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91_HB3897
LRB9112225SMdv
1 AN ACT concerning taxes, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Use Tax Act is amended by changing
5 Sections 3-5 and 3-50 as follows:
6 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
7 Sec. 3-5. Exemptions. Use of the following tangible
8 personal property is exempt from the tax imposed by this Act:
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
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.
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.
19 (3) Personal property purchased by a not-for-profit arts
20 or cultural organization that establishes, by proof required
21 by the Department by rule, that it has received an exemption
22 under Section 501(c)(3) of the Internal Revenue Code and that
23 is organized and operated for the presentation or support of
24 arts or cultural programming, activities, or services. These
25 organizations include, but are not limited to, music and
26 dramatic arts organizations such as symphony orchestras and
27 theatrical groups, arts and cultural service organizations,
28 local arts councils, visual arts organizations, and media
29 arts organizations.
30 (4) Personal property purchased by a governmental body,
31 by a corporation, society, association, foundation, or
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1 institution organized and operated exclusively for
2 charitable, religious, or educational purposes, or by a
3 not-for-profit corporation, society, association, foundation,
4 institution, or organization that has no compensated officers
5 or employees and that is organized and operated primarily for
6 the recreation of persons 55 years of age or older. A limited
7 liability company may qualify for the exemption under this
8 paragraph only if the limited liability company is organized
9 and operated exclusively for educational purposes. On and
10 after July 1, 1987, however, no entity otherwise eligible for
11 this exemption shall make tax-free purchases unless it has an
12 active exemption identification number issued by the
13 Department.
14 (5) A passenger car that is a replacement vehicle to the
15 extent that the purchase price of the car is subject to the
16 Replacement Vehicle Tax.
17 (6) Graphic arts machinery and equipment, including
18 repair and replacement parts, both new and used, and
19 including that manufactured on special order, certified by
20 the purchaser to be used primarily for graphic arts
21 production, and including machinery and equipment purchased
22 for lease.
23 (7) Farm chemicals.
24 (8) Legal tender, currency, medallions, or gold or
25 silver coinage issued by the State of Illinois, the
26 government of the United States of America, or the government
27 of any foreign country, and bullion.
28 (9) Personal property purchased from a teacher-sponsored
29 student organization affiliated with an elementary or
30 secondary school located in Illinois.
31 (10) A motor vehicle of the first division, a motor
32 vehicle of the second division that is a self-contained motor
33 vehicle designed or permanently converted to provide living
34 quarters for recreational, camping, or travel use, with
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1 direct walk through to the living quarters from the driver's
2 seat, or a motor vehicle of the second division that is of
3 the van configuration designed for the transportation of not
4 less than 7 nor more than 16 passengers, as defined in
5 Section 1-146 of the Illinois Vehicle Code, that is used for
6 automobile renting, as defined in the Automobile Renting
7 Occupation and Use Tax Act.
8 (11) Farm machinery and equipment, both new and used,
9 including that manufactured on special order, certified by
10 the purchaser to be used primarily for production agriculture
11 or State or federal agricultural programs, including
12 individual replacement parts for the machinery and equipment,
13 including machinery and equipment purchased for lease, and
14 including implements of husbandry defined in Section 1-130 of
15 the Illinois Vehicle Code, farm machinery and agricultural
16 chemical and fertilizer spreaders, and nurse wagons required
17 to be registered under Section 3-809 of the Illinois Vehicle
18 Code, but excluding other motor vehicles required to be
19 registered under the Illinois Vehicle Code. Horticultural
20 polyhouses or hoop houses used for propagating, growing, or
21 overwintering plants shall be considered farm machinery and
22 equipment under this item (11). Agricultural chemical tender
23 tanks and dry boxes shall include units sold separately from
24 a motor vehicle required to be licensed and units sold
25 mounted on a motor vehicle required to be licensed if the
26 selling price of the tender is separately stated.
27 Farm machinery and equipment shall include precision
28 farming equipment that is installed or purchased to be
29 installed on farm machinery and equipment including, but not
30 limited to, tractors, harvesters, sprayers, planters,
31 seeders, or spreaders. Precision farming equipment includes,
32 but is not limited to, soil testing sensors, computers,
33 monitors, software, global positioning and mapping systems,
34 and other such equipment.
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1 Farm machinery and equipment also includes computers,
2 sensors, software, and related equipment used primarily in
3 the computer-assisted operation of production agriculture
4 facilities, equipment, and activities such as, but not
5 limited to, the collection, monitoring, and correlation of
6 animal and crop data for the purpose of formulating animal
7 diets and agricultural chemicals. This item (11) is exempt
8 from the provisions of Section 3-90.
9 (12) Fuel and petroleum products sold to or used by an
10 air common carrier, certified by the carrier to be used for
11 consumption, shipment, or storage in the conduct of its
12 business as an air common carrier, for a flight destined for
13 or returning from a location or locations outside the United
14 States without regard to previous or subsequent domestic
15 stopovers.
16 (13) Proceeds of mandatory service charges separately
17 stated on customers' bills for the purchase and consumption
18 of food and beverages purchased at retail from a retailer, to
19 the extent that the proceeds of the service charge are in
20 fact turned over as tips or as a substitute for tips to the
21 employees who participate directly in preparing, serving,
22 hosting or cleaning up the food or beverage function with
23 respect to which the service charge is imposed.
24 (14) Oil field exploration, drilling, and production
25 equipment, including (i) rigs and parts of rigs, rotary rigs,
26 cable tool rigs, and workover rigs, (ii) pipe and tubular
27 goods, including casing and drill strings, (iii) pumps and
28 pump-jack units, (iv) storage tanks and flow lines, (v) any
29 individual replacement part for oil field exploration,
30 drilling, and production equipment, and (vi) machinery and
31 equipment purchased for lease; but excluding motor vehicles
32 required to be registered under the Illinois Vehicle Code.
33 (15) Photoprocessing machinery and equipment, including
34 repair and replacement parts, both new and used, including
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1 that manufactured on special order, certified by the
2 purchaser to be used primarily for photoprocessing, and
3 including photoprocessing machinery and equipment purchased
4 for lease.
5 (16) Coal exploration, mining, offhighway hauling,
6 processing, maintenance, and reclamation equipment, including
7 replacement parts and equipment, and including equipment
8 purchased for lease, but excluding motor vehicles required to
9 be registered under the Illinois Vehicle Code.
10 (17) Distillation machinery and equipment, sold as a
11 unit or kit, assembled or installed by the retailer,
12 certified by the user to be used only for the production of
13 ethyl alcohol that will be used for consumption as motor fuel
14 or as a component of motor fuel for the personal use of the
15 user, and not subject to sale or resale.
16 (18) Manufacturing and assembling machinery and
17 equipment used primarily in the process of manufacturing or
18 assembling tangible personal property for wholesale or retail
19 sale or lease, whether that sale or lease is made directly by
20 the manufacturer or by some other person, whether the
21 materials used in the process are owned by the manufacturer
22 or some other person, or whether that sale or lease is made
23 apart from or as an incident to the seller's engaging in the
24 service occupation of producing machines, tools, dies, jigs,
25 patterns, gauges, or other similar items of no commercial
26 value on special order for a particular purchaser.
27 Manufacturing and assembling machinery and equipment exempt
28 under this paragraph (18) includes computers, sensors,
29 software, and related equipment, including these items used
30 in computer-assisted design and computer assisted
31 manufacturing. This paragraph (18) is exempt from the
32 provisions of Section 3-90.
33 (19) Personal property delivered to a purchaser or
34 purchaser's donee inside Illinois when the purchase order for
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1 that personal property was received by a florist located
2 outside Illinois who has a florist located inside Illinois
3 deliver the personal property.
4 (20) Semen used for artificial insemination of livestock
5 for direct agricultural production.
6 (21) Horses, or interests in horses, registered with and
7 meeting the requirements of any of the Arabian Horse Club
8 Registry of America, Appaloosa Horse Club, American Quarter
9 Horse Association, United States Trotting Association, or
10 Jockey Club, as appropriate, used for purposes of breeding or
11 racing for prizes.
12 (22) Computers and communications equipment utilized for
13 any hospital purpose and equipment used in the diagnosis,
14 analysis, or treatment of hospital patients purchased by a
15 lessor who leases the equipment, under a lease of one year or
16 longer executed or in effect at the time the lessor would
17 otherwise be subject to the tax imposed by this Act, to a
18 hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act. If the equipment is
21 leased in a manner that does not qualify for this exemption
22 or is used in any other non-exempt manner, the lessor shall
23 be liable for the tax imposed under this Act or the Service
24 Use Tax Act, as the case may be, based on the fair market
25 value of the property at the time the non-qualifying use
26 occurs. No lessor shall collect or attempt to collect an
27 amount (however designated) that purports to reimburse that
28 lessor for the tax imposed by this Act or the Service Use Tax
29 Act, as the case may be, if the tax has not been paid by the
30 lessor. If a lessor improperly collects any such amount from
31 the lessee, the lessee shall have a legal right to claim a
32 refund of that amount from the lessor. If, however, that
33 amount is not refunded to the lessee for any reason, the
34 lessor is liable to pay that amount to the Department.
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1 (23) Personal property purchased by a lessor who leases
2 the property, under a lease of one year or longer executed
3 or in effect at the time the lessor would otherwise be
4 subject to the tax imposed by this Act, to a governmental
5 body that has been issued an active sales tax exemption
6 identification number by the Department under Section 1g of
7 the Retailers' Occupation Tax Act. If the property is leased
8 in a manner that does not qualify for this exemption or used
9 in any other non-exempt manner, the lessor shall be liable
10 for the tax imposed under this Act or the Service Use Tax
11 Act, as the case may be, based on the fair market value of
12 the property at the time the non-qualifying use occurs. No
13 lessor shall collect or attempt to collect an amount (however
14 designated) that purports to reimburse that lessor for the
15 tax imposed by this Act or the Service Use Tax Act, as the
16 case may be, if the tax has not been paid by the lessor. If
17 a lessor improperly collects any such amount from the lessee,
18 the lessee shall have a legal right to claim a refund of that
19 amount from the lessor. If, however, that amount is not
20 refunded to the lessee for any reason, the lessor is liable
21 to pay that amount to the Department.
22 (24) 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 donated
25 for disaster relief to be used in a State or federally
26 declared disaster area in Illinois or bordering Illinois by a
27 manufacturer or retailer that is registered in this State to
28 a corporation, society, association, foundation, or
29 institution that has been issued a sales tax exemption
30 identification number by the Department that assists victims
31 of the disaster who reside within the declared disaster area.
32 (25) Beginning with taxable years ending on or after
33 December 31, 1995 and ending with taxable years ending on or
34 before December 31, 2004, personal property that is used in
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1 the performance of infrastructure repairs in this State,
2 including but not limited to municipal roads and streets,
3 access roads, bridges, sidewalks, waste disposal systems,
4 water and sewer line extensions, water distribution and
5 purification facilities, storm water drainage and retention
6 facilities, and sewage treatment facilities, resulting from a
7 State or federally declared disaster in Illinois or bordering
8 Illinois when such repairs are initiated on facilities
9 located in the declared disaster area within 6 months after
10 the disaster.
11 (26) Beginning July 1, 1999, game or game birds
12 purchased at a "game breeding and hunting preserve area" or
13 an "exotic game hunting area" as those terms are used in the
14 Wildlife Code or at a hunting enclosure approved through
15 rules adopted by the Department of Natural Resources. This
16 paragraph is exempt from the provisions of Section 3-90.
17 (27) (26) A motor vehicle, as that term is defined in
18 Section 1-146 of the Illinois Vehicle Code, that is donated
19 to a corporation, limited liability company, society,
20 association, foundation, or institution that is determined by
21 the Department to be organized and operated exclusively for
22 educational purposes. For purposes of this exemption, "a
23 corporation, limited liability company, society, association,
24 foundation, or institution organized and operated exclusively
25 for educational purposes" means all tax-supported public
26 schools, private schools that offer systematic instruction in
27 useful branches of learning by methods common to public
28 schools and that compare favorably in their scope and
29 intensity with the course of study presented in tax-supported
30 schools, and vocational or technical schools or institutes
31 organized and operated exclusively to provide a course of
32 study of not less than 6 weeks duration and designed to
33 prepare individuals to follow a trade or to pursue a manual,
34 technical, mechanical, industrial, business, or commercial
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1 occupation.
2 (28) (27) Beginning January 1, 2000, personal property,
3 including food, purchased through fundraising events for the
4 benefit of a public or private elementary or secondary
5 school, a group of those schools, or one or more school
6 districts if the events are sponsored by an entity recognized
7 by the school district that consists primarily of volunteers
8 and includes parents and teachers of the school children.
9 This paragraph does not apply to fundraising events (i) for
10 the benefit of private home instruction or (ii) for which the
11 fundraising entity purchases the personal property sold at
12 the events from another individual or entity that sold the
13 property for the purpose of resale by the fundraising entity
14 and that profits from the sale to the fundraising entity.
15 This paragraph is exempt from the provisions of Section 3-90.
16 (29) (26) Beginning January 1, 2000, new or used
17 automatic vending machines that prepare and serve hot food
18 and beverages, including coffee, soup, and other items, and
19 replacement parts for these machines. This paragraph is
20 exempt from the provisions of Section 3-90.
21 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
22 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
23 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
24 eff. 8-20-99; revised 9-29-99.)
25 (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
26 Sec. 3-50. Manufacturing and assembly exemption. The
27 manufacturing and assembling machinery and equipment
28 exemption includes machinery and equipment that replaces
29 machinery and equipment in an existing manufacturing facility
30 as well as machinery and equipment that are for use in an
31 expanded or new manufacturing facility. The machinery and
32 equipment exemption also includes machinery and equipment
33 used in the general maintenance or repair of exempt machinery
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1 and equipment or for in-house manufacture of exempt machinery
2 and equipment. For the purposes of this exemption, terms have
3 the following meanings:
4 (1) "Manufacturing process" means the production of
5 an article of tangible personal property, whether the
6 article is a finished product or an article for use in
7 the process of manufacturing or assembling a different
8 article of tangible personal property, by a procedure
9 commonly regarded as manufacturing, processing,
10 fabricating, or refining that changes some existing
11 material into a material with a different form, use, or
12 name. In relation to a recognized integrated business
13 composed of a series of operations that collectively
14 constitute manufacturing, or individually constitute
15 manufacturing operations, the manufacturing process
16 commences with the first operation or stage of production
17 in the series and does not end until the completion of
18 the final product in the last operation or stage of
19 production in the series. For purposes of this
20 exemption, photoprocessing is a manufacturing process of
21 tangible personal property for wholesale or retail sale.
22 (2) "Assembling process" means the production of an
23 article of tangible personal property, whether the
24 article is a finished product or an article for use in
25 the process of manufacturing or assembling a different
26 article of tangible personal property, by the combination
27 of existing materials in a manner commonly regarded as
28 assembling that results in an article or material of a
29 different form, use, or name.
30 (3) "Machinery" means major mechanical machines or
31 major components of those machines contributing to a
32 manufacturing or assembling process.
33 (4) "Equipment" includes an independent device or
34 tool separate from machinery but essential to an
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1 integrated manufacturing or assembly process; including
2 computers used primarily in operating exempt machinery
3 and equipment in a computer assisted design, computer
4 assisted manufacturing (CAD/CAM) system contributing to a
5 manufacturing or assembly process; any subunit or
6 assembly comprising a component of any machinery or
7 auxiliary, adjunct, or attachment parts of machinery,
8 such as tools, dies, jigs, fixtures, patterns, and molds;
9 and any parts that require periodic replacement in the
10 course of normal operation; but does not include hand
11 tools.
12 The manufacturing and assembling machinery and equipment
13 exemption includes the sale of materials to a purchaser who
14 produces exempted types of machinery, equipment, or tools and
15 who rents or leases that machinery, equipment, or tools to a
16 manufacturer of tangible personal property. This exemption
17 also includes the sale of materials to a purchaser who
18 manufactures those materials into an exempted type of
19 machinery, equipment, or tools that the purchaser uses
20 himself or herself in the manufacturing of tangible personal
21 property. This exemption includes the sale of exempted types
22 of machinery or equipment to a purchaser who is not the
23 manufacturer, but who rents or leases the use of the property
24 to a manufacturer. The purchaser of the machinery and
25 equipment who has an active resale registration number shall
26 furnish that number to the seller at the time of purchase. A
27 user of the machinery, equipment, or tools without an active
28 resale registration number shall prepare a certificate of
29 exemption for each transaction stating facts establishing the
30 exemption for that transaction, and that certificate shall be
31 available to the Department for inspection or audit. The
32 Department shall prescribe the form of the certificate.
33 Informal rulings, opinions, or letters issued by the
34 Department in response to an inquiry or request for an
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1 opinion from any person regarding the coverage and
2 applicability of this exemption to specific devices shall be
3 published, maintained as a public record, and made available
4 for public inspection and copying. If the informal ruling,
5 opinion, or letter contains trade secrets or other
6 confidential information, where possible, the Department
7 shall delete that information before publication. Whenever
8 informal rulings, opinions, or letters contain a policy of
9 general applicability, the Department shall formulate and
10 adopt that policy as a rule in accordance with the Illinois
11 Administrative Procedure Act.
12 (Source: P.A. 91-51, eff. 6-30-99.)
13 Section 10. The Retailers' Occupation Tax Act is amended
14 by changing Sections 2-5 and 2-45 as follows:
15 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
16 Sec. 2-5. Exemptions. Gross receipts from proceeds from
17 the sale of the following tangible personal property are
18 exempt from the tax imposed by this Act:
19 (1) Farm chemicals.
20 (2) Farm machinery and equipment, both new and used,
21 including that manufactured on special order, certified by
22 the purchaser to be used primarily for production agriculture
23 or State or federal agricultural programs, including
24 individual replacement parts for the machinery and equipment,
25 including machinery and equipment purchased for lease, and
26 including implements of husbandry defined in Section 1-130 of
27 the Illinois Vehicle Code, farm machinery and agricultural
28 chemical and fertilizer spreaders, and nurse wagons required
29 to be registered under Section 3-809 of the Illinois Vehicle
30 Code, but excluding other motor vehicles required to be
31 registered under the Illinois Vehicle Code. Horticultural
32 polyhouses or hoop houses used for propagating, growing, or
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1 overwintering plants shall be considered farm machinery and
2 equipment under this item (2). Agricultural chemical tender
3 tanks and dry boxes shall include units sold separately from
4 a motor vehicle required to be licensed and units sold
5 mounted on a motor vehicle required to be licensed, if the
6 selling price of the tender is separately stated.
7 Farm machinery and equipment shall include precision
8 farming equipment that is installed or purchased to be
9 installed on farm machinery and equipment including, but not
10 limited to, tractors, harvesters, sprayers, planters,
11 seeders, or spreaders. Precision farming equipment includes,
12 but is not limited to, soil testing sensors, computers,
13 monitors, software, global positioning and mapping systems,
14 and other such equipment.
15 Farm machinery and equipment also includes computers,
16 sensors, software, and related equipment used primarily in
17 the computer-assisted operation of production agriculture
18 facilities, equipment, and activities such as, but not
19 limited to, the collection, monitoring, and correlation of
20 animal and crop data for the purpose of formulating animal
21 diets and agricultural chemicals. This item (7) is exempt
22 from the provisions of Section 2-70.
23 (3) Distillation machinery and equipment, sold as a unit
24 or kit, assembled or installed by the retailer, certified by
25 the user to be used only for the production of ethyl alcohol
26 that will be used for consumption as motor fuel or as a
27 component of motor fuel for the personal use of the user, and
28 not subject to sale or resale.
29 (4) Graphic arts machinery and equipment, including
30 repair and replacement parts, both new and used, and
31 including that manufactured on special order or purchased for
32 lease, certified by the purchaser to be used primarily for
33 graphic arts production.
34 (5) A motor vehicle of the first division, a motor
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1 vehicle of the second division that is a self-contained motor
2 vehicle designed or permanently converted to provide living
3 quarters for recreational, camping, or travel use, with
4 direct walk through access to the living quarters from the
5 driver's seat, or a motor vehicle of the second division that
6 is of the van configuration designed for the transportation
7 of not less than 7 nor more than 16 passengers, as defined in
8 Section 1-146 of the Illinois Vehicle Code, that is used for
9 automobile renting, as defined in the Automobile Renting
10 Occupation and Use Tax Act.
11 (6) Personal property sold by a teacher-sponsored
12 student organization affiliated with an elementary or
13 secondary school located in Illinois.
14 (7) Proceeds of that portion of the selling price of a
15 passenger car the sale of which is subject to the Replacement
16 Vehicle Tax.
17 (8) Personal property sold to an Illinois county fair
18 association for use in conducting, operating, or promoting
19 the county fair.
20 (9) Personal property sold to a not-for-profit arts or
21 cultural organization that establishes, by proof required by
22 the Department by rule, that it has received an exemption
23 under Section 501(c)(3) of the Internal Revenue Code and that
24 is organized and operated for the presentation or support of
25 arts or cultural programming, activities, or services. These
26 organizations include, but are not limited to, music and
27 dramatic arts organizations such as symphony orchestras and
28 theatrical groups, arts and cultural service organizations,
29 local arts councils, visual arts organizations, and media
30 arts organizations.
31 (10) Personal property sold by a corporation, society,
32 association, foundation, institution, or organization, other
33 than a limited liability company, that is organized and
34 operated as a not-for-profit service enterprise for the
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1 benefit of persons 65 years of age or older if the personal
2 property was not purchased by the enterprise for the purpose
3 of resale by the enterprise.
4 (11) Personal property sold to a governmental body, to a
5 corporation, society, association, foundation, or institution
6 organized and operated exclusively for charitable, religious,
7 or educational purposes, or to a not-for-profit corporation,
8 society, association, foundation, institution, or
9 organization that has no compensated officers or employees
10 and that is organized and operated primarily for the
11 recreation of persons 55 years of age or older. A limited
12 liability company may qualify for the exemption under this
13 paragraph only if the limited liability company is organized
14 and operated exclusively for educational purposes. On and
15 after July 1, 1987, however, no entity otherwise eligible for
16 this exemption shall make tax-free purchases unless it has an
17 active identification number issued by the Department.
18 (12) Personal property sold to interstate carriers for
19 hire for use as rolling stock moving in interstate commerce
20 or to lessors under leases of one year or longer executed or
21 in effect at the time of purchase by interstate carriers for
22 hire for use as rolling stock moving in interstate commerce
23 and equipment operated by a telecommunications provider,
24 licensed as a common carrier by the Federal Communications
25 Commission, which is permanently installed in or affixed to
26 aircraft moving in interstate commerce.
27 (13) Proceeds from sales to owners, lessors, or shippers
28 of tangible personal property that is utilized by interstate
29 carriers for hire for use as rolling stock moving in
30 interstate commerce and equipment operated by a
31 telecommunications provider, licensed as a common carrier by
32 the Federal Communications Commission, which is permanently
33 installed in or affixed to aircraft moving in interstate
34 commerce.
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1 (14) Machinery and equipment that will be used by the
2 purchaser, or a lessee of the purchaser, primarily in the
3 process of manufacturing or assembling tangible personal
4 property for wholesale or retail sale or lease, whether the
5 sale or lease is made directly by the manufacturer or by some
6 other person, whether the materials used in the process are
7 owned by the manufacturer or some other person, or whether
8 the sale or lease is made apart from or as an incident to the
9 seller's engaging in the service occupation of producing
10 machines, tools, dies, jigs, patterns, gauges, or other
11 similar items of no commercial value on special order for a
12 particular purchaser. Machinery and equipment exempt under
13 this paragraph (14) includes computers, sensors, software,
14 and related equipment, including these items used in
15 computer-assisted design and computer assisted manufacturing.
16 This paragraph (14) is exempt from the provisions of Section
17 2-70.
18 (15) Proceeds of mandatory service charges separately
19 stated on customers' bills for purchase and consumption of
20 food and beverages, to the extent that the proceeds of the
21 service charge are in fact turned over as tips or as a
22 substitute for tips to the employees who participate directly
23 in preparing, serving, hosting or cleaning up the food or
24 beverage function with respect to which the service charge is
25 imposed.
26 (16) Petroleum products sold to a purchaser if the
27 seller is prohibited by federal law from charging tax to the
28 purchaser.
29 (17) Tangible personal property sold to a common carrier
30 by rail or motor that receives the physical possession of the
31 property in Illinois and that transports the property, or
32 shares with another common carrier in the transportation of
33 the property, out of Illinois on a standard uniform bill of
34 lading showing the seller of the property as the shipper or
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1 consignor of the property to a destination outside Illinois,
2 for use outside Illinois.
3 (18) Legal tender, currency, medallions, or gold or
4 silver coinage issued by the State of Illinois, the
5 government of the United States of America, or the government
6 of any foreign country, and bullion.
7 (19) Oil field exploration, drilling, and production
8 equipment, including (i) rigs and parts of rigs, rotary rigs,
9 cable tool rigs, and workover rigs, (ii) pipe and tubular
10 goods, including casing and drill strings, (iii) pumps and
11 pump-jack units, (iv) storage tanks and flow lines, (v) any
12 individual replacement part for oil field exploration,
13 drilling, and production equipment, and (vi) machinery and
14 equipment purchased for lease; but excluding motor vehicles
15 required to be registered under the Illinois Vehicle Code.
16 (20) Photoprocessing machinery and equipment, including
17 repair and replacement parts, both new and used, including
18 that manufactured on special order, certified by the
19 purchaser to be used primarily for photoprocessing, and
20 including photoprocessing machinery and equipment purchased
21 for lease.
22 (21) Coal exploration, mining, offhighway hauling,
23 processing, maintenance, and reclamation equipment, including
24 replacement parts and equipment, and including equipment
25 purchased for lease, but excluding motor vehicles required to
26 be registered under the Illinois Vehicle Code.
27 (22) Fuel and petroleum products sold to or used by an
28 air carrier, certified by the carrier to be used for
29 consumption, shipment, or storage in the conduct of its
30 business as an air common carrier, for a flight destined for
31 or returning from a location or locations outside the United
32 States without regard to previous or subsequent domestic
33 stopovers.
34 (23) A transaction in which the purchase order is
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1 received by a florist who is located outside Illinois, but
2 who has a florist located in Illinois deliver the property to
3 the purchaser or the purchaser's donee in Illinois.
4 (24) Fuel consumed or used in the operation of ships,
5 barges, or vessels that are used primarily in or for the
6 transportation of property or the conveyance of persons for
7 hire on rivers bordering on this State if the fuel is
8 delivered by the seller to the purchaser's barge, ship, or
9 vessel while it is afloat upon that bordering river.
10 (25) A motor vehicle sold in this State to a nonresident
11 even though the motor vehicle is delivered to the nonresident
12 in this State, if the motor vehicle is not to be titled in
13 this State, and if a driveaway decal permit is issued to the
14 motor vehicle as provided in Section 3-603 of the Illinois
15 Vehicle Code or if the nonresident purchaser has vehicle
16 registration plates to transfer to the motor vehicle upon
17 returning to his or her home state. The issuance of the
18 driveaway decal permit or having the out-of-state
19 registration plates to be transferred is prima facie evidence
20 that the motor vehicle will not be titled in this State.
21 (26) Semen used for artificial insemination of livestock
22 for direct agricultural production.
23 (27) Horses, or interests in horses, registered with and
24 meeting the requirements of any of the Arabian Horse Club
25 Registry of America, Appaloosa Horse Club, American Quarter
26 Horse Association, United States Trotting Association, or
27 Jockey Club, as appropriate, used for purposes of breeding or
28 racing for prizes.
29 (28) Computers and communications equipment utilized for
30 any hospital purpose and equipment used in the diagnosis,
31 analysis, or treatment of hospital patients sold to a lessor
32 who leases the equipment, under a lease of one year or longer
33 executed or in effect at the time of the purchase, to a
34 hospital that has been issued an active tax exemption
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1 identification number by the Department under Section 1g of
2 this Act.
3 (29) Personal property sold to a lessor who leases the
4 property, under a lease of one year or longer executed or in
5 effect at the time of the purchase, to a governmental body
6 that has been issued an active tax exemption identification
7 number by the Department under Section 1g of this Act.
8 (30) Beginning with taxable years ending on or after
9 December 31, 1995 and ending with taxable years ending on or
10 before December 31, 2004, personal property that is donated
11 for disaster relief to be used in a State or federally
12 declared disaster area in Illinois or bordering Illinois by a
13 manufacturer or retailer that is registered in this State to
14 a corporation, society, association, foundation, or
15 institution that has been issued a sales tax exemption
16 identification number by the Department that assists victims
17 of the disaster who reside within the declared disaster area.
18 (31) Beginning with taxable years ending on or after
19 December 31, 1995 and ending with taxable years ending on or
20 before December 31, 2004, personal property that is used in
21 the performance of infrastructure repairs in this State,
22 including but not limited to municipal roads and streets,
23 access roads, bridges, sidewalks, waste disposal systems,
24 water and sewer line extensions, water distribution and
25 purification facilities, storm water drainage and retention
26 facilities, and sewage treatment facilities, resulting from a
27 State or federally declared disaster in Illinois or bordering
28 Illinois when such repairs are initiated on facilities
29 located in the declared disaster area within 6 months after
30 the disaster.
31 (32) Beginning July 1, 1999, game or game birds sold at
32 a "game breeding and hunting preserve area" or an "exotic
33 game hunting area" as those terms are used in the Wildlife
34 Code or at a hunting enclosure approved through rules adopted
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1 by the Department of Natural Resources. This paragraph is
2 exempt from the provisions of Section 2-70.
3 (33) (32) A motor vehicle, as that term is defined in
4 Section 1-146 of the Illinois Vehicle Code, that is donated
5 to a corporation, limited liability company, society,
6 association, foundation, or institution that is determined by
7 the Department to be organized and operated exclusively for
8 educational purposes. For purposes of this exemption, "a
9 corporation, limited liability company, society, association,
10 foundation, or institution organized and operated exclusively
11 for educational purposes" means all tax-supported public
12 schools, private schools that offer systematic instruction in
13 useful branches of learning by methods common to public
14 schools and that compare favorably in their scope and
15 intensity with the course of study presented in tax-supported
16 schools, and vocational or technical schools or institutes
17 organized and operated exclusively to provide a course of
18 study of not less than 6 weeks duration and designed to
19 prepare individuals to follow a trade or to pursue a manual,
20 technical, mechanical, industrial, business, or commercial
21 occupation.
22 (34) (33) Beginning January 1, 2000, personal property,
23 including food, purchased through fundraising events for the
24 benefit of a public or private elementary or secondary
25 school, a group of those schools, or one or more school
26 districts if the events are sponsored by an entity recognized
27 by the school district that consists primarily of volunteers
28 and includes parents and teachers of the school children.
29 This paragraph does not apply to fundraising events (i) for
30 the benefit of private home instruction or (ii) for which the
31 fundraising entity purchases the personal property sold at
32 the events from another individual or entity that sold the
33 property for the purpose of resale by the fundraising entity
34 and that profits from the sale to the fundraising entity.
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1 This paragraph is exempt from the provisions of Section 2-70.
2 (35) (32) Beginning January 1, 2000, new or used
3 automatic vending machines that prepare and serve hot food
4 and beverages, including coffee, soup, and other items, and
5 replacement parts for these machines. This paragraph is
6 exempt from the provisions of Section 2-70.
7 (Source: P.A. 90-14, eff. 7-1-97; 90-519, eff. 6-1-98;
8 90-552, eff. 12-12-97; 90-605, eff. 6-30-98; 91-51, eff.
9 6-30-99; 91-200, eff. 7-20-99; 91-439, eff. 8-6-99; 91-533,
10 eff. 8-13-99; 91-637, eff. 8-20-99; 91-644, eff. 8-20-99;
11 revised 9-28-99.)
12 (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
13 Sec. 2-45. Manufacturing and assembly exemption. The
14 manufacturing and assembly machinery and equipment exemption
15 includes machinery and equipment that replaces machinery and
16 equipment in an existing manufacturing facility as well as
17 machinery and equipment that are for use in an expanded or
18 new manufacturing facility.
19 The machinery and equipment exemption also includes
20 machinery and equipment used in the general maintenance or
21 repair of exempt machinery and equipment or for in-house
22 manufacture of exempt machinery and equipment. For the
23 purposes of this exemption, terms have the following
24 meanings:
25 (1) "Manufacturing process" means the production of
26 an article of tangible personal property, whether the
27 article is a finished product or an article for use in
28 the process of manufacturing or assembling a different
29 article of tangible personal property, by a procedure
30 commonly regarded as manufacturing, processing,
31 fabricating, or refining that changes some existing
32 material or materials into a material with a different
33 form, use, or name. In relation to a recognized
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1 integrated business composed of a series of operations
2 that collectively constitute manufacturing, or
3 individually constitute manufacturing operations, the
4 manufacturing process commences with the first operation
5 or stage of production in the series and does not end
6 until the completion of the final product in the last
7 operation or stage of production in the series. For
8 purposes of this exemption, photoprocessing is a
9 manufacturing process of tangible personal property for
10 wholesale or retail sale.
11 (2) "Assembling process" means the production of an
12 article of tangible personal property, whether the
13 article is a finished product or an article for use in
14 the process of manufacturing or assembling a different
15 article of tangible personal property, by the combination
16 of existing materials in a manner commonly regarded as
17 assembling that results in a material of a different
18 form, use, or name.
19 (3) "Machinery" means major mechanical machines or
20 major components of those machines contributing to a
21 manufacturing or assembling process.
22 (4) "Equipment" includes an independent device or
23 tool separate from machinery but essential to an
24 integrated manufacturing or assembly process; including
25 computers used primarily in operating exempt machinery
26 and equipment in a computer assisted design, computer
27 assisted manufacturing (CAD/CAM) system contributing to a
28 manufacturing or assembly process; any subunit or
29 assembly comprising a component of any machinery or
30 auxiliary, adjunct, or attachment parts of machinery,
31 such as tools, dies, jigs, fixtures, patterns, and molds;
32 and any parts that require periodic replacement in the
33 course of normal operation; but does not include hand
34 tools.
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1 The manufacturing and assembling machinery and equipment
2 exemption includes the sale of materials to a purchaser who
3 produces exempted types of machinery, equipment, or tools and
4 who rents or leases that machinery, equipment, or tools to a
5 manufacturer of tangible personal property. This exemption
6 also includes the sale of materials to a purchaser who
7 manufactures those materials into an exempted type of
8 machinery, equipment, or tools that the purchaser uses
9 himself or herself in the manufacturing of tangible personal
10 property. The purchaser of the machinery and equipment who
11 has an active resale registration number shall furnish that
12 number to the seller at the time of purchase. A purchaser of
13 the machinery, equipment, and tools without an active resale
14 registration number shall furnish to the seller a certificate
15 of exemption for each transaction stating facts establishing
16 the exemption for that transaction, and that certificate
17 shall be available to the Department for inspection or audit.
18 Informal rulings, opinions, or letters issued by the
19 Department in response to an inquiry or request for an
20 opinion from any person regarding the coverage and
21 applicability of this exemption to specific devices shall be
22 published, maintained as a public record, and made available
23 for public inspection and copying. If the informal ruling,
24 opinion, or letter contains trade secrets or other
25 confidential information, where possible, the Department
26 shall delete that information before publication. Whenever
27 informal rulings, opinions, or letters contain a policy of
28 general applicability, the Department shall formulate and
29 adopt that policy as a rule in accordance with the Illinois
30 Administrative Procedure Act.
31 (Source: P.A. 91-51, eff. 6-30-99.)
32 Section 90. The State Mandates Act is amended by adding
33 Section 8.24 as follows:
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1 (30 ILCS 805/8.24 new)
2 Sec. 8.24. Exempt mandate. Notwithstanding Sections 6
3 and 8 of this Act, no reimbursement by the State is required
4 for the implementation of any mandate created by this
5 amendatory Act of the 91st General Assembly.