved through
17    rules adopted by the Department of Natural  Resources.   This
18    paragraph is exempt from the provisions of Section 3-90.
19        (27)  A motor vehicle, as that term is defined in Section
20    1-146  of  the  Illinois  Vehicle  Code, that is donated to a
21    corporation, limited liability company, society, association,
22    foundation,  or  institution  that  is  determined   by   the
23    Department  to  be  organized  and  operated  exclusively for
24    educational purposes.  For purposes  of  this  exemption,  "a
25    corporation, limited liability company, society, association,
26    foundation, or institution organized and operated exclusively
27    for  educational  purposes"  means  all  tax-supported public
28    schools, private schools that offer systematic instruction in
29    useful branches of  learning  by  methods  common  to  public
30    schools  and  that  compare  favorably  in  their  scope  and
31    intensity with the course of study presented in tax-supported
32    schools,  and  vocational  or technical schools or institutes
33    organized and operated exclusively to  provide  a  course  of
34    study  of  not  less  than  6  weeks duration and designed to
 
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 1    prepare individuals to follow a trade or to pursue a  manual,
 2    technical,  mechanical,  industrial,  business, or commercial
 3    occupation.
 4        (28)  Beginning  January  1,  2000,   personal  property,
 5    including food, purchased through fundraising events for  the
 6    benefit  of  a  public  or  private  elementary  or secondary
 7    school, a group of those  schools,  or  one  or  more  school
 8    districts if the events are sponsored by an entity recognized
 9    by  the school district that consists primarily of volunteers
10    and includes parents and teachers  of  the  school  children.
11    This  paragraph  does not apply to fundraising events (i) for
12    the benefit of private home instruction or (ii) for which the
13    fundraising entity purchases the personal  property  sold  at
14    the  events  from  another individual or entity that sold the
15    property for the purpose of resale by the fundraising  entity
16    and  that  profits  from  the sale to the fundraising entity.
17    This paragraph is exempt from the provisions of Section 3-90.
18        (29)  Beginning January 1, 2000 and through December  31,
19    2001, new or used automatic vending machines that prepare and
20    serve  hot  food  and  beverages, including coffee, soup, and
21    other  items,  and  replacement  parts  for  these  machines.
22    Beginning January 1, 2002, machines and  parts  for  machines
23    used  in  commercial,  coin-operated  amusement  and  vending
24    business  if  a  use  or  occupation tax is paid on the gross
25    receipts  derived   from   the   use   of   the   commercial,
26    coin-operated  amusement and vending machines. This paragraph
27    is exempt from the provisions of Section 3-90.
28        (30)  Food for human consumption that is to  be  consumed
29    off  the  premises  where  it  is  sold (other than alcoholic
30    beverages, soft drinks, and food that has been  prepared  for
31    immediate  consumption)  and prescription and nonprescription
32    medicines, drugs,  medical  appliances,  and  insulin,  urine
33    testing  materials,  syringes, and needles used by diabetics,
34    for human use, when purchased for use by a  person  receiving
 
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 1    medical assistance under Article 5 of the Illinois Public Aid
 2    Code  who  resides  in a licensed long-term care facility, as
 3    defined in the Nursing Home Care Act.
 4        (31)  Beginning on the effective date of this  amendatory
 5    Act   of   the   92nd   General   Assembly,   computers   and
 6    communications  equipment  utilized  for any hospital purpose
 7    and equipment used in the diagnosis, analysis,  or  treatment
 8    of  hospital  patients  purchased  by a lessor who leases the
 9    equipment, under a lease of one year or longer executed or in
10    effect at the time the lessor would otherwise be  subject  to
11    the  tax  imposed  by  this  Act, to a hospital that has been
12    issued an active tax exemption identification number  by  the
13    Department  under Section 1g of the Retailers' Occupation Tax
14    Act.  If the equipment is leased in a manner  that  does  not
15    qualify  for this exemption or is used in any other nonexempt
16    manner, the lessor shall be liable for the tax imposed  under
17    this  Act  or  the  Service  Use Tax Act, as the case may be,
18    based on the fair market value of the property  at  the  time
19    the  nonqualifying  use  occurs.   No lessor shall collect or
20    attempt  to  collect  an  amount  (however  designated)  that
21    purports to reimburse that lessor for the tax imposed by this
22    Act or the Service Use Tax Act, as the case may  be,  if  the
23    tax  has not been paid by the lessor.  If a lessor improperly
24    collects any such amount from the lessee,  the  lessee  shall
25    have  a legal right to claim a refund of that amount from the
26    lessor.  If, however, that amount  is  not  refunded  to  the
27    lessee  for  any  reason,  the  lessor  is liable to pay that
28    amount to the Department. This paragraph is exempt  from  the
29    provisions of Section 3-90.
30        (32)  Beginning  on the effective date of this amendatory
31    Act of the 92nd General Assembly, personal property purchased
32    by a lessor who leases the property, under  a  lease  of  one
33    year  or  longer executed or in effect at the time the lessor
34    would otherwise be subject to the tax imposed by this Act, to
 
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 1    a governmental body that has been issued an active sales  tax
 2    exemption  identification  number  by  the  Department  under
 3    Section  1g  of  the  Retailers'  Occupation Tax Act.  If the
 4    property is leased in a manner that does not qualify for this
 5    exemption or used in any other nonexempt manner,  the  lessor
 6    shall  be  liable  for  the tax imposed under this Act or the
 7    Service Use Tax Act, as the case may be, based  on  the  fair
 8    market  value  of  the property at the time the nonqualifying
 9    use occurs.  No lessor shall collect or attempt to collect an
10    amount (however designated) that purports to  reimburse  that
11    lessor for the tax imposed by this Act or the Service Use Tax
12    Act,  as the case may be, if the tax has not been paid by the
13    lessor.  If a lessor improperly collects any such amount from
14    the lessee, the lessee shall have a legal right  to  claim  a
15    refund  of  that  amount  from the lessor.  If, however, that
16    amount is not refunded to the  lessee  for  any  reason,  the
17    lessor  is liable to pay that amount to the Department.  This
18    paragraph is exempt from the provisions of Section 3-90.
19        (33)  On and after July 1, 2003, the use in this State of
20    motor vehicles of the second division with  a  gross  vehicle
21    weight  in excess of 8,000 pounds and that are subject to the
22    commercial distribution fee imposed under Section 3-815.1  of
23    the  Illinois  Vehicle Code. This exemption applies to repair
24    and replacement parts added after  the  initial  purchase  of
25    such  a  motor  vehicle  if  that  motor vehicle is used in a
26    manner that would qualify for  the  rolling  stock  exemption
27    otherwise provided for in this Act.
28    (Source:  P.A.  91-51,  eff.  6-30-99;  91-200, eff. 7-20-99;
29    91-439, eff.  8-6-99;  91-637,  eff.  8-20-99;  91-644,  eff.
30    8-20-99;  91-901,  eff.  1-1-01;  92-35, eff. 7-1-01; 92-227,
31    eff. 8-2-01; 92-337,  eff.  8-10-01;  92-484,  eff.  8-23-01;
32    92-651, eff. 7-11-02.)

33        (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
 
SB841 Enrolled             -14-      LRB093 02887 SJM 02903 b
 1        Sec.  3-55.  Multistate  exemption.  To prevent actual or
 2    likely multistate taxation, the tax imposed by this Act  does
 3    not  apply  to  the use of tangible personal property in this
 4    State under the following circumstances:
 5        (a)  The  use,  in  this  State,  of  tangible   personal
 6    property   acquired  outside  this  State  by  a  nonresident
 7    individual and brought into this State by the individual  for
 8    his  or  her  own  use while temporarily within this State or
 9    while passing through this State.
10        (b)  The  use,  in  this  State,  of  tangible   personal
11    property  by  an interstate carrier for hire as rolling stock
12    moving in interstate commerce or by lessors under a lease  of
13    one  year  or  longer  executed  or  in effect at the time of
14    purchase of tangible personal property by interstate carriers
15    for-hire for  use  as  rolling  stock  moving  in  interstate
16    commerce  as  long  as  so  used  by  the interstate carriers
17    for-hire, and  equipment  operated  by  a  telecommunications
18    provider,  licensed  as  a  common  carrier  by  the  Federal
19    Communications  Commission, which is permanently installed in
20    or affixed to aircraft moving in interstate commerce.
21        (c)  The use, in  this  State,  by  owners,  lessors,  or
22    shippers  of  tangible  personal property that is utilized by
23    interstate carriers for hire for use as rolling stock  moving
24    in  interstate  commerce as long as so used by the interstate
25    carriers   for   hire,   and   equipment   operated   by    a
26    telecommunications  provider, licensed as a common carrier by
27    the Federal Communications Commission, which  is  permanently
28    installed  in  or  affixed  to  aircraft moving in interstate
29    commerce.
30        (d)  The  use,  in  this  State,  of  tangible   personal
31    property that is acquired outside this State and caused to be
32    brought  into  this  State by a person who has already paid a
33    tax in another State in respect to the sale, purchase, or use
34    of that property, to the extent of  the  amount  of  the  tax
 
SB841 Enrolled             -15-      LRB093 02887 SJM 02903 b
 1    properly due and paid in the other State.
 2        (e)  The  temporary  storage,  in this State, of tangible
 3    personal property that is acquired  outside  this  State  and
 4    that,  after  being  brought  into this State and stored here
 5    temporarily,  is  used  solely  outside  this  State  or   is
 6    physically  attached  to  or incorporated into other tangible
 7    personal property that is used solely outside this State,  or
 8    is   altered   by   converting,  fabricating,  manufacturing,
 9    printing, processing, or shaping, and, as  altered,  is  used
10    solely outside this State.
11        (f)  The  temporary  storage  in  this  State of building
12    materials and fixtures that are acquired either in this State
13    or outside this State by an Illinois  registered  combination
14    retailer  and construction contractor, and that the purchaser
15    thereafter uses outside  this  State  by  incorporating  that
16    property into real estate located outside this State.
17        (g)  The use or purchase of tangible personal property by
18    a  common carrier by rail or motor that receives the physical
19    possession of the property in Illinois, and  that  transports
20    the  property,  or  shares with another common carrier in the
21    transportation of the property, out of Illinois on a standard
22    uniform bill of lading showing the seller of the property  as
23    the  shipper  or  consignor  of the property to a destination
24    outside Illinois, for use outside Illinois.
25        (h)  The use, in this State, of a motor vehicle that  was
26    sold  in  this  State to a nonresident, even though the motor
27    vehicle is delivered to the nonresident in this State, if the
28    motor vehicle is not to be titled in this  State,  and  if  a
29    drive-away  permit is issued to the motor vehicle as provided
30    in Section 3-603 of the  Illinois  Vehicle  Code  or  if  the
31    nonresident  purchaser  has  vehicle  registration  plates to
32    transfer to the motor vehicle upon returning to  his  or  her
33    home  state.  The issuance of the drive-away permit or having
34    the out-of-state registration plates to be transferred  shall
 
SB841 Enrolled             -16-      LRB093 02887 SJM 02903 b
 1    be  prima  facie  evidence that the motor vehicle will not be
 2    titled in this State.
 3        (i)  Beginning July 1, 1999, the use, in this  State,  of
 4    fuel  acquired outside this State and brought into this State
 5    in the fuel supply tanks of locomotives  engaged  in  freight
 6    hauling  and  passenger service for interstate commerce. This
 7    subsection is exempt from the provisions of Section 3-90.
 8        (j)  Beginning on January 1, 2002, the  use  of  tangible
 9    personal  property  purchased  from an Illinois retailer by a
10    taxpayer engaged  in  centralized  purchasing  activities  in
11    Illinois  who will, upon receipt of the property in Illinois,
12    temporarily store  the  property  in  Illinois  (i)  for  the
13    purpose  of  subsequently  transporting it outside this State
14    for use or consumption thereafter solely outside  this  State
15    or  (ii)  for  the purpose of being processed, fabricated, or
16    manufactured into, attached to, or  incorporated  into  other
17    tangible  personal  property  to  be transported outside this
18    State and thereafter used or  consumed  solely  outside  this
19    State.   The  Director  of  Revenue  shall, pursuant to rules
20    adopted  in  accordance  with  the  Illinois   Administrative
21    Procedure  Act,  issue  a  permit  to  any  taxpayer  in good
22    standing  with  the  Department  who  is  eligible  for   the
23    exemption under this subsection (j).  The permit issued under
24    this subsection (j) shall authorize the holder, to the extent
25    and  in  the manner specified in the rules adopted under this
26    Act, to purchase tangible personal property from  a  retailer
27    exempt  from  the taxes imposed by this Act.  Taxpayers shall
28    maintain all necessary books and records to substantiate  the
29    use  and  consumption  of all such tangible personal property
30    outside of the State of Illinois.
31    (Source: P.A. 91-51,  eff.  6-30-99;  91-313,  eff.  7-29-99;
32    91-587,  eff.  8-14-99;  92-16,  eff.  6-28-01;  92-488, eff.
33    8-23-01; 92-680, eff. 7-16-02.)
 
SB841 Enrolled             -17-      LRB093 02887 SJM 02903 b
 1        (35 ILCS 105/3-60) (from Ch. 120, par. 439.3-60)
 2        Sec. 3-60.  Rolling stock exemption.  Except as  provided
 3    in  Section  3-61  of  this  Act, the rolling stock exemption
 4    applies to rolling stock used by an  interstate  carrier  for
 5    hire,  even  just  between points in Illinois, if the rolling
 6    stock  transports,  for  hire,  persons  whose  journeys   or
 7    property  whose  shipments  originate  or  terminate  outside
 8    Illinois.
 9    (Source: P.A. 91-51, eff. 6-30-99.)

10        (35 ILCS 105/3-61)
11        Sec.   3-61.    Motor  vehicles;  use  as  rolling  stock
12    definition.  Through June 30, 2003,  "use  as  rolling  stock
13    moving  in interstate commerce" in subsections (b) and (c) of
14    Section 3-55 means for motor vehicles, as defined in  Section
15    1-146  of the Illinois Vehicle Code, and trailers, as defined
16    in Section 1-209 of the Illinois Vehicle Code, when on 15  or
17    more  occasions  in  a  12-month period the motor vehicle and
18    trailer  has  carried  persons  or  property  for   hire   in
19    interstate commerce, even just between points in Illinois, if
20    the  motor  vehicle  and  trailer  transports  persons  whose
21    journeys  or  property whose shipments originate or terminate
22    outside Illinois.  This definition applies  to  all  property
23    purchased  for  the  purpose of being attached to those motor
24    vehicles or trailers as a part thereof. On and after July  1,
25    2003, "use as rolling stock moving in interstate commerce" in
26    paragraphs  (b)  and  (c)  of  Section  3-55 occurs for motor
27    vehicles, as defined in Section 1-146 of the Illinois Vehicle
28    Code, when during a 12-month period  the  rolling  stock  has
29    carried  persons  or property for hire in interstate commerce
30    for 51% of its  total  trips  and  transports  persons  whose
31    journeys  or  property whose shipments originate or terminate
32    outside Illinois. Trips  that  are  only  between  points  in
33    Illinois  shall  not  be  counted  as  interstate  trips when
 
SB841 Enrolled             -18-      LRB093 02887 SJM 02903 b
 1    calculating whether the tangible personal property  qualifies
 2    for  the  exemption but such trips shall be included in total
 3    trips taken.
 4    (Source: P.A. 91-587, eff. 8-14-99.)

 5        Section 10.  The  Service  Use  Tax  Act  is  amended  by
 6    changing Sections 2, 3-45, 3-50, and 3-51 as follows:

 7        (35 ILCS 110/2) (from Ch. 120, par. 439.32)
 8        Sec.  2.  "Use"  means  the exercise by any person of any
 9    right or power over tangible personal  property  incident  to
10    the ownership of that property, but does not include the sale
11    or  use for demonstration by him of that property in any form
12    as tangible  personal  property  in  the  regular  course  of
13    business.  "Use"  does  not  mean the interim use of tangible
14    personal property nor the physical incorporation of  tangible
15    personal  property,  as  an  ingredient  or constituent, into
16    other tangible personal property, (a) which is  sold  in  the
17    regular   course   of   business  or  (b)  which  the  person
18    incorporating such  ingredient  or  constituent  therein  has
19    undertaken  at  the  time  of  such  purchase  to cause to be
20    transported in interstate commerce  to  destinations  outside
21    the State of Illinois.
22        "Purchased  from  a  serviceman" means the acquisition of
23    the ownership of, or title  to,  tangible  personal  property
24    through a sale of service.
25        "Purchaser"  means  any  person  who,  through  a sale of
26    service, acquires the ownership of, or title to, any tangible
27    personal property.
28        "Cost  price"  means  the  consideration  paid   by   the
29    serviceman  for  a  purchase valued in money, whether paid in
30    money or otherwise, including cash, credits and services, and
31    shall be determined without any deduction on account  of  the
32    supplier's  cost  of  the  property sold or on account of any
 
SB841 Enrolled             -19-      LRB093 02887 SJM 02903 b
 1    other expense incurred by the  supplier.  When  a  serviceman
 2    contracts  out  part  or  all of the services required in his
 3    sale of service, it shall be presumed that the cost price  to
 4    the  serviceman  of the property transferred to him or her by
 5    his  or  her  subcontractor  is   equal   to   50%   of   the
 6    subcontractor's  charges  to the serviceman in the absence of
 7    proof of the consideration paid by the subcontractor for  the
 8    purchase of such property.
 9        "Selling price" means the consideration for a sale valued
10    in  money  whether  received in money or otherwise, including
11    cash, credits and service, and shall  be  determined  without
12    any  deduction  on  account  of  the serviceman's cost of the
13    property sold, the cost of materials used, labor  or  service
14    cost  or  any  other expense whatsoever, but does not include
15    interest or finance charges which appear as separate items on
16    the bill of sale or sales contract nor charges that are added
17    to prices by sellers on  account  of  the  seller's  duty  to
18    collect,  from the purchaser, the tax that is imposed by this
19    Act.
20        "Department" means the Department of Revenue.
21        "Person" means any natural individual, firm, partnership,
22    association, joint stock company, joint  venture,  public  or
23    private  corporation,  limited  liability  company,  and  any
24    receiver, executor, trustee, guardian or other representative
25    appointed by order of any court.
26        "Sale of service" means any transaction except:
27             (1)  a  retail  sale  of  tangible personal property
28        taxable under the Retailers' Occupation Tax Act or  under
29        the Use Tax Act.
30             (2)  a  sale  of  tangible personal property for the
31        purpose of resale made in compliance with Section  2c  of
32        the Retailers' Occupation Tax Act.
33             (3)  except  as  hereinafter  provided,  a  sale  or
34        transfer  of tangible personal property as an incident to
 
SB841 Enrolled             -20-      LRB093 02887 SJM 02903 b
 1        the rendering of service for or by any governmental body,
 2        or for  or  by  any  corporation,  society,  association,
 3        foundation   or   institution   organized   and  operated
 4        exclusively  for  charitable,  religious  or  educational
 5        purposes  or  any  not-for-profit  corporation,  society,
 6        association,  foundation,  institution  or   organization
 7        which  has no compensated officers or employees and which
 8        is organized and operated primarily for the recreation of
 9        persons 55 years of age or  older.  A  limited  liability
10        company   may   qualify  for  the  exemption  under  this
11        paragraph  only  if  the  limited  liability  company  is
12        organized  and  operated  exclusively   for   educational
13        purposes.
14             (4)  a   sale   or  transfer  of  tangible  personal
15        property as an incident to the rendering of  service  for
16        interstate  carriers  for  hire  for use as rolling stock
17        moving in interstate commerce or by lessors under a lease
18        of one year or longer, executed or in effect at the  time
19        of  purchase of personal property, to interstate carriers
20        for hire for use as rolling stock  moving  in  interstate
21        commerce  so  long as so used by such interstate carriers
22        for hire, and equipment operated by a  telecommunications
23        provider,  licensed  as  a  common carrier by the Federal
24        Communications Commission, which is permanently installed
25        in or affixed to aircraft moving in interstate commerce.
26             (4a)  a  sale  or  transfer  of  tangible   personal
27        property  as  an incident to the rendering of service for
28        owners,  lessors,  or  shippers  of   tangible   personal
29        property  which  is  utilized  by interstate carriers for
30        hire for  use  as  rolling  stock  moving  in  interstate
31        commerce  so  long  as so used by interstate carriers for
32        hire, and  equipment  operated  by  a  telecommunications
33        provider,  licensed  as  a  common carrier by the Federal
34        Communications Commission, which is permanently installed
 
SB841 Enrolled             -21-      LRB093 02887 SJM 02903 b
 1        in or affixed to aircraft moving in interstate commerce.
 2             (4a-5)  on  and  after  July  1,  2003,  a  sale  or
 3        transfer of a motor vehicle of the  second division  with
 4        a  gross  vehicle  weight in excess of 8,000 pounds as an
 5        incident to  the  rendering  of  service  if  that  motor
 6        vehicle  is  subject   to the commercial distribution fee
 7        imposed under Section 3-815.1  of  the  Illinois  Vehicle
 8        Code.    This exemption applies to repair and replacement
 9        parts added after the initial  purchase of such  a  motor
10        vehicle  if  that  motor vehicle is used in a manner that
11        would  qualify for the rolling stock exemption  otherwise
12        provided for in this Act.
13             (5)  a  sale  or transfer of machinery and equipment
14        used primarily in the process  of  the  manufacturing  or
15        assembling,  either  in an existing, an expanded or a new
16        manufacturing facility, of tangible personal property for
17        wholesale or retail sale or lease, whether such  sale  or
18        lease  is  made  directly  by the manufacturer or by some
19        other person, whether the materials used in  the  process
20        are  owned  by  the manufacturer or some other person, or
21        whether such sale or lease is made apart from  or  as  an
22        incident to the seller's engaging in a service occupation
23        and  the  applicable  tax is a Service Use Tax or Service
24        Occupation  Tax,  rather  than  Use  Tax  or   Retailers'
25        Occupation Tax.
26             (5a)  the  repairing,  reconditioning or remodeling,
27        for a  common  carrier  by  rail,  of  tangible  personal
28        property  which  belongs to such carrier for hire, and as
29        to which such carrier receives the physical possession of
30        the repaired, reconditioned or remodeled item of tangible
31        personal property in Illinois,  and  which  such  carrier
32        transports,  or shares with another common carrier in the
33        transportation of such property, out  of  Illinois  on  a
34        standard  uniform  bill  of lading showing the person who
 
SB841 Enrolled             -22-      LRB093 02887 SJM 02903 b
 1        repaired, reconditioned or remodeled the  property  to  a
 2        destination outside Illinois, for use outside Illinois.
 3             (5b)  a   sale  or  transfer  of  tangible  personal
 4        property which is  produced  by  the  seller  thereof  on
 5        special  order  in  such  a  way  as  to  have  made  the
 6        applicable  tax the Service Occupation Tax or the Service
 7        Use Tax, rather than the Retailers' Occupation Tax or the
 8        Use Tax, for an interstate carrier by rail which receives
 9        the physical possession of such property in Illinois, and
10        which transports such property, or  shares  with  another
11        common  carrier  in  the transportation of such property,
12        out of Illinois on a  standard  uniform  bill  of  lading
13        showing  the  seller  of  the  property as the shipper or
14        consignor of  such  property  to  a  destination  outside
15        Illinois, for use outside Illinois.
16             (6)  a  sale  or  transfer of distillation machinery
17        and equipment, sold as a unit or  kit  and  assembled  or
18        installed  by the retailer, which machinery and equipment
19        is certified  by  the  user  to  be  used  only  for  the
20        production  of  ethyl  alcohol  that  will  be  used  for
21        consumption as motor fuel or as a component of motor fuel
22        for the personal use of such user and not subject to sale
23        or resale.
24             (7)  at  the election of any serviceman not required
25        to be otherwise registered as a retailer under Section 2a
26        of the Retailers'  Occupation  Tax  Act,  made  for  each
27        fiscal  year  sales  of  service  in  which the aggregate
28        annual  cost  price   of   tangible   personal   property
29        transferred  as  an  incident  to the sales of service is
30        less  than  35%,  or  75%  in  the  case  of   servicemen
31        transferring  prescription drugs or servicemen engaged in
32        graphic arts production, of the  aggregate  annual  total
33        gross receipts from all sales of service. The purchase of
34        such  tangible  personal property by the serviceman shall
 
SB841 Enrolled             -23-      LRB093 02887 SJM 02903 b
 1        be subject to tax under the Retailers' Occupation Tax Act
 2        and the Use Tax Act. However, if a primary serviceman who
 3        has  made  the  election  described  in  this   paragraph
 4        subcontracts  service  work to a secondary serviceman who
 5        has also made the election described in  this  paragraph,
 6        the primary serviceman does not incur a Use Tax liability
 7        if  the secondary serviceman (i) has paid or will pay Use
 8        Tax on his or her cost price  of  any  tangible  personal
 9        property  transferred  to the primary serviceman and (ii)
10        certifies that fact in writing to the primary serviceman.
11        Tangible personal property transferred  incident  to  the
12    completion  of a maintenance agreement is exempt from the tax
13    imposed pursuant to this Act.
14        Exemption (5) also includes machinery and equipment  used
15    in the general maintenance or repair of such exempt machinery
16    and equipment or for in-house manufacture of exempt machinery
17    and  equipment.  For  the  purposes of exemption (5), each of
18    these  terms  shall  have  the   following   meanings:    (1)
19    "manufacturing  process"  shall  mean  the  production of any
20    article of tangible personal property, whether  such  article
21    is a finished product or an article for use in the process of
22    manufacturing  or  assembling a different article of tangible
23    personal  property,  by  procedures  commonly   regarded   as
24    manufacturing,  processing,  fabricating,  or  refining which
25    changes some existing material or materials into  a  material
26    with  a  different  form,  use  or  name.   In  relation to a
27    recognized  integrated  business  composed  of  a  series  of
28    operations which collectively  constitute  manufacturing,  or
29    individually   constitute   manufacturing   operations,   the
30    manufacturing  process  shall  be deemed to commence with the
31    first operation or stage of production  in  the  series,  and
32    shall  not be deemed to end until the completion of the final
33    product in the last operation or stage of production  in  the
34    series;   and   further,   for  purposes  of  exemption  (5),
 
SB841 Enrolled             -24-      LRB093 02887 SJM 02903 b
 1    photoprocessing is deemed to be a  manufacturing  process  of
 2    tangible  personal property for wholesale or retail sale; (2)
 3    "assembling process" shall mean the production of any article
 4    of tangible personal property,  whether  such  article  is  a
 5    finished  product  or  an  article  for use in the process of
 6    manufacturing or assembling a different article  of  tangible
 7    personal  property,  by the combination of existing materials
 8    in a manner commonly regarded as assembling which results  in
 9    a  material of a different form, use or name; (3) "machinery"
10    shall mean major mechanical machines or major  components  of
11    such  machines  contributing to a manufacturing or assembling
12    process; and (4) "equipment" shall  include  any  independent
13    device  or  tool separate from any machinery but essential to
14    an integrated manufacturing or  assembly  process;  including
15    computers   used   primarily  in  a  manufacturer's  computer
16    assisted design, computer  assisted  manufacturing  (CAD/CAM)
17    system;  or any subunit or assembly comprising a component of
18    any machinery or auxiliary, adjunct or  attachment  parts  of
19    machinery,  such as tools, dies, jigs, fixtures, patterns and
20    molds; or any parts which require periodic replacement in the
21    course of normal operation; but shall not include hand tools.
22    Equipment includes chemicals or chemicals acting as catalysts
23    but only if the chemicals or chemicals  acting  as  catalysts
24    effect  a  direct  and  immediate change upon a product being
25    manufactured or assembled for wholesale  or  retail  sale  or
26    lease.  The purchaser of such machinery and equipment who has
27    an active  resale  registration  number  shall  furnish  such
28    number  to  the  seller  at the time of purchase. The user of
29    such machinery and equipment  and  tools  without  an  active
30    resale  registration  number  shall  prepare a certificate of
31    exemption for each transaction stating facts establishing the
32    exemption for that transaction, which  certificate  shall  be
33    available  to  the  Department  for inspection or audit.  The
34    Department shall prescribe the form of the certificate.
 
SB841 Enrolled             -25-      LRB093 02887 SJM 02903 b
 1        Any informal rulings, opinions or letters issued  by  the
 2    Department  in  response  to  an  inquiry  or request for any
 3    opinion  from  any  person   regarding   the   coverage   and
 4    applicability  of  exemption (5) to specific devices shall be
 5    published, maintained as a public record, and made  available
 6    for  public  inspection and copying.  If the informal ruling,
 7    opinion  or  letter   contains   trade   secrets   or   other
 8    confidential information, where possible the Department shall
 9    delete  such information prior to publication.  Whenever such
10    informal rulings, opinions, or letters contain any policy  of
11    general  applicability,  the  Department  shall formulate and
12    adopt such policy as a rule in accordance with the provisions
13    of the Illinois Administrative Procedure Act.
14        On and after July 1, 1987, no entity  otherwise  eligible
15    under  exemption  (3)  of  this  Section  shall make tax free
16    purchases unless it has an  active  exemption  identification
17    number issued by the Department.
18        The  purchase,  employment  and transfer of such tangible
19    personal property  as  newsprint  and  ink  for  the  primary
20    purpose of conveying news (with or without other information)
21    is  not  a  purchase,  use  or sale of service or of tangible
22    personal property within the meaning of this Act.
23        "Serviceman" means any  person  who  is  engaged  in  the
24    occupation of making sales of service.
25        "Sale at retail" means "sale at retail" as defined in the
26    Retailers' Occupation Tax Act.
27        "Supplier"  means  any person who makes sales of tangible
28    personal property to servicemen for the purpose of resale  as
29    an incident to a sale of service.
30        "Serviceman  maintaining  a  place  of  business  in this
31    State", or any like term, means and includes any serviceman:
32             1.  having  or  maintaining   within   this   State,
33        directly  or  by  a  subsidiary,  an office, distribution
34        house, sales house, warehouse or other place of business,
 
SB841 Enrolled             -26-      LRB093 02887 SJM 02903 b
 1        or any agent or  other  representative  operating  within
 2        this  State  under the authority of the serviceman or its
 3        subsidiary,  irrespective  of  whether  such   place   of
 4        business or agent or other representative is located here
 5        permanently or temporarily, or whether such serviceman or
 6        subsidiary is licensed to do business in this State;
 7             2.  soliciting orders for tangible personal property
 8        by  means  of  a telecommunication or television shopping
 9        system  (which  utilizes  toll  free  numbers)  which  is
10        intended  by  the  retailer  to  be  broadcast  by  cable
11        television or other means of broadcasting,  to  consumers
12        located in this State;
13             3.  pursuant  to  a  contract  with a broadcaster or
14        publisher located in this State,  soliciting  orders  for
15        tangible  personal property by means of advertising which
16        is disseminated primarily to consumers  located  in  this
17        State and only secondarily to bordering jurisdictions;
18             4.  soliciting orders for tangible personal property
19        by   mail   if  the  solicitations  are  substantial  and
20        recurring and if the retailer benefits from any  banking,
21        financing,   debt   collection,   telecommunication,   or
22        marketing  activities occurring in this State or benefits
23        from  the  location   in   this   State   of   authorized
24        installation, servicing, or repair facilities;
25             5.  being  owned or controlled by the same interests
26        which own or control any retailer engaging in business in
27        the same or similar line of business in this State;
28             6.  having a franchisee or licensee operating  under
29        its  trade name if the franchisee or licensee is required
30        to collect the tax under this Section;
31             7.  pursuant to a contract with a  cable  television
32        operator  located  in  this  State, soliciting orders for
33        tangible personal property by means of advertising  which
34        is  transmitted  or  distributed  over a cable television
 
SB841 Enrolled             -27-      LRB093 02887 SJM 02903 b
 1        system in this State; or
 2             8.  engaging  in  activities  in   Illinois,   which
 3        activities  in  the  state  in  which the supply business
 4        engaging in such activities is located  would  constitute
 5        maintaining a place of business in that state.
 6    (Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)

 7        (35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
 8        Sec.  3-45.  Multistate  exemption.  To prevent actual or
 9    likely multistate taxation, the tax imposed by this Act  does
10    not  apply  to  the use of tangible personal property in this
11    State under the following circumstances:
12        (a)  The use, in this State, of property acquired outside
13    this State by a nonresident individual and brought into  this
14    State  by  the  individual  for  his  or  her  own  use while
15    temporarily within this State or while passing  through  this
16    State.
17        (b)  The use, in this State, of property that is acquired
18    outside  this State and that is moved into this State for use
19    as rolling stock moving in interstate commerce.
20        (c)  The use, in this State, of property that is acquired
21    outside this State and caused to be brought into  this  State
22    by  a  person  who has already paid a tax in another state in
23    respect to the sale, purchase, or use of  that  property,  to
24    the  extent of the amount of the tax properly due and paid in
25    the other state.
26        (d)  The temporary storage, in this  State,  of  property
27    that  is  acquired  outside  this  State and that after being
28    brought into this State and stored here temporarily, is  used
29    solely  outside  this  State  or is physically attached to or
30    incorporated into other property that is used solely  outside
31    this   State,  or  is  altered  by  converting,  fabricating,
32    manufacturing, printing,  processing,  or  shaping,  and,  as
33    altered, is used solely outside this State.
 
SB841 Enrolled             -28-      LRB093 02887 SJM 02903 b
 1        (e)  Beginning  July  1, 1999, the use, in this State, of
 2    fuel acquired outside this State and brought into this  State
 3    in  the  fuel  supply tanks of locomotives engaged in freight
 4    hauling and passenger service for interstate  commerce.  This
 5    subsection is exempt from the provisions of Section 3-75.
 6        (f)  Beginning  on  January  1, 2002, the use of tangible
 7    personal property purchased from an Illinois  retailer  by  a
 8    taxpayer  engaged  in  centralized  purchasing  activities in
 9    Illinois who will, upon receipt of the property in  Illinois,
10    temporarily  store  the  property  in  Illinois  (i)  for the
11    purpose of subsequently transporting it  outside  this  State
12    for  use  or consumption thereafter solely outside this State
13    or (ii) for the purpose of being  processed,  fabricated,  or
14    manufactured  into,  attached  to, or incorporated into other
15    tangible personal property to  be  transported  outside  this
16    State  and  thereafter  used  or consumed solely outside this
17    State.  The Director of  Revenue  shall,  pursuant  to  rules
18    adopted   in  accordance  with  the  Illinois  Administrative
19    Procedure Act,  issue  a  permit  to  any  taxpayer  in  good
20    standing   with  the  Department  who  is  eligible  for  the
21    exemption under this subsection (f).  The permit issued under
22    this subsection (f) shall authorize the holder, to the extent
23    and in the manner specified in the rules adopted  under  this
24    Act,  to  purchase tangible personal property from a retailer
25    exempt from the taxes imposed by this Act.   Taxpayers  shall
26    maintain  all necessary books and records to substantiate the
27    use and consumption of all such  tangible  personal  property
28    outside of the State of Illinois.
29    (Source:  P.A.  91-51,  eff.  6-30-99;  91-313, eff. 7-29-99;
30    91-587, eff.  8-14-99;  92-16,  eff.  6-28-01;  92-488,  eff.
31    8-23-01.)

32        (35 ILCS 110/3-50) (from Ch. 120, par. 439.33-50)
33        Sec.  3-50.  Rolling stock exemption.  Except as provided
 
SB841 Enrolled             -29-      LRB093 02887 SJM 02903 b
 1    in Section 3-51 of this  Act,  the  rolling  stock  exemption
 2    applies  to  rolling  stock used by an interstate carrier for
 3    hire, even just between points in Illinois,  if  the  rolling
 4    stock   transports,  for  hire,  persons  whose  journeys  or
 5    property  whose  shipments  originate  or  terminate  outside
 6    Illinois.
 7    (Source: P.A. 91-51, eff. 6-30-99.)

 8        (35 ILCS 110/3-51)
 9        Sec.  3-51.   Motor  vehicles;  use  as   rolling   stock
10    definition.   Through  June  30,  2003, "use as rolling stock
11    moving in interstate commerce" in subsection (b)  of  Section
12    3-45  means for motor vehicles, as defined in Section 1-46 of
13    the Illinois  Vehicle  Code,  and  trailers,  as  defined  in
14    Section  1-209  of  the  Illinois Vehicle Code, when on 15 or
15    more occasions in a 12-month period  the  motor  vehicle  and
16    trailer   has   carried  persons  or  property  for  hire  in
17    interstate commerce, even just between points in Illinois, if
18    the  motor  vehicle  and  trailer  transports  persons  whose
19    journeys or property whose shipments originate  or  terminate
20    outside  Illinois.   This  definition applies to all property
21    purchased for the purpose of being attached  to  those  motor
22    vehicles  or trailers as a part thereof. On and after July 1,
23    2003, "use as rolling stock moving in interstate commerce" in
24    paragraphs (4)  and  (4a)  of  the  definition  of  "sale  of
25    service"  in  Section  2  and  subsection (b) of Section 3-45
26    occurs for motor vehicles, as defined in Section 1-146 of the
27    Illinois Vehicle Code, when  during  a  12-month  period  the
28    rolling  stock  has  carried  persons or property for hire in
29    interstate commerce for 51% of its total trips and transports
30    persons whose journeys or  property whose shipments originate
31    or terminate outside Illinois.   Trips that are only  between
32    points in Illinois shall not be counted as  interstate  trips
33    when  calculating  whether    the  tangible personal property
 
SB841 Enrolled             -30-      LRB093 02887 SJM 02903 b
 1    qualifies for the exemption but such trips shall be included
 2    in total trips taken.
 3    (Source: P.A. 91-587, eff. 8-14-99.)

 4        Section 15.  The Service Occupation Tax Act is amended by
 5    changing Sections 2 and 2d as follows:

 6        (35 ILCS 115/2) (from Ch. 120, par. 439.102)
 7        Sec. 2. "Transfer" means any transfer  of  the  title  to
 8    property  or  of the ownership of property whether or not the
 9    transferor retains title  as  security  for  the  payment  of
10    amounts due him from the transferee.
11        "Cost   Price"   means  the  consideration  paid  by  the
12    serviceman for a purchase valued in money,  whether  paid  in
13    money or otherwise, including cash, credits and services, and
14    shall  be  determined without any deduction on account of the
15    supplier's cost of the property sold or  on  account  of  any
16    other  expense  incurred  by  the supplier. When a serviceman
17    contracts out part or all of the  services  required  in  his
18    sale  of service, it shall be presumed that the cost price to
19    the serviceman of the property transferred to him by  his  or
20    her  subcontractor  is  equal  to  50% of the subcontractor's
21    charges to the serviceman in the  absence  of  proof  of  the
22    consideration  paid  by the subcontractor for the purchase of
23    such property.
24        "Department" means the Department of Revenue.
25        "Person" means any natural individual, firm, partnership,
26    association, joint stock company, joint  venture,  public  or
27    private  corporation,  limited  liability  company,  and  any
28    receiver, executor, trustee, guardian or other representative
29    appointed by order of any court.
30        "Sale of Service" means any transaction except:
31        (a)  A  retail sale of tangible personal property taxable
32    under the Retailers' Occupation Tax Act or under the Use  Tax
 
SB841 Enrolled             -31-      LRB093 02887 SJM 02903 b
 1    Act.
 2        (b)  A sale of tangible personal property for the purpose
 3    of   resale  made  in  compliance  with  Section  2c  of  the
 4    Retailers' Occupation Tax Act.
 5        (c)  Except as hereinafter provided, a sale  or  transfer
 6    of tangible personal property as an incident to the rendering
 7    of  service  for or by any governmental body or for or by any
 8    corporation, society, association, foundation or  institution
 9    organized  and operated exclusively for charitable, religious
10    or educational purposes or  any  not-for-profit  corporation,
11    society, association, foundation, institution or organization
12    which  has  no compensated officers or employees and which is
13    organized  and  operated  primarily  for  the  recreation  of
14    persons 55 years of age or older. A limited liability company
15    may qualify for the exemption under this  paragraph  only  if
16    the  limited  liability  company  is  organized  and operated
17    exclusively for educational purposes.
18        (d)  A sale or transfer of tangible personal property  as
19    an  incident  to  the  rendering  of  service  for interstate
20    carriers  for  hire  for  use  as  rolling  stock  moving  in
21    interstate commerce or lessors under leases of  one  year  or
22    longer,  executed  or  in  effect at the time of purchase, to
23    interstate carriers for hire for use as rolling stock  moving
24    in   interstate   commerce,   and  equipment  operated  by  a
25    telecommunications provider, licensed as a common carrier  by
26    the  Federal  Communications Commission, which is permanently
27    installed in or affixed  to  aircraft  moving  in  interstate
28    commerce.
29        (d-1)  A  sale  or transfer of tangible personal property
30    as an incident  to  the  rendering  of  service  for  owners,
31    lessors  or  shippers  of tangible personal property which is
32    utilized by interstate carriers for hire for use  as  rolling
33    stock  moving  in interstate commerce, and equipment operated
34    by  a  telecommunications  provider,  licensed  as  a  common
 
SB841 Enrolled             -32-      LRB093 02887 SJM 02903 b
 1    carrier by the Federal Communications  Commission,  which  is
 2    permanently  installed  in  or  affixed to aircraft moving in
 3    interstate commerce.
 4        (d-1.1)  On and after July 1, 2003, a sale or transfer of
 5    a motor vehicle of the second division with a  gross  vehicle
 6    weight  in  excess  of  8,000  pounds  as  an incident to the
 7    rendering of service if that motor vehicle is subject to  the
 8    commercial  distribution fee imposed under Section 3-815.1 of
 9    the Illinois Vehicle Code. This exemption applies  to  repair
10    and  replacement  parts  added  after the initial purchase of
11    such a motor vehicle if that  motor  vehicle  is  used  in  a
12    manner  that  would  qualify  for the rolling stock exemption
13    otherwise provided for in this Act.
14        (d-2)  The repairing, reconditioning or remodeling, for a
15    common carrier by rail, of tangible personal  property  which
16    belongs  to  such  carrier  for  hire,  and  as to which such
17    carrier receives the physical  possession  of  the  repaired,
18    reconditioned or remodeled item of tangible personal property
19    in  Illinois,  and  which  such carrier transports, or shares
20    with another common carrier in  the  transportation  of  such
21    property,  out  of  Illinois  on  a  standard uniform bill of
22    lading showing the  person  who  repaired,  reconditioned  or
23    remodeled  the  property  as the shipper or consignor of such
24    property to a destination outside Illinois, for  use  outside
25    Illinois.
26        (d-3)  A  sale  or transfer of tangible personal property
27    which is produced by the seller thereof on special  order  in
28    such  a  way  as  to have made the applicable tax the Service
29    Occupation Tax or  the  Service  Use  Tax,  rather  than  the
30    Retailers'  Occupation  Tax or the Use Tax, for an interstate
31    carrier by rail which receives  the  physical  possession  of
32    such   property   in  Illinois,  and  which  transports  such
33    property, or  shares  with  another  common  carrier  in  the
34    transportation  of  such  property,  out  of  Illinois  on  a
 
SB841 Enrolled             -33-      LRB093 02887 SJM 02903 b
 1    standard  uniform  bill  of  lading showing the seller of the
 2    property as the shipper or consignor of such  property  to  a
 3    destination outside Illinois, for use outside Illinois.
 4        (d-4)  Until  January  1,  1997,  a sale, by a registered
 5    serviceman paying tax under this Act to  the  Department,  of
 6    special  order  printed  materials delivered outside Illinois
 7    and which are not returned to this State, if delivery is made
 8    by the seller or agent of the seller, including an agent  who
 9    causes  the  product  to  be  delivered outside Illinois by a
10    common carrier or the U.S. postal service.
11        (e)  A sale or transfer of machinery and  equipment  used
12    primarily  in the process of the manufacturing or assembling,
13    either in an existing, an expanded  or  a  new  manufacturing
14    facility,  of  tangible  personal  property  for wholesale or
15    retail sale or lease, whether such  sale  or  lease  is  made
16    directly by the manufacturer or by some other person, whether
17    the   materials   used  in  the  process  are  owned  by  the
18    manufacturer or some other person, or whether  such  sale  or
19    lease  is  made  apart from or as an incident to the seller's
20    engaging in a service occupation and the applicable tax is  a
21    Service  Occupation  Tax  or  Service  Use  Tax,  rather than
22    Retailers' Occupation Tax or Use Tax.
23        (f)  The sale or transfer of distillation  machinery  and
24    equipment,  sold  as a unit or kit and assembled or installed
25    by the retailer, which machinery and equipment  is  certified
26    by  the  user  to  be  used  only for the production of ethyl
27    alcohol that will be used for consumption as motor fuel or as
28    a component of motor fuel for the personal use of  such  user
29    and not subject to sale or resale.
30        (g)  At the election of any serviceman not required to be
31    otherwise  registered  as  a retailer under Section 2a of the
32    Retailers' Occupation Tax Act,  made  for  each  fiscal  year
33    sales  of service in which the aggregate annual cost price of
34    tangible personal property transferred as an incident to  the
 
SB841 Enrolled             -34-      LRB093 02887 SJM 02903 b
 1    sales  of  service  is  less  than  35%  (75%  in the case of
 2    servicemen  transferring  prescription  drugs  or  servicemen
 3    engaged in graphic arts production) of the  aggregate  annual
 4    total  gross receipts from all sales of service. The purchase
 5    of such tangible personal property by the serviceman shall be
 6    subject to tax under the Retailers' Occupation  Tax  Act  and
 7    the  Use  Tax  Act.  However, if a primary serviceman who has
 8    made the election described in  this  paragraph  subcontracts
 9    service  work to a secondary serviceman who has also made the
10    election described in this paragraph, the primary  serviceman
11    does   not  incur  a  Use  Tax  liability  if  the  secondary
12    serviceman (i) has paid or will pay Use Tax  on  his  or  her
13    cost  price  of any tangible personal property transferred to
14    the primary  serviceman  and  (ii)  certifies  that  fact  in
15    writing to the primary serviceman.
16        Tangible  personal  property  transferred incident to the
17    completion of a maintenance agreement is exempt from the  tax
18    imposed pursuant to this Act.
19        Exemption  (e) also includes machinery and equipment used
20    in the general maintenance or repair of such exempt machinery
21    and equipment or for in-house manufacture of exempt machinery
22    and equipment.  For the purposes of exemption  (e),  each  of
23    these   terms   shall   have  the  following  meanings:   (1)
24    "manufacturing process" shall  mean  the  production  of  any
25    article  of  tangible personal property, whether such article
26    is a finished product or an article for use in the process of
27    manufacturing or assembling a different article  of  tangible
28    personal   property,   by  procedures  commonly  regarded  as
29    manufacturing, processing,  fabricating,  or  refining  which
30    changes  some  existing material or materials into a material
31    with a different  form,  use  or  name.   In  relation  to  a
32    recognized  integrated  business  composed  of  a  series  of
33    operations  which  collectively  constitute manufacturing, or
34    individually   constitute   manufacturing   operations,   the
 
SB841 Enrolled             -35-      LRB093 02887 SJM 02903 b
 1    manufacturing process shall be deemed to  commence  with  the
 2    first  operation  or  stage  of production in the series, and
 3    shall not be deemed to end until the completion of the  final
 4    product  in  the last operation or stage of production in the
 5    series;  and  further  for   purposes   of   exemption   (e),
 6    photoprocessing  is  deemed  to be a manufacturing process of
 7    tangible personal property for wholesale or retail sale;  (2)
 8    "assembling process" shall mean the production of any article
 9    of  tangible  personal  property,  whether  such article is a
10    finished product or an article for  use  in  the  process  of
11    manufacturing  or  assembling a different article of tangible
12    personal property, by the combination of  existing  materials
13    in  a manner commonly regarded as assembling which results in
14    a material of a different form, use or name; (3)  "machinery"
15    shall  mean  major mechanical machines or major components of
16    such machines contributing to a manufacturing  or  assembling
17    process;  and  (4)  "equipment" shall include any independent
18    device or tool separate from any machinery but  essential  to
19    an  integrated  manufacturing  or assembly process; including
20    computers used primarily in a manufacturer's  manufacuturer's
21    computer  assisted  design,  computer  assisted manufacturing
22    (CAD/CAM) system; or any subunit  or  assembly  comprising  a
23    component   of   any   machinery  or  auxiliary,  adjunct  or
24    attachment parts of machinery, such  as  tools,  dies,  jigs,
25    fixtures,  patterns  and  molds;  or  any parts which require
26    periodic replacement in the course of normal  operation;  but
27    shall  not  include hand tools.  Equipment includes chemicals
28    or chemicals acting as catalysts but only if the chemicals or
29    chemicals acting as catalysts effect a direct  and  immediate
30    change  upon  a  product  being manufactured or assembled for
31    wholesale or retail sale or lease.   The  purchaser  of  such
32    machinery and equipment who has an active resale registration
33    number shall furnish such number to the seller at the time of
34    purchase.   The purchaser of such machinery and equipment and
 
SB841 Enrolled             -36-      LRB093 02887 SJM 02903 b
 1    tools without an  active  resale  registration  number  shall
 2    furnish  to  the  seller  a certificate of exemption for each
 3    transaction stating facts establishing the exemption for that
 4    transaction, which certificate  shall  be  available  to  the
 5    Department for inspection or audit.
 6        Except as provided in Section 2d of this Act, the rolling
 7    stock   exemption   applies  to  rolling  stock  used  by  an
 8    interstate carrier for hire,  even  just  between  points  in
 9    Illinois, if such rolling stock transports, for hire, persons
10    whose  journeys  or  property  whose  shipments  originate or
11    terminate outside Illinois.
12        Any informal rulings, opinions or letters issued  by  the
13    Department  in  response  to  an  inquiry  or request for any
14    opinion  from  any  person   regarding   the   coverage   and
15    applicability  of  exemption (e) to specific devices shall be
16    published, maintained as a public record, and made  available
17    for  public  inspection and copying.  If the informal ruling,
18    opinion  or  letter   contains   trade   secrets   or   other
19    confidential information, where possible the Department shall
20    delete  such information prior to publication.  Whenever such
21    informal rulings, opinions, or letters contain any policy  of
22    general  applicability,  the  Department  shall formulate and
23    adopt such policy as a rule in accordance with the provisions
24    of the Illinois Administrative Procedure Act.
25        On and after July 1, 1987, no entity  otherwise  eligible
26    under  exemption  (c)  of  this  Section  shall make tax free
27    purchases unless it has an  active  exemption  identification
28    number issued by the Department.
29        "Serviceman"  means  any  person  who  is  engaged in the
30    occupation of making sales of service.
31        "Sale at Retail" means "sale at retail" as defined in the
32    Retailers' Occupation Tax Act.
33        "Supplier" means any person who makes sales  of  tangible
34    personal  property to servicemen for the purpose of resale as
 
SB841 Enrolled             -37-      LRB093 02887 SJM 02903 b
 1    an incident to a sale of service.
 2    (Source: P.A. 91-51,  eff.  6-30-99;  92-484,  eff.  8-23-01;
 3    revised 11-22-02.)

 4        (35 ILCS 115/2d)
 5        Sec. 2d. Motor vehicles; use as rolling stock definition.
 6    Through  June  30,  2003,  "use  as  rolling  stock moving in
 7    interstate commerce" in subsections  (d)  and  (d-1)  of  the
 8    definition  of "sale of service" in Section 2 means for motor
 9    vehicles, as defined in Section 1-146 of the Illinois Vehicle
10    Code, and trailers,  as  defined  in  Section  1-209  of  the
11    Illinois  Vehicle  Code,  when  on  15 or more occasions in a
12    12-month period the motor vehicle  and  trailer  has  carried
13    persons  or  property  for  hire in interstate commerce, even
14    just between points in Illinois, if  the  motor  vehicle  and
15    trailer  transports  persons whose journeys or property whose
16    shipments originate or  terminate  outside  Illinois.    This
17    definition  applies to all property purchased for the purpose
18    of being attached to those motor vehicles or  trailers  as  a
19    part  thereof.  On  and  after  July 1, 2003, "use as rolling
20    stock moving in interstate commerce" in  paragraphs  (d)  and
21    (d-1)  of  the  definition  of "sale of service" in Section 2
22    occurs for motor vehicles, as defined in Section 1-146 of the
23    Illinois Vehicle Code, when  during  a  12-month  period  the
24    rolling  stock  has  carried  persons or property for hire in
25    interstate commerce for 51% of its total trips and transports
26    persons whose journeys or property whose shipments  originate
27    or  terminate  outside  Illinois. Trips that are only between
28    points in Illinois will not be counted  as  interstate  trips
29    when  calculating  whether  the  tangible  personal  property
30    qualifies  for  the exemption but such trips will be included
31    in total trips taken.
32    (Source: P.A. 91-587, eff. 8-14-99.)
 
SB841 Enrolled             -38-      LRB093 02887 SJM 02903 b
 1        Section 20.  The Retailers' Occupation Tax Act is amended
 2    by changing Sections 2-5, 2-50, and 2-51 as follows:

 3        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
 4        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
 5    the sale of the  following  tangible  personal  property  are
 6    exempt 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 agriculture
11    or   State   or   federal  agricultural  programs,  including
12    individual replacement parts for the machinery and equipment,
13    including machinery and equipment purchased  for  lease,  and
14    including implements of husbandry defined in Section 1-130 of
15    the  Illinois  Vehicle  Code, farm machinery and agricultural
16    chemical and fertilizer spreaders, and nurse wagons  required
17    to  be registered under Section 3-809 of the Illinois Vehicle
18    Code, but excluding  other  motor  vehicles  required  to  be
19    registered  under  the  Illinois  Vehicle Code. Horticultural
20    polyhouses or hoop houses used for propagating,  growing,  or
21    overwintering  plants  shall be considered farm machinery and
22    equipment under this item (2). Agricultural  chemical  tender
23    tanks  and dry boxes shall include units sold separately from
24    a motor vehicle  required  to  be  licensed  and  units  sold
25    mounted  on  a  motor vehicle required to be licensed, if the
26    selling price of the tender is separately stated.
27        Farm machinery  and  equipment  shall  include  precision
28    farming  equipment  that  is  installed  or  purchased  to be
29    installed on farm machinery and equipment including, but  not
30    limited   to,   tractors,   harvesters,  sprayers,  planters,
31    seeders, or spreaders. Precision farming equipment  includes,
32    but  is  not  limited  to,  soil  testing sensors, computers,
33    monitors, software, global positioning and  mapping  systems,
 
SB841 Enrolled             -39-      LRB093 02887 SJM 02903 b
 1    and other such equipment.
 2        Farm  machinery  and  equipment  also includes computers,
 3    sensors, software, and related equipment  used  primarily  in
 4    the  computer-assisted  operation  of  production agriculture
 5    facilities,  equipment,  and  activities  such  as,  but  not
 6    limited to, the collection, monitoring,  and  correlation  of
 7    animal  and  crop  data for the purpose of formulating animal
 8    diets and agricultural chemicals.  This item  (7)  is  exempt
 9    from the provisions of Section 2-70.
10        (3)  Distillation machinery and equipment, sold as a unit
11    or  kit, assembled or installed by the retailer, certified by
12    the user to be used only for the production of ethyl  alcohol
13    that  will  be  used  for  consumption  as motor fuel or as a
14    component of motor fuel for the personal use of the user, and
15    not subject to sale or resale.
16        (4)  Graphic  arts  machinery  and  equipment,  including
17    repair  and  replacement  parts,  both  new  and  used,   and
18    including that manufactured on special order or purchased for
19    lease,  certified  by  the purchaser to be used primarily for
20    graphic arts  production.  Equipment  includes  chemicals  or
21    chemicals  acting  as  catalysts but only if the chemicals or
22    chemicals acting as catalysts effect a direct  and  immediate
23    change upon a graphic arts product.
24        (5)  A  motor  vehicle  of  the  first  division, a motor
25    vehicle of the second division that is a self-contained motor
26    vehicle designed or permanently converted to  provide  living
27    quarters  for  recreational,  camping,  or  travel  use, with
28    direct walk through access to the living  quarters  from  the
29    driver's seat, or a motor vehicle of the second division that
30    is  of  the van configuration designed for the transportation
31    of not less than 7 nor more than 16 passengers, as defined in
32    Section 1-146 of the Illinois Vehicle Code, that is used  for
33    automobile  renting,  as  defined  in  the Automobile Renting
34    Occupation and Use Tax Act.
 
SB841 Enrolled             -40-      LRB093 02887 SJM 02903 b
 1        (6)  Personal  property  sold  by   a   teacher-sponsored
 2    student   organization   affiliated  with  an  elementary  or
 3    secondary school located in Illinois.
 4        (7)  Proceeds of that portion of the selling price  of  a
 5    passenger car the sale of which is subject to the Replacement
 6    Vehicle Tax.
 7        (8)  Personal  property  sold  to an Illinois county fair
 8    association for use in conducting,  operating,  or  promoting
 9    the county fair.
10        (9)  Personal  property  sold to a not-for-profit arts or
11    cultural organization that establishes, by proof required  by
12    the  Department  by  rule,  that it has received an exemption
13    under Section 501(c)(3) of the Internal Revenue Code and that
14    is organized and operated primarily for the  presentation  or
15    support  of  arts  or  cultural  programming,  activities, or
16    services.  These organizations include, but are  not  limited
17    to,  music  and  dramatic arts organizations such as symphony
18    orchestras and theatrical groups, arts and  cultural  service
19    organizations,    local    arts    councils,    visual   arts
20    organizations, and media arts organizations. On and after the
21    effective date of this amendatory Act  of  the  92nd  General
22    Assembly,  however,  an  entity  otherwise  eligible for this
23    exemption shall not make tax-free purchases unless it has  an
24    active identification number issued by the Department.
25        (10)  Personal  property  sold by a corporation, society,
26    association, foundation, institution, or organization,  other
27    than  a  limited  liability  company,  that  is organized and
28    operated as  a  not-for-profit  service  enterprise  for  the
29    benefit  of  persons 65 years of age or older if the personal
30    property was not purchased by the enterprise for the  purpose
31    of resale by the enterprise.
32        (11)  Personal property sold to a governmental body, to a
33    corporation, society, association, foundation, or institution
34    organized and operated exclusively for charitable, religious,
 
SB841 Enrolled             -41-      LRB093 02887 SJM 02903 b
 1    or  educational purposes, or to a not-for-profit corporation,
 2    society,    association,    foundation,    institution,    or
 3    organization that has no compensated  officers  or  employees
 4    and   that  is  organized  and  operated  primarily  for  the
 5    recreation of persons 55 years of age  or  older.  A  limited
 6    liability  company  may  qualify for the exemption under this
 7    paragraph only if the limited liability company is  organized
 8    and  operated  exclusively  for  educational purposes. On and
 9    after July 1, 1987, however, no entity otherwise eligible for
10    this exemption shall make tax-free purchases unless it has an
11    active identification number issued by the Department.
12        (12)  Tangible  personal  property  sold  to   interstate
13    carriers  for  hire  for  use  as  rolling  stock  moving  in
14    interstate commerce or to lessors under leases of one year or
15    longer  executed  or  in  effect  at  the time of purchase by
16    interstate carriers for hire for use as rolling stock  moving
17    in   interstate   commerce   and   equipment  operated  by  a
18    telecommunications provider, licensed as a common carrier  by
19    the  Federal  Communications Commission, which is permanently
20    installed in or affixed  to  aircraft  moving  in  interstate
21    commerce.
22        (12-5)  On  and after July 1, 2003, motor vehicles of the
23    second division with a gross  vehicle  weight  in  excess  of
24    8,000  pounds that are subject to the commercial distribution
25    fee imposed under Section 3-815.1  of  the  Illinois  Vehicle
26    Code.  This exemption applies to repair and replacement parts
27    added after the initial purchase of such a motor  vehicle  if
28    that motor vehicle is used in a manner that would qualify for
29    the  rolling  stock  exemption otherwise provided for in this
30    Act.
31        (13)  Proceeds from sales to owners, lessors, or shippers
32    of tangible personal property that is utilized by  interstate
33    carriers  for  hire  for  use  as  rolling  stock  moving  in
34    interstate    commerce    and   equipment   operated   by   a
 
SB841 Enrolled             -42-      LRB093 02887 SJM 02903 b
 1    telecommunications provider, licensed as a common carrier  by
 2    the  Federal  Communications Commission, which is permanently
 3    installed in or affixed  to  aircraft  moving  in  interstate
 4    commerce.
 5        (14)  Machinery  and  equipment  that will be used by the
 6    purchaser, or a lessee of the  purchaser,  primarily  in  the
 7    process  of  manufacturing  or  assembling  tangible personal
 8    property for wholesale or retail sale or lease,  whether  the
 9    sale or lease is made directly by the manufacturer or by some
10    other  person,  whether the materials used in the process are
11    owned by the manufacturer or some other  person,  or  whether
12    the sale or lease is made apart from or as an incident to the
13    seller's  engaging  in  the  service  occupation of producing
14    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
15    similar  items  of no commercial value on special order for a
16    particular purchaser.
17        (15)  Proceeds of mandatory  service  charges  separately
18    stated  on  customers'  bills for purchase and consumption of
19    food and beverages, to the extent that the  proceeds  of  the
20    service  charge  are  in  fact  turned  over  as tips or as a
21    substitute for tips to the employees who participate directly
22    in preparing, serving, hosting or cleaning  up  the  food  or
23    beverage function with respect to which the service charge is
24    imposed.
25        (16)  Petroleum  products  sold  to  a  purchaser  if the
26    seller is prohibited by federal law from charging tax to  the
27    purchaser.
28        (17)  Tangible personal property sold to a common carrier
29    by rail or motor that receives the physical possession of the
30    property  in  Illinois  and  that transports the property, or
31    shares with another common carrier in the  transportation  of
32    the  property,  out of Illinois on a standard uniform bill of
33    lading showing the seller of the property as the  shipper  or
34    consignor  of the property to a destination outside Illinois,
 
SB841 Enrolled             -43-      LRB093 02887 SJM 02903 b
 1    for use outside Illinois.
 2        (18)  Legal tender,  currency,  medallions,  or  gold  or
 3    silver   coinage   issued  by  the  State  of  Illinois,  the
 4    government of the United States of America, or the government
 5    of any foreign country, and bullion.
 6        (19)  Oil field  exploration,  drilling,  and  production
 7    equipment, including (i) rigs and parts of rigs, rotary rigs,
 8    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
 9    goods, including casing and drill strings,  (iii)  pumps  and
10    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
11    individual  replacement  part  for  oil  field   exploration,
12    drilling,  and  production  equipment, and (vi) machinery and
13    equipment purchased for lease; but excluding  motor  vehicles
14    required to be registered under the Illinois Vehicle Code.
15        (20)  Photoprocessing  machinery and equipment, including
16    repair and replacement parts, both new  and  used,  including
17    that   manufactured   on  special  order,  certified  by  the
18    purchaser to  be  used  primarily  for  photoprocessing,  and
19    including  photoprocessing  machinery and equipment purchased
20    for lease.
21        (21)  Coal  exploration,  mining,   offhighway   hauling,
22    processing, maintenance, and reclamation equipment, including
23    replacement  parts  and  equipment,  and  including equipment
24    purchased for lease, but excluding motor vehicles required to
25    be registered under the Illinois Vehicle Code.
26        (22)  Fuel and petroleum products sold to or used  by  an
27    air  carrier,  certified  by  the  carrier  to  be  used  for
28    consumption,  shipment,  or  storage  in  the  conduct of its
29    business as an air common carrier, for a flight destined  for
30    or  returning from a location or locations outside the United
31    States without regard  to  previous  or  subsequent  domestic
32    stopovers.
33        (23)  A  transaction  in  which  the  purchase  order  is
34    received  by  a  florist who is located outside Illinois, but
 
SB841 Enrolled             -44-      LRB093 02887 SJM 02903 b
 1    who has a florist located in Illinois deliver the property to
 2    the purchaser or the purchaser's donee in Illinois.
 3        (24)  Fuel consumed or used in the  operation  of  ships,
 4    barges,  or  vessels  that  are  used primarily in or for the
 5    transportation of property or the conveyance of  persons  for
 6    hire  on  rivers  bordering  on  this  State  if  the fuel is
 7    delivered by the seller to the purchaser's  barge,  ship,  or
 8    vessel while it is afloat upon that bordering river.
 9        (25)  A motor vehicle sold in this State to a nonresident
10    even though the motor vehicle is delivered to the nonresident
11    in  this  State,  if the motor vehicle is not to be titled in
12    this State, and if a drive-away permit is issued to the motor
13    vehicle as provided in Section 3-603 of the Illinois  Vehicle
14    Code or if the nonresident purchaser has vehicle registration
15    plates to transfer to the motor vehicle upon returning to his
16    or  her home state.  The issuance of the drive-away permit or
17    having the out-of-state registration plates to be transferred
18    is prima facie evidence that the motor vehicle  will  not  be
19    titled in this State.
20        (26)  Semen used for artificial insemination of livestock
21    for direct agricultural production.
22        (27)  Horses, or interests in horses, registered with and
23    meeting  the  requirements  of  any of the Arabian Horse Club
24    Registry of America, Appaloosa Horse Club,  American  Quarter
25    Horse  Association,  United  States  Trotting Association, or
26    Jockey Club, as appropriate, used for purposes of breeding or
27    racing for prizes.
28        (28)  Computers and communications equipment utilized for
29    any hospital purpose and equipment  used  in  the  diagnosis,
30    analysis,  or treatment of hospital patients sold to a lessor
31    who leases the equipment, under a lease of one year or longer
32    executed or in effect at the  time  of  the  purchase,  to  a
33    hospital  that  has  been  issued  an  active  tax  exemption
34    identification  number  by the Department under Section 1g of
 
SB841 Enrolled             -45-      LRB093 02887 SJM 02903 b
 1    this Act.
 2        (29)  Personal property sold to a lessor who  leases  the
 3    property,  under a lease of one year or longer executed or in
 4    effect at the time of the purchase, to  a  governmental  body
 5    that  has  been issued an active tax exemption identification
 6    number by the Department under Section 1g of this Act.
 7        (30)  Beginning with taxable years  ending  on  or  after
 8    December  31, 1995 and ending with taxable years ending on or
 9    before December 31, 2004, personal property that  is  donated
10    for  disaster  relief  to  be  used  in  a State or federally
11    declared disaster area in Illinois or bordering Illinois by a
12    manufacturer or retailer that is registered in this State  to
13    a   corporation,   society,   association,   foundation,   or
14    institution  that  has  been  issued  a  sales  tax exemption
15    identification number by the Department that assists  victims
16    of the disaster who reside within the declared disaster area.
17        (31)  Beginning  with  taxable  years  ending on or after
18    December 31, 1995 and ending with taxable years ending on  or
19    before  December  31, 2004, personal property that is used in
20    the performance of  infrastructure  repairs  in  this  State,
21    including  but  not  limited  to municipal roads and streets,
22    access roads, bridges,  sidewalks,  waste  disposal  systems,
23    water  and  sewer  line  extensions,  water  distribution and
24    purification facilities, storm water drainage  and  retention
25    facilities, and sewage treatment facilities, resulting from a
26    State or federally declared disaster in Illinois or bordering
27    Illinois  when  such  repairs  are  initiated  on  facilities
28    located  in  the declared disaster area within 6 months after
29    the disaster.
30        (32)  Beginning July 1, 1999, game or game birds sold  at
31    a  "game  breeding  and  hunting preserve area" or an "exotic
32    game hunting area" as those terms are used  in  the  Wildlife
33    Code or at a hunting enclosure approved through rules adopted
34    by  the  Department  of Natural Resources.  This paragraph is
 
SB841 Enrolled             -46-      LRB093 02887 SJM 02903 b
 1    exempt from the provisions of Section 2-70.
 2        (33)  A motor vehicle, as that term is defined in Section
 3    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
 4    corporation, limited liability company, society, association,
 5    foundation,   or   institution  that  is  determined  by  the
 6    Department to  be  organized  and  operated  exclusively  for
 7    educational  purposes.   For  purposes  of this exemption, "a
 8    corporation, limited liability company, society, association,
 9    foundation, or institution organized and operated exclusively
10    for educational  purposes"  means  all  tax-supported  public
11    schools, private schools that offer systematic instruction in
12    useful  branches  of  learning  by  methods  common to public
13    schools  and  that  compare  favorably  in  their  scope  and
14    intensity with the course of study presented in tax-supported
15    schools, and vocational or technical  schools  or  institutes
16    organized  and  operated  exclusively  to provide a course of
17    study of not less than  6  weeks  duration  and  designed  to
18    prepare  individuals to follow a trade or to pursue a manual,
19    technical, mechanical, industrial,  business,  or  commercial
20    occupation.
21        (34)  Beginning   January  1,  2000,  personal  property,
22    including food, purchased through fundraising events for  the
23    benefit  of  a  public  or  private  elementary  or secondary
24    school, a group of those  schools,  or  one  or  more  school
25    districts if the events are sponsored by an entity recognized
26    by  the school district that consists primarily of volunteers
27    and includes parents and teachers  of  the  school  children.
28    This  paragraph  does not apply to fundraising events (i) for
29    the benefit of private home instruction or (ii) for which the
30    fundraising entity purchases the personal  property  sold  at
31    the  events  from  another individual or entity that sold the
32    property for the purpose of resale by the fundraising  entity
33    and  that  profits  from  the sale to the fundraising entity.
34    This paragraph is exempt from the provisions of Section 2-70.
 
SB841 Enrolled             -47-      LRB093 02887 SJM 02903 b
 1        (35)  Beginning January 1, 2000 and through December  31,
 2    2001, new or used automatic vending machines that prepare and
 3    serve  hot  food  and  beverages, including coffee, soup, and
 4    other  items,  and  replacement  parts  for  these  machines.
 5    Beginning January 1, 2002, machines and  parts  for  machines
 6    used  in  commercial,  coin-operated  amusement  and  vending
 7    business  if  a  use  or  occupation tax is paid on the gross
 8    receipts  derived   from   the   use   of   the   commercial,
 9    coin-operated amusement and vending machines.  This paragraph
10    is exempt from the provisions of Section 2-70.
11        (35-5)  (36)  Food  for  human  consumption that is to be
12    consumed off the  premises  where  it  is  sold  (other  than
13    alcoholic  beverages,  soft  drinks,  and  food that has been
14    prepared for  immediate  consumption)  and  prescription  and
15    nonprescription  medicines,  drugs,  medical  appliances, and
16    insulin, urine testing materials, syringes, and needles  used
17    by  diabetics,  for  human  use,  when purchased for use by a
18    person receiving medical assistance under Article  5  of  the
19    Illinois  Public Aid Code who resides in a licensed long-term
20    care facility, as defined in the Nursing Home Care Act.
21        (36)  Beginning August 2, 2001 on the effective  date  of
22    this  amendatory  Act of the 92nd General Assembly, computers
23    and  communications  equipment  utilized  for  any   hospital
24    purpose  and  equipment  used  in the diagnosis, analysis, or
25    treatment of hospital patients sold to a  lessor  who  leases
26    the  equipment,  under a lease of one year or longer executed
27    or in effect at the time of the purchase, to a hospital  that
28    has been issued an active tax exemption identification number
29    by  the  Department  under  Section  1g  of  this  Act.  This
30    paragraph is exempt from the provisions of Section 2-70.
31        (37)  Beginning August 2, 2001 on the effective  date  of
32    this  amendatory  Act  of the 92nd General Assembly, personal
33    property sold to a lessor who leases the  property,  under  a
34    lease of one year or longer executed or in effect at the time
 
SB841 Enrolled             -48-      LRB093 02887 SJM 02903 b
 1    of  the purchase, to a governmental body that has been issued
 2    an  active  tax  exemption  identification  number   by   the
 3    Department  under  Section 1g of this Act.  This paragraph is
 4    exempt from the provisions of Section 2-70.
 5        (38)  Beginning on January  1,  2002,  tangible  personal
 6    property  purchased  from  an Illinois retailer by a taxpayer
 7    engaged in centralized purchasing activities in Illinois  who
 8    will,  upon  receipt of the property in Illinois, temporarily
 9    store the  property  in  Illinois  (i)  for  the  purpose  of
10    subsequently  transporting  it  outside this State for use or
11    consumption thereafter solely outside this State or (ii)  for
12    the  purpose  of being processed, fabricated, or manufactured
13    into,  attached  to,  or  incorporated  into  other  tangible
14    personal property to be transported outside  this  State  and
15    thereafter  used  or consumed solely outside this State.  The
16    Director of Revenue  shall,  pursuant  to  rules  adopted  in
17    accordance  with  the  Illinois Administrative Procedure Act,
18    issue a permit to any taxpayer  in  good  standing  with  the
19    Department  who  is  eligible  for  the  exemption under this
20    paragraph (38).  The permit issued under this paragraph  (38)
21    shall  authorize  the holder, to the extent and in the manner
22    specified in the rules adopted under this  Act,  to  purchase
23    tangible  personal  property  from a retailer exempt from the
24    taxes imposed by this  Act.   Taxpayers  shall  maintain  all
25    necessary  books  and  records  to  substantiate  the use and
26    consumption of all such tangible personal property outside of
27    the State of Illinois.
28    (Source: P.A. 91-51,  eff.  6-30-99;  91-200,  eff.  7-20-99;
29    91-439,  eff.  8-6-99;  91-533,  eff.  8-13-99;  91-637, eff.
30    8-20-99; 91-644, eff. 8-20-99;  92-16, eff.  6-28-01;  92-35,
31    eff.  7-1-01;  92-227,  eff.  8-2-01;  92-337,  eff. 8-10-01;
32    92-484, eff. 8-23-01;  92-488,  eff.  8-23-01;  92-651,  eff.
33    7-11-02; 92-680, eff. 7-16-02; revised 1-26-03.)
 
SB841 Enrolled             -49-      LRB093 02887 SJM 02903 b
 1        (35 ILCS 120/2-50) (from Ch. 120, par. 441-50)
 2        Sec.  2-50.  Rolling stock exemption.  Except as provided
 3    in Section 2-51 of this  Act,  the  rolling  stock  exemption
 4    applies  to  rolling  stock used by an interstate carrier for
 5    hire, even just between points in Illinois, if the    rolling
 6    stock   transports,  for  hire,  persons  whose  journeys  or
 7    property  whose  shipments  originate  or  terminate  outside
 8    Illinois.
 9    (Source: P.A. 91-51, eff. 6-30-99.)

10        (35 ILCS 120/2-51)
11        Sec.  2-51.   Motor  vehicles;  use  as   rolling   stock
12    definition.   Through  June  30,  2003, "use as rolling stock
13    moving in interstate commerce" in paragraphs (12) and (13) of
14    Section 2-5 means for motor vehicles, as defined  in  Section
15    1-146  of the Illinois Vehicle Code, and trailers, as defined
16    in Section 1-209 of the Illinois Vehicle Code, when on 15  or
17    more  occasions  in  a  12-month period the motor vehicle and
18    trailer  has  carried  persons  or  property  for   hire   in
19    interstate commerce, even just between points in Illinois, if
20    the  motor  vehicle  and  trailer  transports  persons  whose
21    journeys  or  property whose shipments originate or terminate
22    outside Illinois.  This definition applies  to  all  property
23    purchased  for  the  purpose of being attached to those motor
24    vehicles or trailers as a part thereof. On and after July  1,
25    2003, "use as rolling stock moving in interstate commerce" in
26    paragraphs  (12)  and  (13)  of  Section 2-5 occurs for motor
27    vehicles, as defined in Section 1-146 of the Illinois Vehicle
28    Code, when during a 12-month period  the  rolling  stock  has
29    carried  persons  or property for hire in interstate commerce
30    for 51% of its  total  trips  and  transports  persons  whose
31    journeys  or  property whose shipments originate or terminate
32    outside Illinois. Trips  that  are  only  between  points  in
33    Illinois  shall  not  be  counted  as  interstate  trips when
 
SB841 Enrolled             -50-      LRB093 02887 SJM 02903 b
 1    calculating whether the tangible personal property  qualifies
 2    for  the  exemption but such trips shall be included in total
 3    trips taken.
 4    (Source: P.A. 91-587, eff. 8-14-99.)

 5        Section 25.  The Illinois  Vehicle  Code  is  amended  by
 6    changing  Sections  3-402.1  and 20-101 and by adding Section
 7    3-815.1 as follows:

 8        (625 ILCS 5/3-402.1) (from Ch. 95 1/2, par. 3-402.1)
 9        Sec. 3-402.1.  Proportional Registration.  Any  owner  or
10    rental  owner  engaged  in operating a fleet of apportionable
11    vehicles in this state and one or more other states  may,  in
12    lieu  of  registration  of  such  vehicles  under the general
13    provisions of sections  3-402,  3-815,  3-815.1,  and  3-819,
14    register  and license such fleet for operations in this state
15    by filing an application statement, signed under penalties of
16    perjury, with the Secretary of State which shall be  in  such
17    form  and  contain such information as the Secretary of State
18    shall require, declaring the total mileage  operated  in  all
19    states  by  such  fleet,  the  total mileage operated in this
20    state by such fleet during the preceding year, and describing
21    and identifying each apportionable vehicle to be operated  in
22    this  state  during the ensuing year.  If mileage data is not
23    available for the preceding year, the Secretary of State  may
24    accept the latest 12-month period available. "Preceding year"
25    means  the  period of 12 consecutive months immediately prior
26    to  July  1st  of  the   year   immediately   preceding   the
27    registration   or   license   year   for  which  proportional
28    registration is sought.
29        Such owner shall determine  the  proportion  of  in-state
30    miles  to total fleet miles.  Such percentage figure shall be
31    such owner's apportionment factor.  In determining the  total
32    fee  payment,  such owner shall first compute the license fee
 
SB841 Enrolled             -51-      LRB093 02887 SJM 02903 b
 1    or fees  for  each  vehicle  within  the  fleet  which  would
 2    otherwise  be  required, and then multiply the said amount by
 3    the Illinois apportionment factor adding the  fees  for  each
 4    vehicle   to   arrive  at  a  total  amount  for  the  fleet.
 5    Apportionable trailers and semitrailers will be registered in
 6    accordance with the provisions of Section 3-813 of this Code.
 7        Upon receipt of the appropriate fees from such  owner  as
 8    computed  under the provisions of this section, the Secretary
 9    of State shall, when this state  is  the  base  jurisdiction,
10    issue  to  such owner number plates or other distinctive tags
11    or such evidence of registration as the  Secretary  of  State
12    shall  deem appropriate to identify each vehicle in the fleet
13    as a part of a proportionally registered interstate fleet.
14        Vehicles registered under the provision of  this  section
15    shall be considered fully licensed and properly registered in
16    Illinois   for  any  type  of  movement  or  operation.   The
17    proportional registration and licensing  provisions  of  this
18    section  shall apply to vehicles added to fleets and operated
19    in this state during the registration year, applying the same
20    apportionment factor to such fees as would be payable for the
21    remainder of the registration year.
22        Apportionment  factors  for  apportionable  vehicles  not
23    operated in this state during the  preceding  year  shall  be
24    determined  by  the Secretary of State on the basis of a full
25    statement  of  the  proposed  methods  of  operation  and  in
26    conformity with an estimated mileage chart as  calculated  by
27    the  Secretary  of State.  An established fleet adding states
28    at the time of renewal shall estimate mileage for  the  added
29    states  in  conformity  with a mileage chart developed by the
30    Secretary of State.
31    (Source: P.A. 90-89, eff. 1-1-98.)

32        (625 ILCS 5/3-815.1 new)
33        Sec.  3-815.1.  Commercial  distribution  fee.  Beginning
 
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 1    July 1, 2003, in addition to any tax  or  fee  imposed  under
 2    this Code:
 3        (a)  vehicles of the second division with a gross vehicle
 4    weight that exceeds 8,000 pounds and that incur  any  tax  or
 5    fee  under  subsection  (a)  of Section 3-815 of this Code or
 6    subsection (a) of Section 3-818 of this Code, as  applicable,
 7    and  shall  pay  to  the  Secretary  of  State  a  commercial
 8    distribution  fee, for each registration year, for the use of
 9    the  public  highways,  State   infrastructure,   and   State
10    services,  in  an  amount  equal to 36% of the taxes and fees
11    incurred under subsection (a) of Section 3-815 of this  Code,
12    or   subsection  (a)  of  Section  3-818  of  this  Code,  as
13    applicable, rounded up to the nearest whole dollar.
14        (b)  vehicles of the second division with a gross vehicle
15    weight of 8,000 pounds or less and that incur any tax or  fee
16    under  subsection  (a)  of  Section  3-815  of  this  Code or
17    subsection (a) of Section 3-818 of this Code, as  applicable,
18    and  have  claimed  the  rolling  stock  exemption  under the
19    Retailers'  Occupation  Tax  Act,  Use   Tax   Act,   Service
20    Occupation  Tax  Act, or Service Use Tax Act shall pay to the
21    Illinois Department of Revenue (or  the  Secretary  of  State
22    under    an   intergovernmental   agreement)   a   commercial
23    distribution fee, for each registration year, for the use  of
24    the   public   highways,   State  infrastructure,  and  State
25    services, in an amount equal to 36% of  the  taxes  and  fees
26    incurred  under  subsection (a) of Section 3-815 of this Code
27    or  subsection  (a)  of  Section  3-818  of  this  Code,   as
28    applicable, rounded up to the nearest whole dollar.
29        The  fees  paid  under this Section shall be deposited by
30    the Secretary of State into the General Revenue Fund.

31        (625 ILCS 5/20-101) (from Ch. 95 1/2, par. 20-101)
32        Sec. 20-101. Moneys derived from registration,  operation
33    and  use  of  automobiles and from fuel taxes - Use. From and
 
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 1    after the effective date of this Act, except as  provided  in
 2    Section  3-815.1  of this Code, no public moneys derived from
 3    fees, excises or  license  taxes  relating  to  registration,
 4    operation  and use of vehicles on public highways or to fuels
 5    used  for  the  propulsion  of  such   vehicles,   shall   be
 6    appropriated   or   expended   other   than   for   costs  of
 7    administering  the  laws  imposing  such  fees,  excises  and
 8    license taxes,  statutory  refunds  and  adjustments  allowed
 9    thereunder,   administrative   costs  of  the  Department  of
10    Transportation, payment of debts and liabilities incurred  in
11    construction   and  reconstruction  of  public  highways  and
12    bridges, acquisition of rights-of-way for, and  the  cost  of
13    construction,   reconstruction,   maintenance,   repair   and
14    operation  of public highways and bridges under the direction
15    and  supervision  of  the  State,  political  subdivision  or
16    municipality  collecting  such  moneys,  and  the  costs  for
17    patrolling and policing the public highways  (by  the  State,
18    political  subdivision or municipality collecting such money)
19    for enforcement of traffic laws; provided, that  such  moneys
20    may  be  used  for  the  retirement  of and interest on bonds
21    heretofore issued for purposes other than the construction of
22    public highways or bridges but not to a greater extent, nor a
23    greater length of time, than is provided in  acts  heretofore
24    adopted and now in force. Further the separation of grades of
25    such  highways  with  railroads  and  costs  associated  with
26    protection  of  at-grade highway and railroad crossings shall
27    also be permissible.
28    (Source: P.A. 81-2nd S.S.-3.)

29        Section 99.  Effective date.  This Act takes effect  upon
30    becoming law.