95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB0109

 

Introduced 1/31/2007, by Sen. John O. Jones

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2   from Ch. 120, par. 439.2
35 ILCS 110/2   from Ch. 120, par. 439.32

    Amends the Use Tax Act and the Service Use Tax Act. Provides that the definition of "selling price" under the Acts does not include the amount of any rebate offered by the manufacturer or retailer. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning revenue.
 
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 Section 2
5 as follows:
 
6     (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7     Sec. 2. "Use" means the exercise by any person of any right
8 or power over tangible personal property incident to the
9 ownership of that property, except that it does not include the
10 sale of such property in any form as tangible personal property
11 in the regular course of business to the extent that such
12 property is not first subjected to a use for which it was
13 purchased, and does not include the use of such property by its
14 owner for demonstration purposes: Provided that the property
15 purchased is deemed to be purchased for the purpose of resale,
16 despite first being used, to the extent to which it is resold
17 as an ingredient of an intentionally produced product or
18 by-product of manufacturing. "Use" does not mean the
19 demonstration use or interim use of tangible personal property
20 by a retailer before he sells that tangible personal property.
21 For watercraft or aircraft, if the period of demonstration use
22 or interim use by the retailer exceeds 18 months, the retailer
23 shall pay on the retailers' original cost price the tax imposed

 

 

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1 by this Act, and no credit for that tax is permitted if the
2 watercraft or aircraft is subsequently sold by the retailer.
3 "Use" does not mean the physical incorporation of tangible
4 personal property, to the extent not first subjected to a use
5 for which it was purchased, as an ingredient or constituent,
6 into other tangible personal property (a) which is sold in the
7 regular course of business or (b) which the person
8 incorporating such ingredient or constituent therein has
9 undertaken at the time of such purchase to cause to be
10 transported in interstate commerce to destinations outside the
11 State of Illinois: Provided that the property purchased is
12 deemed to be purchased for the purpose of resale, despite first
13 being used, to the extent to which it is resold as an
14 ingredient of an intentionally produced product or by-product
15 of manufacturing.
16     "Watercraft" means a Class 2, Class 3, or Class 4
17 watercraft as defined in Section 3-2 of the Boat Registration
18 and Safety Act, a personal watercraft, or any boat equipped
19 with an inboard motor.
20     "Purchase at retail" means the acquisition of the ownership
21 of or title to tangible personal property through a sale at
22 retail.
23     "Purchaser" means anyone who, through a sale at retail,
24 acquires the ownership of tangible personal property for a
25 valuable consideration.
26     "Sale at retail" means any transfer of the ownership of or

 

 

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1 title to tangible personal property to a purchaser, for the
2 purpose of use, and not for the purpose of resale in any form
3 as tangible personal property to the extent not first subjected
4 to a use for which it was purchased, for a valuable
5 consideration: Provided that the property purchased is deemed
6 to be purchased for the purpose of resale, despite first being
7 used, to the extent to which it is resold as an ingredient of
8 an intentionally produced product or by-product of
9 manufacturing. For this purpose, slag produced as an incident
10 to manufacturing pig iron or steel and sold is considered to be
11 an intentionally produced by-product of manufacturing. "Sale
12 at retail" includes any such transfer made for resale unless
13 made in compliance with Section 2c of the Retailers' Occupation
14 Tax Act, as incorporated by reference into Section 12 of this
15 Act. Transactions whereby the possession of the property is
16 transferred but the seller retains the title as security for
17 payment of the selling price are sales.
18     "Sale at retail" shall also be construed to include any
19 Illinois florist's sales transaction in which the purchase
20 order is received in Illinois by a florist and the sale is for
21 use or consumption, but the Illinois florist has a florist in
22 another state deliver the property to the purchaser or the
23 purchaser's donee in such other state.
24     Nonreusable tangible personal property that is used by
25 persons engaged in the business of operating a restaurant,
26 cafeteria, or drive-in is a sale for resale when it is

 

 

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1 transferred to customers in the ordinary course of business as
2 part of the sale of food or beverages and is used to deliver,
3 package, or consume food or beverages, regardless of where
4 consumption of the food or beverages occurs. Examples of those
5 items include, but are not limited to nonreusable, paper and
6 plastic cups, plates, baskets, boxes, sleeves, buckets or other
7 containers, utensils, straws, placemats, napkins, doggie bags,
8 and wrapping or packaging materials that are transferred to
9 customers as part of the sale of food or beverages in the
10 ordinary course of business.
11     The purchase, employment and transfer of such tangible
12 personal property as newsprint and ink for the primary purpose
13 of conveying news (with or without other information) is not a
14 purchase, use or sale of tangible personal property.
15     "Selling price" means the consideration for a sale valued
16 in money whether received in money or otherwise, including
17 cash, credits, property other than as hereinafter provided, and
18 services, but not including the value of or credit given for
19 traded-in tangible personal property where the item that is
20 traded-in is of like kind and character as that which is being
21 sold, and shall be determined without any deduction on account
22 of the cost of the property sold, the cost of materials used,
23 labor or service cost or any other expense whatsoever, but does
24 not include interest or finance charges which appear as
25 separate items on the bill of sale or sales contract nor
26 charges that are added to prices by sellers on account of the

 

 

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1 seller's tax liability under the "Retailers' Occupation Tax
2 Act", or on account of the seller's duty to collect, from the
3 purchaser, the tax that is imposed by this Act, or on account
4 of the seller's tax liability under Section 8-11-1 of the
5 Illinois Municipal Code, as heretofore and hereafter amended,
6 or on account of the seller's tax liability under the "County
7 Retailers' Occupation Tax Act". Effective December 1, 1985,
8 "selling price" shall include charges that are added to prices
9 by sellers on account of the seller's tax liability under the
10 Cigarette Tax Act, on account of the seller's duty to collect,
11 from the purchaser, the tax imposed under the Cigarette Use Tax
12 Act, and on account of the seller's duty to collect, from the
13 purchaser, any cigarette tax imposed by a home rule unit.
14 Beginning on July 1, 2007, the term "selling price" does not
15 include the amount of any rebate offered by the manufacturer or
16 retailer.
17     The phrase "like kind and character" shall be liberally
18 construed (including but not limited to any form of motor
19 vehicle for any form of motor vehicle, or any kind of farm or
20 agricultural implement for any other kind of farm or
21 agricultural implement), while not including a kind of item
22 which, if sold at retail by that retailer, would be exempt from
23 retailers' occupation tax and use tax as an isolated or
24 occasional sale.
25     "Department" means the Department of Revenue.
26     "Person" means any natural individual, firm, partnership,

 

 

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1 association, joint stock company, joint adventure, public or
2 private corporation, limited liability company, or a receiver,
3 executor, trustee, guardian or other representative appointed
4 by order of any court.
5     "Retailer" means and includes every person engaged in the
6 business of making sales at retail as defined in this Section.
7     A person who holds himself or herself out as being engaged
8 (or who habitually engages) in selling tangible personal
9 property at retail is a retailer hereunder with respect to such
10 sales (and not primarily in a service occupation)
11 notwithstanding the fact that such person designs and produces
12 such tangible personal property on special order for the
13 purchaser and in such a way as to render the property of value
14 only to such purchaser, if such tangible personal property so
15 produced on special order serves substantially the same
16 function as stock or standard items of tangible personal
17 property that are sold at retail.
18     A person whose activities are organized and conducted
19 primarily as a not-for-profit service enterprise, and who
20 engages in selling tangible personal property at retail
21 (whether to the public or merely to members and their guests)
22 is a retailer with respect to such transactions, excepting only
23 a person organized and operated exclusively for charitable,
24 religious or educational purposes either (1), to the extent of
25 sales by such person to its members, students, patients or
26 inmates of tangible personal property to be used primarily for

 

 

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1 the purposes of such person, or (2), to the extent of sales by
2 such person of tangible personal property which is not sold or
3 offered for sale by persons organized for profit. The selling
4 of school books and school supplies by schools at retail to
5 students is not "primarily for the purposes of" the school
6 which does such selling. This paragraph does not apply to nor
7 subject to taxation occasional dinners, social or similar
8 activities of a person organized and operated exclusively for
9 charitable, religious or educational purposes, whether or not
10 such activities are open to the public.
11     A person who is the recipient of a grant or contract under
12 Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
13 serves meals to participants in the federal Nutrition Program
14 for the Elderly in return for contributions established in
15 amount by the individual participant pursuant to a schedule of
16 suggested fees as provided for in the federal Act is not a
17 retailer under this Act with respect to such transactions.
18     Persons who engage in the business of transferring tangible
19 personal property upon the redemption of trading stamps are
20 retailers hereunder when engaged in such business.
21     The isolated or occasional sale of tangible personal
22 property at retail by a person who does not hold himself out as
23 being engaged (or who does not habitually engage) in selling
24 such tangible personal property at retail or a sale through a
25 bulk vending machine does not make such person a retailer
26 hereunder. However, any person who is engaged in a business

 

 

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1 which is not subject to the tax imposed by the "Retailers'
2 Occupation Tax Act" because of involving the sale of or a
3 contract to sell real estate or a construction contract to
4 improve real estate, but who, in the course of conducting such
5 business, transfers tangible personal property to users or
6 consumers in the finished form in which it was purchased, and
7 which does not become real estate, under any provision of a
8 construction contract or real estate sale or real estate sales
9 agreement entered into with some other person arising out of or
10 because of such nontaxable business, is a retailer to the
11 extent of the value of the tangible personal property so
12 transferred. If, in such transaction, a separate charge is made
13 for the tangible personal property so transferred, the value of
14 such property, for the purposes of this Act, is the amount so
15 separately charged, but not less than the cost of such property
16 to the transferor; if no separate charge is made, the value of
17 such property, for the purposes of this Act, is the cost to the
18 transferor of such tangible personal property.
19     "Retailer maintaining a place of business in this State",
20 or any like term, means and includes any of the following
21 retailers:
22         1. A retailer having or maintaining within this State,
23     directly or by a subsidiary, an office, distribution house,
24     sales house, warehouse or other place of business, or any
25     agent or other representative operating within this State
26     under the authority of the retailer or its subsidiary,

 

 

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1     irrespective of whether such place of business or agent or
2     other representative is located here permanently or
3     temporarily, or whether such retailer or subsidiary is
4     licensed to do business in this State. However, the
5     ownership of property that is located at the premises of a
6     printer with which the retailer has contracted for printing
7     and that consists of the final printed product, property
8     that becomes a part of the final printed product, or copy
9     from which the printed product is produced shall not result
10     in the retailer being deemed to have or maintain an office,
11     distribution house, sales house, warehouse, or other place
12     of business within this State.
13         2. A retailer soliciting orders for tangible personal
14     property by means of a telecommunication or television
15     shopping system (which utilizes toll free numbers) which is
16     intended by the retailer to be broadcast by cable
17     television or other means of broadcasting, to consumers
18     located in this State.
19         3. A retailer, pursuant to a contract with a
20     broadcaster or publisher located in this State, soliciting
21     orders for tangible personal property by means of
22     advertising which is disseminated primarily to consumers
23     located in this State and only secondarily to bordering
24     jurisdictions.
25         4. A retailer soliciting orders for tangible personal
26     property by mail if the solicitations are substantial and

 

 

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1     recurring and if the retailer benefits from any banking,
2     financing, debt collection, telecommunication, or
3     marketing activities occurring in this State or benefits
4     from the location in this State of authorized installation,
5     servicing, or repair facilities.
6         5. A retailer that is owned or controlled by the same
7     interests that own or control any retailer engaging in
8     business in the same or similar line of business in this
9     State.
10         6. A retailer having a franchisee or licensee operating
11     under its trade name if the franchisee or licensee is
12     required to collect the tax under this Section.
13         7. A retailer, pursuant to a contract with a cable
14     television operator located in this State, soliciting
15     orders for tangible personal property by means of
16     advertising which is transmitted or distributed over a
17     cable television system in this State.
18         8. A retailer engaging in activities in Illinois, which
19     activities in the state in which the retail business
20     engaging in such activities is located would constitute
21     maintaining a place of business in that state.
22     "Bulk vending machine" means a vending machine, containing
23 unsorted confections, nuts, toys, or other items designed
24 primarily to be used or played with by children which, when a
25 coin or coins of a denomination not larger than $0.50 are
26 inserted, are dispensed in equal portions, at random and

 

 

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1 without selection by the customer.
2 (Source: P.A. 94-1074, eff. 12-26-06.)
 
3     Section 10. The Service Use Tax Act is amended by changing
4 Section 2 as follows:
 
5     (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
6     Sec. 2. "Use" means the exercise by any person of any right
7 or power over tangible personal property incident to the
8 ownership of that property, but does not include the sale or
9 use for demonstration by him of that property in any form as
10 tangible personal property in the regular course of business.
11 "Use" does not mean the interim use of tangible personal
12 property nor the physical incorporation of tangible personal
13 property, as an ingredient or constituent, into other tangible
14 personal property, (a) which is sold in the regular course of
15 business or (b) which the person incorporating such ingredient
16 or constituent therein has undertaken at the time of such
17 purchase to cause to be transported in interstate commerce to
18 destinations outside the State of Illinois.
19     "Purchased from a serviceman" means the acquisition of the
20 ownership of, or title to, tangible personal property through a
21 sale of service.
22     "Purchaser" means any person who, through a sale of
23 service, acquires the ownership of, or title to, any tangible
24 personal property.

 

 

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1     "Cost price" means the consideration paid by the serviceman
2 for a purchase valued in money, whether paid in money or
3 otherwise, including cash, credits and services, and shall be
4 determined without any deduction on account of the supplier's
5 cost of the property sold or on account of any other expense
6 incurred by the supplier. When a serviceman contracts out part
7 or all of the services required in his sale of service, it
8 shall be presumed that the cost price to the serviceman of the
9 property transferred to him or her by his or her subcontractor
10 is equal to 50% of the subcontractor's charges to the
11 serviceman in the absence of proof of the consideration paid by
12 the subcontractor for the purchase of such property.
13     "Selling price" means the consideration for a sale valued
14 in money whether received in money or otherwise, including
15 cash, credits and service, and shall be determined without any
16 deduction on account of the serviceman's cost of the property
17 sold, the cost of materials used, labor or service cost or any
18 other expense whatsoever, but does not include interest or
19 finance charges which appear as separate items on the bill of
20 sale or sales contract nor charges that are added to prices by
21 sellers on account of the seller's duty to collect, from the
22 purchaser, the tax that is imposed by this Act. Beginning on
23 July 1, 2007, the term "selling price" does not include the
24 amount of any rebate offered by the manufacturer or retailer.
25     "Department" means the Department of Revenue.
26     "Person" means any natural individual, firm, partnership,

 

 

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1 association, joint stock company, joint venture, public or
2 private corporation, limited liability company, and any
3 receiver, executor, trustee, guardian or other representative
4 appointed by order of any court.
5     "Sale of service" means any transaction except:
6         (1) a retail sale of tangible personal property taxable
7     under the Retailers' Occupation Tax Act or under the Use
8     Tax Act.
9         (2) a sale of tangible personal property for the
10     purpose of resale made in compliance with Section 2c of the
11     Retailers' Occupation Tax Act.
12         (3) except as hereinafter provided, a sale or transfer
13     of tangible personal property as an incident to the
14     rendering of service for or by any governmental body, or
15     for or by any corporation, society, association,
16     foundation or institution organized and operated
17     exclusively for charitable, religious or educational
18     purposes or any not-for-profit corporation, society,
19     association, foundation, institution or organization which
20     has no compensated officers or employees and which is
21     organized and operated primarily for the recreation of
22     persons 55 years of age or older. A limited liability
23     company may qualify for the exemption under this paragraph
24     only if the limited liability company is organized and
25     operated exclusively for educational purposes.
26         (4) a sale or transfer of tangible personal property as

 

 

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1     an incident to the rendering of service for interstate
2     carriers for hire for use as rolling stock moving in
3     interstate commerce or by lessors under a lease of one year
4     or longer, executed or in effect at the time of purchase of
5     personal property, to interstate carriers for hire for use
6     as rolling stock moving in interstate commerce so long as
7     so used by such interstate carriers for hire, and equipment
8     operated by a telecommunications provider, licensed as a
9     common carrier by the Federal Communications Commission,
10     which is permanently installed in or affixed to aircraft
11     moving in interstate commerce.
12         (4a) a sale or transfer of tangible personal property
13     as an incident to the rendering of service for owners,
14     lessors, or shippers of tangible personal property which is
15     utilized by interstate carriers for hire for use as rolling
16     stock moving in interstate commerce so long as so used by
17     interstate carriers for hire, and equipment operated by a
18     telecommunications provider, licensed as a common carrier
19     by the Federal Communications Commission, which is
20     permanently installed in or affixed to aircraft moving in
21     interstate commerce.
22         (4a-5) on and after July 1, 2003 and through June 30,
23     2004, a sale or transfer of a motor vehicle of the second
24     division with a gross vehicle weight in excess of 8,000
25     pounds as an incident to the rendering of service if that
26     motor vehicle is subject to the commercial distribution fee

 

 

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1     imposed under Section 3-815.1 of the Illinois Vehicle Code.
2     Beginning on July 1, 2004 and through June 30, 2005, the
3     use in this State of motor vehicles of the second division:
4     (i) with a gross vehicle weight rating in excess of 8,000
5     pounds; (ii) that are subject to the commercial
6     distribution fee imposed under Section 3-815.1 of the
7     Illinois Vehicle Code; and (iii) that are primarily used
8     for commercial purposes. Through June 30, 2005, this
9     exemption applies to repair and replacement parts added
10     after the initial purchase of such a motor vehicle if that
11     motor vehicle is used in a manner that would qualify for
12     the rolling stock exemption otherwise provided for in this
13     Act. For purposes of this paragraph, "used for commercial
14     purposes" means the transportation of persons or property
15     in furtherance of any commercial or industrial enterprise
16     whether for-hire or not.
17         (5) a sale or transfer of machinery and equipment used
18     primarily in the process of the manufacturing or
19     assembling, either in an existing, an expanded or a new
20     manufacturing facility, of tangible personal property for
21     wholesale or retail sale or lease, whether such sale or
22     lease is made directly by the manufacturer or by some other
23     person, whether the materials used in the process are owned
24     by the manufacturer or some other person, or whether such
25     sale or lease is made apart from or as an incident to the
26     seller's engaging in a service occupation and the

 

 

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1     applicable tax is a Service Use Tax or Service Occupation
2     Tax, rather than Use Tax or Retailers' Occupation Tax.
3         (5a) the repairing, reconditioning or remodeling, for
4     a common carrier by rail, of tangible personal property
5     which belongs to such carrier for hire, and as to which
6     such carrier receives the physical possession of the
7     repaired, reconditioned or remodeled item of tangible
8     personal property in Illinois, and which such carrier
9     transports, or shares with another common carrier in the
10     transportation of such property, out of Illinois on a
11     standard uniform bill of lading showing the person who
12     repaired, reconditioned or remodeled the property to a
13     destination outside Illinois, for use outside Illinois.
14         (5b) a sale or transfer of tangible personal property
15     which is produced by the seller thereof on special order in
16     such a way as to have made the applicable tax the Service
17     Occupation Tax or the Service Use Tax, rather than the
18     Retailers' Occupation Tax or the Use Tax, for an interstate
19     carrier by rail which receives the physical possession of
20     such property in Illinois, and which transports such
21     property, or shares with another common carrier in the
22     transportation of such property, out of Illinois on a
23     standard uniform bill of lading showing the seller of the
24     property as the shipper or consignor of such property to a
25     destination outside Illinois, for use outside Illinois.
26         (6) until July 1, 2003, a sale or transfer of

 

 

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1     distillation machinery and equipment, sold as a unit or kit
2     and assembled or installed by the retailer, which machinery
3     and equipment is certified by the user to be used only for
4     the production of ethyl alcohol that will be used for
5     consumption as motor fuel or as a component of motor fuel
6     for the personal use of such user and not subject to sale
7     or resale.
8         (7) at the election of any serviceman not required to
9     be otherwise registered as a retailer under Section 2a of
10     the Retailers' Occupation Tax Act, made for each fiscal
11     year sales of service in which the aggregate annual cost
12     price of tangible personal property transferred as an
13     incident to the sales of service is less than 35%, or 75%
14     in the case of servicemen transferring prescription drugs
15     or servicemen engaged in graphic arts production, of the
16     aggregate annual total gross receipts from all sales of
17     service. The purchase of such tangible personal property by
18     the serviceman shall be subject to tax under the Retailers'
19     Occupation Tax Act and the Use Tax Act. However, if a
20     primary serviceman who has made the election described in
21     this paragraph subcontracts service work to a secondary
22     serviceman who has also made the election described in this
23     paragraph, the primary serviceman does not incur a Use Tax
24     liability if the secondary serviceman (i) has paid or will
25     pay Use Tax on his or her cost price of any tangible
26     personal property transferred to the primary serviceman

 

 

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1     and (ii) certifies that fact in writing to the primary
2     serviceman.
3     Tangible personal property transferred incident to the
4 completion of a maintenance agreement is exempt from the tax
5 imposed pursuant to this Act.
6     Exemption (5) also includes machinery and equipment used in
7 the general maintenance or repair of such exempt machinery and
8 equipment or for in-house manufacture of exempt machinery and
9 equipment. For the purposes of exemption (5), each of these
10 terms shall have the following meanings: (1) "manufacturing
11 process" shall mean the production of any article of tangible
12 personal property, whether such article is a finished product
13 or an article for use in the process of manufacturing or
14 assembling a different article of tangible personal property,
15 by procedures commonly regarded as manufacturing, processing,
16 fabricating, or refining which changes some existing material
17 or materials into a material with a different form, use or
18 name. In relation to a recognized integrated business composed
19 of a series of operations which collectively constitute
20 manufacturing, or individually constitute manufacturing
21 operations, the manufacturing process shall be deemed to
22 commence with the first operation or stage of production in the
23 series, and shall not be deemed to end until the completion of
24 the final product in the last operation or stage of production
25 in the series; and further, for purposes of exemption (5),
26 photoprocessing is deemed to be a manufacturing process of

 

 

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1 tangible personal property for wholesale or retail sale; (2)
2 "assembling process" shall mean the production of any article
3 of tangible personal property, whether such article is a
4 finished product or an article for use in the process of
5 manufacturing or assembling a different article of tangible
6 personal property, by the combination of existing materials in
7 a manner commonly regarded as assembling which results in a
8 material of a different form, use or name; (3) "machinery"
9 shall mean major mechanical machines or major components of
10 such machines contributing to a manufacturing or assembling
11 process; and (4) "equipment" shall include any independent
12 device or tool separate from any machinery but essential to an
13 integrated manufacturing or assembly process; including
14 computers used primarily in a manufacturer's computer assisted
15 design, computer assisted manufacturing (CAD/CAM) system; or
16 any subunit or assembly comprising a component of any machinery
17 or auxiliary, adjunct or attachment parts of machinery, such as
18 tools, dies, jigs, fixtures, patterns and molds; or any parts
19 which require periodic replacement in the course of normal
20 operation; but shall not include hand tools. Equipment includes
21 chemicals or chemicals acting as catalysts but only if the
22 chemicals or chemicals acting as catalysts effect a direct and
23 immediate change upon a product being manufactured or assembled
24 for wholesale or retail sale or lease. The purchaser of such
25 machinery and equipment who has an active resale registration
26 number shall furnish such number to the seller at the time of

 

 

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1 purchase. The user of such machinery and equipment and tools
2 without an active resale registration number shall prepare a
3 certificate of exemption for each transaction stating facts
4 establishing the exemption for that transaction, which
5 certificate shall be available to the Department for inspection
6 or audit. The Department shall prescribe the form of the
7 certificate.
8     Any informal rulings, opinions or letters issued by the
9 Department in response to an inquiry or request for any opinion
10 from any person regarding the coverage and applicability of
11 exemption (5) to specific devices shall be published,
12 maintained as a public record, and made available for public
13 inspection and copying. If the informal ruling, opinion or
14 letter contains trade secrets or other confidential
15 information, where possible the Department shall delete such
16 information prior to publication. Whenever such informal
17 rulings, opinions, or letters contain any policy of general
18 applicability, the Department shall formulate and adopt such
19 policy as a rule in accordance with the provisions of the
20 Illinois Administrative Procedure Act.
21     On and after July 1, 1987, no entity otherwise eligible
22 under exemption (3) of this Section shall make tax free
23 purchases unless it has an active exemption identification
24 number issued by the Department.
25     The purchase, employment and transfer of such tangible
26 personal property as newsprint and ink for the primary purpose

 

 

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1 of conveying news (with or without other information) is not a
2 purchase, use or sale of service or of tangible personal
3 property within the meaning of this Act.
4     "Serviceman" means any person who is engaged in the
5 occupation of making sales of service.
6     "Sale at retail" means "sale at retail" as defined in the
7 Retailers' Occupation Tax Act.
8     "Supplier" means any person who makes sales of tangible
9 personal property to servicemen for the purpose of resale as an
10 incident to a sale of service.
11     "Serviceman maintaining a place of business in this State",
12 or any like term, means and includes any serviceman:
13         1. having or maintaining within this State, directly or
14     by a subsidiary, an office, distribution house, sales
15     house, warehouse or other place of business, or any agent
16     or other representative operating within this State under
17     the authority of the serviceman or its subsidiary,
18     irrespective of whether such place of business or agent or
19     other representative is located here permanently or
20     temporarily, or whether such serviceman or subsidiary is
21     licensed to do business in this State;
22         2. soliciting orders for tangible personal property by
23     means of a telecommunication or television shopping system
24     (which utilizes toll free numbers) which is intended by the
25     retailer to be broadcast by cable television or other means
26     of broadcasting, to consumers located in this State;

 

 

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1         3. pursuant to a contract with a broadcaster or
2     publisher located in this State, soliciting orders for
3     tangible personal property by means of advertising which is
4     disseminated primarily to consumers located in this State
5     and only secondarily to bordering jurisdictions;
6         4. soliciting orders for tangible personal property by
7     mail if the solicitations are substantial and recurring and
8     if the retailer benefits from any banking, financing, debt
9     collection, telecommunication, or marketing activities
10     occurring in this State or benefits from the location in
11     this State of authorized installation, servicing, or
12     repair facilities;
13         5. being owned or controlled by the same interests
14     which own or control any retailer engaging in business in
15     the same or similar line of business in this State;
16         6. having a franchisee or licensee operating under its
17     trade name if the franchisee or licensee is required to
18     collect the tax under this Section;
19         7. pursuant to a contract with a cable television
20     operator located in this State, soliciting orders for
21     tangible personal property by means of advertising which is
22     transmitted or distributed over a cable television system
23     in this State; or
24         8. engaging in activities in Illinois, which
25     activities in the state in which the supply business
26     engaging in such activities is located would constitute

 

 

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1     maintaining a place of business in that state.
2 (Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
3 eff. 6-20-03; 93-1033, eff. 9-3-04.)
 
4     Section 99. Effective date. This Act takes effect upon
5 becoming law.