Full Text of SB1871 100th General Assembly
SB1871sam003 100TH GENERAL ASSEMBLY | Sen. Pat McGuire Filed: 5/11/2017
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| 1 | | AMENDMENT TO SENATE BILL 1871
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1871, AS AMENDED, | 3 | | by replacing everything after the enacting clause with the | 4 | | following:
| 5 | | "Section 5. The Use Tax Act is amended by changing Sections | 6 | | 3-55, 3-61, and 10 as follows:
| 7 | | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
| 8 | | Sec. 3-55. Multistate exemption. To prevent actual or | 9 | | likely multistate taxation, the tax imposed by this
Act
does | 10 | | not apply to the use of
tangible personal property in this | 11 | | State under the following circumstances:
| 12 | | (a) The use, in this State, of tangible personal property | 13 | | acquired
outside this State by a nonresident individual and | 14 | | brought into this
State by the individual for his or her own | 15 | | use while temporarily within
this State or while passing | 16 | | through this State.
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| 1 | | (b) (Blank). The use, in this State, of tangible personal
| 2 | | property by an
interstate carrier for hire as rolling stock | 3 | | moving in interstate
commerce or by lessors under a lease of | 4 | | one year or longer executed or
in effect at the time of | 5 | | purchase of tangible personal property by
interstate carriers | 6 | | for-hire for use as rolling stock moving in interstate
commerce | 7 | | as long as so used by the interstate carriers for-hire, and | 8 | | equipment
operated by a telecommunications provider, licensed | 9 | | as a common carrier by the
Federal Communications Commission, | 10 | | which is permanently installed in or affixed
to aircraft moving | 11 | | in interstate commerce.
| 12 | | (c) The use, in this State, by owners, lessors,
or
shippers
| 13 | | of tangible personal property that is utilized by interstate | 14 | | carriers
for hire for use as rolling stock moving in interstate | 15 | | commerce as
long as so used by the interstate carriers for | 16 | | hire, and equipment
operated by a telecommunications provider, | 17 | | licensed as a common carrier by the
Federal Communications | 18 | | Commission, which is permanently installed in or affixed
to | 19 | | aircraft moving in interstate commerce.
| 20 | | (d) The use, in this State, of tangible personal property | 21 | | that is
acquired outside this State and caused to be brought | 22 | | into this State by
a person who has already paid a tax in | 23 | | another State in respect to the
sale, purchase, or use of that | 24 | | property, to the extent of the amount of
the tax properly due | 25 | | and paid in the other State.
| 26 | | (e) The temporary storage, in this State, of tangible |
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| 1 | | personal
property that is acquired outside this State and that, | 2 | | after
being brought into this State and stored here | 3 | | temporarily, is used
solely outside this State or is physically | 4 | | attached to or incorporated
into other tangible personal | 5 | | property that is used solely outside this
State, or is altered | 6 | | by converting, fabricating, manufacturing, printing,
| 7 | | processing, or shaping, and, as altered, is used solely outside | 8 | | this State.
| 9 | | (f) The temporary storage in this State of building | 10 | | materials and
fixtures that are acquired either in this State | 11 | | or outside this State
by an Illinois registered combination | 12 | | retailer and construction contractor, and
that the purchaser | 13 | | thereafter uses outside this State by incorporating that
| 14 | | property into real estate located outside this State.
| 15 | | (g) The use or purchase of tangible personal property by a | 16 | | common carrier
by rail or motor that receives the physical | 17 | | possession of the property in
Illinois, and
that transports the | 18 | | property, or shares with another common carrier in the
| 19 | | transportation of the property, out of Illinois on a standard | 20 | | uniform bill of
lading showing the seller of the property as | 21 | | the shipper or consignor of the
property to a destination | 22 | | outside Illinois, for use outside Illinois.
| 23 | | (h) Except as provided in subsection (h-1), the use, in | 24 | | this State, of a motor vehicle that was sold in
this State to a | 25 | | nonresident, even though the motor vehicle is
delivered to the | 26 | | nonresident in this State, if the motor vehicle
is not to be |
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| 1 | | titled in this State, and if a
drive-away permit is issued to | 2 | | the motor vehicle as
provided in Section 3-603 of the Illinois | 3 | | Vehicle Code or if the
nonresident purchaser has vehicle | 4 | | registration plates to transfer
to the motor vehicle upon | 5 | | returning to his or her home state.
The issuance of the | 6 | | drive-away permit or having the
out-of-state
registration | 7 | | plates to be transferred shall be prima facie evidence
that the | 8 | | motor vehicle will not be titled in this State.
| 9 | | (h-1) The exemption under subsection (h) does not apply if | 10 | | the state in which the motor vehicle will be titled does not | 11 | | allow a reciprocal exemption for the use in that state of a | 12 | | motor vehicle sold and delivered in that state to an Illinois | 13 | | resident but titled in Illinois. The tax collected under this | 14 | | Act on the sale of a motor vehicle in this State to a resident | 15 | | of another state that does not allow a reciprocal exemption | 16 | | shall be imposed at a rate equal to the state's rate of tax on | 17 | | taxable property in the state in which the purchaser is a | 18 | | resident, except that the tax shall not exceed the tax that | 19 | | would otherwise be imposed under this Act. At the time of the | 20 | | sale, the purchaser shall execute a statement, signed under | 21 | | penalty of perjury, of his or her intent to title the vehicle | 22 | | in the state in which the purchaser is a resident within 30 | 23 | | days after the sale and of the fact of the payment to the State | 24 | | of Illinois of tax in an amount equivalent to the state's rate | 25 | | of tax on taxable property in his or her state of residence and | 26 | | shall submit the statement to the appropriate tax collection |
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| 1 | | agency in his or her state of residence. In addition, the | 2 | | retailer must retain a signed copy of the statement in his or | 3 | | her records. Nothing in this subsection shall be construed to | 4 | | require the removal of the vehicle from this state following | 5 | | the filing of an intent to title the vehicle in the purchaser's | 6 | | state of residence if the purchaser titles the vehicle in his | 7 | | or her state of residence within 30 days after the date of | 8 | | sale. The tax collected under this Act in accordance with this | 9 | | subsection (h-1) shall be proportionately distributed as if the | 10 | | tax were collected at the 6.25% general rate imposed under this | 11 | | Act.
| 12 | | (h-2) The following exemptions apply with respect to | 13 | | certain aircraft: | 14 | | (1) Beginning on July 1, 2007, no tax is imposed under | 15 | | this Act on the purchase of an aircraft, as defined in | 16 | | Section 3 of the Illinois Aeronautics Act, if all of the | 17 | | following conditions are met: | 18 | | (A) the aircraft leaves this State within 15 days | 19 | | after the later of either the issuance of the final | 20 | | billing for the purchase of the aircraft or the | 21 | | authorized approval for return to service, completion | 22 | | of the maintenance record entry, and completion of the | 23 | | test flight and ground test for inspection, as required | 24 | | by 14 C.F.R. 91.407; | 25 | | (B) the aircraft is not based or registered in this | 26 | | State after the purchase of the aircraft; and |
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| 1 | | (C) the purchaser provides the Department with a | 2 | | signed and dated certification, on a form prescribed by | 3 | | the Department, certifying that the requirements of | 4 | | this item (1) are met. The certificate must also | 5 | | include the name and address of the purchaser, the | 6 | | address of the location where the aircraft is to be | 7 | | titled or registered, the address of the primary | 8 | | physical location of the aircraft, and other | 9 | | information that the Department may reasonably | 10 | | require. | 11 | | (2) Beginning on July 1, 2007, no tax is imposed under | 12 | | this Act on the use of an aircraft, as defined in Section 3 | 13 | | of the Illinois Aeronautics Act, that is temporarily | 14 | | located in this State for the purpose of a prepurchase | 15 | | evaluation if all of the following conditions are met: | 16 | | (A) the aircraft is not based or registered in this | 17 | | State after the prepurchase evaluation; and | 18 | | (B) the purchaser provides the Department with a | 19 | | signed and dated certification, on a form prescribed by | 20 | | the Department, certifying that the requirements of | 21 | | this item (2) are met. The certificate must also | 22 | | include the name and address of the purchaser, the | 23 | | address of the location where the aircraft is to be | 24 | | titled or registered, the address of the primary | 25 | | physical location of the aircraft, and other | 26 | | information that the Department may reasonably |
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| 1 | | require. | 2 | | (3) Beginning on July 1, 2007, no tax is imposed under | 3 | | this Act on the use of an aircraft, as defined in Section 3 | 4 | | of the Illinois Aeronautics Act, that is temporarily | 5 | | located in this State for the purpose of a post-sale | 6 | | customization if all of the following conditions are met: | 7 | | (A) the aircraft leaves this State within 15 days | 8 | | after the authorized approval for return to service, | 9 | | completion of the maintenance record entry, and | 10 | | completion of the test flight and ground test for | 11 | | inspection, as required by 14 C.F.R. 91.407; | 12 | | (B) the aircraft is not based or registered in this | 13 | | State either before or after the post-sale | 14 | | customization; and | 15 | | (C) the purchaser provides the Department with a | 16 | | signed and dated certification, on a form prescribed by | 17 | | the Department, certifying that the requirements of | 18 | | this item (3) are met. The certificate must also | 19 | | include the name and address of the purchaser, the | 20 | | address of the location where the aircraft is to be | 21 | | titled or registered, the address of the primary | 22 | | physical location of the aircraft, and other | 23 | | information that the Department may reasonably | 24 | | require. | 25 | | If tax becomes due under this subsection (h-2) because of | 26 | | the purchaser's use of the aircraft in this State, the |
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| 1 | | purchaser shall file a return with the Department and pay the | 2 | | tax on the fair market value of the aircraft. This return and | 3 | | payment of the tax must be made no later than 30 days after the | 4 | | aircraft is used in a taxable manner in this State. The tax is | 5 | | based on the fair market value of the aircraft on the date that | 6 | | it is first used in a taxable manner in this State. | 7 | | For purposes of this subsection (h-2): | 8 | | "Based in this State" means hangared, stored, or otherwise | 9 | | used, excluding post-sale customizations as defined in this | 10 | | Section, for 10 or more days in each 12-month period | 11 | | immediately following the date of the sale of the aircraft. | 12 | | "Post-sale customization" means any improvement, | 13 | | maintenance, or repair that is performed on an aircraft | 14 | | following a transfer of ownership of the aircraft. | 15 | | "Prepurchase evaluation" means an examination of an | 16 | | aircraft to provide a potential purchaser with information | 17 | | relevant to the potential purchase. | 18 | | "Registered in this State" means an aircraft registered | 19 | | with the Department of Transportation, Aeronautics Division, | 20 | | or titled or registered with the Federal Aviation | 21 | | Administration to an address located in this State.
| 22 | | This subsection (h-2) is exempt from the provisions of | 23 | | Section 3-90.
| 24 | | (i) Beginning July 1, 1999, the use, in this State, of fuel | 25 | | acquired
outside this State and brought into this State in the | 26 | | fuel supply
tanks of locomotives engaged in freight hauling and |
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| 1 | | passenger service for
interstate commerce. This subsection is | 2 | | exempt from the provisions of Section
3-90.
| 3 | | (j) Beginning on January 1, 2002 and through June 30, 2016, | 4 | | the use of tangible personal property
purchased from an | 5 | | Illinois retailer by a taxpayer engaged in centralized
| 6 | | purchasing activities in Illinois who will, upon receipt of the | 7 | | property in
Illinois, temporarily store the property in | 8 | | Illinois (i) for the purpose of
subsequently transporting it | 9 | | outside this State for use or consumption
thereafter solely | 10 | | outside this State or (ii) for the purpose of being
processed, | 11 | | fabricated, or manufactured into, attached to, or incorporated | 12 | | into
other tangible personal property to be transported outside | 13 | | this State and
thereafter used or consumed solely outside this | 14 | | State. The Director of Revenue
shall, pursuant to rules adopted | 15 | | in accordance with the Illinois Administrative
Procedure Act, | 16 | | issue a permit to any taxpayer in good standing with the
| 17 | | Department who is eligible for the exemption under this | 18 | | subsection (j). The
permit issued under this subsection (j) | 19 | | shall authorize the holder, to the
extent and in the manner | 20 | | specified in the rules adopted under this Act, to
purchase | 21 | | tangible personal property from a retailer exempt from the | 22 | | taxes
imposed by this Act. Taxpayers shall maintain all | 23 | | necessary books and records
to substantiate the use and | 24 | | consumption of all such tangible personal property
outside of | 25 | | the State of Illinois.
| 26 | | (Source: P.A. 97-73, eff. 6-30-11.)
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| 1 | | (35 ILCS 105/3-61)
| 2 | | Sec. 3-61. Motor vehicles; trailers; use as rolling stock | 3 | | definition. | 4 | | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | 5 | | moving
in
interstate commerce" in subsections (b) and (c) of | 6 | | Section 3-55 means for motor
vehicles, as defined in Section | 7 | | 1-146 of the Illinois Vehicle Code, and
trailers, as defined in | 8 | | Section 1-209 of the Illinois Vehicle Code, when on 15
or more | 9 | | occasions in a 12-month period the motor vehicle and trailer | 10 | | has
carried
persons or
property for hire in interstate | 11 | | commerce, even just between points in Illinois,
if the motor | 12 | | vehicle and trailer transports persons whose journeys or | 13 | | property
whose shipments originate or terminate outside | 14 | | Illinois. This definition
applies to all property purchased for | 15 | | the purpose of being
attached to those motor vehicles or | 16 | | trailers as a part thereof.
| 17 | | (b) (Blank). On and after July 1, 2003 and through June 30, | 18 | | 2004, "use as rolling stock moving in interstate
commerce" in
| 19 | | paragraphs (b) and (c) of Section 3-55 occurs for motor | 20 | | vehicles, as defined in
Section 1-146 of the Illinois Vehicle | 21 | | Code, when during a 12-month period
the
rolling stock has | 22 | | carried persons or property for hire in interstate commerce
for | 23 | | 51% of
its total trips and transports persons whose journeys or | 24 | | property whose
shipments
originate or terminate outside | 25 | | Illinois. Trips that are only between points in
Illinois shall
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| 1 | | not be counted as interstate trips when calculating whether the | 2 | | tangible
personal property
qualifies for the exemption but such | 3 | | trips shall be included in total trips
taken.
| 4 | | (c) This subsection (c) applies to motor vehicles, other | 5 | | than limousines, purchased through June 30, 2017. For motor | 6 | | vehicles, other than limousines, purchased on or after July 1, | 7 | | 2017, subsection (d-5) applies. This subsection (c) applies to | 8 | | limousines purchased before, on, or after July 1, 2017. "Use | 9 | | Beginning July 1, 2004, "use as rolling stock moving in | 10 | | interstate commerce" in paragraph paragraphs (b) and (c) of | 11 | | Section 3-55 occurs for motor vehicles, as defined in Section | 12 | | 1-146 of the Illinois Vehicle Code, when during a 12-month | 13 | | period the rolling stock has carried persons or property for | 14 | | hire in interstate commerce for greater than 50% of its total | 15 | | trips for that period or for greater than 50% of its total | 16 | | miles for that period. The person claiming the exemption shall | 17 | | make an election at the time of purchase to use either the | 18 | | trips or mileage method. Persons who purchased motor vehicles | 19 | | prior to July 1, 2004 shall make an election to use either the | 20 | | trips or mileage method and document that election in their | 21 | | books and records. If no election is made under this subsection | 22 | | to use the trips or mileage method, the person shall be deemed | 23 | | to have chosen the mileage method. | 24 | | For purposes of determining qualifying trips or miles, | 25 | | motor vehicles that carry persons or property for hire, even | 26 | | just between points in Illinois, will be considered used for |
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| 1 | | hire in interstate commerce if the motor vehicle transports | 2 | | persons whose journeys or property whose shipments originate or | 3 | | terminate outside Illinois. The exemption for motor vehicles
| 4 | | used as rolling stock moving in interstate commerce may be
| 5 | | claimed only for the following vehicles: (i) motor vehicles | 6 | | whose gross vehicle weight
rating exceeds 16,000 pounds; and | 7 | | (ii) limousines, as defined in Section 1-139.1 of the Illinois | 8 | | Vehicle Code. Through June 30, 2017, this This definition | 9 | | applies to all property purchased for the purpose of being | 10 | | attached to those motor vehicles as a part thereof. On and | 11 | | after July 1, 2017, this definition applies to property | 12 | | purchased for the purpose of being attached to limousines as a | 13 | | part thereof. | 14 | | (d) For purchases made through June 30, 2017 Beginning July | 15 | | 1, 2004 , "use as rolling stock moving in interstate commerce" | 16 | | in paragraph paragraphs (b) and (c) of Section 3-55 occurs for | 17 | | trailers, as defined in Section 1-209 of the Illinois Vehicle | 18 | | Code, semitrailers as defined in Section 1-187 of the Illinois | 19 | | Vehicle Code, and pole trailers as defined in Section 1-161 of | 20 | | the Illinois Vehicle Code, when during a 12-month period the | 21 | | rolling stock has carried persons or property for hire in | 22 | | interstate commerce for greater than 50% of its total trips for | 23 | | that period or for greater than 50% of its total miles for that | 24 | | period. The person claiming the exemption for a trailer or | 25 | | trailers that will not be dedicated to a motor vehicle or group | 26 | | of motor vehicles shall make an election at the time of |
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| 1 | | purchase to use either the trips or mileage method. Persons who | 2 | | purchased trailers prior to July 1, 2004 that are not dedicated | 3 | | to a motor vehicle or group of motor vehicles shall make an | 4 | | election to use either the trips or mileage method and document | 5 | | that election in their books and records. If no election is | 6 | | made under this subsection to use the trips or mileage method, | 7 | | the person shall be deemed to have chosen the mileage method. | 8 | | For purposes of determining qualifying trips or miles, | 9 | | trailers, semitrailers, or pole trailers that carry property | 10 | | for hire, even just between points in Illinois, will be | 11 | | considered used for hire in interstate commerce if the | 12 | | trailers, semitrailers, or pole trailers transport property | 13 | | whose shipments originate or terminate outside Illinois. This | 14 | | definition applies to all property purchased for the purpose of | 15 | | being attached to those trailers, semitrailers, or pole | 16 | | trailers as a part thereof. In lieu of a person providing | 17 | | documentation regarding the qualifying use of each individual | 18 | | trailer, semitrailer, or pole trailer, that person may document | 19 | | such qualifying use by providing documentation of the | 20 | | following: | 21 | | (1) If a trailer, semitrailer, or pole trailer is | 22 | | dedicated to a motor vehicle that qualifies as rolling | 23 | | stock moving in interstate commerce under subsection (c) of | 24 | | this Section, then that trailer, semitrailer, or pole | 25 | | trailer qualifies as rolling stock moving in interstate | 26 | | commerce under this subsection. |
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| 1 | | (2) If a trailer, semitrailer, or pole trailer is | 2 | | dedicated to a group of motor vehicles that all qualify as | 3 | | rolling stock moving in interstate commerce under | 4 | | subsection (c) of this Section, then that trailer, | 5 | | semitrailer, or pole trailer qualifies as rolling stock | 6 | | moving in interstate commerce under this subsection. | 7 | | (3) If one or more trailers, semitrailers, or pole | 8 | | trailers are dedicated to a group of motor vehicles and not | 9 | | all of those motor vehicles in that group qualify as | 10 | | rolling stock moving in interstate commerce under | 11 | | subsection (c) of this Section, then the percentage of | 12 | | those trailers, semitrailers, or pole trailers that | 13 | | qualifies as rolling stock moving in interstate commerce | 14 | | under this subsection is equal to the percentage of those | 15 | | motor vehicles in that group that qualify as rolling stock | 16 | | moving in interstate commerce under subsection (c) of this | 17 | | Section to which those trailers, semitrailers, or pole | 18 | | trailers are dedicated. However, to determine the | 19 | | qualification for the exemption provided under this item | 20 | | (3), the mathematical application of the qualifying | 21 | | percentage to one or more trailers, semitrailers, or pole | 22 | | trailers under this subpart shall not be allowed as to any | 23 | | fraction of a trailer, semitrailer, or pole trailer.
| 24 | | (d-5) For motor vehicles and trailers purchased on or after | 25 | | July 1, 2017, "use as rolling stock moving in interstate | 26 | | commerce" means that: |
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| 1 | | (1) the motor vehicle or trailer is used to transport | 2 | | persons or property for hire; | 3 | | (2) for purposes of the exemption under subsection (c) | 4 | | of Section 3-55, the purchaser who is an owner, lessor, or | 5 | | shipper claiming the exemption certifies that the motor | 6 | | vehicle or trailer will be utilized, from the time of | 7 | | purchase and continuing through the statute of limitations | 8 | | for issuing a notice of tax liability under this Act, by an | 9 | | interstate carrier or carriers for hire who hold, and are | 10 | | required by Federal Motor Carrier Safety Administration | 11 | | regulations to hold, an active USDOT Number with the | 12 | | Carrier Operation listed as "Interstate" and the Operation | 13 | | Classification listed as "authorized for hire", "exempt | 14 | | for hire", or both "authorized for hire" and "exempt for | 15 | | hire"; and | 16 | | (3) for motor vehicles, the gross vehicle weight rating | 17 | | exceeds 16,000 pounds. | 18 | | The definition of "use as rolling stock moving in | 19 | | interstate commerce" in this subsection (d-5) applies to all | 20 | | property purchased on or after July 1, 2017 for the purpose of | 21 | | being attached to a motor vehicle or trailer as a part thereof, | 22 | | regardless of whether the motor vehicle or trailer was | 23 | | purchased before, on, or after July 1, 2017. | 24 | | If an item ceases to meet requirements (1) through (3) | 25 | | under this subsection (d-5), then the tax is imposed on the | 26 | | selling price, allowing for a reasonable depreciation for the |
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| 1 | | period during which the item qualified for the exemption. | 2 | | For purposes of this subsection (d-5): | 3 | | "Motor vehicle" excludes limousines, but otherwise | 4 | | means that term as defined in Section 1-146 of the Illinois | 5 | | Vehicle Code. | 6 | | "Trailer" means (i) "trailer", as defined in Section | 7 | | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | 8 | | defined in Section 1-187 of the Illinois Vehicle Code, and | 9 | | (iii) "pole trailer" as defined in Section 1-161 of the | 10 | | Illinois Vehicle Code. | 11 | | (e) For aircraft and watercraft purchased on or after | 12 | | January 1, 2014, "use as rolling stock moving in interstate | 13 | | commerce" in paragraph paragraphs (b) and (c) of Section 3-55 | 14 | | occurs when, during a 12-month period, the rolling stock has | 15 | | carried persons or property for hire in interstate commerce for | 16 | | greater than 50% of its total trips for that period or for | 17 | | greater than 50% of its total miles for that period. The person | 18 | | claiming the exemption shall make an election at the time of | 19 | | purchase to use either the trips or mileage method and document | 20 | | that election in their books and records. If no election is | 21 | | made under this subsection to use the trips or mileage method, | 22 | | the person shall be deemed to have chosen the mileage method. | 23 | | For aircraft, flight hours may be used in lieu of recording | 24 | | miles in determining whether the aircraft meets the mileage | 25 | | test in this subsection. For watercraft, nautical miles or trip | 26 | | hours may be used in lieu of recording miles in determining |
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| 1 | | whether the watercraft meets the mileage test in this | 2 | | subsection. | 3 | | Notwithstanding any other provision of law to the contrary, | 4 | | property purchased on or after January 1, 2014 for the purpose | 5 | | of being attached to aircraft or watercraft as a part thereof | 6 | | qualifies as rolling stock moving in interstate commerce only | 7 | | if the aircraft or watercraft to which it will be attached | 8 | | qualifies as rolling stock moving in interstate commerce under | 9 | | the test set forth in this subsection (e), regardless of when | 10 | | the aircraft or watercraft was purchased. Persons who purchased | 11 | | aircraft or watercraft prior to January 1, 2014 shall make an | 12 | | election to use either the trips or mileage method and document | 13 | | that election in their books and records for the purpose of | 14 | | determining whether property purchased on or after January 1, | 15 | | 2014 for the purpose of being attached to aircraft or | 16 | | watercraft as a part thereof qualifies as rolling stock moving | 17 | | in interstate commerce under this subsection (e). | 18 | | (f) The election to use either the trips or mileage method | 19 | | made under the provisions of subsections (c), (d), or (e) of | 20 | | this Section will remain in effect for the duration of the | 21 | | purchaser's ownership of that item. | 22 | | (Source: P.A. 98-584, eff. 8-27-13.)
| 23 | | (35 ILCS 105/10) (from Ch. 120, par. 439.10) | 24 | | Sec. 10. Except as to motor vehicles, aircraft, watercraft, | 25 | | and
trailers, and except as to cigarettes as defined in the |
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| 1 | | Cigarette Use Tax Act, when tangible personal
property is
| 2 | | purchased from a retailer for use in this State by a purchaser
| 3 | | who did not pay the tax imposed by this Act to the retailer, | 4 | | and who does not
file returns with the Department as a retailer | 5 | | under Section 9 of this
Act, such purchaser (by the last day of | 6 | | the month following the calendar
month in which such purchaser | 7 | | makes any payment upon the selling price of
such property) | 8 | | shall, except as otherwise provided in this Section, file
a | 9 | | return with the Department and pay the tax upon that portion of | 10 | | the
selling price so paid by the purchaser during the preceding | 11 | | calendar month.
When tangible personal property, including but | 12 | | not limited to motor vehicles
and aircraft, is purchased by a | 13 | | lessor, under a lease for
one year or longer, executed or in | 14 | | effect at the time of purchase to an
interstate carrier for | 15 | | hire, who did not pay the tax imposed by this Act to the
| 16 | | retailer, such lessor (by the last day of the month following | 17 | | the calendar
month in which such property reverts to the use of | 18 | | such lessor) shall file
a return with the Department and pay | 19 | | the tax upon the fair market value of
such property on the date | 20 | | of such reversion.
However, in determining the fair market | 21 | | value at the time of reversion, the
fair market value of such | 22 | | property shall not exceed the original purchase price
of the | 23 | | property that was paid by the lessor at the time of purchase.
| 24 | | Such return shall be filed on
a form prescribed by the | 25 | | Department and shall contain such information as
the Department | 26 | | may reasonably require. Such return and payment from the
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| 1 | | purchaser shall be submitted to the Department sooner than the | 2 | | last day of
the month after the month in which the purchase is | 3 | | made to the extent that
that may be necessary in order to | 4 | | secure the title to a motor vehicle or
the certificate of | 5 | | registration for an aircraft. However, except as to motor
| 6 | | vehicles and aircraft, and except as to cigarettes as defined | 7 | | in the Cigarette Use Tax Act, if the
purchaser's annual use tax | 8 | | liability does not exceed $600, the purchaser
may file the | 9 | | return on an annual basis on or before April 15th of the year
| 10 | | following the year use tax liability was incurred. Individual | 11 | | purchasers with an annual use tax liability that does not | 12 | | exceed $600 may, in lieu of the filing and payment requirements | 13 | | in this Section, file and pay in compliance with Section 502.1 | 14 | | of the Illinois Income Tax Act. | 15 | | If cigarettes, as defined in the Cigarette Use Tax Act, are | 16 | | purchased from a retailer for use in this State by a purchaser | 17 | | who did not pay the tax imposed by this Act to the retailer, | 18 | | and who does not file returns with the Department as a retailer | 19 | | under Section 9 of this Act, such purchaser must, within 30 | 20 | | days after acquiring the cigarettes, file a return with the | 21 | | Department and pay the tax upon that portion of the selling | 22 | | price so paid by the purchaser for the cigarettes. | 23 | | In addition with respect to motor vehicles,
aircraft, | 24 | | watercraft, and trailers, a purchaser of such tangible personal
| 25 | | property for use in this
State, who purchases such tangible | 26 | | personal property from an out-of-state
retailer, shall file |
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| 1 | | with the Department, upon a form to be prescribed and
supplied | 2 | | by the Department, a return for each such item of tangible
| 3 | | personal property purchased, except that if, in the same | 4 | | transaction, (i) a
purchaser of motor vehicles,
aircraft, | 5 | | watercraft, or trailers who is a retailer of motor vehicles,
| 6 | | aircraft, watercraft, or trailers purchases more than one motor | 7 | | vehicle,
aircraft, watercraft, or trailer for the purpose of | 8 | | resale or (ii) a purchaser
of motor vehicles, aircraft, | 9 | | watercraft, or trailers purchases more
than one motor vehicle, | 10 | | aircraft, watercraft, or trailer for use as qualifying
rolling | 11 | | stock as provided in Section 3-55 of this Act, then the | 12 | | purchaser may
report the purchase of all motor vehicles, | 13 | | aircraft, watercraft, or trailers
involved in that transaction | 14 | | to the Department on a single return prescribed by
the | 15 | | Department. Such return in the case of motor vehicles and
| 16 | | aircraft must show the name and address of the seller, the | 17 | | name, address of
purchaser, the amount of the selling price | 18 | | including the amount allowed by
the retailer for traded in | 19 | | property, if any; the amount allowed by the
retailer for the | 20 | | traded-in tangible personal property, if any, to the
extent to | 21 | | which Section 2 of this Act allows an exemption for the value | 22 | | of
traded-in property; the balance payable after deducting such | 23 | | trade-in
allowance from the total selling price; the amount of | 24 | | tax due from the
purchaser with respect to such transaction; | 25 | | the amount of tax collected
from the purchaser by the retailer | 26 | | on such transaction (or satisfactory
evidence that such tax is |
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| 1 | | not due in that particular instance if that is
claimed to be | 2 | | the fact); the place and date of the sale, a sufficient
| 3 | | identification of the property sold, and such other information | 4 | | as the
Department may reasonably require. | 5 | | Such return shall be filed not later than 30 days after | 6 | | such motor
vehicle or aircraft is brought into this State for | 7 | | use. | 8 | | For purposes of this Section, "watercraft" means a Class 2, | 9 | | Class 3, or
Class 4 watercraft as defined in Section 3-2 of the | 10 | | Boat Registration and
Safety Act, a personal watercraft, or any | 11 | | boat equipped with an inboard
motor. | 12 | | The return and tax remittance or proof of exemption from | 13 | | the tax that is
imposed by this Act may be transmitted to the | 14 | | Department by way of the
State agency with which, or State | 15 | | officer with whom, the tangible personal
property must be | 16 | | titled or registered (if titling or registration is
required) | 17 | | if the Department and such agency or State officer determine | 18 | | that
this procedure will expedite the processing of | 19 | | applications for title or
registration. | 20 | | With each such return, the purchaser shall remit the proper | 21 | | amount of tax
due (or shall submit satisfactory evidence that | 22 | | the sale is not taxable if
that is the case), to the Department | 23 | | or its agents, whereupon the
Department shall issue, in the | 24 | | purchaser's name, a tax receipt (or a
certificate of exemption | 25 | | if the Department is satisfied that the particular
sale is tax | 26 | | exempt) which such purchaser may submit to the agency with
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| 1 | | which, or State officer with whom, he must title or register | 2 | | the tangible
personal property that is involved (if titling or | 3 | | registration is required)
in support of such purchaser's | 4 | | application for an Illinois certificate or
other evidence of | 5 | | title or registration to such tangible personal property. | 6 | | When a purchaser pays a tax imposed by this Act directly to | 7 | | the Department,
the Department (upon request therefor from such | 8 | | purchaser) shall issue an
appropriate receipt to such purchaser | 9 | | showing that he has paid such tax to
the Department. Such | 10 | | receipt shall be sufficient to relieve the purchaser
from | 11 | | further liability for the tax to which such receipt may refer. | 12 | | A user who is liable to pay use tax directly to the | 13 | | Department only
occasionally and not on a frequently recurring | 14 | | basis, and who is not
required to file returns with the | 15 | | Department as a retailer under Section 9
of this Act, or under | 16 | | the "Retailers' Occupation Tax Act", or as a
registrant with | 17 | | the Department under the "Service Occupation Tax Act" or
the | 18 | | "Service Use Tax Act", need not register with the Department.
| 19 | | However, if such a user has a frequently recurring direct use | 20 | | tax liability
to pay to the Department, such user shall be | 21 | | required to register with the
Department on forms prescribed by | 22 | | the Department and to obtain and display
a certificate of | 23 | | registration from the Department. In that event, all of
the | 24 | | provisions of Section 9 of this Act concerning the filing of | 25 | | regular
monthly, quarterly or annual tax returns and all of the | 26 | | provisions of
Section 2a of the "Retailers' Occupation Tax Act" |
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| 1 | | concerning the
requirements for registrants to post bond or | 2 | | other security with the
Department, as the provisions of such | 3 | | sections now exist or may hereafter
be amended, shall apply to | 4 | | such users to the same extent as if such
provisions were | 5 | | included herein. | 6 | | (Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10; | 7 | | 96-1388, eff. 7-29-10.) | 8 | | Section 10. The Service Use Tax Act is amended by changing | 9 | | Sections 2 and 3-51 as follows:
| 10 | | (35 ILCS 110/2) (from Ch. 120, par. 439.32)
| 11 | | Sec. 2. Definitions. | 12 | | "Use" means the exercise by any person of any right or | 13 | | power
over tangible personal property incident to the ownership | 14 | | of that
property, but does not include the sale or use for | 15 | | demonstration by him
of that property in any form as tangible | 16 | | personal property in the
regular course of business.
"Use" does | 17 | | not mean the interim
use of
tangible personal property nor the | 18 | | physical incorporation of tangible
personal property, as an | 19 | | ingredient or constituent, into other tangible
personal | 20 | | property, (a) which is sold in the regular course of business
| 21 | | or (b) which the person incorporating such ingredient or | 22 | | constituent
therein has undertaken at the time of such purchase | 23 | | to cause to be
transported in interstate commerce to | 24 | | destinations outside the State of
Illinois.
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| 1 | | "Purchased from a serviceman" means the acquisition of the | 2 | | ownership
of, or title to, tangible personal property through a | 3 | | sale of service.
| 4 | | "Purchaser" means any person who, through a sale of | 5 | | service, acquires
the ownership of, or title to, any tangible | 6 | | personal property.
| 7 | | "Cost price" means the consideration paid by the serviceman | 8 | | for a
purchase valued in money, whether paid in money or | 9 | | otherwise, including
cash, credits and services, and shall be | 10 | | determined without any
deduction on account of the supplier's | 11 | | cost of the property sold or on
account of any other expense | 12 | | incurred by the supplier. When a serviceman
contracts out part | 13 | | or all of the services required in his sale of service,
it | 14 | | shall be presumed that the cost price to the serviceman of the | 15 | | property
transferred to him or her by his or her subcontractor | 16 | | is equal to 50% of
the subcontractor's charges to the | 17 | | serviceman in the absence of proof of
the consideration paid by | 18 | | the subcontractor for the purchase of such property.
| 19 | | "Selling price" means the consideration for a sale valued | 20 | | in money
whether received in money or otherwise, including | 21 | | cash, credits and
service, and shall be determined without any | 22 | | deduction on account of the
serviceman's cost of the property | 23 | | sold, the cost of materials used,
labor or service cost or any | 24 | | other expense whatsoever, but does not
include interest or | 25 | | finance charges which appear as separate items on
the bill of | 26 | | sale or sales contract nor charges that are added to prices
by |
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| 1 | | sellers on account of the seller's duty to collect, from the
| 2 | | purchaser, the tax that is imposed by this Act.
| 3 | | "Department" means the Department of Revenue.
| 4 | | "Person" means any natural individual, firm, partnership,
| 5 | | association, joint stock company, joint venture, public or | 6 | | private
corporation, limited liability company, and any | 7 | | receiver, executor, trustee,
guardian or other representative | 8 | | appointed by order of any court.
| 9 | | "Sale of service" means any transaction except:
| 10 | | (1) a retail sale of tangible personal property taxable | 11 | | under the
Retailers' Occupation Tax Act or under the Use | 12 | | Tax Act.
| 13 | | (2) a sale of tangible personal property for the | 14 | | purpose of resale
made in compliance with Section 2c of the | 15 | | Retailers' Occupation Tax Act.
| 16 | | (3) except as hereinafter provided, a sale or transfer | 17 | | of tangible
personal property as an incident to the | 18 | | rendering of service for or by
any governmental body, or | 19 | | for or by any corporation, society,
association, | 20 | | foundation or institution organized and operated
| 21 | | exclusively for charitable, religious or educational | 22 | | purposes or any
not-for-profit corporation, society, | 23 | | association, foundation,
institution or organization which | 24 | | has no compensated officers or
employees and which is | 25 | | organized and operated primarily for the
recreation of | 26 | | persons 55 years of age or older. A limited liability |
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| 1 | | company
may qualify for the exemption under this paragraph | 2 | | only if the limited
liability company is organized and | 3 | | operated exclusively for educational
purposes.
| 4 | | (4) (blank). a sale or transfer of tangible personal
| 5 | | property as an incident to the
rendering of service for | 6 | | interstate carriers for hire for use as rolling stock
| 7 | | moving in interstate commerce or by lessors under a lease | 8 | | of one year or
longer, executed or in effect at the time of | 9 | | purchase of personal property, to
interstate carriers for | 10 | | hire for use as rolling stock moving in interstate
commerce | 11 | | so long as so used by such interstate carriers for hire, | 12 | | and equipment
operated by a telecommunications provider, | 13 | | licensed as a common carrier by the
Federal Communications | 14 | | Commission, which is permanently installed in or affixed
to | 15 | | aircraft moving in interstate commerce.
| 16 | | (4a) a sale or transfer of tangible personal
property | 17 | | as an incident
to the rendering of service for owners, | 18 | | lessors, or shippers of tangible
personal property which is | 19 | | utilized by interstate carriers for hire for
use as rolling | 20 | | stock moving in interstate commerce so long as so used by
| 21 | | interstate carriers for hire, and equipment operated by a
| 22 | | telecommunications provider, licensed as a common carrier | 23 | | by the Federal
Communications Commission, which is | 24 | | permanently installed in or affixed to
aircraft moving in | 25 | | interstate commerce.
| 26 | | (4a-5) on and after July 1, 2003 and through June 30, |
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| 1 | | 2004, a sale or transfer of a motor vehicle
of
the
second | 2 | | division with a gross vehicle weight in excess of 8,000 | 3 | | pounds as an
incident to the rendering of service if that | 4 | | motor
vehicle is subject
to the commercial distribution fee | 5 | | imposed under Section 3-815.1 of the
Illinois Vehicle
Code. | 6 | | Beginning on July 1, 2004 and through June 30, 2005, the | 7 | | use in this State of motor vehicles of the second division: | 8 | | (i) with a gross vehicle weight rating in excess of 8,000 | 9 | | pounds; (ii) that are subject to the commercial | 10 | | distribution fee imposed under Section 3-815.1 of the | 11 | | Illinois Vehicle Code; and (iii) that are primarily used | 12 | | for commercial purposes. Through June 30, 2005, this
| 13 | | exemption applies to repair and replacement parts added | 14 | | after the
initial
purchase of such a motor vehicle if that | 15 | | motor vehicle is used in a manner that
would
qualify for | 16 | | the rolling stock exemption otherwise provided for in this | 17 | | Act. For purposes of this paragraph, "used for commercial | 18 | | purposes" means the transportation of persons or property | 19 | | in furtherance of any commercial or industrial enterprise | 20 | | whether for-hire or not.
| 21 | | (5) a sale or transfer of machinery and equipment used | 22 | | primarily in the
process of the manufacturing or | 23 | | assembling, either in an existing, an expanded
or a new | 24 | | manufacturing facility, of tangible personal property for | 25 | | wholesale or
retail sale or lease, whether such sale or | 26 | | lease is made directly by the
manufacturer or by some other |
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| 1 | | person, whether the materials used in the process
are owned | 2 | | by the manufacturer or some other person, or whether such | 3 | | sale or
lease is made apart from or as an incident to the | 4 | | seller's engaging in a
service occupation and the | 5 | | applicable tax is a Service Use Tax or Service
Occupation | 6 | | Tax, rather than Use Tax or Retailers' Occupation Tax. The | 7 | | exemption provided by this paragraph (5) does not include | 8 | | machinery and equipment used in (i) the generation of | 9 | | electricity for wholesale or retail sale; (ii) the | 10 | | generation or treatment of natural or artificial gas for | 11 | | wholesale or retail sale that is delivered to customers | 12 | | through pipes, pipelines, or mains; or (iii) the treatment | 13 | | of water for wholesale or retail sale that is delivered to | 14 | | customers through pipes, pipelines, or mains. The | 15 | | provisions of this amendatory Act of the 98th General | 16 | | Assembly are declaratory of existing law as to the meaning | 17 | | and scope of this exemption.
| 18 | | (5a) the repairing, reconditioning or remodeling, for | 19 | | a
common carrier by rail, of tangible personal property | 20 | | which belongs to such
carrier for hire, and as to which | 21 | | such carrier receives the physical possession
of the | 22 | | repaired, reconditioned or remodeled item of tangible | 23 | | personal property
in Illinois, and which such carrier | 24 | | transports, or shares with another common
carrier in the | 25 | | transportation of such property, out of Illinois on a | 26 | | standard
uniform bill of lading showing the person who |
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| 1 | | repaired, reconditioned or
remodeled the property to a | 2 | | destination outside Illinois, for use outside
Illinois.
| 3 | | (5b) a sale or transfer of tangible personal property | 4 | | which is produced by
the seller thereof on special order in | 5 | | such a way as to have made the
applicable tax the Service | 6 | | Occupation Tax or the Service Use Tax, rather than
the | 7 | | Retailers' Occupation Tax or the Use Tax, for an interstate | 8 | | carrier by rail
which receives the physical possession of | 9 | | such property in Illinois, and which
transports such | 10 | | property, or shares with another common carrier in the
| 11 | | transportation of such property, out of Illinois on a | 12 | | standard uniform bill of
lading showing the seller of the | 13 | | property as the shipper or consignor of such
property to a | 14 | | destination outside Illinois, for use outside Illinois.
| 15 | | (6) until July 1, 2003, a sale or transfer of | 16 | | distillation machinery
and equipment, sold
as a unit or kit | 17 | | and assembled or installed by the retailer, which
machinery | 18 | | and equipment is certified by the user to be used only for | 19 | | the
production of ethyl alcohol that will be used for | 20 | | consumption as motor fuel
or as a component of motor fuel | 21 | | for the personal use of such user and not
subject to sale | 22 | | or resale.
| 23 | | (7) at the election of any serviceman not required to | 24 | | be
otherwise registered as a retailer under Section 2a of | 25 | | the Retailers'
Occupation Tax Act, made for each fiscal | 26 | | year sales
of service in which the aggregate annual cost |
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| 1 | | price of tangible
personal property transferred as an | 2 | | incident to the sales of service is
less than 35%, or 75% | 3 | | in the case of servicemen transferring prescription
drugs | 4 | | or servicemen engaged in graphic arts production, of the | 5 | | aggregate
annual total gross receipts from all sales of | 6 | | service. The purchase of
such tangible personal property by | 7 | | the serviceman shall be subject to tax
under the Retailers' | 8 | | Occupation Tax Act and the Use Tax Act.
However, if a
| 9 | | primary serviceman who has made the election described in | 10 | | this paragraph
subcontracts service work to a secondary | 11 | | serviceman who has also made the
election described in this | 12 | | paragraph, the primary serviceman does not
incur a Use Tax | 13 | | liability if the secondary serviceman (i) has paid or will | 14 | | pay
Use
Tax on his or her cost price of any tangible | 15 | | personal property transferred
to the primary serviceman | 16 | | and (ii) certifies that fact in writing to the
primary
| 17 | | serviceman.
| 18 | | Tangible personal property transferred incident to the | 19 | | completion of a
maintenance agreement is exempt from the tax | 20 | | imposed pursuant to this Act.
| 21 | | Exemption (5) also includes machinery and equipment used in | 22 | | the general
maintenance or repair of such exempt machinery and | 23 | | equipment or for in-house
manufacture of exempt machinery and | 24 | | equipment. The machinery and equipment exemption does not | 25 | | include machinery and equipment used in (i) the generation of | 26 | | electricity for wholesale or retail sale; (ii) the generation |
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| 1 | | or treatment of natural or artificial gas for wholesale or | 2 | | retail sale that is delivered to customers through pipes, | 3 | | pipelines, or mains; or (iii) the treatment of water for | 4 | | wholesale or retail sale that is delivered to customers through | 5 | | pipes, pipelines, or mains. The provisions of this amendatory | 6 | | Act of the 98th General Assembly are declaratory of existing | 7 | | law as to the meaning and scope of this exemption. For the | 8 | | purposes of exemption
(5), each of these terms shall have the | 9 | | following meanings: (1) "manufacturing
process" shall mean the | 10 | | production of any article of tangible personal
property, | 11 | | whether such article is a finished product or an article for | 12 | | use in
the process of manufacturing or assembling a different | 13 | | article of tangible
personal property, by procedures commonly | 14 | | regarded as manufacturing,
processing, fabricating, or | 15 | | refining which changes some existing
material or materials into | 16 | | a material with a different form, use or
name. In relation to a | 17 | | recognized integrated business composed of a
series of | 18 | | operations which collectively constitute manufacturing, or
| 19 | | individually constitute manufacturing operations, the | 20 | | manufacturing
process shall be deemed to commence with the | 21 | | first operation or stage of
production in the series, and shall | 22 | | not be deemed to end until the
completion of the final product | 23 | | in the last operation or stage of
production in the series; and | 24 | | further, for purposes of exemption (5),
photoprocessing is | 25 | | deemed to be a manufacturing process of tangible
personal | 26 | | property for wholesale or retail sale; (2) "assembling process" |
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| 1 | | shall
mean the production of any article of tangible personal | 2 | | property, whether such
article is a finished product or an | 3 | | article for use in the process of
manufacturing or assembling a | 4 | | different article of tangible personal
property, by the | 5 | | combination of existing materials in a manner commonly
regarded | 6 | | as assembling which results in a material of a different form,
| 7 | | use or name; (3) "machinery" shall mean major mechanical | 8 | | machines or
major components of such machines contributing to a | 9 | | manufacturing or
assembling process; and (4) "equipment" shall | 10 | | include any independent
device or tool separate from any | 11 | | machinery but essential to an
integrated manufacturing or | 12 | | assembly process; including computers
used primarily in a | 13 | | manufacturer's computer
assisted design, computer assisted | 14 | | manufacturing (CAD/CAM) system;
or any subunit or assembly | 15 | | comprising a component of any machinery or
auxiliary, adjunct | 16 | | or attachment parts of machinery, such as tools, dies,
jigs, | 17 | | fixtures, patterns and molds; or any parts which require | 18 | | periodic
replacement in the course of normal operation; but | 19 | | shall not include hand
tools.
Equipment includes chemicals or | 20 | | chemicals acting as catalysts but only if the
chemicals or | 21 | | chemicals acting as catalysts effect a direct and immediate | 22 | | change
upon a
product being manufactured or assembled for | 23 | | wholesale or retail sale or
lease.
The purchaser of such | 24 | | machinery and equipment who has an active
resale registration | 25 | | number shall furnish such number to the seller at the
time of | 26 | | purchase. The user of such machinery and equipment and tools
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| 1 | | without an active resale registration number shall prepare a | 2 | | certificate of
exemption for each transaction stating facts | 3 | | establishing the exemption for
that transaction, which | 4 | | certificate shall be available to the Department
for inspection | 5 | | or audit. The Department shall prescribe the form of the
| 6 | | certificate.
| 7 | | Any informal rulings, opinions or letters issued by the | 8 | | Department in
response to an inquiry or request for any opinion | 9 | | from any person
regarding the coverage and applicability of | 10 | | exemption (5) to specific
devices shall be published, | 11 | | maintained as a public record, and made
available for public | 12 | | inspection and copying. If the informal ruling,
opinion or | 13 | | letter contains trade secrets or other confidential
| 14 | | information, where possible the Department shall delete such | 15 | | information
prior to publication. Whenever such informal | 16 | | rulings, opinions, or
letters contain any policy of general | 17 | | applicability, the Department
shall formulate and adopt such | 18 | | policy as a rule in accordance with the
provisions of the | 19 | | Illinois Administrative Procedure Act.
| 20 | | On and after July 1, 1987, no entity otherwise eligible | 21 | | under exemption
(3) of this Section shall make tax free | 22 | | purchases unless it has an active
exemption identification | 23 | | number issued by the Department.
| 24 | | The purchase, employment and transfer of such tangible | 25 | | personal
property as newsprint and ink for the primary purpose | 26 | | of conveying news
(with or without other information) is not a |
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| 1 | | purchase, use or sale of
service or of tangible personal | 2 | | property within the meaning of this Act.
| 3 | | "Serviceman" means any person who is engaged in the | 4 | | occupation of
making sales of service.
| 5 | | "Sale at retail" means "sale at retail" as defined in the | 6 | | Retailers'
Occupation Tax Act.
| 7 | | "Supplier" means any person who makes sales of tangible | 8 | | personal
property to servicemen for the purpose of resale as an | 9 | | incident to a
sale of service.
| 10 | | "Serviceman maintaining a place of business in this State", | 11 | | or any
like term, means and includes any serviceman:
| 12 | | 1. having or maintaining within this State, directly or | 13 | | by a
subsidiary, an office, distribution house, sales | 14 | | house, warehouse or
other place of business, or any agent | 15 | | or other representative operating
within this State under | 16 | | the authority of the serviceman or its
subsidiary, | 17 | | irrespective of whether such place of business or agent or
| 18 | | other representative is located here permanently or | 19 | | temporarily, or
whether such serviceman or subsidiary is | 20 | | licensed to do business in this
State; | 21 | | 1.1. having a contract with a person located in this | 22 | | State under which the person, for a commission or other | 23 | | consideration based on the sale of service by the | 24 | | serviceman, directly or indirectly refers potential | 25 | | customers to the serviceman by providing to the potential | 26 | | customers a promotional code or other mechanism that allows |
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| 1 | | the serviceman to track purchases referred by such persons. | 2 | | Examples of mechanisms that allow the serviceman to track | 3 | | purchases referred by such persons include but are not | 4 | | limited to the use of a link on the person's Internet | 5 | | website, promotional codes distributed through the | 6 | | person's hand-delivered or mailed material, and | 7 | | promotional codes distributed by the person through radio | 8 | | or other broadcast media. The provisions of this paragraph | 9 | | 1.1 shall apply only if the cumulative gross receipts from | 10 | | sales of service by the serviceman to customers who are | 11 | | referred to the serviceman by all persons in this State | 12 | | under such contracts exceed $10,000 during the preceding 4 | 13 | | quarterly periods ending on the last day of March, June, | 14 | | September, and December; a serviceman meeting the | 15 | | requirements of this paragraph 1.1 shall be presumed to be | 16 | | maintaining a place of business in this State but may rebut | 17 | | this presumption by submitting proof that the referrals or | 18 | | other activities pursued within this State by such persons | 19 | | were not sufficient to meet the nexus standards of the | 20 | | United States Constitution during the preceding 4 | 21 | | quarterly periods; | 22 | | 1.2. beginning July 1, 2011, having a contract with a | 23 | | person located in this State under which: | 24 | | A. the serviceman sells the same or substantially | 25 | | similar line of services as the person located in this | 26 | | State and does so using an identical or substantially |
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| 1 | | similar name, trade name, or trademark as the person | 2 | | located in this State; and | 3 | | B. the serviceman provides a commission or other | 4 | | consideration to the person located in this State based | 5 | | upon the sale of services by the serviceman. | 6 | | The provisions of this paragraph 1.2 shall apply only if | 7 | | the cumulative gross receipts from sales of service by the | 8 | | serviceman to customers in this State under all such | 9 | | contracts exceed $10,000 during the preceding 4 quarterly | 10 | | periods ending on the last day of March, June, September, | 11 | | and December;
| 12 | | 2. soliciting orders for tangible personal property by | 13 | | means of a
telecommunication or television shopping system | 14 | | (which utilizes toll free
numbers) which is intended by the | 15 | | retailer to be broadcast by cable
television or other means | 16 | | of broadcasting, to consumers located in this State;
| 17 | | 3. pursuant to a contract with a broadcaster or | 18 | | publisher located in this
State, soliciting orders for | 19 | | tangible personal property by means of advertising
which is | 20 | | disseminated primarily to consumers located in this State | 21 | | and only
secondarily to bordering jurisdictions;
| 22 | | 4. soliciting orders for tangible personal property by | 23 | | mail if the
solicitations are substantial and recurring and | 24 | | if the retailer benefits
from any banking, financing, debt | 25 | | collection, telecommunication, or
marketing activities | 26 | | occurring in this State or benefits from the location
in |
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| 1 | | this State of authorized installation, servicing, or | 2 | | repair facilities;
| 3 | | 5. being owned or controlled by the same interests | 4 | | which own or
control any retailer engaging in business in | 5 | | the same or similar line of
business in this State;
| 6 | | 6. having a franchisee or licensee operating under its | 7 | | trade name if
the franchisee or licensee is required to | 8 | | collect the tax under this Section;
| 9 | | 7. pursuant to a contract with a cable television | 10 | | operator located in
this State, soliciting orders for | 11 | | tangible personal property by means of
advertising which is | 12 | | transmitted or distributed over a cable television
system | 13 | | in this State; or
| 14 | | 8. engaging in activities in Illinois, which | 15 | | activities in the
state in which the supply business | 16 | | engaging in such activities is located
would constitute | 17 | | maintaining a place of business in that state.
| 18 | | (Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
| 19 | | (35 ILCS 110/3-51)
| 20 | | Sec. 3-51. Motor vehicles; trailers; use as rolling stock | 21 | | definition. | 22 | | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | 23 | | moving
in
interstate commerce" in subsection (b) of Section | 24 | | 3-45 means for motor
vehicles, as defined in Section 1-46 of | 25 | | the Illinois Vehicle Code, and
trailers, as defined in Section |
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| 1 | | 1-209 of the Illinois Vehicle Code, when on 15
or more
| 2 | | occasions in a 12-month period the motor vehicle and trailer | 3 | | has carried
persons
or property
for hire in interstate | 4 | | commerce, even just between points in Illinois, if the
motor | 5 | | vehicle and trailer transports persons whose journeys or | 6 | | property
whose shipments originate or terminate outside | 7 | | Illinois. This definition
applies to all property purchased for | 8 | | the purpose of being attached to those
motor
vehicles or | 9 | | trailers as a part thereof.
| 10 | | (b) (Blank). On and after July 1, 2003 and through June 30, | 11 | | 2004, "use as rolling stock moving in interstate
commerce" in
| 12 | | paragraphs (4) and (4a) of the definition of "sale of service" | 13 | | in Section 2
and subsection (b) of Section 3-45 occurs for | 14 | | motor vehicles, as defined in
Section 1-146 of the Illinois | 15 | | Vehicle Code, when
during a 12-month period the rolling stock | 16 | | has carried persons or property for
hire in
interstate commerce | 17 | | for 51% of its total trips and transports persons whose
| 18 | | journeys or
property whose shipments originate or terminate | 19 | | outside Illinois. Trips that
are only
between points in | 20 | | Illinois shall not be counted as interstate trips when
| 21 | | calculating whether
the tangible personal property qualifies | 22 | | for the exemption but such trips shall
be included
in total | 23 | | trips taken.
| 24 | | (c) This subsection (c) applies to motor vehicles, other | 25 | | than limousines, purchased through June 30, 2017. For motor | 26 | | vehicles, other than limousines, purchased on or after July 1, |
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| 1 | | 2017, subsection (d-5) applies. This subsection (c) applies to | 2 | | limousines purchased before, on, or after July 1, 2017. "Use | 3 | | Beginning July 1, 2004, "use as rolling stock moving in | 4 | | interstate commerce" in paragraph paragraphs (4) and (4a) of | 5 | | the definition of "sale of service" in Section 2 and subsection | 6 | | (b) of Section 3-45 occurs for motor vehicles, as defined in | 7 | | Section 1-146 of the Illinois Vehicle Code, when during a | 8 | | 12-month period the rolling stock has carried persons or | 9 | | property for hire in interstate commerce for greater than 50% | 10 | | of its total trips for that period or for greater than 50% of | 11 | | its total miles for that period. The person claiming the | 12 | | exemption shall make an election at the time of purchase to use | 13 | | either the trips or mileage method. Persons who purchased motor | 14 | | vehicles prior to July 1, 2004 shall make an election to use | 15 | | either the trips or mileage method and document that election | 16 | | in their books and records. If no election is made under this | 17 | | subsection to use the trips or mileage method, the person shall | 18 | | be deemed to have chosen the mileage method. | 19 | | For purposes of determining qualifying trips or miles, | 20 | | motor vehicles that carry persons or property for hire, even | 21 | | just between points in Illinois, will be considered used for | 22 | | hire in interstate commerce if the motor vehicle transports | 23 | | persons whose journeys or property whose shipments originate or | 24 | | terminate outside Illinois. The exemption for motor vehicles
| 25 | | used as rolling stock moving in interstate commerce may be
| 26 | | claimed only for the following vehicles: (i) motor vehicles |
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| 1 | | whose gross vehicle weight
rating exceeds 16,000 pounds; and | 2 | | (ii) limousines, as defined in Section 1-139.1 of the Illinois | 3 | | Vehicle Code. Through June 30, 2017, this This definition | 4 | | applies to all property purchased for the purpose of being | 5 | | attached to those motor vehicles as a part thereof. On and | 6 | | after July 1, 2017, this definition applies to property | 7 | | purchased for the purpose of being attached to limousines as a | 8 | | part thereof. | 9 | | (d) For purchases made through June 30, 2017 Beginning July | 10 | | 1, 2004 , "use as rolling stock moving in interstate commerce" | 11 | | in paragraph paragraphs (4) and (4a) of the definition of "sale | 12 | | of service" in Section 2 and subsection (b) of Section 3-45 | 13 | | occurs for trailers, as defined in Section 1-209 of the | 14 | | Illinois Vehicle Code, semitrailers as defined in Section 1-187 | 15 | | of the Illinois Vehicle Code, and pole trailers as defined in | 16 | | Section 1-161 of the Illinois Vehicle Code, when during a | 17 | | 12-month period the rolling stock has carried persons or | 18 | | property for hire in interstate commerce for greater than 50% | 19 | | of its total trips for that period or for greater than 50% of | 20 | | its total miles for that period. The person claiming the | 21 | | exemption for a trailer or trailers that will not be dedicated | 22 | | to a motor vehicle or group of motor vehicles shall make an | 23 | | election at the time of purchase to use either the trips or | 24 | | mileage method. Persons who purchased trailers prior to July 1, | 25 | | 2004 that are not dedicated to a motor vehicle or group of | 26 | | motor vehicles shall make an election to use either the trips |
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| 1 | | or mileage method and document that election in their books and | 2 | | records. If no election is made under this subsection to use | 3 | | the trips or mileage method, the person shall be deemed to have | 4 | | chosen the mileage method. | 5 | | For purposes of determining qualifying trips or miles, | 6 | | trailers, semitrailers, or pole trailers that carry property | 7 | | for hire, even just between points in Illinois, will be | 8 | | considered used for hire in interstate commerce if the | 9 | | trailers, semitrailers, or pole trailers transport property | 10 | | whose shipments originate or terminate outside Illinois. This | 11 | | definition applies to all property purchased for the purpose of | 12 | | being attached to those trailers, semitrailers, or pole | 13 | | trailers as a part thereof. In lieu of a person providing | 14 | | documentation regarding the qualifying use of each individual | 15 | | trailer, semitrailer, or pole trailer, that person may document | 16 | | such qualifying use by providing documentation of the | 17 | | following: | 18 | | (1) If a trailer, semitrailer, or pole trailer is | 19 | | dedicated to a motor vehicle that qualifies as rolling | 20 | | stock moving in interstate commerce under subsection (c) of | 21 | | this Section, then that trailer, semitrailer, or pole | 22 | | trailer qualifies as rolling stock moving in interstate | 23 | | commerce under this subsection. | 24 | | (2) If a trailer, semitrailer, or pole trailer is | 25 | | dedicated to a group of motor vehicles that all qualify as | 26 | | rolling stock moving in interstate commerce under |
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| 1 | | subsection (c) of this Section, then that trailer, | 2 | | semitrailer, or pole trailer qualifies as rolling stock | 3 | | moving in interstate commerce under this subsection. | 4 | | (3) If one or more trailers, semitrailers, or pole | 5 | | trailers are dedicated to a group of motor vehicles and not | 6 | | all of those motor vehicles in that group qualify as | 7 | | rolling stock moving in interstate commerce under | 8 | | subsection (c) of this Section, then the percentage of | 9 | | those trailers, semitrailers, or pole trailers that | 10 | | qualifies as rolling stock moving in interstate commerce | 11 | | under this subsection is equal to the percentage of those | 12 | | motor vehicles in that group that qualify as rolling stock | 13 | | moving in interstate commerce under subsection (c) of this | 14 | | Section to which those trailers, semitrailers, or pole | 15 | | trailers are dedicated. However, to determine the | 16 | | qualification for the exemption provided under this item | 17 | | (3), the mathematical application of the qualifying | 18 | | percentage to one or more trailers, semitrailers, or pole | 19 | | trailers under this subpart shall not be allowed as to any | 20 | | fraction of a trailer, semitrailer, or pole trailer.
| 21 | | (d-5) For motor vehicles and trailers purchased on or after | 22 | | July 1, 2017, "use as rolling stock moving in interstate | 23 | | commerce" means that: | 24 | | (1) the motor vehicle or trailer is used to transport | 25 | | persons or property for hire; | 26 | | (2) for purposes of the exemption under paragraph (4a) |
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| 1 | | of the definition of "sale of service" in Section 2, the | 2 | | purchaser who is an owner, lessor, or shipper claiming the | 3 | | exemption certifies that the motor vehicle or trailer will | 4 | | be utilized, from the time of purchase and continuing | 5 | | through the statute of limitations for issuing a notice of | 6 | | tax liability under this Act, by an interstate carrier or | 7 | | carriers for hire who hold, and are required by Federal | 8 | | Motor Carrier Safety Administration regulations to hold, | 9 | | an active USDOT Number with the Carrier Operation listed as | 10 | | "Interstate" and the Operation Classification listed as | 11 | | "authorized for hire", "exempt for hire", or both | 12 | | "authorized for hire" and "exempt for hire"; and | 13 | | (3) for motor vehicles, the gross vehicle weight rating | 14 | | exceeds 16,000 pounds. | 15 | | The definition of "use as rolling stock moving in | 16 | | interstate commerce" in this subsection (d-5) applies to all | 17 | | property purchased on or after July 1, 2017 for the purpose of | 18 | | being attached to a motor vehicle or trailer as a part thereof, | 19 | | regardless of whether the motor vehicle or trailer was | 20 | | purchased before, on, or after July 1, 2017. | 21 | | If an item ceases to meet requirements (1) through (3) | 22 | | under this subsection (d-5), then the tax is imposed on the | 23 | | selling price, allowing for a reasonable depreciation for the | 24 | | period during which the item qualified for the exemption. | 25 | | For purposes of this subsection (d-5): | 26 | | "Motor vehicle" excludes limousines, but otherwise |
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| 1 | | means that term as defined in Section 1-146 of the Illinois | 2 | | Vehicle Code. | 3 | | "Trailer" means (i) "trailer", as defined in Section | 4 | | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | 5 | | defined in Section 1-187 of the Illinois Vehicle Code, and | 6 | | (iii) "pole trailer", as defined in Section 1-161 of the | 7 | | Illinois Vehicle Code. | 8 | | (e) For aircraft and watercraft purchased on or after | 9 | | January 1, 2014, "use as rolling stock moving in interstate | 10 | | commerce" in (i) paragraph paragraphs (4) and (4a) of the | 11 | | definition of "sale of service" in Section 2 and (ii) | 12 | | subsection (b) of Section 3-45 occurs when, during a 12-month | 13 | | period, the rolling stock has carried persons or property for | 14 | | hire in interstate commerce for greater than 50% of its total | 15 | | trips for that period or for greater than 50% of its total | 16 | | miles for that period. The person claiming the exemption shall | 17 | | make an election at the time of purchase to use either the | 18 | | trips or mileage method and document that election in their | 19 | | books and records. If no election is made under this subsection | 20 | | to use the trips or mileage method, the person shall be deemed | 21 | | to have chosen the mileage method. For aircraft, flight hours | 22 | | may be used in lieu of recording miles in determining whether | 23 | | the aircraft meets the mileage test in this subsection. For | 24 | | watercraft, nautical miles or trip hours may be used in lieu of | 25 | | recording miles in determining whether the watercraft meets the | 26 | | mileage test in this subsection. |
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| 1 | | Notwithstanding any other provision of law to the contrary, | 2 | | property purchased on or after January 1, 2014 for the purpose | 3 | | of being attached to aircraft or watercraft as a part thereof | 4 | | qualifies as rolling stock moving in interstate commerce only | 5 | | if the aircraft or watercraft to which it will be attached | 6 | | qualifies as rolling stock moving in interstate commerce under | 7 | | the test set forth in this subsection (e), regardless of when | 8 | | the aircraft or watercraft was purchased. Persons who purchased | 9 | | aircraft or watercraft prior to January 1, 2014 shall make an | 10 | | election to use either the trips or mileage method and document | 11 | | that election in their books and records for the purpose of | 12 | | determining whether property purchased on or after January 1, | 13 | | 2014 for the purpose of being attached to aircraft or | 14 | | watercraft as a part thereof qualifies as rolling stock moving | 15 | | in interstate commerce under this subsection (e). | 16 | | (f) The election to use either the trips or mileage method | 17 | | made under the provisions of subsections (c), (d), or (e) of | 18 | | this Section will remain in effect for the duration of the | 19 | | purchaser's ownership of that item. | 20 | | (Source: P.A. 98-584, eff. 8-27-13.)
| 21 | | Section 15. The Service Occupation Tax Act is amended by | 22 | | changing Sections 2 and 2d as follows:
| 23 | | (35 ILCS 115/2) (from Ch. 120, par. 439.102)
| 24 | | Sec. 2. "Transfer" means any transfer of the title to |
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| 1 | | property or of
the ownership of property whether or not the | 2 | | transferor retains title as
security for the payment of amounts | 3 | | due him from the transferee.
| 4 | | "Cost Price" means the consideration paid by the serviceman | 5 | | for a
purchase valued in money, whether paid in money or | 6 | | otherwise, including
cash, credits and services, and shall be | 7 | | determined without any deduction
on account of the supplier's | 8 | | cost of the property sold or on account of any
other expense | 9 | | incurred by the supplier. When a serviceman contracts out
part | 10 | | or all of the services required in his sale of service, it | 11 | | shall be
presumed that the cost price to the serviceman of the | 12 | | property
transferred to him by his or her subcontractor is | 13 | | equal to 50% of the
subcontractor's charges to the serviceman | 14 | | in the absence of proof of the
consideration paid by the | 15 | | subcontractor for the purchase of such
property.
| 16 | | "Department" means the Department of Revenue.
| 17 | | "Person" means any natural individual, firm, partnership, | 18 | | association, joint
stock company, joint venture, public or | 19 | | private corporation, limited liability
company, and any | 20 | | receiver, executor, trustee, guardian or other representative
| 21 | | appointed by order of any court.
| 22 | | "Sale of Service" means any transaction except:
| 23 | | (a) A retail sale of tangible personal property taxable | 24 | | under the Retailers'
Occupation Tax Act or under the Use Tax | 25 | | Act.
| 26 | | (b) A sale of tangible personal property for the purpose of |
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| 1 | | resale made in
compliance with Section 2c of the Retailers' | 2 | | Occupation Tax Act.
| 3 | | (c) Except as hereinafter provided, a sale or transfer of | 4 | | tangible personal
property as an incident to the rendering of | 5 | | service for or by any governmental
body or for or by any | 6 | | corporation, society, association, foundation or
institution | 7 | | organized and operated exclusively for charitable, religious | 8 | | or
educational purposes or any not-for-profit corporation, | 9 | | society, association,
foundation, institution or organization | 10 | | which has no compensated officers or
employees and which is | 11 | | organized and operated primarily for the recreation of
persons | 12 | | 55 years of age or older. A limited liability company may | 13 | | qualify for
the exemption under this paragraph only if the | 14 | | limited liability company is
organized and operated | 15 | | exclusively for educational purposes.
| 16 | | (d) (Blank). A sale or transfer of tangible personal
| 17 | | property
as an incident to the
rendering of service for | 18 | | interstate carriers for hire for use as rolling stock
moving in | 19 | | interstate commerce or lessors under leases of one year or | 20 | | longer,
executed or in effect at the time of purchase, to | 21 | | interstate carriers for hire
for use as rolling stock moving in | 22 | | interstate commerce, and equipment operated
by a | 23 | | telecommunications provider, licensed as a common
carrier by | 24 | | the Federal Communications Commission, which is permanently
| 25 | | installed in or affixed to aircraft moving in interstate | 26 | | commerce.
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| 1 | | (d-1) A sale or transfer of tangible personal
property as | 2 | | an incident to
the rendering of service for owners, lessors or | 3 | | shippers of tangible personal
property which is utilized by | 4 | | interstate carriers for hire for use as rolling
stock moving in | 5 | | interstate commerce, and equipment operated
by a | 6 | | telecommunications provider, licensed as a common carrier by | 7 | | the
Federal Communications Commission, which is permanently | 8 | | installed in or
affixed to aircraft moving in interstate | 9 | | commerce.
| 10 | | (d-1.1) On and after July 1, 2003 and through June 30, | 11 | | 2004, a sale or transfer of a motor vehicle
of the
second | 12 | | division with a gross vehicle weight in excess of 8,000 pounds | 13 | | as an
incident to the rendering of service if that motor
| 14 | | vehicle is subject
to the commercial distribution fee imposed | 15 | | under Section 3-815.1 of the
Illinois Vehicle
Code. Beginning | 16 | | on July 1, 2004 and through June 30, 2005, the use in this | 17 | | State of motor vehicles of the second division: (i) with a | 18 | | gross vehicle weight rating in excess of 8,000 pounds; (ii) | 19 | | that are subject to the commercial distribution fee imposed | 20 | | under Section 3-815.1 of the Illinois Vehicle Code; and (iii) | 21 | | that are primarily used for commercial purposes. Through June | 22 | | 30, 2005, this exemption applies to repair and replacement | 23 | | parts added after the
initial
purchase of such a motor vehicle | 24 | | if that motor vehicle is used in a manner that
would
qualify | 25 | | for the rolling stock exemption otherwise provided for in this | 26 | | Act. For purposes of this paragraph, "used for commercial |
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| 1 | | purposes" means the transportation of persons or property in | 2 | | furtherance of any commercial or industrial enterprise whether | 3 | | for-hire or not.
| 4 | | (d-2) The repairing, reconditioning or remodeling, for a | 5 | | common carrier by
rail, of tangible personal property which | 6 | | belongs to such carrier for hire, and
as to which such carrier | 7 | | receives the physical possession of the repaired,
| 8 | | reconditioned or remodeled item of tangible personal property | 9 | | in Illinois, and
which such carrier transports, or shares with | 10 | | another common carrier in the
transportation of such property, | 11 | | out of Illinois on a standard uniform bill of
lading showing | 12 | | the person who repaired, reconditioned or remodeled the | 13 | | property
as the shipper or consignor of such property to a | 14 | | destination outside Illinois,
for use outside Illinois.
| 15 | | (d-3) A sale or transfer of tangible personal property | 16 | | which
is produced by the seller thereof on special order in | 17 | | such a way as to have
made the applicable tax the Service | 18 | | Occupation Tax or the Service Use Tax,
rather than the | 19 | | Retailers' Occupation Tax or the Use Tax, for an interstate
| 20 | | carrier by rail which receives the physical possession of such | 21 | | property in
Illinois, and which transports such property, or | 22 | | shares with another common
carrier in the transportation of | 23 | | such property, out of Illinois on a standard
uniform bill of | 24 | | lading showing the seller of the property as the shipper or
| 25 | | consignor of such property to a destination outside Illinois, | 26 | | for use outside
Illinois.
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| 1 | | (d-4) Until January 1, 1997, a sale, by a registered | 2 | | serviceman paying tax
under this Act to the Department, of | 3 | | special order printed materials delivered
outside Illinois and | 4 | | which are not returned to this State, if delivery is made
by | 5 | | the seller or agent of the seller, including an agent who | 6 | | causes the product
to be delivered outside Illinois by a common | 7 | | carrier or the U.S.
postal service.
| 8 | | (e) A sale or transfer of machinery and equipment used | 9 | | primarily in
the process of the manufacturing or assembling, | 10 | | either in an existing, an
expanded or a new manufacturing | 11 | | facility, of tangible personal property for
wholesale or retail | 12 | | sale or lease, whether such sale or lease is made directly
by | 13 | | the manufacturer or by some other person, whether the materials | 14 | | used in the
process are owned by the manufacturer or some other | 15 | | person, or whether such
sale or lease is made apart from or as | 16 | | an incident to the seller's engaging in
a service occupation | 17 | | and the applicable tax is a Service Occupation Tax or
Service | 18 | | Use Tax, rather than Retailers' Occupation Tax or Use Tax. The | 19 | | exemption provided by this paragraph (e) does not include | 20 | | machinery and equipment used in (i) the generation of | 21 | | electricity for wholesale or retail sale; (ii) the generation | 22 | | or treatment of natural or artificial gas for wholesale or | 23 | | retail sale that is delivered to customers through pipes, | 24 | | pipelines, or mains; or (iii) the treatment of water for | 25 | | wholesale or retail sale that is delivered to customers through | 26 | | pipes, pipelines, or mains. The provisions of this amendatory |
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| 1 | | Act of the 98th General Assembly are declaratory of existing | 2 | | law as to the meaning and scope of this exemption.
| 3 | | (f) Until July 1, 2003, the sale or transfer of | 4 | | distillation
machinery
and equipment, sold as a
unit or kit and | 5 | | assembled or installed by the retailer, which machinery
and | 6 | | equipment is certified by the user to be used only for the | 7 | | production
of ethyl alcohol that will be used for consumption | 8 | | as motor fuel or as a
component of motor fuel for the personal | 9 | | use of such user and not subject
to sale or resale.
| 10 | | (g) At the election of any serviceman not required to be | 11 | | otherwise
registered as a retailer under Section 2a of the | 12 | | Retailers' Occupation Tax Act,
made for each fiscal year sales | 13 | | of service in which the aggregate annual cost
price of tangible | 14 | | personal property transferred as an incident to the sales of
| 15 | | service is less than 35% (75% in the case of servicemen | 16 | | transferring
prescription drugs or servicemen engaged in | 17 | | graphic arts production) of the
aggregate annual total gross | 18 | | receipts from all sales of service. The purchase
of such | 19 | | tangible personal property by the serviceman shall be subject | 20 | | to tax
under the Retailers' Occupation Tax Act and the Use Tax | 21 | | Act.
However, if a
primary serviceman who has made the election | 22 | | described in this paragraph
subcontracts service work to a | 23 | | secondary serviceman who has also made the
election described | 24 | | in this paragraph, the primary serviceman does not
incur a Use | 25 | | Tax liability if the secondary serviceman (i) has paid or will | 26 | | pay
Use
Tax on his or her cost price of any tangible personal |
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| 1 | | property transferred
to the primary serviceman and (ii) | 2 | | certifies that fact in writing to the
primary serviceman.
| 3 | | Tangible personal property transferred incident to the | 4 | | completion of a
maintenance agreement is exempt from the tax | 5 | | imposed pursuant to this Act.
| 6 | | Exemption (e) also includes machinery and equipment used in | 7 | | the
general maintenance or repair of such exempt machinery and | 8 | | equipment or for
in-house manufacture of exempt machinery and | 9 | | equipment.
The machinery and equipment exemption does not | 10 | | include machinery and equipment used in (i) the generation of | 11 | | electricity for wholesale or retail sale; (ii) the generation | 12 | | or treatment of natural or artificial gas for wholesale or | 13 | | retail sale that is delivered to customers through pipes, | 14 | | pipelines, or mains; or (iii) the treatment of water for | 15 | | wholesale or retail sale that is delivered to customers through | 16 | | pipes, pipelines, or mains. The provisions of this amendatory | 17 | | Act of the 98th General Assembly are declaratory of existing | 18 | | law as to the meaning and scope of this exemption. For the | 19 | | purposes of exemption (e), each of these terms shall have the | 20 | | following
meanings: (1) "manufacturing process" shall mean the | 21 | | production of any
article of tangible personal property, | 22 | | whether such article is a
finished product or an article for | 23 | | use in the process of manufacturing
or assembling a different | 24 | | article of tangible personal property, by
procedures commonly | 25 | | regarded as manufacturing, processing, fabricating,
or | 26 | | refining which changes some existing material or materials into |
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| 1 | | a
material with a different form, use or name. In relation to a
| 2 | | recognized integrated business composed of a series of | 3 | | operations which
collectively constitute manufacturing, or | 4 | | individually constitute
manufacturing operations, the | 5 | | manufacturing process shall be deemed to
commence with the | 6 | | first operation or stage of production in the series,
and shall | 7 | | not be deemed to end until the completion of the final product
| 8 | | in the last operation or stage of production in the series; and | 9 | | further for
purposes of exemption (e), photoprocessing is | 10 | | deemed to be a manufacturing
process of tangible personal | 11 | | property for wholesale or retail sale;
(2) "assembling process" | 12 | | shall mean the production of any article of
tangible personal | 13 | | property, whether such article is a finished product
or an | 14 | | article for use in the process of manufacturing or assembling a
| 15 | | different article of tangible personal property, by the | 16 | | combination of
existing materials in a manner commonly regarded | 17 | | as assembling which
results in a material of a different form, | 18 | | use or name; (3) "machinery"
shall mean major mechanical | 19 | | machines or major components of such machines
contributing to a | 20 | | manufacturing or assembling process; and (4) "equipment"
shall | 21 | | include any independent device or tool separate from any | 22 | | machinery but
essential to an integrated manufacturing or | 23 | | assembly process; including
computers used primarily in a | 24 | | manufacturer's computer
assisted design, computer assisted | 25 | | manufacturing (CAD/CAM) system; or any
subunit or assembly | 26 | | comprising a component of any machinery or auxiliary,
adjunct |
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| 1 | | or attachment parts of machinery, such as tools, dies, jigs, | 2 | | fixtures,
patterns and molds; or any parts which require | 3 | | periodic replacement in the
course of normal operation; but | 4 | | shall not include hand tools. Equipment
includes chemicals or | 5 | | chemicals acting as catalysts but only if the chemicals
or | 6 | | chemicals acting as catalysts effect a direct and immediate | 7 | | change upon a
product being manufactured or assembled for | 8 | | wholesale or retail sale or lease.
The purchaser of such | 9 | | machinery and equipment
who has an active resale registration | 10 | | number shall furnish such number to
the seller at the time of | 11 | | purchase. The purchaser of such machinery and
equipment and | 12 | | tools without an active resale registration number shall | 13 | | furnish
to the seller a certificate of exemption for each | 14 | | transaction stating facts
establishing the exemption for that | 15 | | transaction, which certificate shall
be available to the | 16 | | Department for inspection or audit.
| 17 | | Except as provided in Section 2d of this Act, the rolling | 18 | | stock exemption
applies to rolling
stock
used by an interstate
| 19 | | carrier for hire, even just between points in Illinois, if such | 20 | | rolling
stock transports, for hire, persons whose journeys or | 21 | | property whose
shipments originate or terminate outside | 22 | | Illinois.
| 23 | | Any informal rulings, opinions or letters issued by the | 24 | | Department in
response to an inquiry or request for any opinion | 25 | | from any person
regarding the coverage and applicability of | 26 | | exemption (e) to specific
devices shall be published, |
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| 1 | | maintained as a public record, and made
available for public | 2 | | inspection and copying. If the informal ruling,
opinion or | 3 | | letter contains trade secrets or other confidential
| 4 | | information, where possible the Department shall delete such | 5 | | information
prior to publication. Whenever such informal | 6 | | rulings, opinions, or
letters contain any policy of general | 7 | | applicability, the Department
shall formulate and adopt such | 8 | | policy as a rule in accordance with the
provisions of the | 9 | | Illinois Administrative Procedure Act.
| 10 | | On and after July 1, 1987, no entity otherwise eligible | 11 | | under exemption
(c) of this Section shall make tax free | 12 | | purchases unless it has an active
exemption identification | 13 | | number issued by the Department.
| 14 | | "Serviceman" means any person who is engaged in the | 15 | | occupation of
making sales of service.
| 16 | | "Sale at Retail" means "sale at retail" as defined in the | 17 | | Retailers'
Occupation Tax Act.
| 18 | | "Supplier" means any person who makes sales of tangible | 19 | | personal
property to servicemen for the purpose of resale as an | 20 | | incident to a
sale of service.
| 21 | | (Source: P.A. 98-583, eff. 1-1-14.)
| 22 | | (35 ILCS 115/2d)
| 23 | | Sec. 2d. Motor vehicles; trailers; use as rolling stock | 24 | | definition. | 25 | | (a) (Blank). Through June
30, 2003, "use as
rolling stock |
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| 1 | | moving in
interstate commerce" in subsections (d) and (d-1) of | 2 | | the definition of "sale of
service" in Section 2 means for | 3 | | motor vehicles, as defined in Section 1-146 of
the Illinois | 4 | | Vehicle Code, and trailers, as defined in Section 1-209 of the
| 5 | | Illinois Vehicle Code, when on 15 or more occasions in a | 6 | | 12-month period the
motor vehicle and trailer has carried | 7 | | persons or property for hire in
interstate commerce, even just | 8 | | between points in Illinois, if the motor vehicle
and trailer | 9 | | transports persons whose journeys or property whose shipments
| 10 | | originate or terminate outside Illinois.
This definition | 11 | | applies to all property purchased for the purpose of being
| 12 | | attached to those motor vehicles or trailers as a part thereof.
| 13 | | (b) (Blank). On and after July 1, 2003 and through June 30, | 14 | | 2004, "use as rolling stock moving in interstate
commerce" in
| 15 | | paragraphs (d) and (d-1) of the definition of "sale of service" | 16 | | in
Section 2 occurs for motor vehicles, as defined in Section | 17 | | 1-146 of the
Illinois Vehicle Code,
when during a 12-month | 18 | | period the rolling stock has carried persons or property
for | 19 | | hire
in interstate commerce for 51% of its total trips and | 20 | | transports persons whose
journeys or
property whose shipments | 21 | | originate or terminate outside Illinois. Trips that
are only
| 22 | | between points in Illinois will not be counted as interstate | 23 | | trips when
calculating whether
the tangible personal property | 24 | | qualifies for the exemption but such trips will
be included
in | 25 | | total trips taken.
| 26 | | (c) This subsection (c) applies to motor vehicles, other |
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| 1 | | than limousines, purchased through June 30, 2017. For motor | 2 | | vehicles, other than limousines, purchased on or after July 1, | 3 | | 2017, subsection (d-5) applies. This subsection (c) applies to | 4 | | limousines purchased before, on, or after July 1, 2017. "Use | 5 | | Beginning July 1, 2004, "use as rolling stock moving in | 6 | | interstate commerce" in paragraph paragraphs (d) and (d-1) of | 7 | | the definition of "sale of service" in Section 2 occurs for | 8 | | motor vehicles, as defined in Section 1-146 of the Illinois | 9 | | Vehicle Code, when during a 12-month period the rolling stock | 10 | | has carried persons or property for hire in interstate commerce | 11 | | for greater than 50% of its total trips for that period or for | 12 | | greater than 50% of its total miles for that period. The person | 13 | | claiming the exemption shall make an election at the time of | 14 | | purchase to use either the trips or mileage method. Persons who | 15 | | purchased motor vehicles prior to July 1, 2004 shall make an | 16 | | election to use either the trips or mileage method and document | 17 | | that election in their books and records. If no election is | 18 | | made under this subsection to use the trips or mileage method, | 19 | | the person shall be deemed to have chosen the mileage method. | 20 | | For purposes of determining qualifying trips or miles, | 21 | | motor vehicles that carry persons or property for hire, even | 22 | | just between points in Illinois, will be considered used for | 23 | | hire in interstate commerce if the motor vehicle transports | 24 | | persons whose journeys or property whose shipments originate or | 25 | | terminate outside Illinois. The exemption for motor vehicles
| 26 | | used as rolling stock moving in interstate commerce may be
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| 1 | | claimed only for the following vehicles: (i) motor vehicles | 2 | | whose gross vehicle weight
rating exceeds 16,000 pounds; and | 3 | | (ii) limousines, as defined in Section 1-139.1 of the Illinois | 4 | | Vehicle Code. Through June 30, 2017, this This definition | 5 | | applies to all property purchased for the purpose of being | 6 | | attached to those motor vehicles as a part thereof. On and | 7 | | after July 1, 2017, this definition applies to property | 8 | | purchased for the purpose of being attached to limousines as a | 9 | | part thereof. | 10 | | (d) For purchases made through June 30, 2017 Beginning July | 11 | | 1, 2004 , "use as rolling stock moving in interstate commerce" | 12 | | in paragraph paragraphs (d) and (d-1) of the definition of | 13 | | "sale of service" in Section 2 occurs for trailers, as defined | 14 | | in Section 1-209 of the Illinois Vehicle Code, semitrailers as | 15 | | defined in Section 1-187 of the Illinois Vehicle Code, and pole | 16 | | trailers as defined in Section 1-161 of the Illinois Vehicle | 17 | | Code, when during a 12-month period the rolling stock has | 18 | | carried persons or property for hire in interstate commerce for | 19 | | greater than 50% of its total trips for that period or for | 20 | | greater than 50% of its total miles for that period. The person | 21 | | claiming the exemption for a trailer or trailers that will not | 22 | | be dedicated to a motor vehicle or group of motor vehicles | 23 | | shall make an election at the time of purchase to use either | 24 | | the trips or mileage method. Persons who purchased trailers | 25 | | prior to July 1, 2004 that are not dedicated to a motor vehicle | 26 | | or group of motor vehicles shall make an election to use either |
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| 1 | | the trips or mileage method and document that election in their | 2 | | books and records. If no election is made under this subsection | 3 | | to use the trips or mileage method, the person shall be deemed | 4 | | to have chosen the mileage method. | 5 | | For purposes of determining qualifying trips or miles, | 6 | | trailers, semitrailers, or pole trailers that carry property | 7 | | for hire, even just between points in Illinois, will be | 8 | | considered used for hire in interstate commerce if the | 9 | | trailers, semitrailers, or pole trailers transport property | 10 | | whose shipments originate or terminate outside Illinois. This | 11 | | definition applies to all property purchased for the purpose of | 12 | | being attached to those trailers, semitrailers, or pole | 13 | | trailers as a part thereof. In lieu of a person providing | 14 | | documentation regarding the qualifying use of each individual | 15 | | trailer, semitrailer, or pole trailer, that person may document | 16 | | such qualifying use by providing documentation of the | 17 | | following: | 18 | | (1) If a trailer, semitrailer, or pole trailer is | 19 | | dedicated to a motor vehicle that qualifies as rolling | 20 | | stock moving in interstate commerce under subsection (c) of | 21 | | this Section, then that trailer, semitrailer, or pole | 22 | | trailer qualifies as rolling stock moving in interstate | 23 | | commerce under this subsection. | 24 | | (2) If a trailer, semitrailer, or pole trailer is | 25 | | dedicated to a group of motor vehicles that all qualify as | 26 | | rolling stock moving in interstate commerce under |
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| 1 | | subsection (c) of this Section, then that trailer, | 2 | | semitrailer, or pole trailer qualifies as rolling stock | 3 | | moving in interstate commerce under this subsection. | 4 | | (3) If one or more trailers, semitrailers, or pole | 5 | | trailers are dedicated to a group of motor vehicles and not | 6 | | all of those motor vehicles in that group qualify as | 7 | | rolling stock moving in interstate commerce under | 8 | | subsection (c) of this Section, then the percentage of | 9 | | those trailers, semitrailers, or pole trailers that | 10 | | qualifies as rolling stock moving in interstate commerce | 11 | | under this subsection is equal to the percentage of those | 12 | | motor vehicles in that group that qualify as rolling stock | 13 | | moving in interstate commerce under subsection (c) of this | 14 | | Section to which those trailers, semitrailers, or pole | 15 | | trailers are dedicated. However, to determine the | 16 | | qualification for the exemption provided under this item | 17 | | (3), the mathematical application of the qualifying | 18 | | percentage to one or more trailers, semitrailers, or pole | 19 | | trailers under this subpart shall not be allowed as to any | 20 | | fraction of a trailer, semitrailer, or pole trailer.
| 21 | | (d-5) For motor vehicles and trailers purchased on or after | 22 | | July 1, 2017, "use as rolling stock moving in interstate | 23 | | commerce" means that: | 24 | | (1) the motor vehicle or trailer is used to transport | 25 | | persons or property for hire; | 26 | | (2) for purposes of the exemption under paragraph (d-1) |
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| 1 | | of the definition of "sale of service" in Section 2, the | 2 | | purchaser who is an owner, lessor, or shipper claiming the | 3 | | exemption certifies that the motor vehicle or trailer will | 4 | | be utilized, from the time of purchase and continuing | 5 | | through the statute of limitations for issuing a notice of | 6 | | tax liability under this Act, by an interstate carrier or | 7 | | carriers for hire who hold, and are required by Federal | 8 | | Motor Carrier Safety Administration regulations to hold, | 9 | | an active USDOT Number with the Carrier Operation listed as | 10 | | "Interstate" and the Operation Classification listed as | 11 | | "authorized for hire", "exempt for hire", or both | 12 | | "authorized for hire" and "exempt for hire"; and | 13 | | (3) for motor vehicles, the gross vehicle weight rating | 14 | | exceeds 16,000 pounds. | 15 | | The definition of "use as rolling stock moving in | 16 | | interstate commerce" in this subsection (d-5) applies to all | 17 | | property purchased on or after July 1, 2017 for the purpose of | 18 | | being attached to a motor vehicle or trailer as a part thereof, | 19 | | regardless of whether the motor vehicle or trailer was | 20 | | purchased before, on, or after July 1, 2017. | 21 | | If an item ceases to meet requirements (1) through (3) | 22 | | under this subsection (d-5), then the tax is imposed on the | 23 | | selling price, allowing for a reasonable depreciation for the | 24 | | period during which the item qualified for the exemption. | 25 | | For purposes of this subsection (d-5): | 26 | | "Motor vehicle" excludes limousines, but otherwise |
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| 1 | | means that term as defined in Section 1-146 of the Illinois | 2 | | Vehicle Code. | 3 | | "Trailer" means (i) "trailer", as defined in Section | 4 | | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | 5 | | defined in Section 1-187 of the Illinois Vehicle Code, and | 6 | | (iii) "pole trailer", as defined in Section 1-161 of the | 7 | | Illinois Vehicle Code. | 8 | | (e) For aircraft and watercraft purchased on or after | 9 | | January 1 2014, "use as rolling stock moving in interstate | 10 | | commerce" in paragraph paragraphs (d) and (d-1) of the | 11 | | definition of "sale of service" in Section 2 occurs when, | 12 | | during a 12-month period, the rolling stock has carried persons | 13 | | or property for hire in interstate commerce for greater than | 14 | | 50% of its total trips for that period or for greater than 50% | 15 | | of its total miles for that period. The person claiming the | 16 | | exemption shall make an election at the time of purchase to use | 17 | | either the trips or mileage method and document that election | 18 | | in their books and records. If no election is made under this | 19 | | subsection to use the trips or mileage method, the person shall | 20 | | be deemed to have chosen the mileage method. For aircraft, | 21 | | flight hours may be used in lieu of recording miles in | 22 | | determining whether the aircraft meets the mileage test in this | 23 | | subsection. For watercraft, nautical miles or trip hours may be | 24 | | used in lieu of recording miles in determining whether the | 25 | | watercraft meets the mileage test in this subsection. | 26 | | Notwithstanding any other provision of law to the contrary, |
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| 1 | | property purchased on or after January 1, 2014 for the purpose | 2 | | of being attached to aircraft or watercraft as a part thereof | 3 | | qualifies as rolling stock moving in interstate commerce only | 4 | | if the aircraft or watercraft to which it will be attached | 5 | | qualifies as rolling stock moving in interstate commerce under | 6 | | the test set forth in this subsection (e), regardless of when | 7 | | the aircraft or watercraft was purchased. Persons who purchased | 8 | | aircraft or watercraft prior to January 1, 2014 shall make an | 9 | | election to use either the trips or mileage method and document | 10 | | that election in their books and records for the purpose of | 11 | | determining whether property purchased on or after January 1, | 12 | | 2014 for the purpose of being attached to aircraft or | 13 | | watercraft as a part thereof qualifies as rolling stock moving | 14 | | in interstate commerce under this subsection (e). | 15 | | (f) The election to use either the trips or mileage method | 16 | | made under the provisions of subsections (c), (d), or (e) of | 17 | | this Section will remain in effect for the duration of the | 18 | | purchaser's ownership of that item. | 19 | | (Source: P.A. 98-584, eff. 8-27-13.)
| 20 | | Section 20. The Retailers' Occupation Tax Act is amended by | 21 | | changing Sections 2-5 and 2-51 as follows:
| 22 | | (35 ILCS 120/2-5)
| 23 | | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | 24 | | sale of
the following tangible personal property are exempt |
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| 1 | | from the tax imposed
by this Act:
| 2 | | (1) Farm chemicals.
| 3 | | (2) Farm machinery and equipment, both new and used, | 4 | | including that
manufactured on special order, certified by the | 5 | | purchaser to be used
primarily for production agriculture or | 6 | | State or federal agricultural
programs, including individual | 7 | | replacement parts for the machinery and
equipment, including | 8 | | machinery and equipment purchased for lease,
and including | 9 | | implements of husbandry defined in Section 1-130 of
the | 10 | | Illinois Vehicle Code, farm machinery and agricultural | 11 | | chemical and
fertilizer spreaders, and nurse wagons required to | 12 | | be registered
under Section 3-809 of the Illinois Vehicle Code,
| 13 | | but
excluding other motor vehicles required to be registered | 14 | | under the Illinois
Vehicle Code.
Horticultural polyhouses or | 15 | | hoop houses used for propagating, growing, or
overwintering | 16 | | plants shall be considered farm machinery and equipment under
| 17 | | this item (2).
Agricultural chemical tender tanks and dry boxes | 18 | | shall include units sold
separately from a motor vehicle | 19 | | required to be licensed and units sold mounted
on a motor | 20 | | vehicle required to be licensed, if the selling price of the | 21 | | tender
is separately stated.
| 22 | | Farm machinery and equipment shall include precision | 23 | | farming equipment
that is
installed or purchased to be | 24 | | installed on farm machinery and equipment
including, but not | 25 | | limited to, tractors, harvesters, sprayers, planters,
seeders, | 26 | | or spreaders.
Precision farming equipment includes, but is not |
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| 1 | | limited to,
soil testing sensors, computers, monitors, | 2 | | software, global positioning
and mapping systems, and other | 3 | | such equipment.
| 4 | | Farm machinery and equipment also includes computers, | 5 | | sensors, software, and
related equipment used primarily in the
| 6 | | computer-assisted operation of production agriculture | 7 | | facilities, equipment,
and activities such as, but
not limited | 8 | | to,
the collection, monitoring, and correlation of
animal and | 9 | | crop data for the purpose of
formulating animal diets and | 10 | | agricultural chemicals. This item (2) is exempt
from the | 11 | | provisions of
Section 2-70.
| 12 | | (3) Until July 1, 2003, distillation machinery and | 13 | | equipment, sold as a
unit or kit,
assembled or installed by the | 14 | | retailer, certified by the user to be used
only for the | 15 | | production of ethyl alcohol that will be used for consumption
| 16 | | as motor fuel or as a component of motor fuel for the personal | 17 | | use of the
user, and not subject to sale or resale.
| 18 | | (4) Until July 1, 2003 and beginning again September 1, | 19 | | 2004 through August 30, 2014, graphic arts machinery and | 20 | | equipment, including
repair and
replacement parts, both new and | 21 | | used, and including that manufactured on
special order or | 22 | | purchased for lease, certified by the purchaser to be used
| 23 | | primarily for graphic arts production.
Equipment includes | 24 | | chemicals or
chemicals acting as catalysts but only if
the | 25 | | chemicals or chemicals acting as catalysts effect a direct and | 26 | | immediate
change upon a
graphic arts product.
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| 1 | | (5) A motor vehicle that is used for automobile renting, as | 2 | | defined in the Automobile Renting Occupation and Use Tax Act. | 3 | | This paragraph is exempt from
the provisions of Section 2-70.
| 4 | | (6) Personal property sold by a teacher-sponsored student | 5 | | organization
affiliated with an elementary or secondary school | 6 | | located in Illinois.
| 7 | | (7) Until July 1, 2003, proceeds of that portion of the | 8 | | selling price of
a passenger car the
sale of which is subject | 9 | | to the Replacement Vehicle Tax.
| 10 | | (8) Personal property sold to an Illinois county fair | 11 | | association for
use in conducting, operating, or promoting the | 12 | | county fair.
| 13 | | (9) Personal property sold to a not-for-profit arts
or | 14 | | cultural organization that establishes, by proof required by | 15 | | the Department
by
rule, that it has received an exemption under | 16 | | Section 501(c)(3) of the
Internal Revenue Code and that is | 17 | | organized and operated primarily for the
presentation
or | 18 | | support of arts or cultural programming, activities, or | 19 | | services. These
organizations include, but are not limited to, | 20 | | music and dramatic arts
organizations such as symphony | 21 | | orchestras and theatrical groups, arts and
cultural service | 22 | | organizations, local arts councils, visual arts organizations,
| 23 | | and media arts organizations.
On and after the effective date | 24 | | of this amendatory Act of the 92nd General
Assembly, however, | 25 | | an entity otherwise eligible for this exemption shall not
make | 26 | | tax-free purchases unless it has an active identification |
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| 1 | | number issued by
the Department.
| 2 | | (10) Personal property sold by a corporation, society, | 3 | | association,
foundation, institution, or organization, other | 4 | | than a limited liability
company, that is organized and | 5 | | operated as a not-for-profit service enterprise
for the benefit | 6 | | of persons 65 years of age or older if the personal property
| 7 | | was not purchased by the enterprise for the purpose of resale | 8 | | by the
enterprise.
| 9 | | (11) Personal property sold to a governmental body, to a | 10 | | corporation,
society, association, foundation, or institution | 11 | | organized and operated
exclusively for charitable, religious, | 12 | | or educational purposes, or to a
not-for-profit corporation, | 13 | | society, association, foundation, institution,
or organization | 14 | | that has no compensated officers or employees and that is
| 15 | | organized and operated primarily for the recreation of persons | 16 | | 55 years of
age or older. A limited liability company may | 17 | | qualify for the exemption under
this paragraph only if the | 18 | | limited liability company is organized and operated
| 19 | | exclusively for educational purposes. On and after July 1, | 20 | | 1987, however, no
entity otherwise eligible for this exemption | 21 | | shall make tax-free purchases
unless it has an active | 22 | | identification number issued by the Department.
| 23 | | (12) (Blank). Tangible personal property sold to
| 24 | | interstate carriers
for hire for use as
rolling stock moving in | 25 | | interstate commerce or to lessors under leases of
one year or | 26 | | longer executed or in effect at the time of purchase by
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| 1 | | interstate carriers for hire for use as rolling stock moving in | 2 | | interstate
commerce and equipment operated by a | 3 | | telecommunications provider, licensed as a
common carrier by | 4 | | the Federal Communications Commission, which is permanently
| 5 | | installed in or affixed to aircraft moving in interstate | 6 | | commerce.
| 7 | | (12-5) On and after July 1, 2003 and through June 30, 2004, | 8 | | motor vehicles of the second division
with a gross vehicle | 9 | | weight in excess of 8,000 pounds
that
are
subject to the | 10 | | commercial distribution fee imposed under Section 3-815.1 of
| 11 | | the Illinois
Vehicle Code. Beginning on July 1, 2004 and | 12 | | through June 30, 2005, the use in this State of motor vehicles | 13 | | of the second division: (i) with a gross vehicle weight rating | 14 | | in excess of 8,000 pounds; (ii) that are subject to the | 15 | | commercial distribution fee imposed under Section 3-815.1 of | 16 | | the Illinois Vehicle Code; and (iii) that are primarily used | 17 | | for commercial purposes. Through June 30, 2005, this
exemption | 18 | | applies to repair and replacement parts added
after the
initial | 19 | | purchase of such a motor vehicle if that motor vehicle is used | 20 | | in a
manner that
would qualify for the rolling stock exemption | 21 | | otherwise provided for in this
Act. For purposes of this | 22 | | paragraph, "used for commercial purposes" means the | 23 | | transportation of persons or property in furtherance of any | 24 | | commercial or industrial enterprise whether for-hire or not.
| 25 | | (13) Proceeds from sales to owners, lessors, or
shippers of
| 26 | | tangible personal property that is utilized by interstate |
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| 1 | | carriers for
hire for use as rolling stock moving in interstate | 2 | | commerce
and equipment operated by a telecommunications | 3 | | provider, licensed as a
common carrier by the Federal | 4 | | Communications Commission, which is
permanently installed in | 5 | | or affixed to aircraft moving in interstate commerce.
| 6 | | (14) Machinery and equipment that will be used by the | 7 | | purchaser, or a
lessee of the purchaser, primarily in the | 8 | | process of manufacturing or
assembling tangible personal | 9 | | property for wholesale or retail sale or
lease, whether the | 10 | | sale or lease is made directly by the manufacturer or by
some | 11 | | other person, whether the materials used in the process are | 12 | | owned by
the manufacturer or some other person, or whether the | 13 | | sale or lease is made
apart from or as an incident to the | 14 | | seller's engaging in the service
occupation of producing | 15 | | machines, tools, dies, jigs, patterns, gauges, or
other similar | 16 | | items of no commercial value on special order for a particular
| 17 | | purchaser. The exemption provided by this paragraph (14) does | 18 | | not include machinery and equipment used in (i) the generation | 19 | | of electricity for wholesale or retail sale; (ii) the | 20 | | generation or treatment of natural or artificial gas for | 21 | | wholesale or retail sale that is delivered to customers through | 22 | | pipes, pipelines, or mains; or (iii) the treatment of water for | 23 | | wholesale or retail sale that is delivered to customers through | 24 | | pipes, pipelines, or mains. The provisions of Public Act 98-583 | 25 | | are declaratory of existing law as to the meaning and scope of | 26 | | this exemption.
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| 1 | | (15) Proceeds of mandatory service charges separately | 2 | | stated on
customers' bills for purchase and consumption of food | 3 | | and beverages, to the
extent that the proceeds of the service | 4 | | charge are in fact turned over as
tips or as a substitute for | 5 | | tips to the employees who participate directly
in preparing, | 6 | | serving, hosting or cleaning up the food or beverage function
| 7 | | with respect to which the service charge is imposed.
| 8 | | (16) Petroleum products sold to a purchaser if the seller
| 9 | | is prohibited by federal law from charging tax to the | 10 | | purchaser.
| 11 | | (17) Tangible personal property sold to a common carrier by | 12 | | rail or
motor that
receives the physical possession of the | 13 | | property in Illinois and that
transports the property, or | 14 | | shares with another common carrier in the
transportation of the | 15 | | property, out of Illinois on a standard uniform bill
of lading | 16 | | showing the seller of the property as the shipper or consignor | 17 | | of
the property to a destination outside Illinois, for use | 18 | | outside Illinois.
| 19 | | (18) Legal tender, currency, medallions, or gold or silver | 20 | | coinage
issued by the State of Illinois, the government of the | 21 | | United States of
America, or the government of any foreign | 22 | | country, and bullion.
| 23 | | (19) Until July 1 2003, oil field exploration, drilling, | 24 | | and production
equipment, including
(i) rigs and parts of rigs, | 25 | | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | 26 | | tubular goods, including casing and
drill strings, (iii) pumps |
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| 1 | | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | 2 | | individual replacement part for oil field exploration,
| 3 | | drilling, and production equipment, and (vi) machinery and | 4 | | equipment purchased
for lease; but
excluding motor vehicles | 5 | | required to be registered under the Illinois
Vehicle Code.
| 6 | | (20) Photoprocessing machinery and equipment, including | 7 | | repair and
replacement parts, both new and used, including that | 8 | | manufactured on
special order, certified by the purchaser to be | 9 | | used primarily for
photoprocessing, and including | 10 | | photoprocessing machinery and equipment
purchased for lease.
| 11 | | (21) Coal and aggregate exploration, mining, off-highway | 12 | | hauling,
processing,
maintenance, and reclamation equipment, | 13 | | including
replacement parts and equipment, and including
| 14 | | equipment purchased for lease, but excluding motor vehicles | 15 | | required to be
registered under the Illinois Vehicle Code. The | 16 | | changes made to this Section by Public Act 97-767 apply on and | 17 | | after July 1, 2003, but no claim for credit or refund is | 18 | | allowed on or after August 16, 2013 (the effective date of | 19 | | Public Act 98-456)
for such taxes paid during the period | 20 | | beginning July 1, 2003 and ending on August 16, 2013 (the | 21 | | effective date of Public Act 98-456).
| 22 | | (22) Until June 30, 2013, fuel and petroleum products sold | 23 | | to or used by an air carrier,
certified by the carrier to be | 24 | | used for consumption, shipment, or storage
in the conduct of | 25 | | its business as an air common carrier, for a flight
destined | 26 | | for or returning from a location or locations
outside the |
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| 1 | | United States without regard to previous or subsequent domestic
| 2 | | stopovers.
| 3 | | Beginning July 1, 2013, fuel and petroleum products sold to | 4 | | or used by an air carrier, certified by the carrier to be used | 5 | | for consumption, shipment, or storage in the conduct of its | 6 | | business as an air common carrier, for a flight that (i) is | 7 | | engaged in foreign trade or is engaged in trade between the | 8 | | United States and any of its possessions and (ii) transports at | 9 | | least one individual or package for hire from the city of | 10 | | origination to the city of final destination on the same | 11 | | aircraft, without regard to a change in the flight number of | 12 | | that aircraft. | 13 | | (23) A transaction in which the purchase order is received | 14 | | by a florist
who is located outside Illinois, but who has a | 15 | | florist located in Illinois
deliver the property to the | 16 | | purchaser or the purchaser's donee in Illinois.
| 17 | | (24) Fuel consumed or used in the operation of ships, | 18 | | barges, or vessels
that are used primarily in or for the | 19 | | transportation of property or the
conveyance of persons for | 20 | | hire on rivers bordering on this State if the
fuel is delivered | 21 | | by the seller to the purchaser's barge, ship, or vessel
while | 22 | | it is afloat upon that bordering river.
| 23 | | (25) Except as provided in item (25-5) of this Section, a
| 24 | | motor vehicle sold in this State to a nonresident even though | 25 | | the
motor vehicle is delivered to the nonresident in this | 26 | | State, if the motor
vehicle is not to be titled in this State, |
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| 1 | | and if a drive-away permit
is issued to the motor vehicle as | 2 | | provided in Section 3-603 of the Illinois
Vehicle Code or if | 3 | | the nonresident purchaser has vehicle registration
plates to | 4 | | transfer to the motor vehicle upon returning to his or her home
| 5 | | state. The issuance of the drive-away permit or having
the
| 6 | | out-of-state registration plates to be transferred is prima | 7 | | facie evidence
that the motor vehicle will not be titled in | 8 | | this State.
| 9 | | (25-5) The exemption under item (25) does not apply if the | 10 | | state in which the motor vehicle will be titled does not allow | 11 | | a reciprocal exemption for a motor vehicle sold and delivered | 12 | | in that state to an Illinois resident but titled in Illinois. | 13 | | The tax collected under this Act on the sale of a motor vehicle | 14 | | in this State to a resident of another state that does not | 15 | | allow a reciprocal exemption shall be imposed at a rate equal | 16 | | to the state's rate of tax on taxable property in the state in | 17 | | which the purchaser is a resident, except that the tax shall | 18 | | not exceed the tax that would otherwise be imposed under this | 19 | | Act. At the time of the sale, the purchaser shall execute a | 20 | | statement, signed under penalty of perjury, of his or her | 21 | | intent to title the vehicle in the state in which the purchaser | 22 | | is a resident within 30 days after the sale and of the fact of | 23 | | the payment to the State of Illinois of tax in an amount | 24 | | equivalent to the state's rate of tax on taxable property in | 25 | | his or her state of residence and shall submit the statement to | 26 | | the appropriate tax collection agency in his or her state of |
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| 1 | | residence. In addition, the retailer must retain a signed copy | 2 | | of the statement in his or her records. Nothing in this item | 3 | | shall be construed to require the removal of the vehicle from | 4 | | this state following the filing of an intent to title the | 5 | | vehicle in the purchaser's state of residence if the purchaser | 6 | | titles the vehicle in his or her state of residence within 30 | 7 | | days after the date of sale. The tax collected under this Act | 8 | | in accordance with this item (25-5) shall be proportionately | 9 | | distributed as if the tax were collected at the 6.25% general | 10 | | rate imposed under this Act.
| 11 | | (25-7) Beginning on July 1, 2007, no tax is imposed under | 12 | | this Act on the sale of an aircraft, as defined in Section 3 of | 13 | | the Illinois Aeronautics Act, if all of the following | 14 | | conditions are met: | 15 | | (1) the aircraft leaves this State within 15 days after | 16 | | the later of either the issuance of the final billing for | 17 | | the sale of the aircraft, or the authorized approval for | 18 | | return to service, completion of the maintenance record | 19 | | entry, and completion of the test flight and ground test | 20 | | for inspection, as required by 14 C.F.R. 91.407; | 21 | | (2) the aircraft is not based or registered in this | 22 | | State after the sale of the aircraft; and | 23 | | (3) the seller retains in his or her books and records | 24 | | and provides to the Department a signed and dated | 25 | | certification from the purchaser, on a form prescribed by | 26 | | the Department, certifying that the requirements of this |
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| 1 | | item (25-7) are met. The certificate must also include the | 2 | | name and address of the purchaser, the address of the | 3 | | location where the aircraft is to be titled or registered, | 4 | | the address of the primary physical location of the | 5 | | aircraft, and other information that the Department may | 6 | | reasonably require. | 7 | | For purposes of this item (25-7): | 8 | | "Based in this State" means hangared, stored, or otherwise | 9 | | used, excluding post-sale customizations as defined in this | 10 | | Section, for 10 or more days in each 12-month period | 11 | | immediately following the date of the sale of the aircraft. | 12 | | "Registered in this State" means an aircraft registered | 13 | | with the Department of Transportation, Aeronautics Division, | 14 | | or titled or registered with the Federal Aviation | 15 | | Administration to an address located in this State. | 16 | | This paragraph (25-7) is exempt from the provisions
of
| 17 | | Section 2-70.
| 18 | | (26) Semen used for artificial insemination of livestock | 19 | | for direct
agricultural production.
| 20 | | (27) Horses, or interests in horses, registered with and | 21 | | meeting the
requirements of any of the
Arabian Horse Club | 22 | | Registry of America, Appaloosa Horse Club, American Quarter
| 23 | | Horse Association, United States
Trotting Association, or | 24 | | Jockey Club, as appropriate, used for
purposes of breeding or | 25 | | racing for prizes. This item (27) is exempt from the provisions | 26 | | of Section 2-70, and the exemption provided for under this item |
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| 1 | | (27) applies for all periods beginning May 30, 1995, but no | 2 | | claim for credit or refund is allowed on or after January 1, | 3 | | 2008 (the effective date of Public Act 95-88)
for such taxes | 4 | | paid during the period beginning May 30, 2000 and ending on | 5 | | January 1, 2008 (the effective date of Public Act 95-88).
| 6 | | (28) Computers and communications equipment utilized for | 7 | | any
hospital
purpose
and equipment used in the diagnosis,
| 8 | | analysis, or treatment of hospital patients sold to a lessor | 9 | | who leases the
equipment, under a lease of one year or longer | 10 | | executed or in effect at the
time of the purchase, to a
| 11 | | hospital
that has been issued an active tax exemption | 12 | | identification number by the
Department under Section 1g of | 13 | | this Act.
| 14 | | (29) Personal property sold to a lessor who leases the
| 15 | | property, under a
lease of one year or longer executed or in | 16 | | effect at the time of the purchase,
to a governmental body
that | 17 | | has been issued an active tax exemption identification number | 18 | | by the
Department under Section 1g of this Act.
| 19 | | (30) Beginning with taxable years ending on or after | 20 | | December
31, 1995
and
ending with taxable years ending on or | 21 | | before December 31, 2004,
personal property that is
donated for | 22 | | disaster relief to be used in a State or federally declared
| 23 | | disaster area in Illinois or bordering Illinois by a | 24 | | manufacturer or retailer
that is registered in this State to a | 25 | | corporation, society, association,
foundation, or institution | 26 | | that has been issued a sales tax exemption
identification |
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| 1 | | number by the Department that assists victims of the disaster
| 2 | | who reside within the declared disaster area.
| 3 | | (31) Beginning with taxable years ending on or after | 4 | | December
31, 1995 and
ending with taxable years ending on or | 5 | | before December 31, 2004, personal
property that is used in the | 6 | | performance of infrastructure repairs in this
State, including | 7 | | but not limited to municipal roads and streets, access roads,
| 8 | | bridges, sidewalks, waste disposal systems, water and sewer | 9 | | line extensions,
water distribution and purification | 10 | | facilities, storm water drainage and
retention facilities, and | 11 | | sewage treatment facilities, resulting from a State
or | 12 | | federally declared disaster in Illinois or bordering Illinois | 13 | | when such
repairs are initiated on facilities located in the | 14 | | declared disaster area
within 6 months after the disaster.
| 15 | | (32) Beginning July 1, 1999, game or game birds sold at a | 16 | | "game breeding
and
hunting preserve area" as that term is used
| 17 | | in the
Wildlife Code. This paragraph is exempt from the | 18 | | provisions
of
Section 2-70.
| 19 | | (33) A motor vehicle, as that term is defined in Section | 20 | | 1-146
of the
Illinois Vehicle Code, that is donated to a | 21 | | corporation, limited liability
company, society, association, | 22 | | foundation, or institution that is determined by
the Department | 23 | | to be organized and operated exclusively for educational
| 24 | | purposes. For purposes of this exemption, "a corporation, | 25 | | limited liability
company, society, association, foundation, | 26 | | or institution organized and
operated
exclusively for |
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| 1 | | educational purposes" means all tax-supported public schools,
| 2 | | private schools that offer systematic instruction in useful | 3 | | branches of
learning by methods common to public schools and | 4 | | that compare favorably in
their scope and intensity with the | 5 | | course of study presented in tax-supported
schools, and | 6 | | vocational or technical schools or institutes organized and
| 7 | | operated exclusively to provide a course of study of not less | 8 | | than 6 weeks
duration and designed to prepare individuals to | 9 | | follow a trade or to pursue a
manual, technical, mechanical, | 10 | | industrial, business, or commercial
occupation.
| 11 | | (34) Beginning January 1, 2000, personal property, | 12 | | including food, purchased
through fundraising events for the | 13 | | benefit of a public or private elementary or
secondary school, | 14 | | a group of those schools, or one or more school districts if
| 15 | | the events are sponsored by an entity recognized by the school | 16 | | district that
consists primarily of volunteers and includes | 17 | | parents and teachers of the
school children. This paragraph | 18 | | does not apply to fundraising events (i) for
the benefit of | 19 | | private home instruction or (ii) for which the fundraising
| 20 | | entity purchases the personal property sold at the events from | 21 | | another
individual or entity that sold the property for the | 22 | | purpose of resale by the
fundraising entity and that profits | 23 | | from the sale to the fundraising entity.
This paragraph is | 24 | | exempt from the provisions of Section 2-70.
| 25 | | (35) Beginning January 1, 2000 and through December 31, | 26 | | 2001, new or used
automatic vending machines that prepare and |
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| 1 | | serve hot food and beverages,
including coffee, soup, and other | 2 | | items, and replacement parts for these
machines. Beginning | 3 | | January 1, 2002 and through June 30, 2003, machines
and parts | 4 | | for machines used in
commercial, coin-operated amusement and | 5 | | vending business if a use or occupation
tax is paid on the | 6 | | gross receipts derived from the use of the commercial,
| 7 | | coin-operated amusement and vending machines. This paragraph | 8 | | is exempt from
the provisions of Section 2-70.
| 9 | | (35-5) Beginning August 23, 2001 and through June 30, 2016, | 10 | | food for human consumption that is to be consumed off
the | 11 | | premises where it is sold (other than alcoholic beverages, soft | 12 | | drinks,
and food that has been prepared for immediate | 13 | | consumption) and prescription
and nonprescription medicines, | 14 | | drugs, medical appliances, and insulin, urine
testing | 15 | | materials, syringes, and needles used by diabetics, for human | 16 | | use, when
purchased for use by a person receiving medical | 17 | | assistance under Article V of
the Illinois Public Aid Code who | 18 | | resides in a licensed long-term care facility,
as defined in | 19 | | the Nursing Home Care Act, or a licensed facility as defined in | 20 | | the ID/DD Community Care Act, the MC/DD Act, or the Specialized | 21 | | Mental Health Rehabilitation Act of 2013.
| 22 | | (36) Beginning August 2, 2001, computers and | 23 | | communications equipment
utilized for any hospital purpose and | 24 | | equipment used in the diagnosis,
analysis, or treatment of | 25 | | hospital patients sold to a lessor who leases the
equipment, | 26 | | under a lease of one year or longer executed or in effect at |
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| 1 | | the
time of the purchase, to a hospital that has been issued an | 2 | | active tax
exemption identification number by the Department | 3 | | under Section 1g of this Act.
This paragraph is exempt from the | 4 | | provisions of Section 2-70.
| 5 | | (37) Beginning August 2, 2001, personal property sold to a | 6 | | lessor who
leases the property, under a lease of one year or | 7 | | longer executed or in effect
at the time of the purchase, to a | 8 | | governmental body that has been issued an
active tax exemption | 9 | | identification number by the Department under Section 1g
of | 10 | | this Act. This paragraph is exempt from the provisions of | 11 | | Section 2-70.
| 12 | | (38) Beginning on January 1, 2002 and through June 30, | 13 | | 2016, tangible personal property purchased
from an Illinois | 14 | | retailer by a taxpayer engaged in centralized purchasing
| 15 | | activities in Illinois who will, upon receipt of the property | 16 | | in Illinois,
temporarily store the property in Illinois (i) for | 17 | | the purpose of subsequently
transporting it outside this State | 18 | | for use or consumption thereafter solely
outside this State or | 19 | | (ii) for the purpose of being processed, fabricated, or
| 20 | | manufactured into, attached to, or incorporated into other | 21 | | tangible personal
property to be transported outside this State | 22 | | and thereafter used or consumed
solely outside this State. The | 23 | | Director of Revenue shall, pursuant to rules
adopted in | 24 | | accordance with the Illinois Administrative Procedure Act, | 25 | | issue a
permit to any taxpayer in good standing with the | 26 | | Department who is eligible for
the exemption under this |
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| 1 | | paragraph (38). The permit issued under
this paragraph (38) | 2 | | shall authorize the holder, to the extent and
in the manner | 3 | | specified in the rules adopted under this Act, to purchase
| 4 | | tangible personal property from a retailer exempt from the | 5 | | taxes imposed by
this Act. Taxpayers shall maintain all | 6 | | necessary books and records to
substantiate the use and | 7 | | consumption of all such tangible personal property
outside of | 8 | | the State of Illinois.
| 9 | | (39) Beginning January 1, 2008, tangible personal property | 10 | | used in the construction or maintenance of a community water | 11 | | supply, as defined under Section 3.145 of the Environmental | 12 | | Protection Act, that is operated by a not-for-profit | 13 | | corporation that holds a valid water supply permit issued under | 14 | | Title IV of the Environmental Protection Act. This paragraph is | 15 | | exempt from the provisions of Section 2-70.
| 16 | | (40) Beginning January 1, 2010, materials, parts, | 17 | | equipment, components, and furnishings incorporated into or | 18 | | upon an aircraft as part of the modification, refurbishment, | 19 | | completion, replacement, repair, or maintenance of the | 20 | | aircraft. This exemption includes consumable supplies used in | 21 | | the modification, refurbishment, completion, replacement, | 22 | | repair, and maintenance of aircraft, but excludes any | 23 | | materials, parts, equipment, components, and consumable | 24 | | supplies used in the modification, replacement, repair, and | 25 | | maintenance of aircraft engines or power plants, whether such | 26 | | engines or power plants are installed or uninstalled upon any |
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| 1 | | such aircraft. "Consumable supplies" include, but are not | 2 | | limited to, adhesive, tape, sandpaper, general purpose | 3 | | lubricants, cleaning solution, latex gloves, and protective | 4 | | films. This exemption applies only to the sale of qualifying | 5 | | tangible personal property to persons who modify, refurbish, | 6 | | complete, replace, or maintain an aircraft and who (i) hold an | 7 | | Air Agency Certificate and are empowered to operate an approved | 8 | | repair station by the Federal Aviation Administration, (ii) | 9 | | have a Class IV Rating, and (iii) conduct operations in | 10 | | accordance with Part 145 of the Federal Aviation Regulations. | 11 | | The exemption does not include aircraft operated by a | 12 | | commercial air carrier providing scheduled passenger air | 13 | | service pursuant to authority issued under Part 121 or Part 129 | 14 | | of the Federal Aviation Regulations. The changes made to this | 15 | | paragraph (40) by Public Act 98-534 are declarative of existing | 16 | | law. | 17 | | (41) Tangible personal property sold to a | 18 | | public-facilities corporation, as described in Section | 19 | | 11-65-10 of the Illinois Municipal Code, for purposes of | 20 | | constructing or furnishing a municipal convention hall, but | 21 | | only if the legal title to the municipal convention hall is | 22 | | transferred to the municipality without any further | 23 | | consideration by or on behalf of the municipality at the time | 24 | | of the completion of the municipal convention hall or upon the | 25 | | retirement or redemption of any bonds or other debt instruments | 26 | | issued by the public-facilities corporation in connection with |
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| 1 | | the development of the municipal convention hall. This | 2 | | exemption includes existing public-facilities corporations as | 3 | | provided in Section 11-65-25 of the Illinois Municipal Code. | 4 | | This paragraph is exempt from the provisions of Section 2-70. | 5 | | (42) Beginning January 1, 2017, menstrual pads, tampons, | 6 | | and menstrual cups. | 7 | | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | 8 | | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | 9 | | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | 10 | | 7-29-15; 99-855, eff. 8-19-16.)
| 11 | | (35 ILCS 120/2-51)
| 12 | | Sec. 2-51. Motor vehicles; trailers; use as rolling stock | 13 | | definition. | 14 | | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | 15 | | moving
in
interstate commerce" in
paragraphs (12) and (13) of | 16 | | Section 2-5 means for motor vehicles, as defined in
Section | 17 | | 1-146 of the Illinois Vehicle Code, and trailers, as defined in | 18 | | Section
1-209 of the Illinois Vehicle Code, when on 15 or more | 19 | | occasions in a
12-month period the motor vehicle and trailer | 20 | | has carried persons or property
for
hire in
interstate | 21 | | commerce, even just between points in Illinois, if the motor | 22 | | vehicle
and trailer transports persons whose journeys or | 23 | | property whose shipments
originate or terminate outside | 24 | | Illinois. This
definition applies to all
property purchased for | 25 | | the purpose of being attached to those motor vehicles or
|
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| 1 | | trailers as a part thereof.
| 2 | | (b) (Blank). On and after July 1, 2003 and through June 30, | 3 | | 2004, "use as rolling stock moving in interstate
commerce" in
| 4 | | paragraphs (12) and (13) of Section 2-5 occurs for motor | 5 | | vehicles, as defined
in Section 1-146 of the Illinois Vehicle | 6 | | Code, when during a 12-month
period the
rolling stock has | 7 | | carried persons or property for hire in interstate commerce
for | 8 | | 51% of
its total trips and transports persons whose journeys or | 9 | | property whose
shipments
originate or terminate outside | 10 | | Illinois. Trips that are only between points in
Illinois shall
| 11 | | not be counted as interstate trips when calculating whether the | 12 | | tangible
personal property
qualifies for the exemption but such | 13 | | trips shall be included in total trips
taken.
| 14 | | (c) This subsection (c) applies to motor vehicles, other | 15 | | than limousines, purchased through June 30, 2017. For motor | 16 | | vehicles, other than limousines, purchased on or after July 1, | 17 | | 2017, subsection (d-5) applies. This subsection (c) applies to | 18 | | limousines purchased before, on, or after July 1, 2017. "Use | 19 | | Beginning July 1, 2004, "use as rolling stock moving in | 20 | | interstate commerce" in paragraph paragraphs (12) and (13) of | 21 | | Section 2-5 occurs for motor vehicles, as defined in Section | 22 | | 1-146 of the Illinois Vehicle Code, when during a 12-month | 23 | | period the rolling stock has carried persons or property for | 24 | | hire in interstate commerce for greater than 50% of its total | 25 | | trips for that period or for greater than 50% of its total | 26 | | miles for that period. The person claiming the exemption shall |
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| 1 | | make an election at the time of purchase to use either the | 2 | | trips or mileage method. Persons who purchased motor vehicles | 3 | | prior to July 1, 2004 shall make an election to use either the | 4 | | trips or mileage method and document that election in their | 5 | | books and records. If no election is made under this subsection | 6 | | to use the trips or mileage method, the person shall be deemed | 7 | | to have chosen the mileage method. | 8 | | For purposes of determining qualifying trips or miles, | 9 | | motor vehicles that carry persons or property for hire, even | 10 | | just between points in Illinois, will be considered used for | 11 | | hire in interstate commerce if the motor vehicle transports | 12 | | persons whose journeys or property whose shipments originate or | 13 | | terminate outside Illinois. The exemption for motor vehicles
| 14 | | used as rolling stock moving in interstate commerce may be
| 15 | | claimed only for the following vehicles: (i) motor vehicles | 16 | | whose gross vehicle weight
rating exceeds 16,000 pounds; and | 17 | | (ii) limousines, as defined in Section 1-139.1 of the Illinois | 18 | | Vehicle Code. Through June 30, 2017, this This definition | 19 | | applies to all property purchased for the purpose of being | 20 | | attached to those motor vehicles as a part thereof. On and | 21 | | after July 1, 2017, this definition applies to property | 22 | | purchased for the purpose of being attached to limousines as a | 23 | | part thereof. | 24 | | (d) For purchases made through June 30, 2017 Beginning July | 25 | | 1, 2004 , "use as rolling stock moving in interstate commerce" | 26 | | in paragraph paragraphs (12) and (13) of Section 2-5 occurs for |
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| 1 | | trailers, as defined in Section 1-209 of the Illinois Vehicle | 2 | | Code, semitrailers as defined in Section 1-187 of the Illinois | 3 | | Vehicle Code, and pole trailers as defined in Section 1-161 of | 4 | | the Illinois Vehicle Code, when during a 12-month period the | 5 | | rolling stock has carried persons or property for hire in | 6 | | interstate commerce for greater than 50% of its total trips for | 7 | | that period or for greater than 50% of its total miles for that | 8 | | period. The person claiming the exemption for a trailer or | 9 | | trailers that will not be dedicated to a motor vehicle or group | 10 | | of motor vehicles shall make an election at the time of | 11 | | purchase to use either the trips or mileage method. Persons who | 12 | | purchased trailers prior to July 1, 2004 that are not dedicated | 13 | | to a motor vehicle or group of motor vehicles shall make an | 14 | | election to use either the trips or mileage method and document | 15 | | that election in their books and records. If no election is | 16 | | made under this subsection to use the trips or mileage method, | 17 | | the person shall be deemed to have chosen the mileage method. | 18 | | For purposes of determining qualifying trips or miles, | 19 | | trailers, semitrailers, or pole trailers that carry property | 20 | | for hire, even just between points in Illinois, will be | 21 | | considered used for hire in interstate commerce if the | 22 | | trailers, semitrailers, or pole trailers transport property | 23 | | whose shipments originate or terminate outside Illinois. This | 24 | | definition applies to all property purchased for the purpose of | 25 | | being attached to those trailers, semitrailers, or pole | 26 | | trailers as a part thereof. In lieu of a person providing |
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| 1 | | documentation regarding the qualifying use of each individual | 2 | | trailer, semitrailer, or pole trailer, that person may document | 3 | | such qualifying use by providing documentation of the | 4 | | following: | 5 | | (1) If a trailer, semitrailer, or pole trailer is | 6 | | dedicated to a motor vehicle that qualifies as rolling | 7 | | stock moving in interstate commerce under subsection (c) of | 8 | | this Section, then that trailer, semitrailer, or pole | 9 | | trailer qualifies as rolling stock moving in interstate | 10 | | commerce under this subsection. | 11 | | (2) If a trailer, semitrailer, or pole trailer is | 12 | | dedicated to a group of motor vehicles that all qualify as | 13 | | rolling stock moving in interstate commerce under | 14 | | subsection (c) of this Section, then that trailer, | 15 | | semitrailer, or pole trailer qualifies as rolling stock | 16 | | moving in interstate commerce under this subsection. | 17 | | (3) If one or more trailers, semitrailers, or pole | 18 | | trailers are dedicated to a group of motor vehicles and not | 19 | | all of those motor vehicles in that group qualify as | 20 | | rolling stock moving in interstate commerce under | 21 | | subsection (c) of this Section, then the percentage of | 22 | | those trailers, semitrailers, or pole trailers that | 23 | | qualifies as rolling stock moving in interstate commerce | 24 | | under this subsection is equal to the percentage of those | 25 | | motor vehicles in that group that qualify as rolling stock | 26 | | moving in interstate commerce under subsection (c) of this |
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| 1 | | Section to which those trailers, semitrailers, or pole | 2 | | trailers are dedicated. However, to determine the | 3 | | qualification for the exemption provided under this item | 4 | | (3), the mathematical application of the qualifying | 5 | | percentage to one or more trailers, semitrailers, or pole | 6 | | trailers under this subpart shall not be allowed as to any | 7 | | fraction of a trailer, semitrailer, or pole trailer.
| 8 | | (d-5) For motor vehicles and trailers purchased on or after | 9 | | July 1, 2017, "use as rolling stock moving in interstate | 10 | | commerce" means that: | 11 | | (1) the motor vehicle or trailer is used to transport | 12 | | persons or property for hire; | 13 | | (2) for purposes of the exemption under paragraph (13) | 14 | | of Section 2-5, the purchaser who is an owner, lessor, or | 15 | | shipper claiming the exemption certifies that the motor | 16 | | vehicle or trailer will be utilized, from the time of | 17 | | purchase and continuing through the statute of limitations | 18 | | for issuing a notice of tax liability under this Act, by an | 19 | | interstate carrier or carriers for hire who hold, and are | 20 | | required by Federal Motor Carrier Safety Administration | 21 | | regulations to hold, an active USDOT Number with the | 22 | | Carrier Operation listed as "Interstate" and the Operation | 23 | | Classification listed as "authorized for hire", "exempt | 24 | | for hire", or both "authorized for hire" and "exempt for | 25 | | hire"; and | 26 | | (3) for motor vehicles, the gross vehicle weight rating |
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| 1 | | exceeds 16,000 pounds. | 2 | | The definition of "use as rolling stock moving in | 3 | | interstate commerce" in this subsection (d-5) applies to all | 4 | | property purchased on or after July 1, 2017 for the purpose of | 5 | | being attached to a motor vehicle or trailer as a part thereof, | 6 | | regardless of whether the motor vehicle or trailer was | 7 | | purchased before, on, or after July 1, 2017. | 8 | | If an item ceases to meet requirements (1) through (3) | 9 | | under this subsection (d-5), then the tax is imposed on the | 10 | | selling price, allowing for a reasonable depreciation for the | 11 | | period during which the item qualified for the exemption. | 12 | | For purposes of this subsection (d-5): | 13 | | "Motor vehicle" excludes limousines, but otherwise | 14 | | means that term as defined in Section 1-146 of the Illinois | 15 | | Vehicle Code. | 16 | | "Trailer" means (i) "trailer", as defined in Section | 17 | | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | 18 | | defined in Section 1-187 of the Illinois Vehicle Code, and | 19 | | (iii) "pole trailer", as defined in Section 1-161 of the | 20 | | Illinois Vehicle Code. | 21 | | (e) For aircraft and watercraft purchased on or after | 22 | | January 1, 2014, "use as rolling stock moving in interstate | 23 | | commerce" in paragraph paragraphs (12) and (13) of Section 2-5 | 24 | | occurs when, during a 12-month period, the rolling stock has | 25 | | carried persons or property for hire in interstate commerce for | 26 | | greater than 50% of its total trips for that period or for |
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| 1 | | greater than 50% of its total miles for that period. The person | 2 | | claiming the exemption shall make an election at the time of | 3 | | purchase to use either the trips or mileage method and document | 4 | | that election in their books and records. If no election is | 5 | | made under this subsection to use the trips or mileage method, | 6 | | the person shall be deemed to have chosen the mileage method. | 7 | | For aircraft, flight hours may be used in lieu of recording | 8 | | miles in determining whether the aircraft meets the mileage | 9 | | test in this subsection. For watercraft, nautical miles or trip | 10 | | hours may be used in lieu of recording miles in determining | 11 | | whether the watercraft meets the mileage test in this | 12 | | subsection. | 13 | | Notwithstanding any other provision of law to the contrary, | 14 | | property purchased on or after January 1, 2014 for the purpose | 15 | | of being attached to aircraft or watercraft as a part thereof | 16 | | qualifies as rolling stock moving in interstate commerce only | 17 | | if the aircraft or watercraft to which it will be attached | 18 | | qualifies as rolling stock moving in interstate commerce under | 19 | | the test set forth in this subsection (e), regardless of when | 20 | | the aircraft or watercraft was purchased. Persons who purchased | 21 | | aircraft or watercraft prior to January 1, 2014 shall make an | 22 | | election to use either the trips or mileage method and document | 23 | | that election in their books and records for the purpose of | 24 | | determining whether property purchased on or after January 1, | 25 | | 2014 for the purpose of being attached to aircraft or | 26 | | watercraft as a part thereof qualifies as rolling stock moving |
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| 1 | | in interstate commerce under this subsection (e). | 2 | | (f) The election to use either the trips or mileage method | 3 | | made under the provisions of subsections (c), (d), or (e) of | 4 | | this Section will remain in effect for the duration of the | 5 | | purchaser's ownership of that item. | 6 | | (Source: P.A. 98-584, eff. 8-27-13.)
| 7 | | Section 99. Effective date. This Act takes effect July 1, | 8 | | 2017.".
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