95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB1692

 

Introduced 2/9/2007, by Sen. Don Harmon

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 110/2   from Ch. 120, par. 439.32
35 ILCS 115/2   from Ch. 120, par. 439.102

    Amends the Service Use Tax Act and the Service Occupation Tax Act. In the definitions of "sale of service" under the Acts, deletes the requirement that the treatment of certain sales apply only to servicemen who are not required to be otherwise registered as a retailer under the Retailers' Occupation Tax Act. 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 Service Use Tax Act is amended by changing
5 Section 2 as follows:
 
6     (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
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, but does not include the sale or
10 use for demonstration by him of that property in any form as
11 tangible personal property in the regular course of business.
12 "Use" does not mean the interim use of tangible personal
13 property nor the physical incorporation of tangible personal
14 property, as an ingredient or constituent, into other tangible
15 personal property, (a) which is sold in the regular course of
16 business or (b) which the person incorporating such ingredient
17 or constituent therein has undertaken at the time of such
18 purchase to cause to be transported in interstate commerce to
19 destinations outside the State of Illinois.
20     "Purchased from a serviceman" means the acquisition of the
21 ownership of, or title to, tangible personal property through a
22 sale of service.
23     "Purchaser" means any person who, through a sale of

 

 

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1 service, acquires the ownership of, or title to, any tangible
2 personal property.
3     "Cost price" means the consideration paid by the serviceman
4 for a purchase valued in money, whether paid in money or
5 otherwise, including cash, credits and services, and shall be
6 determined without any deduction on account of the supplier's
7 cost of the property sold or on account of any other expense
8 incurred by the supplier. When a serviceman contracts out part
9 or all of the services required in his sale of service, it
10 shall be presumed that the cost price to the serviceman of the
11 property transferred to him or her by his or her subcontractor
12 is equal to 50% of the subcontractor's charges to the
13 serviceman in the absence of proof of the consideration paid by
14 the subcontractor for the purchase of such property.
15     "Selling price" means the consideration for a sale valued
16 in money whether received in money or otherwise, including
17 cash, credits and service, and shall be determined without any
18 deduction on account of the serviceman's cost of the property
19 sold, the cost of materials used, labor or service cost or any
20 other expense whatsoever, but does not include interest or
21 finance charges which appear as separate items on the bill of
22 sale or sales contract nor charges that are added to prices by
23 sellers on account of the seller's duty to collect, from the
24 purchaser, the tax that is imposed by this Act.
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 10. The Service Occupation Tax Act is amended by
5 changing Section 2 as follows:
 
6     (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
7     Sec. 2. "Transfer" means any transfer of the title to
8 property or of the ownership of property whether or not the
9 transferor retains title as security for the payment of amounts
10 due him from the transferee.
11     "Cost Price" means the consideration paid by the serviceman
12 for a purchase valued in money, whether paid in money or
13 otherwise, including cash, credits and services, and shall be
14 determined without any deduction on account of the supplier's
15 cost of the property sold or on account of any other expense
16 incurred by the supplier. When a serviceman contracts out part
17 or all of the services required in his sale of service, it
18 shall be presumed that the cost price to the serviceman of the
19 property transferred to him by his or her subcontractor is
20 equal to 50% of the subcontractor's charges to the serviceman
21 in the absence of proof of the consideration paid by the
22 subcontractor for the purchase of such property.
23     "Department" means the Department of Revenue.
24     "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     (a) A retail sale of tangible personal property taxable
7 under the Retailers' Occupation Tax Act or under the Use Tax
8 Act.
9     (b) A sale of tangible personal property for the purpose of
10 resale made in compliance with Section 2c of the Retailers'
11 Occupation Tax Act.
12     (c) Except as hereinafter provided, a sale or transfer of
13 tangible personal property as an incident to the rendering of
14 service for or by any governmental body or for or by any
15 corporation, society, association, foundation or institution
16 organized and operated exclusively for charitable, religious
17 or educational purposes or any not-for-profit corporation,
18 society, association, foundation, institution or organization
19 which has no compensated officers or employees and which is
20 organized and operated primarily for the recreation of persons
21 55 years of age or older. A limited liability company may
22 qualify for the exemption under this paragraph only if the
23 limited liability company is organized and operated
24 exclusively for educational purposes.
25     (d) A sale or transfer of tangible personal property as an
26 incident to the rendering of service for interstate carriers

 

 

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1 for hire for use as rolling stock moving in interstate commerce
2 or lessors under leases of one year or longer, executed or in
3 effect at the time of purchase, to interstate carriers for hire
4 for use as rolling stock moving in interstate commerce, and
5 equipment operated by a telecommunications provider, licensed
6 as a common carrier by the Federal Communications Commission,
7 which is permanently installed in or affixed to aircraft moving
8 in interstate commerce.
9     (d-1) A sale or transfer of tangible personal property as
10 an incident to the rendering of service for owners, lessors or
11 shippers of tangible personal property which is utilized by
12 interstate carriers for hire for use as rolling stock moving in
13 interstate commerce, and equipment operated by a
14 telecommunications provider, licensed as a common carrier by
15 the Federal Communications Commission, which is permanently
16 installed in or affixed to aircraft moving in interstate
17 commerce.
18     (d-1.1) On and after July 1, 2003 and through June 30,
19 2004, a sale or transfer of a motor vehicle of the second
20 division with a gross vehicle weight in excess of 8,000 pounds
21 as an incident to the rendering of service if that motor
22 vehicle is subject to the commercial distribution fee imposed
23 under Section 3-815.1 of the Illinois Vehicle Code. Beginning
24 on July 1, 2004 and through June 30, 2005, the use in this
25 State of motor vehicles of the second division: (i) with a
26 gross vehicle weight rating in excess of 8,000 pounds; (ii)

 

 

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1 that are subject to the commercial distribution fee imposed
2 under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
3 that are primarily used for commercial purposes. Through June
4 30, 2005, this exemption applies to repair and replacement
5 parts added after the initial purchase of such a motor vehicle
6 if that motor vehicle is used in a manner that would qualify
7 for the rolling stock exemption otherwise provided for in this
8 Act. For purposes of this paragraph, "used for commercial
9 purposes" means the transportation of persons or property in
10 furtherance of any commercial or industrial enterprise whether
11 for-hire or not.
12     (d-2) The repairing, reconditioning or remodeling, for a
13 common carrier by rail, of tangible personal property which
14 belongs to such carrier for hire, and as to which such carrier
15 receives the physical possession of the repaired,
16 reconditioned or remodeled item of tangible personal property
17 in Illinois, and which such carrier transports, or shares with
18 another common carrier in the transportation of such property,
19 out of Illinois on a standard uniform bill of lading showing
20 the person who repaired, reconditioned or remodeled the
21 property as the shipper or consignor of such property to a
22 destination outside Illinois, for use outside Illinois.
23     (d-3) A sale or transfer of tangible personal property
24 which is produced by the seller thereof on special order in
25 such a way as to have made the applicable tax the Service
26 Occupation Tax or the Service Use Tax, rather than the

 

 

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1 Retailers' Occupation Tax or the Use Tax, for an interstate
2 carrier by rail which receives the physical possession of such
3 property in Illinois, and which transports such property, or
4 shares with another common carrier in the transportation of
5 such property, out of Illinois on a standard uniform bill of
6 lading showing the seller of the property as the shipper or
7 consignor of such property to a destination outside Illinois,
8 for use outside Illinois.
9     (d-4) Until January 1, 1997, a sale, by a registered
10 serviceman paying tax under this Act to the Department, of
11 special order printed materials delivered outside Illinois and
12 which are not returned to this State, if delivery is made by
13 the seller or agent of the seller, including an agent who
14 causes the product to be delivered outside Illinois by a common
15 carrier or the U.S. postal service.
16     (e) A sale or transfer of machinery and equipment used
17 primarily in the process of the manufacturing or assembling,
18 either in an existing, an expanded or a new manufacturing
19 facility, of tangible personal property for wholesale or retail
20 sale or lease, whether such sale or lease is made directly by
21 the manufacturer or by some other person, whether the materials
22 used in the process are owned by the manufacturer or some other
23 person, or whether such sale or lease is made apart from or as
24 an incident to the seller's engaging in a service occupation
25 and the applicable tax is a Service Occupation Tax or Service
26 Use Tax, rather than Retailers' Occupation Tax or Use Tax.

 

 

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1     (f) Until July 1, 2003, the sale or transfer of
2 distillation machinery and equipment, sold as a unit or kit and
3 assembled or installed by the retailer, which machinery and
4 equipment is certified by the user to be used only for the
5 production of ethyl alcohol that will be used for consumption
6 as motor fuel or as a component of motor fuel for the personal
7 use of such user and not subject to sale or resale.
8     (g) At the election of any serviceman not required to be
9 otherwise registered as a retailer under Section 2a of the
10 Retailers' Occupation Tax Act, made for each fiscal year sales
11 of service in which the aggregate annual cost price of tangible
12 personal property transferred as an incident to the sales of
13 service is less than 35% (75% in the case of servicemen
14 transferring prescription drugs or servicemen engaged in
15 graphic arts production) of the aggregate annual total gross
16 receipts from all sales of service. The purchase of such
17 tangible personal property by the serviceman shall be subject
18 to tax under the Retailers' Occupation Tax Act and the Use Tax
19 Act. However, if a primary serviceman who has made the election
20 described in this paragraph subcontracts service work to a
21 secondary serviceman who has also made the election described
22 in this paragraph, the primary serviceman does not incur a Use
23 Tax liability if the secondary serviceman (i) has paid or will
24 pay Use Tax on his or her cost price of any tangible personal
25 property transferred to the primary serviceman and (ii)
26 certifies that fact in writing to the primary serviceman.

 

 

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

 

 

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1 of tangible personal property, whether such article is a
2 finished product or an article for use in the process of
3 manufacturing or assembling a different article of tangible
4 personal property, by the combination of existing materials in
5 a manner commonly regarded as assembling which results in a
6 material of a different form, use or name; (3) "machinery"
7 shall mean major mechanical machines or major components of
8 such machines contributing to a manufacturing or assembling
9 process; and (4) "equipment" shall include any independent
10 device or tool separate from any machinery but essential to an
11 integrated manufacturing or assembly process; including
12 computers used primarily in a manufacturer's computer assisted
13 design, computer assisted manufacturing (CAD/CAM) system; or
14 any subunit or assembly comprising a component of any machinery
15 or auxiliary, adjunct or attachment parts of machinery, such as
16 tools, dies, jigs, fixtures, patterns and molds; or any parts
17 which require periodic replacement in the course of normal
18 operation; but shall not include hand tools. Equipment includes
19 chemicals or chemicals acting as catalysts but only if the
20 chemicals or chemicals acting as catalysts effect a direct and
21 immediate change upon a product being manufactured or assembled
22 for wholesale or retail sale or lease. The purchaser of such
23 machinery and equipment who has an active resale registration
24 number shall furnish such number to the seller at the time of
25 purchase. The purchaser of such machinery and equipment and
26 tools without an active resale registration number shall

 

 

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1 furnish to the seller a certificate of exemption for each
2 transaction stating facts establishing the exemption for that
3 transaction, which certificate shall be available to the
4 Department for inspection or audit.
5     Except as provided in Section 2d of this Act, the rolling
6 stock exemption applies to rolling stock used by an interstate
7 carrier for hire, even just between points in Illinois, if such
8 rolling stock transports, for hire, persons whose journeys or
9 property whose shipments originate or terminate outside
10 Illinois.
11     Any informal rulings, opinions or letters issued by the
12 Department in response to an inquiry or request for any opinion
13 from any person regarding the coverage and applicability of
14 exemption (e) to specific devices shall be published,
15 maintained as a public record, and made available for public
16 inspection and copying. If the informal ruling, opinion or
17 letter contains trade secrets or other confidential
18 information, where possible the Department shall delete such
19 information prior to publication. Whenever such informal
20 rulings, opinions, or letters contain any policy of general
21 applicability, the Department shall formulate and adopt such
22 policy as a rule in accordance with the provisions of the
23 Illinois Administrative Procedure Act.
24     On and after July 1, 1987, no entity otherwise eligible
25 under exemption (c) of this Section shall make tax free
26 purchases unless it has an active exemption identification

 

 

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1 number issued by the Department.
2     "Serviceman" means any person who is engaged in the
3 occupation of making sales of service.
4     "Sale at Retail" means "sale at retail" as defined in the
5 Retailers' Occupation Tax Act.
6     "Supplier" means any person who makes sales of tangible
7 personal property to servicemen for the purpose of resale as an
8 incident to a sale of service.
9 (Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
10 eff. 6-20-03; 93-1033, eff. 9-3-04.)