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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Use Tax Act is amended by changing Section | ||||||||||||||||||||||||||
5 | 3-50 as follows:
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6 | (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
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7 | Sec. 3-50. Manufacturing and assembly exemption. The | ||||||||||||||||||||||||||
8 | manufacturing
and assembling machinery and equipment exemption | ||||||||||||||||||||||||||
9 | includes
machinery and equipment that replaces machinery and | ||||||||||||||||||||||||||
10 | equipment in an
existing manufacturing facility as well as | ||||||||||||||||||||||||||
11 | machinery and equipment that
are for use in an expanded or new | ||||||||||||||||||||||||||
12 | manufacturing facility. The machinery and
equipment exemption | ||||||||||||||||||||||||||
13 | also includes machinery and equipment used in the
general | ||||||||||||||||||||||||||
14 | maintenance or repair of exempt machinery and equipment or for
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15 | in-house manufacture of exempt machinery and equipment. The | ||||||||||||||||||||||||||
16 | manufacturing and assembling machinery and equipment exemption | ||||||||||||||||||||||||||
17 | also includes production related tangible personal property.
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18 | For the
purposes of this exemption, terms have the following
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19 | meanings:
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20 | (1) "Manufacturing process" means the production of
an | ||||||||||||||||||||||||||
21 | article of tangible personal property, whether the article
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22 | is a finished product or an article for use in the process | ||||||||||||||||||||||||||
23 | of manufacturing
or assembling a different article of |
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1 | tangible personal property, by
a procedure commonly | ||||||
2 | regarded as manufacturing, processing, fabricating, or
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3 | refining that changes some existing material into a | ||||||
4 | material
with a different form, use, or name. In relation | ||||||
5 | to a recognized integrated
business composed of a series of | ||||||
6 | operations that collectively constitute
manufacturing, or | ||||||
7 | individually constitute
manufacturing operations, the | ||||||
8 | manufacturing process commences with the
first operation | ||||||
9 | or stage of production in the series
and does not end until | ||||||
10 | the completion of the final product
in the last operation | ||||||
11 | or stage of production in the series. For purposes
of this | ||||||
12 | exemption, photoprocessing is a
manufacturing process of | ||||||
13 | tangible personal property for wholesale or retail
sale.
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14 | (2) "Assembling process" means the production of
an | ||||||
15 | article of tangible personal property, whether the article
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16 | is a finished product or an article for use in the process | ||||||
17 | of manufacturing
or assembling a different article of | ||||||
18 | tangible personal property, by the
combination of existing | ||||||
19 | materials in a manner commonly regarded as
assembling that | ||||||
20 | results in an article or material of a different
form, use, | ||||||
21 | or name.
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22 | (3) "Machinery" means major
mechanical machines or | ||||||
23 | major components of those machines contributing to a
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24 | manufacturing or assembling process.
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25 | (4) "Equipment" includes an independent device
or tool | ||||||
26 | separate from machinery but essential to an integrated
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1 | manufacturing or assembly process; including computers | ||||||
2 | used primarily in
a manufacturer's computer assisted | ||||||
3 | design,
computer assisted manufacturing (CAD/CAM) system; | ||||||
4 | any
subunit or assembly comprising a component of any | ||||||
5 | machinery or auxiliary,
adjunct, or attachment parts of | ||||||
6 | machinery, such as tools, dies, jigs,
fixtures, patterns, | ||||||
7 | and molds; and any parts that require
periodic replacement | ||||||
8 | in the course of normal operation; but does not
include | ||||||
9 | hand tools. Equipment includes chemicals or chemicals | ||||||
10 | acting as
catalysts but only if
the chemicals or chemicals | ||||||
11 | acting as catalysts effect a direct and
immediate change | ||||||
12 | upon a
product being manufactured or assembled for | ||||||
13 | wholesale or retail sale or
lease.
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14 | (5) "Production related tangible personal property" | ||||||
15 | means all tangible personal property used or consumed by | ||||||
16 | the purchaser in a manufacturing facility in which a | ||||||
17 | manufacturing process, as defined in this Section, takes | ||||||
18 | place, including tangible personal property purchased for | ||||||
19 | incorporation into real estate within a manufacturing | ||||||
20 | facility and including, but not limited to, tangible | ||||||
21 | personal property used or consumed in activities such as | ||||||
22 | research and development, preproduction material handling, | ||||||
23 | receiving, quality control, inventory control, storage, | ||||||
24 | staging, and packaging for shipping and transportation | ||||||
25 | purposes. "Production related tangible personal property" | ||||||
26 | does not include (i) tangible personal property used, |
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1 | within or without a manufacturing facility, in sales, | ||||||
2 | purchasing, accounting, fiscal management, marketing, | ||||||
3 | personnel recruitment or selection, or landscaping or (ii) | ||||||
4 | tangible personal property required to be titled or | ||||||
5 | registered with a department, agency, or unit of federal, | ||||||
6 | state, or local government.
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7 | The manufacturing and assembling machinery and equipment
| ||||||
8 | exemption includes the sale of materials to a purchaser who
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9 | produces exempted types of machinery, equipment, or tools and | ||||||
10 | who rents or
leases that machinery, equipment, or tools to a
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11 | manufacturer of tangible
personal property. This exemption | ||||||
12 | also includes the sale of materials to a
purchaser who | ||||||
13 | manufactures those materials into an exempted type of
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14 | machinery, equipment, or tools that the purchaser uses
himself | ||||||
15 | or herself in the
manufacturing of tangible personal property. | ||||||
16 | This exemption includes the
sale of exempted types of machinery | ||||||
17 | or equipment to a
purchaser who is not the manufacturer, but | ||||||
18 | who rents or leases the use of
the property to a manufacturer. | ||||||
19 | The purchaser of the machinery and
equipment who has an active | ||||||
20 | resale registration number shall
furnish that number to the | ||||||
21 | seller at the time of purchase.
A user of the machinery, | ||||||
22 | equipment, or tools without an
active resale registration | ||||||
23 | number shall prepare a certificate of exemption
for each | ||||||
24 | transaction stating facts establishing the exemption for that
| ||||||
25 | transaction, and that certificate shall be
available to the | ||||||
26 | Department for inspection or audit. The Department shall
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1 | prescribe the form of the certificate. Informal rulings, | ||||||
2 | opinions, or
letters issued by the Department in
response to an | ||||||
3 | inquiry or request for an opinion from any person
regarding the | ||||||
4 | coverage and applicability of this exemption to specific
| ||||||
5 | devices shall be published, maintained as a public record, and | ||||||
6 | made
available for public inspection and copying. If the | ||||||
7 | informal ruling,
opinion, or letter contains trade secrets or | ||||||
8 | other confidential
information, where possible, the Department | ||||||
9 | shall delete that information
before publication. Whenever | ||||||
10 | informal rulings, opinions, or
letters contain a policy of | ||||||
11 | general applicability, the Department
shall formulate and | ||||||
12 | adopt that policy as a rule in accordance with the
Illinois | ||||||
13 | Administrative Procedure Act.
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14 | (Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
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15 | Section 10. The Retailers' Occupation Tax Act is amended by | ||||||
16 | changing Section 2-45 as follows:
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17 | (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
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18 | Sec. 2-45. Manufacturing and assembly exemption. The | ||||||
19 | manufacturing
and assembly machinery and equipment exemption | ||||||
20 | includes machinery
and equipment that replaces machinery
and | ||||||
21 | equipment in an existing manufacturing facility as well as | ||||||
22 | machinery
and equipment that are for use in an expanded or new
| ||||||
23 | manufacturing facility.
| ||||||
24 | The machinery and equipment exemption also includes |
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| |||||||
1 | machinery
and equipment used in the
general maintenance or | ||||||
2 | repair of exempt machinery and equipment or for
in-house | ||||||
3 | manufacture of exempt machinery and equipment.
The | ||||||
4 | manufacturing and assembling machinery and equipment exemption | ||||||
5 | also includes production related tangible personal property.
| ||||||
6 | For the purposes of this exemption, terms have the following | ||||||
7 | meanings:
| ||||||
8 | (1) "Manufacturing process" means the production of an | ||||||
9 | article of
tangible personal property, whether the article | ||||||
10 | is a finished product or an
article for use in the process | ||||||
11 | of manufacturing or assembling a different
article of | ||||||
12 | tangible personal property, by a procedure commonly | ||||||
13 | regarded as
manufacturing, processing, fabricating, or | ||||||
14 | refining that changes some
existing material or materials | ||||||
15 | into a material with a different form, use,
or name. In | ||||||
16 | relation to a recognized integrated business composed of a
| ||||||
17 | series of operations that collectively constitute | ||||||
18 | manufacturing, or
individually constitute manufacturing | ||||||
19 | operations, the manufacturing process
commences with the | ||||||
20 | first operation or stage of production in the series and
| ||||||
21 | does not end until the completion of the final product in | ||||||
22 | the last
operation or stage of production in the series. | ||||||
23 | For purposes of this
exemption, photoprocessing is a | ||||||
24 | manufacturing process of tangible personal
property for | ||||||
25 | wholesale or retail sale.
| ||||||
26 | (2) "Assembling process" means the production of an |
| |||||||
| |||||||
1 | article of
tangible personal property, whether the article | ||||||
2 | is a finished product or an
article for use in the process | ||||||
3 | of manufacturing or assembling a different
article of | ||||||
4 | tangible personal property, by the combination of existing
| ||||||
5 | materials in a manner commonly regarded as assembling that | ||||||
6 | results in a
material of a different form, use, or name.
| ||||||
7 | (3) "Machinery" means major mechanical machines or | ||||||
8 | major components of
those machines contributing to a | ||||||
9 | manufacturing or assembling process.
| ||||||
10 | (4) "Equipment" includes an independent device or tool | ||||||
11 | separate from
machinery but essential to an integrated | ||||||
12 | manufacturing or assembly process;
including computers | ||||||
13 | used primarily in a manufacturer's computer assisted | ||||||
14 | design, computer assisted manufacturing
(CAD/CAM) system; | ||||||
15 | any subunit or assembly comprising a component of any
| ||||||
16 | machinery or auxiliary, adjunct, or attachment parts of | ||||||
17 | machinery, such as
tools, dies, jigs, fixtures, patterns, | ||||||
18 | and molds; and any parts that
require periodic replacement | ||||||
19 | in the course of normal operation; but does
not include | ||||||
20 | hand tools. Equipment includes chemicals or chemicals | ||||||
21 | acting as
catalysts but only if
the chemicals or chemicals | ||||||
22 | acting as catalysts effect a direct and
immediate change | ||||||
23 | upon a
product being manufactured or assembled for | ||||||
24 | wholesale or retail sale or
lease.
| ||||||
25 | (5) "Production related tangible personal property" | ||||||
26 | means all tangible personal property used or consumed by |
| |||||||
| |||||||
1 | the purchaser in a manufacturing facility in which a | ||||||
2 | manufacturing process, as defined in this Section, takes | ||||||
3 | place, including tangible personal property purchased for | ||||||
4 | incorporation into real estate within a manufacturing | ||||||
5 | facility and including, but not limited to, tangible | ||||||
6 | personal property used or consumed in activities such as | ||||||
7 | research and development, preproduction material handling, | ||||||
8 | receiving, quality control, inventory control, storage, | ||||||
9 | staging, and packaging for shipping and transportation | ||||||
10 | purposes. "Production related tangible personal property" | ||||||
11 | does not include (i) tangible personal property used, | ||||||
12 | within or without a manufacturing facility, in sales, | ||||||
13 | purchasing, accounting, fiscal management, marketing, | ||||||
14 | personnel recruitment or selection, or landscaping or (ii) | ||||||
15 | tangible personal property required to be titled or | ||||||
16 | registered with a department, agency, or unit of federal, | ||||||
17 | state, or local government.
| ||||||
18 | The manufacturing and assembling machinery and equipment | ||||||
19 | exemption
includes the sale of materials to a purchaser who | ||||||
20 | produces exempted types
of machinery, equipment, or tools and | ||||||
21 | who rents or leases that machinery,
equipment, or tools to a | ||||||
22 | manufacturer of tangible personal property. This
exemption | ||||||
23 | also includes the sale of materials to a purchaser who | ||||||
24 | manufactures
those materials into an exempted type of | ||||||
25 | machinery, equipment, or tools
that the purchaser uses himself | ||||||
26 | or herself in the manufacturing of tangible
personal property. |
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| |||||||
1 | The purchaser of the machinery and equipment who has an
active | ||||||
2 | resale registration number shall furnish that number to the | ||||||
3 | seller
at the time of purchase. A purchaser of the machinery, | ||||||
4 | equipment, and
tools without an active resale registration | ||||||
5 | number shall furnish to the
seller a certificate of exemption | ||||||
6 | for each transaction stating facts
establishing the exemption | ||||||
7 | for that transaction, and that certificate shall
be available | ||||||
8 | to the Department for inspection or audit. Informal
rulings, | ||||||
9 | opinions, or letters issued by the Department in response to an
| ||||||
10 | inquiry or request for an opinion from any person regarding the | ||||||
11 | coverage and
applicability of this exemption to specific | ||||||
12 | devices shall be published,
maintained as a public record,
and | ||||||
13 | made available for public inspection and copying. If the | ||||||
14 | informal
ruling, opinion, or letter contains trade secrets or | ||||||
15 | other confidential
information, where possible, the Department | ||||||
16 | shall delete that information
before publication. Whenever | ||||||
17 | informal rulings, opinions, or letters
contain a policy of | ||||||
18 | general applicability, the Department shall
formulate and | ||||||
19 | adopt that policy as a rule in accordance with the Illinois
| ||||||
20 | Administrative Procedure Act.
| ||||||
21 | (Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
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22 | Section 99. Effective date. This Act takes effect upon | ||||||
23 | becoming law.
|