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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Rental | ||||||
5 | Purchase Agreement Occupation and Use Tax Act. | ||||||
6 | Section 5. Definitions. As used in this Act:
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7 | "Consumer" means an individual who leases personal | ||||||
8 | property under a rental-purchase agreement. | ||||||
9 | "Department" means the Department of Revenue.
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10 | "Gross receipts" from the renting of tangible personal | ||||||
11 | property or "rent" means the total rental price or leasing | ||||||
12 | price. In the case of rental transactions in which the | ||||||
13 | consideration is paid to the merchant on an installment basis, | ||||||
14 | the amounts of such payments shall be included by the merchant | ||||||
15 | in gross receipts or rent only as and when payments are | ||||||
16 | received by the merchant.
"Gross receipts" does not include | ||||||
17 | receipts received by a merchant for delivery fees, | ||||||
18 | reinstatement fees, processing fees, waiver fees or club | ||||||
19 | program fees.
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20 | "Merchandise" means the personal property that is the | ||||||
21 | subject of a rental-purchase agreement.
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22 | "Merchant" means a person who, in the ordinary course of | ||||||
23 | business, regularly leases, offers to lease or arranges for the |
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1 | leasing of merchandise under a rental-purchase agreement, and | ||||||
2 | includes a person who is assigned an interest in a | ||||||
3 | rental-purchase agreement.
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4 | "Person" means any natural individual, firm, partnership, | ||||||
5 | association, joint stock company, joint adventure, public or | ||||||
6 | private corporation, limited liability company, or a receiver, | ||||||
7 | executor, trustee, conservator or other representative | ||||||
8 | appointed by order of any court.
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9 | "Rental price" means the consideration for renting | ||||||
10 | merchandise valued in money, whether received in money or | ||||||
11 | otherwise, including cash credits, property and services, and | ||||||
12 | shall be determined without any deduction on account of the | ||||||
13 | cost of the property rented, the cost of materials used, labor | ||||||
14 | or service cost, or any other expense whatsoever, but does not | ||||||
15 | include charges that are added by a merchant on account of the | ||||||
16 | merchant's tax liability under this Act or on account of the | ||||||
17 | merchant's duty to collect, from the consumer, the tax that is | ||||||
18 | imposed by Section 4 of this Act. The phrase "rental price" | ||||||
19 | does not include compensation paid to a merchant by a consumer | ||||||
20 | in consideration of the waiver by the merchant of any right of | ||||||
21 | action or claim against the consumer for loss or damage to the | ||||||
22 | merchandise rented and also does not include a separately | ||||||
23 | stated charge for insurance or other separately stated charges | ||||||
24 | that are not for the use of tangible personal property.
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25 |
"Rental purchase agreement" means an agreement for the use | ||||||
26 | of merchandise by a consumer for personal, family, or household |
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1 | purposes for an initial period of 4 months or less that is | ||||||
2 | automatically renewable with each payment after the initial | ||||||
3 | period and that permits the consumer to become the owner of the | ||||||
4 | merchandise. | ||||||
5 | "Renting" means any transfer of the possession or right to | ||||||
6 | possession of merchandise to a user for a valuable | ||||||
7 | consideration under a rental-purchase agreement.
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8 | Section 10. Rental Purchase Agreement Occupation Tax. A tax | ||||||
9 | is imposed upon persons engaged in this State in the business | ||||||
10 | of renting merchandise under a rental-purchase agreement in | ||||||
11 | Illinois at the rate of 6.25% of the gross receipts received | ||||||
12 | from such business. Every person engaged in this State in the | ||||||
13 | business of renting merchandise shall apply to the Department | ||||||
14 | (upon a form prescribed and furnished by the Department) for a | ||||||
15 | certificate of registration under this Act. The certificate of | ||||||
16 | registration which is issued by the Department to a retailer | ||||||
17 | under the Retailers' Occupation Tax Act shall permit such | ||||||
18 | merchant to engage in a business which is taxable under this | ||||||
19 | Section without registering separately with the Department.
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20 | The Department shall have full power to administer and | ||||||
21 | enforce this Section, to collect all taxes and penalties due | ||||||
22 | hereunder, to dispose of taxes and penalties so collected in | ||||||
23 | the manner hereinafter provided, and to determine all rights to | ||||||
24 | credit memoranda, arising on account of the erroneous payment | ||||||
25 | of tax or penalty hereunder. In the administration of, and |
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1 | compliance with, this Section, the Department and persons who | ||||||
2 | are subject to this Section shall have the same rights, | ||||||
3 | remedies, privileges, immunities, powers and duties, and be | ||||||
4 | subject to the same conditions, restrictions, limitations, | ||||||
5 | penalties and definitions of terms, and employ the same modes | ||||||
6 | of procedure, as are prescribed in Sections 1, 1a, 2 through | ||||||
7 | 2-65 (in respect to all provisions therein other than the State | ||||||
8 | rate of tax), 2a, 2b, 2c, 3 (except provisions relating to | ||||||
9 | transaction returns and quarter monthly payments), 4, 5, 5a, | ||||||
10 | 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, | ||||||
11 | 11a, 12 and 13 of the Retailers' Occupation Tax Act and Section | ||||||
12 | 3-7 of the Uniform Penalty and Interest Act as fully as if | ||||||
13 | those provisions were set forth herein.
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14 | Section 15. Rental Purchase Agreement Use Tax. A tax is | ||||||
15 | imposed upon the privilege of using, in this State, merchandise | ||||||
16 | which is rented from a merchant. Such tax is at the rate of | ||||||
17 | 6.25% of the rental price paid to the merchant under any rental | ||||||
18 | purchase agreement.
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19 | The tax hereby imposed shall be collected from the consumer | ||||||
20 | by a merchant maintaining a place of business in this State and | ||||||
21 | remitted to the Department.
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22 | The tax hereby imposed and not paid to a merchant pursuant | ||||||
23 | to the preceding paragraph of this Section shall be paid to the | ||||||
24 | Department directly by any person using such merchandise within | ||||||
25 | this State.
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1 | Merchants shall collect the tax from consumers by adding | ||||||
2 | the tax to the rental price of the merchandise, when rented for | ||||||
3 | use, in the manner prescribed by the Department. The Department | ||||||
4 | shall have the power to adopt and promulgate reasonable rules | ||||||
5 | and regulations for the adding of such tax by merchants to | ||||||
6 | rental prices by prescribing bracket systems for the purpose of | ||||||
7 | enabling such merchants to add and collect, as far as | ||||||
8 | practicable, the amount of such tax.
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9 | The tax imposed by this Section shall, when collected, be | ||||||
10 | stated as a distinct item separate and apart from the rental | ||||||
11 | price of the merchandise.
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12 | The Department shall have full power to administer and | ||||||
13 | enforce this Section; to collect all taxes, penalties and | ||||||
14 | interest due hereunder; to dispose of taxes, penalties and | ||||||
15 | interest so collected in the manner hereinafter provided, and | ||||||
16 | to determine all rights to credit memoranda or refunds arising | ||||||
17 | on account of the erroneous payment of tax, penalty or interest | ||||||
18 | hereunder. In the administration of, and compliance with, this | ||||||
19 | Section, the Department and persons who are subject to this | ||||||
20 | Section shall have the same rights, remedies, privileges, | ||||||
21 | immunities, powers and duties, and be subject to the same | ||||||
22 | conditions, restrictions, limitations, penalties and | ||||||
23 | definitions of terms, and employ the same modes of procedure, | ||||||
24 | as are prescribed in Sections 2, 3 through 3-80, 4, 6, 7, 8, 9 | ||||||
25 | (except provisions relating to transaction returns and quarter | ||||||
26 | monthly payments), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21 |
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1 | and 22 of the Use Tax Act, and are not inconsistent with this | ||||||
2 | Section, as fully as if those provisions were set forth herein.
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3 | Section 16. Distribution of taxes. The proceeds from the | ||||||
4 | tax imposed under this Act shall be distributed as follows: 20% | ||||||
5 | shall be deposited into the State and Local Sales Tax Reform | ||||||
6 | Fund and 80% shall be deposited into the General Revenue Fund. | ||||||
7 | Section 20. One-Time Transitional Use Tax Credit. The | ||||||
8 | merchant may file for a one-time credit with the Department for | ||||||
9 | the Use Tax paid during the 12 months immediately prior to the | ||||||
10 | effective date of this Act. Within 18 months after effective | ||||||
11 | date of this Act, the merchant must file an application (upon a | ||||||
12 | form prescribed and furnished by the Department) to receive a | ||||||
13 | credit for the Use Tax paid on merchandise subject to tax under | ||||||
14 | this Act purchased during the 12 months immediately prior to | ||||||
15 | the effective date. The Department shall issue a credit equal | ||||||
16 | to the lesser of 50% of the tax paid by the merchant under this | ||||||
17 | Act in the 12 months immediately following the effective date | ||||||
18 | of this Act or the total Use Tax paid in the 12 months | ||||||
19 | immediately prior to the effective date of this Act. Upon the | ||||||
20 | issuance of the credit the merchant may apply the credit | ||||||
21 | against the tax imposed under this Act. | ||||||
22 | Section 21. Exemptions. This Act does not apply to tangible | ||||||
23 | personal property which is required to be titled and registered |
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1 | by an agency of this State's government. | ||||||
2 | Section 25. Rulemaking. The Department may make such rules | ||||||
3 | as it may deem necessary to implement the purposes of this Act. | ||||||
4 | Section 50. The Use Tax Act is amended by changing Section | ||||||
5 | 3-5 as follows:
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6 | (35 ILCS 105/3-5)
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7 | Sec. 3-5. Exemptions. Use of the following tangible | ||||||
8 | personal property
is exempt from the tax imposed by this Act:
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9 | (1) Personal property purchased from a corporation, | ||||||
10 | society, association,
foundation, institution, or | ||||||
11 | organization, other than a limited liability
company, that is | ||||||
12 | organized and operated as a not-for-profit service enterprise
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13 | for the benefit of persons 65 years of age or older if the | ||||||
14 | personal property
was not purchased by the enterprise for the | ||||||
15 | purpose of resale by the
enterprise.
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16 | (2) Personal property purchased by a not-for-profit | ||||||
17 | Illinois county
fair association for use in conducting, | ||||||
18 | operating, or promoting the
county fair.
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19 | (3) Personal property purchased by a not-for-profit
arts or | ||||||
20 | cultural organization that establishes, by proof required by | ||||||
21 | the
Department by
rule, that it has received an exemption under | ||||||
22 | Section 501(c)(3) of the Internal
Revenue Code and that is | ||||||
23 | organized and operated primarily for the
presentation
or |
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1 | support of arts or cultural programming, activities, or | ||||||
2 | services. These
organizations include, but are not limited to, | ||||||
3 | music and dramatic arts
organizations such as symphony | ||||||
4 | orchestras and theatrical groups, arts and
cultural service | ||||||
5 | organizations, local arts councils, visual arts organizations,
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6 | and media arts organizations.
On and after the effective date | ||||||
7 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
8 | an entity otherwise eligible for this exemption shall not
make | ||||||
9 | tax-free purchases unless it has an active identification | ||||||
10 | number issued by
the Department.
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11 | (4) Personal property purchased by a governmental body, by | ||||||
12 | a
corporation, society, association, foundation, or | ||||||
13 | institution organized and
operated exclusively for charitable, | ||||||
14 | religious, or educational purposes, or
by a not-for-profit | ||||||
15 | corporation, society, association, foundation,
institution, or | ||||||
16 | organization that has no compensated officers or employees
and | ||||||
17 | that is organized and operated primarily for the recreation of | ||||||
18 | persons
55 years of age or older. A limited liability company | ||||||
19 | may qualify for the
exemption under this paragraph only if the | ||||||
20 | limited liability company is
organized and operated | ||||||
21 | exclusively for educational purposes. On and after July
1, | ||||||
22 | 1987, however, no entity otherwise eligible for this exemption | ||||||
23 | shall make
tax-free purchases unless it has an active exemption | ||||||
24 | identification number
issued by the Department.
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25 | (5) Until July 1, 2003, a passenger car that is a | ||||||
26 | replacement vehicle to
the extent that the
purchase price of |
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1 | the car is subject to the Replacement Vehicle Tax.
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2 | (6) Until July 1, 2003 and beginning again on September 1, | ||||||
3 | 2004 through August 30, 2014, graphic arts machinery and | ||||||
4 | equipment, including
repair and replacement
parts, both new and | ||||||
5 | used, and including that manufactured on special order,
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6 | certified by the purchaser to be used primarily for graphic | ||||||
7 | arts production,
and including machinery and equipment | ||||||
8 | purchased for lease.
Equipment includes chemicals or chemicals | ||||||
9 | acting as catalysts but only if
the
chemicals or chemicals | ||||||
10 | acting as catalysts effect a direct and immediate change
upon a | ||||||
11 | graphic arts product.
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12 | (7) Farm chemicals.
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13 | (8) Legal tender, currency, medallions, or gold or silver | ||||||
14 | coinage issued by
the State of Illinois, the government of the | ||||||
15 | United States of America, or the
government of any foreign | ||||||
16 | country, and bullion.
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17 | (9) Personal property purchased from a teacher-sponsored | ||||||
18 | student
organization affiliated with an elementary or | ||||||
19 | secondary school located in
Illinois.
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20 | (10) A motor vehicle that is used for automobile renting, | ||||||
21 | as defined in the
Automobile Renting Occupation and Use Tax | ||||||
22 | Act.
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23 | (11) Farm machinery and equipment, both new and used,
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24 | including that manufactured on special order, certified by the | ||||||
25 | purchaser
to be used primarily for production agriculture or | ||||||
26 | State or federal
agricultural programs, including individual |
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1 | replacement parts for
the machinery and equipment, including | ||||||
2 | machinery and equipment
purchased
for lease,
and including | ||||||
3 | implements of husbandry defined in Section 1-130 of
the | ||||||
4 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
5 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
6 | be registered
under Section 3-809 of the Illinois Vehicle Code,
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7 | but excluding other motor
vehicles required to be
registered | ||||||
8 | under the Illinois Vehicle Code.
Horticultural polyhouses or | ||||||
9 | hoop houses used for propagating, growing, or
overwintering | ||||||
10 | plants shall be considered farm machinery and equipment under
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11 | this item (11).
Agricultural chemical tender tanks and dry | ||||||
12 | boxes shall include units sold
separately from a motor vehicle | ||||||
13 | required to be licensed and units sold mounted
on a motor | ||||||
14 | vehicle required to be licensed if the selling price of the | ||||||
15 | tender
is separately stated.
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16 | Farm machinery and equipment shall include precision | ||||||
17 | farming equipment
that is
installed or purchased to be | ||||||
18 | installed on farm machinery and equipment
including, but not | ||||||
19 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
20 | or spreaders.
Precision farming equipment includes, but is not | ||||||
21 | limited to, soil testing
sensors, computers, monitors, | ||||||
22 | software, global positioning
and mapping systems, and other | ||||||
23 | such equipment.
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24 | Farm machinery and equipment also includes computers, | ||||||
25 | sensors, software, and
related equipment used primarily in the
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26 | computer-assisted operation of production agriculture |
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1 | facilities, equipment,
and
activities such as, but not limited | ||||||
2 | to,
the collection, monitoring, and correlation of
animal and | ||||||
3 | crop data for the purpose of
formulating animal diets and | ||||||
4 | agricultural chemicals. This item (11) is exempt
from the | ||||||
5 | provisions of
Section 3-90.
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6 | (12) Until June 30, 2013, fuel and petroleum products sold | ||||||
7 | to or used by an air common
carrier, certified by the carrier | ||||||
8 | to be used for consumption, shipment, or
storage in the conduct | ||||||
9 | of its business as an air common carrier, for a
flight destined | ||||||
10 | for or returning from a location or locations
outside the | ||||||
11 | United States without regard to previous or subsequent domestic
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12 | stopovers.
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13 | Beginning July 1, 2013, fuel and petroleum products sold to | ||||||
14 | or used by an air carrier, certified by the carrier to be used | ||||||
15 | for consumption, shipment, or storage in the conduct of its | ||||||
16 | business as an air common carrier, for a flight that (i) is | ||||||
17 | engaged in foreign trade or is engaged in trade between the | ||||||
18 | United States and any of its possessions and (ii) transports at | ||||||
19 | least one individual or package for hire from the city of | ||||||
20 | origination to the city of final destination on the same | ||||||
21 | aircraft, without regard to a change in the flight number of | ||||||
22 | that aircraft. | ||||||
23 | (13) Proceeds of mandatory service charges separately
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24 | stated on customers' bills for the purchase and consumption of | ||||||
25 | food and
beverages purchased at retail from a retailer, to the | ||||||
26 | extent that the proceeds
of the service charge are in fact |
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1 | turned over as tips or as a substitute
for tips to the | ||||||
2 | employees who participate directly in preparing, serving,
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3 | hosting or cleaning up the food or beverage function with | ||||||
4 | respect to which
the service charge is imposed.
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5 | (14) Until July 1, 2003, oil field exploration, drilling, | ||||||
6 | and production
equipment,
including (i) rigs and parts of rigs, | ||||||
7 | rotary
rigs, cable tool rigs, and workover rigs, (ii) pipe and | ||||||
8 | tubular goods,
including casing and drill strings, (iii) pumps | ||||||
9 | and pump-jack units, (iv)
storage tanks and flow lines, (v) any | ||||||
10 | individual replacement part for oil
field exploration, | ||||||
11 | drilling, and production equipment, and (vi) machinery and
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12 | equipment purchased
for lease; but excluding motor vehicles | ||||||
13 | required to be registered under the
Illinois Vehicle Code.
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14 | (15) Photoprocessing machinery and equipment, including | ||||||
15 | repair and
replacement parts, both new and used, including that
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16 | manufactured on special order, certified by the purchaser to be | ||||||
17 | used
primarily for photoprocessing, and including
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18 | photoprocessing machinery and equipment purchased for lease.
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19 | (16) Coal and aggregate exploration, mining, off-highway | ||||||
20 | hauling,
processing, maintenance, and reclamation equipment,
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21 | including replacement parts and equipment, and
including | ||||||
22 | equipment purchased for lease, but excluding motor
vehicles | ||||||
23 | required to be registered under the Illinois Vehicle Code. The | ||||||
24 | changes made to this Section by Public Act 97-767 apply on and | ||||||
25 | after July 1, 2003, but no claim for credit or refund is | ||||||
26 | allowed on or after August 16, 2013 (the effective date of |
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1 | Public Act 98-456)
for such taxes paid during the period | ||||||
2 | beginning July 1, 2003 and ending on August 16, 2013 (the | ||||||
3 | effective date of Public Act 98-456).
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4 | (17) Until July 1, 2003, distillation machinery and | ||||||
5 | equipment, sold as a
unit or kit,
assembled or installed by the | ||||||
6 | retailer, certified by the user to be used
only for the | ||||||
7 | production of ethyl alcohol that will be used for consumption
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8 | as motor fuel or as a component of motor fuel for the personal | ||||||
9 | use of the
user, and not subject to sale or resale.
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10 | (18) Manufacturing and assembling machinery and equipment | ||||||
11 | used
primarily in the process of manufacturing or assembling | ||||||
12 | tangible
personal property for wholesale or retail sale or | ||||||
13 | lease, whether that sale
or lease is made directly by the | ||||||
14 | manufacturer or by some other person,
whether the materials | ||||||
15 | used in the process are
owned by the manufacturer or some other | ||||||
16 | person, or whether that sale or
lease is made apart from or as | ||||||
17 | an incident to the seller's engaging in
the service occupation | ||||||
18 | of producing machines, tools, dies, jigs,
patterns, gauges, or | ||||||
19 | other similar items of no commercial value on
special order for | ||||||
20 | a particular purchaser. The exemption provided by this | ||||||
21 | paragraph (18) does not include machinery and equipment used in | ||||||
22 | (i) the generation of electricity for wholesale or retail sale; | ||||||
23 | (ii) the generation or treatment of natural or artificial gas | ||||||
24 | for wholesale or retail sale that is delivered to customers | ||||||
25 | through pipes, pipelines, or mains; or (iii) the treatment of | ||||||
26 | water for wholesale or retail sale that is delivered to |
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1 | customers through pipes, pipelines, or mains. The provisions of | ||||||
2 | Public Act 98-583 are declaratory of existing law as to the | ||||||
3 | meaning and scope of this exemption.
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4 | (19) Personal property delivered to a purchaser or | ||||||
5 | purchaser's donee
inside Illinois when the purchase order for | ||||||
6 | that personal property was
received by a florist located | ||||||
7 | outside Illinois who has a florist located
inside Illinois | ||||||
8 | deliver the personal property.
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9 | (20) Semen used for artificial insemination of livestock | ||||||
10 | for direct
agricultural production.
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11 | (21) Horses, or interests in horses, registered with and | ||||||
12 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
13 | Registry of America, Appaloosa Horse Club, American Quarter
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14 | Horse Association, United States
Trotting Association, or | ||||||
15 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
16 | racing for prizes. This item (21) is exempt from the provisions | ||||||
17 | of Section 3-90, and the exemption provided for under this item | ||||||
18 | (21) applies for all periods beginning May 30, 1995, but no | ||||||
19 | claim for credit or refund is allowed on or after January 1, | ||||||
20 | 2008
for such taxes paid during the period beginning May 30, | ||||||
21 | 2000 and ending on January 1, 2008.
| ||||||
22 | (22) Computers and communications equipment utilized for | ||||||
23 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
24 | analysis, or treatment of hospital patients purchased by a | ||||||
25 | lessor who leases
the
equipment, under a lease of one year or | ||||||
26 | longer executed or in effect at the
time the lessor would |
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1 | otherwise be subject to the tax imposed by this Act, to a
| ||||||
2 | hospital
that has been issued an active tax exemption | ||||||
3 | identification number by
the
Department under Section 1g of the | ||||||
4 | Retailers' Occupation Tax Act. If the
equipment is leased in a | ||||||
5 | manner that does not qualify for
this exemption or is used in | ||||||
6 | any other non-exempt manner, the lessor
shall be liable for the
| ||||||
7 | tax imposed under this Act or the Service Use Tax Act, as the | ||||||
8 | case may
be, based on the fair market value of the property at | ||||||
9 | the time the
non-qualifying use occurs. No lessor shall collect | ||||||
10 | or attempt to collect an
amount (however
designated) that | ||||||
11 | purports to reimburse that lessor for the tax imposed by this
| ||||||
12 | Act or the Service Use Tax Act, as the case may be, if the tax | ||||||
13 | has not been
paid by the lessor. If a lessor improperly | ||||||
14 | collects any such amount from the
lessee, the lessee shall have | ||||||
15 | a legal right to claim a refund of that amount
from the lessor. | ||||||
16 | If, however, that amount is not refunded to the lessee for
any | ||||||
17 | reason, the lessor is liable to pay that amount to the | ||||||
18 | Department.
| ||||||
19 | (23) Personal property purchased by a lessor who leases the
| ||||||
20 | property, under
a
lease of
one year or longer executed or in | ||||||
21 | effect at the time
the lessor would otherwise be subject to the | ||||||
22 | tax imposed by this Act,
to a governmental body
that has been | ||||||
23 | issued an active sales tax exemption identification number by | ||||||
24 | the
Department under Section 1g of the Retailers' Occupation | ||||||
25 | Tax Act.
If the
property is leased in a manner that does not | ||||||
26 | qualify for
this exemption
or used in any other non-exempt |
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1 | manner, the lessor shall be liable for the
tax imposed under | ||||||
2 | this Act or the Service Use Tax Act, as the case may
be, based | ||||||
3 | on the fair market value of the property at the time the
| ||||||
4 | non-qualifying use occurs. No lessor shall collect or attempt | ||||||
5 | to collect an
amount (however
designated) that purports to | ||||||
6 | reimburse that lessor for the tax imposed by this
Act or the | ||||||
7 | Service Use Tax Act, as the case may be, if the tax has not been
| ||||||
8 | paid by the lessor. If a lessor improperly collects any such | ||||||
9 | amount from the
lessee, the lessee shall have a legal right to | ||||||
10 | claim a refund of that amount
from the lessor. If, however, | ||||||
11 | that amount is not refunded to the lessee for
any reason, the | ||||||
12 | lessor is liable to pay that amount to the Department.
| ||||||
13 | (24) Beginning with taxable years ending on or after | ||||||
14 | December
31, 1995
and
ending with taxable years ending on or | ||||||
15 | before December 31, 2004,
personal property that is
donated for | ||||||
16 | disaster relief to be used in a State or federally declared
| ||||||
17 | disaster area in Illinois or bordering Illinois by a | ||||||
18 | manufacturer or retailer
that is registered in this State to a | ||||||
19 | corporation, society, association,
foundation, or institution | ||||||
20 | that has been issued a sales tax exemption
identification | ||||||
21 | number by the Department that assists victims of the disaster
| ||||||
22 | who reside within the declared disaster area.
| ||||||
23 | (25) Beginning with taxable years ending on or after | ||||||
24 | December
31, 1995 and
ending with taxable years ending on or | ||||||
25 | before December 31, 2004, personal
property that is used in the | ||||||
26 | performance of infrastructure repairs in this
State, including |
| |||||||
| |||||||
1 | but not limited to municipal roads and streets, access roads,
| ||||||
2 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
3 | line extensions,
water distribution and purification | ||||||
4 | facilities, storm water drainage and
retention facilities, and | ||||||
5 | sewage treatment facilities, resulting from a State
or | ||||||
6 | federally declared disaster in Illinois or bordering Illinois | ||||||
7 | when such
repairs are initiated on facilities located in the | ||||||
8 | declared disaster area
within 6 months after the disaster.
| ||||||
9 | (26) Beginning July 1, 1999, game or game birds purchased | ||||||
10 | at a "game
breeding
and hunting preserve area" as that term is
| ||||||
11 | used in
the Wildlife Code. This paragraph is exempt from the | ||||||
12 | provisions
of
Section 3-90.
| ||||||
13 | (27) A motor vehicle, as that term is defined in Section | ||||||
14 | 1-146
of the
Illinois
Vehicle Code, that is donated to a | ||||||
15 | corporation, limited liability company,
society, association, | ||||||
16 | foundation, or institution that is determined by the
Department | ||||||
17 | to be organized and operated exclusively for educational | ||||||
18 | purposes.
For purposes of this exemption, "a corporation, | ||||||
19 | limited liability company,
society, association, foundation, | ||||||
20 | or institution organized and operated
exclusively for | ||||||
21 | educational purposes" means all tax-supported public schools,
| ||||||
22 | private schools that offer systematic instruction in useful | ||||||
23 | branches of
learning by methods common to public schools and | ||||||
24 | that compare favorably in
their scope and intensity with the | ||||||
25 | course of study presented in tax-supported
schools, and | ||||||
26 | vocational or technical schools or institutes organized and
|
| |||||||
| |||||||
1 | operated exclusively to provide a course of study of not less | ||||||
2 | than 6 weeks
duration and designed to prepare individuals to | ||||||
3 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
4 | industrial, business, or commercial
occupation.
| ||||||
5 | (28) Beginning January 1, 2000, personal property, | ||||||
6 | including
food,
purchased through fundraising
events for the | ||||||
7 | benefit of
a public or private elementary or
secondary school, | ||||||
8 | a group of those schools, or one or more school
districts if | ||||||
9 | the events are
sponsored by an entity recognized by the school | ||||||
10 | district that consists
primarily of volunteers and includes
| ||||||
11 | parents and teachers of the school children. This paragraph | ||||||
12 | does not apply
to fundraising
events (i) for the benefit of | ||||||
13 | private home instruction or (ii)
for which the fundraising | ||||||
14 | entity purchases the personal property sold at
the events from | ||||||
15 | another individual or entity that sold the property for the
| ||||||
16 | purpose of resale by the fundraising entity and that
profits | ||||||
17 | from the sale to the
fundraising entity. This paragraph is | ||||||
18 | exempt
from the provisions
of Section 3-90.
| ||||||
19 | (29) Beginning January 1, 2000 and through December 31, | ||||||
20 | 2001, new or
used automatic vending
machines that prepare and | ||||||
21 | serve hot food and beverages, including coffee, soup,
and
other | ||||||
22 | items, and replacement parts for these machines.
Beginning | ||||||
23 | January 1,
2002 and through June 30, 2003, machines and parts | ||||||
24 | for machines used in
commercial, coin-operated amusement and | ||||||
25 | vending business if a use or occupation
tax is paid on the | ||||||
26 | gross receipts derived from the use of the commercial,
|
| |||||||
| |||||||
1 | coin-operated amusement and vending machines.
This
paragraph
| ||||||
2 | is exempt from the provisions of Section 3-90.
| ||||||
3 | (30) Beginning January 1, 2001 and through June 30, 2016, | ||||||
4 | food for human consumption that is to be consumed off the | ||||||
5 | premises
where it is sold (other than alcoholic beverages, soft | ||||||
6 | drinks, and food that
has been prepared for immediate | ||||||
7 | consumption) and prescription and
nonprescription medicines, | ||||||
8 | drugs, medical appliances, and insulin, urine
testing | ||||||
9 | materials, syringes, and needles used by diabetics, for human | ||||||
10 | use, when
purchased for use by a person receiving medical | ||||||
11 | assistance under Article V of
the Illinois Public Aid Code who | ||||||
12 | resides in a licensed long-term care facility,
as defined in | ||||||
13 | the Nursing Home Care Act, or in a licensed facility as defined | ||||||
14 | in the ID/DD Community Care Act, the MC/DD Act, or the | ||||||
15 | Specialized Mental Health Rehabilitation Act of 2013.
| ||||||
16 | (31) Beginning on
the effective date of this amendatory Act | ||||||
17 | of the 92nd General Assembly,
computers and communications | ||||||
18 | equipment
utilized for any hospital purpose and equipment used | ||||||
19 | in the diagnosis,
analysis, or treatment of hospital patients | ||||||
20 | purchased by a lessor who leases
the equipment, under a lease | ||||||
21 | of one year or longer executed or in effect at the
time the | ||||||
22 | lessor would otherwise be subject to the tax imposed by this | ||||||
23 | Act, to a
hospital that has been issued an active tax exemption | ||||||
24 | identification number by
the Department under Section 1g of the | ||||||
25 | Retailers' Occupation Tax Act. If the
equipment is leased in a | ||||||
26 | manner that does not qualify for this exemption or is
used in |
| |||||||
| |||||||
1 | any other nonexempt manner, the lessor shall be liable for the | ||||||
2 | tax
imposed under this Act or the Service Use Tax Act, as the | ||||||
3 | case may be, based on
the fair market value of the property at | ||||||
4 | the time the nonqualifying use
occurs. No lessor shall collect | ||||||
5 | or attempt to collect an amount (however
designated) that | ||||||
6 | purports to reimburse that lessor for the tax imposed by this
| ||||||
7 | Act or the Service Use Tax Act, as the case may be, if the tax | ||||||
8 | has not been
paid by the lessor. If a lessor improperly | ||||||
9 | collects any such amount from the
lessee, the lessee shall have | ||||||
10 | a legal right to claim a refund of that amount
from the lessor. | ||||||
11 | If, however, that amount is not refunded to the lessee for
any | ||||||
12 | reason, the lessor is liable to pay that amount to the | ||||||
13 | Department.
This paragraph is exempt from the provisions of | ||||||
14 | Section 3-90.
| ||||||
15 | (32) Beginning on
the effective date of this amendatory Act | ||||||
16 | of the 92nd General Assembly,
personal property purchased by a | ||||||
17 | lessor who leases the property,
under a lease of one year or | ||||||
18 | longer executed or in effect at the time the
lessor would | ||||||
19 | otherwise be subject to the tax imposed by this Act, to a
| ||||||
20 | governmental body that has been issued an active sales tax | ||||||
21 | exemption
identification number by the Department under | ||||||
22 | Section 1g of the Retailers'
Occupation Tax Act. If the | ||||||
23 | property is leased in a manner that does not
qualify for this | ||||||
24 | exemption or used in any other nonexempt manner, the lessor
| ||||||
25 | shall be liable for the tax imposed under this Act or the | ||||||
26 | Service Use Tax Act,
as the case may be, based on the fair |
| |||||||
| |||||||
1 | market value of the property at the time
the nonqualifying use | ||||||
2 | occurs. No lessor shall collect or attempt to collect
an amount | ||||||
3 | (however designated) that purports to reimburse that lessor for | ||||||
4 | the
tax imposed by this Act or the Service Use Tax Act, as the | ||||||
5 | case may be, if the
tax has not been paid by the lessor. If a | ||||||
6 | lessor improperly collects any such
amount from the lessee, the | ||||||
7 | lessee shall have a legal right to claim a refund
of that | ||||||
8 | amount from the lessor. If, however, that amount is not | ||||||
9 | refunded to
the lessee for any reason, the lessor is liable to | ||||||
10 | pay that amount to the
Department. This paragraph is exempt | ||||||
11 | from the provisions of Section 3-90.
| ||||||
12 | (33) On and after July 1, 2003 and through June 30, 2004, | ||||||
13 | the use in this State of motor vehicles of
the second division | ||||||
14 | with a gross vehicle weight in excess of 8,000 pounds and
that | ||||||
15 | are subject to the commercial distribution fee imposed under | ||||||
16 | Section
3-815.1 of the Illinois Vehicle Code. Beginning on July | ||||||
17 | 1, 2004 and through June 30, 2005, the use in this State of | ||||||
18 | motor vehicles of the second division: (i) with a gross vehicle | ||||||
19 | weight rating in excess of 8,000 pounds; (ii) that are subject | ||||||
20 | to the commercial distribution fee imposed under Section | ||||||
21 | 3-815.1 of the Illinois Vehicle Code; and (iii) that are | ||||||
22 | primarily used for commercial purposes. Through June 30, 2005, | ||||||
23 | this exemption applies to repair and
replacement parts added | ||||||
24 | after the initial purchase of such a motor vehicle if
that | ||||||
25 | motor
vehicle is used in a manner that would qualify for the | ||||||
26 | rolling stock exemption
otherwise provided for in this Act. For |
| |||||||
| |||||||
1 | purposes of this paragraph, the term "used for commercial | ||||||
2 | purposes" means the transportation of persons or property in | ||||||
3 | furtherance of any commercial or industrial enterprise, | ||||||
4 | whether for-hire or not.
| ||||||
5 | (34) Beginning January 1, 2008, tangible personal property | ||||||
6 | used in the construction or maintenance of a community water | ||||||
7 | supply, as defined under Section 3.145 of the Environmental | ||||||
8 | Protection Act, that is operated by a not-for-profit | ||||||
9 | corporation that holds a valid water supply permit issued under | ||||||
10 | Title IV of the Environmental Protection Act. This paragraph is | ||||||
11 | exempt from the provisions of Section 3-90. | ||||||
12 | (35) Beginning January 1, 2010, materials, parts, | ||||||
13 | equipment, components, and furnishings incorporated into or | ||||||
14 | upon an aircraft as part of the modification, refurbishment, | ||||||
15 | completion, replacement, repair, or maintenance of the | ||||||
16 | aircraft. This exemption includes consumable supplies used in | ||||||
17 | the modification, refurbishment, completion, replacement, | ||||||
18 | repair, and maintenance of aircraft, but excludes any | ||||||
19 | materials, parts, equipment, components, and consumable | ||||||
20 | supplies used in the modification, replacement, repair, and | ||||||
21 | maintenance of aircraft engines or power plants, whether such | ||||||
22 | engines or power plants are installed or uninstalled upon any | ||||||
23 | such aircraft. "Consumable supplies" include, but are not | ||||||
24 | limited to, adhesive, tape, sandpaper, general purpose | ||||||
25 | lubricants, cleaning solution, latex gloves, and protective | ||||||
26 | films. This exemption applies only to the use of qualifying |
| |||||||
| |||||||
1 | tangible personal property by persons who modify, refurbish, | ||||||
2 | complete, repair, replace, or maintain aircraft and who (i) | ||||||
3 | hold an Air Agency Certificate and are empowered to operate an | ||||||
4 | approved repair station by the Federal Aviation | ||||||
5 | Administration, (ii) have a Class IV Rating, and (iii) conduct | ||||||
6 | operations in accordance with Part 145 of the Federal Aviation | ||||||
7 | Regulations. The exemption does not include aircraft operated | ||||||
8 | by a commercial air carrier providing scheduled passenger air | ||||||
9 | service pursuant to authority issued under Part 121 or Part 129 | ||||||
10 | of the Federal Aviation Regulations. The changes made to this | ||||||
11 | paragraph (35) by Public Act 98-534 are declarative of existing | ||||||
12 | law. | ||||||
13 | (36) Tangible personal property purchased by a | ||||||
14 | public-facilities corporation, as described in Section | ||||||
15 | 11-65-10 of the Illinois Municipal Code, for purposes of | ||||||
16 | constructing or furnishing a municipal convention hall, but | ||||||
17 | only if the legal title to the municipal convention hall is | ||||||
18 | transferred to the municipality without any further | ||||||
19 | consideration by or on behalf of the municipality at the time | ||||||
20 | of the completion of the municipal convention hall or upon the | ||||||
21 | retirement or redemption of any bonds or other debt instruments | ||||||
22 | issued by the public-facilities corporation in connection with | ||||||
23 | the development of the municipal convention hall. This | ||||||
24 | exemption includes existing public-facilities corporations as | ||||||
25 | provided in Section 11-65-25 of the Illinois Municipal Code. | ||||||
26 | This paragraph is exempt from the provisions of Section 3-90. |
| |||||||
| |||||||
1 | (37) Beginning January 1, 2017, menstrual pads, tampons, | ||||||
2 | and menstrual cups. | ||||||
3 | (38) Merchandise that is subject to the Rental Purchase | ||||||
4 | Agreement Occupation and Use Tax. The purchaser must certify | ||||||
5 | that the item is purchased to be rented subject to a rental | ||||||
6 | purchase agreement, as defined in the Rental Purchase Agreement | ||||||
7 | Act, and provide proof of registration under the Rental | ||||||
8 | Purchase Agreement Occupation and Use Tax Act. This paragraph | ||||||
9 | is exempt from the provisions of Section 3-90. | ||||||
10 | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | ||||||
11 | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | ||||||
12 | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | ||||||
13 | 7-29-15; 99-855, eff. 8-19-16.)
| ||||||
14 | Section 55. The Retailers' Occupation Tax Act is amended by | ||||||
15 | changing Section 2-5 as follows:
| ||||||
16 | (35 ILCS 120/2-5)
| ||||||
17 | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | ||||||
18 | sale of
the following tangible personal property are exempt | ||||||
19 | from the tax imposed
by this Act:
| ||||||
20 | (1) Farm chemicals.
| ||||||
21 | (2) Farm machinery and equipment, both new and used, | ||||||
22 | including that
manufactured on special order, certified by the | ||||||
23 | purchaser to be used
primarily for production agriculture or | ||||||
24 | State or federal agricultural
programs, including individual |
| |||||||
| |||||||
1 | replacement parts for the machinery and
equipment, including | ||||||
2 | machinery and equipment purchased for lease,
and including | ||||||
3 | implements of husbandry defined in Section 1-130 of
the | ||||||
4 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
5 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
6 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
7 | but
excluding other motor vehicles required to be registered | ||||||
8 | under the Illinois
Vehicle Code.
Horticultural polyhouses or | ||||||
9 | hoop houses used for propagating, growing, or
overwintering | ||||||
10 | plants shall be considered farm machinery and equipment under
| ||||||
11 | this item (2).
Agricultural chemical tender tanks and dry boxes | ||||||
12 | shall include units sold
separately from a motor vehicle | ||||||
13 | required to be licensed and units sold mounted
on a motor | ||||||
14 | vehicle required to be licensed, if the selling price of the | ||||||
15 | tender
is separately stated.
| ||||||
16 | Farm machinery and equipment shall include precision | ||||||
17 | farming equipment
that is
installed or purchased to be | ||||||
18 | installed on farm machinery and equipment
including, but not | ||||||
19 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
20 | or spreaders.
Precision farming equipment includes, but is not | ||||||
21 | limited to,
soil testing sensors, computers, monitors, | ||||||
22 | software, global positioning
and mapping systems, and other | ||||||
23 | such equipment.
| ||||||
24 | Farm machinery and equipment also includes computers, | ||||||
25 | sensors, software, and
related equipment used primarily in the
| ||||||
26 | computer-assisted operation of production agriculture |
| |||||||
| |||||||
1 | facilities, equipment,
and activities such as, but
not limited | ||||||
2 | to,
the collection, monitoring, and correlation of
animal and | ||||||
3 | crop data for the purpose of
formulating animal diets and | ||||||
4 | agricultural chemicals. This item (2) is exempt
from the | ||||||
5 | provisions of
Section 2-70.
| ||||||
6 | (3) Until July 1, 2003, distillation machinery and | ||||||
7 | equipment, sold as a
unit or kit,
assembled or installed by the | ||||||
8 | retailer, certified by the user to be used
only for the | ||||||
9 | production of ethyl alcohol that will be used for consumption
| ||||||
10 | as motor fuel or as a component of motor fuel for the personal | ||||||
11 | use of the
user, and not subject to sale or resale.
| ||||||
12 | (4) Until July 1, 2003 and beginning again September 1, | ||||||
13 | 2004 through August 30, 2014, graphic arts machinery and | ||||||
14 | equipment, including
repair and
replacement parts, both new and | ||||||
15 | used, and including that manufactured on
special order or | ||||||
16 | purchased for lease, certified by the purchaser to be used
| ||||||
17 | primarily for graphic arts production.
Equipment includes | ||||||
18 | chemicals or
chemicals acting as catalysts but only if
the | ||||||
19 | chemicals or chemicals acting as catalysts effect a direct and | ||||||
20 | immediate
change upon a
graphic arts product.
| ||||||
21 | (5) A motor vehicle that is used for automobile renting, as | ||||||
22 | defined in the Automobile Renting Occupation and Use Tax Act. | ||||||
23 | This paragraph is exempt from
the provisions of Section 2-70.
| ||||||
24 | (6) Personal property sold by a teacher-sponsored student | ||||||
25 | organization
affiliated with an elementary or secondary school | ||||||
26 | located in Illinois.
|
| |||||||
| |||||||
1 | (7) Until July 1, 2003, proceeds of that portion of the | ||||||
2 | selling price of
a passenger car the
sale of which is subject | ||||||
3 | to the Replacement Vehicle Tax.
| ||||||
4 | (8) Personal property sold to an Illinois county fair | ||||||
5 | association for
use in conducting, operating, or promoting the | ||||||
6 | county fair.
| ||||||
7 | (9) Personal property sold to a not-for-profit arts
or | ||||||
8 | cultural organization that establishes, by proof required by | ||||||
9 | the Department
by
rule, that it has received an exemption under | ||||||
10 | Section 501(c)(3) of the
Internal Revenue Code and that is | ||||||
11 | organized and operated primarily for the
presentation
or | ||||||
12 | support of arts or cultural programming, activities, or | ||||||
13 | services. These
organizations include, but are not limited to, | ||||||
14 | music and dramatic arts
organizations such as symphony | ||||||
15 | orchestras and theatrical groups, arts and
cultural service | ||||||
16 | organizations, local arts councils, visual arts organizations,
| ||||||
17 | and media arts organizations.
On and after the effective date | ||||||
18 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
19 | an entity otherwise eligible for this exemption shall not
make | ||||||
20 | tax-free purchases unless it has an active identification | ||||||
21 | number issued by
the Department.
| ||||||
22 | (10) Personal property sold by a corporation, society, | ||||||
23 | association,
foundation, institution, or organization, other | ||||||
24 | than a limited liability
company, that is organized and | ||||||
25 | operated as a not-for-profit service enterprise
for the benefit | ||||||
26 | of persons 65 years of age or older if the personal property
|
| |||||||
| |||||||
1 | was not purchased by the enterprise for the purpose of resale | ||||||
2 | by the
enterprise.
| ||||||
3 | (11) Personal property sold to a governmental body, to a | ||||||
4 | corporation,
society, association, foundation, or institution | ||||||
5 | organized and operated
exclusively for charitable, religious, | ||||||
6 | or educational purposes, or to a
not-for-profit corporation, | ||||||
7 | society, association, foundation, institution,
or organization | ||||||
8 | that has no compensated officers or employees and that is
| ||||||
9 | organized and operated primarily for the recreation of persons | ||||||
10 | 55 years of
age or older. A limited liability company may | ||||||
11 | qualify for the exemption under
this paragraph only if the | ||||||
12 | limited liability company is organized and operated
| ||||||
13 | exclusively for educational purposes. On and after July 1, | ||||||
14 | 1987, however, no
entity otherwise eligible for this exemption | ||||||
15 | shall make tax-free purchases
unless it has an active | ||||||
16 | identification number issued by the Department.
| ||||||
17 | (12) Tangible personal property sold to
interstate | ||||||
18 | carriers
for hire for use as
rolling stock moving in interstate | ||||||
19 | commerce or to lessors under leases of
one year or longer | ||||||
20 | executed or in effect at the time of purchase by
interstate | ||||||
21 | carriers for hire for use as rolling stock moving in interstate
| ||||||
22 | commerce and equipment operated by a telecommunications | ||||||
23 | provider, licensed as a
common carrier by the Federal | ||||||
24 | Communications Commission, which is permanently
installed in | ||||||
25 | or affixed to aircraft moving in interstate commerce.
| ||||||
26 | (12-5) On and after July 1, 2003 and through June 30, 2004, |
| |||||||
| |||||||
1 | motor vehicles of the second division
with a gross vehicle | ||||||
2 | weight in excess of 8,000 pounds
that
are
subject to the | ||||||
3 | commercial distribution fee imposed under Section 3-815.1 of
| ||||||
4 | the Illinois
Vehicle Code. Beginning on July 1, 2004 and | ||||||
5 | through June 30, 2005, the use in this State of motor vehicles | ||||||
6 | of the second division: (i) with a gross vehicle weight rating | ||||||
7 | in excess of 8,000 pounds; (ii) that are subject to the | ||||||
8 | commercial distribution fee imposed under Section 3-815.1 of | ||||||
9 | the Illinois Vehicle Code; and (iii) that are primarily used | ||||||
10 | for commercial purposes. Through June 30, 2005, this
exemption | ||||||
11 | applies to repair and replacement parts added
after the
initial | ||||||
12 | purchase of such a motor vehicle if that motor vehicle is used | ||||||
13 | in a
manner that
would qualify for the rolling stock exemption | ||||||
14 | otherwise provided for in this
Act. For purposes of this | ||||||
15 | paragraph, "used for commercial purposes" means the | ||||||
16 | transportation of persons or property in furtherance of any | ||||||
17 | commercial or industrial enterprise whether for-hire or not.
| ||||||
18 | (13) Proceeds from sales to owners, lessors, or
shippers of
| ||||||
19 | tangible personal property that is utilized by interstate | ||||||
20 | carriers for
hire for use as rolling stock moving in interstate | ||||||
21 | commerce
and equipment operated by a telecommunications | ||||||
22 | provider, licensed as a
common carrier by the Federal | ||||||
23 | Communications Commission, which is
permanently installed in | ||||||
24 | or affixed to aircraft moving in interstate commerce.
| ||||||
25 | (14) Machinery and equipment that will be used by the | ||||||
26 | purchaser, or a
lessee of the purchaser, primarily in the |
| |||||||
| |||||||
1 | process of manufacturing or
assembling tangible personal | ||||||
2 | property for wholesale or retail sale or
lease, whether the | ||||||
3 | sale or lease is made directly by the manufacturer or by
some | ||||||
4 | other person, whether the materials used in the process are | ||||||
5 | owned by
the manufacturer or some other person, or whether the | ||||||
6 | sale or lease is made
apart from or as an incident to the | ||||||
7 | seller's engaging in the service
occupation of producing | ||||||
8 | machines, tools, dies, jigs, patterns, gauges, or
other similar | ||||||
9 | items of no commercial value on special order for a particular
| ||||||
10 | purchaser. The exemption provided by this paragraph (14) does | ||||||
11 | not include machinery and equipment used in (i) the generation | ||||||
12 | of electricity for wholesale or retail sale; (ii) the | ||||||
13 | generation or treatment of natural or artificial gas for | ||||||
14 | wholesale or retail sale that is delivered to customers through | ||||||
15 | pipes, pipelines, or mains; or (iii) the treatment of water for | ||||||
16 | wholesale or retail sale that is delivered to customers through | ||||||
17 | pipes, pipelines, or mains. The provisions of Public Act 98-583 | ||||||
18 | are declaratory of existing law as to the meaning and scope of | ||||||
19 | this exemption.
| ||||||
20 | (15) Proceeds of mandatory service charges separately | ||||||
21 | stated on
customers' bills for purchase and consumption of food | ||||||
22 | and beverages, to the
extent that the proceeds of the service | ||||||
23 | charge are in fact turned over as
tips or as a substitute for | ||||||
24 | tips to the employees who participate directly
in preparing, | ||||||
25 | serving, hosting or cleaning up the food or beverage function
| ||||||
26 | with respect to which the service charge is imposed.
|
| |||||||
| |||||||
1 | (16) Petroleum products sold to a purchaser if the seller
| ||||||
2 | is prohibited by federal law from charging tax to the | ||||||
3 | purchaser.
| ||||||
4 | (17) Tangible personal property sold to a common carrier by | ||||||
5 | rail or
motor that
receives the physical possession of the | ||||||
6 | property in Illinois and that
transports the property, or | ||||||
7 | shares with another common carrier in the
transportation of the | ||||||
8 | property, out of Illinois on a standard uniform bill
of lading | ||||||
9 | showing the seller of the property as the shipper or consignor | ||||||
10 | of
the property to a destination outside Illinois, for use | ||||||
11 | outside Illinois.
| ||||||
12 | (18) Legal tender, currency, medallions, or gold or silver | ||||||
13 | coinage
issued by the State of Illinois, the government of the | ||||||
14 | United States of
America, or the government of any foreign | ||||||
15 | country, and bullion.
| ||||||
16 | (19) Until July 1 2003, oil field exploration, drilling, | ||||||
17 | and production
equipment, including
(i) rigs and parts of rigs, | ||||||
18 | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||||||
19 | tubular goods, including casing and
drill strings, (iii) pumps | ||||||
20 | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||||||
21 | individual replacement part for oil field exploration,
| ||||||
22 | drilling, and production equipment, and (vi) machinery and | ||||||
23 | equipment purchased
for lease; but
excluding motor vehicles | ||||||
24 | required to be registered under the Illinois
Vehicle Code.
| ||||||
25 | (20) Photoprocessing machinery and equipment, including | ||||||
26 | repair and
replacement parts, both new and used, including that |
| |||||||
| |||||||
1 | manufactured on
special order, certified by the purchaser to be | ||||||
2 | used primarily for
photoprocessing, and including | ||||||
3 | photoprocessing machinery and equipment
purchased for lease.
| ||||||
4 | (21) Coal and aggregate exploration, mining, off-highway | ||||||
5 | hauling,
processing,
maintenance, and reclamation equipment, | ||||||
6 | including
replacement parts and equipment, and including
| ||||||
7 | equipment purchased for lease, but excluding motor vehicles | ||||||
8 | required to be
registered under the Illinois Vehicle Code. The | ||||||
9 | changes made to this Section by Public Act 97-767 apply on and | ||||||
10 | after July 1, 2003, but no claim for credit or refund is | ||||||
11 | allowed on or after August 16, 2013 (the effective date of | ||||||
12 | Public Act 98-456)
for such taxes paid during the period | ||||||
13 | beginning July 1, 2003 and ending on August 16, 2013 (the | ||||||
14 | effective date of Public Act 98-456).
| ||||||
15 | (22) Until June 30, 2013, fuel and petroleum products sold | ||||||
16 | to or used by an air carrier,
certified by the carrier to be | ||||||
17 | used for consumption, shipment, or storage
in the conduct of | ||||||
18 | its business as an air common carrier, for a flight
destined | ||||||
19 | for or returning from a location or locations
outside the | ||||||
20 | United States without regard to previous or subsequent domestic
| ||||||
21 | stopovers.
| ||||||
22 | Beginning July 1, 2013, fuel and petroleum products sold to | ||||||
23 | or used by an air carrier, certified by the carrier to be used | ||||||
24 | for consumption, shipment, or storage in the conduct of its | ||||||
25 | business as an air common carrier, for a flight that (i) is | ||||||
26 | engaged in foreign trade or is engaged in trade between the |
| |||||||
| |||||||
1 | United States and any of its possessions and (ii) transports at | ||||||
2 | least one individual or package for hire from the city of | ||||||
3 | origination to the city of final destination on the same | ||||||
4 | aircraft, without regard to a change in the flight number of | ||||||
5 | that aircraft. | ||||||
6 | (23) A transaction in which the purchase order is received | ||||||
7 | by a florist
who is located outside Illinois, but who has a | ||||||
8 | florist located in Illinois
deliver the property to the | ||||||
9 | purchaser or the purchaser's donee in Illinois.
| ||||||
10 | (24) Fuel consumed or used in the operation of ships, | ||||||
11 | barges, or vessels
that are used primarily in or for the | ||||||
12 | transportation of property or the
conveyance of persons for | ||||||
13 | hire on rivers bordering on this State if the
fuel is delivered | ||||||
14 | by the seller to the purchaser's barge, ship, or vessel
while | ||||||
15 | it is afloat upon that bordering river.
| ||||||
16 | (25) Except as provided in item (25-5) of this Section, a
| ||||||
17 | motor vehicle sold in this State to a nonresident even though | ||||||
18 | the
motor vehicle is delivered to the nonresident in this | ||||||
19 | State, if the motor
vehicle is not to be titled in this State, | ||||||
20 | and if a drive-away permit
is issued to the motor vehicle as | ||||||
21 | provided in Section 3-603 of the Illinois
Vehicle Code or if | ||||||
22 | the nonresident purchaser has vehicle registration
plates to | ||||||
23 | transfer to the motor vehicle upon returning to his or her home
| ||||||
24 | state. The issuance of the drive-away permit or having
the
| ||||||
25 | out-of-state registration plates to be transferred is prima | ||||||
26 | facie evidence
that the motor vehicle will not be titled in |
| |||||||
| |||||||
1 | this State.
| ||||||
2 | (25-5) The exemption under item (25) does not apply if the | ||||||
3 | state in which the motor vehicle will be titled does not allow | ||||||
4 | a reciprocal exemption for a motor vehicle sold and delivered | ||||||
5 | in that state to an Illinois resident but titled in Illinois. | ||||||
6 | The tax collected under this Act on the sale of a motor vehicle | ||||||
7 | in this State to a resident of another state that does not | ||||||
8 | allow a reciprocal exemption shall be imposed at a rate equal | ||||||
9 | to the state's rate of tax on taxable property in the state in | ||||||
10 | which the purchaser is a resident, except that the tax shall | ||||||
11 | not exceed the tax that would otherwise be imposed under this | ||||||
12 | Act. At the time of the sale, the purchaser shall execute a | ||||||
13 | statement, signed under penalty of perjury, of his or her | ||||||
14 | intent to title the vehicle in the state in which the purchaser | ||||||
15 | is a resident within 30 days after the sale and of the fact of | ||||||
16 | the payment to the State of Illinois of tax in an amount | ||||||
17 | equivalent to the state's rate of tax on taxable property in | ||||||
18 | his or her state of residence and shall submit the statement to | ||||||
19 | the appropriate tax collection agency in his or her state of | ||||||
20 | residence. In addition, the retailer must retain a signed copy | ||||||
21 | of the statement in his or her records. Nothing in this item | ||||||
22 | shall be construed to require the removal of the vehicle from | ||||||
23 | this state following the filing of an intent to title the | ||||||
24 | vehicle in the purchaser's state of residence if the purchaser | ||||||
25 | titles the vehicle in his or her state of residence within 30 | ||||||
26 | days after the date of sale. The tax collected under this Act |
| |||||||
| |||||||
1 | in accordance with this item (25-5) shall be proportionately | ||||||
2 | distributed as if the tax were collected at the 6.25% general | ||||||
3 | rate imposed under this Act.
| ||||||
4 | (25-7) Beginning on July 1, 2007, no tax is imposed under | ||||||
5 | this Act on the sale of an aircraft, as defined in Section 3 of | ||||||
6 | the Illinois Aeronautics Act, if all of the following | ||||||
7 | conditions are met: | ||||||
8 | (1) the aircraft leaves this State within 15 days after | ||||||
9 | the later of either the issuance of the final billing for | ||||||
10 | the sale of the aircraft, or the authorized approval for | ||||||
11 | return to service, completion of the maintenance record | ||||||
12 | entry, and completion of the test flight and ground test | ||||||
13 | for inspection, as required by 14 C.F.R. 91.407; | ||||||
14 | (2) the aircraft is not based or registered in this | ||||||
15 | State after the sale of the aircraft; and | ||||||
16 | (3) the seller retains in his or her books and records | ||||||
17 | and provides to the Department a signed and dated | ||||||
18 | certification from the purchaser, on a form prescribed by | ||||||
19 | the Department, certifying that the requirements of this | ||||||
20 | item (25-7) are met. The certificate must also include the | ||||||
21 | name and address of the purchaser, the address of the | ||||||
22 | location where the aircraft is to be titled or registered, | ||||||
23 | the address of the primary physical location of the | ||||||
24 | aircraft, and other information that the Department may | ||||||
25 | reasonably require. | ||||||
26 | For purposes of this item (25-7): |
| |||||||
| |||||||
1 | "Based in this State" means hangared, stored, or otherwise | ||||||
2 | used, excluding post-sale customizations as defined in this | ||||||
3 | Section, for 10 or more days in each 12-month period | ||||||
4 | immediately following the date of the sale of the aircraft. | ||||||
5 | "Registered in this State" means an aircraft registered | ||||||
6 | with the Department of Transportation, Aeronautics Division, | ||||||
7 | or titled or registered with the Federal Aviation | ||||||
8 | Administration to an address located in this State. | ||||||
9 | This paragraph (25-7) is exempt from the provisions
of
| ||||||
10 | Section 2-70.
| ||||||
11 | (26) Semen used for artificial insemination of livestock | ||||||
12 | for direct
agricultural production.
| ||||||
13 | (27) Horses, or interests in horses, registered with and | ||||||
14 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
15 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
16 | Horse Association, United States
Trotting Association, or | ||||||
17 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
18 | racing for prizes. This item (27) is exempt from the provisions | ||||||
19 | of Section 2-70, and the exemption provided for under this item | ||||||
20 | (27) applies for all periods beginning May 30, 1995, but no | ||||||
21 | claim for credit or refund is allowed on or after January 1, | ||||||
22 | 2008 (the effective date of Public Act 95-88)
for such taxes | ||||||
23 | paid during the period beginning May 30, 2000 and ending on | ||||||
24 | January 1, 2008 (the effective date of Public Act 95-88).
| ||||||
25 | (28) Computers and communications equipment utilized for | ||||||
26 | any
hospital
purpose
and equipment used in the diagnosis,
|
| |||||||
| |||||||
1 | analysis, or treatment of hospital patients sold to a lessor | ||||||
2 | who leases the
equipment, under a lease of one year or longer | ||||||
3 | executed or in effect at the
time of the purchase, to a
| ||||||
4 | hospital
that has been issued an active tax exemption | ||||||
5 | identification number by the
Department under Section 1g of | ||||||
6 | this Act.
| ||||||
7 | (29) Personal property sold to a lessor who leases the
| ||||||
8 | property, under a
lease of one year or longer executed or in | ||||||
9 | effect at the time of the purchase,
to a governmental body
that | ||||||
10 | has been issued an active tax exemption identification number | ||||||
11 | by the
Department under Section 1g of this Act.
| ||||||
12 | (30) Beginning with taxable years ending on or after | ||||||
13 | December
31, 1995
and
ending with taxable years ending on or | ||||||
14 | before December 31, 2004,
personal property that is
donated for | ||||||
15 | disaster relief to be used in a State or federally declared
| ||||||
16 | disaster area in Illinois or bordering Illinois by a | ||||||
17 | manufacturer or retailer
that is registered in this State to a | ||||||
18 | corporation, society, association,
foundation, or institution | ||||||
19 | that has been issued a sales tax exemption
identification | ||||||
20 | number by the Department that assists victims of the disaster
| ||||||
21 | who reside within the declared disaster area.
| ||||||
22 | (31) Beginning with taxable years ending on or after | ||||||
23 | December
31, 1995 and
ending with taxable years ending on or | ||||||
24 | before December 31, 2004, personal
property that is used in the | ||||||
25 | performance of infrastructure repairs in this
State, including | ||||||
26 | but not limited to municipal roads and streets, access roads,
|
| |||||||
| |||||||
1 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
2 | line extensions,
water distribution and purification | ||||||
3 | facilities, storm water drainage and
retention facilities, and | ||||||
4 | sewage treatment facilities, resulting from a State
or | ||||||
5 | federally declared disaster in Illinois or bordering Illinois | ||||||
6 | when such
repairs are initiated on facilities located in the | ||||||
7 | declared disaster area
within 6 months after the disaster.
| ||||||
8 | (32) Beginning July 1, 1999, game or game birds sold at a | ||||||
9 | "game breeding
and
hunting preserve area" as that term is used
| ||||||
10 | in the
Wildlife Code. This paragraph is exempt from the | ||||||
11 | provisions
of
Section 2-70.
| ||||||
12 | (33) A motor vehicle, as that term is defined in Section | ||||||
13 | 1-146
of the
Illinois Vehicle Code, that is donated to a | ||||||
14 | corporation, limited liability
company, society, association, | ||||||
15 | foundation, or institution that is determined by
the Department | ||||||
16 | to be organized and operated exclusively for educational
| ||||||
17 | purposes. For purposes of this exemption, "a corporation, | ||||||
18 | limited liability
company, society, association, foundation, | ||||||
19 | or institution organized and
operated
exclusively for | ||||||
20 | educational purposes" means all tax-supported public schools,
| ||||||
21 | private schools that offer systematic instruction in useful | ||||||
22 | branches of
learning by methods common to public schools and | ||||||
23 | that compare favorably in
their scope and intensity with the | ||||||
24 | course of study presented in tax-supported
schools, and | ||||||
25 | vocational or technical schools or institutes organized and
| ||||||
26 | operated exclusively to provide a course of study of not less |
| |||||||
| |||||||
1 | than 6 weeks
duration and designed to prepare individuals to | ||||||
2 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
3 | industrial, business, or commercial
occupation.
| ||||||
4 | (34) Beginning January 1, 2000, personal property, | ||||||
5 | including food, purchased
through fundraising events for the | ||||||
6 | benefit of a public or private elementary or
secondary school, | ||||||
7 | a group of those schools, or one or more school districts if
| ||||||
8 | the events are sponsored by an entity recognized by the school | ||||||
9 | district that
consists primarily of volunteers and includes | ||||||
10 | parents and teachers of the
school children. This paragraph | ||||||
11 | does not apply to fundraising events (i) for
the benefit of | ||||||
12 | private home instruction or (ii) for which the fundraising
| ||||||
13 | entity purchases the personal property sold at the events from | ||||||
14 | another
individual or entity that sold the property for the | ||||||
15 | purpose of resale by the
fundraising entity and that profits | ||||||
16 | from the sale to the fundraising entity.
This paragraph is | ||||||
17 | exempt from the provisions of Section 2-70.
| ||||||
18 | (35) Beginning January 1, 2000 and through December 31, | ||||||
19 | 2001, new or used
automatic vending machines that prepare and | ||||||
20 | serve hot food and beverages,
including coffee, soup, and other | ||||||
21 | items, and replacement parts for these
machines. Beginning | ||||||
22 | January 1, 2002 and through June 30, 2003, machines
and parts | ||||||
23 | for machines used in
commercial, coin-operated amusement and | ||||||
24 | vending business if a use or occupation
tax is paid on the | ||||||
25 | gross receipts derived from the use of the commercial,
| ||||||
26 | coin-operated amusement and vending machines. This paragraph |
| |||||||
| |||||||
1 | is exempt from
the provisions of Section 2-70.
| ||||||
2 | (35-5) Beginning August 23, 2001 and through June 30, 2016, | ||||||
3 | food for human consumption that is to be consumed off
the | ||||||
4 | premises where it is sold (other than alcoholic beverages, soft | ||||||
5 | drinks,
and food that has been prepared for immediate | ||||||
6 | consumption) and prescription
and nonprescription medicines, | ||||||
7 | drugs, medical appliances, and insulin, urine
testing | ||||||
8 | materials, syringes, and needles used by diabetics, for human | ||||||
9 | use, when
purchased for use by a person receiving medical | ||||||
10 | assistance under Article V of
the Illinois Public Aid Code who | ||||||
11 | resides in a licensed long-term care facility,
as defined in | ||||||
12 | the Nursing Home Care Act, or a licensed facility as defined in | ||||||
13 | the ID/DD Community Care Act, the MC/DD Act, or the Specialized | ||||||
14 | Mental Health Rehabilitation Act of 2013.
| ||||||
15 | (36) Beginning August 2, 2001, computers and | ||||||
16 | communications equipment
utilized for any hospital purpose and | ||||||
17 | equipment used in the diagnosis,
analysis, or treatment of | ||||||
18 | hospital patients sold to a lessor who leases the
equipment, | ||||||
19 | under a lease of one year or longer executed or in effect at | ||||||
20 | the
time of the purchase, to a hospital that has been issued an | ||||||
21 | active tax
exemption identification number by the Department | ||||||
22 | under Section 1g of this Act.
This paragraph is exempt from the | ||||||
23 | provisions of Section 2-70.
| ||||||
24 | (37) Beginning August 2, 2001, personal property sold to a | ||||||
25 | lessor who
leases the property, under a lease of one year or | ||||||
26 | longer executed or in effect
at the time of the purchase, to a |
| |||||||
| |||||||
1 | governmental body that has been issued an
active tax exemption | ||||||
2 | identification number by the Department under Section 1g
of | ||||||
3 | this Act. This paragraph is exempt from the provisions of | ||||||
4 | Section 2-70.
| ||||||
5 | (38) Beginning on January 1, 2002 and through June 30, | ||||||
6 | 2016, tangible personal property purchased
from an Illinois | ||||||
7 | retailer by a taxpayer engaged in centralized purchasing
| ||||||
8 | activities in Illinois who will, upon receipt of the property | ||||||
9 | in Illinois,
temporarily store the property in Illinois (i) for | ||||||
10 | the purpose of subsequently
transporting it outside this State | ||||||
11 | for use or consumption thereafter solely
outside this State or | ||||||
12 | (ii) for the purpose of being processed, fabricated, or
| ||||||
13 | manufactured into, attached to, or incorporated into other | ||||||
14 | tangible personal
property to be transported outside this State | ||||||
15 | and thereafter used or consumed
solely outside this State. The | ||||||
16 | Director of Revenue shall, pursuant to rules
adopted in | ||||||
17 | accordance with the Illinois Administrative Procedure Act, | ||||||
18 | issue a
permit to any taxpayer in good standing with the | ||||||
19 | Department who is eligible for
the exemption under this | ||||||
20 | paragraph (38). The permit issued under
this paragraph (38) | ||||||
21 | shall authorize the holder, to the extent and
in the manner | ||||||
22 | specified in the rules adopted under this Act, to purchase
| ||||||
23 | tangible personal property from a retailer exempt from the | ||||||
24 | taxes imposed by
this Act. Taxpayers shall maintain all | ||||||
25 | necessary books and records to
substantiate the use and | ||||||
26 | consumption of all such tangible personal property
outside of |
| |||||||
| |||||||
1 | the State of Illinois.
| ||||||
2 | (39) Beginning January 1, 2008, tangible personal property | ||||||
3 | used in the construction or maintenance of a community water | ||||||
4 | supply, as defined under Section 3.145 of the Environmental | ||||||
5 | Protection Act, that is operated by a not-for-profit | ||||||
6 | corporation that holds a valid water supply permit issued under | ||||||
7 | Title IV of the Environmental Protection Act. This paragraph is | ||||||
8 | exempt from the provisions of Section 2-70.
| ||||||
9 | (40) Beginning January 1, 2010, materials, parts, | ||||||
10 | equipment, components, and furnishings incorporated into or | ||||||
11 | upon an aircraft as part of the modification, refurbishment, | ||||||
12 | completion, replacement, repair, or maintenance of the | ||||||
13 | aircraft. This exemption includes consumable supplies used in | ||||||
14 | the modification, refurbishment, completion, replacement, | ||||||
15 | repair, and maintenance of aircraft, but excludes any | ||||||
16 | materials, parts, equipment, components, and consumable | ||||||
17 | supplies used in the modification, replacement, repair, and | ||||||
18 | maintenance of aircraft engines or power plants, whether such | ||||||
19 | engines or power plants are installed or uninstalled upon any | ||||||
20 | such aircraft. "Consumable supplies" include, but are not | ||||||
21 | limited to, adhesive, tape, sandpaper, general purpose | ||||||
22 | lubricants, cleaning solution, latex gloves, and protective | ||||||
23 | films. This exemption applies only to the sale of qualifying | ||||||
24 | tangible personal property to persons who modify, refurbish, | ||||||
25 | complete, replace, or maintain an aircraft and who (i) hold an | ||||||
26 | Air Agency Certificate and are empowered to operate an approved |
| |||||||
| |||||||
1 | repair station by the Federal Aviation Administration, (ii) | ||||||
2 | have a Class IV Rating, and (iii) conduct operations in | ||||||
3 | accordance with Part 145 of the Federal Aviation Regulations. | ||||||
4 | The exemption does not include aircraft operated by a | ||||||
5 | commercial air carrier providing scheduled passenger air | ||||||
6 | service pursuant to authority issued under Part 121 or Part 129 | ||||||
7 | of the Federal Aviation Regulations. The changes made to this | ||||||
8 | paragraph (40) by Public Act 98-534 are declarative of existing | ||||||
9 | law. | ||||||
10 | (41) Tangible personal property sold to a | ||||||
11 | public-facilities corporation, as described in Section | ||||||
12 | 11-65-10 of the Illinois Municipal Code, for purposes of | ||||||
13 | constructing or furnishing a municipal convention hall, but | ||||||
14 | only if the legal title to the municipal convention hall is | ||||||
15 | transferred to the municipality without any further | ||||||
16 | consideration by or on behalf of the municipality at the time | ||||||
17 | of the completion of the municipal convention hall or upon the | ||||||
18 | retirement or redemption of any bonds or other debt instruments | ||||||
19 | issued by the public-facilities corporation in connection with | ||||||
20 | the development of the municipal convention hall. This | ||||||
21 | exemption includes existing public-facilities corporations as | ||||||
22 | provided in Section 11-65-25 of the Illinois Municipal Code. | ||||||
23 | This paragraph is exempt from the provisions of Section 2-70. | ||||||
24 | (42) Beginning January 1, 2017, menstrual pads, tampons, | ||||||
25 | and menstrual cups. | ||||||
26 | (43) Merchandise that is subject to the Rental Purchase |
| |||||||
| |||||||
1 | Agreement Occupation and Use Tax. The purchaser must certify | ||||||
2 | that the item is purchased to be rented subject to a rental | ||||||
3 | purchase agreement, as defined in the Rental Purchase Agreement | ||||||
4 | Act, and provide proof of registration under the Rental | ||||||
5 | Purchase Agreement Occupation and Use Tax Act. This paragraph | ||||||
6 | is exempt from the provisions of Section 2-70. | ||||||
7 | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | ||||||
8 | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | ||||||
9 | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | ||||||
10 | 7-29-15; 99-855, eff. 8-19-16.)
| ||||||
11 | Section 99. Effective date. This Act takes effect January | ||||||
12 | 1, 2018.
|