Illinois General Assembly - Full Text of SB1869
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Full Text of SB1869  103rd General Assembly

SB1869 103RD GENERAL ASSEMBLY

  
  

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1869

 

Introduced 2/9/2023, by Sen. Patrick J. Joyce

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-10
35 ILCS 105/3-40  from Ch. 120, par. 439.3-40
35 ILCS 105/3-44
35 ILCS 105/3-44.3 new
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the tax imposed on mid-range ethanol blends applies to (i) 80% of the proceeds of sales made on or after July 1, 2023 and on or before December 31, 2030 and (ii) 100% of the proceeds of sales made thereafter. Provides that the term "mid-range ethanol blend" means a blend of gasoline and denatured ethanol that contains at least 20% but less than 51% denatured ethanol. Makes changes to the definitions of "gasohol" and "majority blended ethanol fuel" to adjusts the percentages of ethanol that must be included in those motor fuels. Provides that, on and after July 1, 2023 and prior to December 31, 2030, the tax shall be imposed on 90% of the proceeds of sales of gasohol. Effective immediately.


LRB103 27518 HLH 53893 b

 

 

A BILL FOR

 

SB1869LRB103 27518 HLH 53893 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 Use Tax Act is amended by changing Sections
53-10, 3-40, and 3-44 and by adding Section 3-44.3 as follows:
 
6    (35 ILCS 105/3-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9either the selling price or the fair market value, if any, of
10the tangible personal property. In all cases where property
11functionally used or consumed is the same as the property that
12was purchased at retail, then the tax is imposed on the selling
13price of the property. In all cases where property
14functionally used or consumed is a by-product or waste product
15that has been refined, manufactured, or produced from property
16purchased at retail, then the tax is imposed on the lower of
17the fair market value, if any, of the specific property so used
18in this State or on the selling price of the property purchased
19at retail. For purposes of this Section "fair market value"
20means the price at which property would change hands between a
21willing buyer and a willing seller, neither being under any
22compulsion to buy or sell and both having reasonable knowledge
23of the relevant facts. The fair market value shall be

 

 

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1established by Illinois sales by the taxpayer of the same
2property as that functionally used or consumed, or if there
3are no such sales by the taxpayer, then comparable sales or
4purchases of property of like kind and character in Illinois.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning on August 6, 2010 through August 15, 2010, and
10beginning again on August 5, 2022 through August 14, 2022,
11with respect to sales tax holiday items as defined in Section
123-6 of this Act, the tax is imposed at the rate of 1.25%.
13    With respect to gasohol, the tax imposed by this Act
14applies to (i) 70% of the proceeds of sales made on or after
15January 1, 1990, and before July 1, 2003, (ii) 80% of the
16proceeds of sales made on or after July 1, 2003 and on or
17before July 1, 2017, and (iii) 100% of the proceeds of sales
18made after July 1, 2017 and prior to July 1, 2023, (iv) 90% of
19the proceeds of sales made on or after July 1, 2023 and on or
20before December 31, 2030, and (v) 100% of the proceeds of sales
21made after December 31, 2030 thereafter. If, at any time,
22however, the tax under this Act on sales of gasohol is imposed
23at the rate of 1.25%, then the tax imposed by this Act applies
24to 100% of the proceeds of sales of gasohol made during that
25time.
26    With respect to mid-range ethanol blends, the tax imposed

 

 

SB1869- 3 -LRB103 27518 HLH 53893 b

1by this Act applies to (i) 80% of the proceeds of sales made on
2or after July 1, 2023 and on or before December 31, 2030 and
3(ii) 100% of the proceeds of sales made thereafter. If, at any
4time, however, the tax under this Act on sales of mid-range
5ethanol blends is imposed at the rate of 1.25%, then the tax
6imposed by this Act applies to 100% of the proceeds of sales of
7mid-range ethanol blends made during that time.
8    With respect to majority blended ethanol fuel, the tax
9imposed by this Act does not apply to the proceeds of sales
10made on or after July 1, 2003 and on or before December 31,
112030 December 31, 2023 but applies to 100% of the proceeds of
12sales made thereafter.
13    With respect to biodiesel blends with no less than 1% and
14no more than 10% biodiesel, the tax imposed by this Act applies
15to (i) 80% of the proceeds of sales made on or after July 1,
162003 and on or before December 31, 2018 and (ii) 100% of the
17proceeds of sales made after December 31, 2018 and before
18January 1, 2024. On and after January 1, 2024 and on or before
19December 31, 2030, the taxation of biodiesel, renewable
20diesel, and biodiesel blends shall be as provided in Section
213-5.1. If, at any time, however, the tax under this Act on
22sales of biodiesel blends with no less than 1% and no more than
2310% biodiesel is imposed at the rate of 1.25%, then the tax
24imposed by this Act applies to 100% of the proceeds of sales of
25biodiesel blends with no less than 1% and no more than 10%
26biodiesel made during that time.

 

 

SB1869- 4 -LRB103 27518 HLH 53893 b

1    With respect to biodiesel and biodiesel blends with more
2than 10% but no more than 99% biodiesel, the tax imposed by
3this Act does not apply to the proceeds of sales made on or
4after July 1, 2003 and on or before December 31, 2023. On and
5after January 1, 2024 and on or before December 31, 2030, the
6taxation of biodiesel, renewable diesel, and biodiesel blends
7shall be as provided in Section 3-5.1.
8    Until July 1, 2022 and beginning again on July 1, 2023,
9with respect to food for human consumption that is to be
10consumed off the premises where it is sold (other than
11alcoholic beverages, food consisting of or infused with adult
12use cannabis, soft drinks, and food that has been prepared for
13immediate consumption), the tax is imposed at the rate of 1%.
14Beginning on July 1, 2022 and until July 1, 2023, with respect
15to food for human consumption that is to be consumed off the
16premises where it is sold (other than alcoholic beverages,
17food consisting of or infused with adult use cannabis, soft
18drinks, and food that has been prepared for immediate
19consumption), the tax is imposed at the rate of 0%.
20    With respect to prescription and nonprescription
21medicines, drugs, medical appliances, products classified as
22Class III medical devices by the United States Food and Drug
23Administration that are used for cancer treatment pursuant to
24a prescription, as well as any accessories and components
25related to those devices, modifications to a motor vehicle for
26the purpose of rendering it usable by a person with a

 

 

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1disability, and insulin, blood sugar testing materials,
2syringes, and needles used by human diabetics, the tax is
3imposed at the rate of 1%. For the purposes of this Section,
4until September 1, 2009: the term "soft drinks" means any
5complete, finished, ready-to-use, non-alcoholic drink, whether
6carbonated or not, including, but not limited to, soda water,
7cola, fruit juice, vegetable juice, carbonated water, and all
8other preparations commonly known as soft drinks of whatever
9kind or description that are contained in any closed or sealed
10bottle, can, carton, or container, regardless of size; but
11"soft drinks" does not include coffee, tea, non-carbonated
12water, infant formula, milk or milk products as defined in the
13Grade A Pasteurized Milk and Milk Products Act, or drinks
14containing 50% or more natural fruit or vegetable juice.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "soft drinks" means non-alcoholic
17beverages that contain natural or artificial sweeteners. "Soft
18drinks" does do not include beverages that contain milk or
19milk products, soy, rice or similar milk substitutes, or
20greater than 50% of vegetable or fruit juice by volume.
21    Until August 1, 2009, and notwithstanding any other
22provisions of this Act, "food for human consumption that is to
23be consumed off the premises where it is sold" includes all
24food sold through a vending machine, except soft drinks and
25food products that are dispensed hot from a vending machine,
26regardless of the location of the vending machine. Beginning

 

 

SB1869- 6 -LRB103 27518 HLH 53893 b

1August 1, 2009, and notwithstanding any other provisions of
2this Act, "food for human consumption that is to be consumed
3off the premises where it is sold" includes all food sold
4through a vending machine, except soft drinks, candy, and food
5products that are dispensed hot from a vending machine,
6regardless of the location of the vending machine.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "food for human consumption that
9is to be consumed off the premises where it is sold" does not
10include candy. For purposes of this Section, "candy" means a
11preparation of sugar, honey, or other natural or artificial
12sweeteners in combination with chocolate, fruits, nuts or
13other ingredients or flavorings in the form of bars, drops, or
14pieces. "Candy" does not include any preparation that contains
15flour or requires refrigeration.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "nonprescription medicines and
18drugs" does not include grooming and hygiene products. For
19purposes of this Section, "grooming and hygiene products"
20includes, but is not limited to, soaps and cleaning solutions,
21shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
22lotions and screens, unless those products are available by
23prescription only, regardless of whether the products meet the
24definition of "over-the-counter-drugs". For the purposes of
25this paragraph, "over-the-counter-drug" means a drug for human
26use that contains a label that identifies the product as a drug

 

 

SB1869- 7 -LRB103 27518 HLH 53893 b

1as required by 21 CFR C.F.R. § 201.66. The
2"over-the-counter-drug" label includes:
3        (A) a A "Drug Facts" panel; or
4        (B) a A statement of the "active ingredient(s)" with a
5    list of those ingredients contained in the compound,
6    substance or preparation.
7    Beginning on January 1, 2014 (the effective date of Public
8Act 98-122) this amendatory Act of the 98th General Assembly,
9"prescription and nonprescription medicines and drugs"
10includes medical cannabis purchased from a registered
11dispensing organization under the Compassionate Use of Medical
12Cannabis Program Act.
13    As used in this Section, "adult use cannabis" means
14cannabis subject to tax under the Cannabis Cultivation
15Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
16and does not include cannabis subject to tax under the
17Compassionate Use of Medical Cannabis Program Act.
18    If the property that is purchased at retail from a
19retailer is acquired outside Illinois and used outside
20Illinois before being brought to Illinois for use here and is
21taxable under this Act, the "selling price" on which the tax is
22computed shall be reduced by an amount that represents a
23reasonable allowance for depreciation for the period of prior
24out-of-state use.
25(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
26102-4, eff. 4-27-21; 102-700, Article 20, Section 20-5, eff.

 

 

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14-19-22; 102-700, Article 60, Section 60-15, eff. 4-19-22;
2102-700, Article 65, Section 65-5, eff. 4-19-22; revised
35-27-22.)
 
4    (35 ILCS 105/3-40)  (from Ch. 120, par. 439.3-40)
5    Sec. 3-40. Gasohol. As used in this Act, "gasohol" means
6motor fuel that is a blend of denatured ethanol and gasoline
7that contains (i) no more than 1.25% water by weight and (ii)
8the maximum proportion of ethanol authorized by the United
9States Environmental Protection Agency under Section 211 of
10the Clean Air Act. The blend must contain 90% gasoline and 10%
11denatured ethanol. A maximum of one percent error factor in
12the amount of denatured ethanol used in the blend is allowable
13to compensate for blending equipment variations. Any person
14who knowingly sells or represents as gasohol any fuel that
15does not qualify as gasohol under this Act is guilty of a
16business offense and shall be fined not more than $100 for each
17day that the sale or representation takes place after
18notification from the Department of Agriculture that the fuel
19in question does not qualify as gasohol.
20(Source: P.A. 93-724, eff. 7-13-04.)
 
21    (35 ILCS 105/3-44)
22    Sec. 3-44. Majority blended ethanol fuel. "Majority
23blended ethanol fuel" means motor fuel that contains at least
2451% and not more than 83% ethanol, by volume, as specified in

 

 

SB1869- 9 -LRB103 27518 HLH 53893 b

1ASTM Standard DS798-11, and that is capable of being used in
2the operation of flexible fuel vehicles not less than 70% and
3no more than 90% denatured ethanol and no less than 10% and no
4more than 30% gasoline.
5(Source: P.A. 93-17, eff. 6-11-03.)
 
6    (35 ILCS 105/3-44.3 new)
7    Sec. 3-44.3. Mid-range ethanol blend. "Mid-range ethanol
8blend" means a blend of gasoline and denatured ethanol that
9contains at least 20% but less than 51% denatured ethanol.
 
10    Section 10. The Service Use Tax Act is amended by changing
11Section 3-10 as follows:
 
12    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
13    Sec. 3-10. Rate of tax. Unless otherwise provided in this
14Section, the tax imposed by this Act is at the rate of 6.25% of
15the selling price of tangible personal property transferred as
16an incident to the sale of service, but, for the purpose of
17computing this tax, in no event shall the selling price be less
18than the cost price of the property to the serviceman.
19    Beginning on July 1, 2000 and through December 31, 2000,
20with respect to motor fuel, as defined in Section 1.1 of the
21Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
22the Use Tax Act, the tax is imposed at the rate of 1.25%.
23    With respect to gasohol, as defined in the Use Tax Act, the

 

 

SB1869- 10 -LRB103 27518 HLH 53893 b

1tax imposed by this Act applies to (i) 70% of the selling price
2of property transferred as an incident to the sale of service
3on or after January 1, 1990, and before July 1, 2003, (ii) 80%
4of the selling price of property transferred as an incident to
5the sale of service on or after July 1, 2003 and on or before
6July 1, 2017, and (iii) 100% of the selling price of property
7transferred as an incident to the sale of service after July 1,
82017 and before July 1, 2023, (iv) 90% of the selling price of
9property transferred as an incident to the sale of service on
10or after July 1, 2023 and on or before December 31, 2030, and
11(v) 100% of the selling price of property transferred as an
12incident to the sale of service after December 31, 2030
13thereafter. If, at any time, however, the tax under this Act on
14sales of gasohol, as defined in the Use Tax Act, is imposed at
15the rate of 1.25%, then the tax imposed by this Act applies to
16100% of the proceeds of sales of gasohol made during that time.
17    With respect to mid-range ethanol blends, as defined in
18Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
19applies to (i) 80% of the proceeds of sales made on or after
20July 1, 2023 and on or before December 31, 2030 and (ii) 100%
21of the proceeds of sales made after December 31, 2030. If, at
22any time, however, the tax under this Act on sales of mid-range
23ethanol blends is imposed at the rate of 1.25%, then the tax
24imposed by this Act applies to 100% of the proceeds of sales of
25mid-range ethanol blends made during that time.
26    With respect to majority blended ethanol fuel, as defined

 

 

SB1869- 11 -LRB103 27518 HLH 53893 b

1in the Use Tax Act, the tax imposed by this Act does not apply
2to the selling price of property transferred as an incident to
3the sale of service on or after July 1, 2003 and on or before
4December 31, 2030 December 31, 2023 but applies to 100% of the
5selling price thereafter.
6    With respect to biodiesel blends, as defined in the Use
7Tax Act, with no less than 1% and no more than 10% biodiesel,
8the tax imposed by this Act applies to (i) 80% of the selling
9price of property transferred as an incident to the sale of
10service on or after July 1, 2003 and on or before December 31,
112018 and (ii) 100% of the proceeds of the selling price after
12December 31, 2018 and before January 1, 2024. On and after
13January 1, 2024 and on or before December 31, 2030, the
14taxation of biodiesel, renewable diesel, and biodiesel blends
15shall be as provided in Section 3-5.1 of the Use Tax Act. If,
16at any time, however, the tax under this Act on sales of
17biodiesel blends, as defined in the Use Tax Act, with no less
18than 1% and no more than 10% biodiesel is imposed at the rate
19of 1.25%, then the tax imposed by this Act applies to 100% of
20the proceeds of sales of biodiesel blends with no less than 1%
21and no more than 10% biodiesel made during that time.
22    With respect to biodiesel, as defined in the Use Tax Act,
23and biodiesel blends, as defined in the Use Tax Act, with more
24than 10% but no more than 99% biodiesel, the tax imposed by
25this Act does not apply to the proceeds of the selling price of
26property transferred as an incident to the sale of service on

 

 

SB1869- 12 -LRB103 27518 HLH 53893 b

1or after July 1, 2003 and on or before December 31, 2023. On
2and after January 1, 2024 and on or before December 31, 2030,
3the taxation of biodiesel, renewable diesel, and biodiesel
4blends shall be as provided in Section 3-5.1 of the Use Tax
5Act.
6    At the election of any registered serviceman made for each
7fiscal year, sales of service in which the aggregate annual
8cost price of tangible personal property transferred as an
9incident to the sales of service is less than 35%, or 75% in
10the case of servicemen transferring prescription drugs or
11servicemen engaged in graphic arts production, of the
12aggregate annual total gross receipts from all sales of
13service, the tax imposed by this Act shall be based on the
14serviceman's cost price of the tangible personal property
15transferred as an incident to the sale of those services.
16    Until July 1, 2022 and beginning again on July 1, 2023, the
17tax shall be imposed at the rate of 1% on food prepared for
18immediate consumption and transferred incident to a sale of
19service subject to this Act or the Service Occupation Tax Act
20by an entity licensed under the Hospital Licensing Act, the
21Nursing Home Care Act, the Assisted Living and Shared Housing
22Act, the ID/DD Community Care Act, the MC/DD Act, the
23Specialized Mental Health Rehabilitation Act of 2013, or the
24Child Care Act of 1969, or an entity that holds a permit issued
25pursuant to the Life Care Facilities Act. Until July 1, 2022
26and beginning again on July 1, 2023, the tax shall also be

 

 

SB1869- 13 -LRB103 27518 HLH 53893 b

1imposed at the rate of 1% on food for human consumption that is
2to be consumed off the premises where it is sold (other than
3alcoholic beverages, food consisting of or infused with adult
4use cannabis, soft drinks, and food that has been prepared for
5immediate consumption and is not otherwise included in this
6paragraph).
7    Beginning on July 1, 2022 and until July 1, 2023, the tax
8shall be imposed at the rate of 0% on food prepared for
9immediate consumption and transferred incident to a sale of
10service subject to this Act or the Service Occupation Tax Act
11by an entity licensed under the Hospital Licensing Act, the
12Nursing Home Care Act, the Assisted Living and Shared Housing
13Act, the ID/DD Community Care Act, the MC/DD Act, the
14Specialized Mental Health Rehabilitation Act of 2013, or the
15Child Care Act of 1969, or an entity that holds a permit issued
16pursuant to the Life Care Facilities Act. Beginning on July 1,
172022 and until July 1, 2023, the tax shall also be imposed at
18the rate of 0% on food for human consumption that is to be
19consumed off the premises where it is sold (other than
20alcoholic beverages, food consisting of or infused with adult
21use cannabis, soft drinks, and food that has been prepared for
22immediate consumption and is not otherwise included in this
23paragraph).
24    The tax shall also be imposed at the rate of 1% on
25prescription and nonprescription medicines, drugs, medical
26appliances, products classified as Class III medical devices

 

 

SB1869- 14 -LRB103 27518 HLH 53893 b

1by the United States Food and Drug Administration that are
2used for cancer treatment pursuant to a prescription, as well
3as any accessories and components related to those devices,
4modifications to a motor vehicle for the purpose of rendering
5it usable by a person with a disability, and insulin, blood
6sugar testing materials, syringes, and needles used by human
7diabetics. For the purposes of this Section, until September
81, 2009: the term "soft drinks" means any complete, finished,
9ready-to-use, non-alcoholic drink, whether carbonated or not,
10including, but not limited to, soda water, cola, fruit juice,
11vegetable juice, carbonated water, and all other preparations
12commonly known as soft drinks of whatever kind or description
13that are contained in any closed or sealed bottle, can,
14carton, or container, regardless of size; but "soft drinks"
15does not include coffee, tea, non-carbonated water, infant
16formula, milk or milk products as defined in the Grade A
17Pasteurized Milk and Milk Products Act, or drinks containing
1850% or more natural fruit or vegetable juice.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "soft drinks" means non-alcoholic
21beverages that contain natural or artificial sweeteners. "Soft
22drinks" does do not include beverages that contain milk or
23milk products, soy, rice or similar milk substitutes, or
24greater than 50% of vegetable or fruit juice by volume.
25    Until August 1, 2009, and notwithstanding any other
26provisions of this Act, "food for human consumption that is to

 

 

SB1869- 15 -LRB103 27518 HLH 53893 b

1be consumed off the premises where it is sold" includes all
2food sold through a vending machine, except soft drinks and
3food products that are dispensed hot from a vending machine,
4regardless of the location of the vending machine. Beginning
5August 1, 2009, and notwithstanding any other provisions of
6this Act, "food for human consumption that is to be consumed
7off the premises where it is sold" includes all food sold
8through a vending machine, except soft drinks, candy, and food
9products that are dispensed hot from a vending machine,
10regardless of the location of the vending machine.
11    Notwithstanding any other provisions of this Act,
12beginning September 1, 2009, "food for human consumption that
13is to be consumed off the premises where it is sold" does not
14include candy. For purposes of this Section, "candy" means a
15preparation of sugar, honey, or other natural or artificial
16sweeteners in combination with chocolate, fruits, nuts or
17other ingredients or flavorings in the form of bars, drops, or
18pieces. "Candy" does not include any preparation that contains
19flour or requires refrigeration.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "nonprescription medicines and
22drugs" does not include grooming and hygiene products. For
23purposes of this Section, "grooming and hygiene products"
24includes, but is not limited to, soaps and cleaning solutions,
25shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
26lotions and screens, unless those products are available by

 

 

SB1869- 16 -LRB103 27518 HLH 53893 b

1prescription only, regardless of whether the products meet the
2definition of "over-the-counter-drugs". For the purposes of
3this paragraph, "over-the-counter-drug" means a drug for human
4use that contains a label that identifies the product as a drug
5as required by 21 CFR C.F.R. § 201.66. The
6"over-the-counter-drug" label includes:
7        (A) a A "Drug Facts" panel; or
8        (B) a A statement of the "active ingredient(s)" with a
9    list of those ingredients contained in the compound,
10    substance or preparation.
11    Beginning on January 1, 2014 (the effective date of Public
12Act 98-122), "prescription and nonprescription medicines and
13drugs" includes medical cannabis purchased from a registered
14dispensing organization under the Compassionate Use of Medical
15Cannabis Program Act.
16    As used in this Section, "adult use cannabis" means
17cannabis subject to tax under the Cannabis Cultivation
18Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
19and does not include cannabis subject to tax under the
20Compassionate Use of Medical Cannabis Program Act.
21    If the property that is acquired from a serviceman is
22acquired outside Illinois and used outside Illinois before
23being brought to Illinois for use here and is taxable under
24this Act, the "selling price" on which the tax is computed
25shall be reduced by an amount that represents a reasonable
26allowance for depreciation for the period of prior

 

 

SB1869- 17 -LRB103 27518 HLH 53893 b

1out-of-state use.
2(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
3102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article
420, Section 20-10, eff. 4-19-22; 102-700, Article 60, Section
560-20, eff. 4-19-22; revised 6-1-22.)
 
6    Section 15. The Service Occupation Tax Act is amended by
7changing Section 3-10 as follows:
 
8    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
9    Sec. 3-10. Rate of tax. Unless otherwise provided in this
10Section, the tax imposed by this Act is at the rate of 6.25% of
11the "selling price", as defined in Section 2 of the Service Use
12Tax Act, of the tangible personal property. For the purpose of
13computing this tax, in no event shall the "selling price" be
14less than the cost price to the serviceman of the tangible
15personal property transferred. The selling price of each item
16of tangible personal property transferred as an incident of a
17sale of service may be shown as a distinct and separate item on
18the serviceman's billing to the service customer. If the
19selling price is not so shown, the selling price of the
20tangible personal property is deemed to be 50% of the
21serviceman's entire billing to the service customer. When,
22however, a serviceman contracts to design, develop, and
23produce special order machinery or equipment, the tax imposed
24by this Act shall be based on the serviceman's cost price of

 

 

SB1869- 18 -LRB103 27518 HLH 53893 b

1the tangible personal property transferred incident to the
2completion of the contract.
3    Beginning on July 1, 2000 and through December 31, 2000,
4with respect to motor fuel, as defined in Section 1.1 of the
5Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
6the Use Tax Act, the tax is imposed at the rate of 1.25%.
7    With respect to gasohol, as defined in the Use Tax Act, the
8tax imposed by this Act shall apply to (i) 70% of the cost
9price of property transferred as an incident to the sale of
10service on or after January 1, 1990, and before July 1, 2003,
11(ii) 80% of the selling price of property transferred as an
12incident to the sale of service on or after July 1, 2003 and on
13or before July 1, 2017, and (iii) 100% of the cost price of
14property transferred as an incident to the sale of service
15after July 1, 2017 and prior to July 1, 2023, (iv) 90% of the
16cost price of property transferred as an incident to the sale
17of service on or after July 1, 2023 and on or before December
1831, 2030, and (v) 100% of the cost price of property
19transferred as an incident to the sale of service after
20December 31, 2030 thereafter. If, at any time, however, the
21tax under this Act on sales of gasohol, as defined in the Use
22Tax Act, is imposed at the rate of 1.25%, then the tax imposed
23by this Act applies to 100% of the proceeds of sales of gasohol
24made during that time.
25    With respect to mid-range ethanol blends, as defined in
26Section 3-44.3 of the Use Tax Act, the tax imposed by this Act

 

 

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1applies to (i) 80% of the selling price of property
2transferred as an incident to the sale of service on or after
3July 1, 2023 and on or before December 31, 2030 and (ii) 100%
4of the selling price after December 31, 2030. If, at any time,
5however, the tax under this Act on sales of mid-range ethanol
6blends is imposed at the rate of 1.25%, then the tax imposed by
7this Act applies to 100% of the proceeds of sales of mid-range
8ethanol blends made during that time.
9    With respect to majority blended ethanol fuel, as defined
10in the Use Tax Act, the tax imposed by this Act does not apply
11to the selling price of property transferred as an incident to
12the sale of service on or after July 1, 2003 and on or before
13December 31, 2030 December 31, 2023 but applies to 100% of the
14selling price thereafter.
15    With respect to biodiesel blends, as defined in the Use
16Tax Act, with no less than 1% and no more than 10% biodiesel,
17the tax imposed by this Act applies to (i) 80% of the selling
18price of property transferred as an incident to the sale of
19service on or after July 1, 2003 and on or before December 31,
202018 and (ii) 100% of the proceeds of the selling price after
21December 31, 2018 and before January 1, 2024. On and after
22January 1, 2024 and on or before December 31, 2030, the
23taxation of biodiesel, renewable diesel, and biodiesel blends
24shall be as provided in Section 3-5.1 of the Use Tax Act. If,
25at any time, however, the tax under this Act on sales of
26biodiesel blends, as defined in the Use Tax Act, with no less

 

 

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1than 1% and no more than 10% biodiesel is imposed at the rate
2of 1.25%, then the tax imposed by this Act applies to 100% of
3the proceeds of sales of biodiesel blends with no less than 1%
4and no more than 10% biodiesel made during that time.
5    With respect to biodiesel, as defined in the Use Tax Act,
6and biodiesel blends, as defined in the Use Tax Act, with more
7than 10% but no more than 99% biodiesel material, the tax
8imposed by this Act does not apply to the proceeds of the
9selling price of property transferred as an incident to the
10sale of service on or after July 1, 2003 and on or before
11December 31, 2023. On and after January 1, 2024 and on or
12before December 31, 2030, the taxation of biodiesel, renewable
13diesel, and biodiesel blends shall be as provided in Section
143-5.1 of the Use Tax Act.
15    At the election of any registered serviceman made for each
16fiscal year, sales of service in which the aggregate annual
17cost price of tangible personal property transferred as an
18incident to the sales of service is less than 35%, or 75% in
19the case of servicemen transferring prescription drugs or
20servicemen engaged in graphic arts production, of the
21aggregate annual total gross receipts from all sales of
22service, the tax imposed by this Act shall be based on the
23serviceman's cost price of the tangible personal property
24transferred incident to the sale of those services.
25    Until July 1, 2022 and beginning again on July 1, 2023, the
26tax shall be imposed at the rate of 1% on food prepared for

 

 

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1immediate consumption and transferred incident to a sale of
2service subject to this Act or the Service Use Tax Act by an
3entity licensed under the Hospital Licensing Act, the Nursing
4Home Care Act, the Assisted Living and Shared Housing Act, the
5ID/DD Community Care Act, the MC/DD Act, the Specialized
6Mental Health Rehabilitation Act of 2013, or the Child Care
7Act of 1969, or an entity that holds a permit issued pursuant
8to the Life Care Facilities Act. Until July 1, 2022 and
9beginning again on July 1, 2023, the tax shall also be imposed
10at the rate of 1% on food for human consumption that is to be
11consumed off the premises where it is sold (other than
12alcoholic beverages, food consisting of or infused with adult
13use cannabis, soft drinks, and food that has been prepared for
14immediate consumption and is not otherwise included in this
15paragraph).
16    Beginning on July 1, 2022 and until July 1, 2023, the tax
17shall be imposed at the rate of 0% on food prepared for
18immediate consumption and transferred incident to a sale of
19service subject to this Act or the Service Use Tax Act by an
20entity licensed under the Hospital Licensing Act, the Nursing
21Home Care Act, the Assisted Living and Shared Housing Act, the
22ID/DD Community Care Act, the MC/DD Act, the Specialized
23Mental Health Rehabilitation Act of 2013, or the Child Care
24Act of 1969, or an entity that holds a permit issued pursuant
25to the Life Care Facilities Act. Beginning July 1, 2022 and
26until July 1, 2023, the tax shall also be imposed at the rate

 

 

SB1869- 22 -LRB103 27518 HLH 53893 b

1of 0% on food for human consumption that is to be consumed off
2the premises where it is sold (other than alcoholic beverages,
3food consisting of or infused with adult use cannabis, soft
4drinks, and food that has been prepared for immediate
5consumption and is not otherwise included in this paragraph).
6    The tax shall also be imposed at the rate of 1% on
7prescription and nonprescription medicines, drugs, medical
8appliances, products classified as Class III medical devices
9by the United States Food and Drug Administration that are
10used for cancer treatment pursuant to a prescription, as well
11as any accessories and components related to those devices,
12modifications to a motor vehicle for the purpose of rendering
13it usable by a person with a disability, and insulin, blood
14sugar testing materials, syringes, and needles used by human
15diabetics. For the purposes of this Section, until September
161, 2009: the term "soft drinks" means any complete, finished,
17ready-to-use, non-alcoholic drink, whether carbonated or not,
18including, but not limited to, soda water, cola, fruit juice,
19vegetable juice, carbonated water, and all other preparations
20commonly known as soft drinks of whatever kind or description
21that are contained in any closed or sealed can, carton, or
22container, regardless of size; but "soft drinks" does not
23include coffee, tea, non-carbonated water, infant formula,
24milk or milk products as defined in the Grade A Pasteurized
25Milk and Milk Products Act, or drinks containing 50% or more
26natural fruit or vegetable juice.

 

 

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1    Notwithstanding any other provisions of this Act,
2beginning September 1, 2009, "soft drinks" means non-alcoholic
3beverages that contain natural or artificial sweeteners. "Soft
4drinks" does do not include beverages that contain milk or
5milk products, soy, rice or similar milk substitutes, or
6greater than 50% of vegetable or fruit juice by volume.
7    Until August 1, 2009, and notwithstanding any other
8provisions of this Act, "food for human consumption that is to
9be consumed off the premises where it is sold" includes all
10food sold through a vending machine, except soft drinks and
11food products that are dispensed hot from a vending machine,
12regardless of the location of the vending machine. Beginning
13August 1, 2009, and notwithstanding any other provisions of
14this Act, "food for human consumption that is to be consumed
15off the premises where it is sold" includes all food sold
16through a vending machine, except soft drinks, candy, and food
17products that are dispensed hot from a vending machine,
18regardless of the location of the vending machine.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "food for human consumption that
21is to be consumed off the premises where it is sold" does not
22include candy. For purposes of this Section, "candy" means a
23preparation of sugar, honey, or other natural or artificial
24sweeteners in combination with chocolate, fruits, nuts or
25other ingredients or flavorings in the form of bars, drops, or
26pieces. "Candy" does not include any preparation that contains

 

 

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1flour or requires refrigeration.
2    Notwithstanding any other provisions of this Act,
3beginning September 1, 2009, "nonprescription medicines and
4drugs" does not include grooming and hygiene products. For
5purposes of this Section, "grooming and hygiene products"
6includes, but is not limited to, soaps and cleaning solutions,
7shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
8lotions and screens, unless those products are available by
9prescription only, regardless of whether the products meet the
10definition of "over-the-counter-drugs". For the purposes of
11this paragraph, "over-the-counter-drug" means a drug for human
12use that contains a label that identifies the product as a drug
13as required by 21 CFR C.F.R. § 201.66. The
14"over-the-counter-drug" label includes:
15        (A) a A "Drug Facts" panel; or
16        (B) a A statement of the "active ingredient(s)" with a
17    list of those ingredients contained in the compound,
18    substance or preparation.
19    Beginning on January 1, 2014 (the effective date of Public
20Act 98-122), "prescription and nonprescription medicines and
21drugs" includes medical cannabis purchased from a registered
22dispensing organization under the Compassionate Use of Medical
23Cannabis Program Act.
24    As used in this Section, "adult use cannabis" means
25cannabis subject to tax under the Cannabis Cultivation
26Privilege Tax Law and the Cannabis Purchaser Excise Tax Law

 

 

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1and does not include cannabis subject to tax under the
2Compassionate Use of Medical Cannabis Program Act.
3(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
4102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article
520, Section 20-15, eff. 4-19-22; 102-700, Article 60, Section
660-25, eff. 4-19-22; revised 6-1-22.)
 
7    Section 20. The Retailers' Occupation Tax Act is amended
8by changing Section 2-10 as follows:
 
9    (35 ILCS 120/2-10)
10    Sec. 2-10. Rate of tax. Unless otherwise provided in this
11Section, the tax imposed by this Act is at the rate of 6.25% of
12gross receipts from sales of tangible personal property made
13in the course of business.
14    Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18    Beginning on August 6, 2010 through August 15, 2010, and
19beginning again on August 5, 2022 through August 14, 2022,
20with respect to sales tax holiday items as defined in Section
212-8 of this Act, the tax is imposed at the rate of 1.25%.
22    Within 14 days after July 1, 2000 (the effective date of
23Public Act 91-872) this amendatory Act of the 91st General
24Assembly, each retailer of motor fuel and gasohol shall cause

 

 

SB1869- 26 -LRB103 27518 HLH 53893 b

1the following notice to be posted in a prominently visible
2place on each retail dispensing device that is used to
3dispense motor fuel or gasohol in the State of Illinois: "As of
4July 1, 2000, the State of Illinois has eliminated the State's
5share of sales tax on motor fuel and gasohol through December
631, 2000. The price on this pump should reflect the
7elimination of the tax." The notice shall be printed in bold
8print on a sign that is no smaller than 4 inches by 8 inches.
9The sign shall be clearly visible to customers. Any retailer
10who fails to post or maintain a required sign through December
1131, 2000 is guilty of a petty offense for which the fine shall
12be $500 per day per each retail premises where a violation
13occurs.
14    With respect to gasohol, as defined in the Use Tax Act, the
15tax imposed by this Act applies to (i) 70% of the proceeds of
16sales made on or after January 1, 1990, and before July 1,
172003, (ii) 80% of the proceeds of sales made on or after July
181, 2003 and on or before July 1, 2017, and (iii) 100% of the
19proceeds of sales made after July 1, 2017 and prior to July 1,
202023, (iv) 90% of the proceeds of sales made on or after July
211, 2023 and on or before December 31, 2030, and (v) 100% of the
22proceeds of sales made after December 31, 2030 thereafter. If,
23at any time, however, the tax under this Act on sales of
24gasohol, as defined in the Use Tax Act, is imposed at the rate
25of 1.25%, then the tax imposed by this Act applies to 100% of
26the proceeds of sales of gasohol made during that time.

 

 

SB1869- 27 -LRB103 27518 HLH 53893 b

1    With respect to mid-range ethanol blends, as defined in
2Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
3applies to (i) 80% of the proceeds of sales made on or after
4July 1, 2023 and on or before December 31, 2030 and (ii) 100%
5of the proceeds of sales made after December 31, 2030. If, at
6any time, however, the tax under this Act on sales of mid-range
7ethanol blends is imposed at the rate of 1.25%, then the tax
8imposed by this Act applies to 100% of the proceeds of sales of
9mid-range ethanol blends made during that time.
10    With respect to majority blended ethanol fuel, as defined
11in the Use Tax Act, the tax imposed by this Act does not apply
12to the proceeds of sales made on or after July 1, 2003 and on
13or before December 31, 2030 December 31, 2023 but applies to
14100% of the proceeds of sales made thereafter.
15    With respect to biodiesel blends, as defined in the Use
16Tax Act, with no less than 1% and no more than 10% biodiesel,
17the tax imposed by this Act applies to (i) 80% of the proceeds
18of sales made on or after July 1, 2003 and on or before
19December 31, 2018 and (ii) 100% of the proceeds of sales made
20after December 31, 2018 and before January 1, 2024. On and
21after January 1, 2024 and on or before December 31, 2030, the
22taxation of biodiesel, renewable diesel, and biodiesel blends
23shall be as provided in Section 3-5.1 of the Use Tax Act. If,
24at any time, however, the tax under this Act on sales of
25biodiesel blends, as defined in the Use Tax Act, with no less
26than 1% and no more than 10% biodiesel is imposed at the rate

 

 

SB1869- 28 -LRB103 27518 HLH 53893 b

1of 1.25%, then the tax imposed by this Act applies to 100% of
2the proceeds of sales of biodiesel blends with no less than 1%
3and no more than 10% biodiesel made during that time.
4    With respect to biodiesel, as defined in the Use Tax Act,
5and biodiesel blends, as defined in the Use Tax Act, with more
6than 10% but no more than 99% biodiesel, the tax imposed by
7this Act does not apply to the proceeds of sales made on or
8after July 1, 2003 and on or before December 31, 2023. On and
9after January 1, 2024 and on or before December 31, 2030, the
10taxation of biodiesel, renewable diesel, and biodiesel blends
11shall be as provided in Section 3-5.1 of the Use Tax Act.
12    Until July 1, 2022 and beginning again on July 1, 2023,
13with respect to food for human consumption that is to be
14consumed off the premises where it is sold (other than
15alcoholic beverages, food consisting of or infused with adult
16use cannabis, soft drinks, and food that has been prepared for
17immediate consumption), the tax is imposed at the rate of 1%.
18Beginning July 1, 2022 and until July 1, 2023, with respect to
19food for human consumption that is to be consumed off the
20premises where it is sold (other than alcoholic beverages,
21food consisting of or infused with adult use cannabis, soft
22drinks, and food that has been prepared for immediate
23consumption), the tax is imposed at the rate of 0%.
24    With respect to prescription and nonprescription
25medicines, drugs, medical appliances, products classified as
26Class III medical devices by the United States Food and Drug

 

 

SB1869- 29 -LRB103 27518 HLH 53893 b

1Administration that are used for cancer treatment pursuant to
2a prescription, as well as any accessories and components
3related to those devices, modifications to a motor vehicle for
4the purpose of rendering it usable by a person with a
5disability, and insulin, blood sugar testing materials,
6syringes, and needles used by human diabetics, the tax is
7imposed at the rate of 1%. For the purposes of this Section,
8until September 1, 2009: the term "soft drinks" means any
9complete, finished, ready-to-use, non-alcoholic drink, whether
10carbonated or not, including, but not limited to, soda water,
11cola, fruit juice, vegetable juice, carbonated water, and all
12other preparations commonly known as soft drinks of whatever
13kind or description that are contained in any closed or sealed
14bottle, can, carton, or container, regardless of size; but
15"soft drinks" does not include coffee, tea, non-carbonated
16water, infant formula, milk or milk products as defined in the
17Grade A Pasteurized Milk and Milk Products Act, or drinks
18containing 50% or more natural fruit or vegetable juice.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "soft drinks" means non-alcoholic
21beverages that contain natural or artificial sweeteners. "Soft
22drinks" does do not include beverages that contain milk or
23milk products, soy, rice or similar milk substitutes, or
24greater than 50% of vegetable or fruit juice by volume.
25    Until August 1, 2009, and notwithstanding any other
26provisions of this Act, "food for human consumption that is to

 

 

SB1869- 30 -LRB103 27518 HLH 53893 b

1be consumed off the premises where it is sold" includes all
2food sold through a vending machine, except soft drinks and
3food products that are dispensed hot from a vending machine,
4regardless of the location of the vending machine. Beginning
5August 1, 2009, and notwithstanding any other provisions of
6this Act, "food for human consumption that is to be consumed
7off the premises where it is sold" includes all food sold
8through a vending machine, except soft drinks, candy, and food
9products that are dispensed hot from a vending machine,
10regardless of the location of the vending machine.
11    Notwithstanding any other provisions of this Act,
12beginning September 1, 2009, "food for human consumption that
13is to be consumed off the premises where it is sold" does not
14include candy. For purposes of this Section, "candy" means a
15preparation of sugar, honey, or other natural or artificial
16sweeteners in combination with chocolate, fruits, nuts or
17other ingredients or flavorings in the form of bars, drops, or
18pieces. "Candy" does not include any preparation that contains
19flour or requires refrigeration.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "nonprescription medicines and
22drugs" does not include grooming and hygiene products. For
23purposes of this Section, "grooming and hygiene products"
24includes, but is not limited to, soaps and cleaning solutions,
25shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
26lotions and screens, unless those products are available by

 

 

SB1869- 31 -LRB103 27518 HLH 53893 b

1prescription only, regardless of whether the products meet the
2definition of "over-the-counter-drugs". For the purposes of
3this paragraph, "over-the-counter-drug" means a drug for human
4use that contains a label that identifies the product as a drug
5as required by 21 CFR C.F.R. § 201.66. The
6"over-the-counter-drug" label includes:
7        (A) a A "Drug Facts" panel; or
8        (B) a A statement of the "active ingredient(s)" with a
9    list of those ingredients contained in the compound,
10    substance or preparation.
11    Beginning on January 1, 2014 (the effective date of Public
12Act 98-122) this amendatory Act of the 98th General Assembly,
13"prescription and nonprescription medicines and drugs"
14includes medical cannabis purchased from a registered
15dispensing organization under the Compassionate Use of Medical
16Cannabis Program Act.
17    As used in this Section, "adult use cannabis" means
18cannabis subject to tax under the Cannabis Cultivation
19Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
20and does not include cannabis subject to tax under the
21Compassionate Use of Medical Cannabis Program Act.
22(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
23102-4, eff. 4-27-21; 102-700, Article 20, Section 20-20, eff.
244-19-22; 102-700, Article 60, Section 60-30, eff. 4-19-22;
25102-700, Article 65, Section 65-10, eff. 4-19-22; revised
266-1-22.)
 

 

 

SB1869- 32 -LRB103 27518 HLH 53893 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.