94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB0033

 

Introduced 12/15/2004, by Rep. Robert W. Pritchard

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-5   from Ch. 120, par. 439.3-5
35 ILCS 105/3-5.5
35 ILCS 105/3-10   from Ch. 120, par. 439.3-10
35 ILCS 110/3-5   from Ch. 120, par. 439.33-5
35 ILCS 110/3-5.5
35 ILCS 110/3-10   from Ch. 120, par. 439.33-10
35 ILCS 115/3-5   from Ch. 120, par. 439.103-5
35 ILCS 115/3-5.5
35 ILCS 115/3-10   from Ch. 120, par. 439.103-10
35 ILCS 120/2-5   from Ch. 120, par. 441-5
35 ILCS 120/2-5.5
35 ILCS 120/2-10   from Ch. 120, par. 441-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides for tax exemptions for: (i) certain users of ostomy supplies who reside in licensed long-term care facilities and (ii) not-for-profit sellers of ostomy supplies. Provides that the rate of tax on ostomy supplies is 1% (instead of 6.25%).


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 5. The Use Tax Act is amended by changing Sections
5 3-5, 3-5.5, and 3-10 as follows:
 
6     (35 ILCS 105/3-5)  (from Ch. 120, par. 439.3-5)
7     Sec. 3-5. Exemptions. Use of the following tangible
8 personal property is exempt from the tax imposed by this Act:
9     (1) Personal property purchased from a corporation,
10 society, association, foundation, institution, or
11 organization, other than a limited liability company, that is
12 organized and operated as a not-for-profit service enterprise
13 for the benefit of persons 65 years of age or older if the
14 personal property was not purchased by the enterprise for the
15 purpose of resale by the enterprise.
16     (2) Personal property purchased by a not-for-profit
17 Illinois county fair association for use in conducting,
18 operating, or promoting the county fair.
19     (3) Personal property purchased by a not-for-profit arts or
20 cultural organization that establishes, by proof required by
21 the Department by rule, that it has received an exemption under
22 Section 501(c)(3) of the Internal Revenue Code and that is
23 organized and operated primarily for the presentation or
24 support of arts or cultural programming, activities, or
25 services. These organizations include, but are not limited to,
26 music and dramatic arts organizations such as symphony
27 orchestras and theatrical groups, arts and cultural service
28 organizations, local arts councils, visual arts organizations,
29 and media arts organizations. On and after the effective date
30 of this amendatory Act of the 92nd General Assembly, however,
31 an entity otherwise eligible for this exemption shall not make
32 tax-free purchases unless it has an active identification

 

 

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1 number issued by the Department.
2     (4) Personal property purchased by a governmental body, by
3 a corporation, society, association, foundation, or
4 institution organized and operated exclusively for charitable,
5 religious, or educational purposes, or by a not-for-profit
6 corporation, society, association, foundation, institution, or
7 organization that has no compensated officers or employees and
8 that is organized and operated primarily for the recreation of
9 persons 55 years of age or older. A limited liability company
10 may qualify for the exemption under this paragraph only if the
11 limited liability company is organized and operated
12 exclusively for educational purposes. On and after July 1,
13 1987, however, no entity otherwise eligible for this exemption
14 shall make tax-free purchases unless it has an active exemption
15 identification number issued by the Department.
16     (5) Until July 1, 2003, a passenger car that is a
17 replacement vehicle to the extent that the purchase price of
18 the car is subject to the Replacement Vehicle Tax.
19     (6) Until July 1, 2003 and beginning again on September 1,
20 2004, graphic arts machinery and equipment, including repair
21 and replacement parts, both new and used, and including that
22 manufactured on special order, certified by the purchaser to be
23 used primarily for graphic arts production, and including
24 machinery and equipment purchased for lease. Equipment
25 includes chemicals or chemicals acting as catalysts but only if
26 the chemicals or chemicals acting as catalysts effect a direct
27 and immediate change upon a graphic arts product.
28     (7) Farm chemicals.
29     (8) Legal tender, currency, medallions, or gold or silver
30 coinage issued by the State of Illinois, the government of the
31 United States of America, or the government of any foreign
32 country, and bullion.
33     (9) Personal property purchased from a teacher-sponsored
34 student organization affiliated with an elementary or
35 secondary school located in Illinois.
36     (10) A motor vehicle of the first division, a motor vehicle

 

 

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1 of the second division that is a self-contained motor vehicle
2 designed or permanently converted to provide living quarters
3 for recreational, camping, or travel use, with direct walk
4 through to the living quarters from the driver's seat, or a
5 motor vehicle of the second division that is of the van
6 configuration designed for the transportation of not less than
7 7 nor more than 16 passengers, as defined in Section 1-146 of
8 the Illinois Vehicle Code, that is used for automobile renting,
9 as defined in the Automobile Renting Occupation and Use Tax
10 Act.
11     (11) Farm machinery and equipment, both new and used,
12 including that manufactured on special order, certified by the
13 purchaser to be used primarily for production agriculture or
14 State or federal agricultural programs, including individual
15 replacement parts for the machinery and equipment, including
16 machinery and equipment purchased for lease, and including
17 implements of husbandry defined in Section 1-130 of the
18 Illinois Vehicle Code, farm machinery and agricultural
19 chemical and fertilizer spreaders, and nurse wagons required to
20 be registered under Section 3-809 of the Illinois Vehicle Code,
21 but excluding other motor vehicles required to be registered
22 under the Illinois Vehicle Code. Horticultural polyhouses or
23 hoop houses used for propagating, growing, or overwintering
24 plants shall be considered farm machinery and equipment under
25 this item (11). Agricultural chemical tender tanks and dry
26 boxes shall include units sold separately from a motor vehicle
27 required to be licensed and units sold mounted on a motor
28 vehicle required to be licensed if the selling price of the
29 tender is separately stated.
30     Farm machinery and equipment shall include precision
31 farming equipment that is installed or purchased to be
32 installed on farm machinery and equipment including, but not
33 limited to, tractors, harvesters, sprayers, planters, seeders,
34 or spreaders. Precision farming equipment includes, but is not
35 limited to, soil testing sensors, computers, monitors,
36 software, global positioning and mapping systems, and other

 

 

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1 such equipment.
2     Farm machinery and equipment also includes computers,
3 sensors, software, and related equipment used primarily in the
4 computer-assisted operation of production agriculture
5 facilities, equipment, and activities such as, but not limited
6 to, the collection, monitoring, and correlation of animal and
7 crop data for the purpose of formulating animal diets and
8 agricultural chemicals. This item (11) is exempt from the
9 provisions of Section 3-90.
10     (12) Fuel and petroleum products sold to or used by an air
11 common carrier, certified by the carrier to be used for
12 consumption, shipment, or storage in the conduct of its
13 business as an air common carrier, for a flight destined for or
14 returning from a location or locations outside the United
15 States without regard to previous or subsequent domestic
16 stopovers.
17     (13) Proceeds of mandatory service charges separately
18 stated on customers' bills for the purchase and consumption of
19 food and beverages purchased at retail from a retailer, to the
20 extent that the proceeds of the service charge are in fact
21 turned over as tips or as a substitute for tips to the
22 employees who participate directly in preparing, serving,
23 hosting or cleaning up the food or beverage function with
24 respect to which the service charge is imposed.
25     (14) Until July 1, 2003, oil field exploration, drilling,
26 and production equipment, including (i) rigs and parts of rigs,
27 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
28 tubular goods, including casing and drill strings, (iii) pumps
29 and pump-jack units, (iv) storage tanks and flow lines, (v) any
30 individual replacement part for oil field exploration,
31 drilling, and production equipment, and (vi) machinery and
32 equipment purchased for lease; but excluding motor vehicles
33 required to be registered under the Illinois Vehicle Code.
34     (15) Photoprocessing machinery and equipment, including
35 repair and replacement parts, both new and used, including that
36 manufactured on special order, certified by the purchaser to be

 

 

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1 used primarily for photoprocessing, and including
2 photoprocessing machinery and equipment purchased for lease.
3     (16) Until July 1, 2003, coal exploration, mining,
4 offhighway hauling, processing, maintenance, and reclamation
5 equipment, including replacement parts and equipment, and
6 including equipment purchased for lease, but excluding motor
7 vehicles required to be registered under the Illinois Vehicle
8 Code.
9     (17) Until July 1, 2003, distillation machinery and
10 equipment, sold as a unit or kit, assembled or installed by the
11 retailer, certified by the user to be used only for the
12 production of ethyl alcohol that will be used for consumption
13 as motor fuel or as a component of motor fuel for the personal
14 use of the user, and not subject to sale or resale.
15     (18) Manufacturing and assembling machinery and equipment
16 used primarily in the process of manufacturing or assembling
17 tangible personal property for wholesale or retail sale or
18 lease, whether that sale or lease is made directly by the
19 manufacturer or by some other person, whether the materials
20 used in the process are owned by the manufacturer or some other
21 person, or whether that sale or lease is made apart from or as
22 an incident to the seller's engaging in the service occupation
23 of producing machines, tools, dies, jigs, patterns, gauges, or
24 other similar items of no commercial value on special order for
25 a particular purchaser.
26     (19) Personal property delivered to a purchaser or
27 purchaser's donee inside Illinois when the purchase order for
28 that personal property was received by a florist located
29 outside Illinois who has a florist located inside Illinois
30 deliver the personal property.
31     (20) Semen used for artificial insemination of livestock
32 for direct agricultural production.
33     (21) Horses, or interests in horses, registered with and
34 meeting the requirements of any of the Arabian Horse Club
35 Registry of America, Appaloosa Horse Club, American Quarter
36 Horse Association, United States Trotting Association, or

 

 

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

 

 

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1 non-qualifying use occurs. No lessor shall collect or attempt
2 to collect an amount (however designated) that purports to
3 reimburse that lessor for the tax imposed by this Act or the
4 Service Use Tax Act, as the case may be, if the tax has not been
5 paid by the lessor. If a lessor improperly collects any such
6 amount from the lessee, the lessee shall have a legal right to
7 claim a refund of that amount from the lessor. If, however,
8 that amount is not refunded to the lessee for any reason, the
9 lessor is liable to pay that amount to the Department.
10     (24) Beginning with taxable years ending on or after
11 December 31, 1995 and ending with taxable years ending on or
12 before December 31, 2004, personal property that is donated for
13 disaster relief to be used in a State or federally declared
14 disaster area in Illinois or bordering Illinois by a
15 manufacturer or retailer that is registered in this State to a
16 corporation, society, association, foundation, or institution
17 that has been issued a sales tax exemption identification
18 number by the Department that assists victims of the disaster
19 who reside within the declared disaster area.
20     (25) Beginning with taxable years ending on or after
21 December 31, 1995 and ending with taxable years ending on or
22 before December 31, 2004, personal property that is used in the
23 performance of infrastructure repairs in this State, including
24 but not limited to municipal roads and streets, access roads,
25 bridges, sidewalks, waste disposal systems, water and sewer
26 line extensions, water distribution and purification
27 facilities, storm water drainage and retention facilities, and
28 sewage treatment facilities, resulting from a State or
29 federally declared disaster in Illinois or bordering Illinois
30 when such repairs are initiated on facilities located in the
31 declared disaster area within 6 months after the disaster.
32     (26) Beginning July 1, 1999, game or game birds purchased
33 at a "game breeding and hunting preserve area" or an "exotic
34 game hunting area" as those terms are used in the Wildlife Code
35 or at a hunting enclosure approved through rules adopted by the
36 Department of Natural Resources. This paragraph is exempt from

 

 

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1 the provisions of Section 3-90.
2     (27) 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 Department
6 to be organized and operated exclusively for educational
7 purposes. For purposes of this exemption, "a corporation,
8 limited liability company, society, association, foundation,
9 or institution organized and operated exclusively for
10 educational purposes" means all tax-supported public schools,
11 private schools that offer systematic instruction in useful
12 branches of learning by methods common to public schools and
13 that compare favorably in their scope and intensity with the
14 course of study presented in tax-supported schools, and
15 vocational or technical schools or institutes organized and
16 operated exclusively to provide a course of study of not less
17 than 6 weeks duration and designed to prepare individuals to
18 follow a trade or to pursue a manual, technical, mechanical,
19 industrial, business, or commercial occupation.
20     (28) Beginning January 1, 2000, personal property,
21 including food, purchased through fundraising events for the
22 benefit of a public or private elementary or secondary school,
23 a group of those schools, or one or more school districts if
24 the events are sponsored by an entity recognized by the school
25 district that consists primarily of volunteers and includes
26 parents and teachers of the school children. This paragraph
27 does not apply to fundraising events (i) for the benefit of
28 private home instruction or (ii) for which the fundraising
29 entity purchases the personal property sold at the events from
30 another individual or entity that sold the property for the
31 purpose of resale by the fundraising entity and that profits
32 from the sale to the fundraising entity. This paragraph is
33 exempt from the provisions of Section 3-90.
34     (29) Beginning January 1, 2000 and through December 31,
35 2001, new or used automatic vending machines that prepare and
36 serve hot food and beverages, including coffee, soup, and other

 

 

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1 items, and replacement parts for these machines. Beginning
2 January 1, 2002 and through June 30, 2003, machines and parts
3 for machines used in commercial, coin-operated amusement and
4 vending business if a use or occupation tax is paid on the
5 gross receipts derived from the use of the commercial,
6 coin-operated amusement and vending machines. This paragraph
7 is exempt from the provisions of Section 3-90.
8     (30) Food for human consumption that is to be consumed off
9 the premises where it is sold (other than alcoholic beverages,
10 soft drinks, and food that has been prepared for immediate
11 consumption) and prescription and nonprescription medicines,
12 drugs, medical appliances, colostomy bags and other supplies
13 and equipment used for the care of ostomy patients, and
14 insulin, urine testing materials, syringes, and needles used by
15 diabetics, for human use, when purchased for use by a person
16 receiving medical assistance under Article 5 of the Illinois
17 Public Aid Code who resides in a licensed long-term care
18 facility, as defined in the Nursing Home Care Act.
19     (31) Beginning on the effective date of this amendatory Act
20 of the 92nd General Assembly, computers and communications
21 equipment utilized for any hospital purpose and equipment used
22 in the diagnosis, analysis, or treatment of hospital patients
23 purchased by a lessor who leases the equipment, under a lease
24 of one year or longer executed or in effect at the time the
25 lessor would otherwise be subject to the tax imposed by this
26 Act, to a hospital that has been issued an active tax exemption
27 identification number by the Department under Section 1g of the
28 Retailers' Occupation Tax Act. If the equipment is leased in a
29 manner that does not qualify for this exemption or is used in
30 any other nonexempt manner, the lessor shall be liable for the
31 tax imposed under this Act or the Service Use Tax Act, as the
32 case may be, based on the fair market value of the property at
33 the time the nonqualifying use occurs. No lessor shall collect
34 or attempt to collect an amount (however designated) that
35 purports to reimburse that lessor for the tax imposed by this
36 Act or the Service Use Tax Act, as the case may be, if the tax

 

 

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1 has not been paid by the lessor. If a lessor improperly
2 collects any such amount from the lessee, the lessee shall have
3 a legal right to claim a refund of that amount from the lessor.
4 If, however, that amount is not refunded to the lessee for any
5 reason, the lessor is liable to pay that amount to the
6 Department. This paragraph is exempt from the provisions of
7 Section 3-90.
8     (32) Beginning on the effective date of this amendatory Act
9 of the 92nd General Assembly, personal property purchased by a
10 lessor who leases the property, under a lease of one year or
11 longer executed or in effect at the time the lessor would
12 otherwise be subject to the tax imposed by this Act, to a
13 governmental body that has been issued an active sales tax
14 exemption identification number by the Department under
15 Section 1g of the Retailers' Occupation Tax Act. If the
16 property is leased in a manner that does not qualify for this
17 exemption or used in any other nonexempt manner, the lessor
18 shall be liable for the tax imposed under this Act or the
19 Service Use Tax Act, as the case may be, based on the fair
20 market value of the property at the time the nonqualifying use
21 occurs. No lessor shall collect or attempt to collect an amount
22 (however designated) that purports to reimburse that lessor for
23 the tax imposed by this Act or the Service Use Tax Act, as the
24 case may be, if the tax has not been paid by the lessor. If a
25 lessor improperly collects any such amount from the lessee, the
26 lessee shall have a legal right to claim a refund of that
27 amount from the lessor. If, however, that amount is not
28 refunded to the lessee for any reason, the lessor is liable to
29 pay that amount to the Department. This paragraph is exempt
30 from the provisions of Section 3-90.
31     (33) On and after July 1, 2003 and through June 30, 2004,
32 the use in this State of motor vehicles of the second division
33 with a gross vehicle weight in excess of 8,000 pounds and that
34 are subject to the commercial distribution fee imposed under
35 Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
36 1, 2004 and through June 30, 2005, the use in this State of

 

 

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1 motor vehicles of the second division: (i) with a gross vehicle
2 weight rating in excess of 8,000 pounds; (ii) that are subject
3 to the commercial distribution fee imposed under Section
4 3-815.1 of the Illinois Vehicle Code; and (iii) that are
5 primarily used for commercial purposes. Through June 30, 2005,
6 this exemption applies to repair and replacement parts added
7 after the initial purchase of such a motor vehicle if that
8 motor vehicle is used in a manner that would qualify for the
9 rolling stock exemption otherwise provided for in this Act. For
10 purposes of this paragraph, the term "used for commercial
11 purposes" means the transportation of persons or property in
12 furtherance of any commercial or industrial enterprise,
13 whether for-hire or not.
14 (Source: P.A. 92-35, eff. 7-1-01; 92-227, eff. 8-2-01; 92-337,
15 eff. 8-10-01; 92-484, eff. 8-23-01; 92-651, eff. 7-11-02;
16 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; 93-840, eff. 7-30-04;
17 93-1033, eff. 9-3-04; revised 10-21-04.)
 
18     (35 ILCS 105/3-5.5)
19     Sec. 3-5.5. Food and drugs sold by not-for-profit
20 organizations; exemption. The Department shall not collect the
21 1% tax imposed on food for human consumption that is to be
22 consumed off the premises where it is sold (other than
23 alcoholic beverages, soft drinks, and food that has been
24 prepared for immediate consumption) and prescription and
25 nonprescription medicines, drugs, medical appliances,
26 colostomy bags and other supplies and equipment used for the
27 care of ostomy patients, and insulin, urine testing materials,
28 syringes, and needles used by diabetics, for human use from any
29 not-for-profit organization, that sells food in a food
30 distribution program at a price below the retail cost of the
31 food to purchasers who, as a condition of participation in the
32 program, are required to perform community service, located in
33 a county or municipality that notifies the Department, in
34 writing, that the county or municipality does not want the tax
35 to be collected from any of such organizations located in the

 

 

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1 county or municipality.
2 (Source: P.A. 88-374.)
 
3     (35 ILCS 105/3-10)  (from Ch. 120, par. 439.3-10)
4     Sec. 3-10. Rate of tax. Unless otherwise provided in this
5 Section, the tax imposed by this Act is at the rate of 6.25% of
6 either the selling price or the fair market value, if any, of
7 the tangible personal property. In all cases where property
8 functionally used or consumed is the same as the property that
9 was purchased at retail, then the tax is imposed on the selling
10 price of the property. In all cases where property functionally
11 used or consumed is a by-product or waste product that has been
12 refined, manufactured, or produced from property purchased at
13 retail, then the tax is imposed on the lower of the fair market
14 value, if any, of the specific property so used in this State
15 or on the selling price of the property purchased at retail.
16 For purposes of this Section "fair market value" means the
17 price at which property would change hands between a willing
18 buyer and a willing seller, neither being under any compulsion
19 to buy or sell and both having reasonable knowledge of the
20 relevant facts. The fair market value shall be established by
21 Illinois sales by the taxpayer of the same property as that
22 functionally used or consumed, or if there are no such sales by
23 the taxpayer, then comparable sales or purchases of property of
24 like kind and character in Illinois.
25     Beginning on July 1, 2000 and through December 31, 2000,
26 with respect to motor fuel, as defined in Section 1.1 of the
27 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
28 the Use Tax Act, the tax is imposed at the rate of 1.25%.
29     With respect to gasohol, the tax imposed by this Act
30 applies to (i) 70% of the proceeds of sales made on or after
31 January 1, 1990, and before July 1, 2003, (ii) 80% of the
32 proceeds of sales made on or after July 1, 2003 and on or
33 before December 31, 2013, and (iii) 100% of the proceeds of
34 sales made thereafter. If, at any time, however, the tax under
35 this Act on sales of gasohol is imposed at the rate of 1.25%,

 

 

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1 then the tax imposed by this Act applies to 100% of the
2 proceeds of sales of gasohol made during that time.
3     With respect to majority blended ethanol fuel, the tax
4 imposed by this Act does not apply to the proceeds of sales
5 made on or after July 1, 2003 and on or before December 31,
6 2013 but applies to 100% of the proceeds of sales made
7 thereafter.
8     With respect to biodiesel blends with no less than 1% and
9 no more than 10% biodiesel, the tax imposed by this Act applies
10 to (i) 80% of the proceeds of sales made on or after July 1,
11 2003 and on or before December 31, 2013 and (ii) 100% of the
12 proceeds of sales made thereafter. If, at any time, however,
13 the tax under this Act on sales of biodiesel blends with no
14 less than 1% and no more than 10% biodiesel is imposed at the
15 rate of 1.25%, then the tax imposed by this Act applies to 100%
16 of the proceeds of sales of biodiesel blends with no less than
17 1% and no more than 10% biodiesel made during that time.
18     With respect to 100% biodiesel and biodiesel blends with
19 more than 10% but no more than 99% biodiesel, the tax imposed
20 by this Act does not apply to the proceeds of sales made on or
21 after July 1, 2003 and on or before December 31, 2013 but
22 applies to 100% of the proceeds of sales made thereafter.
23     With respect to food for human consumption that is to be
24 consumed off the premises where it is sold (other than
25 alcoholic beverages, soft drinks, and food that has been
26 prepared for immediate consumption) and prescription and
27 nonprescription medicines, drugs, medical appliances,
28 colostomy bags and other supplies and equipment used for the
29 care of ostomy patients, modifications to a motor vehicle for
30 the purpose of rendering it usable by a disabled person, and
31 insulin, urine testing materials, syringes, and needles used by
32 diabetics, for human use, the tax is imposed at the rate of 1%.
33 For the purposes of this Section, the term "soft drinks" means
34 any complete, finished, ready-to-use, non-alcoholic drink,
35 whether carbonated or not, including but not limited to soda
36 water, cola, fruit juice, vegetable juice, carbonated water,

 

 

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1 and all other preparations commonly known as soft drinks of
2 whatever kind or description that are contained in any closed
3 or sealed bottle, can, carton, or container, regardless of
4 size. "Soft drinks" does not include coffee, tea,
5 non-carbonated water, infant formula, milk or milk products as
6 defined in the Grade A Pasteurized Milk and Milk Products Act,
7 or drinks containing 50% or more natural fruit or vegetable
8 juice.
9     Notwithstanding any other provisions of this Act, "food for
10 human consumption that is to be consumed off the premises where
11 it is sold" includes all food sold through a vending machine,
12 except soft drinks and food products that are dispensed hot
13 from a vending machine, regardless of the location of the
14 vending machine.
15     If the property that is purchased at retail from a retailer
16 is acquired outside Illinois and used outside Illinois before
17 being brought to Illinois for use here and is taxable under
18 this Act, the "selling price" on which the tax is computed
19 shall be reduced by an amount that represents a reasonable
20 allowance for depreciation for the period of prior out-of-state
21 use.
22 (Source: P.A. 93-17, eff. 6-11-03.)
 
23     Section 10. The Service Use Tax Act is amended by changing
24 Sections 3-5, 3-5.5, and 3-10 as follows:
 
25     (35 ILCS 110/3-5)  (from Ch. 120, par. 439.33-5)
26     Sec. 3-5. Exemptions. Use of the following tangible
27 personal property is exempt from the tax imposed by this Act:
28     (1) Personal property purchased from a corporation,
29 society, association, foundation, institution, or
30 organization, other than a limited liability company, that is
31 organized and operated as a not-for-profit service enterprise
32 for the benefit of persons 65 years of age or older if the
33 personal property was not purchased by the enterprise for the
34 purpose of resale by the enterprise.

 

 

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1     (2) Personal property purchased by a non-profit Illinois
2 county fair association for use in conducting, operating, or
3 promoting the county fair.
4     (3) Personal property purchased by a not-for-profit arts or
5 cultural organization that establishes, by proof required by
6 the Department by rule, that it has received an exemption under
7 Section 501(c)(3) of the Internal Revenue Code and that is
8 organized and operated primarily for the presentation or
9 support of arts or cultural programming, activities, or
10 services. These organizations include, but are not limited to,
11 music and dramatic arts organizations such as symphony
12 orchestras and theatrical groups, arts and cultural service
13 organizations, local arts councils, visual arts organizations,
14 and media arts organizations. On and after the effective date
15 of this amendatory Act of the 92nd General Assembly, however,
16 an entity otherwise eligible for this exemption shall not make
17 tax-free purchases unless it has an active identification
18 number issued by the Department.
19     (4) Legal tender, currency, medallions, or gold or silver
20 coinage issued by the State of Illinois, the government of the
21 United States of America, or the government of any foreign
22 country, and bullion.
23     (5) Until July 1, 2003 and beginning again on September 1,
24 2004, graphic arts machinery and equipment, including repair
25 and replacement parts, both new and used, and including that
26 manufactured on special order or purchased for lease, certified
27 by the purchaser to be used primarily for graphic arts
28 production. Equipment includes chemicals or chemicals acting
29 as catalysts but only if the chemicals or chemicals acting as
30 catalysts effect a direct and immediate change upon a graphic
31 arts product.
32     (6) Personal property purchased from a teacher-sponsored
33 student organization affiliated with an elementary or
34 secondary school located in Illinois.
35     (7) Farm machinery and equipment, both new and used,
36 including that manufactured on special order, certified by the

 

 

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1 purchaser to be used primarily for production agriculture or
2 State or federal agricultural programs, including individual
3 replacement parts for the machinery and equipment, including
4 machinery and equipment purchased for lease, and including
5 implements of husbandry defined in Section 1-130 of the
6 Illinois Vehicle Code, farm machinery and agricultural
7 chemical and fertilizer spreaders, and nurse wagons required to
8 be registered under Section 3-809 of the Illinois Vehicle Code,
9 but excluding other motor vehicles required to be registered
10 under the Illinois Vehicle Code. Horticultural polyhouses or
11 hoop houses used for propagating, growing, or overwintering
12 plants shall be considered farm machinery and equipment under
13 this item (7). Agricultural chemical tender tanks and dry boxes
14 shall include units sold separately from a motor vehicle
15 required to be licensed and units sold mounted on a motor
16 vehicle required to be licensed if the selling price of the
17 tender is separately stated.
18     Farm machinery and equipment shall include precision
19 farming equipment that is installed or purchased to be
20 installed on farm machinery and equipment including, but not
21 limited to, tractors, harvesters, sprayers, planters, seeders,
22 or spreaders. Precision farming equipment includes, but is not
23 limited to, soil testing sensors, computers, monitors,
24 software, global positioning and mapping systems, and other
25 such equipment.
26     Farm machinery and equipment also includes computers,
27 sensors, software, and related equipment used primarily in the
28 computer-assisted operation of production agriculture
29 facilities, equipment, and activities such as, but not limited
30 to, the collection, monitoring, and correlation of animal and
31 crop data for the purpose of formulating animal diets and
32 agricultural chemicals. This item (7) is exempt from the
33 provisions of Section 3-75.
34     (8) Fuel and petroleum products sold to or used by an air
35 common carrier, certified by the carrier to be used for
36 consumption, shipment, or storage in the conduct of its

 

 

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1 business as an air common carrier, for a flight destined for or
2 returning from a location or locations outside the United
3 States without regard to previous or subsequent domestic
4 stopovers.
5     (9) Proceeds of mandatory service charges separately
6 stated on customers' bills for the purchase and consumption of
7 food and beverages acquired as an incident to the purchase of a
8 service from a serviceman, to the extent that the proceeds of
9 the service charge are in fact turned over as tips or as a
10 substitute for tips to the employees who participate directly
11 in preparing, serving, hosting or cleaning up the food or
12 beverage function with respect to which the service charge is
13 imposed.
14     (10) Until July 1, 2003, oil field exploration, drilling,
15 and production equipment, including (i) rigs and parts of rigs,
16 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
17 tubular goods, including casing and drill strings, (iii) pumps
18 and pump-jack units, (iv) storage tanks and flow lines, (v) any
19 individual replacement part for oil field exploration,
20 drilling, and production equipment, and (vi) machinery and
21 equipment purchased for lease; but excluding motor vehicles
22 required to be registered under the Illinois Vehicle Code.
23     (11) Proceeds from the sale of photoprocessing machinery
24 and equipment, including repair and replacement parts, both new
25 and used, including that manufactured on special order,
26 certified by the purchaser to be used primarily for
27 photoprocessing, and including photoprocessing machinery and
28 equipment purchased for lease.
29     (12) Until July 1, 2003, coal exploration, mining,
30 offhighway hauling, processing, maintenance, and reclamation
31 equipment, including replacement parts and equipment, and
32 including equipment purchased for lease, but excluding motor
33 vehicles required to be registered under the Illinois Vehicle
34 Code.
35     (13) Semen used for artificial insemination of livestock
36 for direct agricultural production.

 

 

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1     (14) Horses, or interests in horses, registered with and
2 meeting the requirements of any of the Arabian Horse Club
3 Registry of America, Appaloosa Horse Club, American Quarter
4 Horse Association, United States Trotting Association, or
5 Jockey Club, as appropriate, used for purposes of breeding or
6 racing for prizes.
7     (15) Computers and communications equipment utilized for
8 any hospital purpose and equipment used in the diagnosis,
9 analysis, or treatment of hospital patients purchased by a
10 lessor who leases the equipment, under a lease of one year or
11 longer executed or in effect at the time the lessor would
12 otherwise be subject to the tax imposed by this Act, to a
13 hospital that has been issued an active tax exemption
14 identification number by the Department under Section 1g of the
15 Retailers' Occupation Tax Act. If the equipment is leased in a
16 manner that does not qualify for this exemption or is used in
17 any other non-exempt manner, the lessor shall be liable for the
18 tax imposed under this Act or the Use Tax Act, as the case may
19 be, based on the fair market value of the property at the time
20 the non-qualifying use occurs. No lessor shall collect or
21 attempt to collect an amount (however designated) that purports
22 to reimburse that lessor for the tax imposed by this Act or the
23 Use Tax Act, as the case may be, if the tax has not been paid by
24 the lessor. If a lessor improperly collects any such amount
25 from the lessee, the lessee shall have a legal right to claim a
26 refund of that amount from the lessor. If, however, that amount
27 is not refunded to the lessee for any reason, the lessor is
28 liable to pay that amount to the Department.
29     (16) Personal property purchased by a lessor who leases the
30 property, under a lease of one year or longer executed or in
31 effect at the time the lessor would otherwise be subject to the
32 tax imposed by this Act, to a governmental body that has been
33 issued an active tax exemption identification number by the
34 Department under Section 1g of the Retailers' Occupation Tax
35 Act. If the property is leased in a manner that does not
36 qualify for this exemption or is used in any other non-exempt

 

 

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1 manner, the lessor shall be liable for the tax imposed under
2 this Act or the Use Tax Act, as the case may be, based on the
3 fair market value of the property at the time the
4 non-qualifying use occurs. No lessor shall collect or attempt
5 to collect an amount (however designated) that purports to
6 reimburse that lessor for the tax imposed by this Act or the
7 Use Tax Act, as the case may be, if the tax has not been paid by
8 the lessor. If a lessor improperly collects any such amount
9 from the lessee, the lessee shall have a legal right to claim a
10 refund of that amount from the lessor. If, however, that amount
11 is not refunded to the lessee for any reason, the lessor is
12 liable to pay that amount to the Department.
13     (17) Beginning with taxable years ending on or after
14 December 31, 1995 and ending with taxable years ending on or
15 before December 31, 2004, personal property that is donated for
16 disaster relief to be used in a State or federally declared
17 disaster area in Illinois or bordering Illinois by a
18 manufacturer or retailer that is registered in this State to a
19 corporation, society, association, foundation, or institution
20 that has been issued a sales tax exemption identification
21 number by the Department that assists victims of the disaster
22 who reside within the declared disaster area.
23     (18) Beginning with taxable years ending on or after
24 December 31, 1995 and ending with taxable years ending on or
25 before December 31, 2004, personal property that is used in the
26 performance of infrastructure repairs in this State, including
27 but not limited to municipal roads and streets, access roads,
28 bridges, sidewalks, waste disposal systems, water and sewer
29 line extensions, water distribution and purification
30 facilities, storm water drainage and retention facilities, and
31 sewage treatment facilities, resulting from a State or
32 federally declared disaster in Illinois or bordering Illinois
33 when such repairs are initiated on facilities located in the
34 declared disaster area within 6 months after the disaster.
35     (19) Beginning July 1, 1999, game or game birds purchased
36 at a "game breeding and hunting preserve area" or an "exotic

 

 

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1 game hunting area" as those terms are used in the Wildlife Code
2 or at a hunting enclosure approved through rules adopted by the
3 Department of Natural Resources. This paragraph is exempt from
4 the provisions of Section 3-75.
5     (20) A motor vehicle, as that term is defined in Section
6 1-146 of the Illinois Vehicle Code, that is donated to a
7 corporation, limited liability company, society, association,
8 foundation, or institution that is determined by the Department
9 to be organized and operated exclusively for educational
10 purposes. For purposes of this exemption, "a corporation,
11 limited liability company, society, association, foundation,
12 or institution organized and operated exclusively for
13 educational purposes" means all tax-supported public schools,
14 private schools that offer systematic instruction in useful
15 branches of learning by methods common to public schools and
16 that compare favorably in their scope and intensity with the
17 course of study presented in tax-supported schools, and
18 vocational or technical schools or institutes organized and
19 operated exclusively to provide a course of study of not less
20 than 6 weeks duration and designed to prepare individuals to
21 follow a trade or to pursue a manual, technical, mechanical,
22 industrial, business, or commercial occupation.
23     (21) Beginning January 1, 2000, personal property,
24 including food, purchased through fundraising events for the
25 benefit of a public or private elementary or secondary school,
26 a group of those schools, or one or more school districts if
27 the events are sponsored by an entity recognized by the school
28 district that consists primarily of volunteers and includes
29 parents and teachers of the school children. This paragraph
30 does not apply to fundraising events (i) for the benefit of
31 private home instruction or (ii) for which the fundraising
32 entity purchases the personal property sold at the events from
33 another individual or entity that sold the property for the
34 purpose of resale by the fundraising entity and that profits
35 from the sale to the fundraising entity. This paragraph is
36 exempt from the provisions of Section 3-75.

 

 

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1     (22) 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 other
4 items, and replacement parts for these machines. Beginning
5 January 1, 2002 and through June 30, 2003, machines and parts
6 for machines used in commercial, coin-operated amusement and
7 vending business if a use or occupation tax is paid on the
8 gross 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 3-75.
11     (23) Food for human consumption that is to be consumed off
12 the premises where it is sold (other than alcoholic beverages,
13 soft drinks, and food that has been prepared for immediate
14 consumption) and prescription and nonprescription medicines,
15 drugs, medical appliances, colostomy bags and other supplies
16 and equipment used for the care of ostomy patients, and
17 insulin, urine testing materials, syringes, and needles used by
18 diabetics, for human use, when purchased for use by a person
19 receiving medical assistance under Article 5 of the Illinois
20 Public Aid Code who resides in a licensed long-term care
21 facility, as defined in the Nursing Home Care Act.
22     (24) Beginning on the effective date of this amendatory Act
23 of the 92nd General Assembly, computers and communications
24 equipment utilized for any hospital purpose and equipment used
25 in the diagnosis, analysis, or treatment of hospital patients
26 purchased by a lessor who leases the equipment, under a lease
27 of one year or longer executed or in effect at the time the
28 lessor would otherwise be subject to the tax imposed by this
29 Act, to a hospital that has been issued an active tax exemption
30 identification number by the Department under Section 1g of the
31 Retailers' Occupation Tax Act. If the equipment is leased in a
32 manner that does not qualify for this exemption or is used in
33 any other nonexempt manner, the lessor shall be liable for the
34 tax imposed under this Act or the Use Tax Act, as the case may
35 be, based on the fair market value of the property at the time
36 the nonqualifying use occurs. No lessor shall collect or

 

 

HB0033 - 22 - LRB094 00034 BDD 30034 b

1 attempt to collect an amount (however designated) that purports
2 to reimburse that lessor for the tax imposed by this Act or the
3 Use Tax Act, as the case may be, if the tax has not been paid by
4 the lessor. If a lessor improperly collects any such amount
5 from the lessee, the lessee shall have a legal right to claim a
6 refund of that amount from the lessor. If, however, that amount
7 is not refunded to the lessee for any reason, the lessor is
8 liable to pay that amount to the Department. This paragraph is
9 exempt from the provisions of Section 3-75.
10     (25) Beginning on the effective date of this amendatory Act
11 of the 92nd General Assembly, personal property purchased by a
12 lessor who leases the property, under a lease of one year or
13 longer executed or in effect at the time the lessor would
14 otherwise be subject to the tax imposed by this Act, to a
15 governmental body that has been issued an active tax exemption
16 identification number by the Department under Section 1g of the
17 Retailers' Occupation Tax Act. If the property is leased in a
18 manner that does not qualify for this exemption or is used in
19 any other nonexempt manner, the lessor shall be liable for the
20 tax imposed under this Act or the Use Tax Act, as the case may
21 be, based on the fair market value of the property at the time
22 the nonqualifying use occurs. No lessor shall collect or
23 attempt to collect an amount (however designated) that purports
24 to reimburse that lessor for the tax imposed by this Act or the
25 Use Tax Act, as the case may be, if the tax has not been paid by
26 the lessor. If a lessor improperly collects any such amount
27 from the lessee, the lessee shall have a legal right to claim a
28 refund of that amount from the lessor. If, however, that amount
29 is not refunded to the lessee for any reason, the lessor is
30 liable to pay that amount to the Department. This paragraph is
31 exempt from the provisions of Section 3-75.
32 (Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
33 eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
34 92-651, eff. 7-11-02; 93-24, eff. 6-20-03; 93-840, eff.
35 7-30-04.)
 

 

 

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1     (35 ILCS 110/3-5.5)
2     Sec. 3-5.5. Food and drugs sold by not-for-profit
3 organizations; exemption. The Department shall not collect the
4 1% tax imposed on food for human consumption that is to be
5 consumed off the premises where it is sold (other than
6 alcoholic beverages, soft drinks, and food that has been
7 prepared for immediate consumption) and prescription and
8 nonprescription medicines, drugs, medical appliances,
9 colostomy bags and other supplies and equipment used for the
10 care of ostomy patients, and insulin, urine testing materials,
11 syringes, and needles used by diabetics, for human use from any
12 not-for-profit organization, that sells food in a food
13 distribution program at a price below the retail cost of the
14 food to purchasers who, as a condition of participation in the
15 program, are required to perform community service, located in
16 a county or municipality that notifies the Department, in
17 writing, that the county or municipality does not want the tax
18 to be collected from any of such organizations located in the
19 county or municipality.
20 (Source: P.A. 88-374.)
 
21     (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
22     Sec. 3-10. Rate of tax. Unless otherwise provided in this
23 Section, the tax imposed by this Act is at the rate of 6.25% of
24 the selling price of tangible personal property transferred as
25 an incident to the sale of service, but, for the purpose of
26 computing this tax, in no event shall the selling price be less
27 than the cost price of the property to the serviceman.
28     Beginning on July 1, 2000 and through December 31, 2000,
29 with respect to motor fuel, as defined in Section 1.1 of the
30 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
31 the Use Tax Act, the tax is imposed at the rate of 1.25%.
32     With respect to gasohol, as defined in the Use Tax Act, the
33 tax imposed by this Act applies to (i) 70% of the selling price
34 of property transferred as an incident to the sale of service
35 on or after January 1, 1990, and before July 1, 2003, (ii) 80%

 

 

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1 of the selling price of property transferred as an incident to
2 the sale of service on or after July 1, 2003 and on or before
3 December 31, 2013, and (iii) 100% of the selling price
4 thereafter. If, at any time, however, the tax under this Act on
5 sales of gasohol, as defined in the Use Tax Act, is imposed at
6 the rate of 1.25%, then the tax imposed by this Act applies to
7 100% of the proceeds of sales of gasohol made during that time.
8     With respect to majority blended ethanol fuel, as defined
9 in the Use Tax Act, the tax imposed by this Act does not apply
10 to the selling price of property transferred as an incident to
11 the sale of service on or after July 1, 2003 and on or before
12 December 31, 2013 but applies to 100% of the selling price
13 thereafter.
14     With respect to biodiesel blends, as defined in the Use Tax
15 Act, with no less than 1% and no more than 10% biodiesel, the
16 tax imposed by this Act applies to (i) 80% of the selling price
17 of property transferred as an incident to the sale of service
18 on or after July 1, 2003 and on or before December 31, 2013 and
19 (ii) 100% of the proceeds of the selling price thereafter. If,
20 at any time, however, the tax under this Act on sales of
21 biodiesel blends, as defined in the Use Tax Act, with no less
22 than 1% and no more than 10% biodiesel is imposed at the rate
23 of 1.25%, then the tax imposed by this Act applies to 100% of
24 the proceeds of sales of biodiesel blends with no less than 1%
25 and no more than 10% biodiesel made during that time.
26     With respect to 100% biodiesel, as defined in the Use Tax
27 Act, and biodiesel blends, as defined in the Use Tax Act, with
28 more than 10% but no more than 99% biodiesel, the tax imposed
29 by this Act does not apply to the proceeds of the selling price
30 of property transferred as an incident to the sale of service
31 on or after July 1, 2003 and on or before December 31, 2013 but
32 applies to 100% of the selling price thereafter.
33     At the election of any registered serviceman made for each
34 fiscal year, sales of service in which the aggregate annual
35 cost price of tangible personal property transferred as an
36 incident to the sales of service is less than 35%, or 75% in

 

 

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1 the case of servicemen transferring prescription drugs or
2 servicemen engaged in graphic arts production, of the aggregate
3 annual total gross receipts from all sales of service, the tax
4 imposed by this Act shall be based on the serviceman's cost
5 price of the tangible personal property transferred as an
6 incident to the sale of those services.
7     The tax shall be imposed at the rate of 1% on food prepared
8 for immediate consumption and transferred incident to a sale of
9 service subject to this Act or the Service Occupation Tax Act
10 by an entity licensed under the Hospital Licensing Act, the
11 Nursing Home Care Act, or the Child Care Act of 1969. The tax
12 shall also be imposed at the rate of 1% on food for human
13 consumption that is to be consumed off the premises where it is
14 sold (other than alcoholic beverages, soft drinks, and food
15 that has been prepared for immediate consumption and is not
16 otherwise included in this paragraph) and prescription and
17 nonprescription medicines, drugs, medical appliances,
18 modifications to a motor vehicle for the purpose of rendering
19 it usable by a disabled person, colostomy bags and other
20 supplies and equipment used for the care of ostomy patients,
21 and insulin, urine testing materials, syringes, and needles
22 used by diabetics, for human use. For the purposes of this
23 Section, the term "soft drinks" means any complete, finished,
24 ready-to-use, non-alcoholic drink, whether carbonated or not,
25 including but not limited to soda water, cola, fruit juice,
26 vegetable juice, carbonated water, and all other preparations
27 commonly known as soft drinks of whatever kind or description
28 that are contained in any closed or sealed bottle, can, carton,
29 or container, regardless of size. "Soft drinks" does not
30 include coffee, tea, non-carbonated water, infant formula,
31 milk or milk products as defined in the Grade A Pasteurized
32 Milk and Milk Products Act, or drinks containing 50% or more
33 natural fruit or vegetable juice.
34     Notwithstanding any other provisions of this Act, "food for
35 human consumption that is to be consumed off the premises where
36 it is sold" includes all food sold through a vending machine,

 

 

HB0033 - 26 - LRB094 00034 BDD 30034 b

1 except soft drinks and food products that are dispensed hot
2 from a vending machine, regardless of the location of the
3 vending machine.
4     If the property that is acquired from a serviceman is
5 acquired outside Illinois and used outside Illinois before
6 being brought to Illinois for use here and is taxable under
7 this Act, the "selling price" on which the tax is computed
8 shall be reduced by an amount that represents a reasonable
9 allowance for depreciation for the period of prior out-of-state
10 use.
11 (Source: P.A. 93-17, eff. 6-11-03.)
 
12     Section 15. The Service Occupation Tax Act is amended by
13 changing Sections 3-5, 3-5.5, and 3-10 as follows:
 
14     (35 ILCS 115/3-5)  (from Ch. 120, par. 439.103-5)
15     Sec. 3-5. Exemptions. The following tangible personal
16 property is exempt from the tax imposed by this Act:
17     (1) Personal property sold by a corporation, society,
18 association, foundation, institution, or organization, other
19 than a limited liability company, that is organized and
20 operated as a not-for-profit service enterprise for the benefit
21 of persons 65 years of age or older if the personal property
22 was not purchased by the enterprise for the purpose of resale
23 by the enterprise.
24     (2) Personal property purchased by a not-for-profit
25 Illinois county fair association for use in conducting,
26 operating, or promoting the county fair.
27     (3) Personal property purchased by any not-for-profit arts
28 or cultural organization that establishes, by proof required by
29 the Department by rule, that it has received an exemption under
30 Section 501(c)(3) of the Internal Revenue Code and that is
31 organized and operated primarily for the presentation or
32 support of arts or cultural programming, activities, or
33 services. These organizations include, but are not limited to,
34 music and dramatic arts organizations such as symphony

 

 

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1 orchestras and theatrical groups, arts and cultural service
2 organizations, local arts councils, visual arts organizations,
3 and media arts organizations. On and after the effective date
4 of this amendatory Act of the 92nd General Assembly, however,
5 an entity otherwise eligible for this exemption shall not make
6 tax-free purchases unless it has an active identification
7 number issued by the Department.
8     (4) Legal tender, currency, medallions, or gold or silver
9 coinage issued by the State of Illinois, the government of the
10 United States of America, or the government of any foreign
11 country, and bullion.
12     (5) Until July 1, 2003 and beginning again on September 1,
13 2004, graphic arts machinery and equipment, including repair
14 and replacement parts, both new and used, and including that
15 manufactured on special order or purchased for lease, certified
16 by the purchaser to be used primarily for graphic arts
17 production. Equipment includes chemicals or chemicals acting
18 as catalysts but only if the chemicals or chemicals acting as
19 catalysts effect a direct and immediate change upon a graphic
20 arts product.
21     (6) Personal property sold by a teacher-sponsored student
22 organization affiliated with an elementary or secondary school
23 located in Illinois.
24     (7) Farm machinery and equipment, both new and used,
25 including that manufactured on special order, certified by the
26 purchaser to be used primarily for production agriculture or
27 State or federal agricultural programs, including individual
28 replacement parts for the machinery and equipment, including
29 machinery and equipment purchased for lease, and including
30 implements of husbandry defined in Section 1-130 of the
31 Illinois Vehicle Code, farm machinery and agricultural
32 chemical and fertilizer spreaders, and nurse wagons required to
33 be registered under Section 3-809 of the Illinois Vehicle Code,
34 but excluding other motor vehicles required to be registered
35 under the Illinois Vehicle Code. Horticultural polyhouses or
36 hoop houses used for propagating, growing, or overwintering

 

 

HB0033 - 28 - LRB094 00034 BDD 30034 b

1 plants shall be considered farm machinery and equipment under
2 this item (7). Agricultural chemical tender tanks and dry boxes
3 shall include units sold separately from a motor vehicle
4 required to be licensed and units sold mounted on a motor
5 vehicle required to be licensed if the selling price of the
6 tender is separately stated.
7     Farm machinery and equipment shall include precision
8 farming equipment that is installed or purchased to be
9 installed on farm machinery and equipment including, but not
10 limited to, tractors, harvesters, sprayers, planters, seeders,
11 or spreaders. Precision farming equipment includes, but is not
12 limited to, soil testing sensors, computers, monitors,
13 software, global positioning and mapping systems, and other
14 such equipment.
15     Farm machinery and equipment also includes computers,
16 sensors, software, and related equipment used primarily in the
17 computer-assisted operation of production agriculture
18 facilities, equipment, and activities such as, but not limited
19 to, the collection, monitoring, and correlation of animal and
20 crop data for the purpose of formulating animal diets and
21 agricultural chemicals. This item (7) is exempt from the
22 provisions of Section 3-55.
23     (8) Fuel and petroleum products sold to or used by an air
24 common carrier, certified by the carrier to be used for
25 consumption, shipment, or storage in the conduct of its
26 business as an air common carrier, for a flight destined for or
27 returning from a location or locations outside the United
28 States without regard to previous or subsequent domestic
29 stopovers.
30     (9) Proceeds of mandatory service charges separately
31 stated on customers' bills for the purchase and consumption of
32 food and beverages, to the extent that the proceeds of the
33 service charge are in fact turned over as tips or as a
34 substitute for tips to the employees who participate directly
35 in preparing, serving, hosting or cleaning up the food or
36 beverage function with respect to which the service charge is

 

 

HB0033 - 29 - LRB094 00034 BDD 30034 b

1 imposed.
2     (10) Until July 1, 2003, oil field exploration, drilling,
3 and production equipment, including (i) rigs and parts of rigs,
4 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
5 tubular goods, including casing and drill strings, (iii) pumps
6 and pump-jack units, (iv) storage tanks and flow lines, (v) any
7 individual replacement part for oil field exploration,
8 drilling, and production equipment, and (vi) machinery and
9 equipment purchased for lease; but excluding motor vehicles
10 required to be registered under the Illinois Vehicle Code.
11     (11) Photoprocessing machinery and equipment, including
12 repair and replacement parts, both new and used, including that
13 manufactured on special order, certified by the purchaser to be
14 used primarily for photoprocessing, and including
15 photoprocessing machinery and equipment purchased for lease.
16     (12) Until July 1, 2003, coal exploration, mining,
17 offhighway hauling, processing, maintenance, and reclamation
18 equipment, including replacement parts and equipment, and
19 including equipment purchased for lease, but excluding motor
20 vehicles required to be registered under the Illinois Vehicle
21 Code.
22     (13) Food for human consumption that is to be consumed off
23 the premises where it is sold (other than alcoholic beverages,
24 soft drinks and food that has been prepared for immediate
25 consumption) and prescription and non-prescription medicines,
26 drugs, medical appliances, colostomy bags and other supplies
27 and equipment used for the care of ostomy patients, and
28 insulin, urine testing materials, syringes, and needles used by
29 diabetics, for human use, when purchased for use by a person
30 receiving medical assistance under Article 5 of the Illinois
31 Public Aid Code who resides in a licensed long-term care
32 facility, as defined in the Nursing Home Care Act.
33     (14) Semen used for artificial insemination of livestock
34 for direct agricultural production.
35     (15) Horses, or interests in horses, registered with and
36 meeting the requirements of any of the Arabian Horse Club

 

 

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1 Registry of America, Appaloosa Horse Club, American Quarter
2 Horse Association, United States Trotting Association, or
3 Jockey Club, as appropriate, used for purposes of breeding or
4 racing for prizes.
5     (16) Computers and communications equipment utilized for
6 any hospital purpose and equipment used in the diagnosis,
7 analysis, or treatment of hospital patients sold to a lessor
8 who leases the equipment, under a lease of one year or longer
9 executed or in effect at the time of the purchase, to a
10 hospital that has been issued an active tax exemption
11 identification number by the Department under Section 1g of the
12 Retailers' Occupation Tax Act.
13     (17) Personal property sold to a lessor who leases the
14 property, under a lease of one year or longer executed or in
15 effect at the time of the purchase, to a governmental body that
16 has been issued an active tax exemption identification number
17 by the Department under Section 1g of the Retailers' Occupation
18 Tax Act.
19     (18) Beginning with taxable years ending on or after
20 December 31, 1995 and ending with taxable years ending on or
21 before December 31, 2004, personal property that is donated for
22 disaster relief to be used in a State or federally declared
23 disaster area in Illinois or bordering Illinois by a
24 manufacturer or retailer that is registered in this State to a
25 corporation, society, association, foundation, or institution
26 that has been issued a sales tax exemption identification
27 number by the Department that assists victims of the disaster
28 who reside within the declared disaster area.
29     (19) Beginning with taxable years ending on or after
30 December 31, 1995 and ending with taxable years ending on or
31 before December 31, 2004, personal property that is used in the
32 performance of infrastructure repairs in this State, including
33 but not limited to municipal roads and streets, access roads,
34 bridges, sidewalks, waste disposal systems, water and sewer
35 line extensions, water distribution and purification
36 facilities, storm water drainage and retention facilities, and

 

 

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1 sewage treatment facilities, resulting from a State or
2 federally declared disaster in Illinois or bordering Illinois
3 when such repairs are initiated on facilities located in the
4 declared disaster area within 6 months after the disaster.
5     (20) Beginning July 1, 1999, game or game birds sold at a
6 "game breeding and hunting preserve area" or an "exotic game
7 hunting area" as those terms are used in the Wildlife Code or
8 at a hunting enclosure approved through rules adopted by the
9 Department of Natural Resources. This paragraph is exempt from
10 the provisions of Section 3-55.
11     (21) A motor vehicle, as that term is defined in Section
12 1-146 of the Illinois Vehicle Code, that is donated to a
13 corporation, limited liability company, society, association,
14 foundation, or institution that is determined by the Department
15 to be organized and operated exclusively for educational
16 purposes. For purposes of this exemption, "a corporation,
17 limited liability company, society, association, foundation,
18 or institution organized and operated exclusively for
19 educational purposes" means all tax-supported public schools,
20 private schools that offer systematic instruction in useful
21 branches of learning by methods common to public schools and
22 that compare favorably in their scope and intensity with the
23 course of study presented in tax-supported schools, and
24 vocational or technical schools or institutes organized and
25 operated exclusively to provide a course of study of not less
26 than 6 weeks duration and designed to prepare individuals to
27 follow a trade or to pursue a manual, technical, mechanical,
28 industrial, business, or commercial occupation.
29     (22) Beginning January 1, 2000, personal property,
30 including food, purchased through fundraising events for the
31 benefit of a public or private elementary or secondary school,
32 a group of those schools, or one or more school districts if
33 the events are sponsored by an entity recognized by the school
34 district that consists primarily of volunteers and includes
35 parents and teachers of the school children. This paragraph
36 does not apply to fundraising events (i) for the benefit of

 

 

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

 

 

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1 engaged in centralized purchasing activities in Illinois who
2 will, upon receipt of the property in Illinois, temporarily
3 store the property in Illinois (i) for the purpose of
4 subsequently transporting it outside this State for use or
5 consumption thereafter solely outside this State or (ii) for
6 the purpose of being processed, fabricated, or manufactured
7 into, attached to, or incorporated into other tangible personal
8 property to be transported outside this State and thereafter
9 used or consumed solely outside this State. The Director of
10 Revenue shall, pursuant to rules adopted in accordance with the
11 Illinois Administrative Procedure Act, issue a permit to any
12 taxpayer in good standing with the Department who is eligible
13 for the exemption under this paragraph (26). The permit issued
14 under this paragraph (26) shall authorize the holder, to the
15 extent and in the manner specified in the rules adopted under
16 this Act, to purchase tangible personal property from a
17 retailer exempt from the taxes imposed by this Act. Taxpayers
18 shall maintain all necessary books and records to substantiate
19 the use and consumption of all such tangible personal property
20 outside of the State of Illinois.
21 (Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
22 eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
23 92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 93-24, eff.
24 6-20-03; 93-840, eff. 7-30-04.)
 
25     (35 ILCS 115/3-5.5)
26     Sec. 3-5.5. Food and drugs sold by not-for-profit
27 organizations; exemption. The Department shall not collect the
28 1% tax imposed on food for human consumption that is to be
29 consumed off the premises where it is sold (other than
30 alcoholic beverages, soft drinks, and food that has been
31 prepared for immediate consumption) and prescription and
32 nonprescription medicines, drugs, medical appliances,
33 colostomy bags and other supplies and equipment used for the
34 care of ostomy patients, and insulin, urine testing materials,
35 syringes, and needles used by diabetics, for human use from any

 

 

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1 not-for-profit organization, that sells food in a food
2 distribution program at a price below the retail cost of the
3 food to purchasers who, as a condition of participation in the
4 program, are required to perform community service, located in
5 a county or municipality that notifies the Department, in
6 writing, that the county or municipality does not want the tax
7 to be collected from any of such organizations located in the
8 county or municipality.
9 (Source: P.A. 88-374.)
 
10     (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
11     Sec. 3-10. Rate of tax. Unless otherwise provided in this
12 Section, the tax imposed by this Act is at the rate of 6.25% of
13 the "selling price", as defined in Section 2 of the Service Use
14 Tax Act, of the tangible personal property. For the purpose of
15 computing this tax, in no event shall the "selling price" be
16 less than the cost price to the serviceman of the tangible
17 personal property transferred. The selling price of each item
18 of tangible personal property transferred as an incident of a
19 sale of service may be shown as a distinct and separate item on
20 the serviceman's billing to the service customer. If the
21 selling price is not so shown, the selling price of the
22 tangible personal property is deemed to be 50% of the
23 serviceman's entire billing to the service customer. When,
24 however, a serviceman contracts to design, develop, and produce
25 special order machinery or equipment, the tax imposed by this
26 Act shall be based on the serviceman's cost price of the
27 tangible personal property transferred incident to the
28 completion of the contract.
29     Beginning on July 1, 2000 and through December 31, 2000,
30 with respect to motor fuel, as defined in Section 1.1 of the
31 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
32 the Use Tax Act, the tax is imposed at the rate of 1.25%.
33     With respect to gasohol, as defined in the Use Tax Act, the
34 tax imposed by this Act shall apply to (i) 70% of the cost
35 price of property transferred as an incident to the sale of

 

 

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1 service on or after January 1, 1990, and before July 1, 2003,
2 (ii) 80% of the selling price of property transferred as an
3 incident to the sale of service on or after July 1, 2003 and on
4 or before December 31, 2013, and (iii) 100% of the cost price
5 thereafter. If, at any time, however, the tax under this Act on
6 sales of gasohol, as defined in the Use Tax Act, is imposed at
7 the rate of 1.25%, then the tax imposed by this Act applies to
8 100% of the proceeds of sales of gasohol made during that time.
9     With respect to majority blended ethanol fuel, as defined
10 in the Use Tax Act, the tax imposed by this Act does not apply
11 to the selling price of property transferred as an incident to
12 the sale of service on or after July 1, 2003 and on or before
13 December 31, 2013 but applies to 100% of the selling price
14 thereafter.
15     With respect to biodiesel blends, as defined in the Use Tax
16 Act, with no less than 1% and no more than 10% biodiesel, the
17 tax imposed by this Act applies to (i) 80% of the selling price
18 of property transferred as an incident to the sale of service
19 on or after July 1, 2003 and on or before December 31, 2013 and
20 (ii) 100% of the proceeds of the selling price thereafter. If,
21 at any time, however, the tax under this Act on sales of
22 biodiesel blends, as defined in the Use Tax Act, with no less
23 than 1% and no more than 10% biodiesel is imposed at the rate
24 of 1.25%, then the tax imposed by this Act applies to 100% of
25 the proceeds of sales of biodiesel blends with no less than 1%
26 and no more than 10% biodiesel made during that time.
27     With respect to 100% biodiesel, as defined in the Use Tax
28 Act, and biodiesel blends, as defined in the Use Tax Act, with
29 more than 10% but no more than 99% biodiesel material, the tax
30 imposed by this Act does not apply to the proceeds of the
31 selling price of property transferred as an incident to the
32 sale of service on or after July 1, 2003 and on or before
33 December 31, 2013 but applies to 100% of the selling price
34 thereafter.
35     At the election of any registered serviceman made for each
36 fiscal year, sales of service in which the aggregate annual

 

 

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1 cost price of tangible personal property transferred as an
2 incident to the sales of service is less than 35%, or 75% in
3 the case of servicemen transferring prescription drugs or
4 servicemen engaged in graphic arts production, of the aggregate
5 annual total gross receipts from all sales of service, the tax
6 imposed by this Act shall be based on the serviceman's cost
7 price of the tangible personal property transferred incident to
8 the sale of those services.
9     The tax shall be imposed at the rate of 1% on food prepared
10 for immediate consumption and transferred incident to a sale of
11 service subject to this Act or the Service Occupation Tax Act
12 by an entity licensed under the Hospital Licensing Act, the
13 Nursing Home Care Act, or the Child Care Act of 1969. The tax
14 shall also be imposed at the rate of 1% on food for human
15 consumption that is to be consumed off the premises where it is
16 sold (other than alcoholic beverages, soft drinks, and food
17 that has been prepared for immediate consumption and is not
18 otherwise included in this paragraph) and prescription and
19 nonprescription medicines, drugs, medical appliances,
20 modifications to a motor vehicle for the purpose of rendering
21 it usable by a disabled person, colostomy bags and other
22 supplies and equipment used for the care of ostomy patients,
23 and insulin, urine testing materials, syringes, and needles
24 used by diabetics, for human use. For the purposes of this
25 Section, the term "soft drinks" means any complete, finished,
26 ready-to-use, non-alcoholic drink, whether carbonated or not,
27 including but not limited to soda water, cola, fruit juice,
28 vegetable juice, carbonated water, and all other preparations
29 commonly known as soft drinks of whatever kind or description
30 that are contained in any closed or sealed can, carton, or
31 container, regardless of size. "Soft drinks" does not include
32 coffee, tea, non-carbonated water, infant formula, milk or milk
33 products as defined in the Grade A Pasteurized Milk and Milk
34 Products Act, or drinks containing 50% or more natural fruit or
35 vegetable juice.
36     Notwithstanding any other provisions of this Act, "food for

 

 

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1 human consumption that is to be consumed off the premises where
2 it is sold" includes all food sold through a vending machine,
3 except soft drinks and food products that are dispensed hot
4 from a vending machine, regardless of the location of the
5 vending machine.
6 (Source: P.A. 93-17, eff. 6-11-03.)
 
7     Section 20. The Retailers' Occupation Tax Act is amended by
8 changing Sections 2-5, 2-5.5, and 2-10 as follows:
 
9     (35 ILCS 120/2-5)  (from Ch. 120, par. 441-5)
10     Sec. 2-5. Exemptions. Gross receipts from proceeds from the
11 sale of the following tangible personal property are exempt
12 from the tax imposed by this Act:
13     (1) Farm chemicals.
14     (2) Farm machinery and equipment, both new and used,
15 including that manufactured on special order, certified by the
16 purchaser to be used primarily for production agriculture or
17 State or federal agricultural programs, including individual
18 replacement parts for the machinery and equipment, including
19 machinery and equipment purchased for lease, and including
20 implements of husbandry defined in Section 1-130 of the
21 Illinois Vehicle Code, farm machinery and agricultural
22 chemical and fertilizer spreaders, and nurse wagons required to
23 be registered under Section 3-809 of the Illinois Vehicle Code,
24 but excluding other motor vehicles required to be registered
25 under the Illinois Vehicle Code. Horticultural polyhouses or
26 hoop houses used for propagating, growing, or overwintering
27 plants shall be considered farm machinery and equipment under
28 this item (2). Agricultural chemical tender tanks and dry boxes
29 shall include units sold separately from a motor vehicle
30 required to be licensed and units sold mounted on a motor
31 vehicle required to be licensed, if the selling price of the
32 tender is separately stated.
33     Farm machinery and equipment shall include precision
34 farming equipment that is installed or purchased to be

 

 

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1 installed on farm machinery and equipment including, but not
2 limited to, tractors, harvesters, sprayers, planters, seeders,
3 or spreaders. Precision farming equipment includes, but is not
4 limited to, soil testing sensors, computers, monitors,
5 software, global positioning and mapping systems, and other
6 such equipment.
7     Farm machinery and equipment also includes computers,
8 sensors, software, and related equipment used primarily in the
9 computer-assisted operation of production agriculture
10 facilities, equipment, and activities such as, but not limited
11 to, the collection, monitoring, and correlation of animal and
12 crop data for the purpose of formulating animal diets and
13 agricultural chemicals. This item (7) is exempt from the
14 provisions of Section 2-70.
15     (3) Until July 1, 2003, distillation machinery and
16 equipment, sold as a unit or kit, assembled or installed by the
17 retailer, certified by the user to be used only for the
18 production of ethyl alcohol that will be used for consumption
19 as motor fuel or as a component of motor fuel for the personal
20 use of the user, and not subject to sale or resale.
21     (4) Until July 1, 2003 and beginning again September 1,
22 2004, graphic arts machinery and equipment, including repair
23 and replacement parts, both new and used, and including that
24 manufactured on special order or purchased for lease, certified
25 by the purchaser to be used primarily for graphic arts
26 production. Equipment includes chemicals or chemicals acting
27 as catalysts but only if the chemicals or chemicals acting as
28 catalysts effect a direct and immediate change upon a graphic
29 arts product.
30     (5) A motor vehicle of the first division, a motor vehicle
31 of the second division that is a self-contained motor vehicle
32 designed or permanently converted to provide living quarters
33 for recreational, camping, or travel use, with direct walk
34 through access to the living quarters from the driver's seat,
35 or a motor vehicle of the second division that is of the van
36 configuration designed for the transportation of not less than

 

 

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1 7 nor more than 16 passengers, as defined in Section 1-146 of
2 the Illinois Vehicle Code, that is used for automobile renting,
3 as defined in the Automobile Renting Occupation and Use Tax
4 Act.
5     (6) Personal property sold by a teacher-sponsored student
6 organization affiliated with an elementary or secondary school
7 located in Illinois.
8     (7) Until July 1, 2003, proceeds of that portion of the
9 selling price of a passenger car the sale of which is subject
10 to the Replacement Vehicle Tax.
11     (8) Personal property sold to an Illinois county fair
12 association for use in conducting, operating, or promoting the
13 county fair.
14     (9) Personal property sold to a not-for-profit arts or
15 cultural organization that establishes, by proof required by
16 the Department by rule, that it has received an exemption under
17 Section 501(c)(3) of the Internal Revenue Code and that is
18 organized and operated primarily for the presentation or
19 support of arts or cultural programming, activities, or
20 services. These organizations include, but are not limited to,
21 music and dramatic arts organizations such as symphony
22 orchestras and theatrical groups, arts and cultural service
23 organizations, local arts councils, visual arts organizations,
24 and media arts organizations. On and after the effective date
25 of this amendatory Act of the 92nd General Assembly, however,
26 an entity otherwise eligible for this exemption shall not make
27 tax-free purchases unless it has an active identification
28 number issued by the Department.
29     (10) Personal property sold by a corporation, society,
30 association, foundation, institution, or organization, other
31 than a limited liability company, that is organized and
32 operated as a not-for-profit service enterprise for the benefit
33 of persons 65 years of age or older if the personal property
34 was not purchased by the enterprise for the purpose of resale
35 by the enterprise.
36     (11) Personal property sold to a governmental body, to a

 

 

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1 corporation, society, association, foundation, or institution
2 organized and operated exclusively for charitable, religious,
3 or educational purposes, or to a not-for-profit corporation,
4 society, association, foundation, institution, or organization
5 that has no compensated officers or employees and that is
6 organized and operated primarily for the recreation of persons
7 55 years of age or older. A limited liability company may
8 qualify for the exemption under this paragraph only if the
9 limited liability company is organized and operated
10 exclusively for educational purposes. On and after July 1,
11 1987, however, no entity otherwise eligible for this exemption
12 shall make tax-free purchases unless it has an active
13 identification number issued by the Department.
14     (12) Tangible personal property sold to interstate
15 carriers for hire for use as rolling stock moving in interstate
16 commerce or to lessors under leases of one year or longer
17 executed or in effect at the time of purchase by interstate
18 carriers for hire for use as rolling stock moving in interstate
19 commerce and equipment operated by a telecommunications
20 provider, licensed as a common carrier by the Federal
21 Communications Commission, which is permanently installed in
22 or affixed to aircraft moving in interstate commerce.
23     (12-5) On and after July 1, 2003 and through June 30, 2004,
24 motor vehicles of the second division with a gross vehicle
25 weight in excess of 8,000 pounds that are subject to the
26 commercial distribution fee imposed under Section 3-815.1 of
27 the Illinois Vehicle Code. Beginning on July 1, 2004 and
28 through June 30, 2005, the use in this State of motor vehicles
29 of the second division: (i) with a gross vehicle weight rating
30 in excess of 8,000 pounds; (ii) that are subject to the
31 commercial distribution fee imposed under Section 3-815.1 of
32 the Illinois Vehicle Code; and (iii) that are primarily used
33 for commercial purposes. Through June 30, 2005, this exemption
34 applies to repair and replacement parts added after the initial
35 purchase of such a motor vehicle if that motor vehicle is used
36 in a manner that would qualify for the rolling stock exemption

 

 

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1 otherwise provided for in this Act. For purposes of this
2 paragraph, "used for commercial purposes" means the
3 transportation of persons or property in furtherance of any
4 commercial or industrial enterprise whether for-hire or not.
5     (13) Proceeds from sales to owners, lessors, or shippers of
6 tangible personal property that is utilized by interstate
7 carriers for hire for use as rolling stock moving in interstate
8 commerce and equipment operated by a telecommunications
9 provider, licensed as a common carrier by the Federal
10 Communications Commission, which is permanently installed in
11 or affixed to aircraft moving in interstate commerce.
12     (14) Machinery and equipment that will be used by the
13 purchaser, or a lessee of the purchaser, primarily in the
14 process of manufacturing or assembling tangible personal
15 property for wholesale or retail sale or lease, whether the
16 sale or lease is made directly by the manufacturer or by some
17 other person, whether the materials used in the process are
18 owned by the manufacturer or some other person, or whether the
19 sale or lease is made apart from or as an incident to the
20 seller's engaging in the service occupation of producing
21 machines, tools, dies, jigs, patterns, gauges, or other similar
22 items of no commercial value on special order for a particular
23 purchaser.
24     (15) Proceeds of mandatory service charges separately
25 stated on customers' bills for purchase and consumption of food
26 and beverages, to the extent that the proceeds of the service
27 charge are in fact turned over as tips or as a substitute for
28 tips to the employees who participate directly in preparing,
29 serving, hosting or cleaning up the food or beverage function
30 with respect to which the service charge is imposed.
31     (16) Petroleum products sold to a purchaser if the seller
32 is prohibited by federal law from charging tax to the
33 purchaser.
34     (17) Tangible personal property sold to a common carrier by
35 rail or motor that receives the physical possession of the
36 property in Illinois and that transports the property, or

 

 

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1 shares with another common carrier in the transportation of the
2 property, out of Illinois on a standard uniform bill of lading
3 showing the seller of the property as the shipper or consignor
4 of the property to a destination outside Illinois, for use
5 outside Illinois.
6     (18) Legal tender, currency, medallions, or gold or silver
7 coinage issued by the State of Illinois, the government of the
8 United States of America, or the government of any foreign
9 country, and bullion.
10     (19) Until July 1 2003, oil field exploration, drilling,
11 and production equipment, including (i) rigs and parts of rigs,
12 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
13 tubular goods, including casing and drill strings, (iii) pumps
14 and pump-jack units, (iv) storage tanks and flow lines, (v) any
15 individual replacement part for oil field exploration,
16 drilling, and production equipment, and (vi) machinery and
17 equipment purchased for lease; but excluding motor vehicles
18 required to be registered under the Illinois Vehicle Code.
19     (20) Photoprocessing machinery and equipment, including
20 repair and replacement parts, both new and used, including that
21 manufactured on special order, certified by the purchaser to be
22 used primarily for photoprocessing, and including
23 photoprocessing machinery and equipment purchased for lease.
24     (21) Until July 1, 2003, coal exploration, mining,
25 offhighway hauling, processing, maintenance, and reclamation
26 equipment, including replacement parts and equipment, and
27 including equipment purchased for lease, but excluding motor
28 vehicles required to be registered under the Illinois Vehicle
29 Code.
30     (22) Fuel and petroleum products sold to or used by an air
31 carrier, certified by the carrier to be used for consumption,
32 shipment, or storage in the conduct of its business as an air
33 common carrier, for a flight destined for or returning from a
34 location or locations outside the United States without regard
35 to previous or subsequent domestic stopovers.
36     (23) A transaction in which the purchase order is received

 

 

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1 by a florist who is located outside Illinois, but who has a
2 florist located in Illinois deliver the property to the
3 purchaser or the purchaser's donee in Illinois.
4     (24) Fuel consumed or used in the operation of ships,
5 barges, or vessels that are used primarily in or for the
6 transportation of property or the conveyance of persons for
7 hire on rivers bordering on this State if the fuel is delivered
8 by the seller to the purchaser's barge, ship, or vessel while
9 it is afloat upon that bordering river.
10     (25) A motor vehicle sold in this State to a nonresident
11 even though the motor vehicle is delivered to the nonresident
12 in this State, if the motor vehicle is not to be titled in this
13 State, and if a drive-away permit is issued to the motor
14 vehicle as provided in Section 3-603 of the Illinois Vehicle
15 Code or if the nonresident purchaser has vehicle registration
16 plates to transfer to the motor vehicle upon returning to his
17 or her home state. The issuance of the drive-away permit or
18 having the out-of-state registration plates to be transferred
19 is prima facie evidence that the motor vehicle will not be
20 titled in this State.
21     (26) Semen used for artificial insemination of livestock
22 for direct agricultural production.
23     (27) Horses, or interests in horses, registered with and
24 meeting the requirements of any of the Arabian Horse Club
25 Registry of America, Appaloosa Horse Club, American Quarter
26 Horse Association, United States Trotting Association, or
27 Jockey Club, as appropriate, used for purposes of breeding or
28 racing for prizes.
29     (28) Computers and communications equipment utilized for
30 any hospital purpose and equipment used in the diagnosis,
31 analysis, or treatment of hospital patients sold to a lessor
32 who leases the equipment, under a lease of one year or longer
33 executed or in effect at the time of the purchase, to a
34 hospital that has been issued an active tax exemption
35 identification number by the Department under Section 1g of
36 this Act.

 

 

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1     (29) Personal property sold to a lessor who leases the
2 property, under a lease of one year or longer executed or in
3 effect at the time of the purchase, to a governmental body that
4 has been issued an active tax exemption identification number
5 by the Department under Section 1g of this Act.
6     (30) Beginning with taxable years ending on or after
7 December 31, 1995 and ending with taxable years ending on or
8 before December 31, 2004, personal property that is donated for
9 disaster relief to be used in a State or federally declared
10 disaster area in Illinois or bordering Illinois by a
11 manufacturer or retailer that is registered in this State to a
12 corporation, society, association, foundation, or institution
13 that has been issued a sales tax exemption identification
14 number by the Department that assists victims of the disaster
15 who reside within the declared disaster area.
16     (31) Beginning with taxable years ending on or after
17 December 31, 1995 and ending with taxable years ending on or
18 before December 31, 2004, personal property that is used in the
19 performance of infrastructure repairs in this State, including
20 but not limited to municipal roads and streets, access roads,
21 bridges, sidewalks, waste disposal systems, water and sewer
22 line extensions, water distribution and purification
23 facilities, storm water drainage and retention facilities, and
24 sewage treatment facilities, resulting from a State or
25 federally declared disaster in Illinois or bordering Illinois
26 when such repairs are initiated on facilities located in the
27 declared disaster area within 6 months after the disaster.
28     (32) Beginning July 1, 1999, game or game birds sold at a
29 "game breeding and hunting preserve area" or an "exotic game
30 hunting area" as those terms are used in the Wildlife Code or
31 at a hunting enclosure approved through rules adopted by the
32 Department of Natural Resources. This paragraph is exempt from
33 the provisions of Section 2-70.
34     (33) A motor vehicle, as that term is defined in Section
35 1-146 of the Illinois Vehicle Code, that is donated to a
36 corporation, limited liability company, society, association,

 

 

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1 foundation, or institution that is determined by the Department
2 to be organized and operated exclusively for educational
3 purposes. For purposes of this exemption, "a corporation,
4 limited liability company, society, association, foundation,
5 or institution organized and operated exclusively for
6 educational purposes" means all tax-supported public schools,
7 private schools that offer systematic instruction in useful
8 branches of learning by methods common to public schools and
9 that compare favorably in their scope and intensity with the
10 course of study presented in tax-supported schools, and
11 vocational or technical schools or institutes organized and
12 operated exclusively to provide a course of study of not less
13 than 6 weeks duration and designed to prepare individuals to
14 follow a trade or to pursue a manual, technical, mechanical,
15 industrial, business, or commercial occupation.
16     (34) Beginning January 1, 2000, personal property,
17 including food, purchased through fundraising events for the
18 benefit of a public or private elementary or secondary school,
19 a group of those schools, or one or more school districts if
20 the events are sponsored by an entity recognized by the school
21 district that consists primarily of volunteers and includes
22 parents and teachers of the school children. This paragraph
23 does not apply to fundraising events (i) for the benefit of
24 private home instruction or (ii) for which the fundraising
25 entity purchases the personal property sold at the events from
26 another individual or entity that sold the property for the
27 purpose of resale by the fundraising entity and that profits
28 from the sale to the fundraising entity. This paragraph is
29 exempt from the provisions of Section 2-70.
30     (35) Beginning January 1, 2000 and through December 31,
31 2001, new or used automatic vending machines that prepare and
32 serve hot food and beverages, including coffee, soup, and other
33 items, and replacement parts for these machines. Beginning
34 January 1, 2002 and through June 30, 2003, machines and parts
35 for machines used in commercial, coin-operated amusement and
36 vending business if a use or occupation tax is paid on the

 

 

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1 gross receipts derived from the use of the commercial,
2 coin-operated amusement and vending machines. This paragraph
3 is exempt from the provisions of Section 2-70.
4     (35-5) Food for human consumption that is to be consumed
5 off the premises where it is sold (other than alcoholic
6 beverages, soft drinks, and food that has been prepared for
7 immediate consumption) and prescription and nonprescription
8 medicines, drugs, medical appliances, colostomy bags and other
9 supplies and equipment used for the care of ostomy patients,
10 and insulin, urine testing materials, syringes, and needles
11 used by diabetics, for human use, when purchased for use by a
12 person receiving medical assistance under Article 5 of the
13 Illinois Public Aid Code who resides in a licensed long-term
14 care facility, as defined in the Nursing Home Care Act.
15     (36) Beginning August 2, 2001, computers and
16 communications equipment utilized for any hospital purpose and
17 equipment used in the diagnosis, analysis, or treatment of
18 hospital patients sold to a lessor who leases the equipment,
19 under a lease of one year or longer executed or in effect at
20 the time of the purchase, to a hospital that has been issued an
21 active tax exemption identification number by the Department
22 under Section 1g of this Act. This paragraph is exempt from the
23 provisions of Section 2-70.
24     (37) Beginning August 2, 2001, personal property sold to a
25 lessor who leases the property, under a lease of one year or
26 longer executed or in effect at the time of the purchase, to a
27 governmental body that has been issued an active tax exemption
28 identification number by the Department under Section 1g of
29 this Act. This paragraph is exempt from the provisions of
30 Section 2-70.
31     (38) Beginning on January 1, 2002, tangible personal
32 property purchased from an Illinois retailer by a taxpayer
33 engaged in centralized purchasing activities in Illinois who
34 will, upon receipt of the property in Illinois, temporarily
35 store the property in Illinois (i) for the purpose of
36 subsequently transporting it outside this State for use or

 

 

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1 consumption thereafter solely outside this State or (ii) for
2 the purpose of being processed, fabricated, or manufactured
3 into, attached to, or incorporated into other tangible personal
4 property to be transported outside this State and thereafter
5 used or consumed solely outside this State. The Director of
6 Revenue shall, pursuant to rules adopted in accordance with the
7 Illinois Administrative Procedure Act, issue a permit to any
8 taxpayer in good standing with the Department who is eligible
9 for the exemption under this paragraph (38). The permit issued
10 under this paragraph (38) shall authorize the holder, to the
11 extent and in the manner specified in the rules adopted under
12 this Act, to purchase tangible personal property from a
13 retailer exempt from the taxes imposed by this Act. Taxpayers
14 shall maintain all necessary books and records to substantiate
15 the use and consumption of all such tangible personal property
16 outside of the State of Illinois.
17 (Source: P.A. 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
18 eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
19 92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 92-680, eff.
20 7-16-02; 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; 93-840, eff.
21 7-30-04; 93-1033, eff. 9-3-04; revised 9-14-04.)
 
22     (35 ILCS 120/2-5.5)
23     Sec. 2-5.5. Food and drugs sold by not-for-profit
24 organizations; exemption. The Department shall not collect the
25 1% tax imposed on food for human consumption that is to be
26 consumed off the premises where it is sold (other than
27 alcoholic beverages, soft drinks, and food that has been
28 prepared for immediate consumption) and prescription and
29 nonprescription medicines, drugs, medical appliances,
30 colostomy bags and other supplies and equipment used for the
31 care of ostomy patients, and insulin, urine testing materials,
32 syringes, and needles used by diabetics, for human use from any
33 not-for-profit organization, that sells food in a food
34 distribution program at a price below the retail cost of the
35 food to purchasers who, as a condition of participation in the

 

 

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1 program, are required to perform community service, located in
2 a county or municipality that notifies the Department, in
3 writing, that the county or municipality does not want the tax
4 to be collected from any of such organizations located in the
5 county or municipality.
6 (Source: P.A. 88-374.)
 
7     (35 ILCS 120/2-10)  (from Ch. 120, par. 441-10)
8     Sec. 2-10. Rate of tax. Unless otherwise provided in this
9 Section, the tax imposed by this Act is at the rate of 6.25% of
10 gross receipts from sales of tangible personal property made in
11 the course of business.
12     Beginning on July 1, 2000 and through December 31, 2000,
13 with respect to motor fuel, as defined in Section 1.1 of the
14 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
15 the Use Tax Act, the tax is imposed at the rate of 1.25%.
16     Within 14 days after the effective date of this amendatory
17 Act of the 91st General Assembly, each retailer of motor fuel
18 and gasohol shall cause the following notice to be posted in a
19 prominently visible place on each retail dispensing device that
20 is used to dispense motor fuel or gasohol in the State of
21 Illinois: "As of July 1, 2000, the State of Illinois has
22 eliminated the State's share of sales tax on motor fuel and
23 gasohol through December 31, 2000. The price on this pump
24 should reflect the elimination of the tax." The notice shall be
25 printed in bold print on a sign that is no smaller than 4
26 inches by 8 inches. The sign shall be clearly visible to
27 customers. Any retailer who fails to post or maintain a
28 required sign through December 31, 2000 is guilty of a petty
29 offense for which the fine shall be $500 per day per each
30 retail premises where a violation occurs.
31     With respect to gasohol, as defined in the Use Tax Act, the
32 tax imposed by this Act applies to (i) 70% of the proceeds of
33 sales made on or after January 1, 1990, and before July 1,
34 2003, (ii) 80% of the proceeds of sales made on or after July
35 1, 2003 and on or before December 31, 2013, and (iii) 100% of

 

 

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1 the proceeds of sales made thereafter. If, at any time,
2 however, the tax under this Act on sales of gasohol, as defined
3 in the Use Tax Act, is imposed at the rate of 1.25%, then the
4 tax imposed by this Act applies to 100% of the proceeds of
5 sales of gasohol made during that time.
6     With respect to majority blended ethanol fuel, as defined
7 in the Use Tax Act, the tax imposed by this Act does not apply
8 to the proceeds of sales made on or after July 1, 2003 and on or
9 before December 31, 2013 but applies to 100% of the proceeds of
10 sales made thereafter.
11     With respect to biodiesel blends, as defined in the Use Tax
12 Act, with no less than 1% and no more than 10% biodiesel, the
13 tax imposed by this Act applies to (i) 80% of the proceeds of
14 sales made on or after July 1, 2003 and on or before December
15 31, 2013 and (ii) 100% of the proceeds of sales made
16 thereafter. If, at any time, however, the tax under this Act on
17 sales of biodiesel blends, as defined in the Use Tax Act, with
18 no less than 1% and no more than 10% biodiesel is imposed at
19 the rate of 1.25%, then the tax imposed by this Act applies to
20 100% of the proceeds of sales of biodiesel blends with no less
21 than 1% and no more than 10% biodiesel made during that time.
22     With respect to 100% biodiesel, as defined in the Use Tax
23 Act, and biodiesel blends, as defined in the Use Tax Act, with
24 more than 10% but no more than 99% biodiesel, the tax imposed
25 by this Act does not apply to the proceeds of sales made on or
26 after July 1, 2003 and on or before December 31, 2013 but
27 applies to 100% of the proceeds of sales made thereafter.
28     With respect to food for human consumption that is to be
29 consumed off the premises where it is sold (other than
30 alcoholic beverages, soft drinks, and food that has been
31 prepared for immediate consumption) and prescription and
32 nonprescription medicines, drugs, medical appliances,
33 modifications to a motor vehicle for the purpose of rendering
34 it usable by a disabled person, colostomy bags and other
35 supplies and equipment used for the care of ostomy patients,
36 and insulin, urine testing materials, syringes, and needles

 

 

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1 used by diabetics, for human use, the tax is imposed at the
2 rate of 1%. For the purposes of this Section, the term "soft
3 drinks" means any complete, finished, ready-to-use,
4 non-alcoholic drink, whether carbonated or not, including but
5 not limited to soda water, cola, fruit juice, vegetable juice,
6 carbonated water, and all other preparations commonly known as
7 soft drinks of whatever kind or description that are contained
8 in any closed or sealed bottle, can, carton, or container,
9 regardless of size. "Soft drinks" does not include coffee, tea,
10 non-carbonated water, infant formula, milk or milk products as
11 defined in the Grade A Pasteurized Milk and Milk Products Act,
12 or drinks containing 50% or more natural fruit or vegetable
13 juice.
14     Notwithstanding any other provisions of this Act, "food for
15 human consumption that is to be consumed off the premises where
16 it is sold" includes all food sold through a vending machine,
17 except soft drinks and food products that are dispensed hot
18 from a vending machine, regardless of the location of the
19 vending machine.
20 (Source: P.A. 93-17, eff. 6-11-03.)