Public Act 90-0605 of the 90th General Assembly

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Public Act 90-0605

HB2950 Enrolled                                LRB9008806KDcd

    AN ACT in relation to taxes.

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

    Section  3.   The  Illinois  Income Tax Act is amended by
changing Section 201 as follows:

    (35 ILCS 5/201) (from Ch. 120, par. 2-201)
    Sec. 201.  Tax Imposed.
    (a)  In general. A tax measured by net income  is  hereby
imposed  on  every  individual, corporation, trust and estate
for each taxable year ending  after  July  31,  1969  on  the
privilege  of earning or receiving income in or as a resident
of this State. Such tax shall be in  addition  to  all  other
occupation or privilege taxes imposed by this State or by any
municipal corporation or political subdivision thereof.
    (b)  Rates.  The  tax  imposed  by subsection (a) of this
Section shall be determined as follows:
         (1)  In the case of an individual, trust or  estate,
    for taxable years ending prior to July 1, 1989, an amount
    equal  to  2  1/2%  of  the taxpayer's net income for the
    taxable year.
         (2)  In the case of an individual, trust or  estate,
    for  taxable  years  beginning  prior to July 1, 1989 and
    ending after June 30, 1989, an amount equal to the sum of
    (i) 2 1/2% of the taxpayer's net income  for  the  period
    prior to July 1, 1989, as calculated under Section 202.3,
    and  (ii)  3% of the taxpayer's net income for the period
    after June 30, 1989, as calculated under Section 202.3.
         (3)  In the case of an individual, trust or  estate,
    for  taxable  years  beginning  after  June  30, 1989, an
    amount equal to 3% of the taxpayer's net income  for  the
    taxable year.
         (4)  (Blank).
         (5)  (Blank).
         (6)  In the case of a corporation, for taxable years
    ending  prior  to  July 1, 1989, an amount equal to 4% of
    the taxpayer's net income for the taxable year.
         (7)  In the case of a corporation, for taxable years
    beginning prior to July 1, 1989 and ending after June 30,
    1989, an amount equal  to  the  sum  of  (i)  4%  of  the
    taxpayer's  net  income  for  the period prior to July 1,
    1989, as calculated under Section 202.3, and (ii) 4.8% of
    the taxpayer's net income for the period after  June  30,
    1989, as calculated under Section 202.3.
         (8)  In the case of a corporation, for taxable years
    beginning after June 30, 1989, an amount equal to 4.8% of
    the taxpayer's net income for the taxable year.
    (c)  Beginning   on  July  1,  1979  and  thereafter,  in
addition to such income tax, there is also hereby imposed the
Personal Property Tax Replacement Income Tax measured by  net
income   on   every   corporation   (including  Subchapter  S
corporations), partnership and trust, for each  taxable  year
ending  after  June  30, 1979.  Such taxes are imposed on the
privilege of earning or receiving income in or as a  resident
of  this State.  The Personal Property Tax Replacement Income
Tax shall be  in  addition  to  the  income  tax  imposed  by
subsections  (a)  and  (b) of this Section and in addition to
all other occupation or privilege taxes imposed by this State
or by any  municipal  corporation  or  political  subdivision
thereof.
    (d)  Additional  Personal Property Tax Replacement Income
Tax Rates.  The personal property tax replacement income  tax
imposed by this subsection and subsection (c) of this Section
in  the  case  of  a  corporation,  other than a Subchapter S
corporation, shall be an additional amount equal to 2.85%  of
such  taxpayer's net income for the taxable year, except that
beginning on January 1, 1981, and  thereafter,  the  rate  of
2.85%  specified in this subsection shall be reduced to 2.5%,
and in the case of a partnership, trust  or  a  Subchapter  S
corporation  shall  be  an additional amount equal to 1.5% of
such taxpayer's net income for the taxable year.
    (e)  Investment credit.  A taxpayer shall  be  allowed  a
credit  against  the Personal Property Tax Replacement Income
Tax for investment in qualified property.
         (1)  A taxpayer shall be allowed a credit  equal  to
    .5%  of the basis of qualified property placed in service
    during the taxable year, provided such property is placed
    in service on or after July  1,  1984.   There  shall  be
    allowed an additional credit equal to .5% of the basis of
    qualified  property  placed in service during the taxable
    year, provided such property is placed in service  on  or
    after  July  1,  1986, and the taxpayer's base employment
    within Illinois has increased by  1%  or  more  over  the
    preceding year as determined by the taxpayer's employment
    records  filed with the Illinois Department of Employment
    Security.  Taxpayers who are new  to  Illinois  shall  be
    deemed  to  have met the 1% growth in base employment for
    the first year in which they file employment records with
    the Illinois  Department  of  Employment  Security.   The
    provisions  added  to  this Section by Public Act 85-1200
    (and restored by Public Act 87-895) shall be construed as
    declaratory of existing law and not as a  new  enactment.
    If,  in  any year, the increase in base employment within
    Illinois over the preceding year is  less  than  1%,  the
    additional  credit  shall  be  limited to that percentage
    times a fraction, the numerator of which is .5%  and  the
    denominator  of  which  is  1%, but shall not exceed .5%.
    The investment credit shall not be allowed to the  extent
    that  it  would  reduce a taxpayer's liability in any tax
    year  below  zero,  nor  may  any  credit  for  qualified
    property be allowed for any year other than the  year  in
    which the property was placed in service in Illinois. For
    tax years ending on or after December 31, 1987, and on or
    before December 31, 1988, the credit shall be allowed for
    the  tax year in which the property is placed in service,
    or, if the amount of the credit exceeds the tax liability
    for that year, whether it exceeds the original  liability
    or  the  liability  as  later amended, such excess may be
    carried forward and applied to the tax liability of the 5
    taxable years following the excess credit  years  if  the
    taxpayer  (i)  makes investments which cause the creation
    of a  minimum  of  2,000  full-time  equivalent  jobs  in
    Illinois,   (ii)   is   located  in  an  enterprise  zone
    established pursuant to the Illinois Enterprise Zone  Act
    and  (iii) is certified by the Department of Commerce and
    Community Affairs  as  complying  with  the  requirements
    specified  in  clause  (i) and (ii) by July 1, 1986.  The
    Department of Commerce and Community Affairs shall notify
    the Department of  Revenue  of  all  such  certifications
    immediately.  For  tax  years  ending  after December 31,
    1988, the credit shall be allowed for  the  tax  year  in
    which  the  property  is  placed  in  service, or, if the
    amount of the credit exceeds the tax liability  for  that
    year,  whether  it  exceeds the original liability or the
    liability as later amended, such excess  may  be  carried
    forward and applied to the tax liability of the 5 taxable
    years following the excess credit years. The credit shall
    be  applied  to  the  earliest  year for which there is a
    liability. If there is credit from more than one tax year
    that is available to offset a liability,  earlier  credit
    shall be applied first.
         (2)  The  term  "qualified  property" means property
    which:
              (A)  is  tangible,   whether   new   or   used,
         including  buildings  and  structural  components of
         buildings and signs that are real property, but  not
         including land or improvements to real property that
         are not a structural component of a building such as
         landscaping,   sewer   lines,  local  access  roads,
         fencing, parking lots, and other appurtenances;
              (B)  is depreciable pursuant to Section 167  of
         the  Internal  Revenue  Code,  except  that  "3-year
         property" as defined in Section 168(c)(2)(A) of that
         Code is not eligible for the credit provided by this
         subsection (e);
              (C)  is  acquired  by  purchase  as  defined in
         Section 179(d) of the Internal Revenue Code;
              (D)  is used in Illinois by a taxpayer  who  is
         primarily  engaged  in  manufacturing,  or in mining
         coal or fluorite, or in retailing; and
              (E)  has not previously been used  in  Illinois
         in  such  a  manner  and  by  such a person as would
         qualify for the credit provided by  this  subsection
         (e) or subsection (f).
         (3)  For    purposes   of   this   subsection   (e),
    "manufacturing" means the material staging and production
    of tangible  personal  property  by  procedures  commonly
    regarded  as  manufacturing,  processing, fabrication, or
    assembling which changes some existing material into  new
    shapes, new qualities, or new combinations.  For purposes
    of  this  subsection (e) the term "mining" shall have the
    same meaning as the term "mining" in  Section  613(c)  of
    the   Internal   Revenue  Code.   For  purposes  of  this
    subsection (e), the term "retailing" means  the  sale  of
    tangible   personal  property  or  services  rendered  in
    conjunction with the sale of tangible consumer  goods  or
    commodities.
         (4)  The  basis  of  qualified property shall be the
    basis used to  compute  the  depreciation  deduction  for
    federal income tax purposes.
         (5)  If the basis of the property for federal income
    tax  depreciation purposes is increased after it has been
    placed in service in Illinois by the taxpayer, the amount
    of such increase  shall  be  deemed  property  placed  in
    service on the date of such increase in basis.
         (6)  The  term  "placed  in  service" shall have the
    same meaning as under Section 46 of the Internal  Revenue
    Code.
         (7)  If during any taxable year, any property ceases
    to  be  qualified  property  in the hands of the taxpayer
    within 48 months after being placed in  service,  or  the
    situs of any qualified property is moved outside Illinois
    within  48  months  after  being  placed  in service, the
    Personal Property Tax Replacement  Income  Tax  for  such
    taxable  year shall be increased.  Such increase shall be
    determined by (i) recomputing the investment credit which
    would have been allowed for the year in which credit  for
    such  property was originally allowed by eliminating such
    property from such computation and, (ii) subtracting such
    recomputed credit from the amount  of  credit  previously
    allowed.  For  the  purposes  of  this  paragraph  (7), a
    reduction of the basis of  qualified  property  resulting
    from  a  redetermination  of  the purchase price shall be
    deemed a disposition of qualified property to the  extent
    of such reduction.
         (8)  Unless  the  investment  credit  is extended by
    law, the basis of qualified property  shall  not  include
    costs  incurred after December 31, 2003, except for costs
    incurred pursuant to a binding contract entered  into  on
    or before December 31, 2003.
         (9)  Each  taxable  year, a partnership may elect to
    pass through to its partners the  credits  to  which  the
    partnership is entitled under this subsection (e) for the
    taxable  year.  A partner may use the credit allocated to
    him or her under this  paragraph  only  against  the  tax
    imposed  in  subsections (c) and (d) of this Section.  If
    the partnership makes that election, those credits  shall
    be  allocated  among  the  partners in the partnership in
    accordance with the rules set forth in Section 704(b)  of
    the  Internal  Revenue  Code,  and  the rules promulgated
    under that Section,  and  the  allocated  amount  of  the
    credits shall be allowed to the partners for that taxable
    year.   The  partnership  shall make this election on its
    Personal Property Tax Replacement Income Tax  return  for
    that  taxable  year.  The  election  to  pass through the
    credits shall be irrevocable.
    (f)  Investment credit; Enterprise Zone.
         (1)  A taxpayer shall be allowed  a  credit  against
    the  tax  imposed  by  subsections  (a)  and  (b) of this
    Section for investment in  qualified  property  which  is
    placed  in service in an Enterprise Zone created pursuant
    to the Illinois Enterprise Zone Act. For partners and for
    shareholders of Subchapter S corporations, there shall be
    allowed  a  credit  under  this  subsection  (f)  to   be
    determined in accordance with the determination of income
    and  distributive  share of income under Sections 702 and
    704 and Subchapter S of the Internal  Revenue  Code.  The
    credit  shall be .5% of the basis for such property.  The
    credit shall be available only in  the  taxable  year  in
    which the property is placed in service in the Enterprise
    Zone and shall not be allowed to the extent that it would
    reduce  a  taxpayer's  liability  for  the tax imposed by
    subsections (a) and (b) of this Section  to  below  zero.
    For  tax  years ending on or after December 31, 1985, the
    credit shall be allowed for the tax  year  in  which  the
    property  is  placed in service, or, if the amount of the
    credit exceeds the tax liability for that  year,  whether
    it  exceeds  the  original  liability or the liability as
    later amended, such excess may  be  carried  forward  and
    applied  to  the  tax  liability  of  the 5 taxable years
    following the excess credit year.  The  credit  shall  be
    applied  to  the  earliest  year  for  which  there  is a
    liability. If there is credit from more than one tax year
    that is available  to  offset  a  liability,  the  credit
    accruing first in time shall be applied first.
         (2)  The  term  qualified  property  means  property
    which:
              (A)  is   tangible,   whether   new   or  used,
         including buildings  and  structural  components  of
         buildings;
              (B)  is  depreciable pursuant to Section 167 of
         the  Internal  Revenue  Code,  except  that  "3-year
         property" as defined in Section 168(c)(2)(A) of that
         Code is not eligible for the credit provided by this
         subsection (f);
              (C)  is acquired  by  purchase  as  defined  in
         Section 179(d) of the Internal Revenue Code;
              (D)  is  used  in  the  Enterprise  Zone by the
         taxpayer; and
              (E)  has not been previously used  in  Illinois
         in  such  a  manner  and  by  such a person as would
         qualify for the credit provided by  this  subsection
         (f) or subsection (e).
         (3)  The  basis  of  qualified property shall be the
    basis used to  compute  the  depreciation  deduction  for
    federal income tax purposes.
         (4)  If the basis of the property for federal income
    tax  depreciation purposes is increased after it has been
    placed in service in the Enterprise Zone by the taxpayer,
    the amount of such  increase  shall  be  deemed  property
    placed in service on the date of such increase in basis.
         (5)  The  term  "placed  in  service" shall have the
    same meaning as under Section 46 of the Internal  Revenue
    Code.
         (6)  If during any taxable year, any property ceases
    to  be  qualified  property  in the hands of the taxpayer
    within 48 months after being placed in  service,  or  the
    situs  of  any  qualified  property  is moved outside the
    Enterprise Zone within 48 months after  being  placed  in
    service, the tax imposed under subsections (a) and (b) of
    this  Section  for  such taxable year shall be increased.
    Such increase shall be determined by (i) recomputing  the
    investment  credit  which would have been allowed for the
    year in which credit for  such  property  was  originally
    allowed   by   eliminating   such   property   from  such
    computation, and (ii) subtracting such recomputed  credit
    from  the  amount  of credit previously allowed.  For the
    purposes of this paragraph (6), a reduction of the  basis
    of qualified property resulting from a redetermination of
    the  purchase  price  shall  be  deemed  a disposition of
    qualified property to the extent of such reduction.
         (g)  Jobs Tax Credit; Enterprise  Zone  and  Foreign
Trade Zone or Sub-Zone.
         (1)  A taxpayer conducting a trade or business in an
    enterprise  zone  or a High Impact Business designated by
    the  Department  of  Commerce   and   Community   Affairs
    conducting  a trade or business in a federally designated
    Foreign Trade Zone or Sub-Zone shall be allowed a  credit
    against  the  tax  imposed  by subsections (a) and (b) of
    this Section in the amount of $500 per eligible  employee
    hired to work in the zone during the taxable year.
         (2)  To qualify for the credit:
              (A)  the  taxpayer must hire 5 or more eligible
         employees to work in an enterprise zone or federally
         designated Foreign Trade Zone or Sub-Zone during the
         taxable year;
              (B)  the taxpayer's total employment within the
         enterprise  zone  or  federally  designated  Foreign
         Trade Zone or Sub-Zone must increase by  5  or  more
         full-time  employees  beyond  the  total employed in
         that zone at the end of the previous  tax  year  for
         which  a  jobs  tax  credit  under  this Section was
         taken, or beyond the total employed by the  taxpayer
         as of December 31, 1985, whichever is later; and
              (C)  the  eligible  employees  must be employed
         180 consecutive days in order to be deemed hired for
         purposes of this subsection.
         (3)  An "eligible employee" means  an  employee  who
    is:
              (A)  Certified  by  the  Department of Commerce
         and Community Affairs  as  "eligible  for  services"
         pursuant  to  regulations  promulgated in accordance
         with Title II of the Job Training  Partnership  Act,
         Training Services for the Disadvantaged or Title III
         of  the Job Training Partnership Act, Employment and
         Training Assistance for Dislocated Workers Program.
              (B)  Hired  after  the   enterprise   zone   or
         federally  designated Foreign Trade Zone or Sub-Zone
         was designated or the trade or business was  located
         in that zone, whichever is later.
              (C)  Employed in the enterprise zone or Foreign
         Trade  Zone  or Sub-Zone. An employee is employed in
         an enterprise zone or federally  designated  Foreign
         Trade  Zone or Sub-Zone if his services are rendered
         there or it  is  the  base  of  operations  for  the
         services performed.
              (D)  A  full-time  employee  working 30 or more
         hours per week.
         (4)  For tax years ending on or after  December  31,
    1985  and prior to December 31, 1988, the credit shall be
    allowed for the tax year in which the eligible  employees
    are hired.  For tax years ending on or after December 31,
    1988,  the  credit  shall  be  allowed  for  the tax year
    immediately following the tax year in which the  eligible
    employees are hired.  If the amount of the credit exceeds
    the  tax  liability for that year, whether it exceeds the
    original liability or the  liability  as  later  amended,
    such excess may be carried forward and applied to the tax
    liability  of  the  5  taxable years following the excess
    credit year.  The credit shall be applied to the earliest
    year for which there is a liability. If there  is  credit
    from more than one tax year that is available to offset a
    liability, earlier credit shall be applied first.
         (5)  The Department of Revenue shall promulgate such
    rules and regulations as may be deemed necessary to carry
    out the purposes of this subsection (g).
         (6)  The  credit  shall  be  available  for eligible
    employees hired on or after January 1, 1986.
         (h)  Investment credit; High Impact Business.
         (1)  Subject to subsection (b) of Section 5.5 of the
    Illinois Enterprise Zone Act, a taxpayer shall be allowed
    a credit against the tax imposed by subsections  (a)  and
    (b)  of this Section for investment in qualified property
    which is placed in service by a  Department  of  Commerce
    and  Community  Affairs  designated High Impact Business.
    The credit shall be .5% of the basis for  such  property.
    The  credit  shall  not  be  available  until the minimum
    investments in qualified property set  forth  in  Section
    5.5  of  the  Illinois  Enterprise  Zone  Act  have  been
    satisfied  and shall not be allowed to the extent that it
    would reduce a taxpayer's liability for the  tax  imposed
    by subsections (a) and (b) of this Section to below zero.
    The  credit  applicable to such minimum investments shall
    be taken in  the  taxable  year  in  which  such  minimum
    investments   have   been   completed.   The  credit  for
    additional investments beyond the minimum investment by a
    designated high impact business shall be  available  only
    in  the  taxable  year in which the property is placed in
    service and shall not be allowed to the  extent  that  it
    would  reduce  a taxpayer's liability for the tax imposed
    by subsections (a) and (b) of this Section to below zero.
    For tax years ending on or after December 31,  1987,  the
    credit  shall  be  allowed  for the tax year in which the
    property is placed in service, or, if the amount  of  the
    credit  exceeds  the tax liability for that year, whether
    it exceeds the original liability  or  the  liability  as
    later  amended,  such  excess  may be carried forward and
    applied to the tax  liability  of  the  5  taxable  years
    following  the  excess  credit year.  The credit shall be
    applied to  the  earliest  year  for  which  there  is  a
    liability.   If  there  is  credit from more than one tax
    year that is available to offset a liability, the  credit
    accruing first in time shall be applied first.
         Changes  made  in  this subdivision (h)(1) by Public
    Act 88-670 restore changes made by Public Act 85-1182 and
    reflect existing law.
         (2)  The  term  qualified  property  means  property
    which:
              (A)  is  tangible,   whether   new   or   used,
         including  buildings  and  structural  components of
         buildings;
              (B)  is depreciable pursuant to Section 167  of
         the  Internal  Revenue  Code,  except  that  "3-year
         property" as defined in Section 168(c)(2)(A) of that
         Code is not eligible for the credit provided by this
         subsection (h);
              (C)  is  acquired  by  purchase  as  defined in
         Section 179(d) of the Internal Revenue Code; and
              (D)  is not eligible for  the  Enterprise  Zone
         Investment Credit provided by subsection (f) of this
         Section.
         (3)  The  basis  of  qualified property shall be the
    basis used to  compute  the  depreciation  deduction  for
    federal income tax purposes.
         (4)  If the basis of the property for federal income
    tax  depreciation purposes is increased after it has been
    placed in service in a federally designated Foreign Trade
    Zone or Sub-Zone located in Illinois by the taxpayer, the
    amount of such increase shall be deemed  property  placed
    in service on the date of such increase in basis.
         (5)  The  term  "placed  in  service" shall have the
    same meaning as under Section 46 of the Internal  Revenue
    Code.
         (6)  If  during any taxable year ending on or before
    December 31, 1996, any property ceases  to  be  qualified
    property  in  the  hands of the taxpayer within 48 months
    after being placed  in  service,  or  the  situs  of  any
    qualified  property  is  moved outside Illinois within 48
    months after being placed in  service,  the  tax  imposed
    under  subsections  (a)  and (b) of this Section for such
    taxable year shall be increased.  Such increase shall  be
    determined by (i) recomputing the investment credit which
    would  have been allowed for the year in which credit for
    such property was originally allowed by eliminating  such
    property from such computation, and (ii) subtracting such
    recomputed  credit  from  the amount of credit previously
    allowed.  For the  purposes  of  this  paragraph  (6),  a
    reduction  of  the  basis of qualified property resulting
    from a redetermination of the  purchase  price  shall  be
    deemed  a disposition of qualified property to the extent
    of such reduction.
         (7)  Beginning with tax years ending after  December
    31,  1996,  if  a taxpayer qualifies for the credit under
    this  subsection  (h)  and  thereby  is  granted  a   tax
    abatement  and the taxpayer relocates its entire facility
    in violation of the explicit  terms  and  length  of  the
    contract  under  Section 18-183 of the Property Tax Code,
    the tax imposed under subsections (a)  and  (b)  of  this
    Section  shall be increased for the taxable year in which
    the taxpayer relocated its facility by an amount equal to
    the amount of credit received by the taxpayer under  this
    subsection (h).
    (i)  A credit shall be allowed against the tax imposed by
subsections  (a)  and (b) of this Section for the tax imposed
by subsections (c) and (d)  of  this  Section.   This  credit
shall   be   computed  by  multiplying  the  tax  imposed  by
subsections (c) and (d) of this Section by  a  fraction,  the
numerator  of  which is base income allocable to Illinois and
the denominator of which is Illinois base income, and further
multiplying  the  product  by  the  tax   rate   imposed   by
subsections (a) and (b) of this Section.
    Any  credit  earned  on  or after December 31, 1986 under
this subsection which is unused in the  year  the  credit  is
computed  because  it  exceeds  the  tax liability imposed by
subsections (a) and (b) for that year (whether it exceeds the
original liability or the liability as later amended) may  be
carried  forward  and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following  the
excess  credit  year.   This credit shall be applied first to
the earliest year for which there is a liability.   If  there
is a credit under this subsection from more than one tax year
that  is  available to offset a liability the earliest credit
arising under this subsection shall be applied first.
    If, during any taxable year ending on or  after  December
31,  1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under  this
subsection  (i) is reduced, the amount of credit for such tax
shall also be reduced.  Such reduction shall be determined by
recomputing the credit to take into account the  reduced  tax
imposed  by  subsection  (c)  and (d).  If any portion of the
reduced amount of credit has  been  carried  to  a  different
taxable  year,  an  amended  return  shall  be filed for such
taxable year to reduce the amount of credit claimed.
    (j)  Training expense credit.  Beginning with  tax  years
ending  on  or  after  December 31, 1986, a taxpayer shall be
allowed a credit against the tax imposed  by  subsection  (a)
and  (b)  under this Section for all amounts paid or accrued,
on behalf of all persons employed by the taxpayer in Illinois
or Illinois residents  employed  outside  of  Illinois  by  a
taxpayer,   for   educational   or   vocational  training  in
semi-technical or technical fields or semi-skilled or skilled
fields,  which  were  deducted  from  gross  income  in   the
computation  of  taxable  income.  The credit against the tax
imposed by subsections (a) and (b)  shall  be  1.6%  of  such
training  expenses.   For  partners  and  for shareholders of
subchapter S corporations, there shall be  allowed  a  credit
under this subsection (j) to be determined in accordance with
the  determination of income and distributive share of income
under Sections 702 and 704 and subchapter S of  the  Internal
Revenue Code.
    Any  credit allowed under this subsection which is unused
in the year the credit is earned may be  carried  forward  to
each  of the 5 taxable years following the year for which the
credit is first computed until it is used.  This credit shall
be applied first to the earliest year for which  there  is  a
liability.   If  there is a credit under this subsection from
more than  one  tax  year  that  is  available  to  offset  a
liability  the  earliest credit arising under this subsection
shall be applied first.
    (k)  Research and development credit.
    Beginning with tax years ending after  July  1,  1990,  a
taxpayer shall be allowed a credit against the tax imposed by
subsections  (a)  and  (b)  of  this  Section  for increasing
research  activities  in  this  State.   The  credit  allowed
against the tax imposed by subsections (a) and (b)  shall  be
equal to 6 1/2% of the qualifying expenditures for increasing
research activities in this State.
    For    purposes    of    this   subsection,   "qualifying
expenditures" means the qualifying  expenditures  as  defined
for  the  federal  credit  for increasing research activities
which would be allowable under Section  41  of  the  Internal
Revenue   Code   and  which  are  conducted  in  this  State,
"qualifying expenditures for increasing  research  activities
in  this  State"  means the excess of qualifying expenditures
for the  taxable  year  in  which  incurred  over  qualifying
expenditures  for  the  base period, "qualifying expenditures
for the base period" means  the  average  of  the  qualifying
expenditures  for  each  year  in  the base period, and "base
period" means the 3 taxable years immediately  preceding  the
taxable year for which the determination is being made.
    Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused  credit  shown  on  its final completed return carried
over as a credit against the tax liability for the  following
5  taxable  years  or until it has been fully used, whichever
occurs first.
    If an unused credit is carried forward to  a  given  year
from  2  or  more  earlier  years, that credit arising in the
earliest year will be applied first against the tax liability
for the given year.  If a tax liability for  the  given  year
still  remains,  the  credit from the next earliest year will
then be applied, and so on, until all credits have been  used
or  no  tax  liability  for  the  given  year  remains.   Any
remaining  unused  credit  or  credits  then  will be carried
forward to the next following year in which a  tax  liability
is  incurred, except that no credit can be carried forward to
a year which is more than 5 years after the year in which the
expense for which the credit is given was incurred.
    Unless extended by law,  the  credit  shall  not  include
costs incurred after December 31, 2004 1999, except for costs
incurred  pursuant  to  a binding contract entered into on or
before December 31, 2004 1999.
    (l)  Environmental Remediation Tax Credit.
         (i)  For tax  years ending after December  31,  1997
    and  on  or before December 31, 2001, a taxpayer shall be
    allowed a credit against the tax imposed  by  subsections
    (a)  and (b) of this Section for certain amounts paid for
    unreimbursed eligible remediation costs, as specified  in
    this   subsection.    For   purposes   of  this  Section,
    "unreimbursed eligible  remediation  costs"  means  costs
    approved  by the Illinois Environmental Protection Agency
    ("Agency")  under  Section  58.14  of  the  Environmental
    Protection Act that were paid in performing environmental
    remediation at a site for which a No Further  Remediation
    Letter  was  issued  by  the  Agency  and  recorded under
    Section 58.10 of the Environmental  Protection  Act,  and
    does  not  mean  approved eligible remediation costs that
    are at any time deducted  under  the  provisions  of  the
    Internal  Revenue  Code.   The credit must be claimed for
    the taxable year in which Agency approval of the eligible
    remediation  costs  is  granted.   In  no   event   shall
    unreimbursed eligible remediation costs include any costs
    taken   into  account  in  calculating  an  environmental
    remediation credit granted against a  tax  imposed  under
    the  provisions of the Internal Revenue Code.  The credit
    is not available to any taxpayer if the taxpayer  or  any
    related  party  caused or contributed to, in any material
    respect, a release of regulated  substances  on,  in,  or
    under  the  site that was identified and addressed by the
    remedial action pursuant to the Site Remediation  Program
    of the Environmental Protection Act.  After the Pollution
    Control  Board rules are adopted pursuant to the Illinois
    Administrative Procedure Act for the  administration  and
    enforcement   of   Section   58.9  of  the  Environmental
    Protection Act, determinations as to credit  availability
    for  purposes  of  this  Section shall be made consistent
    with  those  rules.   For  purposes  of   this   Section,
    "taxpayer"  includes  a  person  whose tax attributes the
    taxpayer has  succeeded  to  under  Section  381  of  the
    Internal  Revenue  Code  and "related party" includes the
    persons disallowed a deduction for losses  by  paragraphs
    (b),  (c),  and  (f)(1)  of  Section  267 of the Internal
    Revenue Code by virtue of being a  related  taxpayer,  as
    well  as any of its partners.  The credit allowed against
    the tax imposed by subsections (a) and (b) shall be equal
    to 25% of the unreimbursed eligible remediation costs  in
    excess  of  $100,000  per  site, except that the $100,000
    threshold shall not apply to any  site  contained  in  an
    enterprise  zone  and  located  in a census tract that is
    located in a minor civil division  and  place  or  county
    that  has  been  determined by the Department of Commerce
    and Community Affairs to contain a majority of households
    consisting of low and moderate income persons.  The total
    credit allowed shall not exceed $40,000 per year  with  a
    maximum  total  of  $150,000  per site.  For partners and
    shareholders of subchapter S corporations, there shall be
    allowed a credit under this subsection to  be  determined
    in  accordance  with  the  determination  of  income  and
    distributive  share  of income under Sections 702 and 704
    of subchapter S of the Internal Revenue Code.
         (ii)  A credit allowed under this subsection that is
    unused in the year the credit is earned  may  be  carried
    forward to each of the 5 taxable years following the year
    for  which  the  credit is first earned until it is used.
    The term "unused credit" does not include any amounts  of
    unreimbursed  eligible remediation costs in excess of the
    maximum credit per site authorized under  paragraph  (i).
    This  credit  shall be applied first to the earliest year
    for which there is a liability.  If  there  is  a  credit
    under this subsection from more than one tax year that is
    available  to  offset  a  liability,  the earliest credit
    arising under this subsection shall be applied first.   A
    credit  allowed  under  this  subsection may be sold to a
    buyer as part of a sale of all or part of the remediation
    site for which the credit was granted.  The purchaser  of
    a  remediation  site  and the tax credit shall succeed to
    the unused credit and remaining carry-forward  period  of
    the  seller.  To perfect the transfer, the assignor shall
    record the transfer in the chain of title  for  the  site
    and  provide  written  notice  to  the  Director  of  the
    Illinois  Department  of Revenue of the assignor's intent
    to sell the remediation site and the amount  of  the  tax
    credit to be transferred as a portion of the sale.  In no
    event  may a credit be transferred to any taxpayer if the
    taxpayer or a related party would not be  eligible  under
    the provisions of subsection (i).
         (iii)  For purposes of this Section, the term "site"
    shall  have the same meaning as under Section 58.2 of the
    Environmental Protection Act.
(Source: P.A. 89-235,  eff.  8-4-95;  89-519,  eff.  7-18-96;
89-591,  eff.  8-1-96;  90-123,  eff.  7-21-97;  90-458, eff.
8-17-97; revised 10-16-97.)

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

    (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
    Sec.  3-5.   Exemptions.   Use  of the following tangible
personal property is exempt from the tax imposed by this Act:
    (1)  Personal  property  purchased  from  a  corporation,
society,    association,    foundation,    institution,    or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or  older  if  the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
    (2)  Personal  property  purchased  by  a  not-for-profit
Illinois  county  fair  association  for  use  in conducting,
operating, or promoting the county fair.
    (3)  Personal  property  purchased  by  a  not-for-profit
music or dramatic  arts  organization  that  establishes,  by
proof  required  by  the  Department  by  rule,  that  it has
received an exemption under Section 501(c)(3) of the Internal
Revenue Code and that  is  organized  and  operated  for  the
presentation  of  live  public  performances  of  musical  or
theatrical works on a regular basis.
    (4)  Personal  property purchased by a governmental body,
by  a  corporation,  society,  association,  foundation,   or
institution    organized   and   operated   exclusively   for
charitable, religious,  or  educational  purposes,  or  by  a
not-for-profit corporation, society, association, foundation,
institution, or organization that has no compensated officers
or employees and that is organized and operated primarily for
the recreation of persons 55 years of age or older. A limited
liability  company  may  qualify for the exemption under this
paragraph only if the limited liability company is  organized
and  operated  exclusively  for  educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active  exemption  identification  number   issued   by   the
Department.
    (5)  A passenger car that is a replacement vehicle to the
extent  that  the purchase price of the car is subject to the
Replacement Vehicle Tax.
    (6)  Graphic  arts  machinery  and  equipment,  including
repair  and  replacement  parts,  both  new  and  used,   and
including  that  manufactured  on special order, certified by
the  purchaser  to  be  used  primarily  for   graphic   arts
production,  and  including machinery and equipment purchased
for lease.
    (7)  Farm chemicals.
    (8)  Legal  tender,  currency,  medallions,  or  gold  or
silver  coinage  issued  by  the  State  of   Illinois,   the
government of the United States of America, or the government
of any foreign country, and bullion.
    (9)  Personal property purchased from a teacher-sponsored
student   organization   affiliated  with  an  elementary  or
secondary school located in Illinois.
    (10)  A motor vehicle of  the  first  division,  a  motor
vehicle of the second division that is a self-contained motor
vehicle  designed  or permanently converted to provide living
quarters for  recreational,  camping,  or  travel  use,  with
direct  walk through to the living quarters from the driver's
seat, or a motor vehicle of the second division  that  is  of
the  van configuration designed for the transportation of not
less than 7 nor  more  than  16  passengers,  as  defined  in
Section  1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as  defined  in  the  Automobile  Renting
Occupation and Use Tax Act.
    (11)  Farm  machinery  and  equipment, both new and used,
including that manufactured on special  order,  certified  by
the purchaser to be used primarily for production agriculture
or   State   or   federal  agricultural  programs,  including
individual replacement parts for the machinery and equipment,
and including machinery and equipment  purchased  for  lease,
and  including  implements  of  husbandry  defined in Section
1-130 of  the  Illinois  Vehicle  Code,  farm  machinery  and
agricultural  chemical  and  fertilizer  spreaders, and nurse
wagons required to be registered under Section 3-809  of  the
Illinois  Vehicle  Code,  but  excluding other motor vehicles
required to be registered under the  Illinois  Vehicle  Code.
Horticultural polyhouses or hoop houses used for propagating,
growing,  or  overwintering  plants  shall be considered farm
machinery and  equipment  under  this  item  (11)  paragraph.
Agricultural  chemical  tender  tanks  and  dry  boxes  shall
include  units  sold separately from a motor vehicle required
to be licensed and units sold  mounted  on  a  motor  vehicle
required to be licensed if the selling price of the tender is
separately stated.
    Farm  machinery  and  equipment  shall  include precision
farming equipment  that  is  installed  or  purchased  to  be
installed  on farm machinery and equipment including, but not
limited  to,  tractors,   harvesters,   sprayers,   planters,
seeders,  or spreaders. Precision farming equipment includes,
but is not  limited  to,  soil  testing  sensors,  computers,
monitors,  software,  global positioning and mapping systems,
and other such equipment.
    Farm machinery and  equipment  also  includes  computers,
sensors,  software,  and  related equipment used primarily in
the computer-assisted  operation  of  production  agriculture
facilities,  equipment,  and  activities  such  as,  but  not
limited  to,  the  collection, monitoring, and correlation of
animal and crop data for the purpose  of  formulating  animal
diets  and  agricultural chemicals.  This item (11) is exempt
from the provisions of Section 3-90.
    (12)  Fuel and petroleum products sold to or used  by  an
air  common  carrier, certified by the carrier to be used for
consumption, shipment, or  storage  in  the  conduct  of  its
business  as an air common carrier, for a flight destined for
or returning from a location or locations outside the  United
States  without  regard  to  previous  or subsequent domestic
stopovers.
    (13)  Proceeds of mandatory  service  charges  separately
stated  on  customers' bills for the purchase and consumption
of food and beverages purchased at retail from a retailer, to
the extent that the proceeds of the  service  charge  are  in
fact  turned  over as tips or as a substitute for tips to the
employees who participate  directly  in  preparing,  serving,
hosting  or  cleaning  up  the food or beverage function with
respect to which the service charge is imposed.
    (14)  Oil field  exploration,  drilling,  and  production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
goods, including casing and drill strings,  (iii)  pumps  and
pump-jack  units,  (iv) storage tanks and flow lines, (v) any
individual  replacement  part  for  oil  field   exploration,
drilling,  and  production  equipment, and (vi) machinery and
equipment purchased for lease; but excluding  motor  vehicles
required to be registered under the Illinois Vehicle Code.
    (15)  Photoprocessing  machinery and equipment, including
repair and replacement parts, both new  and  used,  including
that   manufactured   on  special  order,  certified  by  the
purchaser to  be  used  primarily  for  photoprocessing,  and
including  photoprocessing  machinery and equipment purchased
for lease.
    (16)  Coal  exploration,  mining,   offhighway   hauling,
processing, maintenance, and reclamation equipment, including
replacement  parts  and  equipment,  and  including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
    (17)  Distillation machinery and  equipment,  sold  as  a
unit   or  kit,  assembled  or  installed  by  the  retailer,
certified by the user to be used only for the  production  of
ethyl alcohol that will be used for consumption as motor fuel
or  as  a component of motor fuel for the personal use of the
user, and not subject to sale or resale.
    (18)  Manufacturing   and   assembling   machinery    and
equipment  used  primarily in the process of manufacturing or
assembling tangible personal property for wholesale or retail
sale or lease, whether that sale or lease is made directly by
the  manufacturer  or  by  some  other  person,  whether  the
materials used in the process are owned by  the  manufacturer
or  some  other person, or whether that sale or lease is made
apart from or as an incident to the seller's engaging in  the
service  occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar  items  of  no  commercial
value on special order for a particular purchaser.
    (19)  Personal  property  delivered  to  a  purchaser  or
purchaser's donee inside Illinois when the purchase order for
that  personal  property  was  received  by a florist located
outside Illinois who has a florist  located  inside  Illinois
deliver the personal property.
    (20)  Semen used for artificial insemination of livestock
for direct agricultural production.
    (21)  Horses, or interests in horses, registered with and
meeting  the  requirements  of  any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club,  American  Quarter
Horse  Association,  United  States  Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
    (22)  Computers and communications equipment utilized for
any hospital purpose and equipment  used  in  the  diagnosis,
analysis,  or  treatment  of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the  time  the  lessor  would
otherwise  be  subject  to  the tax imposed by this Act, to a
hospital  that  has  been  issued  an  active  tax  exemption
identification  number  by the Department under Section 1g of
the Retailers' Occupation  Tax  Act.   If  the  equipment  is
leased  in  a manner that does not qualify for this exemption
or is used in any other non-exempt manner, the  lessor  shall
be  liable  for the tax imposed under this Act or the Service
Use Tax Act, as the case may be, based  on  the  fair  market
value  of  the  property  at  the time the non-qualifying use
occurs.  No lessor shall collect or  attempt  to  collect  an
amount  (however  designated) that purports to reimburse that
lessor for the tax imposed by this Act or the Service Use Tax
Act, as the case may be, if the tax has not been paid by  the
lessor.  If a lessor improperly collects any such amount from
the  lessee,  the  lessee shall have a legal right to claim a
refund of that amount from the  lessor.   If,  however,  that
amount  is  not  refunded  to  the lessee for any reason, the
lessor is liable to pay that amount to the Department.
    (23)  Personal property purchased by a lessor who  leases
the  property,  under a lease of  one year or longer executed
or in effect at  the  time  the  lessor  would  otherwise  be
subject  to  the  tax  imposed by this Act, to a governmental
body that has been  issued  an  active  sales  tax  exemption
identification  number  by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the property is  leased
in  a manner that does not qualify for this exemption or used
in any other non-exempt manner, the lessor  shall  be  liable
for  the  tax  imposed  under this Act or the Service Use Tax
Act, as the case may be, based on the fair  market  value  of
the  property  at the time the non-qualifying use occurs.  No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that  lessor  for  the
tax  imposed  by  this Act or the Service Use Tax Act, as the
case may be, if the tax has not been paid by the lessor.   If
a lessor improperly collects any such amount from the lessee,
the lessee shall have a legal right to claim a refund of that
amount  from  the  lessor.   If,  however, that amount is not
refunded to the lessee for any reason, the lessor  is  liable
to pay that amount to the Department.
    (24)  Beginning  with  taxable  years  ending on or after
December 31, 1995 and ending with taxable years ending on  or
before  December  31, 2004, personal property that is donated
for disaster relief to  be  used  in  a  State  or  federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer  or retailer that is registered in this State to
a   corporation,   society,   association,   foundation,   or
institution that  has  been  issued  a  sales  tax  exemption
identification  number by the Department that assists victims
of the disaster who reside within the declared disaster area.
    (25)  Beginning with taxable years  ending  on  or  after
December  31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is  used  in
the  performance  of  infrastructure  repairs  in this State,
including but not limited to  municipal  roads  and  streets,
access  roads,  bridges,  sidewalks,  waste disposal systems,
water and  sewer  line  extensions,  water  distribution  and
purification  facilities,  storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois  when  such  repairs  are  initiated  on  facilities
located in the declared disaster area within 6  months  after
the disaster.
(Source:  P.A.  89-16,  eff.  5-30-95;  89-115,  eff. 1-1-96;
89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)
    (35 ILCS 105/3-10) (from Ch. 120, par. 439.3-10)
    Sec. 3-10.  Rate of tax.  Unless  otherwise  provided  in
this  Section,  the tax imposed by this Act is at the rate of
6.25% of either the selling price or the fair  market  value,
if  any,  of  the  tangible  personal property.  In all cases
where property functionally used or consumed is the  same  as
the  property  that  was purchased at retail, then the tax is
imposed on the selling price of the property.  In  all  cases
where  property functionally used or consumed is a by-product
or waste product that  has  been  refined,  manufactured,  or
produced  from  property purchased at retail, then the tax is
imposed on the lower of the fair market value, if any, of the
specific property so used in this State  or  on  the  selling
price  of  the  property purchased at retail. For purposes of
this Section "fair market value" means  the  price  at  which
property  would  change  hands  between a willing buyer and a
willing seller, neither being under any compulsion to buy  or
sell  and  both  having  reasonable knowledge of the relevant
facts. The fair market value shall be established by Illinois
sales  by  the  taxpayer  of  the  same  property   as   that
functionally  used or consumed, or if there are no such sales
by the  taxpayer,  then  comparable  sales  or  purchases  of
property of like kind and character in Illinois.
    With  respect  to  gasohol,  the  tax imposed by this Act
applies to 70% of the proceeds of  sales  made  on  or  after
January 1, 1990, and before July 1, 2003 1999, and to 100% of
the  proceeds of sales made thereafter, except that from July
1, 1997 to July 1, 1999, the rate shall be  85%  for  gasohol
sold  in  this  State  during  the 12 months beginning July 1
following any calendar year  for  which  the  Department  has
determined  that the percentages in Section 10 of the Gasohol
Fuels Tax Abatement Act have not been met.
    With respect to food for human consumption that is to  be
consumed  off  the  premises  where  it  is  sold (other than
alcoholic beverages, soft drinks,  and  food  that  has  been
prepared  for  immediate  consumption)  and  prescription and
nonprescription   medicines,   drugs,   medical   appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and  insulin,  urine  testing
materials, syringes, and needles used by diabetics, for human
use,  the  tax is imposed at the rate of 1%. For the purposes
of this Section, the term "soft drinks" means  any  complete,
finished,    ready-to-use,   non-alcoholic   drink,   whether
carbonated or not, including but not limited to  soda  water,
cola, fruit juice, vegetable juice, carbonated water, and all
other  preparations commonly known as soft drinks of whatever
kind or description that  are  contained  in  any  closed  or
sealed bottle, can, carton, or container, regardless of size.
"Soft  drinks"  does  not include coffee, tea, non-carbonated
water, infant formula, milk or milk products  as  defined  in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
    Notwithstanding  any  other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold  through  a  vending
machine,  except  soft  drinks  and  food  products  that are
dispensed hot from  a  vending  machine,  regardless  of  the
location of the vending machine.
    If  the  property  that  is  purchased  at  retail from a
retailer  is  acquired  outside  Illinois  and  used  outside
Illinois before being brought to Illinois for use here and is
taxable under this Act, the "selling price" on which the  tax
is  computed  shall be reduced by an amount that represents a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A.  88-45;  89-359,  eff.  8-17-95;  89-420,  eff.
6-1-96; 89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)
    Section  10.  The  Service  Use  Tax  Act  is  amended by
changing Sections 3-5 and 3-10 as follows:

    (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
    Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
personal property is exempt from the tax imposed by this Act:
    (1)  Personal  property  purchased  from  a  corporation,
society,    association,    foundation,    institution,    or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for  the  benefit  of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
    (2)  Personal property purchased by a non-profit Illinois
county fair association for use in conducting, operating,  or
promoting the county fair.
    (3)  Personal  property  purchased  by  a  not-for-profit
music  or  dramatic  arts  organization  that establishes, by
proof required  by  the  Department  by  rule,  that  it  has
received an exemption under Section 501(c)(3) of the Internal
Revenue  Code  and  that  is  organized  and operated for the
presentation  of  live  public  performances  of  musical  or
theatrical works on a regular basis.
    (4)  Legal  tender,  currency,  medallions,  or  gold  or
silver  coinage  issued  by  the  State  of   Illinois,   the
government of the United States of America, or the government
of any foreign country, and bullion.
    (5)  Graphic  arts  machinery  and  equipment,  including
repair   and  replacement  parts,  both  new  and  used,  and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be  used  primarily  for
graphic arts production.
    (6)  Personal property purchased from a teacher-sponsored
student   organization   affiliated  with  an  elementary  or
secondary school located in Illinois.
    (7)  Farm machinery and equipment,  both  new  and  used,
including  that  manufactured  on special order, certified by
the purchaser to be used primarily for production agriculture
or  State  or  federal   agricultural   programs,   including
individual replacement parts for the machinery and equipment,
and  including  machinery  and equipment purchased for lease,
and including implements  of  husbandry  defined  in  Section
1-130  of  the  Illinois  Vehicle  Code,  farm  machinery and
agricultural chemical and  fertilizer  spreaders,  and  nurse
wagons  required  to be registered under Section 3-809 of the
Illinois Vehicle Code, but  excluding  other  motor  vehicles
required  to  be  registered under the Illinois Vehicle Code.
Horticultural polyhouses or hoop houses used for propagating,
growing, or overwintering plants  shall  be  considered  farm
machinery  and  equipment  under  this  item  (7)  paragraph.
Agricultural  chemical  tender  tanks  and  dry  boxes  shall
include  units  sold separately from a motor vehicle required
to be licensed and units sold  mounted  on  a  motor  vehicle
required to be licensed if the selling price of the tender is
separately stated.
    Farm  machinery  and  equipment  shall  include precision
farming equipment  that  is  installed  or  purchased  to  be
installed  on farm machinery and equipment including, but not
limited  to,  tractors,   harvesters,   sprayers,   planters,
seeders,  or spreaders. Precision farming equipment includes,
but is not  limited  to,  soil  testing  sensors,  computers,
monitors,  software,  global positioning and mapping systems,
and other such equipment.
    Farm machinery and  equipment  also  includes  computers,
sensors,  software,  and  related equipment used primarily in
the computer-assisted  operation  of  production  agriculture
facilities,  equipment,  and  activities  such  as,  but  not
limited  to,  the  collection, monitoring, and correlation of
animal and crop data for the purpose  of  formulating  animal
diets  and  agricultural  chemicals.  This item (7) is exempt
from the provisions of Section 3-75.
    (8)  Fuel and petroleum products sold to or  used  by  an
air  common  carrier, certified by the carrier to be used for
consumption, shipment, or  storage  in  the  conduct  of  its
business  as an air common carrier, for a flight destined for
or returning from a location or locations outside the  United
States  without  regard  to  previous  or subsequent domestic
stopovers.
    (9)  Proceeds of  mandatory  service  charges  separately
stated  on  customers' bills for the purchase and consumption
of food and beverages acquired as an incident to the purchase
of a service from  a  serviceman,  to  the  extent  that  the
proceeds  of  the  service  charge are in fact turned over as
tips or as  a  substitute  for  tips  to  the  employees  who
participate   directly  in  preparing,  serving,  hosting  or
cleaning up the food or beverage  function  with  respect  to
which the service charge is imposed.
    (10)  Oil  field  exploration,  drilling,  and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
goods,  including  casing  and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines,  (v)  any
individual   replacement  part  for  oil  field  exploration,
drilling, and production equipment, and  (vi)  machinery  and
equipment  purchased  for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
    (11)  Proceeds from the sale of photoprocessing machinery
and equipment, including repair and replacement  parts,  both
new  and  used, including that manufactured on special order,
certified  by  the  purchaser  to  be  used   primarily   for
photoprocessing,  and including photoprocessing machinery and
equipment purchased for lease.
    (12)  Coal  exploration,  mining,   offhighway   hauling,
processing, maintenance, and reclamation equipment, including
replacement  parts  and  equipment,  and  including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
    (13)  Semen used for artificial insemination of livestock
for direct agricultural production.
    (14)  Horses, or interests in horses, registered with and
meeting the requirements of any of  the  Arabian  Horse  Club
Registry  of  America, Appaloosa Horse Club, American Quarter
Horse Association, United  States  Trotting  Association,  or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
    (15)  Computers and communications equipment utilized for
any  hospital  purpose  and  equipment used in the diagnosis,
analysis, or treatment of hospital patients  purchased  by  a
lessor who leases the equipment, under a lease of one year or
longer  executed  or  in  effect at the time the lessor would
otherwise be subject to the tax imposed by  this  Act,  to  a
hospital  that  has  been  issued  an  active  tax  exemption
identification  number  by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this  exemption  or  is
used  in  any  other  non-exempt  manner, the lessor shall be
liable for the tax imposed under this Act or the Use Tax Act,
as the case may be, based on the fair  market  value  of  the
property  at  the  time  the  non-qualifying  use occurs.  No
lessor shall collect or attempt to collect an amount (however
designated) that purports to reimburse that  lessor  for  the
tax  imposed  by this Act or the Use Tax Act, as the case may
be, if the tax has not been paid by the lessor.  If a  lessor
improperly  collects  any  such  amount  from the lessee, the
lessee shall have a legal right to claim  a  refund  of  that
amount  from  the  lessor.   If,  however, that amount is not
refunded to the lessee for any reason, the lessor  is  liable
to pay that amount to the Department.
    (16)  Personal  property purchased by a lessor who leases
the property, under a lease of one year or longer executed or
in effect at the time the lessor would otherwise  be  subject
to  the  tax imposed by this Act, to a governmental body that
has been issued an active tax exemption identification number
by  the  Department  under  Section  1g  of  the   Retailers'
Occupation  Tax  Act.   If the property is leased in a manner
that does not qualify for this exemption or is  used  in  any
other  non-exempt  manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act,  as  the  case
may be, based on the fair market value of the property at the
time  the non-qualifying use occurs.  No lessor shall collect
or attempt to collect an  amount  (however  designated)  that
purports to reimburse that lessor for the tax imposed by this
Act  or  the  Use Tax Act, as the case may be, if the tax has
not been paid by the lessor.  If a lessor improperly collects
any such amount from the lessee,  the  lessee  shall  have  a
legal right to claim a refund of that amount from the lessor.
If,  however,  that  amount is not refunded to the lessee for
any reason, the lessor is liable to pay that  amount  to  the
Department.
    (17)  Beginning  with  taxable  years  ending on or after
December 31, 1995 and ending with taxable years ending on  or
before  December  31, 2004, personal property that is donated
for disaster relief to  be  used  in  a  State  or  federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer  or retailer that is registered in this State to
a   corporation,   society,   association,   foundation,   or
institution that  has  been  issued  a  sales  tax  exemption
identification  number by the Department that assists victims
of the disaster who reside within the declared disaster area.
    (18)  Beginning with taxable years  ending  on  or  after
December  31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is  used  in
the  performance  of  infrastructure  repairs  in this State,
including but not limited to  municipal  roads  and  streets,
access  roads,  bridges,  sidewalks,  waste disposal systems,
water and  sewer  line  extensions,  water  distribution  and
purification  facilities,  storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois  when  such  repairs  are  initiated  on  facilities
located in the declared disaster area within 6  months  after
the disaster.
(Source:  P.A.  89-16,  eff.  5-30-95;  89-115,  eff. 1-1-96;
89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)

    (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
    Sec. 3-10.  Rate of tax.  Unless  otherwise  provided  in
this  Section,  the tax imposed by this Act is at the rate of
6.25% of the selling  price  of  tangible  personal  property
transferred  as  an incident to the sale of service, but, for
the purpose of computing this tax,  in  no  event  shall  the
selling  price be less than the cost price of the property to
the serviceman.
    With respect to gasohol, as defined in the Use  Tax  Act,
the  tax  imposed  by  this Act applies to 70% of the selling
price of property transferred as an incident to the  sale  of
service  on or after January 1, 1990, and before July 1, 2003
1999, and to 100% of the  selling  price  thereafter,  except
that from July 1, 1997 to July 1, 1999, the rate shall be 85%
for gasohol sold in this State during the 12 months beginning
July  1  following any calendar year for which the Department
has determined that the percentages  in  Section  10  of  the
Gasohol Fuels Tax Abatement Act have not been met.
    At  the  election  of  any registered serviceman made for
each fiscal year, sales of service  in  which  the  aggregate
annual  cost  price of tangible personal property transferred
as an incident to the sales of service is less than  35%,  or
75% in the case of servicemen transferring prescription drugs
or  servicemen  engaged  in  graphic  arts production, of the
aggregate annual total  gross  receipts  from  all  sales  of
service,  the  tax  imposed by this Act shall be based on the
serviceman's cost price of  the  tangible  personal  property
transferred as an incident to the sale of those services.
    The  tax  shall  be  imposed  at  the  rate of 1% on food
prepared for immediate consumption and  transferred  incident
to  a  sale  of  service  subject  to this Act or the Service
Occupation Tax Act by an entity licensed under  the  Hospital
Licensing  Act  or  the Nursing Home Care Act.  The tax shall
also be  imposed  at  the  rate  of  1%  on  food  for  human
consumption  that is to be consumed off the premises where it
is sold (other than alcoholic  beverages,  soft  drinks,  and
food  that has been prepared for immediate consumption and is
not otherwise included in this  paragraph)  and  prescription
and  nonprescription  medicines,  drugs,  medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and  insulin,  urine  testing
materials, syringes, and needles used by diabetics, for human
use. For the purposes of this Section, the term "soft drinks"
means  any  complete,  finished,  ready-to-use, non-alcoholic
drink, whether carbonated or not, including but  not  limited
to soda water, cola, fruit juice, vegetable juice, carbonated
water,  and  all  other  preparations  commonly known as soft
drinks of whatever kind or description that are contained  in
any  closed  or  sealed  bottle,  can,  carton, or container,
regardless of size.  "Soft drinks" does not  include  coffee,
tea,  non-carbonated  water,  infant  formula,  milk  or milk
products as defined in the Grade A Pasteurized Milk and  Milk
Products  Act, or drinks containing 50% or more natural fruit
or vegetable juice.
    Notwithstanding any other provisions of this  Act,  "food
for human consumption that is to be consumed off the premises
where  it  is  sold" includes all food sold through a vending
machine, except  soft  drinks  and  food  products  that  are
dispensed  hot  from  a  vending  machine,  regardless of the
location of the vending machine.
    If the property that is acquired  from  a  serviceman  is
acquired  outside  Illinois  and used outside Illinois before
being brought to Illinois for use here and is  taxable  under
this  Act,  the  "selling price" on which the tax is computed
shall be reduced by an amount that  represents  a  reasonable
allowance   for   depreciation   for   the  period  of  prior
out-of-state use.
(Source: P.A.  88-45;  89-359,  eff.  8-17-95;  89-420,  eff.
6-1-96; 89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)

    Section 15.  The Service Occupation Tax Act is amended by
changing Sections 3-5 and 3-10 as follows:

    (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
    Sec. 3-5.  Exemptions.  The following  tangible  personal
property is exempt from the tax imposed by this Act:
    (1)  Personal  property  sold  by a corporation, society,
association, foundation, institution, or organization,  other
than  a  limited  liability  company,  that  is organized and
operated as  a  not-for-profit  service  enterprise  for  the
benefit  of  persons 65 years of age or older if the personal
property was not purchased by the enterprise for the  purpose
of resale by the enterprise.
    (2)  Personal  property  purchased  by  a  not-for-profit
Illinois  county  fair  association  for  use  in conducting,
operating, or promoting the county fair.
    (3)  Personal property purchased  by  any  not-for-profit
music  or  dramatic  arts  organization  that establishes, by
proof required  by  the  Department  by  rule,  that  it  has
received   an  exemption   under  Section  501(c)(3)  of  the
Internal Revenue Code and that is organized and operated  for
the  presentation  of  live public performances of musical or
theatrical works on a regular basis.
    (4)  Legal  tender,  currency,  medallions,  or  gold  or
silver  coinage  issued  by  the  State  of   Illinois,   the
government of the United States of America, or the government
of any foreign country, and bullion.
    (5)  Graphic  arts  machinery  and  equipment,  including
repair   and  replacement  parts,  both  new  and  used,  and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be  used  primarily  for
graphic arts production.
    (6)  Personal   property   sold  by  a  teacher-sponsored
student  organization  affiliated  with  an   elementary   or
secondary school located in Illinois.
    (7)  Farm  machinery  and  equipment,  both new and used,
including that manufactured on special  order,  certified  by
the purchaser to be used primarily for production agriculture
or   State   or   federal  agricultural  programs,  including
individual replacement parts for the machinery and equipment,
and including machinery and equipment  purchased  for  lease,
and  including  implements  of  husbandry  defined in Section
1-130 of  the  Illinois  Vehicle  Code,  farm  machinery  and
agricultural  chemical  and  fertilizer  spreaders, and nurse
wagons required to be registered under Section 3-809  of  the
Illinois  Vehicle  Code,  but  excluding other motor vehicles
required to be registered under the  Illinois  Vehicle  Code.
Horticultural polyhouses or hoop houses used for propagating,
growing,  or  overwintering  plants  shall be considered farm
machinery  and  equipment  under  this  item  (7)  paragraph.
Agricultural  chemical  tender  tanks  and  dry  boxes  shall
include units sold separately from a motor  vehicle  required
to  be  licensed  and  units  sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
    Farm machinery  and  equipment  shall  include  precision
farming  equipment  that  is  installed  or  purchased  to be
installed on farm machinery and equipment including, but  not
limited   to,   tractors,   harvesters,  sprayers,  planters,
seeders, or spreaders. Precision farming equipment  includes,
but  is  not  limited  to,  soil  testing sensors, computers,
monitors, software, global positioning and  mapping  systems,
and other such equipment.
    Farm  machinery  and  equipment  also includes computers,
sensors, software, and related equipment  used  primarily  in
the  computer-assisted  operation  of  production agriculture
facilities,  equipment,  and  activities  such  as,  but  not
limited to, the collection, monitoring,  and  correlation  of
animal  and  crop  data for the purpose of formulating animal
diets and agricultural chemicals.  This item  (7)  is  exempt
from the provisions of Section 3-75.
    (8)  Fuel  and  petroleum  products sold to or used by an
air common carrier, certified by the carrier to be  used  for
consumption,  shipment,  or  storage  in  the  conduct of its
business as an air common carrier, for a flight destined  for
or  returning from a location or locations outside the United
States without regard  to  previous  or  subsequent  domestic
stopovers.
    (9)  Proceeds  of  mandatory  service  charges separately
stated on customers' bills for the purchase  and  consumption
of food and beverages, to the extent that the proceeds of the
service  charge  are  in  fact  turned  over  as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning  up  the  food  or
beverage function with respect to which the service charge is
imposed.
    (10)  Oil  field  exploration,  drilling,  and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
goods,  including  casing  and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines,  (v)  any
individual   replacement  part  for  oil  field  exploration,
drilling, and production equipment, and  (vi)  machinery  and
equipment  purchased  for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
    (11)  Photoprocessing machinery and equipment,  including
repair  and  replacement  parts, both new and used, including
that  manufactured  on  special  order,  certified   by   the
purchaser  to  be  used  primarily  for  photoprocessing, and
including photoprocessing machinery and  equipment  purchased
for lease.
    (12)  Coal   exploration,   mining,  offhighway  hauling,
processing, maintenance, and reclamation equipment, including
replacement parts  and  equipment,  and  including  equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
    (13)  Food  for  human consumption that is to be consumed
off the premises where  it  is  sold  (other  than  alcoholic
beverages,  soft  drinks  and food that has been prepared for
immediate consumption) and prescription and  non-prescription
medicines,  drugs,  medical  appliances,  and  insulin, urine
testing materials, syringes, and needles used  by  diabetics,
for  human  use, when purchased for use by a person receiving
medical assistance under Article 5 of the Illinois Public Aid
Code who resides in a licensed long-term  care  facility,  as
defined in the Nursing Home Care Act.
    (14)  Semen used for artificial insemination of livestock
for direct agricultural production.
    (15)  Horses, or interests in horses, registered with and
meeting  the  requirements  of  any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club,  American  Quarter
Horse  Association,  United  States  Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
    (16)  Computers and communications equipment utilized for
any hospital purpose and equipment  used  in  the  diagnosis,
analysis,  or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the  time  of  the  purchase,  to  a
hospital  that  has  been  issued  an  active  tax  exemption
identification  number  by the Department under Section 1g of
the Retailers' Occupation Tax Act.
    (17)  Personal property sold to a lessor who  leases  the
property,  under a lease of one year or longer executed or in
effect at the time of the purchase, to  a  governmental  body
that  has  been issued an active tax exemption identification
number by the Department under Section 1g of  the  Retailers'
Occupation Tax Act.
    (18)  Beginning  with  taxable  years  ending on or after
December 31, 1995 and ending with taxable years ending on  or
before  December  31, 2004, personal property that is donated
for disaster relief to  be  used  in  a  State  or  federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer  or retailer that is registered in this State to
a   corporation,   society,   association,   foundation,   or
institution that  has  been  issued  a  sales  tax  exemption
identification  number by the Department that assists victims
of the disaster who reside within the declared disaster area.
    (19)  Beginning with taxable years  ending  on  or  after
December  31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is  used  in
the  performance  of  infrastructure  repairs  in this State,
including but not limited to  municipal  roads  and  streets,
access  roads,  bridges,  sidewalks,  waste disposal systems,
water and  sewer  line  extensions,  water  distribution  and
purification  facilities,  storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois  when  such  repairs  are  initiated  on  facilities
located in the declared disaster area within 6  months  after
the disaster.
(Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
89-349,  eff.  8-17-95;  89-495,  eff.  6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96;  90-14,  eff.  7-1-97;  90-552,
eff. 12-12-97.)

    (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
    Sec.  3-10.  Rate  of  tax.  Unless otherwise provided in
this Section, the tax imposed by this Act is at the  rate  of
6.25%  of the "selling price", as defined in Section 2 of the
Service Use Tax Act, of the tangible personal property.   For
the  purpose  of  computing  this  tax, in no event shall the
"selling price" be less than the cost price to the serviceman
of the tangible personal property transferred.   The  selling
price  of each item of tangible personal property transferred
as an incident of a  sale  of  service  may  be  shown  as  a
distinct and separate item on the serviceman's billing to the
service  customer.  If the selling price is not so shown, the
selling price of the tangible personal property is deemed  to
be  50%  of  the  serviceman's  entire billing to the service
customer.  When, however, a serviceman contracts  to  design,
develop,  and  produce  special order machinery or equipment,
the  tax  imposed  by  this  Act  shall  be  based   on   the
serviceman's  cost  price  of  the tangible personal property
transferred incident to the completion of the contract.
    With respect to gasohol, as defined in the Use  Tax  Act,
the  tax  imposed  by this Act shall apply to 70% of the cost
price of property transferred as an incident to the  sale  of
service  on or after January 1, 1990, and before July 1, 2003
1999, and to 100% of the cost price thereafter,  except  that
from  July 1, 1997 to July 1, 1999, the rate shall be 85% for
gasohol sold in this State during  the  12  months  beginning
July  1  following any calendar year for which the Department
has determined that the percentages  in  Section  10  of  the
Gasohol Fuels Tax Abatement Act have not been met.
    At  the  election  of  any registered serviceman made for
each fiscal year, sales of service  in  which  the  aggregate
annual  cost  price of tangible personal property transferred
as an incident to the sales of service is less than  35%,  or
75% in the case of servicemen transferring prescription drugs
or  servicemen  engaged  in  graphic  arts production, of the
aggregate annual total  gross  receipts  from  all  sales  of
service,  the  tax  imposed by this Act shall be based on the
serviceman's cost price of  the  tangible  personal  property
transferred incident to the sale of those services.
    The  tax  shall  be  imposed  at  the  rate of 1% on food
prepared for immediate consumption and  transferred  incident
to  a  sale  of  service  subject  to this Act or the Service
Occupation Tax Act by an entity licensed under  the  Hospital
Licensing  Act  or  the Nursing Home Care Act.  The tax shall
also be  imposed  at  the  rate  of  1%  on  food  for  human
consumption  that is to be consumed off the premises where it
is sold (other than alcoholic  beverages,  soft  drinks,  and
food  that has been prepared for immediate consumption and is
not otherwise included in this  paragraph)  and  prescription
and  nonprescription  medicines,  drugs,  medical appliances,
modifications to a motor vehicle for the purpose of rendering
it usable by a disabled person, and  insulin,  urine  testing
materials, syringes, and needles used by diabetics, for human
use.   For  the  purposes  of  this  Section,  the term "soft
drinks"   means   any   complete,   finished,   ready-to-use,
non-alcoholic drink, whether carbonated or not, including but
not limited to  soda  water,  cola,  fruit  juice,  vegetable
juice,  carbonated water, and all other preparations commonly
known as soft drinks of whatever kind or description that are
contained in any closed or sealed can, carton, or  container,
regardless  of  size.  "Soft drinks" does not include coffee,
tea, non-carbonated  water,  infant  formula,  milk  or  milk
products  as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural  fruit
or vegetable juice.
    Notwithstanding  any  other provisions of this Act, "food
for human consumption that is to be consumed off the premises
where it is sold" includes all food sold  through  a  vending
machine,  except  soft  drinks  and  food  products  that are
dispensed hot from  a  vending  machine,  regardless  of  the
location of the vending machine.
(Source:  P.A.  89-359,  eff.  8-17-95;  89-420, eff. 6-1-96;
89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)

    Section 20.  The Retailers' Occupation Tax Act is amended
by changing Sections 2-5 and 2-10 as follows:

    (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
    (Text of Section before amendment by P.A. 90-519)
    Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
the sale of the  following  tangible  personal  property  are
exempt from the tax imposed by this Act:
    (1)  Farm chemicals.
    (2)  Farm  machinery  and  equipment,  both new and used,
including that manufactured on special  order,  certified  by
the purchaser to be used primarily for production agriculture
or   State   or   federal  agricultural  programs,  including
individual replacement parts for the machinery and equipment,
and including machinery and equipment  purchased  for  lease,
and  including  implements  of  husbandry  defined in Section
1-130 of  the  Illinois  Vehicle  Code,  farm  machinery  and
agricultural  chemical  and  fertilizer  spreaders, and nurse
wagons required to be registered under Section 3-809  of  the
Illinois  Vehicle  Code,  but  excluding other motor vehicles
required to be registered under the  Illinois  Vehicle  Code.
Horticultural polyhouses or hoop houses used for propagating,
growing,  or  overwintering  plants  shall be considered farm
machinery  and  equipment  under  this  item  (2)  paragraph.
Agricultural  chemical  tender  tanks  and  dry  boxes  shall
include units sold separately from a motor  vehicle  required
to  be  licensed  and  units  sold mounted on a motor vehicle
required to be licensed if the selling price of the tender is
separately stated.
    Farm machinery  and  equipment  shall  include  precision
farming  equipment  that  is  installed  or  purchased  to be
installed on farm machinery and equipment including, but  not
limited   to,   tractors,   harvesters,  sprayers,  planters,
seeders, or spreaders. Precision farming equipment  includes,
but  is  not  limited  to,  soil  testing sensors, computers,
monitors, software, global positioning and  mapping  systems,
and other such equipment.
    Farm  machinery  and  equipment  also includes computers,
sensors, software, and related equipment  used  primarily  in
the  computer-assisted  operation  of  production agriculture
facilities,  equipment,  and  activities  such  as,  but  not
limited to, the collection, monitoring,  and  correlation  of
animal  and  crop  data for the purpose of formulating animal
diets and agricultural chemicals.  This item  (7)  is  exempt
from the provisions of Section 3-75.
    (3)  Distillation machinery and equipment, sold as a unit
or  kit, assembled or installed by the retailer, certified by
the user to be used only for the production of ethyl  alcohol
that  will  be  used  for  consumption  as motor fuel or as a
component of motor fuel for the personal use of the user, and
not subject to sale or resale.
    (4)  Graphic  arts  machinery  and  equipment,  including
repair  and  replacement  parts,  both  new  and  used,   and
including that manufactured on special order or purchased for
lease,  certified  by  the purchaser to be used primarily for
graphic arts production.
    (5)  A motor vehicle  of  the  first  division,  a  motor
vehicle of the second division that is a self-contained motor
vehicle  designed  or permanently converted to provide living
quarters for  recreational,  camping,  or  travel  use,  with
direct  walk  through  access to the living quarters from the
driver's seat, or a motor vehicle of the second division that
is of the van configuration designed for  the  transportation
of not less than 7 nor more than 16 passengers, as defined in
Section  1-146 of the Illinois Vehicle Code, that is used for
automobile renting, as  defined  in  the  Automobile  Renting
Occupation and Use Tax Act.
    (6)  Personal   property   sold  by  a  teacher-sponsored
student  organization  affiliated  with  an   elementary   or
secondary school located in Illinois.
    (7)  Proceeds  of  that portion of the selling price of a
passenger car the sale of which is subject to the Replacement
Vehicle Tax.
    (8)  Personal property sold to an  Illinois  county  fair
association  for  use  in conducting, operating, or promoting
the county fair.
    (9)  Personal property sold to a not-for-profit music  or
dramatic   arts   organization  that  establishes,  by  proof
required by the Department by rule, that it has  received  an
exemption  under  Section  501(c) (3) of the Internal Revenue
Code and that is organized and operated for the  presentation
of live public performances of musical or theatrical works on
a regular basis.
    (10)  Personal  property  sold by a corporation, society,
association, foundation, institution, or organization,  other
than  a  limited  liability  company,  that  is organized and
operated as  a  not-for-profit  service  enterprise  for  the
benefit  of  persons 65 years of age or older if the personal
property was not purchased by the enterprise for the  purpose
of resale by the enterprise.
    (11)  Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or  educational purposes, or to a not-for-profit corporation,
society,    association,    foundation,    institution,    or
organization that has no compensated  officers  or  employees
and   that  is  organized  and  operated  primarily  for  the
recreation of persons 55 years of age  or  older.  A  limited
liability  company  may  qualify for the exemption under this
paragraph only if the limited liability company is  organized
and  operated  exclusively  for  educational purposes. On and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
    (12)  Personal property sold to interstate  carriers  for
hire  for  use as rolling stock moving in interstate commerce
or to lessors under leases of one year or longer executed  or
in  effect at the time of purchase by interstate carriers for
hire for use as rolling stock moving in  interstate  commerce
and  equipment  operated  by  a  telecommunications provider,
licensed as a common carrier by  the  Federal  Communications
Commission,  which  is permanently installed in or affixed to
aircraft moving in interstate commerce.
    (13)  Proceeds from sales to owners, lessors, or shippers
of tangible personal property that is utilized by  interstate
carriers  for  hire  for  use  as  rolling  stock  moving  in
interstate    commerce    and   equipment   operated   by   a
telecommunications provider, licensed as a common carrier  by
the  Federal  Communications Commission, which is permanently
installed in or affixed  to  aircraft  moving  in  interstate
commerce.
    (14)  Machinery  and  equipment  that will be used by the
purchaser, or a lessee of the  purchaser,  primarily  in  the
process  of  manufacturing  or  assembling  tangible personal
property for wholesale or retail sale or lease,  whether  the
sale or lease is made directly by the manufacturer or by some
other  person,  whether the materials used in the process are
owned by the manufacturer or some other  person,  or  whether
the sale or lease is made apart from or as an incident to the
seller's  engaging  in  the  service  occupation of producing
machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
similar  items  of no commercial value on special order for a
particular purchaser.
    (15)  Proceeds of mandatory  service  charges  separately
stated  on  customers'  bills for purchase and consumption of
food and beverages, to the extent that the  proceeds  of  the
service  charge  are  in  fact  turned  over  as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning  up  the  food  or
beverage function with respect to which the service charge is
imposed.
    (16)  Petroleum  products  sold  to  a  purchaser  if the
seller is prohibited by federal law from charging tax to  the
purchaser.
    (17)  Tangible personal property sold to a common carrier
by rail or motor that receives the physical possession of the
property  in  Illinois  and  that transports the property, or
shares with another common carrier in the  transportation  of
the  property,  out of Illinois on a standard uniform bill of
lading showing the seller of the property as the  shipper  or
consignor  of the property to a destination outside Illinois,
for use outside Illinois.
    (18)  Legal tender,  currency,  medallions,  or  gold  or
silver   coinage   issued  by  the  State  of  Illinois,  the
government of the United States of America, or the government
of any foreign country, and bullion.
    (19)  Oil field  exploration,  drilling,  and  production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
goods, including casing and drill strings,  (iii)  pumps  and
pump-jack  units,  (iv) storage tanks and flow lines, (v) any
individual  replacement  part  for  oil  field   exploration,
drilling,  and  production  equipment, and (vi) machinery and
equipment purchased for lease; but excluding  motor  vehicles
required to be registered under the Illinois Vehicle Code.
    (20)  Photoprocessing  machinery and equipment, including
repair and replacement parts, both new  and  used,  including
that   manufactured   on  special  order,  certified  by  the
purchaser to  be  used  primarily  for  photoprocessing,  and
including  photoprocessing  machinery and equipment purchased
for lease.
    (21)  Coal  exploration,  mining,   offhighway   hauling,
processing, maintenance, and reclamation equipment, including
replacement  parts  and  equipment,  and  including equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
    (22)  Fuel and petroleum products sold to or used  by  an
air  carrier,  certified  by  the  carrier  to  be  used  for
consumption,  shipment,  or  storage  in  the  conduct of its
business as an air common carrier, for a flight destined  for
or  returning from a location or locations outside the United
States without regard  to  previous  or  subsequent  domestic
stopovers.
    (23)  A  transaction  in  which  the  purchase  order  is
received  by  a  florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property to
the purchaser or the purchaser's donee in Illinois.
    (24)  Fuel consumed or used in the  operation  of  ships,
barges,  or  vessels  that  are  used primarily in or for the
transportation of property or the conveyance of  persons  for
hire  on  rivers  bordering  on  this  State  if  the fuel is
delivered by the seller to the purchaser's  barge,  ship,  or
vessel while it is afloat upon that bordering river.
    (25)  A motor vehicle sold in this State to a nonresident
even though the motor vehicle is delivered to the nonresident
in  this  State,  if the motor vehicle is not to be titled in
this State, and if a driveaway decal permit is issued to  the
motor  vehicle  as  provided in Section 3-603 of the Illinois
Vehicle Code or if  the  nonresident  purchaser  has  vehicle
registration  plates  to  transfer  to the motor vehicle upon
returning to his or her home  state.   The  issuance  of  the
driveaway   decal   permit   or   having   the   out-of-state
registration plates to be transferred is prima facie evidence
that the motor vehicle will not be titled in this State.
    (26)  Semen used for artificial insemination of livestock
for direct agricultural production.
    (27)  Horses, or interests in horses, registered with and
meeting  the  requirements  of  any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club,  American  Quarter
Horse  Association,  United  States  Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
    (28)   Computers and  communications  equipment  utilized
for any hospital purpose and equipment used in the diagnosis,
analysis,  or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the  time  of  the  purchase,  to  a
hospital  that  has  been  issued  an  active  tax  exemption
identification  number  by the Department under Section 1g of
this Act.
    (29)   Personal property sold to a lessor who leases  the
property,  under a lease of one year or longer executed or in
effect at the time of the purchase, to  a  governmental  body
that  has  been issued an active tax exemption identification
number by the Department under Section 1g of this Act.
    (30)   Beginning with taxable years ending  on  or  after
December  31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that  is  donated
for  disaster  relief  to  be  used  in  a State or federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State  to
a   corporation,   society,   association,   foundation,   or
institution  that  has  been  issued  a  sales  tax exemption
identification number by the Department that assists  victims
of the disaster who reside within the declared disaster area.
    (31)   Beginning  with  taxable  years ending on or after
December 31, 1995 and ending with taxable years ending on  or
before  December  31, 2004, personal property that is used in
the performance of  infrastructure  repairs  in  this  State,
including  but  not  limited  to municipal roads and streets,
access roads, bridges,  sidewalks,  waste  disposal  systems,
water  and  sewer  line  extensions,  water  distribution and
purification facilities, storm water drainage  and  retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois  when  such  repairs  are  initiated  on  facilities
located  in  the declared disaster area within 6 months after
the disaster.
(Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
89-349, eff. 8-17-95;  89-495,  eff.  6-24-96;  89-496,  eff.
6-25-96;  89-626,  eff.  8-9-96;  90-14, eff. 7-1-97; 90-552,
eff. 12-12-97.)

    (Text of Section after amendment by P.A. 90-519)
    Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
the sale of the  following  tangible  personal  property  are
exempt from the tax imposed by this Act:
    (1)  Farm chemicals.
    (2)  Farm  machinery  and  equipment,  both new and used,
including that manufactured on special  order,  certified  by
the purchaser to be used primarily for production agriculture
or   State   or   federal  agricultural  programs,  including
individual replacement parts for the machinery and equipment,
and including machinery and equipment  purchased  for  lease,
and  including  implements  of  husbandry  defined in Section
1-130 of  the  Illinois  Vehicle  Code,  farm  machinery  and
agricultural  chemical  and  fertilizer  spreaders, and nurse
wagons required to be registered under Section 3-809  of  the
Illinois  Vehicle  Code,  but  excluding other motor vehicles
required to be registered under the  Illinois  Vehicle  Code.
Horticultural polyhouses or hoop houses used for propagating,
growing,  or  overwintering  plants  shall be considered farm
machinery  and  equipment  under  this  item  (2)  paragraph.
Agricultural  chemical  tender  tanks  and  dry  boxes  shall
include units sold separately from a motor  vehicle  required
to  be  licensed  and  units  sold mounted on a motor vehicle
required to be licensed, if the selling price of  the  tender
is separately stated.
    Farm  machinery  and  equipment  shall  include precision
farming equipment  that  is  installed  or  purchased  to  be
installed  on farm machinery and equipment including, but not
limited  to,  tractors,   harvesters,   sprayers,   planters,
seeders,  or spreaders. Precision farming equipment includes,
but is not  limited  to,  soil  testing  sensors,  computers,
monitors,  software,  global positioning and mapping systems,
and other such equipment.
    Farm machinery and  equipment  also  includes  computers,
sensors,  software,  and  related equipment used primarily in
the computer-assisted  operation  of  production  agriculture
facilities,  equipment,  and  activities  such  as,  but  not
limited  to,  the  collection, monitoring, and correlation of
animal and crop data for the purpose  of  formulating  animal
diets  and  agricultural  chemicals.  This item (7) is exempt
from the provisions of Section 3-75.
    (3)  Distillation machinery and equipment, sold as a unit
or kit, assembled or installed by the retailer, certified  by
the  user to be used only for the production of ethyl alcohol
that will be used for consumption  as  motor  fuel  or  as  a
component of motor fuel for the personal use of the user, and
not subject to sale or resale.
    (4)  Graphic  arts  machinery  and  equipment,  including
repair   and  replacement  parts,  both  new  and  used,  and
including that manufactured on special order or purchased for
lease, certified by the purchaser to be  used  primarily  for
graphic arts production.
    (5)  A  motor  vehicle  of  the  first  division, a motor
vehicle of the second division that is a self-contained motor
vehicle designed or permanently converted to  provide  living
quarters  for  recreational,  camping,  or  travel  use, with
direct walk through access to the living  quarters  from  the
driver's seat, or a motor vehicle of the second division that
is  of  the van configuration designed for the transportation
of not less than 7 nor more than 16 passengers, as defined in
Section 1-146 of the Illinois Vehicle Code, that is used  for
automobile  renting,  as  defined  in  the Automobile Renting
Occupation and Use Tax Act.
    (6)  Personal  property  sold  by   a   teacher-sponsored
student   organization   affiliated  with  an  elementary  or
secondary school located in Illinois.
    (7)  Proceeds of that portion of the selling price  of  a
passenger car the sale of which is subject to the Replacement
Vehicle Tax.
    (8)  Personal  property  sold  to an Illinois county fair
association for use in conducting,  operating,  or  promoting
the county fair.
    (9)  Personal  property sold to a not-for-profit music or
dramatic  arts  organization  that  establishes,   by   proof
required  by  the Department by rule, that it has received an
exemption under Section 501(c) (3) of  the  Internal  Revenue
Code  and that is organized and operated for the presentation
of live public performances of musical or theatrical works on
a regular basis.
    (10)  Personal property sold by a  corporation,  society,
association,  foundation, institution, or organization, other
than a limited  liability  company,  that  is  organized  and
operated  as  a  not-for-profit  service  enterprise  for the
benefit of persons 65 years of age or older if  the  personal
property  was not purchased by the enterprise for the purpose
of resale by the enterprise.
    (11)  Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or educational purposes, or to a not-for-profit  corporation,
society,    association,    foundation,    institution,    or
organization  that  has  no compensated officers or employees
and  that  is  organized  and  operated  primarily  for   the
recreation  of  persons  55  years of age or older. A limited
liability company may qualify for the  exemption  under  this
paragraph  only if the limited liability company is organized
and operated exclusively for  educational  purposes.  On  and
after July 1, 1987, however, no entity otherwise eligible for
this exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
    (12)  Personal  property  sold to interstate carriers for
hire for use as rolling stock moving in  interstate  commerce
or  to lessors under leases of one year or longer executed or
in effect at the time of purchase by interstate carriers  for
hire  for  use as rolling stock moving in interstate commerce
and equipment  operated  by  a  telecommunications  provider,
licensed  as  a  common carrier by the Federal Communications
Commission, which is permanently installed in or  affixed  to
aircraft moving in interstate commerce.
    (13)  Proceeds from sales to owners, lessors, or shippers
of  tangible personal property that is utilized by interstate
carriers  for  hire  for  use  as  rolling  stock  moving  in
interstate   commerce   and   equipment   operated    by    a
telecommunications  provider, licensed as a common carrier by
the Federal Communications Commission, which  is  permanently
installed  in  or  affixed  to  aircraft moving in interstate
commerce.
    (14)  Machinery and equipment that will be  used  by  the
purchaser,  or  a  lessee  of the purchaser, primarily in the
process of  manufacturing  or  assembling  tangible  personal
property  for  wholesale or retail sale or lease, whether the
sale or lease is made directly by the manufacturer or by some
other person, whether the materials used in the  process  are
owned  by  the  manufacturer or some other person, or whether
the sale or lease is made apart from or as an incident to the
seller's engaging in  the  service  occupation  of  producing
machines,  tools,  dies,  jigs,  patterns,  gauges,  or other
similar items of no commercial value on special order  for  a
particular purchaser.
    (15)  Proceeds  of  mandatory  service charges separately
stated on customers' bills for purchase  and  consumption  of
food  and  beverages,  to the extent that the proceeds of the
service charge are in fact  turned  over  as  tips  or  as  a
substitute for tips to the employees who participate directly
in  preparing,  serving,  hosting  or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
    (16)  Petroleum products  sold  to  a  purchaser  if  the
seller  is prohibited by federal law from charging tax to the
purchaser.
    (17)  Tangible personal property sold to a common carrier
by rail or motor that receives the physical possession of the
property in Illinois and that  transports  the  property,  or
shares  with  another common carrier in the transportation of
the property, out of Illinois on a standard uniform  bill  of
lading  showing  the seller of the property as the shipper or
consignor of the property to a destination outside  Illinois,
for use outside Illinois.
    (18)  Legal  tender,  currency,  medallions,  or  gold or
silver  coinage  issued  by  the  State  of   Illinois,   the
government of the United States of America, or the government
of any foreign country, and bullion.
    (19)  Oil  field  exploration,  drilling,  and production
equipment, including (i) rigs and parts of rigs, rotary rigs,
cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
goods,  including  casing  and drill strings, (iii) pumps and
pump-jack units, (iv) storage tanks and flow lines,  (v)  any
individual   replacement  part  for  oil  field  exploration,
drilling, and production equipment, and  (vi)  machinery  and
equipment  purchased  for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
    (20)  Photoprocessing machinery and equipment,  including
repair  and  replacement  parts, both new and used, including
that  manufactured  on  special  order,  certified   by   the
purchaser  to  be  used  primarily  for  photoprocessing, and
including photoprocessing machinery and  equipment  purchased
for lease.
    (21)  Coal   exploration,   mining,  offhighway  hauling,
processing, maintenance, and reclamation equipment, including
replacement parts  and  equipment,  and  including  equipment
purchased for lease, but excluding motor vehicles required to
be registered under the Illinois Vehicle Code.
    (22)  Fuel  and  petroleum products sold to or used by an
air  carrier,  certified  by  the  carrier  to  be  used  for
consumption, shipment, or  storage  in  the  conduct  of  its
business  as an air common carrier, for a flight destined for
or returning from a location or locations outside the  United
States  without  regard  to  previous  or subsequent domestic
stopovers.
    (23)  A  transaction  in  which  the  purchase  order  is
received by a florist who is located  outside  Illinois,  but
who has a florist located in Illinois deliver the property to
the purchaser or the purchaser's donee in Illinois.
    (24)  Fuel  consumed  or  used in the operation of ships,
barges, or vessels that are used  primarily  in  or  for  the
transportation  of  property or the conveyance of persons for
hire on rivers  bordering  on  this  State  if  the  fuel  is
delivered  by  the  seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
    (25)  A motor vehicle sold in this State to a nonresident
even though the motor vehicle is delivered to the nonresident
in this State, if the motor vehicle is not to  be  titled  in
this  State, and if a driveaway decal permit is issued to the
motor vehicle as provided in Section 3-603  of  the  Illinois
Vehicle  Code  or  if  the  nonresident purchaser has vehicle
registration plates to transfer to  the  motor  vehicle  upon
returning  to  his  or  her  home state.  The issuance of the
driveaway   decal   permit   or   having   the   out-of-state
registration plates to be transferred is prima facie evidence
that the motor vehicle will not be titled in this State.
    (26)  Semen used for artificial insemination of livestock
for direct agricultural production.
    (27)  Horses, or interests in horses, registered with and
meeting the requirements of any of  the  Arabian  Horse  Club
Registry  of  America, Appaloosa Horse Club, American Quarter
Horse Association, United  States  Trotting  Association,  or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes.
    (28)   Computers  and  communications  equipment utilized
for any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a  lessor
who leases the equipment, under a lease of one year or longer
executed  or  in  effect  at  the  time of the purchase, to a
hospital  that  has  been  issued  an  active  tax  exemption
identification number by the Department under Section  1g  of
this Act.
    (29)   Personal  property sold to a lessor who leases the
property, under a lease of one year or longer executed or  in
effect  at  the  time of the purchase, to a governmental body
that has been issued an active tax  exemption  identification
number by the Department under Section 1g of this Act.
    (30)   Beginning  with  taxable  years ending on or after
December 31, 1995 and ending with taxable years ending on  or
before  December  31, 2004, personal property that is donated
for disaster relief to  be  used  in  a  State  or  federally
declared disaster area in Illinois or bordering Illinois by a
manufacturer  or retailer that is registered in this State to
a   corporation,   society,   association,   foundation,   or
institution that  has  been  issued  a  sales  tax  exemption
identification  number by the Department that assists victims
of the disaster who reside within the declared disaster area.
    (31)   Beginning with taxable years ending  on  or  after
December  31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is  used  in
the  performance  of  infrastructure  repairs  in this State,
including but not limited to  municipal  roads  and  streets,
access  roads,  bridges,  sidewalks,  waste disposal systems,
water and  sewer  line  extensions,  water  distribution  and
purification  facilities,  storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois  when  such  repairs  are  initiated  on  facilities
located in the declared disaster area within 6  months  after
the disaster.
(Source: P.A.  89-16,  eff.  5-30-95;  89-115,  eff.  1-1-96;
89-349,  eff.  8-17-95;  89-495,  eff.  6-24-96; 89-496, eff.
6-25-96; 89-626, eff. 8-9-96;  90-14,  eff.  7-1-97;  90-519,
eff. 6-1-98; 90-552, eff. 12-12-97.)

    (35 ILCS 120/2-10) (from Ch. 120, par. 441-10)
    Sec.  2-10.  Rate  of  tax.  Unless otherwise provided in
this Section, the tax imposed by this Act is at the  rate  of
6.25%  of  gross  receipts  from  sales  of tangible personal
property made in the course of business.
    With respect to gasohol, as defined in the Use  Tax  Act,
the tax imposed by this Act applies to 70% of the proceeds of
sales  made  on  or after January 1, 1990, and before July 1,
2003 1999,  and  to  100%  of  the  proceeds  of  sales  made
thereafter,  except  that  from July 1, 1997 to July 1, 1999,
the rate shall be 85% for gasohol sold in this  State  during
the  12  months  beginning July 1 following any calendar year
for which the Department has determined that the  percentages
in Section 10 of the Gasohol Fuels Tax Abatement Act have not
been met.
    With  respect to food for human consumption that is to be
consumed off the  premises  where  it  is  sold  (other  than
alcoholic  beverages,  soft  drinks,  and  food that has been
prepared for  immediate  consumption)  and  prescription  and
nonprescription   medicines,   drugs,   medical   appliances,
modifications to a motor vehicle for the purpose of rendering
it  usable  by  a disabled person, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, the tax is imposed at the rate of 1%. For  the  purposes
of  this  Section, the term "soft drinks" means any complete,
finished,   ready-to-use,   non-alcoholic   drink,    whether
carbonated  or  not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of  whatever
kind  or  description  that  are  contained  in any closed or
sealed bottle, can, carton, or container, regardless of size.
"Soft drinks" does not include  coffee,  tea,  non-carbonated
water,  infant  formula,  milk or milk products as defined in
the Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
    Notwithstanding any other provisions of this  Act,  "food
for human consumption that is to be consumed off the premises
where  it  is  sold" includes all food sold through a vending
machine, except  soft  drinks  and  food  products  that  are
dispensed  hot  from  a  vending  machine,  regardless of the
location of the vending machine.
(Source: P.A. 89-359,  eff.  8-17-95;  89-420,  eff.  6-1-96;
89-463, eff. 5-31-96; 89-626, eff. 8-9-96.)

    (35 ILCS 125/Act rep.)
    Section  25.  The  Gasohol  Fuels  Tax  Abatement  Act is
repealed.

    Section 95.  No acceleration or delay.   Where  this  Act
makes changes in a statute that is represented in this Act by
text  that  is not yet or no longer in effect (for example, a
Section represented by multiple versions), the  use  of  that
text  does  not  accelerate or delay the taking effect of (i)
the changes made by this Act or (ii) provisions derived  from
any other Public Act.
    Section  99.  Effective date.  This Act takes effect upon
becoming law.

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