Sen. Pat McGuire

Filed: 5/11/2017

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1871

2    AMENDMENT NO. ______. Amend Senate Bill 1871, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Use Tax Act is amended by changing Sections
63-55, 3-61, and 10 as follows:
 
7    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
8    Sec. 3-55. Multistate exemption. To prevent actual or
9likely multistate taxation, the tax imposed by this Act does
10not apply to the use of tangible personal property in this
11State under the following circumstances:
12    (a) The use, in this State, of tangible personal property
13acquired outside this State by a nonresident individual and
14brought into this State by the individual for his or her own
15use while temporarily within this State or while passing
16through this State.

 

 

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1    (b) (Blank). The use, in this State, of tangible personal
2property by an interstate carrier for hire as rolling stock
3moving in interstate commerce or by lessors under a lease of
4one year or longer executed or in effect at the time of
5purchase of tangible personal property by interstate carriers
6for-hire for use as rolling stock moving in interstate commerce
7as long as so used by the interstate carriers for-hire, and
8equipment operated by a telecommunications provider, licensed
9as a common carrier by the Federal Communications Commission,
10which is permanently installed in or affixed to aircraft moving
11in interstate commerce.
12    (c) The use, in this State, by owners, lessors, or shippers
13of tangible personal property that is utilized by interstate
14carriers for hire for use as rolling stock moving in interstate
15commerce as long as so used by the interstate carriers for
16hire, and equipment operated by a telecommunications provider,
17licensed as a common carrier by the Federal Communications
18Commission, which is permanently installed in or affixed to
19aircraft moving in interstate commerce.
20    (d) The use, in this State, of tangible personal property
21that is acquired outside this State and caused to be brought
22into this State by a person who has already paid a tax in
23another State in respect to the sale, purchase, or use of that
24property, to the extent of the amount of the tax properly due
25and paid in the other State.
26    (e) The temporary storage, in this State, of tangible

 

 

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1personal property that is acquired outside this State and that,
2after being brought into this State and stored here
3temporarily, is used solely outside this State or is physically
4attached to or incorporated into other tangible personal
5property that is used solely outside this State, or is altered
6by converting, fabricating, manufacturing, printing,
7processing, or shaping, and, as altered, is used solely outside
8this State.
9    (f) The temporary storage in this State of building
10materials and fixtures that are acquired either in this State
11or outside this State by an Illinois registered combination
12retailer and construction contractor, and that the purchaser
13thereafter uses outside this State by incorporating that
14property into real estate located outside this State.
15    (g) The use or purchase of tangible personal property by a
16common carrier by rail or motor that receives the physical
17possession of the property in Illinois, and that transports the
18property, or shares with another common carrier in the
19transportation of the property, out of Illinois on a standard
20uniform bill of lading showing the seller of the property as
21the shipper or consignor of the property to a destination
22outside Illinois, for use outside Illinois.
23    (h) Except as provided in subsection (h-1), the use, in
24this State, of a motor vehicle that was sold in this State to a
25nonresident, even though the motor vehicle is delivered to the
26nonresident in this State, if the motor vehicle is not to be

 

 

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1titled in this State, and if a drive-away permit is issued to
2the motor vehicle as provided in Section 3-603 of the Illinois
3Vehicle Code or if the nonresident purchaser has vehicle
4registration plates to transfer to the motor vehicle upon
5returning to his or her home state. The issuance of the
6drive-away permit or having the out-of-state registration
7plates to be transferred shall be prima facie evidence that the
8motor vehicle will not be titled in this State.
9    (h-1) The exemption under subsection (h) does not apply if
10the state in which the motor vehicle will be titled does not
11allow a reciprocal exemption for the use in that state of a
12motor vehicle sold and delivered in that state to an Illinois
13resident but titled in Illinois. The tax collected under this
14Act on the sale of a motor vehicle in this State to a resident
15of another state that does not allow a reciprocal exemption
16shall be imposed at a rate equal to the state's rate of tax on
17taxable property in the state in which the purchaser is a
18resident, except that the tax shall not exceed the tax that
19would otherwise be imposed under this Act. At the time of the
20sale, the purchaser shall execute a statement, signed under
21penalty of perjury, of his or her intent to title the vehicle
22in the state in which the purchaser is a resident within 30
23days after the sale and of the fact of the payment to the State
24of Illinois of tax in an amount equivalent to the state's rate
25of tax on taxable property in his or her state of residence and
26shall submit the statement to the appropriate tax collection

 

 

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1agency in his or her state of residence. In addition, the
2retailer must retain a signed copy of the statement in his or
3her records. Nothing in this subsection shall be construed to
4require the removal of the vehicle from this state following
5the filing of an intent to title the vehicle in the purchaser's
6state of residence if the purchaser titles the vehicle in his
7or her state of residence within 30 days after the date of
8sale. The tax collected under this Act in accordance with this
9subsection (h-1) shall be proportionately distributed as if the
10tax were collected at the 6.25% general rate imposed under this
11Act.
12    (h-2) The following exemptions apply with respect to
13certain aircraft:
14        (1) Beginning on July 1, 2007, no tax is imposed under
15    this Act on the purchase of an aircraft, as defined in
16    Section 3 of the Illinois Aeronautics Act, if all of the
17    following conditions are met:
18            (A) the aircraft leaves this State within 15 days
19        after the later of either the issuance of the final
20        billing for the purchase of the aircraft or the
21        authorized approval for return to service, completion
22        of the maintenance record entry, and completion of the
23        test flight and ground test for inspection, as required
24        by 14 C.F.R. 91.407;
25            (B) the aircraft is not based or registered in this
26        State after the purchase of the aircraft; and

 

 

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1            (C) the purchaser provides the Department with a
2        signed and dated certification, on a form prescribed by
3        the Department, certifying that the requirements of
4        this item (1) are met. The certificate must also
5        include the name and address of the purchaser, the
6        address of the location where the aircraft is to be
7        titled or registered, the address of the primary
8        physical location of the aircraft, and other
9        information that the Department may reasonably
10        require.
11        (2) Beginning on July 1, 2007, no tax is imposed under
12    this Act on the use of an aircraft, as defined in Section 3
13    of the Illinois Aeronautics Act, that is temporarily
14    located in this State for the purpose of a prepurchase
15    evaluation if all of the following conditions are met:
16            (A) the aircraft is not based or registered in this
17        State after the prepurchase evaluation; and
18            (B) the purchaser provides the Department with a
19        signed and dated certification, on a form prescribed by
20        the Department, certifying that the requirements of
21        this item (2) are met. The certificate must also
22        include the name and address of the purchaser, the
23        address of the location where the aircraft is to be
24        titled or registered, the address of the primary
25        physical location of the aircraft, and other
26        information that the Department may reasonably

 

 

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1        require.
2        (3) Beginning on July 1, 2007, no tax is imposed under
3    this Act on the use of an aircraft, as defined in Section 3
4    of the Illinois Aeronautics Act, that is temporarily
5    located in this State for the purpose of a post-sale
6    customization if all of the following conditions are met:
7            (A) the aircraft leaves this State within 15 days
8        after the authorized approval for return to service,
9        completion of the maintenance record entry, and
10        completion of the test flight and ground test for
11        inspection, as required by 14 C.F.R. 91.407;
12            (B) the aircraft is not based or registered in this
13        State either before or after the post-sale
14        customization; and
15            (C) the purchaser provides the Department with a
16        signed and dated certification, on a form prescribed by
17        the Department, certifying that the requirements of
18        this item (3) are met. The certificate must also
19        include the name and address of the purchaser, the
20        address of the location where the aircraft is to be
21        titled or registered, the address of the primary
22        physical location of the aircraft, and other
23        information that the Department may reasonably
24        require.
25    If tax becomes due under this subsection (h-2) because of
26the purchaser's use of the aircraft in this State, the

 

 

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1purchaser shall file a return with the Department and pay the
2tax on the fair market value of the aircraft. This return and
3payment of the tax must be made no later than 30 days after the
4aircraft is used in a taxable manner in this State. The tax is
5based on the fair market value of the aircraft on the date that
6it is first used in a taxable manner in this State.
7    For purposes of this subsection (h-2):
8    "Based in this State" means hangared, stored, or otherwise
9used, excluding post-sale customizations as defined in this
10Section, for 10 or more days in each 12-month period
11immediately following the date of the sale of the aircraft.
12    "Post-sale customization" means any improvement,
13maintenance, or repair that is performed on an aircraft
14following a transfer of ownership of the aircraft.
15    "Prepurchase evaluation" means an examination of an
16aircraft to provide a potential purchaser with information
17relevant to the potential purchase.
18    "Registered in this State" means an aircraft registered
19with the Department of Transportation, Aeronautics Division,
20or titled or registered with the Federal Aviation
21Administration to an address located in this State.
22    This subsection (h-2) is exempt from the provisions of
23Section 3-90.
24    (i) Beginning July 1, 1999, the use, in this State, of fuel
25acquired outside this State and brought into this State in the
26fuel supply tanks of locomotives engaged in freight hauling and

 

 

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1passenger service for interstate commerce. This subsection is
2exempt from the provisions of Section 3-90.
3    (j) Beginning on January 1, 2002 and through June 30, 2016,
4the use of tangible personal property purchased from an
5Illinois retailer by a taxpayer engaged in centralized
6purchasing activities in Illinois who will, upon receipt of the
7property in Illinois, temporarily store the property in
8Illinois (i) for the purpose of subsequently transporting it
9outside this State for use or consumption thereafter solely
10outside this State or (ii) for the purpose of being processed,
11fabricated, or manufactured into, attached to, or incorporated
12into other tangible personal property to be transported outside
13this State and thereafter used or consumed solely outside this
14State. The Director of Revenue shall, pursuant to rules adopted
15in accordance with the Illinois Administrative Procedure Act,
16issue a permit to any taxpayer in good standing with the
17Department who is eligible for the exemption under this
18subsection (j). The permit issued under this subsection (j)
19shall authorize the holder, to the extent and in the manner
20specified in the rules adopted under this Act, to purchase
21tangible personal property from a retailer exempt from the
22taxes imposed by this Act. Taxpayers shall maintain all
23necessary books and records to substantiate the use and
24consumption of all such tangible personal property outside of
25the State of Illinois.
26(Source: P.A. 97-73, eff. 6-30-11.)
 

 

 

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1    (35 ILCS 105/3-61)
2    Sec. 3-61. Motor vehicles; trailers; use as rolling stock
3definition.
4    (a) (Blank). Through June 30, 2003, "use as rolling stock
5moving in interstate commerce" in subsections (b) and (c) of
6Section 3-55 means for motor vehicles, as defined in Section
71-146 of the Illinois Vehicle Code, and trailers, as defined in
8Section 1-209 of the Illinois Vehicle Code, when on 15 or more
9occasions in a 12-month period the motor vehicle and trailer
10has carried persons or property for hire in interstate
11commerce, even just between points in Illinois, if the motor
12vehicle and trailer transports persons whose journeys or
13property whose shipments originate or terminate outside
14Illinois. This definition applies to all property purchased for
15the purpose of being attached to those motor vehicles or
16trailers as a part thereof.
17    (b) (Blank). On and after July 1, 2003 and through June 30,
182004, "use as rolling stock moving in interstate commerce" in
19paragraphs (b) and (c) of Section 3-55 occurs for motor
20vehicles, as defined in Section 1-146 of the Illinois Vehicle
21Code, when during a 12-month period the rolling stock has
22carried persons or property for hire in interstate commerce for
2351% of its total trips and transports persons whose journeys or
24property whose shipments originate or terminate outside
25Illinois. Trips that are only between points in Illinois shall

 

 

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1not be counted as interstate trips when calculating whether the
2tangible personal property qualifies for the exemption but such
3trips shall be included in total trips taken.
4    (c) This subsection (c) applies to motor vehicles, other
5than limousines, purchased through June 30, 2017. For motor
6vehicles, other than limousines, purchased on or after July 1,
72017, subsection (d-5) applies. This subsection (c) applies to
8limousines purchased before, on, or after July 1, 2017. "Use
9Beginning July 1, 2004, "use as rolling stock moving in
10interstate commerce" in paragraph paragraphs (b) and (c) of
11Section 3-55 occurs for motor vehicles, as defined in Section
121-146 of the Illinois Vehicle Code, when during a 12-month
13period the rolling stock has carried persons or property for
14hire in interstate commerce for greater than 50% of its total
15trips for that period or for greater than 50% of its total
16miles for that period. The person claiming the exemption shall
17make an election at the time of purchase to use either the
18trips or mileage method. Persons who purchased motor vehicles
19prior to July 1, 2004 shall make an election to use either the
20trips or mileage method and document that election in their
21books and records. If no election is made under this subsection
22to use the trips or mileage method, the person shall be deemed
23to have chosen the mileage method.
24    For purposes of determining qualifying trips or miles,
25motor vehicles that carry persons or property for hire, even
26just between points in Illinois, will be considered used for

 

 

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1hire in interstate commerce if the motor vehicle transports
2persons whose journeys or property whose shipments originate or
3terminate outside Illinois. The exemption for motor vehicles
4used as rolling stock moving in interstate commerce may be
5claimed only for the following vehicles: (i) motor vehicles
6whose gross vehicle weight rating exceeds 16,000 pounds; and
7(ii) limousines, as defined in Section 1-139.1 of the Illinois
8Vehicle Code. Through June 30, 2017, this This definition
9applies to all property purchased for the purpose of being
10attached to those motor vehicles as a part thereof. On and
11after July 1, 2017, this definition applies to property
12purchased for the purpose of being attached to limousines as a
13part thereof.
14    (d) For purchases made through June 30, 2017 Beginning July
151, 2004, "use as rolling stock moving in interstate commerce"
16in paragraph paragraphs (b) and (c) of Section 3-55 occurs for
17trailers, as defined in Section 1-209 of the Illinois Vehicle
18Code, semitrailers as defined in Section 1-187 of the Illinois
19Vehicle Code, and pole trailers as defined in Section 1-161 of
20the Illinois Vehicle Code, when during a 12-month period the
21rolling stock has carried persons or property for hire in
22interstate commerce for greater than 50% of its total trips for
23that period or for greater than 50% of its total miles for that
24period. The person claiming the exemption for a trailer or
25trailers that will not be dedicated to a motor vehicle or group
26of motor vehicles shall make an election at the time of

 

 

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1purchase to use either the trips or mileage method. Persons who
2purchased trailers prior to July 1, 2004 that are not dedicated
3to a motor vehicle or group of motor vehicles shall make an
4election to use either the trips or mileage method and document
5that election in their books and records. If no election is
6made under this subsection to use the trips or mileage method,
7the person shall be deemed to have chosen the mileage method.
8    For purposes of determining qualifying trips or miles,
9trailers, semitrailers, or pole trailers that carry property
10for hire, even just between points in Illinois, will be
11considered used for hire in interstate commerce if the
12trailers, semitrailers, or pole trailers transport property
13whose shipments originate or terminate outside Illinois. This
14definition applies to all property purchased for the purpose of
15being attached to those trailers, semitrailers, or pole
16trailers as a part thereof. In lieu of a person providing
17documentation regarding the qualifying use of each individual
18trailer, semitrailer, or pole trailer, that person may document
19such qualifying use by providing documentation of the
20following:
21        (1) If a trailer, semitrailer, or pole trailer is
22    dedicated to a motor vehicle that qualifies as rolling
23    stock moving in interstate commerce under subsection (c) of
24    this Section, then that trailer, semitrailer, or pole
25    trailer qualifies as rolling stock moving in interstate
26    commerce under this subsection.

 

 

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1        (2) If a trailer, semitrailer, or pole trailer is
2    dedicated to a group of motor vehicles that all qualify as
3    rolling stock moving in interstate commerce under
4    subsection (c) of this Section, then that trailer,
5    semitrailer, or pole trailer qualifies as rolling stock
6    moving in interstate commerce under this subsection.
7        (3) If one or more trailers, semitrailers, or pole
8    trailers are dedicated to a group of motor vehicles and not
9    all of those motor vehicles in that group qualify as
10    rolling stock moving in interstate commerce under
11    subsection (c) of this Section, then the percentage of
12    those trailers, semitrailers, or pole trailers that
13    qualifies as rolling stock moving in interstate commerce
14    under this subsection is equal to the percentage of those
15    motor vehicles in that group that qualify as rolling stock
16    moving in interstate commerce under subsection (c) of this
17    Section to which those trailers, semitrailers, or pole
18    trailers are dedicated. However, to determine the
19    qualification for the exemption provided under this item
20    (3), the mathematical application of the qualifying
21    percentage to one or more trailers, semitrailers, or pole
22    trailers under this subpart shall not be allowed as to any
23    fraction of a trailer, semitrailer, or pole trailer.
24    (d-5) For motor vehicles and trailers purchased on or after
25July 1, 2017, "use as rolling stock moving in interstate
26commerce" means that:

 

 

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1        (1) the motor vehicle or trailer is used to transport
2    persons or property for hire;
3        (2) for purposes of the exemption under subsection (c)
4    of Section 3-55, the purchaser who is an owner, lessor, or
5    shipper claiming the exemption certifies that the motor
6    vehicle or trailer will be utilized, from the time of
7    purchase and continuing through the statute of limitations
8    for issuing a notice of tax liability under this Act, by an
9    interstate carrier or carriers for hire who hold, and are
10    required by Federal Motor Carrier Safety Administration
11    regulations to hold, an active USDOT Number with the
12    Carrier Operation listed as "Interstate" and the Operation
13    Classification listed as "authorized for hire", "exempt
14    for hire", or both "authorized for hire" and "exempt for
15    hire"; and
16        (3) for motor vehicles, the gross vehicle weight rating
17    exceeds 16,000 pounds.
18    The definition of "use as rolling stock moving in
19interstate commerce" in this subsection (d-5) applies to all
20property purchased on or after July 1, 2017 for the purpose of
21being attached to a motor vehicle or trailer as a part thereof,
22regardless of whether the motor vehicle or trailer was
23purchased before, on, or after July 1, 2017.
24    If an item ceases to meet requirements (1) through (3)
25under this subsection (d-5), then the tax is imposed on the
26selling price, allowing for a reasonable depreciation for the

 

 

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1period during which the item qualified for the exemption.
2    For purposes of this subsection (d-5):
3        "Motor vehicle" excludes limousines, but otherwise
4    means that term as defined in Section 1-146 of the Illinois
5    Vehicle Code.
6        "Trailer" means (i) "trailer", as defined in Section
7    1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as
8    defined in Section 1-187 of the Illinois Vehicle Code, and
9    (iii) "pole trailer" as defined in Section 1-161 of the
10    Illinois Vehicle Code.
11    (e) For aircraft and watercraft purchased on or after
12January 1, 2014, "use as rolling stock moving in interstate
13commerce" in paragraph paragraphs (b) and (c) of Section 3-55
14occurs when, during a 12-month period, the rolling stock has
15carried persons or property for hire in interstate commerce for
16greater than 50% of its total trips for that period or for
17greater than 50% of its total miles for that period. The person
18claiming the exemption shall make an election at the time of
19purchase to use either the trips or mileage method and document
20that election in their books and records. If no election is
21made under this subsection to use the trips or mileage method,
22the person shall be deemed to have chosen the mileage method.
23For aircraft, flight hours may be used in lieu of recording
24miles in determining whether the aircraft meets the mileage
25test in this subsection. For watercraft, nautical miles or trip
26hours may be used in lieu of recording miles in determining

 

 

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1whether the watercraft meets the mileage test in this
2subsection.
3    Notwithstanding any other provision of law to the contrary,
4property purchased on or after January 1, 2014 for the purpose
5of being attached to aircraft or watercraft as a part thereof
6qualifies as rolling stock moving in interstate commerce only
7if the aircraft or watercraft to which it will be attached
8qualifies as rolling stock moving in interstate commerce under
9the test set forth in this subsection (e), regardless of when
10the aircraft or watercraft was purchased. Persons who purchased
11aircraft or watercraft prior to January 1, 2014 shall make an
12election to use either the trips or mileage method and document
13that election in their books and records for the purpose of
14determining whether property purchased on or after January 1,
152014 for the purpose of being attached to aircraft or
16watercraft as a part thereof qualifies as rolling stock moving
17in interstate commerce under this subsection (e).
18    (f) The election to use either the trips or mileage method
19made under the provisions of subsections (c), (d), or (e) of
20this Section will remain in effect for the duration of the
21purchaser's ownership of that item.
22(Source: P.A. 98-584, eff. 8-27-13.)
 
23    (35 ILCS 105/10)  (from Ch. 120, par. 439.10)
24    Sec. 10. Except as to motor vehicles, aircraft, watercraft,
25and trailers, and except as to cigarettes as defined in the

 

 

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1Cigarette Use Tax Act, when tangible personal property is
2purchased from a retailer for use in this State by a purchaser
3who did not pay the tax imposed by this Act to the retailer,
4and who does not file returns with the Department as a retailer
5under Section 9 of this Act, such purchaser (by the last day of
6the month following the calendar month in which such purchaser
7makes any payment upon the selling price of such property)
8shall, except as otherwise provided in this Section, file a
9return with the Department and pay the tax upon that portion of
10the selling price so paid by the purchaser during the preceding
11calendar month. When tangible personal property, including but
12not limited to motor vehicles and aircraft, is purchased by a
13lessor, under a lease for one year or longer, executed or in
14effect at the time of purchase to an interstate carrier for
15hire, who did not pay the tax imposed by this Act to the
16retailer, such lessor (by the last day of the month following
17the calendar month in which such property reverts to the use of
18such lessor) shall file a return with the Department and pay
19the tax upon the fair market value of such property on the date
20of such reversion. However, in determining the fair market
21value at the time of reversion, the fair market value of such
22property shall not exceed the original purchase price of the
23property that was paid by the lessor at the time of purchase.
24Such return shall be filed on a form prescribed by the
25Department and shall contain such information as the Department
26may reasonably require. Such return and payment from the

 

 

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1purchaser shall be submitted to the Department sooner than the
2last day of the month after the month in which the purchase is
3made to the extent that that may be necessary in order to
4secure the title to a motor vehicle or the certificate of
5registration for an aircraft. However, except as to motor
6vehicles and aircraft, and except as to cigarettes as defined
7in the Cigarette Use Tax Act, if the purchaser's annual use tax
8liability does not exceed $600, the purchaser may file the
9return on an annual basis on or before April 15th of the year
10following the year use tax liability was incurred. Individual
11purchasers with an annual use tax liability that does not
12exceed $600 may, in lieu of the filing and payment requirements
13in this Section, file and pay in compliance with Section 502.1
14of the Illinois Income Tax Act.
15    If cigarettes, as defined in the Cigarette Use Tax Act, are
16purchased from a retailer for use in this State by a purchaser
17who did not pay the tax imposed by this Act to the retailer,
18and who does not file returns with the Department as a retailer
19under Section 9 of this Act, such purchaser must, within 30
20days after acquiring the cigarettes, file a return with the
21Department and pay the tax upon that portion of the selling
22price so paid by the purchaser for the cigarettes.
23    In addition with respect to motor vehicles, aircraft,
24watercraft, and trailers, a purchaser of such tangible personal
25property for use in this State, who purchases such tangible
26personal property from an out-of-state retailer, shall file

 

 

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1with the Department, upon a form to be prescribed and supplied
2by the Department, a return for each such item of tangible
3personal property purchased, except that if, in the same
4transaction, (i) a purchaser of motor vehicles, aircraft,
5watercraft, or trailers who is a retailer of motor vehicles,
6aircraft, watercraft, or trailers purchases more than one motor
7vehicle, aircraft, watercraft, or trailer for the purpose of
8resale or (ii) a purchaser of motor vehicles, aircraft,
9watercraft, or trailers purchases more than one motor vehicle,
10aircraft, watercraft, or trailer for use as qualifying rolling
11stock as provided in Section 3-55 of this Act, then the
12purchaser may report the purchase of all motor vehicles,
13aircraft, watercraft, or trailers involved in that transaction
14to the Department on a single return prescribed by the
15Department. Such return in the case of motor vehicles and
16aircraft must show the name and address of the seller, the
17name, address of purchaser, the amount of the selling price
18including the amount allowed by the retailer for traded in
19property, if any; the amount allowed by the retailer for the
20traded-in tangible personal property, if any, to the extent to
21which Section 2 of this Act allows an exemption for the value
22of traded-in property; the balance payable after deducting such
23trade-in allowance from the total selling price; the amount of
24tax due from the purchaser with respect to such transaction;
25the amount of tax collected from the purchaser by the retailer
26on such transaction (or satisfactory evidence that such tax is

 

 

10000SB1871sam003- 21 -LRB100 08399 HLH 26203 a

1not due in that particular instance if that is claimed to be
2the fact); the place and date of the sale, a sufficient
3identification of the property sold, and such other information
4as the Department may reasonably require.
5    Such return shall be filed not later than 30 days after
6such motor vehicle or aircraft is brought into this State for
7use.
8    For purposes of this Section, "watercraft" means a Class 2,
9Class 3, or Class 4 watercraft as defined in Section 3-2 of the
10Boat Registration and Safety Act, a personal watercraft, or any
11boat equipped with an inboard motor.
12    The return and tax remittance or proof of exemption from
13the tax that is imposed by this Act may be transmitted to the
14Department by way of the State agency with which, or State
15officer with whom, the tangible personal property must be
16titled or registered (if titling or registration is required)
17if the Department and such agency or State officer determine
18that this procedure will expedite the processing of
19applications for title or registration.
20    With each such return, the purchaser shall remit the proper
21amount of tax due (or shall submit satisfactory evidence that
22the sale is not taxable if that is the case), to the Department
23or its agents, whereupon the Department shall issue, in the
24purchaser's name, a tax receipt (or a certificate of exemption
25if the Department is satisfied that the particular sale is tax
26exempt) which such purchaser may submit to the agency with

 

 

10000SB1871sam003- 22 -LRB100 08399 HLH 26203 a

1which, or State officer with whom, he must title or register
2the tangible personal property that is involved (if titling or
3registration is required) in support of such purchaser's
4application for an Illinois certificate or other evidence of
5title or registration to such tangible personal property.
6    When a purchaser pays a tax imposed by this Act directly to
7the Department, the Department (upon request therefor from such
8purchaser) shall issue an appropriate receipt to such purchaser
9showing that he has paid such tax to the Department. Such
10receipt shall be sufficient to relieve the purchaser from
11further liability for the tax to which such receipt may refer.
12    A user who is liable to pay use tax directly to the
13Department only occasionally and not on a frequently recurring
14basis, and who is not required to file returns with the
15Department as a retailer under Section 9 of this Act, or under
16the "Retailers' Occupation Tax Act", or as a registrant with
17the Department under the "Service Occupation Tax Act" or the
18"Service Use Tax Act", need not register with the Department.
19However, if such a user has a frequently recurring direct use
20tax liability to pay to the Department, such user shall be
21required to register with the Department on forms prescribed by
22the Department and to obtain and display a certificate of
23registration from the Department. In that event, all of the
24provisions of Section 9 of this Act concerning the filing of
25regular monthly, quarterly or annual tax returns and all of the
26provisions of Section 2a of the "Retailers' Occupation Tax Act"

 

 

10000SB1871sam003- 23 -LRB100 08399 HLH 26203 a

1concerning the requirements for registrants to post bond or
2other security with the Department, as the provisions of such
3sections now exist or may hereafter be amended, shall apply to
4such users to the same extent as if such provisions were
5included herein.
6(Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10;
796-1388, eff. 7-29-10.)
 
8    Section 10. The Service Use Tax Act is amended by changing
9Sections 2 and 3-51 as follows:
 
10    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
11    Sec. 2. Definitions.
12    "Use" means the exercise by any person of any right or
13power over tangible personal property incident to the ownership
14of that property, but does not include the sale or use for
15demonstration by him of that property in any form as tangible
16personal property in the regular course of business. "Use" does
17not mean the interim use of tangible personal property nor the
18physical incorporation of tangible personal property, as an
19ingredient or constituent, into other tangible personal
20property, (a) which is sold in the regular course of business
21or (b) which the person incorporating such ingredient or
22constituent therein has undertaken at the time of such purchase
23to cause to be transported in interstate commerce to
24destinations outside the State of Illinois.

 

 

10000SB1871sam003- 24 -LRB100 08399 HLH 26203 a

1    "Purchased from a serviceman" means the acquisition of the
2ownership of, or title to, tangible personal property through a
3sale of service.
4    "Purchaser" means any person who, through a sale of
5service, acquires the ownership of, or title to, any tangible
6personal property.
7    "Cost price" means the consideration paid by the serviceman
8for a purchase valued in money, whether paid in money or
9otherwise, including cash, credits and services, and shall be
10determined without any deduction on account of the supplier's
11cost of the property sold or on account of any other expense
12incurred by the supplier. When a serviceman contracts out part
13or all of the services required in his sale of service, it
14shall be presumed that the cost price to the serviceman of the
15property transferred to him or her by his or her subcontractor
16is equal to 50% of the subcontractor's charges to the
17serviceman in the absence of proof of the consideration paid by
18the subcontractor for the purchase of such property.
19    "Selling price" means the consideration for a sale valued
20in money whether received in money or otherwise, including
21cash, credits and service, and shall be determined without any
22deduction on account of the serviceman's cost of the property
23sold, the cost of materials used, labor or service cost or any
24other expense whatsoever, but does not include interest or
25finance charges which appear as separate items on the bill of
26sale or sales contract nor charges that are added to prices by

 

 

10000SB1871sam003- 25 -LRB100 08399 HLH 26203 a

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

 

 

10000SB1871sam003- 26 -LRB100 08399 HLH 26203 a

1    company may qualify for the exemption under this paragraph
2    only if the limited liability company is organized and
3    operated exclusively for educational purposes.
4        (4) (blank). a sale or transfer of tangible personal
5    property as an incident to the rendering of service for
6    interstate carriers for hire for use as rolling stock
7    moving in interstate commerce or by lessors under a lease
8    of one year or longer, executed or in effect at the time of
9    purchase of personal property, to interstate carriers for
10    hire for use as rolling stock moving in interstate commerce
11    so long as so used by such interstate carriers for hire,
12    and equipment operated by a telecommunications provider,
13    licensed as a common carrier by the Federal Communications
14    Commission, which is permanently installed in or affixed to
15    aircraft moving in interstate commerce.
16        (4a) a sale or transfer of tangible personal property
17    as an incident to the rendering of service for owners,
18    lessors, or shippers of tangible personal property which is
19    utilized by interstate carriers for hire for use as rolling
20    stock moving in interstate commerce so long as so used by
21    interstate carriers for hire, and equipment operated by a
22    telecommunications provider, licensed as a common carrier
23    by the Federal Communications Commission, which is
24    permanently installed in or affixed to aircraft moving in
25    interstate commerce.
26        (4a-5) on and after July 1, 2003 and through June 30,

 

 

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

 

 

10000SB1871sam003- 28 -LRB100 08399 HLH 26203 a

1    person, whether the materials used in the process are owned
2    by the manufacturer or some other person, or whether such
3    sale or lease is made apart from or as an incident to the
4    seller's engaging in a service occupation and the
5    applicable tax is a Service Use Tax or Service Occupation
6    Tax, rather than Use Tax or Retailers' Occupation Tax. The
7    exemption provided by this paragraph (5) does not include
8    machinery and equipment used in (i) the generation of
9    electricity for wholesale or retail sale; (ii) the
10    generation or treatment of natural or artificial gas for
11    wholesale or retail sale that is delivered to customers
12    through pipes, pipelines, or mains; or (iii) the treatment
13    of water for wholesale or retail sale that is delivered to
14    customers through pipes, pipelines, or mains. The
15    provisions of this amendatory Act of the 98th General
16    Assembly are declaratory of existing law as to the meaning
17    and scope of this exemption.
18        (5a) the repairing, reconditioning or remodeling, for
19    a common carrier by rail, of tangible personal property
20    which belongs to such carrier for hire, and as to which
21    such carrier receives the physical possession of the
22    repaired, reconditioned or remodeled item of tangible
23    personal property in Illinois, and which such carrier
24    transports, or shares with another common carrier in the
25    transportation of such property, out of Illinois on a
26    standard uniform bill of lading showing the person who

 

 

10000SB1871sam003- 29 -LRB100 08399 HLH 26203 a

1    repaired, reconditioned or remodeled the property to a
2    destination outside Illinois, for use outside Illinois.
3        (5b) a sale or transfer of tangible personal property
4    which is produced by the seller thereof on special order in
5    such a way as to have made the applicable tax the Service
6    Occupation Tax or the Service Use Tax, rather than the
7    Retailers' Occupation Tax or the Use Tax, for an interstate
8    carrier by rail which receives the physical possession of
9    such property in Illinois, and which transports such
10    property, or shares with another common carrier in the
11    transportation of such property, out of Illinois on a
12    standard uniform bill of lading showing the seller of the
13    property as the shipper or consignor of such property to a
14    destination outside Illinois, for use outside Illinois.
15        (6) until July 1, 2003, a sale or transfer of
16    distillation machinery and equipment, sold as a unit or kit
17    and assembled or installed by the retailer, which machinery
18    and equipment is certified by the user to be used only for
19    the production of ethyl alcohol that will be used for
20    consumption as motor fuel or as a component of motor fuel
21    for the personal use of such user and not subject to sale
22    or resale.
23        (7) at the election of any serviceman not required to
24    be otherwise registered as a retailer under Section 2a of
25    the Retailers' Occupation Tax Act, made for each fiscal
26    year sales of service in which the aggregate annual cost

 

 

10000SB1871sam003- 30 -LRB100 08399 HLH 26203 a

1    price of tangible personal property transferred as an
2    incident to the sales of service is less than 35%, or 75%
3    in the case of servicemen transferring prescription drugs
4    or servicemen engaged in graphic arts production, of the
5    aggregate annual total gross receipts from all sales of
6    service. The purchase of such tangible personal property by
7    the serviceman shall be subject to tax under the Retailers'
8    Occupation Tax Act and the Use Tax Act. However, if a
9    primary serviceman who has made the election described in
10    this paragraph subcontracts service work to a secondary
11    serviceman who has also made the election described in this
12    paragraph, the primary serviceman does not incur a Use Tax
13    liability if the secondary serviceman (i) has paid or will
14    pay Use Tax on his or her cost price of any tangible
15    personal property transferred to the primary serviceman
16    and (ii) certifies that fact in writing to the primary
17    serviceman.
18    Tangible personal property transferred incident to the
19completion of a maintenance agreement is exempt from the tax
20imposed pursuant to this Act.
21    Exemption (5) also includes machinery and equipment used in
22the general maintenance or repair of such exempt machinery and
23equipment or for in-house manufacture of exempt machinery and
24equipment. The machinery and equipment exemption does not
25include machinery and equipment used in (i) the generation of
26electricity for wholesale or retail sale; (ii) the generation

 

 

10000SB1871sam003- 31 -LRB100 08399 HLH 26203 a

1or treatment of natural or artificial gas for wholesale or
2retail sale that is delivered to customers through pipes,
3pipelines, or mains; or (iii) the treatment of water for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains. The provisions of this amendatory
6Act of the 98th General Assembly are declaratory of existing
7law as to the meaning and scope of this exemption. For the
8purposes of exemption (5), each of these terms shall have the
9following meanings: (1) "manufacturing process" shall mean the
10production of any article of tangible personal property,
11whether such article is a finished product or an article for
12use in the process of manufacturing or assembling a different
13article of tangible personal property, by procedures commonly
14regarded as manufacturing, processing, fabricating, or
15refining which changes some existing material or materials into
16a material with a different form, use or name. In relation to a
17recognized integrated business composed of a series of
18operations which collectively constitute manufacturing, or
19individually constitute manufacturing operations, the
20manufacturing process shall be deemed to commence with the
21first operation or stage of production in the series, and shall
22not be deemed to end until the completion of the final product
23in the last operation or stage of production in the series; and
24further, for purposes of exemption (5), photoprocessing is
25deemed to be a manufacturing process of tangible personal
26property for wholesale or retail sale; (2) "assembling process"

 

 

10000SB1871sam003- 32 -LRB100 08399 HLH 26203 a

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

 

 

10000SB1871sam003- 33 -LRB100 08399 HLH 26203 a

1without an active resale registration number shall prepare a
2certificate of exemption for each transaction stating facts
3establishing the exemption for that transaction, which
4certificate shall be available to the Department for inspection
5or audit. The Department shall prescribe the form of the
6certificate.
7    Any informal rulings, opinions or letters issued by the
8Department in response to an inquiry or request for any opinion
9from any person regarding the coverage and applicability of
10exemption (5) to specific devices shall be published,
11maintained as a public record, and made available for public
12inspection and copying. If the informal ruling, opinion or
13letter contains trade secrets or other confidential
14information, where possible the Department shall delete such
15information prior to publication. Whenever such informal
16rulings, opinions, or letters contain any policy of general
17applicability, the Department shall formulate and adopt such
18policy as a rule in accordance with the provisions of the
19Illinois Administrative Procedure Act.
20    On and after July 1, 1987, no entity otherwise eligible
21under exemption (3) of this Section shall make tax free
22purchases unless it has an active exemption identification
23number issued by the Department.
24    The purchase, employment and transfer of such tangible
25personal property as newsprint and ink for the primary purpose
26of conveying news (with or without other information) is not a

 

 

10000SB1871sam003- 34 -LRB100 08399 HLH 26203 a

1purchase, use or sale of service or of tangible personal
2property within the meaning of this Act.
3    "Serviceman" means any person who is engaged in the
4occupation of making sales of service.
5    "Sale at retail" means "sale at retail" as defined in the
6Retailers' Occupation Tax Act.
7    "Supplier" means any person who makes sales of tangible
8personal property to servicemen for the purpose of resale as an
9incident to a sale of service.
10    "Serviceman maintaining a place of business in this State",
11or any like term, means and includes any serviceman:
12        1. having or maintaining within this State, directly or
13    by a subsidiary, an office, distribution house, sales
14    house, warehouse or other place of business, or any agent
15    or other representative operating within this State under
16    the authority of the serviceman or its subsidiary,
17    irrespective of whether such place of business or agent or
18    other representative is located here permanently or
19    temporarily, or whether such serviceman or subsidiary is
20    licensed to do business in this State;
21        1.1. having a contract with a person located in this
22    State under which the person, for a commission or other
23    consideration based on the sale of service by the
24    serviceman, directly or indirectly refers potential
25    customers to the serviceman by providing to the potential
26    customers a promotional code or other mechanism that allows

 

 

10000SB1871sam003- 35 -LRB100 08399 HLH 26203 a

1    the serviceman to track purchases referred by such persons.
2    Examples of mechanisms that allow the serviceman to track
3    purchases referred by such persons include but are not
4    limited to the use of a link on the person's Internet
5    website, promotional codes distributed through the
6    person's hand-delivered or mailed material, and
7    promotional codes distributed by the person through radio
8    or other broadcast media. The provisions of this paragraph
9    1.1 shall apply only if the cumulative gross receipts from
10    sales of service by the serviceman to customers who are
11    referred to the serviceman by all persons in this State
12    under such contracts exceed $10,000 during the preceding 4
13    quarterly periods ending on the last day of March, June,
14    September, and December; a serviceman meeting the
15    requirements of this paragraph 1.1 shall be presumed to be
16    maintaining a place of business in this State but may rebut
17    this presumption by submitting proof that the referrals or
18    other activities pursued within this State by such persons
19    were not sufficient to meet the nexus standards of the
20    United States Constitution during the preceding 4
21    quarterly periods;
22        1.2. beginning July 1, 2011, having a contract with a
23    person located in this State under which:
24            A. the serviceman sells the same or substantially
25        similar line of services as the person located in this
26        State and does so using an identical or substantially

 

 

10000SB1871sam003- 36 -LRB100 08399 HLH 26203 a

1        similar name, trade name, or trademark as the person
2        located in this State; and
3            B. the serviceman provides a commission or other
4        consideration to the person located in this State based
5        upon the sale of services by the serviceman.
6    The provisions of this paragraph 1.2 shall apply only if
7    the cumulative gross receipts from sales of service by the
8    serviceman to customers in this State under all such
9    contracts exceed $10,000 during the preceding 4 quarterly
10    periods ending on the last day of March, June, September,
11    and December;
12        2. soliciting orders for tangible personal property by
13    means of a telecommunication or television shopping system
14    (which utilizes toll free numbers) which is intended by the
15    retailer to be broadcast by cable television or other means
16    of broadcasting, to consumers located in this State;
17        3. pursuant to a contract with a broadcaster or
18    publisher located in this State, soliciting orders for
19    tangible personal property by means of advertising which is
20    disseminated primarily to consumers located in this State
21    and only secondarily to bordering jurisdictions;
22        4. soliciting orders for tangible personal property by
23    mail if the solicitations are substantial and recurring and
24    if the retailer benefits from any banking, financing, debt
25    collection, telecommunication, or marketing activities
26    occurring in this State or benefits from the location in

 

 

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1    this State of authorized installation, servicing, or
2    repair facilities;
3        5. being owned or controlled by the same interests
4    which own or control any retailer engaging in business in
5    the same or similar line of business in this State;
6        6. having a franchisee or licensee operating under its
7    trade name if the franchisee or licensee is required to
8    collect the tax under this Section;
9        7. pursuant to a contract with a cable television
10    operator located in this State, soliciting orders for
11    tangible personal property by means of advertising which is
12    transmitted or distributed over a cable television system
13    in this State; or
14        8. engaging in activities in Illinois, which
15    activities in the state in which the supply business
16    engaging in such activities is located would constitute
17    maintaining a place of business in that state.
18(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
19    (35 ILCS 110/3-51)
20    Sec. 3-51. Motor vehicles; trailers; use as rolling stock
21definition.
22    (a) (Blank). Through June 30, 2003, "use as rolling stock
23moving in interstate commerce" in subsection (b) of Section
243-45 means for motor vehicles, as defined in Section 1-46 of
25the Illinois Vehicle Code, and trailers, as defined in Section

 

 

10000SB1871sam003- 38 -LRB100 08399 HLH 26203 a

11-209 of the Illinois Vehicle Code, when on 15 or more
2occasions in a 12-month period the motor vehicle and trailer
3has carried persons or property for hire in interstate
4commerce, even just between points in Illinois, if the motor
5vehicle and trailer transports persons whose journeys or
6property whose shipments originate or terminate outside
7Illinois. This definition applies to all property purchased for
8the purpose of being attached to those motor vehicles or
9trailers as a part thereof.
10    (b) (Blank). On and after July 1, 2003 and through June 30,
112004, "use as rolling stock moving in interstate commerce" in
12paragraphs (4) and (4a) of the definition of "sale of service"
13in Section 2 and subsection (b) of Section 3-45 occurs for
14motor vehicles, as defined in Section 1-146 of the Illinois
15Vehicle Code, when during a 12-month period the rolling stock
16has carried persons or property for hire in interstate commerce
17for 51% of its total trips and transports persons whose
18journeys or property whose shipments originate or terminate
19outside Illinois. Trips that are only between points in
20Illinois shall not be counted as interstate trips when
21calculating whether the tangible personal property qualifies
22for the exemption but such trips shall be included in total
23trips taken.
24    (c) This subsection (c) applies to motor vehicles, other
25than limousines, purchased through June 30, 2017. For motor
26vehicles, other than limousines, purchased on or after July 1,

 

 

10000SB1871sam003- 39 -LRB100 08399 HLH 26203 a

12017, subsection (d-5) applies. This subsection (c) applies to
2limousines purchased before, on, or after July 1, 2017. "Use
3Beginning July 1, 2004, "use as rolling stock moving in
4interstate commerce" in paragraph paragraphs (4) and (4a) of
5the definition of "sale of service" in Section 2 and subsection
6(b) of Section 3-45 occurs for motor vehicles, as defined in
7Section 1-146 of the Illinois Vehicle Code, when during a
812-month period the rolling stock has carried persons or
9property for hire in interstate commerce for greater than 50%
10of its total trips for that period or for greater than 50% of
11its total miles for that period. The person claiming the
12exemption shall make an election at the time of purchase to use
13either the trips or mileage method. Persons who purchased motor
14vehicles prior to July 1, 2004 shall make an election to use
15either the trips or mileage method and document that election
16in their books and records. If no election is made under this
17subsection to use the trips or mileage method, the person shall
18be deemed to have chosen the mileage method.
19    For purposes of determining qualifying trips or miles,
20motor vehicles that carry persons or property for hire, even
21just between points in Illinois, will be considered used for
22hire in interstate commerce if the motor vehicle transports
23persons whose journeys or property whose shipments originate or
24terminate outside Illinois. The exemption for motor vehicles
25used as rolling stock moving in interstate commerce may be
26claimed only for the following vehicles: (i) motor vehicles

 

 

10000SB1871sam003- 40 -LRB100 08399 HLH 26203 a

1whose gross vehicle weight rating exceeds 16,000 pounds; and
2(ii) limousines, as defined in Section 1-139.1 of the Illinois
3Vehicle Code. Through June 30, 2017, this This definition
4applies to all property purchased for the purpose of being
5attached to those motor vehicles as a part thereof. On and
6after July 1, 2017, this definition applies to property
7purchased for the purpose of being attached to limousines as a
8part thereof.
9    (d) For purchases made through June 30, 2017 Beginning July
101, 2004, "use as rolling stock moving in interstate commerce"
11in paragraph paragraphs (4) and (4a) of the definition of "sale
12of service" in Section 2 and subsection (b) of Section 3-45
13occurs for trailers, as defined in Section 1-209 of the
14Illinois Vehicle Code, semitrailers as defined in Section 1-187
15of the Illinois Vehicle Code, and pole trailers as defined in
16Section 1-161 of the Illinois Vehicle Code, when during a
1712-month period the rolling stock has carried persons or
18property for hire in interstate commerce for greater than 50%
19of its total trips for that period or for greater than 50% of
20its total miles for that period. The person claiming the
21exemption for a trailer or trailers that will not be dedicated
22to a motor vehicle or group of motor vehicles shall make an
23election at the time of purchase to use either the trips or
24mileage method. Persons who purchased trailers prior to July 1,
252004 that are not dedicated to a motor vehicle or group of
26motor vehicles shall make an election to use either the trips

 

 

10000SB1871sam003- 41 -LRB100 08399 HLH 26203 a

1or mileage method and document that election in their books and
2records. If no election is made under this subsection to use
3the trips or mileage method, the person shall be deemed to have
4chosen the mileage method.
5    For purposes of determining qualifying trips or miles,
6trailers, semitrailers, or pole trailers that carry property
7for hire, even just between points in Illinois, will be
8considered used for hire in interstate commerce if the
9trailers, semitrailers, or pole trailers transport property
10whose shipments originate or terminate outside Illinois. This
11definition applies to all property purchased for the purpose of
12being attached to those trailers, semitrailers, or pole
13trailers as a part thereof. In lieu of a person providing
14documentation regarding the qualifying use of each individual
15trailer, semitrailer, or pole trailer, that person may document
16such qualifying use by providing documentation of the
17following:
18        (1) If a trailer, semitrailer, or pole trailer is
19    dedicated to a motor vehicle that qualifies as rolling
20    stock moving in interstate commerce under subsection (c) of
21    this Section, then that trailer, semitrailer, or pole
22    trailer qualifies as rolling stock moving in interstate
23    commerce under this subsection.
24        (2) If a trailer, semitrailer, or pole trailer is
25    dedicated to a group of motor vehicles that all qualify as
26    rolling stock moving in interstate commerce under

 

 

10000SB1871sam003- 42 -LRB100 08399 HLH 26203 a

1    subsection (c) of this Section, then that trailer,
2    semitrailer, or pole trailer qualifies as rolling stock
3    moving in interstate commerce under this subsection.
4        (3) If one or more trailers, semitrailers, or pole
5    trailers are dedicated to a group of motor vehicles and not
6    all of those motor vehicles in that group qualify as
7    rolling stock moving in interstate commerce under
8    subsection (c) of this Section, then the percentage of
9    those trailers, semitrailers, or pole trailers that
10    qualifies as rolling stock moving in interstate commerce
11    under this subsection is equal to the percentage of those
12    motor vehicles in that group that qualify as rolling stock
13    moving in interstate commerce under subsection (c) of this
14    Section to which those trailers, semitrailers, or pole
15    trailers are dedicated. However, to determine the
16    qualification for the exemption provided under this item
17    (3), the mathematical application of the qualifying
18    percentage to one or more trailers, semitrailers, or pole
19    trailers under this subpart shall not be allowed as to any
20    fraction of a trailer, semitrailer, or pole trailer.
21    (d-5) For motor vehicles and trailers purchased on or after
22July 1, 2017, "use as rolling stock moving in interstate
23commerce" means that:
24        (1) the motor vehicle or trailer is used to transport
25    persons or property for hire;
26        (2) for purposes of the exemption under paragraph (4a)

 

 

10000SB1871sam003- 43 -LRB100 08399 HLH 26203 a

1    of the definition of "sale of service" in Section 2, the
2    purchaser who is an owner, lessor, or shipper claiming the
3    exemption certifies that the motor vehicle or trailer will
4    be utilized, from the time of purchase and continuing
5    through the statute of limitations for issuing a notice of
6    tax liability under this Act, by an interstate carrier or
7    carriers for hire who hold, and are required by Federal
8    Motor Carrier Safety Administration regulations to hold,
9    an active USDOT Number with the Carrier Operation listed as
10    "Interstate" and the Operation Classification listed as
11    "authorized for hire", "exempt for hire", or both
12    "authorized for hire" and "exempt for hire"; and
13        (3) for motor vehicles, the gross vehicle weight rating
14    exceeds 16,000 pounds.
15    The definition of "use as rolling stock moving in
16interstate commerce" in this subsection (d-5) applies to all
17property purchased on or after July 1, 2017 for the purpose of
18being attached to a motor vehicle or trailer as a part thereof,
19regardless of whether the motor vehicle or trailer was
20purchased before, on, or after July 1, 2017.
21    If an item ceases to meet requirements (1) through (3)
22under this subsection (d-5), then the tax is imposed on the
23selling price, allowing for a reasonable depreciation for the
24period during which the item qualified for the exemption.
25    For purposes of this subsection (d-5):
26        "Motor vehicle" excludes limousines, but otherwise

 

 

10000SB1871sam003- 44 -LRB100 08399 HLH 26203 a

1    means that term as defined in Section 1-146 of the Illinois
2    Vehicle Code.
3        "Trailer" means (i) "trailer", as defined in Section
4    1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as
5    defined in Section 1-187 of the Illinois Vehicle Code, and
6    (iii) "pole trailer", as defined in Section 1-161 of the
7    Illinois Vehicle Code.
8    (e) For aircraft and watercraft purchased on or after
9January 1, 2014, "use as rolling stock moving in interstate
10commerce" in (i) paragraph paragraphs (4) and (4a) of the
11definition of "sale of service" in Section 2 and (ii)
12subsection (b) of Section 3-45 occurs when, during a 12-month
13period, the rolling stock has carried persons or property for
14hire in interstate commerce for greater than 50% of its total
15trips for that period or for greater than 50% of its total
16miles for that period. The person claiming the exemption shall
17make an election at the time of purchase to use either the
18trips or mileage method and document that election in their
19books and records. If no election is made under this subsection
20to use the trips or mileage method, the person shall be deemed
21to have chosen the mileage method. For aircraft, flight hours
22may be used in lieu of recording miles in determining whether
23the aircraft meets the mileage test in this subsection. For
24watercraft, nautical miles or trip hours may be used in lieu of
25recording miles in determining whether the watercraft meets the
26mileage test in this subsection.

 

 

10000SB1871sam003- 45 -LRB100 08399 HLH 26203 a

1    Notwithstanding any other provision of law to the contrary,
2property purchased on or after January 1, 2014 for the purpose
3of being attached to aircraft or watercraft as a part thereof
4qualifies as rolling stock moving in interstate commerce only
5if the aircraft or watercraft to which it will be attached
6qualifies as rolling stock moving in interstate commerce under
7the test set forth in this subsection (e), regardless of when
8the aircraft or watercraft was purchased. Persons who purchased
9aircraft or watercraft prior to January 1, 2014 shall make an
10election to use either the trips or mileage method and document
11that election in their books and records for the purpose of
12determining whether property purchased on or after January 1,
132014 for the purpose of being attached to aircraft or
14watercraft as a part thereof qualifies as rolling stock moving
15in interstate commerce under this subsection (e).
16    (f) The election to use either the trips or mileage method
17made under the provisions of subsections (c), (d), or (e) of
18this Section will remain in effect for the duration of the
19purchaser's ownership of that item.
20(Source: P.A. 98-584, eff. 8-27-13.)
 
21    Section 15. The Service Occupation Tax Act is amended by
22changing Sections 2 and 2d as follows:
 
23    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
24    Sec. 2. "Transfer" means any transfer of the title to

 

 

10000SB1871sam003- 46 -LRB100 08399 HLH 26203 a

1property or of the ownership of property whether or not the
2transferor retains title as security for the payment of amounts
3due him from the transferee.
4    "Cost Price" means the consideration paid by the serviceman
5for a purchase valued in money, whether paid in money or
6otherwise, including cash, credits and services, and shall be
7determined without any deduction on account of the supplier's
8cost of the property sold or on account of any other expense
9incurred by the supplier. When a serviceman contracts out part
10or all of the services required in his sale of service, it
11shall be presumed that the cost price to the serviceman of the
12property transferred to him by his or her subcontractor is
13equal to 50% of the subcontractor's charges to the serviceman
14in the absence of proof of the consideration paid by the
15subcontractor for the purchase of such property.
16    "Department" means the Department of Revenue.
17    "Person" means any natural individual, firm, partnership,
18association, joint stock company, joint venture, public or
19private corporation, limited liability company, and any
20receiver, executor, trustee, guardian or other representative
21appointed by order of any court.
22    "Sale of Service" means any transaction except:
23    (a) A retail sale of tangible personal property taxable
24under the Retailers' Occupation Tax Act or under the Use Tax
25Act.
26    (b) A sale of tangible personal property for the purpose of

 

 

10000SB1871sam003- 47 -LRB100 08399 HLH 26203 a

1resale made in compliance with Section 2c of the Retailers'
2Occupation Tax Act.
3    (c) Except as hereinafter provided, a sale or transfer of
4tangible personal property as an incident to the rendering of
5service for or by any governmental body or for or by any
6corporation, society, association, foundation or institution
7organized and operated exclusively for charitable, religious
8or educational purposes or any not-for-profit corporation,
9society, association, foundation, institution or organization
10which has no compensated officers or employees and which is
11organized and operated primarily for the recreation of persons
1255 years of age or older. A limited liability company may
13qualify for the exemption under this paragraph only if the
14limited liability company is organized and operated
15exclusively for educational purposes.
16    (d) (Blank). A sale or transfer of tangible personal
17property as an incident to the rendering of service for
18interstate carriers for hire for use as rolling stock moving in
19interstate commerce or lessors under leases of one year or
20longer, executed or in effect at the time of purchase, to
21interstate carriers for hire for use as rolling stock moving in
22interstate commerce, and equipment operated by a
23telecommunications provider, licensed as a common carrier by
24the Federal Communications Commission, which is permanently
25installed in or affixed to aircraft moving in interstate
26commerce.

 

 

10000SB1871sam003- 48 -LRB100 08399 HLH 26203 a

1    (d-1) A sale or transfer of tangible personal property as
2an incident to the rendering of service for owners, lessors or
3shippers of tangible personal property which is utilized by
4interstate carriers for hire for use as rolling stock moving in
5interstate commerce, and equipment operated by a
6telecommunications provider, licensed as a common carrier by
7the Federal Communications Commission, which is permanently
8installed in or affixed to aircraft moving in interstate
9commerce.
10    (d-1.1) On and after July 1, 2003 and through June 30,
112004, a sale or transfer of a motor vehicle of the second
12division with a gross vehicle weight in excess of 8,000 pounds
13as an incident to the rendering of service if that motor
14vehicle is subject to the commercial distribution fee imposed
15under Section 3-815.1 of the Illinois Vehicle Code. Beginning
16on July 1, 2004 and through June 30, 2005, the use in this
17State of motor vehicles of the second division: (i) with a
18gross vehicle weight rating in excess of 8,000 pounds; (ii)
19that are subject to the commercial distribution fee imposed
20under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
21that are primarily used for commercial purposes. Through June
2230, 2005, this exemption applies to repair and replacement
23parts added after the initial purchase of such a motor vehicle
24if that motor vehicle is used in a manner that would qualify
25for the rolling stock exemption otherwise provided for in this
26Act. For purposes of this paragraph, "used for commercial

 

 

10000SB1871sam003- 49 -LRB100 08399 HLH 26203 a

1purposes" means the transportation of persons or property in
2furtherance of any commercial or industrial enterprise whether
3for-hire or not.
4    (d-2) The repairing, reconditioning or remodeling, for a
5common carrier by rail, of tangible personal property which
6belongs to such carrier for hire, and as to which such carrier
7receives the physical possession of the repaired,
8reconditioned or remodeled item of tangible personal property
9in Illinois, and which such carrier transports, or shares with
10another common carrier in the transportation of such property,
11out of Illinois on a standard uniform bill of lading showing
12the person who repaired, reconditioned or remodeled the
13property as the shipper or consignor of such property to a
14destination outside Illinois, for use outside Illinois.
15    (d-3) A sale or transfer of tangible personal property
16which is produced by the seller thereof on special order in
17such a way as to have made the applicable tax the Service
18Occupation Tax or the Service Use Tax, rather than the
19Retailers' Occupation Tax or the Use Tax, for an interstate
20carrier by rail which receives the physical possession of such
21property in Illinois, and which transports such property, or
22shares with another common carrier in the transportation of
23such property, out of Illinois on a standard uniform bill of
24lading showing the seller of the property as the shipper or
25consignor of such property to a destination outside Illinois,
26for use outside Illinois.

 

 

10000SB1871sam003- 50 -LRB100 08399 HLH 26203 a

1    (d-4) Until January 1, 1997, a sale, by a registered
2serviceman paying tax under this Act to the Department, of
3special order printed materials delivered outside Illinois and
4which are not returned to this State, if delivery is made by
5the seller or agent of the seller, including an agent who
6causes the product to be delivered outside Illinois by a common
7carrier or the U.S. postal service.
8    (e) A sale or transfer of machinery and equipment used
9primarily in the process of the manufacturing or assembling,
10either in an existing, an expanded or a new manufacturing
11facility, of tangible personal property for wholesale or retail
12sale or lease, whether such sale or lease is made directly by
13the manufacturer or by some other person, whether the materials
14used in the process are owned by the manufacturer or some other
15person, or whether such sale or lease is made apart from or as
16an incident to the seller's engaging in a service occupation
17and the applicable tax is a Service Occupation Tax or Service
18Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
19exemption provided by this paragraph (e) does not include
20machinery and equipment used in (i) the generation of
21electricity for wholesale or retail sale; (ii) the generation
22or treatment of natural or artificial gas for wholesale or
23retail sale that is delivered to customers through pipes,
24pipelines, or mains; or (iii) the treatment of water for
25wholesale or retail sale that is delivered to customers through
26pipes, pipelines, or mains. The provisions of this amendatory

 

 

10000SB1871sam003- 51 -LRB100 08399 HLH 26203 a

1Act of the 98th General Assembly are declaratory of existing
2law as to the meaning and scope of this exemption.
3    (f) Until July 1, 2003, the sale or transfer of
4distillation machinery and equipment, sold as a unit or kit and
5assembled or installed by the retailer, which machinery and
6equipment is certified by the user to be used only for the
7production of ethyl alcohol that will be used for consumption
8as motor fuel or as a component of motor fuel for the personal
9use of such user and not subject to sale or resale.
10    (g) At the election of any serviceman not required to be
11otherwise registered as a retailer under Section 2a of the
12Retailers' Occupation Tax Act, made for each fiscal year sales
13of service in which the aggregate annual cost price of tangible
14personal property transferred as an incident to the sales of
15service is less than 35% (75% in the case of servicemen
16transferring prescription drugs or servicemen engaged in
17graphic arts production) of the aggregate annual total gross
18receipts from all sales of service. The purchase of such
19tangible personal property by the serviceman shall be subject
20to tax under the Retailers' Occupation Tax Act and the Use Tax
21Act. However, if a primary serviceman who has made the election
22described in this paragraph subcontracts service work to a
23secondary serviceman who has also made the election described
24in this paragraph, the primary serviceman does not incur a Use
25Tax liability if the secondary serviceman (i) has paid or will
26pay Use Tax on his or her cost price of any tangible personal

 

 

10000SB1871sam003- 52 -LRB100 08399 HLH 26203 a

1property transferred to the primary serviceman and (ii)
2certifies that fact in writing to the primary serviceman.
3    Tangible personal property transferred incident to the
4completion of a maintenance agreement is exempt from the tax
5imposed pursuant to this Act.
6    Exemption (e) also includes machinery and equipment used in
7the general maintenance or repair of such exempt machinery and
8equipment or for in-house manufacture of exempt machinery and
9equipment. The machinery and equipment exemption does not
10include machinery and equipment used in (i) the generation of
11electricity for wholesale or retail sale; (ii) the generation
12or treatment of natural or artificial gas for wholesale or
13retail sale that is delivered to customers through pipes,
14pipelines, or mains; or (iii) the treatment of water for
15wholesale or retail sale that is delivered to customers through
16pipes, pipelines, or mains. The provisions of this amendatory
17Act of the 98th General Assembly are declaratory of existing
18law as to the meaning and scope of this exemption. For the
19purposes of exemption (e), each of these terms shall have the
20following meanings: (1) "manufacturing process" shall mean the
21production of any article of tangible personal property,
22whether such article is a finished product or an article for
23use in the process of manufacturing or assembling a different
24article of tangible personal property, by procedures commonly
25regarded as manufacturing, processing, fabricating, or
26refining which changes some existing material or materials into

 

 

10000SB1871sam003- 53 -LRB100 08399 HLH 26203 a

1a material with a different form, use or name. In relation to a
2recognized integrated business composed of a series of
3operations which collectively constitute manufacturing, or
4individually constitute manufacturing operations, the
5manufacturing process shall be deemed to commence with the
6first operation or stage of production in the series, and shall
7not be deemed to end until the completion of the final product
8in the last operation or stage of production in the series; and
9further for purposes of exemption (e), photoprocessing is
10deemed to be a manufacturing process of tangible personal
11property for wholesale or retail sale; (2) "assembling process"
12shall mean the production of any article of tangible personal
13property, whether such article is a finished product or an
14article for use in the process of manufacturing or assembling a
15different article of tangible personal property, by the
16combination of existing materials in a manner commonly regarded
17as assembling which results in a material of a different form,
18use or name; (3) "machinery" shall mean major mechanical
19machines or major components of such machines contributing to a
20manufacturing or assembling process; and (4) "equipment" shall
21include any independent device or tool separate from any
22machinery but essential to an integrated manufacturing or
23assembly process; including computers used primarily in a
24manufacturer's computer assisted design, computer assisted
25manufacturing (CAD/CAM) system; or any subunit or assembly
26comprising a component of any machinery or auxiliary, adjunct

 

 

10000SB1871sam003- 54 -LRB100 08399 HLH 26203 a

1or attachment parts of machinery, such as tools, dies, jigs,
2fixtures, patterns and molds; or any parts which require
3periodic replacement in the course of normal operation; but
4shall not include hand tools. Equipment includes chemicals or
5chemicals acting as catalysts but only if the chemicals or
6chemicals acting as catalysts effect a direct and immediate
7change upon a product being manufactured or assembled for
8wholesale or retail sale or lease. The purchaser of such
9machinery and equipment who has an active resale registration
10number shall furnish such number to the seller at the time of
11purchase. The purchaser of such machinery and equipment and
12tools without an active resale registration number shall
13furnish to the seller a certificate of exemption for each
14transaction stating facts establishing the exemption for that
15transaction, which certificate shall be available to the
16Department for inspection or audit.
17    Except as provided in Section 2d of this Act, the rolling
18stock exemption applies to rolling stock used by an interstate
19carrier for hire, even just between points in Illinois, if such
20rolling stock transports, for hire, persons whose journeys or
21property whose shipments originate or terminate outside
22Illinois.
23    Any informal rulings, opinions or letters issued by the
24Department in response to an inquiry or request for any opinion
25from any person regarding the coverage and applicability of
26exemption (e) to specific devices shall be published,

 

 

10000SB1871sam003- 55 -LRB100 08399 HLH 26203 a

1maintained as a public record, and made available for public
2inspection and copying. If the informal ruling, opinion or
3letter contains trade secrets or other confidential
4information, where possible the Department shall delete such
5information prior to publication. Whenever such informal
6rulings, opinions, or letters contain any policy of general
7applicability, the Department shall formulate and adopt such
8policy as a rule in accordance with the provisions of the
9Illinois Administrative Procedure Act.
10    On and after July 1, 1987, no entity otherwise eligible
11under exemption (c) of this Section shall make tax free
12purchases unless it has an active exemption identification
13number issued by the Department.
14    "Serviceman" means any person who is engaged in the
15occupation of making sales of service.
16    "Sale at Retail" means "sale at retail" as defined in the
17Retailers' Occupation Tax Act.
18    "Supplier" means any person who makes sales of tangible
19personal property to servicemen for the purpose of resale as an
20incident to a sale of service.
21(Source: P.A. 98-583, eff. 1-1-14.)
 
22    (35 ILCS 115/2d)
23    Sec. 2d. Motor vehicles; trailers; use as rolling stock
24definition.
25    (a) (Blank). Through June 30, 2003, "use as rolling stock

 

 

10000SB1871sam003- 56 -LRB100 08399 HLH 26203 a

1moving in interstate commerce" in subsections (d) and (d-1) of
2the definition of "sale of service" in Section 2 means for
3motor vehicles, as defined in Section 1-146 of the Illinois
4Vehicle Code, and trailers, as defined in Section 1-209 of the
5Illinois Vehicle Code, when on 15 or more occasions in a
612-month period the motor vehicle and trailer has carried
7persons or property for hire in interstate commerce, even just
8between points in Illinois, if the motor vehicle and trailer
9transports persons whose journeys or property whose shipments
10originate or terminate outside Illinois. This definition
11applies to all property purchased for the purpose of being
12attached to those motor vehicles or trailers as a part thereof.
13    (b) (Blank). On and after July 1, 2003 and through June 30,
142004, "use as rolling stock moving in interstate commerce" in
15paragraphs (d) and (d-1) of the definition of "sale of service"
16in Section 2 occurs for motor vehicles, as defined in Section
171-146 of the Illinois Vehicle Code, when during a 12-month
18period the rolling stock has carried persons or property for
19hire in interstate commerce for 51% of its total trips and
20transports persons whose journeys or property whose shipments
21originate or terminate outside Illinois. Trips that are only
22between points in Illinois will not be counted as interstate
23trips when calculating whether the tangible personal property
24qualifies for the exemption but such trips will be included in
25total trips taken.
26    (c) This subsection (c) applies to motor vehicles, other

 

 

10000SB1871sam003- 57 -LRB100 08399 HLH 26203 a

1than limousines, purchased through June 30, 2017. For motor
2vehicles, other than limousines, purchased on or after July 1,
32017, subsection (d-5) applies. This subsection (c) applies to
4limousines purchased before, on, or after July 1, 2017. "Use
5Beginning July 1, 2004, "use as rolling stock moving in
6interstate commerce" in paragraph paragraphs (d) and (d-1) of
7the definition of "sale of service" in Section 2 occurs for
8motor vehicles, as defined in Section 1-146 of the Illinois
9Vehicle Code, when during a 12-month period the rolling stock
10has carried persons or property for hire in interstate commerce
11for greater than 50% of its total trips for that period or for
12greater than 50% of its total miles for that period. The person
13claiming the exemption shall make an election at the time of
14purchase to use either the trips or mileage method. Persons who
15purchased motor vehicles prior to July 1, 2004 shall make an
16election to use either the trips or mileage method and document
17that election in their books and records. If no election is
18made under this subsection to use the trips or mileage method,
19the person shall be deemed to have chosen the mileage method.
20    For purposes of determining qualifying trips or miles,
21motor vehicles that carry persons or property for hire, even
22just between points in Illinois, will be considered used for
23hire in interstate commerce if the motor vehicle transports
24persons whose journeys or property whose shipments originate or
25terminate outside Illinois. The exemption for motor vehicles
26used as rolling stock moving in interstate commerce may be

 

 

10000SB1871sam003- 58 -LRB100 08399 HLH 26203 a

1claimed only for the following vehicles: (i) motor vehicles
2whose gross vehicle weight rating exceeds 16,000 pounds; and
3(ii) limousines, as defined in Section 1-139.1 of the Illinois
4Vehicle Code. Through June 30, 2017, this This definition
5applies to all property purchased for the purpose of being
6attached to those motor vehicles as a part thereof. On and
7after July 1, 2017, this definition applies to property
8purchased for the purpose of being attached to limousines as a
9part thereof.
10    (d) For purchases made through June 30, 2017 Beginning July
111, 2004, "use as rolling stock moving in interstate commerce"
12in paragraph paragraphs (d) and (d-1) of the definition of
13"sale of service" in Section 2 occurs for trailers, as defined
14in Section 1-209 of the Illinois Vehicle Code, semitrailers as
15defined in Section 1-187 of the Illinois Vehicle Code, and pole
16trailers as defined in Section 1-161 of the Illinois Vehicle
17Code, when during a 12-month period the rolling stock has
18carried persons or property for hire in interstate commerce for
19greater than 50% of its total trips for that period or for
20greater than 50% of its total miles for that period. The person
21claiming the exemption for a trailer or trailers that will not
22be dedicated to a motor vehicle or group of motor vehicles
23shall make an election at the time of purchase to use either
24the trips or mileage method. Persons who purchased trailers
25prior to July 1, 2004 that are not dedicated to a motor vehicle
26or group of motor vehicles shall make an election to use either

 

 

10000SB1871sam003- 59 -LRB100 08399 HLH 26203 a

1the trips or mileage method and document that election in their
2books and records. If no election is made under this subsection
3to use the trips or mileage method, the person shall be deemed
4to have chosen the mileage method.
5    For purposes of determining qualifying trips or miles,
6trailers, semitrailers, or pole trailers that carry property
7for hire, even just between points in Illinois, will be
8considered used for hire in interstate commerce if the
9trailers, semitrailers, or pole trailers transport property
10whose shipments originate or terminate outside Illinois. This
11definition applies to all property purchased for the purpose of
12being attached to those trailers, semitrailers, or pole
13trailers as a part thereof. In lieu of a person providing
14documentation regarding the qualifying use of each individual
15trailer, semitrailer, or pole trailer, that person may document
16such qualifying use by providing documentation of the
17following:
18        (1) If a trailer, semitrailer, or pole trailer is
19    dedicated to a motor vehicle that qualifies as rolling
20    stock moving in interstate commerce under subsection (c) of
21    this Section, then that trailer, semitrailer, or pole
22    trailer qualifies as rolling stock moving in interstate
23    commerce under this subsection.
24        (2) If a trailer, semitrailer, or pole trailer is
25    dedicated to a group of motor vehicles that all qualify as
26    rolling stock moving in interstate commerce under

 

 

10000SB1871sam003- 60 -LRB100 08399 HLH 26203 a

1    subsection (c) of this Section, then that trailer,
2    semitrailer, or pole trailer qualifies as rolling stock
3    moving in interstate commerce under this subsection.
4        (3) If one or more trailers, semitrailers, or pole
5    trailers are dedicated to a group of motor vehicles and not
6    all of those motor vehicles in that group qualify as
7    rolling stock moving in interstate commerce under
8    subsection (c) of this Section, then the percentage of
9    those trailers, semitrailers, or pole trailers that
10    qualifies as rolling stock moving in interstate commerce
11    under this subsection is equal to the percentage of those
12    motor vehicles in that group that qualify as rolling stock
13    moving in interstate commerce under subsection (c) of this
14    Section to which those trailers, semitrailers, or pole
15    trailers are dedicated. However, to determine the
16    qualification for the exemption provided under this item
17    (3), the mathematical application of the qualifying
18    percentage to one or more trailers, semitrailers, or pole
19    trailers under this subpart shall not be allowed as to any
20    fraction of a trailer, semitrailer, or pole trailer.
21    (d-5) For motor vehicles and trailers purchased on or after
22July 1, 2017, "use as rolling stock moving in interstate
23commerce" means that:
24        (1) the motor vehicle or trailer is used to transport
25    persons or property for hire;
26        (2) for purposes of the exemption under paragraph (d-1)

 

 

10000SB1871sam003- 61 -LRB100 08399 HLH 26203 a

1    of the definition of "sale of service" in Section 2, the
2    purchaser who is an owner, lessor, or shipper claiming the
3    exemption certifies that the motor vehicle or trailer will
4    be utilized, from the time of purchase and continuing
5    through the statute of limitations for issuing a notice of
6    tax liability under this Act, by an interstate carrier or
7    carriers for hire who hold, and are required by Federal
8    Motor Carrier Safety Administration regulations to hold,
9    an active USDOT Number with the Carrier Operation listed as
10    "Interstate" and the Operation Classification listed as
11    "authorized for hire", "exempt for hire", or both
12    "authorized for hire" and "exempt for hire"; and
13        (3) for motor vehicles, the gross vehicle weight rating
14    exceeds 16,000 pounds.
15    The definition of "use as rolling stock moving in
16interstate commerce" in this subsection (d-5) applies to all
17property purchased on or after July 1, 2017 for the purpose of
18being attached to a motor vehicle or trailer as a part thereof,
19regardless of whether the motor vehicle or trailer was
20purchased before, on, or after July 1, 2017.
21    If an item ceases to meet requirements (1) through (3)
22under this subsection (d-5), then the tax is imposed on the
23selling price, allowing for a reasonable depreciation for the
24period during which the item qualified for the exemption.
25    For purposes of this subsection (d-5):
26        "Motor vehicle" excludes limousines, but otherwise

 

 

10000SB1871sam003- 62 -LRB100 08399 HLH 26203 a

1    means that term as defined in Section 1-146 of the Illinois
2    Vehicle Code.
3        "Trailer" means (i) "trailer", as defined in Section
4    1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as
5    defined in Section 1-187 of the Illinois Vehicle Code, and
6    (iii) "pole trailer", as defined in Section 1-161 of the
7    Illinois Vehicle Code.
8    (e) For aircraft and watercraft purchased on or after
9January 1 2014, "use as rolling stock moving in interstate
10commerce" in paragraph paragraphs (d) and (d-1) of the
11definition of "sale of service" in Section 2 occurs when,
12during a 12-month period, the rolling stock has carried persons
13or property for hire in interstate commerce for greater than
1450% of its total trips for that period or for greater than 50%
15of its total miles for that period. The person claiming the
16exemption shall make an election at the time of purchase to use
17either the trips or mileage method and document that election
18in their books and records. If no election is made under this
19subsection to use the trips or mileage method, the person shall
20be deemed to have chosen the mileage method. For aircraft,
21flight hours may be used in lieu of recording miles in
22determining whether the aircraft meets the mileage test in this
23subsection. For watercraft, nautical miles or trip hours may be
24used in lieu of recording miles in determining whether the
25watercraft meets the mileage test in this subsection.
26    Notwithstanding any other provision of law to the contrary,

 

 

10000SB1871sam003- 63 -LRB100 08399 HLH 26203 a

1property purchased on or after January 1, 2014 for the purpose
2of being attached to aircraft or watercraft as a part thereof
3qualifies as rolling stock moving in interstate commerce only
4if the aircraft or watercraft to which it will be attached
5qualifies as rolling stock moving in interstate commerce under
6the test set forth in this subsection (e), regardless of when
7the aircraft or watercraft was purchased. Persons who purchased
8aircraft or watercraft prior to January 1, 2014 shall make an
9election to use either the trips or mileage method and document
10that election in their books and records for the purpose of
11determining whether property purchased on or after January 1,
122014 for the purpose of being attached to aircraft or
13watercraft as a part thereof qualifies as rolling stock moving
14in interstate commerce under this subsection (e).
15    (f) The election to use either the trips or mileage method
16made under the provisions of subsections (c), (d), or (e) of
17this Section will remain in effect for the duration of the
18purchaser's ownership of that item.
19(Source: P.A. 98-584, eff. 8-27-13.)
 
20    Section 20. The Retailers' Occupation Tax Act is amended by
21changing Sections 2-5 and 2-51 as follows:
 
22    (35 ILCS 120/2-5)
23    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
24sale of the following tangible personal property are exempt

 

 

10000SB1871sam003- 64 -LRB100 08399 HLH 26203 a

1from the tax imposed by this Act:
2    (1) Farm chemicals.
3    (2) Farm machinery and equipment, both new and used,
4including that manufactured on special order, certified by the
5purchaser to be used primarily for production agriculture or
6State or federal agricultural programs, including individual
7replacement parts for the machinery and equipment, including
8machinery and equipment purchased for lease, and including
9implements of husbandry defined in Section 1-130 of the
10Illinois Vehicle Code, farm machinery and agricultural
11chemical and fertilizer spreaders, and nurse wagons required to
12be registered under Section 3-809 of the Illinois Vehicle Code,
13but excluding other motor vehicles required to be registered
14under the Illinois Vehicle Code. Horticultural polyhouses or
15hoop houses used for propagating, growing, or overwintering
16plants shall be considered farm machinery and equipment under
17this item (2). Agricultural chemical tender tanks and dry boxes
18shall include units sold separately from a motor vehicle
19required to be licensed and units sold mounted on a motor
20vehicle required to be licensed, if the selling price of the
21tender is separately stated.
22    Farm machinery and equipment shall include precision
23farming equipment that is installed or purchased to be
24installed on farm machinery and equipment including, but not
25limited to, tractors, harvesters, sprayers, planters, seeders,
26or spreaders. Precision farming equipment includes, but is not

 

 

10000SB1871sam003- 65 -LRB100 08399 HLH 26203 a

1limited to, soil testing sensors, computers, monitors,
2software, global positioning and mapping systems, and other
3such equipment.
4    Farm machinery and equipment also includes computers,
5sensors, software, and related equipment used primarily in the
6computer-assisted operation of production agriculture
7facilities, equipment, and activities such as, but not limited
8to, the collection, monitoring, and correlation of animal and
9crop data for the purpose of formulating animal diets and
10agricultural chemicals. This item (2) is exempt from the
11provisions of Section 2-70.
12    (3) Until July 1, 2003, distillation machinery and
13equipment, sold as a unit or kit, assembled or installed by the
14retailer, certified by the user to be used only for the
15production of ethyl alcohol that will be used for consumption
16as motor fuel or as a component of motor fuel for the personal
17use of the user, and not subject to sale or resale.
18    (4) Until July 1, 2003 and beginning again September 1,
192004 through August 30, 2014, graphic arts machinery and
20equipment, including repair and replacement parts, both new and
21used, and including that manufactured on special order or
22purchased for lease, certified by the purchaser to be used
23primarily for graphic arts production. Equipment includes
24chemicals or chemicals acting as catalysts but only if the
25chemicals or chemicals acting as catalysts effect a direct and
26immediate change upon a graphic arts product.

 

 

10000SB1871sam003- 66 -LRB100 08399 HLH 26203 a

1    (5) A motor vehicle that is used for automobile renting, as
2defined in the Automobile Renting Occupation and Use Tax Act.
3This paragraph is exempt from the provisions of Section 2-70.
4    (6) Personal property sold by a teacher-sponsored student
5organization affiliated with an elementary or secondary school
6located in Illinois.
7    (7) Until July 1, 2003, proceeds of that portion of the
8selling price of a passenger car the sale of which is subject
9to the Replacement Vehicle Tax.
10    (8) Personal property sold to an Illinois county fair
11association for use in conducting, operating, or promoting the
12county fair.
13    (9) Personal property sold to a not-for-profit arts or
14cultural organization that establishes, by proof required by
15the Department by rule, that it has received an exemption under
16Section 501(c)(3) of the Internal Revenue Code and that is
17organized and operated primarily for the presentation or
18support of arts or cultural programming, activities, or
19services. These organizations include, but are not limited to,
20music and dramatic arts organizations such as symphony
21orchestras and theatrical groups, arts and cultural service
22organizations, local arts councils, visual arts organizations,
23and media arts organizations. On and after the effective date
24of this amendatory Act of the 92nd General Assembly, however,
25an entity otherwise eligible for this exemption shall not make
26tax-free purchases unless it has an active identification

 

 

10000SB1871sam003- 67 -LRB100 08399 HLH 26203 a

1number issued by the Department.
2    (10) Personal property sold by a corporation, society,
3association, foundation, institution, or organization, other
4than a limited liability company, that is organized and
5operated as a not-for-profit service enterprise for the benefit
6of persons 65 years of age or older if the personal property
7was not purchased by the enterprise for the purpose of resale
8by the enterprise.
9    (11) Personal property sold to a governmental body, to a
10corporation, society, association, foundation, or institution
11organized and operated exclusively for charitable, religious,
12or educational purposes, or to a not-for-profit corporation,
13society, association, foundation, institution, or organization
14that has no compensated officers or employees and that is
15organized and operated primarily for the recreation of persons
1655 years of age or older. A limited liability company may
17qualify for the exemption under this paragraph only if the
18limited liability company is organized and operated
19exclusively for educational purposes. On and after July 1,
201987, however, no entity otherwise eligible for this exemption
21shall make tax-free purchases unless it has an active
22identification number issued by the Department.
23    (12) (Blank). Tangible personal property sold to
24interstate carriers for hire for use as rolling stock moving in
25interstate commerce or to lessors under leases of one year or
26longer executed or in effect at the time of purchase by

 

 

10000SB1871sam003- 68 -LRB100 08399 HLH 26203 a

1interstate carriers for hire for use as rolling stock moving in
2interstate commerce and equipment operated by a
3telecommunications provider, licensed as a common carrier by
4the Federal Communications Commission, which is permanently
5installed in or affixed to aircraft moving in interstate
6commerce.
7    (12-5) On and after July 1, 2003 and through June 30, 2004,
8motor vehicles of the second division with a gross vehicle
9weight in excess of 8,000 pounds that are subject to the
10commercial distribution fee imposed under Section 3-815.1 of
11the Illinois Vehicle Code. Beginning on July 1, 2004 and
12through June 30, 2005, the use in this State of motor vehicles
13of the second division: (i) with a gross vehicle weight rating
14in excess of 8,000 pounds; (ii) that are subject to the
15commercial distribution fee imposed under Section 3-815.1 of
16the Illinois Vehicle Code; and (iii) that are primarily used
17for commercial purposes. Through June 30, 2005, this exemption
18applies to repair and replacement parts added after the initial
19purchase of such a motor vehicle if that motor vehicle is used
20in a manner that would qualify for the rolling stock exemption
21otherwise provided for in this Act. For purposes of this
22paragraph, "used for commercial purposes" means the
23transportation of persons or property in furtherance of any
24commercial or industrial enterprise whether for-hire or not.
25    (13) Proceeds from sales to owners, lessors, or shippers of
26tangible personal property that is utilized by interstate

 

 

10000SB1871sam003- 69 -LRB100 08399 HLH 26203 a

1carriers for hire for use as rolling stock moving in interstate
2commerce and equipment operated by a telecommunications
3provider, licensed as a common carrier by the Federal
4Communications Commission, which is permanently installed in
5or affixed to aircraft moving in interstate commerce.
6    (14) Machinery and equipment that will be used by the
7purchaser, or a lessee of the purchaser, primarily in the
8process of manufacturing or assembling tangible personal
9property for wholesale or retail sale or lease, whether the
10sale or lease is made directly by the manufacturer or by some
11other person, whether the materials used in the process are
12owned by the manufacturer or some other person, or whether the
13sale or lease is made apart from or as an incident to the
14seller's engaging in the service occupation of producing
15machines, tools, dies, jigs, patterns, gauges, or other similar
16items of no commercial value on special order for a particular
17purchaser. The exemption provided by this paragraph (14) does
18not include machinery and equipment used in (i) the generation
19of electricity for wholesale or retail sale; (ii) the
20generation or treatment of natural or artificial gas for
21wholesale or retail sale that is delivered to customers through
22pipes, pipelines, or mains; or (iii) the treatment of water for
23wholesale or retail sale that is delivered to customers through
24pipes, pipelines, or mains. The provisions of Public Act 98-583
25are declaratory of existing law as to the meaning and scope of
26this exemption.

 

 

10000SB1871sam003- 70 -LRB100 08399 HLH 26203 a

1    (15) Proceeds of mandatory service charges separately
2stated on customers' bills for purchase and consumption of food
3and beverages, to the extent that the proceeds of the service
4charge are in fact turned over as tips or as a substitute for
5tips to the employees who participate directly in preparing,
6serving, hosting or cleaning up the food or beverage function
7with respect to which the service charge is imposed.
8    (16) Petroleum products sold to a purchaser if the seller
9is prohibited by federal law from charging tax to the
10purchaser.
11    (17) Tangible personal property sold to a common carrier by
12rail or motor that receives the physical possession of the
13property in Illinois and that transports the property, or
14shares with another common carrier in the transportation of the
15property, out of Illinois on a standard uniform bill of lading
16showing the seller of the property as the shipper or consignor
17of the property to a destination outside Illinois, for use
18outside Illinois.
19    (18) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (19) Until July 1 2003, oil field exploration, drilling,
24and production equipment, including (i) rigs and parts of rigs,
25rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
26tubular goods, including casing and drill strings, (iii) pumps

 

 

10000SB1871sam003- 71 -LRB100 08399 HLH 26203 a

1and pump-jack units, (iv) storage tanks and flow lines, (v) any
2individual replacement part for oil field exploration,
3drilling, and production equipment, and (vi) machinery and
4equipment purchased for lease; but excluding motor vehicles
5required to be registered under the Illinois Vehicle Code.
6    (20) Photoprocessing machinery and equipment, including
7repair and replacement parts, both new and used, including that
8manufactured on special order, certified by the purchaser to be
9used primarily for photoprocessing, and including
10photoprocessing machinery and equipment purchased for lease.
11    (21) Coal and aggregate exploration, mining, off-highway
12hauling, processing, maintenance, and reclamation equipment,
13including replacement parts and equipment, and including
14equipment purchased for lease, but excluding motor vehicles
15required to be registered under the Illinois Vehicle Code. The
16changes made to this Section by Public Act 97-767 apply on and
17after July 1, 2003, but no claim for credit or refund is
18allowed on or after August 16, 2013 (the effective date of
19Public Act 98-456) for such taxes paid during the period
20beginning July 1, 2003 and ending on August 16, 2013 (the
21effective date of Public Act 98-456).
22    (22) Until June 30, 2013, fuel and petroleum products sold
23to or used by an air carrier, certified by the carrier to be
24used for consumption, shipment, or storage in the conduct of
25its business as an air common carrier, for a flight destined
26for or returning from a location or locations outside the

 

 

10000SB1871sam003- 72 -LRB100 08399 HLH 26203 a

1United States without regard to previous or subsequent domestic
2stopovers.
3    Beginning July 1, 2013, fuel and petroleum products sold to
4or used by an air carrier, certified by the carrier to be used
5for consumption, shipment, or storage in the conduct of its
6business as an air common carrier, for a flight that (i) is
7engaged in foreign trade or is engaged in trade between the
8United States and any of its possessions and (ii) transports at
9least one individual or package for hire from the city of
10origination to the city of final destination on the same
11aircraft, without regard to a change in the flight number of
12that aircraft.
13    (23) A transaction in which the purchase order is received
14by a florist who is located outside Illinois, but who has a
15florist located in Illinois deliver the property to the
16purchaser or the purchaser's donee in Illinois.
17    (24) Fuel consumed or used in the operation of ships,
18barges, or vessels that are used primarily in or for the
19transportation of property or the conveyance of persons for
20hire on rivers bordering on this State if the fuel is delivered
21by the seller to the purchaser's barge, ship, or vessel while
22it is afloat upon that bordering river.
23    (25) Except as provided in item (25-5) of this Section, a
24motor vehicle sold in this State to a nonresident even though
25the motor vehicle is delivered to the nonresident in this
26State, if the motor vehicle is not to be titled in this State,

 

 

10000SB1871sam003- 73 -LRB100 08399 HLH 26203 a

1and if a drive-away permit is issued to the motor vehicle as
2provided in Section 3-603 of the Illinois Vehicle Code or if
3the nonresident purchaser has vehicle registration plates to
4transfer to the motor vehicle upon returning to his or her home
5state. The issuance of the drive-away permit or having the
6out-of-state registration plates to be transferred is prima
7facie evidence that the motor vehicle will not be titled in
8this State.
9    (25-5) The exemption under item (25) does not apply if the
10state in which the motor vehicle will be titled does not allow
11a reciprocal exemption for a motor vehicle sold and delivered
12in that state to an Illinois resident but titled in Illinois.
13The tax collected under this Act on the sale of a motor vehicle
14in this State to a resident of another state that does not
15allow a reciprocal exemption shall be imposed at a rate equal
16to the state's rate of tax on taxable property in the state in
17which the purchaser is a resident, except that the tax shall
18not exceed the tax that would otherwise be imposed under this
19Act. At the time of the sale, the purchaser shall execute a
20statement, signed under penalty of perjury, of his or her
21intent to title the vehicle in the state in which the purchaser
22is a resident within 30 days after the sale and of the fact of
23the payment to the State of Illinois of tax in an amount
24equivalent to the state's rate of tax on taxable property in
25his or her state of residence and shall submit the statement to
26the appropriate tax collection agency in his or her state of

 

 

10000SB1871sam003- 74 -LRB100 08399 HLH 26203 a

1residence. In addition, the retailer must retain a signed copy
2of the statement in his or her records. Nothing in this item
3shall be construed to require the removal of the vehicle from
4this state following the filing of an intent to title the
5vehicle in the purchaser's state of residence if the purchaser
6titles the vehicle in his or her state of residence within 30
7days after the date of sale. The tax collected under this Act
8in accordance with this item (25-5) shall be proportionately
9distributed as if the tax were collected at the 6.25% general
10rate imposed under this Act.
11    (25-7) Beginning on July 1, 2007, no tax is imposed under
12this Act on the sale of an aircraft, as defined in Section 3 of
13the Illinois Aeronautics Act, if all of the following
14conditions are met:
15        (1) the aircraft leaves this State within 15 days after
16    the later of either the issuance of the final billing for
17    the sale of the aircraft, or the authorized approval for
18    return to service, completion of the maintenance record
19    entry, and completion of the test flight and ground test
20    for inspection, as required by 14 C.F.R. 91.407;
21        (2) the aircraft is not based or registered in this
22    State after the sale of the aircraft; and
23        (3) the seller retains in his or her books and records
24    and provides to the Department a signed and dated
25    certification from the purchaser, on a form prescribed by
26    the Department, certifying that the requirements of this

 

 

10000SB1871sam003- 75 -LRB100 08399 HLH 26203 a

1    item (25-7) are met. The certificate must also include the
2    name and address of the purchaser, the address of the
3    location where the aircraft is to be titled or registered,
4    the address of the primary physical location of the
5    aircraft, and other information that the Department may
6    reasonably require.
7    For purposes of this item (25-7):
8    "Based in this State" means hangared, stored, or otherwise
9used, excluding post-sale customizations as defined in this
10Section, for 10 or more days in each 12-month period
11immediately following the date of the sale of the aircraft.
12    "Registered in this State" means an aircraft registered
13with the Department of Transportation, Aeronautics Division,
14or titled or registered with the Federal Aviation
15Administration to an address located in this State.
16    This paragraph (25-7) is exempt from the provisions of
17Section 2-70.
18    (26) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (27) Horses, or interests in horses, registered with and
21meeting the requirements of any of the Arabian Horse Club
22Registry of America, Appaloosa Horse Club, American Quarter
23Horse Association, United States Trotting Association, or
24Jockey Club, as appropriate, used for purposes of breeding or
25racing for prizes. This item (27) is exempt from the provisions
26of Section 2-70, and the exemption provided for under this item

 

 

10000SB1871sam003- 76 -LRB100 08399 HLH 26203 a

1(27) applies for all periods beginning May 30, 1995, but no
2claim for credit or refund is allowed on or after January 1,
32008 (the effective date of Public Act 95-88) for such taxes
4paid during the period beginning May 30, 2000 and ending on
5January 1, 2008 (the effective date of Public Act 95-88).
6    (28) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients sold to a lessor
9who leases the equipment, under a lease of one year or longer
10executed or in effect at the time of the purchase, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of
13this Act.
14    (29) Personal property sold to a lessor who leases the
15property, under a lease of one year or longer executed or in
16effect at the time of the purchase, to a governmental body that
17has been issued an active tax exemption identification number
18by the Department under Section 1g of this Act.
19    (30) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is donated for
22disaster relief to be used in a State or federally declared
23disaster area in Illinois or bordering Illinois by a
24manufacturer or retailer that is registered in this State to a
25corporation, society, association, foundation, or institution
26that has been issued a sales tax exemption identification

 

 

10000SB1871sam003- 77 -LRB100 08399 HLH 26203 a

1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (31) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (32) Beginning July 1, 1999, game or game birds sold at a
16"game breeding and hunting preserve area" as that term is used
17in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 2-70.
19    (33) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the Department
23to be organized and operated exclusively for educational
24purposes. For purposes of this exemption, "a corporation,
25limited liability company, society, association, foundation,
26or institution organized and operated exclusively for

 

 

10000SB1871sam003- 78 -LRB100 08399 HLH 26203 a

1educational purposes" means all tax-supported public schools,
2private schools that offer systematic instruction in useful
3branches of learning by methods common to public schools and
4that compare favorably in their scope and intensity with the
5course of study presented in tax-supported schools, and
6vocational or technical schools or institutes organized and
7operated exclusively to provide a course of study of not less
8than 6 weeks duration and designed to prepare individuals to
9follow a trade or to pursue a manual, technical, mechanical,
10industrial, business, or commercial occupation.
11    (34) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 2-70.
25    (35) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

10000SB1871sam003- 79 -LRB100 08399 HLH 26203 a

1serve hot food and beverages, including coffee, soup, and other
2items, and replacement parts for these machines. Beginning
3January 1, 2002 and through June 30, 2003, machines and parts
4for machines used in commercial, coin-operated amusement and
5vending business if a use or occupation tax is paid on the
6gross receipts derived from the use of the commercial,
7coin-operated amusement and vending machines. This paragraph
8is exempt from the provisions of Section 2-70.
9    (35-5) Beginning August 23, 2001 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks, and food that has been prepared for immediate
13consumption) and prescription and nonprescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or a licensed facility as defined in
20the ID/DD Community Care Act, the MC/DD Act, or the Specialized
21Mental Health Rehabilitation Act of 2013.
22    (36) Beginning August 2, 2001, computers and
23communications equipment utilized for any hospital purpose and
24equipment used in the diagnosis, analysis, or treatment of
25hospital patients sold to a lessor who leases the equipment,
26under a lease of one year or longer executed or in effect at

 

 

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1the time of the purchase, to a hospital that has been issued an
2active tax exemption identification number by the Department
3under Section 1g of this Act. This paragraph is exempt from the
4provisions of Section 2-70.
5    (37) Beginning August 2, 2001, personal property sold to a
6lessor who leases the property, under a lease of one year or
7longer executed or in effect at the time of the purchase, to a
8governmental body that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10this Act. This paragraph is exempt from the provisions of
11Section 2-70.
12    (38) Beginning on January 1, 2002 and through June 30,
132016, tangible personal property purchased from an Illinois
14retailer by a taxpayer engaged in centralized purchasing
15activities in Illinois who will, upon receipt of the property
16in Illinois, temporarily store the property in Illinois (i) for
17the purpose of subsequently transporting it outside this State
18for use or consumption thereafter solely outside this State or
19(ii) for the purpose of being processed, fabricated, or
20manufactured into, attached to, or incorporated into other
21tangible personal property to be transported outside this State
22and thereafter used or consumed solely outside this State. The
23Director of Revenue shall, pursuant to rules adopted in
24accordance with the Illinois Administrative Procedure Act,
25issue a permit to any taxpayer in good standing with the
26Department who is eligible for the exemption under this

 

 

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1paragraph (38). The permit issued under this paragraph (38)
2shall authorize the holder, to the extent and in the manner
3specified in the rules adopted under this Act, to purchase
4tangible personal property from a retailer exempt from the
5taxes imposed by this Act. Taxpayers shall maintain all
6necessary books and records to substantiate the use and
7consumption of all such tangible personal property outside of
8the State of Illinois.
9    (39) Beginning January 1, 2008, tangible personal property
10used in the construction or maintenance of a community water
11supply, as defined under Section 3.145 of the Environmental
12Protection Act, that is operated by a not-for-profit
13corporation that holds a valid water supply permit issued under
14Title IV of the Environmental Protection Act. This paragraph is
15exempt from the provisions of Section 2-70.
16    (40) Beginning January 1, 2010, materials, parts,
17equipment, components, and furnishings incorporated into or
18upon an aircraft as part of the modification, refurbishment,
19completion, replacement, repair, or maintenance of the
20aircraft. This exemption includes consumable supplies used in
21the modification, refurbishment, completion, replacement,
22repair, and maintenance of aircraft, but excludes any
23materials, parts, equipment, components, and consumable
24supplies used in the modification, replacement, repair, and
25maintenance of aircraft engines or power plants, whether such
26engines or power plants are installed or uninstalled upon any

 

 

10000SB1871sam003- 82 -LRB100 08399 HLH 26203 a

1such aircraft. "Consumable supplies" include, but are not
2limited to, adhesive, tape, sandpaper, general purpose
3lubricants, cleaning solution, latex gloves, and protective
4films. This exemption applies only to the sale of qualifying
5tangible personal property to persons who modify, refurbish,
6complete, replace, or maintain an aircraft and who (i) hold an
7Air Agency Certificate and are empowered to operate an approved
8repair station by the Federal Aviation Administration, (ii)
9have a Class IV Rating, and (iii) conduct operations in
10accordance with Part 145 of the Federal Aviation Regulations.
11The exemption does not include aircraft operated by a
12commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (40) by Public Act 98-534 are declarative of existing
16law.
17    (41) Tangible personal property sold to a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

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1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 2-70.
5    (42) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
898-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
91-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
107-29-15; 99-855, eff. 8-19-16.)
 
11    (35 ILCS 120/2-51)
12    Sec. 2-51. Motor vehicles; trailers; use as rolling stock
13definition.
14    (a) (Blank). Through June 30, 2003, "use as rolling stock
15moving in interstate commerce" in paragraphs (12) and (13) of
16Section 2-5 means for motor vehicles, as defined in Section
171-146 of the Illinois Vehicle Code, and trailers, as defined in
18Section 1-209 of the Illinois Vehicle Code, when on 15 or more
19occasions in a 12-month period the motor vehicle and trailer
20has carried persons or property for hire in interstate
21commerce, even just between points in Illinois, if the motor
22vehicle and trailer transports persons whose journeys or
23property whose shipments originate or terminate outside
24Illinois. This definition applies to all property purchased for
25the purpose of being attached to those motor vehicles or

 

 

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1trailers as a part thereof.
2    (b) (Blank). On and after July 1, 2003 and through June 30,
32004, "use as rolling stock moving in interstate commerce" in
4paragraphs (12) and (13) of Section 2-5 occurs for motor
5vehicles, as defined in Section 1-146 of the Illinois Vehicle
6Code, when during a 12-month period the rolling stock has
7carried persons or property for hire in interstate commerce for
851% of its total trips and transports persons whose journeys or
9property whose shipments originate or terminate outside
10Illinois. Trips that are only between points in Illinois shall
11not be counted as interstate trips when calculating whether the
12tangible personal property qualifies for the exemption but such
13trips shall be included in total trips taken.
14    (c) This subsection (c) applies to motor vehicles, other
15than limousines, purchased through June 30, 2017. For motor
16vehicles, other than limousines, purchased on or after July 1,
172017, subsection (d-5) applies. This subsection (c) applies to
18limousines purchased before, on, or after July 1, 2017. "Use
19Beginning July 1, 2004, "use as rolling stock moving in
20interstate commerce" in paragraph paragraphs (12) and (13) of
21Section 2-5 occurs for motor vehicles, as defined in Section
221-146 of the Illinois Vehicle Code, when during a 12-month
23period the rolling stock has carried persons or property for
24hire in interstate commerce for greater than 50% of its total
25trips for that period or for greater than 50% of its total
26miles for that period. The person claiming the exemption shall

 

 

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1make an election at the time of purchase to use either the
2trips or mileage method. Persons who purchased motor vehicles
3prior to July 1, 2004 shall make an election to use either the
4trips or mileage method and document that election in their
5books and records. If no election is made under this subsection
6to use the trips or mileage method, the person shall be deemed
7to have chosen the mileage method.
8    For purposes of determining qualifying trips or miles,
9motor vehicles that carry persons or property for hire, even
10just between points in Illinois, will be considered used for
11hire in interstate commerce if the motor vehicle transports
12persons whose journeys or property whose shipments originate or
13terminate outside Illinois. The exemption for motor vehicles
14used as rolling stock moving in interstate commerce may be
15claimed only for the following vehicles: (i) motor vehicles
16whose gross vehicle weight rating exceeds 16,000 pounds; and
17(ii) limousines, as defined in Section 1-139.1 of the Illinois
18Vehicle Code. Through June 30, 2017, this This definition
19applies to all property purchased for the purpose of being
20attached to those motor vehicles as a part thereof. On and
21after July 1, 2017, this definition applies to property
22purchased for the purpose of being attached to limousines as a
23part thereof.
24    (d) For purchases made through June 30, 2017 Beginning July
251, 2004, "use as rolling stock moving in interstate commerce"
26in paragraph paragraphs (12) and (13) of Section 2-5 occurs for

 

 

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1trailers, as defined in Section 1-209 of the Illinois Vehicle
2Code, semitrailers as defined in Section 1-187 of the Illinois
3Vehicle Code, and pole trailers as defined in Section 1-161 of
4the Illinois Vehicle Code, when during a 12-month period the
5rolling stock has carried persons or property for hire in
6interstate commerce for greater than 50% of its total trips for
7that period or for greater than 50% of its total miles for that
8period. The person claiming the exemption for a trailer or
9trailers that will not be dedicated to a motor vehicle or group
10of motor vehicles shall make an election at the time of
11purchase to use either the trips or mileage method. Persons who
12purchased trailers prior to July 1, 2004 that are not dedicated
13to a motor vehicle or group of motor vehicles shall make an
14election to use either the trips or mileage method and document
15that election in their books and records. If no election is
16made under this subsection to use the trips or mileage method,
17the person shall be deemed to have chosen the mileage method.
18    For purposes of determining qualifying trips or miles,
19trailers, semitrailers, or pole trailers that carry property
20for hire, even just between points in Illinois, will be
21considered used for hire in interstate commerce if the
22trailers, semitrailers, or pole trailers transport property
23whose shipments originate or terminate outside Illinois. This
24definition applies to all property purchased for the purpose of
25being attached to those trailers, semitrailers, or pole
26trailers as a part thereof. In lieu of a person providing

 

 

10000SB1871sam003- 87 -LRB100 08399 HLH 26203 a

1documentation regarding the qualifying use of each individual
2trailer, semitrailer, or pole trailer, that person may document
3such qualifying use by providing documentation of the
4following:
5        (1) If a trailer, semitrailer, or pole trailer is
6    dedicated to a motor vehicle that qualifies as rolling
7    stock moving in interstate commerce under subsection (c) of
8    this Section, then that trailer, semitrailer, or pole
9    trailer qualifies as rolling stock moving in interstate
10    commerce under this subsection.
11        (2) If a trailer, semitrailer, or pole trailer is
12    dedicated to a group of motor vehicles that all qualify as
13    rolling stock moving in interstate commerce under
14    subsection (c) of this Section, then that trailer,
15    semitrailer, or pole trailer qualifies as rolling stock
16    moving in interstate commerce under this subsection.
17        (3) If one or more trailers, semitrailers, or pole
18    trailers are dedicated to a group of motor vehicles and not
19    all of those motor vehicles in that group qualify as
20    rolling stock moving in interstate commerce under
21    subsection (c) of this Section, then the percentage of
22    those trailers, semitrailers, or pole trailers that
23    qualifies as rolling stock moving in interstate commerce
24    under this subsection is equal to the percentage of those
25    motor vehicles in that group that qualify as rolling stock
26    moving in interstate commerce under subsection (c) of this

 

 

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1    Section to which those trailers, semitrailers, or pole
2    trailers are dedicated. However, to determine the
3    qualification for the exemption provided under this item
4    (3), the mathematical application of the qualifying
5    percentage to one or more trailers, semitrailers, or pole
6    trailers under this subpart shall not be allowed as to any
7    fraction of a trailer, semitrailer, or pole trailer.
8    (d-5) For motor vehicles and trailers purchased on or after
9July 1, 2017, "use as rolling stock moving in interstate
10commerce" means that:
11        (1) the motor vehicle or trailer is used to transport
12    persons or property for hire;
13        (2) for purposes of the exemption under paragraph (13)
14    of Section 2-5, the purchaser who is an owner, lessor, or
15    shipper claiming the exemption certifies that the motor
16    vehicle or trailer will be utilized, from the time of
17    purchase and continuing through the statute of limitations
18    for issuing a notice of tax liability under this Act, by an
19    interstate carrier or carriers for hire who hold, and are
20    required by Federal Motor Carrier Safety Administration
21    regulations to hold, an active USDOT Number with the
22    Carrier Operation listed as "Interstate" and the Operation
23    Classification listed as "authorized for hire", "exempt
24    for hire", or both "authorized for hire" and "exempt for
25    hire"; and
26        (3) for motor vehicles, the gross vehicle weight rating

 

 

10000SB1871sam003- 89 -LRB100 08399 HLH 26203 a

1    exceeds 16,000 pounds.
2    The definition of "use as rolling stock moving in
3interstate commerce" in this subsection (d-5) applies to all
4property purchased on or after July 1, 2017 for the purpose of
5being attached to a motor vehicle or trailer as a part thereof,
6regardless of whether the motor vehicle or trailer was
7purchased before, on, or after July 1, 2017.
8    If an item ceases to meet requirements (1) through (3)
9under this subsection (d-5), then the tax is imposed on the
10selling price, allowing for a reasonable depreciation for the
11period during which the item qualified for the exemption.
12    For purposes of this subsection (d-5):
13        "Motor vehicle" excludes limousines, but otherwise
14    means that term as defined in Section 1-146 of the Illinois
15    Vehicle Code.
16        "Trailer" means (i) "trailer", as defined in Section
17    1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as
18    defined in Section 1-187 of the Illinois Vehicle Code, and
19    (iii) "pole trailer", as defined in Section 1-161 of the
20    Illinois Vehicle Code.
21    (e) For aircraft and watercraft purchased on or after
22January 1, 2014, "use as rolling stock moving in interstate
23commerce" in paragraph paragraphs (12) and (13) of Section 2-5
24occurs when, during a 12-month period, the rolling stock has
25carried persons or property for hire in interstate commerce for
26greater than 50% of its total trips for that period or for

 

 

10000SB1871sam003- 90 -LRB100 08399 HLH 26203 a

1greater than 50% of its total miles for that period. The person
2claiming the exemption shall make an election at the time of
3purchase to use either the trips or mileage method and document
4that election in their books and records. If no election is
5made under this subsection to use the trips or mileage method,
6the person shall be deemed to have chosen the mileage method.
7For aircraft, flight hours may be used in lieu of recording
8miles in determining whether the aircraft meets the mileage
9test in this subsection. For watercraft, nautical miles or trip
10hours may be used in lieu of recording miles in determining
11whether the watercraft meets the mileage test in this
12subsection.
13    Notwithstanding any other provision of law to the contrary,
14property purchased on or after January 1, 2014 for the purpose
15of being attached to aircraft or watercraft as a part thereof
16qualifies as rolling stock moving in interstate commerce only
17if the aircraft or watercraft to which it will be attached
18qualifies as rolling stock moving in interstate commerce under
19the test set forth in this subsection (e), regardless of when
20the aircraft or watercraft was purchased. Persons who purchased
21aircraft or watercraft prior to January 1, 2014 shall make an
22election to use either the trips or mileage method and document
23that election in their books and records for the purpose of
24determining whether property purchased on or after January 1,
252014 for the purpose of being attached to aircraft or
26watercraft as a part thereof qualifies as rolling stock moving

 

 

10000SB1871sam003- 91 -LRB100 08399 HLH 26203 a

1in interstate commerce under this subsection (e).
2    (f) The election to use either the trips or mileage method
3made under the provisions of subsections (c), (d), or (e) of
4this Section will remain in effect for the duration of the
5purchaser's ownership of that item.
6(Source: P.A. 98-584, eff. 8-27-13.)
 
7    Section 99. Effective date. This Act takes effect July 1,
82017.".