103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3426

 

Introduced 2/8/2024, by Sen. Christopher Belt

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 505/2  from Ch. 120, par. 418
235 ILCS 5/8-1

    Amends the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Makes changes concerning the exemption for materials, parts, equipment, components, and furnishings incorporated into or upon an aircraft. Amends the Liquor Control Act of 1934. Provides that the tax imposed on manufacturers or importing distributors of alcoholic liquor containing not less than 0.5% alcohol by volume nor more than 10% alcohol by volume, other than cider, wine, or beer, is imposed at the rate of $0.231 per gallon. Amends the Motor Fuel Tax Law. Sets forth the method for calculating the percentage change in the Consumer Price Index for the purpose of the annual adjustment in the tax rate. Effective immediately.


LRB103 37529 HLH 67652 b

 

 

A BILL FOR

 

SB3426LRB103 37529 HLH 67652 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Service Use Tax Act is amended by changing
5Section 3-5 as follows:
 
6    (35 ILCS 110/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a non-profit Illinois
17county fair association for use in conducting, operating, or
18promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts
20or cultural organization that establishes, by proof required
21by the Department by rule, that it has received an exemption
22under Section 501(c)(3) of the Internal Revenue Code and that
23is organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Legal tender, currency, medallions, or gold or silver
12coinage issued by the State of Illinois, the government of the
13United States of America, or the government of any foreign
14country, and bullion.
15    (5) Until July 1, 2003 and beginning again on September 1,
162004 through August 30, 2014, graphic arts machinery and
17equipment, including repair and replacement parts, both new
18and used, and including that manufactured on special order or
19purchased for lease, certified by the purchaser to be used
20primarily for graphic arts production. Equipment includes
21chemicals or chemicals acting as catalysts but only if the
22chemicals or chemicals acting as catalysts effect a direct and
23immediate change upon a graphic arts product. Beginning on
24July 1, 2017, graphic arts machinery and equipment is included
25in the manufacturing and assembling machinery and equipment
26exemption under Section 2 of this Act.

 

 

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

 

 

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1or spreaders. Precision farming equipment includes, but is not
2limited to, soil testing sensors, computers, monitors,
3software, global positioning and mapping systems, and other
4such equipment.
5    Farm machinery and equipment also includes computers,
6sensors, software, and related equipment used primarily in the
7computer-assisted operation of production agriculture
8facilities, equipment, and activities such as, but not limited
9to, the collection, monitoring, and correlation of animal and
10crop data for the purpose of formulating animal diets and
11agricultural chemicals.
12    Beginning on January 1, 2024, farm machinery and equipment
13also includes electrical power generation equipment used
14primarily for production agriculture.
15    This item (7) is exempt from the provisions of Section
163-75.
17    (8) Until June 30, 2013, fuel and petroleum products sold
18to or used by an air common carrier, certified by the carrier
19to be used for consumption, shipment, or storage in the
20conduct of its business as an air common carrier, for a flight
21destined for or returning from a location or locations outside
22the United States without regard to previous or subsequent
23domestic stopovers.
24    Beginning July 1, 2013, fuel and petroleum products sold
25to or used by an air carrier, certified by the carrier to be
26used for consumption, shipment, or storage in the conduct of

 

 

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1its business as an air common carrier, for a flight that (i) is
2engaged in foreign trade or is engaged in trade between the
3United States and any of its possessions and (ii) transports
4at least one individual or package for hire from the city of
5origination to the city of final destination on the same
6aircraft, without regard to a change in the flight number of
7that aircraft.
8    (9) Proceeds of mandatory service charges separately
9stated on customers' bills for the purchase and consumption of
10food and beverages acquired as an incident to the purchase of a
11service from a serviceman, to the extent that the proceeds of
12the service charge are in fact turned over as tips or as a
13substitute for tips to the employees who participate directly
14in preparing, serving, hosting or cleaning up the food or
15beverage function with respect to which the service charge is
16imposed.
17    (10) Until July 1, 2003, oil field exploration, drilling,
18and production equipment, including (i) rigs and parts of
19rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
20pipe and tubular goods, including casing and drill strings,
21(iii) pumps and pump-jack units, (iv) storage tanks and flow
22lines, (v) any individual replacement part for oil field
23exploration, drilling, and production equipment, and (vi)
24machinery and equipment purchased for lease; but excluding
25motor vehicles required to be registered under the Illinois
26Vehicle Code.

 

 

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1    (11) Proceeds from the sale of photoprocessing machinery
2and equipment, including repair and replacement parts, both
3new and used, including that manufactured on special order,
4certified by the purchaser to be used primarily for
5photoprocessing, and including photoprocessing machinery and
6equipment purchased for lease.
7    (12) Until July 1, 2028, coal and aggregate exploration,
8mining, off-highway hauling, processing, maintenance, and
9reclamation equipment, including replacement parts and
10equipment, and including equipment purchased for lease, but
11excluding motor vehicles required to be registered under the
12Illinois Vehicle Code. The changes made to this Section by
13Public Act 97-767 apply on and after July 1, 2003, but no claim
14for credit or refund is allowed on or after August 16, 2013
15(the effective date of Public Act 98-456) for such taxes paid
16during the period beginning July 1, 2003 and ending on August
1716, 2013 (the effective date of Public Act 98-456).
18    (13) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (14) 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 (14) is exempt from the
26provisions of Section 3-75, and the exemption provided for

 

 

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1under this item (14) applies for all periods beginning May 30,
21995, but no claim for credit or refund is allowed on or after
3January 1, 2008 (the effective date of Public Act 95-88) for
4such taxes paid during the period beginning May 30, 2000 and
5ending on January 1, 2008 (the effective date of Public Act
695-88).
7    (15) Computers and communications equipment utilized for
8any hospital purpose and equipment used in the diagnosis,
9analysis, or treatment of hospital patients purchased by a
10lessor who leases the equipment, under a lease of one year or
11longer executed or in effect at the time the lessor would
12otherwise be subject to the tax imposed by this Act, to a
13hospital that has been issued an active tax exemption
14identification number by the Department under Section 1g of
15the Retailers' Occupation Tax Act. If the equipment is leased
16in a manner that does not qualify for this exemption or is used
17in any other non-exempt manner, the lessor shall be liable for
18the tax imposed under this Act or the Use Tax Act, as the case
19may be, based on the fair market value of the property at the
20time the non-qualifying use occurs. No lessor shall collect or
21attempt to collect an amount (however designated) that
22purports to reimburse that lessor for the tax imposed by this
23Act or the Use Tax Act, as the case may be, if the tax has not
24been paid by the lessor. If a lessor improperly collects any
25such amount from the lessee, the lessee shall have a legal
26right to claim a refund of that amount from the lessor. If,

 

 

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1however, that amount is not refunded to the lessee for any
2reason, the lessor is liable to pay that amount to the
3Department.
4    (16) Personal property purchased by a lessor who leases
5the property, under a lease of one year or longer executed or
6in effect at the time the lessor would otherwise be subject to
7the tax imposed by this Act, to a governmental body that has
8been issued an active tax exemption identification number by
9the Department under Section 1g of the Retailers' Occupation
10Tax Act. If the property is leased in a manner that does not
11qualify for this exemption or is used in any other non-exempt
12manner, the lessor shall be liable for the tax imposed under
13this Act or the Use Tax Act, as the case may be, based on the
14fair market value of the property at the time the
15non-qualifying use occurs. No lessor shall collect or attempt
16to collect an amount (however designated) that purports to
17reimburse that lessor for the tax imposed by this Act or the
18Use Tax Act, as the case may be, if the tax has not been paid
19by the lessor. If a lessor improperly collects any such amount
20from the lessee, the lessee shall have a legal right to claim a
21refund of that amount from the lessor. If, however, that
22amount is not refunded to the lessee for any reason, the lessor
23is liable to pay that amount to the Department.
24    (17) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated

 

 

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1for disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (18) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in
11the performance of infrastructure repairs in this State,
12including, but not limited to, municipal roads and streets,
13access roads, bridges, sidewalks, waste disposal systems,
14water and sewer line extensions, water distribution and
15purification facilities, storm water drainage and retention
16facilities, and sewage treatment facilities, resulting from a
17State or federally declared disaster in Illinois or bordering
18Illinois when such repairs are initiated on facilities located
19in the declared disaster area within 6 months after the
20disaster.
21    (19) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-75.
25    (20) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

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1corporation, limited liability company, society, association,
2foundation, or institution that is determined by the
3Department to be organized and operated exclusively for
4educational purposes. For purposes of this exemption, "a
5corporation, limited liability company, society, association,
6foundation, or institution organized and operated exclusively
7for educational purposes" means all tax-supported public
8schools, private schools that offer systematic instruction in
9useful branches of learning by methods common to public
10schools and that compare favorably in their scope and
11intensity with the course of study presented in tax-supported
12schools, and vocational or technical schools or institutes
13organized and operated exclusively to provide a course of
14study of not less than 6 weeks duration and designed to prepare
15individuals to follow a trade or to pursue a manual,
16technical, mechanical, industrial, business, or commercial
17occupation.
18    (21) Beginning January 1, 2000, personal property,
19including food, purchased through fundraising events for the
20benefit of a public or private elementary or secondary school,
21a group of those schools, or one or more school districts if
22the events are sponsored by an entity recognized by the school
23district that consists primarily of volunteers and includes
24parents and teachers of the school children. This paragraph
25does not apply to fundraising events (i) for the benefit of
26private home instruction or (ii) for which the fundraising

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-75.
6    (22) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and
9other items, and replacement parts for these machines.
10Beginning January 1, 2002 and through June 30, 2003, machines
11and parts for machines used in commercial, coin-operated
12amusement and vending business if a use or occupation tax is
13paid on the gross receipts derived from the use of the
14commercial, coin-operated amusement and vending machines. This
15paragraph is exempt from the provisions of Section 3-75.
16    (23) Beginning August 23, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19soft drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (24) Beginning on August 2, 2001 (the effective date of
4Public Act 92-227), computers and communications equipment
5utilized for any hospital purpose and equipment used in the
6diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. If the equipment is leased
13in a manner that does not qualify for this exemption or is used
14in any other nonexempt manner, the lessor shall be liable for
15the tax imposed under this Act or the Use Tax Act, as the case
16may be, based on the fair market value of the property at the
17time the nonqualifying use occurs. No lessor shall collect or
18attempt to collect an amount (however designated) that
19purports to reimburse that lessor for the tax imposed by this
20Act or the Use Tax Act, as the case may be, if the tax has not
21been paid by the lessor. If a lessor improperly collects any
22such amount from the lessee, the lessee shall have a legal
23right to claim a refund of that amount from the lessor. If,
24however, that amount is not refunded to the lessee for any
25reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

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1Section 3-75.
2    (25) Beginning on August 2, 2001 (the effective date of
3Public Act 92-227), personal property purchased by a lessor
4who leases the property, under a lease of one year or longer
5executed or in effect at the time the lessor would otherwise be
6subject to the tax imposed by this Act, to a governmental body
7that has been issued an active tax exemption identification
8number by the Department under Section 1g of the Retailers'
9Occupation Tax Act. If the property is leased in a manner that
10does not qualify for this exemption or is used in any other
11nonexempt manner, the lessor shall be liable for the tax
12imposed under this Act or the Use Tax Act, as the case may be,
13based on the fair market value of the property at the time the
14nonqualifying use occurs. No lessor shall collect or attempt
15to collect an amount (however designated) that purports to
16reimburse that lessor for the tax imposed by this Act or the
17Use Tax Act, as the case may be, if the tax has not been paid
18by the lessor. If a lessor improperly collects any such amount
19from the lessee, the lessee shall have a legal right to claim a
20refund of that amount from the lessor. If, however, that
21amount is not refunded to the lessee for any reason, the lessor
22is liable to pay that amount to the Department. This paragraph
23is exempt from the provisions of Section 3-75.
24    (26) Beginning January 1, 2008, tangible personal property
25used in the construction or maintenance of a community water
26supply, as defined under Section 3.145 of the Environmental

 

 

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1Protection Act, that is operated by a not-for-profit
2corporation that holds a valid water supply permit issued
3under Title IV of the Environmental Protection Act. This
4paragraph is exempt from the provisions of Section 3-75.
5    (27) Beginning January 1, 2010 and continuing through
6December 31, 2029, materials, parts, equipment, components,
7and furnishings incorporated into or upon an aircraft as part
8of the modification, refurbishment, completion, replacement,
9repair, or maintenance of the aircraft. This exemption
10includes consumable supplies used in the modification,
11refurbishment, completion, replacement, repair, and
12maintenance of aircraft. However, until January 1, 2024, this
13exemption excludes any materials, parts, equipment,
14components, and consumable supplies used in the modification,
15replacement, repair, and maintenance of aircraft engines or
16power plants, whether such engines or power plants are
17installed or uninstalled upon any such aircraft. "Consumable
18supplies" include, but are not limited to, adhesive, tape,
19sandpaper, general purpose lubricants, cleaning solution,
20latex gloves, and protective films.
21    Beginning January 1, 2010 and continuing through December
2231, 2023, this exemption applies only to the use of qualifying
23tangible personal property transferred incident to the
24modification, refurbishment, completion, replacement, repair,
25or maintenance of aircraft by persons who (i) hold an Air
26Agency Certificate and are empowered to operate an approved

 

 

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1repair station by the Federal Aviation Administration, (ii)
2have a Class IV Rating, and (iii) conduct operations in
3accordance with Part 145 of the Federal Aviation Regulations.
4From January 1, 2024 through December 31, 2029, this exemption
5applies only to the use of qualifying tangible personal
6property transferred incident to by: (A) the modification,
7refurbishment, completion, repair, replacement, or maintenance
8of an aircraft by persons who modify, refurbish, complete,
9repair, replace, or maintain aircraft and who (i) hold an Air
10Agency Certificate and are empowered to operate an approved
11repair station by the Federal Aviation Administration, (ii)
12have a Class IV Rating, and (iii) conduct operations in
13accordance with Part 145 of the Federal Aviation Regulations;
14and (B) persons who engage in the modification, replacement,
15repair, and maintenance of aircraft engines or power plants
16without regard to whether or not those persons meet the
17qualifications of item (A).
18    The exemption does not include aircraft operated by a
19commercial air carrier providing scheduled passenger air
20service pursuant to authority issued under Part 121 or Part
21129 of the Federal Aviation Regulations. The changes made to
22this paragraph (27) by Public Act 98-534 are declarative of
23existing law. It is the intent of the General Assembly that the
24exemption under this paragraph (27) applies continuously from
25January 1, 2010 through December 31, 2024; however, no claim
26for credit or refund is allowed for taxes paid as a result of

 

 

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1the disallowance of this exemption on or after January 1, 2015
2and prior to February 5, 2020 (the effective date of Public Act
3101-629).
4    (28) Tangible personal property purchased by a
5public-facilities corporation, as described in Section
611-65-10 of the Illinois Municipal Code, for purposes of
7constructing or furnishing a municipal convention hall, but
8only if the legal title to the municipal convention hall is
9transferred to the municipality without any further
10consideration by or on behalf of the municipality at the time
11of the completion of the municipal convention hall or upon the
12retirement or redemption of any bonds or other debt
13instruments issued by the public-facilities corporation in
14connection with the development of the municipal convention
15hall. This exemption includes existing public-facilities
16corporations as provided in Section 11-65-25 of the Illinois
17Municipal Code. This paragraph is exempt from the provisions
18of Section 3-75.
19    (29) Beginning January 1, 2017 and through December 31,
202026, menstrual pads, tampons, and menstrual cups.
21    (30) Tangible personal property transferred to a purchaser
22who is exempt from the tax imposed by this Act by operation of
23federal law. This paragraph is exempt from the provisions of
24Section 3-75.
25    (31) Qualified tangible personal property used in the
26construction or operation of a data center that has been

 

 

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1granted a certificate of exemption by the Department of
2Commerce and Economic Opportunity, whether that tangible
3personal property is purchased by the owner, operator, or
4tenant of the data center or by a contractor or subcontractor
5of the owner, operator, or tenant. Data centers that would
6have qualified for a certificate of exemption prior to January
71, 2020 had Public Act 101-31 been in effect, may apply for and
8obtain an exemption for subsequent purchases of computer
9equipment or enabling software purchased or leased to upgrade,
10supplement, or replace computer equipment or enabling software
11purchased or leased in the original investment that would have
12qualified.
13    The Department of Commerce and Economic Opportunity shall
14grant a certificate of exemption under this item (31) to
15qualified data centers as defined by Section 605-1025 of the
16Department of Commerce and Economic Opportunity Law of the
17Civil Administrative Code of Illinois.
18    For the purposes of this item (31):
19        "Data center" means a building or a series of
20    buildings rehabilitated or constructed to house working
21    servers in one physical location or multiple sites within
22    the State of Illinois.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency

 

 

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1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. The term "qualified tangible personal
18    property" also includes building materials physically
19    incorporated into in to the qualifying data center. To
20    document the exemption allowed under this Section, the
21    retailer must obtain from the purchaser a copy of the
22    certificate of eligibility issued by the Department of
23    Commerce and Economic Opportunity.
24    This item (31) is exempt from the provisions of Section
253-75.
26    (32) Beginning July 1, 2022, breast pumps, breast pump

 

 

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1collection and storage supplies, and breast pump kits. This
2item (32) is exempt from the provisions of Section 3-75. As
3used in this item (32):
4        "Breast pump" means an electrically controlled or
5    manually controlled pump device designed or marketed to be
6    used to express milk from a human breast during lactation,
7    including the pump device and any battery, AC adapter, or
8    other power supply unit that is used to power the pump
9    device and is packaged and sold with the pump device at the
10    time of sale.
11        "Breast pump collection and storage supplies" means
12    items of tangible personal property designed or marketed
13    to be used in conjunction with a breast pump to collect
14    milk expressed from a human breast and to store collected
15    milk until it is ready for consumption.
16        "Breast pump collection and storage supplies"
17    includes, but is not limited to: breast shields and breast
18    shield connectors; breast pump tubes and tubing adapters;
19    breast pump valves and membranes; backflow protectors and
20    backflow protector adaptors; bottles and bottle caps
21    specific to the operation of the breast pump; and breast
22    milk storage bags.
23        "Breast pump collection and storage supplies" does not
24    include: (1) bottles and bottle caps not specific to the
25    operation of the breast pump; (2) breast pump travel bags
26    and other similar carrying accessories, including ice

 

 

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1    packs, labels, and other similar products; (3) breast pump
2    cleaning supplies; (4) nursing bras, bra pads, breast
3    shells, and other similar products; and (5) creams,
4    ointments, and other similar products that relieve
5    breastfeeding-related symptoms or conditions of the
6    breasts or nipples, unless sold as part of a breast pump
7    kit that is pre-packaged by the breast pump manufacturer
8    or distributor.
9        "Breast pump kit" means a kit that: (1) contains no
10    more than a breast pump, breast pump collection and
11    storage supplies, a rechargeable battery for operating the
12    breast pump, a breastmilk cooler, bottle stands, ice
13    packs, and a breast pump carrying case; and (2) is
14    pre-packaged as a breast pump kit by the breast pump
15    manufacturer or distributor.
16    (33) Tangible personal property sold by or on behalf of
17the State Treasurer pursuant to the Revised Uniform Unclaimed
18Property Act. This item (33) is exempt from the provisions of
19Section 3-75.
20    (34) Beginning on January 1, 2024, tangible personal
21property purchased by an active duty member of the armed
22forces of the United States who presents valid military
23identification and purchases the property using a form of
24payment where the federal government is the payor. The member
25of the armed forces must complete, at the point of sale, a form
26prescribed by the Department of Revenue documenting that the

 

 

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1transaction is eligible for the exemption under this
2paragraph. Retailers must keep the form as documentation of
3the exemption in their records for a period of not less than 6
4years. "Armed forces of the United States" means the United
5States Army, Navy, Air Force, Marine Corps, or Coast Guard.
6This paragraph is exempt from the provisions of Section 3-75.
7(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
8Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
975-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
10Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
11eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
12revised 12-12-23.)
 
13    Section 10. The Service Occupation Tax Act is amended by
14changing Section 3-5 as follows:
 
15    (35 ILCS 115/3-5)
16    Sec. 3-5. Exemptions. The following tangible personal
17property is exempt from the tax imposed by this Act:
18    (1) Personal property sold by a corporation, society,
19association, foundation, institution, or organization, other
20than a limited liability company, that is organized and
21operated as a not-for-profit service enterprise for the
22benefit of persons 65 years of age or older if the personal
23property was not purchased by the enterprise for the purpose
24of resale by the enterprise.

 

 

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1    (2) Personal property purchased by a not-for-profit
2Illinois county fair association for use in conducting,
3operating, or promoting the county fair.
4    (3) Personal property purchased by any not-for-profit arts
5or cultural organization that establishes, by proof required
6by the Department by rule, that it has received an exemption
7under Section 501(c)(3) of the Internal Revenue Code and that
8is organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after July 1, 2001 (the
15effective date of Public Act 92-35), however, an entity
16otherwise eligible for this exemption shall not make tax-free
17purchases unless it has an active identification number issued
18by the Department.
19    (4) 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    (5) Until July 1, 2003 and beginning again on September 1,
242004 through August 30, 2014, graphic arts machinery and
25equipment, including repair and replacement parts, both new
26and used, and including that manufactured on special order or

 

 

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1purchased for lease, certified by the purchaser to be used
2primarily for graphic arts production. Equipment includes
3chemicals or chemicals acting as catalysts but only if the
4chemicals or chemicals acting as catalysts effect a direct and
5immediate change upon a graphic arts product. Beginning on
6July 1, 2017, graphic arts machinery and equipment is included
7in the manufacturing and assembling machinery and equipment
8exemption under Section 2 of this Act.
9    (6) Personal property sold by a teacher-sponsored student
10organization affiliated with an elementary or secondary school
11located in Illinois.
12    (7) Farm machinery and equipment, both new and used,
13including that manufactured on special order, certified by the
14purchaser to be used primarily for production agriculture or
15State or federal agricultural programs, including individual
16replacement parts for the machinery and equipment, including
17machinery and equipment purchased for lease, and including
18implements of husbandry defined in Section 1-130 of the
19Illinois Vehicle Code, farm machinery and agricultural
20chemical and fertilizer spreaders, and nurse wagons required
21to be registered under Section 3-809 of the Illinois Vehicle
22Code, but excluding other motor vehicles required to be
23registered under the Illinois Vehicle Code. Horticultural
24polyhouses or hoop houses used for propagating, growing, or
25overwintering plants shall be considered farm machinery and
26equipment under this item (7). Agricultural chemical tender

 

 

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1tanks and dry boxes shall include units sold separately from a
2motor vehicle required to be licensed and units sold mounted
3on a motor vehicle required to be licensed if the selling price
4of the tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment, including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals.
20    Beginning on January 1, 2024, farm machinery and equipment
21also includes electrical power generation equipment used
22primarily for production agriculture.
23    This item (7) is exempt from the provisions of Section
243-55.
25    (8) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air common carrier, certified by the carrier

 

 

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1to be used for consumption, shipment, or storage in the
2conduct of its business as an air common carrier, for a flight
3destined for or returning from a location or locations outside
4the United States without regard to previous or subsequent
5domestic stopovers.
6    Beginning July 1, 2013, fuel and petroleum products sold
7to or used by an air carrier, certified by the carrier to be
8used for consumption, shipment, or storage in the conduct of
9its business as an air common carrier, for a flight that (i) is
10engaged in foreign trade or is engaged in trade between the
11United States and any of its possessions and (ii) transports
12at least one individual or package for hire from the city of
13origination to the city of final destination on the same
14aircraft, without regard to a change in the flight number of
15that aircraft.
16    (9) Proceeds of mandatory service charges separately
17stated on customers' bills for the purchase and consumption of
18food and beverages, to the extent that the proceeds of the
19service charge are in fact turned over as tips or as a
20substitute for tips to the employees who participate directly
21in preparing, serving, hosting or cleaning up the food or
22beverage function with respect to which the service charge is
23imposed.
24    (10) Until July 1, 2003, oil field exploration, drilling,
25and production equipment, including (i) rigs and parts of
26rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

 

 

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1pipe and tubular goods, including casing and drill strings,
2(iii) pumps and pump-jack units, (iv) storage tanks and flow
3lines, (v) any individual replacement part for oil field
4exploration, drilling, and production equipment, and (vi)
5machinery and equipment purchased for lease; but excluding
6motor vehicles required to be registered under the Illinois
7Vehicle Code.
8    (11) Photoprocessing machinery and equipment, including
9repair and replacement parts, both new and used, including
10that manufactured on special order, certified by the purchaser
11to be used primarily for photoprocessing, and including
12photoprocessing machinery and equipment purchased for lease.
13    (12) Until July 1, 2028, coal and aggregate exploration,
14mining, off-highway hauling, processing, maintenance, and
15reclamation equipment, including replacement parts and
16equipment, and including equipment purchased for lease, but
17excluding motor vehicles required to be registered under the
18Illinois Vehicle Code. The changes made to this Section by
19Public Act 97-767 apply on and after July 1, 2003, but no claim
20for credit or refund is allowed on or after August 16, 2013
21(the effective date of Public Act 98-456) for such taxes paid
22during the period beginning July 1, 2003 and ending on August
2316, 2013 (the effective date of Public Act 98-456).
24    (13) Beginning January 1, 1992 and through June 30, 2016,
25food for human consumption that is to be consumed off the
26premises where it is sold (other than alcoholic beverages,

 

 

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1soft drinks and food that has been prepared for immediate
2consumption) and prescription and non-prescription medicines,
3drugs, medical appliances, and insulin, urine testing
4materials, syringes, and needles used by diabetics, for human
5use, when purchased for use by a person receiving medical
6assistance under Article V of the Illinois Public Aid Code who
7resides in a licensed long-term care facility, as defined in
8the Nursing Home Care Act, or in a licensed facility as defined
9in the ID/DD Community Care Act, the MC/DD Act, or the
10Specialized Mental Health Rehabilitation Act of 2013.
11    (14) Semen used for artificial insemination of livestock
12for direct agricultural production.
13    (15) Horses, or interests in horses, registered with and
14meeting the requirements of any of the Arabian Horse Club
15Registry of America, Appaloosa Horse Club, American Quarter
16Horse Association, United States Trotting Association, or
17Jockey Club, as appropriate, used for purposes of breeding or
18racing for prizes. This item (15) is exempt from the
19provisions of Section 3-55, and the exemption provided for
20under this item (15) applies for all periods beginning May 30,
211995, but no claim for credit or refund is allowed on or after
22January 1, 2008 (the effective date of Public Act 95-88) for
23such taxes paid during the period beginning May 30, 2000 and
24ending on January 1, 2008 (the effective date of Public Act
2595-88).
26    (16) Computers and communications equipment utilized for

 

 

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1any hospital purpose and equipment used in the diagnosis,
2analysis, or treatment of hospital patients sold to a lessor
3who leases the equipment, under a lease of one year or longer
4executed or in effect at the time of the purchase, to a
5hospital that has been issued an active tax exemption
6identification number by the Department under Section 1g of
7the Retailers' Occupation Tax Act.
8    (17) Personal property sold to a lessor who leases the
9property, under a lease of one year or longer executed or in
10effect at the time of the purchase, to a governmental body that
11has been issued an active tax exemption identification number
12by the Department under Section 1g of the Retailers'
13Occupation Tax Act.
14    (18) Beginning with taxable years ending on or after
15December 31, 1995 and ending with taxable years ending on or
16before December 31, 2004, personal property that is donated
17for disaster relief to be used in a State or federally declared
18disaster area in Illinois or bordering Illinois by a
19manufacturer or retailer that is registered in this State to a
20corporation, society, association, foundation, or institution
21that has been issued a sales tax exemption identification
22number by the Department that assists victims of the disaster
23who reside within the declared disaster area.
24    (19) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is used in

 

 

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1the performance of infrastructure repairs in this State,
2including, but not limited to, municipal roads and streets,
3access roads, bridges, sidewalks, waste disposal systems,
4water and sewer line extensions, water distribution and
5purification facilities, storm water drainage and retention
6facilities, and sewage treatment facilities, resulting from a
7State or federally declared disaster in Illinois or bordering
8Illinois when such repairs are initiated on facilities located
9in the declared disaster area within 6 months after the
10disaster.
11    (20) Beginning July 1, 1999, game or game birds sold at a
12"game breeding and hunting preserve area" as that term is used
13in the Wildlife Code. This paragraph is exempt from the
14provisions of Section 3-55.
15    (21) A motor vehicle, as that term is defined in Section
161-146 of the Illinois Vehicle Code, that is donated to a
17corporation, limited liability company, society, association,
18foundation, or institution that is determined by the
19Department to be organized and operated exclusively for
20educational purposes. For purposes of this exemption, "a
21corporation, limited liability company, society, association,
22foundation, or institution organized and operated exclusively
23for educational purposes" means all tax-supported public
24schools, private schools that offer systematic instruction in
25useful branches of learning by methods common to public
26schools and that compare favorably in their scope and

 

 

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1intensity with the course of study presented in tax-supported
2schools, and vocational or technical schools or institutes
3organized and operated exclusively to provide a course of
4study of not less than 6 weeks duration and designed to prepare
5individuals to follow a trade or to pursue a manual,
6technical, mechanical, industrial, business, or commercial
7occupation.
8    (22) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 3-55.
22    (23) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and
25other items, and replacement parts for these machines.
26Beginning January 1, 2002 and through June 30, 2003, machines

 

 

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1and parts for machines used in commercial, coin-operated
2amusement and vending business if a use or occupation tax is
3paid on the gross receipts derived from the use of the
4commercial, coin-operated amusement and vending machines. This
5paragraph is exempt from the provisions of Section 3-55.
6    (24) Beginning on August 2, 2001 (the effective date of
7Public Act 92-227), computers and communications equipment
8utilized for any hospital purpose and equipment used in the
9diagnosis, analysis, or treatment of hospital patients sold to
10a lessor who leases the equipment, under a lease of one year or
11longer executed or in effect at the time of the purchase, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14the Retailers' Occupation Tax Act. This paragraph is exempt
15from the provisions of Section 3-55.
16    (25) Beginning on August 2, 2001 (the effective date of
17Public Act 92-227), personal property sold to a lessor who
18leases the property, under a lease of one year or longer
19executed or in effect at the time of the purchase, to a
20governmental body that has been issued an active tax exemption
21identification number by the Department under Section 1g of
22the Retailers' Occupation Tax Act. This paragraph is exempt
23from the provisions of Section 3-55.
24    (26) Beginning on January 1, 2002 and through June 30,
252016, tangible personal property purchased from an Illinois
26retailer by a taxpayer engaged in centralized purchasing

 

 

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1activities in Illinois who will, upon receipt of the property
2in Illinois, temporarily store the property in Illinois (i)
3for the purpose of subsequently transporting it outside this
4State for use or consumption thereafter solely outside this
5State or (ii) for the purpose of being processed, fabricated,
6or manufactured into, attached to, or incorporated into other
7tangible personal property to be transported outside this
8State and thereafter used or consumed solely outside this
9State. The Director of Revenue shall, pursuant to rules
10adopted in accordance with the Illinois Administrative
11Procedure Act, issue a permit to any taxpayer in good standing
12with the Department who is eligible for the exemption under
13this paragraph (26). The permit issued under this paragraph
14(26) shall authorize the holder, to the extent and in the
15manner specified in the rules adopted under this Act, to
16purchase tangible personal property from a retailer exempt
17from the taxes imposed by this Act. Taxpayers shall maintain
18all necessary books and records to substantiate the use and
19consumption of all such tangible personal property outside of
20the State of Illinois.
21    (27) Beginning January 1, 2008, tangible personal property
22used in the construction or maintenance of a community water
23supply, as defined under Section 3.145 of the Environmental
24Protection Act, that is operated by a not-for-profit
25corporation that holds a valid water supply permit issued
26under Title IV of the Environmental Protection Act. This

 

 

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1paragraph is exempt from the provisions of Section 3-55.
2    (28) Tangible personal property sold to a
3public-facilities corporation, as described in Section
411-65-10 of the Illinois Municipal Code, for purposes of
5constructing or furnishing a municipal convention hall, but
6only if the legal title to the municipal convention hall is
7transferred to the municipality without any further
8consideration by or on behalf of the municipality at the time
9of the completion of the municipal convention hall or upon the
10retirement or redemption of any bonds or other debt
11instruments issued by the public-facilities corporation in
12connection with the development of the municipal convention
13hall. This exemption includes existing public-facilities
14corporations as provided in Section 11-65-25 of the Illinois
15Municipal Code. This paragraph is exempt from the provisions
16of Section 3-55.
17    (29) Beginning January 1, 2010 and continuing through
18December 31, 2029, materials, parts, equipment, components,
19and furnishings incorporated into or upon an aircraft as part
20of the modification, refurbishment, completion, replacement,
21repair, or maintenance of the aircraft. This exemption
22includes consumable supplies used in the modification,
23refurbishment, completion, replacement, repair, and
24maintenance of aircraft. However, until January 1, 2024, this
25exemption excludes any materials, parts, equipment,
26components, and consumable supplies used in the modification,

 

 

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1replacement, repair, and maintenance of aircraft engines or
2power plants, whether such engines or power plants are
3installed or uninstalled upon any such aircraft. "Consumable
4supplies" include, but are not limited to, adhesive, tape,
5sandpaper, general purpose lubricants, cleaning solution,
6latex gloves, and protective films.
7    Beginning January 1, 2010 and continuing through December
831, 2023, this exemption applies only to the transfer of
9qualifying tangible personal property incident to the
10modification, refurbishment, completion, replacement, repair,
11or maintenance of an aircraft by persons who (i) hold an Air
12Agency Certificate and are empowered to operate an approved
13repair station by the Federal Aviation Administration, (ii)
14have a Class IV Rating, and (iii) conduct operations in
15accordance with Part 145 of the Federal Aviation Regulations.
16The exemption does not include aircraft operated by a
17commercial air carrier providing scheduled passenger air
18service pursuant to authority issued under Part 121 or Part
19129 of the Federal Aviation Regulations. From January 1, 2024
20through December 31, 2029, this exemption applies only to the
21transfer use of qualifying tangible personal property incident
22to by: (A) the modification, refurbishment, completion,
23repair, replacement, or maintenance of an aircraft by persons
24who modify, refurbish, complete, repair, replace, or maintain
25aircraft and who (i) hold an Air Agency Certificate and are
26empowered to operate an approved repair station by the Federal

 

 

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1Aviation Administration, (ii) have a Class IV Rating, and
2(iii) conduct operations in accordance with Part 145 of the
3Federal Aviation Regulations; and (B) persons who engage in
4the modification, replacement, repair, and maintenance of
5aircraft engines or power plants without regard to whether or
6not those persons meet the qualifications of item (A).
7    The changes made to this paragraph (29) by Public Act
898-534 are declarative of existing law. It is the intent of the
9General Assembly that the exemption under this paragraph (29)
10applies continuously from January 1, 2010 through December 31,
112024; however, no claim for credit or refund is allowed for
12taxes paid as a result of the disallowance of this exemption on
13or after January 1, 2015 and prior to February 5, 2020 (the
14effective date of Public Act 101-629).
15    (30) Beginning January 1, 2017 and through December 31,
162026, menstrual pads, tampons, and menstrual cups.
17    (31) Tangible personal property transferred to a purchaser
18who is exempt from tax by operation of federal law. This
19paragraph is exempt from the provisions of Section 3-55.
20    (32) Qualified tangible personal property used in the
21construction or operation of a data center that has been
22granted a certificate of exemption by the Department of
23Commerce and Economic Opportunity, whether that tangible
24personal property is purchased by the owner, operator, or
25tenant of the data center or by a contractor or subcontractor
26of the owner, operator, or tenant. Data centers that would

 

 

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1have qualified for a certificate of exemption prior to January
21, 2020 had Public Act 101-31 been in effect, may apply for and
3obtain an exemption for subsequent purchases of computer
4equipment or enabling software purchased or leased to upgrade,
5supplement, or replace computer equipment or enabling software
6purchased or leased in the original investment that would have
7qualified.
8    The Department of Commerce and Economic Opportunity shall
9grant a certificate of exemption under this item (32) to
10qualified data centers as defined by Section 605-1025 of the
11Department of Commerce and Economic Opportunity Law of the
12Civil Administrative Code of Illinois.
13    For the purposes of this item (32):
14        "Data center" means a building or a series of
15    buildings rehabilitated or constructed to house working
16    servers in one physical location or multiple sites within
17    the State of Illinois.
18        "Qualified tangible personal property" means:
19    electrical systems and equipment; climate control and
20    chilling equipment and systems; mechanical systems and
21    equipment; monitoring and secure systems; emergency
22    generators; hardware; computers; servers; data storage
23    devices; network connectivity equipment; racks; cabinets;
24    telecommunications cabling infrastructure; raised floor
25    systems; peripheral components or systems; software;
26    mechanical, electrical, or plumbing systems; battery

 

 

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1    systems; cooling systems and towers; temperature control
2    systems; other cabling; and other data center
3    infrastructure equipment and systems necessary to operate
4    qualified tangible personal property, including fixtures;
5    and component parts of any of the foregoing, including
6    installation, maintenance, repair, refurbishment, and
7    replacement of qualified tangible personal property to
8    generate, transform, transmit, distribute, or manage
9    electricity necessary to operate qualified tangible
10    personal property; and all other tangible personal
11    property that is essential to the operations of a computer
12    data center. The term "qualified tangible personal
13    property" also includes building materials physically
14    incorporated into in to the qualifying data center. To
15    document the exemption allowed under this Section, the
16    retailer must obtain from the purchaser a copy of the
17    certificate of eligibility issued by the Department of
18    Commerce and Economic Opportunity.
19    This item (32) is exempt from the provisions of Section
203-55.
21    (33) Beginning July 1, 2022, breast pumps, breast pump
22collection and storage supplies, and breast pump kits. This
23item (33) is exempt from the provisions of Section 3-55. As
24used in this item (33):
25        "Breast pump" means an electrically controlled or
26    manually controlled pump device designed or marketed to be

 

 

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1    used to express milk from a human breast during lactation,
2    including the pump device and any battery, AC adapter, or
3    other power supply unit that is used to power the pump
4    device and is packaged and sold with the pump device at the
5    time of sale.
6        "Breast pump collection and storage supplies" means
7    items of tangible personal property designed or marketed
8    to be used in conjunction with a breast pump to collect
9    milk expressed from a human breast and to store collected
10    milk until it is ready for consumption.
11        "Breast pump collection and storage supplies"
12    includes, but is not limited to: breast shields and breast
13    shield connectors; breast pump tubes and tubing adapters;
14    breast pump valves and membranes; backflow protectors and
15    backflow protector adaptors; bottles and bottle caps
16    specific to the operation of the breast pump; and breast
17    milk storage bags.
18        "Breast pump collection and storage supplies" does not
19    include: (1) bottles and bottle caps not specific to the
20    operation of the breast pump; (2) breast pump travel bags
21    and other similar carrying accessories, including ice
22    packs, labels, and other similar products; (3) breast pump
23    cleaning supplies; (4) nursing bras, bra pads, breast
24    shells, and other similar products; and (5) creams,
25    ointments, and other similar products that relieve
26    breastfeeding-related symptoms or conditions of the

 

 

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1    breasts or nipples, unless sold as part of a breast pump
2    kit that is pre-packaged by the breast pump manufacturer
3    or distributor.
4        "Breast pump kit" means a kit that: (1) contains no
5    more than a breast pump, breast pump collection and
6    storage supplies, a rechargeable battery for operating the
7    breast pump, a breastmilk cooler, bottle stands, ice
8    packs, and a breast pump carrying case; and (2) is
9    pre-packaged as a breast pump kit by the breast pump
10    manufacturer or distributor.
11    (34) Tangible personal property sold by or on behalf of
12the State Treasurer pursuant to the Revised Uniform Unclaimed
13Property Act. This item (34) is exempt from the provisions of
14Section 3-55.
15    (35) Beginning on January 1, 2024, tangible personal
16property purchased by an active duty member of the armed
17forces of the United States who presents valid military
18identification and purchases the property using a form of
19payment where the federal government is the payor. The member
20of the armed forces must complete, at the point of sale, a form
21prescribed by the Department of Revenue documenting that the
22transaction is eligible for the exemption under this
23paragraph. Retailers must keep the form as documentation of
24the exemption in their records for a period of not less than 6
25years. "Armed forces of the United States" means the United
26States Army, Navy, Air Force, Marine Corps, or Coast Guard.

 

 

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1This paragraph is exempt from the provisions of Section 3-55.
2(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
3Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
475-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
5Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
6eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
7revised 12-12-23.)
 
8    Section 15. The Retailers' Occupation Tax Act is amended
9by changing Section 2-5 as follows:
 
10    (35 ILCS 120/2-5)
11    Sec. 2-5. Exemptions. Gross receipts from proceeds from
12the sale of the following tangible personal property are
13exempt from the tax imposed by this Act:
14        (1) Farm chemicals.
15        (2) Farm machinery and equipment, both new and used,
16    including that manufactured on special order, certified by
17    the purchaser to be used primarily for production
18    agriculture or State or federal agricultural programs,
19    including individual replacement parts for the machinery
20    and equipment, including machinery and equipment purchased
21    for lease, and including implements of husbandry defined
22    in Section 1-130 of the Illinois Vehicle Code, farm
23    machinery and agricultural chemical and fertilizer
24    spreaders, and nurse wagons required to be registered

 

 

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1    under Section 3-809 of the Illinois Vehicle Code, but
2    excluding other motor vehicles required to be registered
3    under the Illinois Vehicle Code. Horticultural polyhouses
4    or hoop houses used for propagating, growing, or
5    overwintering plants shall be considered farm machinery
6    and equipment under this item (2). Agricultural chemical
7    tender tanks and dry boxes shall include units sold
8    separately from a motor vehicle required to be licensed
9    and units sold mounted on a motor vehicle required to be
10    licensed, if the selling price of the tender is separately
11    stated.
12        Farm machinery and equipment shall include precision
13    farming equipment that is installed or purchased to be
14    installed on farm machinery and equipment including, but
15    not limited to, tractors, harvesters, sprayers, planters,
16    seeders, or spreaders. Precision farming equipment
17    includes, but is not limited to, soil testing sensors,
18    computers, monitors, software, global positioning and
19    mapping systems, and other such equipment.
20        Farm machinery and equipment also includes computers,
21    sensors, software, and related equipment used primarily in
22    the computer-assisted operation of production agriculture
23    facilities, equipment, and activities such as, but not
24    limited to, the collection, monitoring, and correlation of
25    animal and crop data for the purpose of formulating animal
26    diets and agricultural chemicals.

 

 

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1        Beginning on January 1, 2024, farm machinery and
2    equipment also includes electrical power generation
3    equipment used primarily for production agriculture.
4        This item (2) is exempt from the provisions of Section
5    2-70.
6        (3) Until July 1, 2003, distillation machinery and
7    equipment, sold as a unit or kit, assembled or installed
8    by the retailer, certified by the user to be used only for
9    the production of ethyl alcohol that will be used for
10    consumption as motor fuel or as a component of motor fuel
11    for the personal use of the user, and not subject to sale
12    or resale.
13        (4) Until July 1, 2003 and beginning again September
14    1, 2004 through August 30, 2014, graphic arts machinery
15    and equipment, including repair and replacement parts,
16    both new and used, and including that manufactured on
17    special order or purchased for lease, certified by the
18    purchaser to be used primarily for graphic arts
19    production. Equipment includes chemicals or chemicals
20    acting as catalysts but only if the chemicals or chemicals
21    acting as catalysts effect a direct and immediate change
22    upon a graphic arts product. Beginning on July 1, 2017,
23    graphic arts machinery and equipment is included in the
24    manufacturing and assembling machinery and equipment
25    exemption under paragraph (14).
26        (5) A motor vehicle that is used for automobile

 

 

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1    renting, as defined in the Automobile Renting Occupation
2    and Use Tax Act. This paragraph is exempt from the
3    provisions of Section 2-70.
4        (6) Personal property sold by a teacher-sponsored
5    student organization affiliated with an elementary or
6    secondary school located in Illinois.
7        (7) Until July 1, 2003, proceeds of that portion of
8    the selling price of a passenger car the sale of which is
9    subject to the Replacement Vehicle Tax.
10        (8) Personal property sold to an Illinois county fair
11    association for use in conducting, operating, or promoting
12    the county fair.
13        (9) Personal property sold to a not-for-profit arts or
14    cultural organization that establishes, by proof required
15    by the Department by rule, that it has received an
16    exemption under Section 501(c)(3) of the Internal Revenue
17    Code and that is organized and operated primarily for the
18    presentation or support of arts or cultural programming,
19    activities, or services. These organizations include, but
20    are not limited to, music and dramatic arts organizations
21    such as symphony orchestras and theatrical groups, arts
22    and cultural service organizations, local arts councils,
23    visual arts organizations, and media arts organizations.
24    On and after July 1, 2001 (the effective date of Public Act
25    92-35), however, an entity otherwise eligible for this
26    exemption shall not make tax-free purchases unless it has

 

 

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1    an active identification number issued by the Department.
2        (10) Personal property sold by a corporation, society,
3    association, foundation, institution, or organization,
4    other than a limited liability company, that is organized
5    and operated as a not-for-profit service enterprise for
6    the benefit of persons 65 years of age or older if the
7    personal property was not purchased by the enterprise for
8    the purpose of resale by the enterprise.
9        (11) Except as otherwise provided in this Section,
10    personal property sold to a governmental body, to a
11    corporation, society, association, foundation, or
12    institution organized and operated exclusively for
13    charitable, religious, or educational purposes, or to a
14    not-for-profit corporation, society, association,
15    foundation, institution, or organization that has no
16    compensated officers or employees and that is organized
17    and operated primarily for the recreation of persons 55
18    years of age or older. A limited liability company may
19    qualify for the exemption under this paragraph only if the
20    limited liability company is organized and operated
21    exclusively for educational purposes. On and after July 1,
22    1987, however, no entity otherwise eligible for this
23    exemption shall make tax-free purchases unless it has an
24    active identification number issued by the Department.
25        (12) (Blank).
26        (12-5) On and after July 1, 2003 and through June 30,

 

 

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

 

 

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1    interstate commerce.
2        (14) Machinery and equipment that will be used by the
3    purchaser, or a lessee of the purchaser, primarily in the
4    process of manufacturing or assembling tangible personal
5    property for wholesale or retail sale or lease, whether
6    the sale or lease is made directly by the manufacturer or
7    by some other person, whether the materials used in the
8    process are owned by the manufacturer or some other
9    person, or whether the sale or lease is made apart from or
10    as an incident to the seller's engaging in the service
11    occupation of producing machines, tools, dies, jigs,
12    patterns, gauges, or other similar items of no commercial
13    value on special order for a particular purchaser. The
14    exemption provided by this paragraph (14) does not include
15    machinery and equipment used in (i) the generation of
16    electricity for wholesale or retail sale; (ii) the
17    generation or treatment of natural or artificial gas for
18    wholesale or retail sale that is delivered to customers
19    through pipes, pipelines, or mains; or (iii) the treatment
20    of water for wholesale or retail sale that is delivered to
21    customers through pipes, pipelines, or mains. The
22    provisions of Public Act 98-583 are declaratory of
23    existing law as to the meaning and scope of this
24    exemption. Beginning on July 1, 2017, the exemption
25    provided by this paragraph (14) includes, but is not
26    limited to, graphic arts machinery and equipment, as

 

 

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1    defined in paragraph (4) of this Section.
2        (15) Proceeds of mandatory service charges separately
3    stated on customers' bills for purchase and consumption of
4    food and beverages, to the extent that the proceeds of the
5    service charge are in fact turned over as tips or as a
6    substitute for tips to the employees who participate
7    directly in preparing, serving, hosting or cleaning up the
8    food or beverage function with respect to which the
9    service charge is imposed.
10        (16) Tangible personal property sold to a purchaser if
11    the purchaser is exempt from use tax by operation of
12    federal law. This paragraph is exempt from the provisions
13    of Section 2-70.
14        (17) Tangible personal property sold to a common
15    carrier by rail or motor that receives the physical
16    possession of the property in Illinois and that transports
17    the property, or shares with another common carrier in the
18    transportation of the property, out of Illinois on a
19    standard uniform bill of lading showing the seller of the
20    property as the shipper or consignor of the property to a
21    destination outside Illinois, for use outside Illinois.
22        (18) Legal tender, currency, medallions, or gold or
23    silver coinage issued by the State of Illinois, the
24    government of the United States of America, or the
25    government of any foreign country, and bullion.
26        (19) Until July 1, 2003, oil field exploration,

 

 

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1    drilling, and production equipment, including (i) rigs and
2    parts of rigs, rotary rigs, cable tool rigs, and workover
3    rigs, (ii) pipe and tubular goods, including casing and
4    drill strings, (iii) pumps and pump-jack units, (iv)
5    storage tanks and flow lines, (v) any individual
6    replacement part for oil field exploration, drilling, and
7    production equipment, and (vi) machinery and equipment
8    purchased for lease; but excluding motor vehicles required
9    to be registered under the Illinois Vehicle Code.
10        (20) Photoprocessing machinery and equipment,
11    including repair and replacement parts, both new and used,
12    including that manufactured on special order, certified by
13    the purchaser to be used primarily for photoprocessing,
14    and including photoprocessing machinery and equipment
15    purchased for lease.
16        (21) Until July 1, 2028, coal and aggregate
17    exploration, mining, off-highway hauling, processing,
18    maintenance, and reclamation equipment, including
19    replacement parts and equipment, and including equipment
20    purchased for lease, but excluding motor vehicles required
21    to be registered under the Illinois Vehicle Code. The
22    changes made to this Section by Public Act 97-767 apply on
23    and after July 1, 2003, but no claim for credit or refund
24    is allowed on or after August 16, 2013 (the effective date
25    of Public Act 98-456) for such taxes paid during the
26    period beginning July 1, 2003 and ending on August 16,

 

 

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1    2013 (the effective date of Public Act 98-456).
2        (22) Until June 30, 2013, fuel and petroleum products
3    sold to or used by an air carrier, certified by the carrier
4    to be used for consumption, shipment, or storage in the
5    conduct of its business as an air common carrier, for a
6    flight destined for or returning from a location or
7    locations outside the United States without regard to
8    previous or subsequent domestic stopovers.
9        Beginning July 1, 2013, fuel and petroleum products
10    sold to or used by an air carrier, certified by the carrier
11    to be used for consumption, shipment, or storage in the
12    conduct of its business as an air common carrier, for a
13    flight that (i) is engaged in foreign trade or is engaged
14    in trade between the United States and any of its
15    possessions and (ii) transports at least one individual or
16    package for hire from the city of origination to the city
17    of final destination on the same aircraft, without regard
18    to a change in the flight number of that aircraft.
19        (23) A transaction in which the purchase order is
20    received by a florist who is located outside Illinois, but
21    who has a florist located in Illinois deliver the property
22    to the purchaser or the purchaser's donee in Illinois.
23        (24) Fuel consumed or used in the operation of ships,
24    barges, or vessels that are used primarily in or for the
25    transportation of property or the conveyance of persons
26    for hire on rivers bordering on this State if the fuel is

 

 

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1    delivered by the seller to the purchaser's barge, ship, or
2    vessel while it is afloat upon that bordering river.
3        (25) Except as provided in item (25-5) of this
4    Section, a motor vehicle sold in this State to a
5    nonresident even though the motor vehicle is delivered to
6    the nonresident in this State, if the motor vehicle is not
7    to be titled in this State, and if a drive-away permit is
8    issued to the motor vehicle as provided in Section 3-603
9    of the Illinois Vehicle Code or if the nonresident
10    purchaser has vehicle registration plates to transfer to
11    the motor vehicle upon returning to his or her home state.
12    The issuance of the drive-away permit or having the
13    out-of-state registration plates to be transferred is
14    prima facie evidence that the motor vehicle will not be
15    titled in this State.
16        (25-5) The exemption under item (25) does not apply if
17    the state in which the motor vehicle will be titled does
18    not allow a reciprocal exemption for a motor vehicle sold
19    and delivered in that state to an Illinois resident but
20    titled in Illinois. The tax collected under this Act on
21    the sale of a motor vehicle in this State to a resident of
22    another state that does not allow a reciprocal exemption
23    shall be imposed at a rate equal to the state's rate of tax
24    on taxable property in the state in which the purchaser is
25    a resident, except that the tax shall not exceed the tax
26    that would otherwise be imposed under this Act. At the

 

 

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1    time of the sale, the purchaser shall execute a statement,
2    signed under penalty of perjury, of his or her intent to
3    title the vehicle in the state in which the purchaser is a
4    resident within 30 days after the sale and of the fact of
5    the payment to the State of Illinois of tax in an amount
6    equivalent to the state's rate of tax on taxable property
7    in his or her state of residence and shall submit the
8    statement to the appropriate tax collection agency in his
9    or her state of residence. In addition, the retailer must
10    retain a signed copy of the statement in his or her
11    records. Nothing in this item shall be construed to
12    require the removal of the vehicle from this state
13    following the filing of an intent to title the vehicle in
14    the purchaser's state of residence if the purchaser titles
15    the vehicle in his or her state of residence within 30 days
16    after the date of sale. The tax collected under this Act in
17    accordance with this item (25-5) shall be proportionately
18    distributed as if the tax were collected at the 6.25%
19    general rate imposed under this Act.
20        (25-7) Beginning on July 1, 2007, no tax is imposed
21    under this Act on the sale of an aircraft, as defined in
22    Section 3 of the Illinois Aeronautics Act, if all of the
23    following conditions are met:
24            (1) the aircraft leaves this State within 15 days
25        after the later of either the issuance of the final
26        billing for the sale of the aircraft, or the

 

 

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1        authorized approval for return to service, completion
2        of the maintenance record entry, and completion of the
3        test flight and ground test for inspection, as
4        required by 14 CFR 91.407;
5            (2) the aircraft is not based or registered in
6        this State after the sale of the aircraft; and
7            (3) the seller retains in his or her books and
8        records and provides to the Department a signed and
9        dated certification from the purchaser, on a form
10        prescribed by the Department, certifying that the
11        requirements of this item (25-7) are met. The
12        certificate must also include the name and address of
13        the purchaser, the address of the location where the
14        aircraft is to be titled or registered, the address of
15        the primary physical location of the aircraft, and
16        other information that the Department may reasonably
17        require.
18        For purposes of this item (25-7):
19        "Based in this State" means hangared, stored, or
20    otherwise used, excluding post-sale customizations as
21    defined in this Section, for 10 or more days in each
22    12-month period immediately following the date of the sale
23    of the aircraft.
24        "Registered in this State" means an aircraft
25    registered with the Department of Transportation,
26    Aeronautics Division, or titled or registered with the

 

 

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1    Federal Aviation Administration to an address located in
2    this State.
3        This paragraph (25-7) is exempt from the provisions of
4    Section 2-70.
5        (26) Semen used for artificial insemination of
6    livestock for direct agricultural production.
7        (27) Horses, or interests in horses, registered with
8    and meeting the requirements of any of the Arabian Horse
9    Club Registry of America, Appaloosa Horse Club, American
10    Quarter Horse Association, United States Trotting
11    Association, or Jockey Club, as appropriate, used for
12    purposes of breeding or racing for prizes. This item (27)
13    is exempt from the provisions of Section 2-70, and the
14    exemption provided for under this item (27) applies for
15    all periods beginning May 30, 1995, but no claim for
16    credit or refund is allowed on or after January 1, 2008
17    (the effective date of Public Act 95-88) for such taxes
18    paid during the period beginning May 30, 2000 and ending
19    on January 1, 2008 (the effective date of Public Act
20    95-88).
21        (28) Computers and communications equipment utilized
22    for any hospital purpose and equipment used in the
23    diagnosis, analysis, or treatment of hospital patients
24    sold to a lessor who leases the equipment, under a lease of
25    one year or longer executed or in effect at the time of the
26    purchase, to a hospital that has been issued an active tax

 

 

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1    exemption identification number by the Department under
2    Section 1g of this Act.
3        (29) Personal property sold to a lessor who leases the
4    property, under a lease of one year or longer executed or
5    in effect at the time of the purchase, to a governmental
6    body that has been issued an active tax exemption
7    identification number by the Department under Section 1g
8    of this Act.
9        (30) Beginning with taxable years ending on or after
10    December 31, 1995 and ending with taxable years ending on
11    or before December 31, 2004, personal property that is
12    donated for disaster relief to be used in a State or
13    federally declared disaster area in Illinois or bordering
14    Illinois by a manufacturer or retailer that is registered
15    in this State to a corporation, society, association,
16    foundation, or institution that has been issued a sales
17    tax exemption identification number by the Department that
18    assists victims of the disaster who reside within the
19    declared disaster area.
20        (31) Beginning with taxable years ending on or after
21    December 31, 1995 and ending with taxable years ending on
22    or before December 31, 2004, personal property that is
23    used in the performance of infrastructure repairs in this
24    State, including, but not limited to, municipal roads and
25    streets, access roads, bridges, sidewalks, waste disposal
26    systems, water and sewer line extensions, water

 

 

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1    distribution and purification facilities, storm water
2    drainage and retention facilities, and sewage treatment
3    facilities, resulting from a State or federally declared
4    disaster in Illinois or bordering Illinois when such
5    repairs are initiated on facilities located in the
6    declared disaster area within 6 months after the disaster.
7        (32) Beginning July 1, 1999, game or game birds sold
8    at a "game breeding and hunting preserve area" as that
9    term is used in the Wildlife Code. This paragraph is
10    exempt from the provisions of Section 2-70.
11        (33) A motor vehicle, as that term is defined in
12    Section 1-146 of the Illinois Vehicle Code, that is
13    donated to a corporation, limited liability company,
14    society, association, foundation, or institution that is
15    determined by the Department to be organized and operated
16    exclusively for educational purposes. For purposes of this
17    exemption, "a corporation, limited liability company,
18    society, association, foundation, or institution organized
19    and operated exclusively for educational purposes" means
20    all tax-supported public schools, private schools that
21    offer systematic instruction in useful branches of
22    learning by methods common to public schools and that
23    compare favorably in their scope and intensity with the
24    course of study presented in tax-supported schools, and
25    vocational or technical schools or institutes organized
26    and operated exclusively to provide a course of study of

 

 

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1    not less than 6 weeks duration and designed to prepare
2    individuals to follow a trade or to pursue a manual,
3    technical, mechanical, industrial, business, or commercial
4    occupation.
5        (34) Beginning January 1, 2000, personal property,
6    including food, purchased through fundraising events for
7    the benefit of a public or private elementary or secondary
8    school, a group of those schools, or one or more school
9    districts if the events are sponsored by an entity
10    recognized by the school district that consists primarily
11    of volunteers and includes parents and teachers of the
12    school children. This paragraph does not apply to
13    fundraising events (i) for the benefit of private home
14    instruction or (ii) for which the fundraising entity
15    purchases the personal property sold at the events from
16    another individual or entity that sold the property for
17    the purpose of resale by the fundraising entity and that
18    profits from the sale to the fundraising entity. This
19    paragraph is exempt from the provisions of Section 2-70.
20        (35) Beginning January 1, 2000 and through December
21    31, 2001, new or used automatic vending machines that
22    prepare and serve hot food and beverages, including
23    coffee, soup, and other items, and replacement parts for
24    these machines. Beginning January 1, 2002 and through June
25    30, 2003, machines and parts for machines used in
26    commercial, coin-operated amusement and vending business

 

 

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

 

 

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1    of this Act. This paragraph is exempt from the provisions
2    of Section 2-70.
3        (37) Beginning August 2, 2001, personal property sold
4    to a lessor who leases the property, under a lease of one
5    year or longer executed or in effect at the time of the
6    purchase, to a governmental body that has been issued an
7    active tax exemption identification number by the
8    Department under Section 1g of this Act. This paragraph is
9    exempt from the provisions of Section 2-70.
10        (38) Beginning on January 1, 2002 and through June 30,
11    2016, tangible personal property purchased from an
12    Illinois retailer by a taxpayer engaged in centralized
13    purchasing activities in Illinois who will, upon receipt
14    of the property in Illinois, temporarily store the
15    property in Illinois (i) for the purpose of subsequently
16    transporting it outside this State for use or consumption
17    thereafter solely outside this State or (ii) for the
18    purpose of being processed, fabricated, or manufactured
19    into, attached to, or incorporated into other tangible
20    personal property to be transported outside this State and
21    thereafter used or consumed solely outside this State. The
22    Director of Revenue shall, pursuant to rules adopted in
23    accordance with the Illinois Administrative Procedure Act,
24    issue a permit to any taxpayer in good standing with the
25    Department who is eligible for the exemption under this
26    paragraph (38). The permit issued under this paragraph

 

 

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1    (38) shall authorize the holder, to the extent and in the
2    manner specified in the rules adopted under this Act, to
3    purchase tangible personal property from a retailer exempt
4    from the taxes imposed by this Act. Taxpayers shall
5    maintain all necessary books and records to substantiate
6    the use and consumption of all such tangible personal
7    property outside of the State of Illinois.
8        (39) Beginning January 1, 2008, tangible personal
9    property used in the construction or maintenance of a
10    community water supply, as defined under Section 3.145 of
11    the Environmental Protection Act, that is operated by a
12    not-for-profit corporation that holds a valid water supply
13    permit issued under Title IV of the Environmental
14    Protection Act. This paragraph is exempt from the
15    provisions of Section 2-70.
16        (40) Beginning January 1, 2010 and continuing through
17    December 31, 2029, materials, parts, equipment,
18    components, and furnishings incorporated into or upon an
19    aircraft as part of the modification, refurbishment,
20    completion, replacement, repair, or maintenance of the
21    aircraft. This exemption includes consumable supplies used
22    in the modification, refurbishment, completion,
23    replacement, repair, and maintenance of aircraft. However,
24    until January 1, 2024, this exemption excludes any
25    materials, parts, equipment, components, and consumable
26    supplies used in the modification, replacement, repair,

 

 

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1    and maintenance of aircraft engines or power plants,
2    whether such engines or power plants are installed or
3    uninstalled upon any such aircraft. "Consumable supplies"
4    include, but are not limited to, adhesive, tape,
5    sandpaper, general purpose lubricants, cleaning solution,
6    latex gloves, and protective films.
7        Beginning January 1, 2010 and continuing through
8    December 31, 2023, this exemption applies only to the sale
9    of qualifying tangible personal property to persons who
10    modify, refurbish, complete, replace, or maintain an
11    aircraft and who (i) hold an Air Agency Certificate and
12    are empowered to operate an approved repair station by the
13    Federal Aviation Administration, (ii) have a Class IV
14    Rating, and (iii) conduct operations in accordance with
15    Part 145 of the Federal Aviation Regulations. The
16    exemption does not include aircraft operated by a
17    commercial air carrier providing scheduled passenger air
18    service pursuant to authority issued under Part 121 or
19    Part 129 of the Federal Aviation Regulations. From January
20    1, 2024 through December 31, 2029, this exemption applies
21    only to the sale use of qualifying tangible personal
22    property to by: (A) persons who modify, refurbish,
23    complete, repair, replace, or maintain aircraft and who
24    (i) hold an Air Agency Certificate and are empowered to
25    operate an approved repair station by the Federal Aviation
26    Administration, (ii) have a Class IV Rating, and (iii)

 

 

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1    conduct operations in accordance with Part 145 of the
2    Federal Aviation Regulations; and (B) persons who engage
3    in the modification, replacement, repair, and maintenance
4    of aircraft engines or power plants without regard to
5    whether or not those persons meet the qualifications of
6    item (A).
7        The changes made to this paragraph (40) by Public Act
8    98-534 are declarative of existing law. It is the intent
9    of the General Assembly that the exemption under this
10    paragraph (40) applies continuously from January 1, 2010
11    through December 31, 2024; however, no claim for credit or
12    refund is allowed for taxes paid as a result of the
13    disallowance of this exemption on or after January 1, 2015
14    and prior to February 5, 2020 (the effective date of
15    Public Act 101-629).
16        (41) Tangible personal property sold to a
17    public-facilities corporation, as described in Section
18    11-65-10 of the Illinois Municipal Code, for purposes of
19    constructing or furnishing a municipal convention hall,
20    but only if the legal title to the municipal convention
21    hall is transferred to the municipality without any
22    further consideration by or on behalf of the municipality
23    at the time of the completion of the municipal convention
24    hall or upon the retirement or redemption of any bonds or
25    other debt instruments issued by the public-facilities
26    corporation in connection with the development of the

 

 

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1    municipal convention hall. This exemption includes
2    existing public-facilities corporations as provided in
3    Section 11-65-25 of the Illinois Municipal Code. This
4    paragraph is exempt from the provisions of Section 2-70.
5        (42) Beginning January 1, 2017 and through December
6    31, 2026, menstrual pads, tampons, and menstrual cups.
7        (43) Merchandise that is subject to the Rental
8    Purchase Agreement Occupation and Use Tax. The purchaser
9    must certify that the item is purchased to be rented
10    subject to a rental-purchase rental purchase agreement, as
11    defined in the Rental-Purchase Rental Purchase Agreement
12    Act, and provide proof of registration under the Rental
13    Purchase Agreement Occupation and Use Tax Act. This
14    paragraph is exempt from the provisions of Section 2-70.
15        (44) Qualified tangible personal property used in the
16    construction or operation of a data center that has been
17    granted a certificate of exemption by the Department of
18    Commerce and Economic Opportunity, whether that tangible
19    personal property is purchased by the owner, operator, or
20    tenant of the data center or by a contractor or
21    subcontractor of the owner, operator, or tenant. Data
22    centers that would have qualified for a certificate of
23    exemption prior to January 1, 2020 had Public Act 101-31
24    been in effect, may apply for and obtain an exemption for
25    subsequent purchases of computer equipment or enabling
26    software purchased or leased to upgrade, supplement, or

 

 

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1    replace computer equipment or enabling software purchased
2    or leased in the original investment that would have
3    qualified.
4        The Department of Commerce and Economic Opportunity
5    shall grant a certificate of exemption under this item
6    (44) to qualified data centers as defined by Section
7    605-1025 of the Department of Commerce and Economic
8    Opportunity Law of the Civil Administrative Code of
9    Illinois.
10        For the purposes of this item (44):
11            "Data center" means a building or a series of
12        buildings rehabilitated or constructed to house
13        working servers in one physical location or multiple
14        sites within the State of Illinois.
15            "Qualified tangible personal property" means:
16        electrical systems and equipment; climate control and
17        chilling equipment and systems; mechanical systems and
18        equipment; monitoring and secure systems; emergency
19        generators; hardware; computers; servers; data storage
20        devices; network connectivity equipment; racks;
21        cabinets; telecommunications cabling infrastructure;
22        raised floor systems; peripheral components or
23        systems; software; mechanical, electrical, or plumbing
24        systems; battery systems; cooling systems and towers;
25        temperature control systems; other cabling; and other
26        data center infrastructure equipment and systems

 

 

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1        necessary to operate qualified tangible personal
2        property, including fixtures; and component parts of
3        any of the foregoing, including installation,
4        maintenance, repair, refurbishment, and replacement of
5        qualified tangible personal property to generate,
6        transform, transmit, distribute, or manage electricity
7        necessary to operate qualified tangible personal
8        property; and all other tangible personal property
9        that is essential to the operations of a computer data
10        center. The term "qualified tangible personal
11        property" also includes building materials physically
12        incorporated into the qualifying data center. To
13        document the exemption allowed under this Section, the
14        retailer must obtain from the purchaser a copy of the
15        certificate of eligibility issued by the Department of
16        Commerce and Economic Opportunity.
17        This item (44) is exempt from the provisions of
18    Section 2-70.
19        (45) Beginning January 1, 2020 and through December
20    31, 2020, sales of tangible personal property made by a
21    marketplace seller over a marketplace for which tax is due
22    under this Act but for which use tax has been collected and
23    remitted to the Department by a marketplace facilitator
24    under Section 2d of the Use Tax Act are exempt from tax
25    under this Act. A marketplace seller claiming this
26    exemption shall maintain books and records demonstrating

 

 

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1    that the use tax on such sales has been collected and
2    remitted by a marketplace facilitator. Marketplace sellers
3    that have properly remitted tax under this Act on such
4    sales may file a claim for credit as provided in Section 6
5    of this Act. No claim is allowed, however, for such taxes
6    for which a credit or refund has been issued to the
7    marketplace facilitator under the Use Tax Act, or for
8    which the marketplace facilitator has filed a claim for
9    credit or refund under the Use Tax Act.
10        (46) Beginning July 1, 2022, breast pumps, breast pump
11    collection and storage supplies, and breast pump kits.
12    This item (46) is exempt from the provisions of Section
13    2-70. As used in this item (46):
14        "Breast pump" means an electrically controlled or
15    manually controlled pump device designed or marketed to be
16    used to express milk from a human breast during lactation,
17    including the pump device and any battery, AC adapter, or
18    other power supply unit that is used to power the pump
19    device and is packaged and sold with the pump device at the
20    time of sale.
21        "Breast pump collection and storage supplies" means
22    items of tangible personal property designed or marketed
23    to be used in conjunction with a breast pump to collect
24    milk expressed from a human breast and to store collected
25    milk until it is ready for consumption.
26        "Breast pump collection and storage supplies"

 

 

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1    includes, but is not limited to: breast shields and breast
2    shield connectors; breast pump tubes and tubing adapters;
3    breast pump valves and membranes; backflow protectors and
4    backflow protector adaptors; bottles and bottle caps
5    specific to the operation of the breast pump; and breast
6    milk storage bags.
7        "Breast pump collection and storage supplies" does not
8    include: (1) bottles and bottle caps not specific to the
9    operation of the breast pump; (2) breast pump travel bags
10    and other similar carrying accessories, including ice
11    packs, labels, and other similar products; (3) breast pump
12    cleaning supplies; (4) nursing bras, bra pads, breast
13    shells, and other similar products; and (5) creams,
14    ointments, and other similar products that relieve
15    breastfeeding-related symptoms or conditions of the
16    breasts or nipples, unless sold as part of a breast pump
17    kit that is pre-packaged by the breast pump manufacturer
18    or distributor.
19        "Breast pump kit" means a kit that: (1) contains no
20    more than a breast pump, breast pump collection and
21    storage supplies, a rechargeable battery for operating the
22    breast pump, a breastmilk cooler, bottle stands, ice
23    packs, and a breast pump carrying case; and (2) is
24    pre-packaged as a breast pump kit by the breast pump
25    manufacturer or distributor.
26        (47) Tangible personal property sold by or on behalf

 

 

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1    of the State Treasurer pursuant to the Revised Uniform
2    Unclaimed Property Act. This item (47) is exempt from the
3    provisions of Section 2-70.
4        (48) Beginning on January 1, 2024, tangible personal
5    property purchased by an active duty member of the armed
6    forces of the United States who presents valid military
7    identification and purchases the property using a form of
8    payment where the federal government is the payor. The
9    member of the armed forces must complete, at the point of
10    sale, a form prescribed by the Department of Revenue
11    documenting that the transaction is eligible for the
12    exemption under this paragraph. Retailers must keep the
13    form as documentation of the exemption in their records
14    for a period of not less than 6 years. "Armed forces of the
15    United States" means the United States Army, Navy, Air
16    Force, Marine Corps, or Coast Guard. This paragraph is
17    exempt from the provisions of Section 2-70.
18(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
19102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
20Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
215-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
225-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
236-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
2412-12-23.)
 
25    Section 20. The Motor Fuel Tax Law is amended by changing

 

 

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1Section 2 as follows:
 
2    (35 ILCS 505/2)  (from Ch. 120, par. 418)
3    Sec. 2. A tax is imposed on the privilege of operating
4motor vehicles upon the public highways and recreational-type
5watercraft upon the waters of this State.
6    (a) Prior to August 1, 1989, the tax is imposed at the rate
7of 13 cents per gallon on all motor fuel used in motor vehicles
8operating on the public highways and recreational type
9watercraft operating upon the waters of this State. Beginning
10on August 1, 1989 and until January 1, 1990, the rate of the
11tax imposed in this paragraph shall be 16 cents per gallon.
12Beginning January 1, 1990 and until July 1, 2019, the rate of
13tax imposed in this paragraph, including the tax on compressed
14natural gas, shall be 19 cents per gallon. Beginning July 1,
152019 and until July 1, 2020, the rate of tax imposed in this
16paragraph shall be 38 cents per gallon. Beginning July 1, 2020
17and until July 1, 2021, the rate of tax imposed in this
18paragraph shall be 38.7 cents per gallon. Beginning July 1,
192021 and until January 1, 2023, the rate of tax imposed in this
20paragraph shall be 39.2 cents per gallon. On January 1, 2023,
21the rate of tax imposed in this paragraph shall be increased by
22an amount equal to the percentage increase, if any, in the
23Consumer Price Index for All Urban Consumers for all items
24published by the United States Department of Labor for the 12
25months ending in September of 2022. On July 1, 2023, and on

 

 

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1July 1 of each subsequent year, the rate of tax imposed in this
2paragraph shall be increased by an amount equal to the
3percentage increase, if any, in the Consumer Price Index for
4All Urban Consumers for all items published by the United
5States Department of Labor for the 12 months ending in March of
6the year in which the increase takes place. The percentage
7increase in the Consumer Price Index shall be calculated as
8follows: (1) calculate the average Consumer Price Index for
9the full 12 months ending in March of the year in which the
10increase takes place; (2) calculate the average Consumer Price
11Index for the full 12 months ending in March of the year
12immediately preceding the year in which the increase takes
13place; (3) calculate the percentage increase, if any, in the
14current-year average determined under item (1) over the
15preceding-year average determined under item (2). The rate
16shall be rounded to the nearest one-tenth of one cent.
17    (a-5) Beginning on July 1, 2022 and through December 31,
182022, each retailer of motor fuel shall cause the following
19notice to be posted in a prominently visible place on each
20retail dispensing device that is used to dispense motor fuel
21in the State of Illinois: "As of July 1, 2022, the State of
22Illinois has suspended the inflation adjustment to the motor
23fuel tax through December 31, 2022. The price on this pump
24should reflect the suspension of the tax increase." The notice
25shall be printed in bold print on a sign that is no smaller
26than 4 inches by 8 inches. The sign shall be clearly visible to

 

 

SB3426- 70 -LRB103 37529 HLH 67652 b

1customers. Any retailer who fails to post or maintain a
2required sign through December 31, 2022 is guilty of a petty
3offense for which the fine shall be $500 per day per each
4retail premises where a violation occurs.
5    (b) Until July 1, 2019, the tax on the privilege of
6operating motor vehicles which use diesel fuel, liquefied
7natural gas, or propane shall be the rate according to
8paragraph (a) plus an additional 2 1/2 cents per gallon.
9Beginning July 1, 2019, the tax on the privilege of operating
10motor vehicles which use diesel fuel, liquefied natural gas,
11or propane shall be the rate according to subsection (a) plus
12an additional 7.5 cents per gallon. "Diesel fuel" is defined
13as any product intended for use or offered for sale as a fuel
14for engines in which the fuel is injected into the combustion
15chamber and ignited by pressure without electric spark.
16    (c) A tax is imposed upon the privilege of engaging in the
17business of selling motor fuel as a retailer or reseller on all
18motor fuel used in motor vehicles operating on the public
19highways and recreational type watercraft operating upon the
20waters of this State: (1) at the rate of 3 cents per gallon on
21motor fuel owned or possessed by such retailer or reseller at
2212:01 a.m. on August 1, 1989; and (2) at the rate of 3 cents
23per gallon on motor fuel owned or possessed by such retailer or
24reseller at 12:01 A.M. on January 1, 1990.
25    Retailers and resellers who are subject to this additional
26tax shall be required to inventory such motor fuel and pay this

 

 

SB3426- 71 -LRB103 37529 HLH 67652 b

1additional tax in a manner prescribed by the Department of
2Revenue.
3    The tax imposed in this paragraph (c) shall be in addition
4to all other taxes imposed by the State of Illinois or any unit
5of local government in this State.
6    (d) Except as provided in Section 2a, the collection of a
7tax based on gallonage of gasoline used for the propulsion of
8any aircraft is prohibited on and after October 1, 1979, and
9the collection of a tax based on gallonage of special fuel used
10for the propulsion of any aircraft is prohibited on and after
11December 1, 2019.
12    (e) The collection of a tax, based on gallonage of all
13products commonly or commercially known or sold as 1-K
14kerosene, regardless of its classification or uses, is
15prohibited (i) on and after July 1, 1992 until December 31,
161999, except when the 1-K kerosene is either: (1) delivered
17into bulk storage facilities of a bulk user, or (2) delivered
18directly into the fuel supply tanks of motor vehicles and (ii)
19on and after January 1, 2000. Beginning on January 1, 2000, the
20collection of a tax, based on gallonage of all products
21commonly or commercially known or sold as 1-K kerosene,
22regardless of its classification or uses, is prohibited except
23when the 1-K kerosene is delivered directly into a storage
24tank that is located at a facility that has withdrawal
25facilities that are readily accessible to and are capable of
26dispensing 1-K kerosene into the fuel supply tanks of motor

 

 

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1vehicles. For purposes of this subsection (e), a facility is
2considered to have withdrawal facilities that are not "readily
3accessible to and capable of dispensing 1-K kerosene into the
4fuel supply tanks of motor vehicles" only if the 1-K kerosene
5is delivered from: (i) a dispenser hose that is short enough so
6that it will not reach the fuel supply tank of a motor vehicle
7or (ii) a dispenser that is enclosed by a fence or other
8physical barrier so that a vehicle cannot pull alongside the
9dispenser to permit fueling.
10    Any person who sells or uses 1-K kerosene for use in motor
11vehicles upon which the tax imposed by this Law has not been
12paid shall be liable for any tax due on the sales or use of 1-K
13kerosene.
14    As used in this Section, "Consumer Price Index" means the
15index published by the Bureau of Labor Statistics of the
16United States Department of Labor that measures the average
17change in prices of goods and services purchased by all urban
18consumers, United States city average, all items, 1982-84 =
19100.
20(Source: P.A. 101-10, eff. 6-5-19; 101-32, eff. 6-28-19;
21101-604, eff. 12-13-19; 102-700, eff. 4-19-22.)
 
22    Section 25. The Liquor Control Act of 1934 is amended by
23changing Section 8-1 as follows:
 
24    (235 ILCS 5/8-1)

 

 

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1    Sec. 8-1. A tax is imposed upon the privilege of engaging
2in business as a manufacturer or as an importing distributor
3of alcoholic liquor other than beer at the rate of $0.185 per
4gallon until September 1, 2009 and $0.231 per gallon beginning
5September 1, 2009 for cider containing not less than 0.5%
6alcohol by volume nor more than 7% alcohol by volume, $0.73 per
7gallon until September 1, 2009 and $1.39 per gallon beginning
8September 1, 2009 for wine other than cider containing less
9than 7% alcohol by volume, and $4.50 per gallon until
10September 1, 2009 and $8.55 per gallon beginning September 1,
112009 on alcohol and spirits manufactured and sold or used by
12such manufacturer, or as agent for any other person, or sold or
13used by such importing distributor, or as agent for any other
14person. A tax is imposed upon the privilege of engaging in
15business as a manufacturer of beer or as an importing
16distributor of beer at the rate of $0.185 per gallon until
17September 1, 2009 and $0.231 per gallon beginning September 1,
182009 on all beer, regardless of alcohol by volume,
19manufactured and sold or used by such manufacturer, or as
20agent for any other person, or sold or used by such importing
21distributor, or as agent for any other person. A tax is imposed
22upon the privilege of engaging in business as a manufacturer
23or as an importing distributor of alcoholic liquor containing
24not less than 0.5% alcohol by volume nor more than 10% alcohol
25by volume, other than cider, wine, or beer, at the rate of
26$0.231 per gallon manufactured and sold or used by such

 

 

SB3426- 74 -LRB103 37529 HLH 67652 b

1manufacturer, or as agent for any other person, or sold or used
2by such importing distributor, or as agent for any other
3person. Any brewer manufacturing beer in this State shall be
4entitled to and given a credit or refund of 75% of the tax
5imposed on each gallon of beer up to 4.9 million gallons per
6year in any given calendar year for tax paid or payable on beer
7produced and sold in the State of Illinois.
8    For purposes of this Section, "beer" means beer, ale,
9porter, stout, and other similar fermented beverages of any
10name or description containing one-half of one percent or more
11of alcohol by volume, brewed or produced from malt, wholly or
12in part, or from any substitute for malt.
13    For the purpose of this Section, "cider" means any
14alcoholic beverage obtained by the alcohol fermentation of the
15juice of apples or pears including, but not limited to,
16flavored, sparkling, or carbonated cider.
17    The credit or refund created by this Act shall apply to all
18beer taxes in the calendar years 1982 through 1986.
19    The increases made by this amendatory Act of the 91st
20General Assembly in the rates of taxes imposed under this
21Section shall apply beginning on July 1, 1999.
22    A tax at the rate of 1¢ per gallon on beer and 48¢ per
23gallon on alcohol and spirits is also imposed upon the
24privilege of engaging in business as a retailer or as a
25distributor who is not also an importing distributor with
26respect to all beer and all alcohol and spirits owned or

 

 

SB3426- 75 -LRB103 37529 HLH 67652 b

1possessed by such retailer or distributor when this amendatory
2Act of 1969 becomes effective, and with respect to which the
3additional tax imposed by this amendatory Act upon
4manufacturers and importing distributors does not apply.
5Retailers and distributors who are subject to the additional
6tax imposed by this paragraph of this Section shall be
7required to inventory such alcoholic liquor and to pay this
8additional tax in a manner prescribed by the Department.
9    The provisions of this Section shall be construed to apply
10to any importing distributor engaging in business in this
11State, whether licensed or not.
12    However, such tax is not imposed upon any such business as
13to any alcoholic liquor shipped outside Illinois by an
14Illinois licensed manufacturer or importing distributor, nor
15as to any alcoholic liquor delivered in Illinois by an
16Illinois licensed manufacturer or importing distributor to a
17purchaser for immediate transportation by the purchaser to
18another state into which the purchaser has a legal right,
19under the laws of such state, to import such alcoholic liquor,
20nor as to any alcoholic liquor other than beer sold by one
21Illinois licensed manufacturer or importing distributor to
22another Illinois licensed manufacturer or importing
23distributor to the extent to which the sale of alcoholic
24liquor other than beer by one Illinois licensed manufacturer
25or importing distributor to another Illinois licensed
26manufacturer or importing distributor is authorized by the

 

 

SB3426- 76 -LRB103 37529 HLH 67652 b

1licensing provisions of this Act, nor to alcoholic liquor
2whether manufactured in or imported into this State when sold
3to a "non-beverage user" licensed by the State for use in the
4manufacture of any of the following when they are unfit for
5beverage purposes:
6    Patent and proprietary medicines and medicinal,
7antiseptic, culinary and toilet preparations;
8    Flavoring extracts and syrups and food products;
9    Scientific, industrial and chemical products, excepting
10denatured alcohol;
11    Or for scientific, chemical, experimental or mechanical
12purposes;
13    Nor is the tax imposed upon the privilege of engaging in
14any business in interstate commerce or otherwise, which
15business may not, under the Constitution and Statutes of the
16United States, be made the subject of taxation by this State.
17    The tax herein imposed shall be in addition to all other
18occupation or privilege taxes imposed by the State of Illinois
19or political subdivision thereof.
20    If any alcoholic liquor manufactured in or imported into
21this State is sold to a licensed manufacturer or importing
22distributor by a licensed manufacturer or importing
23distributor to be used solely as an ingredient in the
24manufacture of any beverage for human consumption, the tax
25imposed upon such purchasing manufacturer or importing
26distributor shall be reduced by the amount of the taxes which

 

 

SB3426- 77 -LRB103 37529 HLH 67652 b

1have been paid by the selling manufacturer or importing
2distributor under this Act as to such alcoholic liquor so used
3to the Department of Revenue.
4    If any person received any alcoholic liquors from a
5manufacturer or importing distributor, with respect to which
6alcoholic liquors no tax is imposed under this Article, and
7such alcoholic liquor shall thereafter be disposed of in such
8manner or under such circumstances as may cause the same to
9become the base for the tax imposed by this Article, such
10person shall make the same reports and returns, pay the same
11taxes and be subject to all other provisions of this Article
12relating to manufacturers and importing distributors.
13    Nothing in this Article shall be construed to require the
14payment to the Department of the taxes imposed by this Article
15more than once with respect to any quantity of alcoholic
16liquor sold or used within this State.
17    No tax is imposed by this Act on sales of alcoholic liquor
18by Illinois licensed foreign importers to Illinois licensed
19importing distributors.
20    All of the proceeds of the additional tax imposed by
21Public Act 96-34 shall be deposited by the Department into the
22Capital Projects Fund. The remainder of the tax imposed by
23this Act shall be deposited by the Department into the General
24Revenue Fund.
25    A manufacturer of beer that imports or transfers beer into
26this State must comply with the provisions of this Section

 

 

SB3426- 78 -LRB103 37529 HLH 67652 b

1with regard to the beer imported into this State.
2    The provisions of this Section 8-1 are severable under
3Section 1.31 of the Statute on Statutes.
4(Source: P.A. 100-885, eff. 8-14-18; 101-16, eff. 6-14-19.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.