State of Illinois
92nd General Assembly
Legislation

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92_HB3709

                                              LRB9209999SMdvA

 1        AN ACT regarding taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The  Use  Tax  Act  is  amended  by  changing
 5    Section 3-10 as follows:

 6        (35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10)
 7        Sec.  3-10.   Rate  of tax.  Unless otherwise provided in
 8    this Section, the tax imposed by this Act is at the  rate  of
 9    6.25%  of  either the selling price or the fair market value,
10    if any, of the tangible  personal  property.   In  all  cases
11    where  property  functionally used or consumed is the same as
12    the property that was purchased at retail, then  the  tax  is
13    imposed  on  the selling price of the property.  In all cases
14    where property functionally used or consumed is a  by-product
15    or  waste  product  that  has  been refined, manufactured, or
16    produced from property purchased at retail, then the  tax  is
17    imposed on the lower of the fair market value, if any, of the
18    specific  property  so  used  in this State or on the selling
19    price of the property purchased at retail.  For  purposes  of
20    this  Section  "fair  market  value" means the price at which
21    property would change hands between a  willing  buyer  and  a
22    willing  seller, neither being under any compulsion to buy or
23    sell and both having reasonable  knowledge  of  the  relevant
24    facts. The fair market value shall be established by Illinois
25    sales   by   the  taxpayer  of  the  same  property  as  that
26    functionally used or consumed, or if there are no such  sales
27    by  the  taxpayer,  then  comparable  sales  or  purchases of
28    property of like kind and character in Illinois.
29        Beginning on July 1, 2000 and through December 31,  2000,
30    with  respect to motor fuel, as defined in Section 1.1 of the
31    Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
 
                            -2-               LRB9209999SMdvA
 1    of the Use Tax Act, the tax is imposed at the rate of 1.25%.
 2        With  respect  to  gasohol,  the  tax imposed by this Act
 3    applies to 70% of the proceeds of  sales  made  on  or  after
 4    January 1, 1990, and before January 1, 2008 July 1, 2003, and
 5    to 100% of the proceeds of sales made thereafter.
 6        With  respect to food for human consumption that is to be
 7    consumed off the  premises  where  it  is  sold  (other  than
 8    alcoholic  beverages,  soft  drinks,  and  food that has been
 9    prepared for  immediate  consumption)  and  prescription  and
10    nonprescription   medicines,   drugs,   medical   appliances,
11    modifications to a motor vehicle for the purpose of rendering
12    it  usable  by  a disabled person, and insulin, urine testing
13    materials, syringes, and needles used by diabetics, for human
14    use, the tax is imposed at the rate of 1%. For  the  purposes
15    of  this  Section, the term "soft drinks" means any complete,
16    finished,   ready-to-use,   non-alcoholic   drink,    whether
17    carbonated  or  not, including but not limited to soda water,
18    cola, fruit juice, vegetable juice, carbonated water, and all
19    other preparations commonly known as soft drinks of  whatever
20    kind  or  description  that  are  contained  in any closed or
21    sealed bottle, can, carton, or container, regardless of size.
22    "Soft drinks" does not include  coffee,  tea,  non-carbonated
23    water,  infant  formula,  milk or milk products as defined in
24    the Grade A Pasteurized Milk and Milk Products Act, or drinks
25    containing 50% or more natural fruit or vegetable juice.
26        Notwithstanding any other provisions of this  Act,  "food
27    for human consumption that is to be consumed off the premises
28    where  it  is  sold" includes all food sold through a vending
29    machine, except  soft  drinks  and  food  products  that  are
30    dispensed  hot  from  a  vending  machine,  regardless of the
31    location of the vending machine.
32        If the property  that  is  purchased  at  retail  from  a
33    retailer  is  acquired  outside  Illinois  and  used  outside
34    Illinois before being brought to Illinois for use here and is
 
                            -3-               LRB9209999SMdvA
 1    taxable  under this Act, the "selling price" on which the tax
 2    is computed shall be reduced by an amount that  represents  a
 3    reasonable allowance for depreciation for the period of prior
 4    out-of-state use.
 5    (Source:  P.A.  90-605,  eff.  6-30-98; 90-606, eff. 6-30-98;
 6    91-51, eff. 6-30-99; 91-872, eff. 7-1-00.)

 7        Section 10.  The  Service  Use  Tax  Act  is  amended  by
 8    changing Section 3-10 as follows:

 9        (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
10        Sec.  3-10.   Rate  of tax.  Unless otherwise provided in
11    this Section, the tax imposed by this Act is at the  rate  of
12    6.25%  of  the  selling  price  of tangible personal property
13    transferred as an incident to the sale of service,  but,  for
14    the  purpose  of  computing  this  tax, in no event shall the
15    selling price be less than the cost price of the property  to
16    the serviceman.
17        Beginning  on July 1, 2000 and through December 31, 2000,
18    with respect to motor fuel, as defined in Section 1.1 of  the
19    Motor  Fuel  Tax Law, and gasohol, as defined in Section 3-40
20    of the Use Tax Act, the tax is imposed at the rate of 1.25%.
21        With respect to gasohol, as defined in the Use  Tax  Act,
22    the  tax  imposed  by  this Act applies to 70% of the selling
23    price of property transferred as an incident to the  sale  of
24    service  on  or  after January 1, 1990, and before January 1,
25    2008  July  1,  2003,  and  to  100%  of  the  selling  price
26    thereafter.
27        At the election of any  registered  serviceman  made  for
28    each  fiscal  year,  sales  of service in which the aggregate
29    annual cost price of tangible personal  property  transferred
30    as  an  incident to the sales of service is less than 35%, or
31    75% in the case of servicemen transferring prescription drugs
32    or servicemen engaged in  graphic  arts  production,  of  the
 
                            -4-               LRB9209999SMdvA
 1    aggregate  annual  total  gross  receipts  from  all sales of
 2    service, the tax imposed by this Act shall be  based  on  the
 3    serviceman's  cost  price  of  the tangible personal property
 4    transferred as an incident to the sale of those services.
 5        The tax shall be imposed  at  the  rate  of  1%  on  food
 6    prepared  for  immediate consumption and transferred incident
 7    to a sale of service subject  to  this  Act  or  the  Service
 8    Occupation  Tax  Act by an entity licensed under the Hospital
 9    Licensing Act, the Nursing Home Care Act, or the  Child  Care
10    Act of 1969.  The tax shall also be imposed at the rate of 1%
11    on  food for human consumption that is to be consumed off the
12    premises where it is sold (other  than  alcoholic  beverages,
13    soft  drinks,  and  food that has been prepared for immediate
14    consumption and is not otherwise included in this  paragraph)
15    and   prescription   and  nonprescription  medicines,  drugs,
16    medical appliances, modifications to a motor vehicle for  the
17    purpose  of  rendering  it  usable  by a disabled person, and
18    insulin, urine testing materials, syringes, and needles  used
19    by  diabetics,  for  human  use.  For  the  purposes  of this
20    Section, the term "soft drinks" means any complete, finished,
21    ready-to-use, non-alcoholic drink, whether carbonated or not,
22    including but not limited to soda water, cola,  fruit  juice,
23    vegetable juice, carbonated water, and all other preparations
24    commonly known as soft drinks of whatever kind or description
25    that  are  contained  in  any  closed  or sealed bottle, can,
26    carton, or container, regardless of size.  "Soft drinks" does
27    not  include  coffee,  tea,  non-carbonated   water,   infant
28    formula,  milk  or  milk  products  as defined in the Grade A
29    Pasteurized Milk and Milk Products Act, or drinks  containing
30    50% or more natural fruit or vegetable juice.
31        Notwithstanding  any  other provisions of this Act, "food
32    for human consumption that is to be consumed off the premises
33    where it is sold" includes all food sold  through  a  vending
34    machine,  except  soft  drinks  and  food  products  that are
 
                            -5-               LRB9209999SMdvA
 1    dispensed hot from  a  vending  machine,  regardless  of  the
 2    location of the vending machine.
 3        If  the  property  that  is acquired from a serviceman is
 4    acquired outside Illinois and used  outside  Illinois  before
 5    being  brought  to Illinois for use here and is taxable under
 6    this Act, the "selling price" on which the  tax  is  computed
 7    shall  be  reduced  by an amount that represents a reasonable
 8    allowance  for  depreciation  for   the   period   of   prior
 9    out-of-state use.
10    (Source: P.A.  90-605,  eff.  6-30-98;  90-606, eff. 6-30-98;
11    91-51, eff.  6-30-99;  91-541,  eff.  8-13-99;  91-872,  eff.
12    7-1-00.)

13        Section 15.  The Service Occupation Tax Act is amended by
14    changing Section 3-10 as follows:

15        (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
16        Sec.  3-10.  Rate  of  tax.  Unless otherwise provided in
17    this Section, the tax imposed by this Act is at the  rate  of
18    6.25%  of the "selling price", as defined in Section 2 of the
19    Service Use Tax Act, of the tangible personal property.   For
20    the  purpose  of  computing  this  tax, in no event shall the
21    "selling price" be less than the cost price to the serviceman
22    of the tangible personal property transferred.   The  selling
23    price  of each item of tangible personal property transferred
24    as an incident of a  sale  of  service  may  be  shown  as  a
25    distinct and separate item on the serviceman's billing to the
26    service  customer.  If the selling price is not so shown, the
27    selling price of the tangible personal property is deemed  to
28    be  50%  of  the  serviceman's  entire billing to the service
29    customer.  When, however, a serviceman contracts  to  design,
30    develop,  and  produce  special order machinery or equipment,
31    the  tax  imposed  by  this  Act  shall  be  based   on   the
32    serviceman's  cost  price  of  the tangible personal property
 
                            -6-               LRB9209999SMdvA
 1    transferred incident to the completion of the contract.
 2        Beginning on July 1, 2000 and through December 31,  2000,
 3    with  respect to motor fuel, as defined in Section 1.1 of the
 4    Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
 5    of the Use Tax Act, the tax is imposed at the rate of 1.25%.
 6        With  respect  to gasohol, as defined in the Use Tax Act,
 7    the tax imposed by this Act shall apply to 70%  of  the  cost
 8    price  of  property transferred as an incident to the sale of
 9    service on or after January 1, 1990, and  before  January  1,
10    2008 July 1, 2003, and to 100% of the cost price thereafter.
11        At  the  election  of  any registered serviceman made for
12    each fiscal year, sales of service  in  which  the  aggregate
13    annual  cost  price of tangible personal property transferred
14    as an incident to the sales of service is less than  35%,  or
15    75% in the case of servicemen transferring prescription drugs
16    or  servicemen  engaged  in  graphic  arts production, of the
17    aggregate annual total  gross  receipts  from  all  sales  of
18    service,  the  tax  imposed by this Act shall be based on the
19    serviceman's cost price of  the  tangible  personal  property
20    transferred incident to the sale of those services.
21        The  tax  shall  be  imposed  at  the  rate of 1% on food
22    prepared for immediate consumption and  transferred  incident
23    to  a  sale  of  service  subject  to this Act or the Service
24    Occupation Tax Act by an entity licensed under  the  Hospital
25    Licensing  Act,  the Nursing Home Care Act, or the Child Care
26    Act of 1969.  The tax shall also be imposed at the rate of 1%
27    on food for human consumption that is to be consumed off  the
28    premises  where  it  is sold (other than alcoholic beverages,
29    soft drinks, and food that has been  prepared  for  immediate
30    consumption  and is not otherwise included in this paragraph)
31    and  prescription  and  nonprescription   medicines,   drugs,
32    medical  appliances, modifications to a motor vehicle for the
33    purpose of rendering it usable  by  a  disabled  person,  and
34    insulin,  urine testing materials, syringes, and needles used
 
                            -7-               LRB9209999SMdvA
 1    by diabetics, for  human  use.   For  the  purposes  of  this
 2    Section, the term "soft drinks" means any complete, finished,
 3    ready-to-use, non-alcoholic drink, whether carbonated or not,
 4    including  but  not limited to soda water, cola, fruit juice,
 5    vegetable juice, carbonated water, and all other preparations
 6    commonly known as soft drinks of whatever kind or description
 7    that are contained in any closed or sealed  can,  carton,  or
 8    container,  regardless  of  size.   "Soft  drinks"  does  not
 9    include  coffee,  tea,  non-carbonated water, infant formula,
10    milk or milk products as defined in the Grade  A  Pasteurized
11    Milk  and Milk Products Act, or drinks containing 50% or more
12    natural fruit or vegetable juice.
13        Notwithstanding any other provisions of this  Act,  "food
14    for human consumption that is to be consumed off the premises
15    where  it  is  sold" includes all food sold through a vending
16    machine, except  soft  drinks  and  food  products  that  are
17    dispensed  hot  from  a  vending  machine,  regardless of the
18    location of the vending machine.
19    (Source: P.A. 90-605, eff.  6-30-98;  90-606,  eff.  6-30-98;
20    91-51, 6-30-99; 91-541, eff. 8-13-99; 91-872, eff. 7-1-00.)

21        Section 20.  The Retailers' Occupation Tax Act is amended
22    by changing Section 2-10 as follows:

23        (35 ILCS 120/2-10) (from Ch. 120, par. 441-10)
24        Sec.  2-10.  Rate  of  tax.  Unless otherwise provided in
25    this Section, the tax imposed by this Act is at the  rate  of
26    6.25%  of  gross  receipts  from  sales  of tangible personal
27    property made in the course of business.
28        Beginning on July 1, 2000 and through December 31,  2000,
29    with  respect to motor fuel, as defined in Section 1.1 of the
30    Motor Fuel Tax Law, and gasohol, as defined in  Section  3-40
31    of the Use Tax Act, the tax is imposed at the rate of 1.25%.
32        Within   14   days  after  the  effective  date  of  this
 
                            -8-               LRB9209999SMdvA
 1    amendatory Act of the 91st General Assembly, each retailer of
 2    motor fuel and gasohol shall cause the following notice to be
 3    posted  in  a  prominently  visible  place  on  each   retail
 4    dispensing  device  that  is  used  to dispense motor fuel or
 5    gasohol in the State of Illinois:  "As of July 1,  2000,  the
 6    State  of  Illinois has eliminated the State's share of sales
 7    tax on motor fuel and gasohol through December 31, 2000.  The
 8    price  on  this  pump  should  reflect the elimination of the
 9    tax."  The notice shall be printed in bold print  on  a  sign
10    that is no smaller than 4 inches by 8 inches.  The sign shall
11    be  clearly  visible to customers.  Any retailer who fails to
12    post or maintain a required sign through December 31, 2000 is
13    guilty of a petty offense for which the fine  shall  be  $500
14    per day per each retail premises where a violation occurs.
15        With  respect  to gasohol, as defined in the Use Tax Act,
16    the tax imposed by this Act applies to 70% of the proceeds of
17    sales made on or after January 1, 1990, and before January 1,
18    2008 July 1, 2003, and to 100% of the proceeds of sales  made
19    thereafter.
20        With  respect to food for human consumption that is to be
21    consumed off the  premises  where  it  is  sold  (other  than
22    alcoholic  beverages,  soft  drinks,  and  food that has been
23    prepared for  immediate  consumption)  and  prescription  and
24    nonprescription   medicines,   drugs,   medical   appliances,
25    modifications to a motor vehicle for the purpose of rendering
26    it  usable  by  a disabled person, and insulin, urine testing
27    materials, syringes, and needles used by diabetics, for human
28    use, the tax is imposed at the rate of 1%. For  the  purposes
29    of  this  Section, the term "soft drinks" means any complete,
30    finished,   ready-to-use,   non-alcoholic   drink,    whether
31    carbonated  or  not, including but not limited to soda water,
32    cola, fruit juice, vegetable juice, carbonated water, and all
33    other preparations commonly known as soft drinks of  whatever
34    kind  or  description  that  are  contained  in any closed or
 
                            -9-               LRB9209999SMdvA
 1    sealed bottle, can, carton, or container, regardless of size.
 2    "Soft drinks" does not include  coffee,  tea,  non-carbonated
 3    water,  infant  formula,  milk or milk products as defined in
 4    the Grade A Pasteurized Milk and Milk Products Act, or drinks
 5    containing 50% or more natural fruit or vegetable juice.
 6        Notwithstanding any other provisions of this  Act,  "food
 7    for human consumption that is to be consumed off the premises
 8    where  it  is  sold" includes all food sold through a vending
 9    machine, except  soft  drinks  and  food  products  that  are
10    dispensed  hot  from  a  vending  machine,  regardless of the
11    location of the vending machine.
12    (Source: P.A. 90-605, eff.  6-30-98;  90-606,  eff.  6-30-98;
13    91-51, eff. 6-30-99; 91-872, eff. 7-1-00.)

14        Section  99.  Effective date.  This Act takes effect upon
15    becoming law.

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