State of Illinois
92nd General Assembly
Legislation

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[ Engrossed ][ Enrolled ][ House Amendment 001 ]
[ Senate Amendment 001 ]


92_HB0539

 
                                               LRB9203973SMdv

 1        AN ACT concerning taxation.

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

 4        Section  5.   The  Use  Tax  Act  is  amended by changing
 5    Section 3-5 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
 
                            -2-                LRB9203973SMdv
 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
 
                            -3-                LRB9203973SMdv
 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.
 
                            -4-                LRB9203973SMdv
 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
 
                            -5-                LRB9203973SMdv
 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        (19)  Personal  property  delivered  to  a  purchaser  or
28    purchaser's donee inside Illinois when the purchase order for
29    that  personal  property  was  received  by a florist located
30    outside Illinois who has a florist  located  inside  Illinois
31    deliver the personal property.
32        (20)  Semen used for artificial insemination of livestock
33    for direct agricultural production.
34        (21)  Horses, or interests in horses, registered with and
 
                            -6-                LRB9203973SMdv
 1    meeting  the  requirements  of  any of the Arabian Horse Club
 2    Registry of America, Appaloosa Horse Club,  American  Quarter
 3    Horse  Association,  United  States  Trotting Association, or
 4    Jockey Club, as appropriate, used for purposes of breeding or
 5    racing for prizes.
 6        (22)  Computers and communications equipment utilized for
 7    any hospital purpose and equipment  used  in  the  diagnosis,
 8    analysis,  or  treatment  of hospital patients purchased by a
 9    lessor who leases the equipment, under a lease of one year or
10    longer executed or in effect at the  time  the  lessor  would
11    otherwise  be  subject  to  the tax imposed by this Act, to a
12    hospital  that  has  been  issued  an  active  tax  exemption
13    identification  number  by the Department under Section 1g of
14    the Retailers' Occupation  Tax  Act.   If  the  equipment  is
15    leased  in  a manner that does not qualify for this exemption
16    or is used in any other non-exempt manner, the  lessor  shall
17    be  liable  for the tax imposed under this Act or the Service
18    Use Tax Act, as the case may be, based  on  the  fair  market
19    value  of  the  property  at  the time the non-qualifying use
20    occurs.  No lessor shall collect or  attempt  to  collect  an
21    amount  (however  designated) that purports to reimburse that
22    lessor for the tax imposed by this Act or the Service Use Tax
23    Act, as the case may be, if the tax has not been paid by  the
24    lessor.  If a lessor improperly collects any such amount from
25    the  lessee,  the  lessee shall have a legal right to claim a
26    refund of that amount from the  lessor.   If,  however,  that
27    amount  is  not  refunded  to  the lessee for any reason, the
28    lessor is liable to pay that amount to the Department.
29        (23)  Personal property purchased by a lessor who  leases
30    the  property,  under a lease of  one year or longer executed
31    or in effect at  the  time  the  lessor  would  otherwise  be
32    subject  to  the  tax  imposed by this Act, to a governmental
33    body that has been  issued  an  active  sales  tax  exemption
34    identification  number  by the Department under Section 1g of
 
                            -7-                LRB9203973SMdv
 1    the Retailers' Occupation Tax Act. If the property is  leased
 2    in  a manner that does not qualify for this exemption or used
 3    in any other non-exempt manner, the lessor  shall  be  liable
 4    for  the  tax  imposed  under this Act or the Service Use Tax
 5    Act, as the case may be, based on the fair  market  value  of
 6    the  property  at the time the non-qualifying use occurs.  No
 7    lessor shall collect or attempt to collect an amount (however
 8    designated) that purports to reimburse that  lessor  for  the
 9    tax  imposed  by  this Act or the Service Use Tax Act, as the
10    case may be, if the tax has not been paid by the lessor.   If
11    a lessor improperly collects any such amount from the lessee,
12    the lessee shall have a legal right to claim a refund of that
13    amount  from  the  lessor.   If,  however, that amount is not
14    refunded to the lessee for any reason, the lessor  is  liable
15    to pay that amount to the Department.
16        (24)  Beginning  with  taxable  years  ending on or after
17    December 31, 1995 and ending with taxable years ending on  or
18    before  December  31, 2004, personal property that is donated
19    for disaster relief to  be  used  in  a  State  or  federally
20    declared disaster area in Illinois or bordering Illinois by a
21    manufacturer  or retailer that is registered in this State to
22    a   corporation,   society,   association,   foundation,   or
23    institution that  has  been  issued  a  sales  tax  exemption
24    identification  number by the Department that assists victims
25    of the disaster who reside within the declared disaster area.
26        (25)  Beginning with taxable years  ending  on  or  after
27    December  31, 1995 and ending with taxable years ending on or
28    before December 31, 2004, personal property that is  used  in
29    the  performance  of  infrastructure  repairs  in this State,
30    including but not limited to  municipal  roads  and  streets,
31    access  roads,  bridges,  sidewalks,  waste disposal systems,
32    water and  sewer  line  extensions,  water  distribution  and
33    purification  facilities,  storm water drainage and retention
34    facilities, and sewage treatment facilities, resulting from a
 
                            -8-                LRB9203973SMdv
 1    State or federally declared disaster in Illinois or bordering
 2    Illinois  when  such  repairs  are  initiated  on  facilities
 3    located in the declared disaster area within 6  months  after
 4    the disaster.
 5        (26)  Beginning   July   1,  1999,  game  or  game  birds
 6    purchased at a "game breeding and hunting preserve  area"  or
 7    an  "exotic game hunting area" as those terms are used in the
 8    Wildlife Code or at  a  hunting  enclosure  approved  through
 9    rules  adopted  by the Department of Natural Resources.  This
10    paragraph is exempt from the provisions of Section 3-90.
11        (27)  A motor vehicle, as that term is defined in Section
12    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
13    corporation, limited liability company, society, association,
14    foundation,   or   institution  that  is  determined  by  the
15    Department to  be  organized  and  operated  exclusively  for
16    educational  purposes.    For  purposes of this exemption, "a
17    corporation, limited liability company, society, association,
18    foundation, or institution organized and operated exclusively
19    for educational  purposes"  means  all  tax-supported  public
20    schools, private schools that offer systematic instruction in
21    useful  branches  of  learning  by  methods  common to public
22    schools  and  that  compare  favorably  in  their  scope  and
23    intensity with the course of study presented in tax-supported
24    schools, and vocational or technical  schools  or  institutes
25    organized  and  operated  exclusively  to provide a course of
26    study of not less than  6  weeks  duration  and  designed  to
27    prepare  individuals to follow a trade or to pursue a manual,
28    technical, mechanical, industrial,  business,  or  commercial
29    occupation.
30        (28)  Beginning  January  1,  2000,   personal  property,
31    including  food, purchased through fundraising events for the
32    benefit of  a  public  or  private  elementary  or  secondary
33    school,  a  group  of  those  schools,  or one or more school
34    districts if the events are sponsored by an entity recognized
 
                            -9-                LRB9203973SMdv
 1    by the school district that consists primarily of  volunteers
 2    and  includes  parents  and  teachers of the school children.
 3    This paragraph does not apply to fundraising events  (i)  for
 4    the benefit of private home instruction or (ii) for which the
 5    fundraising  entity  purchases  the personal property sold at
 6    the events from another individual or entity  that  sold  the
 7    property  for the purpose of resale by the fundraising entity
 8    and that profits from the sale  to  the  fundraising  entity.
 9    This paragraph is exempt from the provisions of Section 3-90.
10        (29)  Beginning  January  1,  2000, new or used automatic
11    vending  machines  that  prepare  and  serve  hot  food   and
12    beverages,  including  coffee,  soup,  and  other  items, and
13    replacement parts for these  machines.    This  paragraph  is
14    exempt from the provisions of Section 3-90.
15        (30)  Food  for  human consumption that is to be consumed
16    off the premises where  it  is  sold  (other  than  alcoholic
17    beverages,  soft  drinks, and food that has been prepared for
18    immediate consumption) and prescription  and  nonprescription
19    medicines,  drugs,  medical  appliances,  and  insulin, urine
20    testing materials, syringes, and needles used  by  diabetics,
21    for  human  use, when purchased for use by a person receiving
22    medical assistance under Article 5 of the Illinois Public Aid
23    Code who resides in a licensed long-term  care  facility,  as
24    defined in the Nursing Home Care Act.
25        (31)  Beginning   January   1,  2002,  tangible  personal
26    property   and   its   component   parts   purchased   by   a
27    telecommunications carrier if the property and parts are used
28    directly and primarily in transmitting, receiving, switching,
29    or  recording  any   interactive,   two-way   electromagnetic
30    communications,    including    voice,   image,   data,   and
31    information, through the use of any  medium,  including,  but
32    not  limited  to,  poles, wires, cables, switching equipment,
33    computers,  and  record  storage  devices  and  media.   This
34    paragraph is exempt from the provisions of Section 3-90.
 
                            -10-               LRB9203973SMdv
 1    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
 2    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
 3    7-20-99; 91-439, eff. 8-6-99; 91-637, eff.  8-20-99;  91-644,
 4    eff. 8-20-99; 91-901, eff. 1-1-01.)

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

 7        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
 8        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
 9    personal property is exempt from the tax imposed by this Act:
10        (1)  Personal  property  purchased  from  a  corporation,
11    society,    association,    foundation,    institution,    or
12    organization, other than a limited liability company, that is
13    organized and operated as a not-for-profit service enterprise
14    for  the  benefit  of persons 65 years of age or older if the
15    personal property was not purchased by the enterprise for the
16    purpose of resale by the enterprise.
17        (2)  Personal property purchased by a non-profit Illinois
18    county fair association for use in conducting, operating,  or
19    promoting the county fair.
20        (3)  Personal property purchased by a not-for-profit arts
21    or  cultural organization that establishes, by proof required
22    by 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        (4)  Legal  tender,  currency,  medallions,  or  gold  or
32    silver  coinage  issued  by  the  State  of   Illinois,   the
 
                            -11-               LRB9203973SMdv
 1    government of the United States of America, or the government
 2    of any foreign country, and bullion.
 3        (5)  Graphic  arts  machinery  and  equipment,  including
 4    repair   and  replacement  parts,  both  new  and  used,  and
 5    including that manufactured on special order or purchased for
 6    lease, certified by the purchaser to be  used  primarily  for
 7    graphic arts production.
 8        (6)  Personal property purchased from a teacher-sponsored
 9    student   organization   affiliated  with  an  elementary  or
10    secondary school located in Illinois.
11        (7)  Farm machinery and equipment,  both  new  and  used,
12    including  that  manufactured  on special order, certified by
13    the purchaser to be used primarily for production agriculture
14    or  State  or  federal   agricultural   programs,   including
15    individual replacement parts for the machinery and equipment,
16    including  machinery  and  equipment purchased for lease, and
17    including implements of husbandry defined in Section 1-130 of
18    the Illinois Vehicle Code, farm  machinery  and  agricultural
19    chemical  and fertilizer spreaders, and nurse wagons required
20    to be registered under Section 3-809 of the Illinois  Vehicle
21    Code,  but  excluding  other  motor  vehicles  required to be
22    registered under the  Illinois  Vehicle  Code.  Horticultural
23    polyhouses  or  hoop houses used for propagating, growing, or
24    overwintering plants shall be considered farm  machinery  and
25    equipment  under  this item (7). Agricultural chemical tender
26    tanks and dry boxes shall include units sold separately  from
27    a  motor  vehicle  required  to  be  licensed  and units sold
28    mounted on a motor vehicle required to  be  licensed  if  the
29    selling price of the tender is separately stated.
30        Farm  machinery  and  equipment  shall  include precision
31    farming equipment  that  is  installed  or  purchased  to  be
32    installed  on farm machinery and equipment including, but not
33    limited  to,  tractors,   harvesters,   sprayers,   planters,
34    seeders,  or spreaders. Precision farming equipment includes,
 
                            -12-               LRB9203973SMdv
 1    but is not  limited  to,  soil  testing  sensors,  computers,
 2    monitors,  software,  global positioning and mapping systems,
 3    and other such equipment.
 4        Farm machinery and  equipment  also  includes  computers,
 5    sensors,  software,  and  related equipment used primarily in
 6    the computer-assisted  operation  of  production  agriculture
 7    facilities,  equipment,  and  activities  such  as,  but  not
 8    limited  to,  the  collection, monitoring, and correlation of
 9    animal and crop data for the purpose  of  formulating  animal
10    diets  and  agricultural  chemicals.  This item (7) is exempt
11    from the provisions of Section 3-75.
12        (8)  Fuel and petroleum products sold to or  used  by  an
13    air  common  carrier, certified by the carrier to be used for
14    consumption, shipment, or  storage  in  the  conduct  of  its
15    business  as an air common carrier, for a flight destined for
16    or returning from a location or locations outside the  United
17    States  without  regard  to  previous  or subsequent domestic
18    stopovers.
19        (9)  Proceeds of  mandatory  service  charges  separately
20    stated  on  customers' bills for the purchase and consumption
21    of food and beverages acquired as an incident to the purchase
22    of a service from  a  serviceman,  to  the  extent  that  the
23    proceeds  of  the  service  charge are in fact turned over as
24    tips or as  a  substitute  for  tips  to  the  employees  who
25    participate   directly  in  preparing,  serving,  hosting  or
26    cleaning up the food or beverage  function  with  respect  to
27    which the service charge is imposed.
28        (10)  Oil  field  exploration,  drilling,  and production
29    equipment, including (i) rigs and parts of rigs, rotary rigs,
30    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
31    goods,  including  casing  and drill strings, (iii) pumps and
32    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
33    individual   replacement  part  for  oil  field  exploration,
34    drilling, and production equipment, and  (vi)  machinery  and
 
                            -13-               LRB9203973SMdv
 1    equipment  purchased  for lease; but excluding motor vehicles
 2    required to be registered under the Illinois Vehicle Code.
 3        (11)  Proceeds from the sale of photoprocessing machinery
 4    and equipment, including repair and replacement  parts,  both
 5    new  and  used, including that manufactured on special order,
 6    certified  by  the  purchaser  to  be  used   primarily   for
 7    photoprocessing,  and including photoprocessing machinery and
 8    equipment purchased for lease.
 9        (12)  Coal  exploration,  mining,   offhighway   hauling,
10    processing, maintenance, and reclamation equipment, including
11    replacement  parts  and  equipment,  and  including equipment
12    purchased for lease, but excluding motor vehicles required to
13    be registered under the Illinois Vehicle Code.
14        (13)  Semen used for artificial insemination of livestock
15    for direct agricultural production.
16        (14)  Horses, or interests in horses, registered with and
17    meeting the requirements of any of  the  Arabian  Horse  Club
18    Registry  of  America, Appaloosa Horse Club, American Quarter
19    Horse Association, United  States  Trotting  Association,  or
20    Jockey Club, as appropriate, used for purposes of breeding or
21    racing for prizes.
22        (15)  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
27    otherwise be subject to the tax imposed by  this  Act,  to  a
28    hospital  that  has  been  issued  an  active  tax  exemption
29    identification  number  by the Department under Section 1g of
30    the Retailers' Occupation Tax Act. If the equipment is leased
31    in a manner that does not qualify for this  exemption  or  is
32    used  in  any  other  non-exempt  manner, the lessor shall be
33    liable for the tax imposed under this Act or the Use Tax Act,
34    as the case may be, based on the fair  market  value  of  the
 
                            -14-               LRB9203973SMdv
 1    property  at  the  time  the  non-qualifying  use occurs.  No
 2    lessor shall collect or attempt to collect an amount (however
 3    designated) that purports to reimburse that  lessor  for  the
 4    tax  imposed  by this Act or the Use Tax Act, as the case may
 5    be, if the tax has not been paid by the lessor.  If a  lessor
 6    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
10    to pay that amount to the Department.
11        (16)  Personal  property purchased by a lessor who leases
12    the property, under a lease of one year or longer executed or
13    in effect at the time the lessor would otherwise  be  subject
14    to  the  tax imposed by this Act, to a governmental body that
15    has been issued an active tax exemption identification number
16    by  the  Department  under  Section  1g  of  the   Retailers'
17    Occupation  Tax  Act.   If the property is leased in a manner
18    that does not qualify for this exemption or is  used  in  any
19    other  non-exempt  manner, the lessor shall be liable for the
20    tax imposed under this Act or the Use Tax Act,  as  the  case
21    may be, based on the fair market value of the property at the
22    time  the non-qualifying use occurs.  No lessor shall collect
23    or attempt to collect an  amount  (however  designated)  that
24    purports to reimburse that lessor for the tax imposed by this
25    Act  or  the  Use Tax Act, as the case may be, if the tax has
26    not been paid by the lessor.  If a lessor improperly collects
27    any such amount from the lessee,  the  lessee  shall  have  a
28    legal right to claim a refund of that amount from the lessor.
29    If,  however,  that  amount is not refunded to the lessee for
30    any reason, the lessor is liable to pay that  amount  to  the
31    Department.
32        (17)  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 donated
 
                            -15-               LRB9203973SMdv
 1    for disaster relief to  be  used  in  a  State  or  federally
 2    declared disaster area in Illinois or bordering Illinois by a
 3    manufacturer  or retailer that is registered in this State to
 4    a   corporation,   society,   association,   foundation,   or
 5    institution that  has  been  issued  a  sales  tax  exemption
 6    identification  number by the Department that assists victims
 7    of the disaster who reside within the declared disaster area.
 8        (18)  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  used  in
11    the  performance  of  infrastructure  repairs  in this State,
12    including but not limited to  municipal  roads  and  streets,
13    access  roads,  bridges,  sidewalks,  waste disposal systems,
14    water and  sewer  line  extensions,  water  distribution  and
15    purification  facilities,  storm water drainage and retention
16    facilities, and sewage treatment facilities, resulting from a
17    State or federally declared disaster in Illinois or bordering
18    Illinois  when  such  repairs  are  initiated  on  facilities
19    located in the declared disaster area within 6  months  after
20    the disaster.
21        (19)  Beginning   July   1,  1999,  game  or  game  birds
22    purchased at a "game breeding and hunting preserve  area"  or
23    an  "exotic game hunting area" as those terms are used in the
24    Wildlife Code or at  a  hunting  enclosure  approved  through
25    rules  adopted  by the Department of Natural Resources.  This
26    paragraph is exempt from the provisions of Section 3-75.
27        (20) (19)  A motor vehicle, as that term  is  defined  in
28    Section  1-146  of the Illinois Vehicle Code, that is donated
29    to  a  corporation,  limited  liability   company,   society,
30    association, foundation, or institution that is determined by
31    the  Department  to be organized and operated exclusively for
32    educational purposes.  For purposes  of  this  exemption,  "a
33    corporation, limited liability company, society, association,
34    foundation, or institution organized and operated exclusively
 
                            -16-               LRB9203973SMdv
 1    for  educational  purposes"  means  all  tax-supported public
 2    schools, private schools that offer systematic instruction in
 3    useful branches of  learning  by  methods  common  to  public
 4    schools  and  that  compare  favorably  in  their  scope  and
 5    intensity with the course of study presented in tax-supported
 6    schools,  and  vocational  or technical schools or institutes
 7    organized and operated exclusively to  provide  a  course  of
 8    study  of  not  less  than  6  weeks duration and designed to
 9    prepare individuals to follow a trade or to pursue a  manual,
10    technical,  mechanical,  industrial,  business, or commercial
11    occupation.
12        (21) (20)  Beginning January 1, 2000,  personal property,
13    including food, purchased through fundraising events for  the
14    benefit  of  a  public  or  private  elementary  or secondary
15    school, a group of those  schools,  or  one  or  more  school
16    districts if the events are sponsored by an entity recognized
17    by  the school district that consists primarily of volunteers
18    and includes parents and teachers  of  the  school  children.
19    This  paragraph  does not apply to fundraising events (i) for
20    the benefit of private home instruction or (ii) for which the
21    fundraising entity purchases the personal  property  sold  at
22    the  events  from  another individual or entity that sold the
23    property for the purpose of resale by the fundraising  entity
24    and  that  profits  from  the sale to the fundraising entity.
25    This paragraph is exempt from the provisions of Section 3-75.
26        (22)  (19)  Beginning  January  1,  2000,  new  or   used
27    automatic  vending  machines  that prepare and serve hot food
28    and beverages, including coffee, soup, and other  items,  and
29    replacement  parts  for  these  machines.   This paragraph is
30    exempt from the provisions of Section 3-75.
31        (23)  Beginning  January  1,  2002,   tangible   personal
32    property   and   its   component   parts   purchased   by   a
33    telecommunications carrier if the property and parts are used
34    directly and primarily in transmitting, receiving, switching,
 
                            -17-               LRB9203973SMdv
 1    or   recording   any   interactive,  two-way  electromagnetic
 2    communications,   including   voice,   image,    data,    and
 3    information,  through  the  use of any medium, including, but
 4    not limited to, poles, wires,  cables,  switching  equipment,
 5    computers,  and  record  storage  devices  and  media.   This
 6    paragraph is exempt from the provisions of Section 3-75.
 7    (Source:  P.A.  90-14,  eff.  7-1-97;  90-552, eff. 12-12-97;
 8    90-605, eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200,  eff.
 9    7-20-99;  91-439,  eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
10    eff. 8-20-99; revised 9-29-99.)

11        Section 15.  The Service Occupation Tax Act is amended by
12    changing Section 3-5 as follows:

13        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
14        Sec. 3-5.  Exemptions.  The following  tangible  personal
15    property is exempt from the tax imposed by this Act:
16        (1)  Personal  property  sold  by a corporation, society,
17    association, foundation, institution, or organization,  other
18    than  a  limited  liability  company,  that  is organized and
19    operated as  a  not-for-profit  service  enterprise  for  the
20    benefit  of  persons 65 years of age or older if the personal
21    property was not purchased by the enterprise for the  purpose
22    of resale by the enterprise.
23        (2)  Personal  property  purchased  by  a  not-for-profit
24    Illinois  county  fair  association  for  use  in conducting,
25    operating, or promoting the county fair.
26        (3)  Personal property purchased  by  any  not-for-profit
27    arts  or  cultural  organization  that  establishes, by proof
28    required by the Department by rule, that it has  received  an
29    exemption   under  Section  501(c)(3) of the Internal Revenue
30    Code and that is organized and operated for the  presentation
31    or  support  of  arts or cultural programming, activities, or
32    services.  These organizations include, but are  not  limited
 
                            -18-               LRB9203973SMdv
 1    to,  music  and  dramatic arts organizations such as symphony
 2    orchestras and theatrical groups, arts and  cultural  service
 3    organizations,    local    arts    councils,    visual   arts
 4    organizations, and media arts organizations.
 5        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 6    silver  coinage  issued  by  the  State  of   Illinois,   the
 7    government of the United States of America, or the government
 8    of any foreign country, and bullion.
 9        (5)  Graphic  arts  machinery  and  equipment,  including
10    repair   and  replacement  parts,  both  new  and  used,  and
11    including that manufactured on special order or purchased for
12    lease, certified by the purchaser to be  used  primarily  for
13    graphic arts production.
14        (6)  Personal   property   sold  by  a  teacher-sponsored
15    student  organization  affiliated  with  an   elementary   or
16    secondary school located in Illinois.
17        (7)  Farm  machinery  and  equipment,  both new and used,
18    including that manufactured on special  order,  certified  by
19    the purchaser to be used primarily for production agriculture
20    or   State   or   federal  agricultural  programs,  including
21    individual replacement parts for the machinery and equipment,
22    including machinery and equipment purchased  for  lease,  and
23    including implements of husbandry defined in Section 1-130 of
24    the  Illinois  Vehicle  Code, farm machinery and agricultural
25    chemical and fertilizer spreaders, and nurse wagons  required
26    to  be registered under Section 3-809 of the Illinois Vehicle
27    Code, but excluding  other  motor  vehicles  required  to  be
28    registered  under  the  Illinois  Vehicle Code. Horticultural
29    polyhouses or hoop houses used for propagating,  growing,  or
30    overwintering  plants  shall be considered farm machinery and
31    equipment under this item (7). Agricultural  chemical  tender
32    tanks  and dry boxes shall include units sold separately from
33    a motor vehicle  required  to  be  licensed  and  units  sold
34    mounted  on  a  motor  vehicle required to be licensed if the
 
                            -19-               LRB9203973SMdv
 1    selling price of the tender is separately stated.
 2        Farm machinery  and  equipment  shall  include  precision
 3    farming  equipment  that  is  installed  or  purchased  to be
 4    installed on farm machinery and equipment including, but  not
 5    limited   to,   tractors,   harvesters,  sprayers,  planters,
 6    seeders, or spreaders. Precision farming equipment  includes,
 7    but  is  not  limited  to,  soil  testing sensors, computers,
 8    monitors, software, global positioning and  mapping  systems,
 9    and other such equipment.
10        Farm  machinery  and  equipment  also includes computers,
11    sensors, software, and related equipment  used  primarily  in
12    the  computer-assisted  operation  of  production agriculture
13    facilities,  equipment,  and  activities  such  as,  but  not
14    limited to, the collection, monitoring,  and  correlation  of
15    animal  and  crop  data for the purpose of formulating animal
16    diets and agricultural chemicals.  This item  (7)  is  exempt
17    from the provisions of Section 3-55.
18        (8)  Fuel  and  petroleum  products sold to or used by an
19    air common carrier, certified by the carrier to be  used  for
20    consumption,  shipment,  or  storage  in  the  conduct of its
21    business as an air common carrier, for a flight destined  for
22    or  returning from a location or locations outside the United
23    States without regard  to  previous  or  subsequent  domestic
24    stopovers.
25        (9)  Proceeds  of  mandatory  service  charges separately
26    stated on customers' bills for the purchase  and  consumption
27    of food and beverages, to the extent that the proceeds of the
28    service  charge  are  in  fact  turned  over  as tips or as a
29    substitute for tips to the employees who participate directly
30    in preparing, serving, hosting or cleaning  up  the  food  or
31    beverage function with respect to which the service charge is
32    imposed.
33        (10)  Oil  field  exploration,  drilling,  and production
34    equipment, including (i) rigs and parts of rigs, rotary rigs,
 
                            -20-               LRB9203973SMdv
 1    cable tool rigs, and workover rigs,  (ii)  pipe  and  tubular
 2    goods,  including  casing  and drill strings, (iii) pumps and
 3    pump-jack units, (iv) storage tanks and flow lines,  (v)  any
 4    individual   replacement  part  for  oil  field  exploration,
 5    drilling, and production equipment, and  (vi)  machinery  and
 6    equipment  purchased  for lease; but excluding motor vehicles
 7    required to be registered under the Illinois Vehicle Code.
 8        (11)  Photoprocessing machinery and equipment,  including
 9    repair  and  replacement  parts, both new and used, including
10    that  manufactured  on  special  order,  certified   by   the
11    purchaser  to  be  used  primarily  for  photoprocessing, and
12    including photoprocessing machinery and  equipment  purchased
13    for lease.
14        (12)  Coal   exploration,   mining,  offhighway  hauling,
15    processing, maintenance, and reclamation equipment, including
16    replacement parts  and  equipment,  and  including  equipment
17    purchased for lease, but excluding motor vehicles required to
18    be registered under the Illinois Vehicle Code.
19        (13)  Food  for  human consumption that is to be consumed
20    off the premises where  it  is  sold  (other  than  alcoholic
21    beverages,  soft  drinks  and food that has been prepared for
22    immediate consumption) and prescription and  non-prescription
23    medicines,  drugs,  medical  appliances,  and  insulin, urine
24    testing materials, syringes, and needles used  by  diabetics,
25    for  human  use, when purchased for use by a person receiving
26    medical assistance under Article 5 of the Illinois Public Aid
27    Code who resides in a licensed long-term  care  facility,  as
28    defined in the Nursing Home Care Act.
29        (14)  Semen used for artificial insemination of livestock
30    for direct agricultural production.
31        (15)  Horses, or interests in horses, registered with and
32    meeting  the  requirements  of  any of the Arabian Horse Club
33    Registry of America, Appaloosa Horse Club,  American  Quarter
34    Horse  Association,  United  States  Trotting Association, or
 
                            -21-               LRB9203973SMdv
 1    Jockey Club, as appropriate, used for purposes of breeding or
 2    racing for prizes.
 3        (16)  Computers and communications equipment utilized for
 4    any hospital purpose and equipment  used  in  the  diagnosis,
 5    analysis,  or treatment of hospital patients sold to a lessor
 6    who leases the equipment, under a lease of one year or longer
 7    executed or in effect at the  time  of  the  purchase,  to  a
 8    hospital  that  has  been  issued  an  active  tax  exemption
 9    identification  number  by the Department under Section 1g of
10    the Retailers' Occupation Tax Act.
11        (17)  Personal property sold to a lessor who  leases  the
12    property,  under a lease of one year or longer executed or in
13    effect at the time of the purchase, to  a  governmental  body
14    that  has  been issued an active tax exemption identification
15    number by the Department under Section 1g of  the  Retailers'
16    Occupation Tax Act.
17        (18)  Beginning  with  taxable  years  ending on or after
18    December 31, 1995 and ending with taxable years ending on  or
19    before  December  31, 2004, personal property that is donated
20    for disaster relief to  be  used  in  a  State  or  federally
21    declared disaster area in Illinois or bordering Illinois by a
22    manufacturer  or retailer that is registered in this State to
23    a   corporation,   society,   association,   foundation,   or
24    institution that  has  been  issued  a  sales  tax  exemption
25    identification  number by the Department that assists victims
26    of the disaster who reside within the declared disaster area.
27        (19)  Beginning with taxable years  ending  on  or  after
28    December  31, 1995 and ending with taxable years ending on or
29    before December 31, 2004, personal property that is  used  in
30    the  performance  of  infrastructure  repairs  in this State,
31    including but not limited to  municipal  roads  and  streets,
32    access  roads,  bridges,  sidewalks,  waste disposal systems,
33    water and  sewer  line  extensions,  water  distribution  and
34    purification  facilities,  storm water drainage and retention
 
                            -22-               LRB9203973SMdv
 1    facilities, and sewage treatment facilities, resulting from a
 2    State or federally declared disaster in Illinois or bordering
 3    Illinois  when  such  repairs  are  initiated  on  facilities
 4    located in the declared disaster area within 6  months  after
 5    the disaster.
 6        (20)  Beginning  July 1, 1999, game or game birds sold at
 7    a "game breeding and hunting preserve  area"  or  an  "exotic
 8    game  hunting  area"  as those terms are used in the Wildlife
 9    Code or at a hunting enclosure approved through rules adopted
10    by the Department of Natural Resources.   This  paragraph  is
11    exempt from the provisions of Section 3-55.
12        (21)  (20)  A  motor  vehicle, as that term is defined in
13    Section 1-146 of the Illinois Vehicle Code, that  is  donated
14    to   a   corporation,  limited  liability  company,  society,
15    association, foundation, or institution that is determined by
16    the Department to be organized and operated  exclusively  for
17    educational  purposes.   For  purposes  of this exemption, "a
18    corporation, limited liability company, society, association,
19    foundation, or institution organized and operated exclusively
20    for educational  purposes"  means  all  tax-supported  public
21    schools, private schools that offer systematic instruction in
22    useful  branches  of  learning  by  methods  common to public
23    schools  and  that  compare  favorably  in  their  scope  and
24    intensity with the course of study presented in tax-supported
25    schools, and vocational or technical  schools  or  institutes
26    organized  and  operated  exclusively  to provide a course of
27    study of not less than  6  weeks  duration  and  designed  to
28    prepare  individuals to follow a trade or to pursue a manual,
29    technical, mechanical, industrial,  business,  or  commercial
30    occupation.
31        (22) (21)  Beginning January 1, 2000,  personal property,
32    including  food, purchased through fundraising events for the
33    benefit of  a  public  or  private  elementary  or  secondary
34    school,  a  group  of  those  schools,  or one or more school
 
                            -23-               LRB9203973SMdv
 1    districts if the events are sponsored by an entity recognized
 2    by the school district that consists primarily of  volunteers
 3    and  includes  parents  and  teachers of the school children.
 4    This paragraph does not apply to fundraising events  (i)  for
 5    the benefit of private home instruction or (ii) for which the
 6    fundraising  entity  purchases  the personal property sold at
 7    the events from another individual or entity  that  sold  the
 8    property  for the purpose of resale by the fundraising entity
 9    and that profits from the sale  to  the  fundraising  entity.
10    This paragraph is exempt from the provisions of Section 3-55.
11        (23)   (20)  Beginning  January  1,  2000,  new  or  used
12    automatic vending machines that prepare and  serve  hot  food
13    and  beverages,  including coffee, soup, and other items, and
14    replacement parts for  these  machines.   This  paragraph  is
15    exempt from the provisions of Section 3-55.
16        (24)  Beginning   January   1,  2002,  tangible  personal
17    property   and   its   component   parts   purchased   by   a
18    telecommunications carrier if the property and parts are used
19    directly and primarily in transmitting, receiving, switching,
20    or  recording  any   interactive,   two-way   electromagnetic
21    communications,    including    voice,   image,   data,   and
22    information, through the use of any  medium,  including,  but
23    not  limited  to,  poles, wires, cables, switching equipment,
24    computers,  and  record  storage  devices  and  media.   This
25    paragraph is exempt from the provisions of Section 3-55.
26    (Source: P.A. 90-14,  eff.  7-1-97;  90-552,  eff.  12-12-97;
27    90-605,  eff.  6-30-98;  91-51,  eff.  6-30-99;  91-200, eff.
28    7-20-99; 91-439, eff. 8-6-99; 91-533, eff.  8-13-99;  91-637,
29    eff. 8-20-99; 91-644, eff. 8-20-99; revised 9-29-99.)

30        Section 20.  The Retailers' Occupation Tax Act is amended
31    by changing Section 2-5 as follows:

32        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
 
                            -24-               LRB9203973SMdv
 1        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
 2    the  sale  of  the  following  tangible personal property are
 3    exempt from the tax imposed by this Act:
 4        (1)  Farm chemicals.
 5        (2)  Farm machinery and equipment,  both  new  and  used,
 6    including  that  manufactured  on special order, certified by
 7    the purchaser to be used primarily for production agriculture
 8    or  State  or  federal   agricultural   programs,   including
 9    individual replacement parts for the machinery and equipment,
10    including  machinery  and  equipment purchased for lease, and
11    including implements of husbandry defined in Section 1-130 of
12    the Illinois Vehicle Code, farm  machinery  and  agricultural
13    chemical  and fertilizer spreaders, and nurse wagons required
14    to be registered under Section 3-809 of the Illinois  Vehicle
15    Code,  but  excluding  other  motor  vehicles  required to be
16    registered under the  Illinois  Vehicle  Code.  Horticultural
17    polyhouses  or  hoop houses used for propagating, growing, or
18    overwintering plants shall be considered farm  machinery  and
19    equipment  under  this item (2). Agricultural chemical tender
20    tanks and dry boxes shall include units sold separately  from
21    a  motor  vehicle  required  to  be  licensed  and units sold
22    mounted on a motor vehicle required to be  licensed,  if  the
23    selling price of the tender is separately stated.
24        Farm  machinery  and  equipment  shall  include precision
25    farming equipment  that  is  installed  or  purchased  to  be
26    installed  on farm machinery and equipment including, but not
27    limited  to,  tractors,   harvesters,   sprayers,   planters,
28    seeders,  or spreaders. Precision farming equipment includes,
29    but is not  limited  to,  soil  testing  sensors,  computers,
30    monitors,  software,  global positioning and mapping systems,
31    and other such equipment.
32        Farm machinery and  equipment  also  includes  computers,
33    sensors,  software,  and  related equipment used primarily in
34    the computer-assisted  operation  of  production  agriculture
 
                            -25-               LRB9203973SMdv
 1    facilities,  equipment,  and  activities  such  as,  but  not
 2    limited  to,  the  collection, monitoring, and correlation of
 3    animal and crop data for the purpose  of  formulating  animal
 4    diets  and  agricultural  chemicals.  This item (7) is exempt
 5    from the provisions of Section 2-70.
 6        (3)  Distillation machinery and equipment, sold as a unit
 7    or kit, assembled or installed by the retailer, certified  by
 8    the  user to be used only for the production of ethyl alcohol
 9    that will be used for consumption  as  motor  fuel  or  as  a
10    component of motor fuel for the personal use of the user, and
11    not subject to sale or resale.
12        (4)  Graphic  arts  machinery  and  equipment,  including
13    repair   and  replacement  parts,  both  new  and  used,  and
14    including that manufactured on special order or purchased for
15    lease, certified by the purchaser to be  used  primarily  for
16    graphic arts production.
17        (5)  A  motor  vehicle  of  the  first  division, a motor
18    vehicle of the second division that is a self-contained motor
19    vehicle designed or permanently converted to  provide  living
20    quarters  for  recreational,  camping,  or  travel  use, with
21    direct walk through access to the living  quarters  from  the
22    driver's seat, or a motor vehicle of the second division that
23    is  of  the van configuration designed for the transportation
24    of not less than 7 nor more than 16 passengers, as defined in
25    Section 1-146 of the Illinois Vehicle Code, that is used  for
26    automobile  renting,  as  defined  in  the Automobile Renting
27    Occupation and Use Tax Act.
28        (6)  Personal  property  sold  by   a   teacher-sponsored
29    student   organization   affiliated  with  an  elementary  or
30    secondary school located in Illinois.
31        (7)  Proceeds of that portion of the selling price  of  a
32    passenger car the sale of which is subject to the Replacement
33    Vehicle Tax.
34        (8)  Personal  property  sold  to an Illinois county fair
 
                            -26-               LRB9203973SMdv
 1    association for use in conducting,  operating,  or  promoting
 2    the county fair.
 3        (9)  Personal  property  sold to a not-for-profit arts or
 4    cultural organization that establishes, by proof required  by
 5    the  Department  by  rule,  that it has received an exemption
 6    under Section 501(c)(3) of the Internal Revenue Code and that
 7    is organized and operated for the presentation or support  of
 8    arts or cultural programming, activities, or services.  These
 9    organizations  include,  but  are  not  limited to, music and
10    dramatic arts organizations such as symphony  orchestras  and
11    theatrical  groups,  arts and cultural service organizations,
12    local arts councils, visual  arts  organizations,  and  media
13    arts organizations.
14        (10)  Personal  property  sold by a corporation, society,
15    association, foundation, institution, or organization,  other
16    than  a  limited  liability  company,  that  is organized and
17    operated as  a  not-for-profit  service  enterprise  for  the
18    benefit  of  persons 65 years of age or older if the personal
19    property was not purchased by the enterprise for the  purpose
20    of resale by the enterprise.
21        (11)  Personal property sold to a governmental body, to a
22    corporation, society, association, foundation, or institution
23    organized and operated exclusively for charitable, religious,
24    or  educational purposes, or to a not-for-profit corporation,
25    society,    association,    foundation,    institution,    or
26    organization that has no compensated  officers  or  employees
27    and   that  is  organized  and  operated  primarily  for  the
28    recreation of persons 55 years of age  or  older.  A  limited
29    liability  company  may  qualify for the exemption under this
30    paragraph only if the limited liability company is  organized
31    and  operated  exclusively  for  educational purposes. On and
32    after July 1, 1987, however, no entity otherwise eligible for
33    this exemption shall make tax-free purchases unless it has an
34    active identification number issued by the Department.
 
                            -27-               LRB9203973SMdv
 1        (12)  Personal property sold to interstate  carriers  for
 2    hire  for  use as rolling stock moving in interstate commerce
 3    or to lessors under leases of one year or longer executed  or
 4    in  effect at the time of purchase by interstate carriers for
 5    hire for use as rolling stock moving in  interstate  commerce
 6    and  equipment  operated  by  a  telecommunications provider,
 7    licensed as a common carrier by  the  Federal  Communications
 8    Commission,  which  is permanently installed in or affixed to
 9    aircraft moving in interstate commerce.
10        (13)  Proceeds from sales to owners, lessors, or shippers
11    of tangible personal property that is utilized by  interstate
12    carriers  for  hire  for  use  as  rolling  stock  moving  in
13    interstate    commerce    and   equipment   operated   by   a
14    telecommunications provider, licensed as a common carrier  by
15    the  Federal  Communications Commission, which is permanently
16    installed in or affixed  to  aircraft  moving  in  interstate
17    commerce.
18        (14)  Machinery  and  equipment  that will be used by the
19    purchaser, or a lessee of the  purchaser,  primarily  in  the
20    process  of  manufacturing  or  assembling  tangible personal
21    property for wholesale or retail sale or lease,  whether  the
22    sale or lease is made directly by the manufacturer or by some
23    other  person,  whether the materials used in the process are
24    owned by the manufacturer or some other  person,  or  whether
25    the sale or lease is made apart from or as an incident to the
26    seller's  engaging  in  the  service  occupation of producing
27    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
28    similar  items  of no commercial value on special order for a
29    particular purchaser.
30        (15)  Proceeds of mandatory  service  charges  separately
31    stated  on  customers'  bills for purchase and consumption of
32    food and beverages, to the extent that the  proceeds  of  the
33    service  charge  are  in  fact  turned  over  as tips or as a
34    substitute for tips to the employees who participate directly
 
                            -28-               LRB9203973SMdv
 1    in preparing, serving, hosting or cleaning  up  the  food  or
 2    beverage function with respect to which the service charge is
 3    imposed.
 4        (16)  Petroleum  products  sold  to  a  purchaser  if the
 5    seller is prohibited by federal law from charging tax to  the
 6    purchaser.
 7        (17)  Tangible personal property sold to a common carrier
 8    by rail or motor that receives the physical possession of the
 9    property  in  Illinois  and  that transports the property, or
10    shares with another common carrier in the  transportation  of
11    the  property,  out of Illinois on a standard uniform bill of
12    lading showing the seller of the property as the  shipper  or
13    consignor  of the property to a destination outside Illinois,
14    for use outside Illinois.
15        (18)  Legal tender,  currency,  medallions,  or  gold  or
16    silver   coinage   issued  by  the  State  of  Illinois,  the
17    government of the United States of America, or the government
18    of any foreign country, and bullion.
19        (19)  Oil field  exploration,  drilling,  and  production
20    equipment, including (i) rigs and parts of rigs, rotary rigs,
21    cable  tool  rigs,  and  workover rigs, (ii) pipe and tubular
22    goods, including casing and drill strings,  (iii)  pumps  and
23    pump-jack  units,  (iv) storage tanks and flow lines, (v) any
24    individual  replacement  part  for  oil  field   exploration,
25    drilling,  and  production  equipment, and (vi) machinery and
26    equipment purchased for lease; but excluding  motor  vehicles
27    required to be registered under the Illinois Vehicle Code.
28        (20)  Photoprocessing  machinery and equipment, including
29    repair and replacement parts, both new  and  used,  including
30    that   manufactured   on  special  order,  certified  by  the
31    purchaser to  be  used  primarily  for  photoprocessing,  and
32    including  photoprocessing  machinery and equipment purchased
33    for lease.
34        (21)  Coal  exploration,  mining,   offhighway   hauling,
 
                            -29-               LRB9203973SMdv
 1    processing, maintenance, and reclamation equipment, including
 2    replacement  parts  and  equipment,  and  including equipment
 3    purchased for lease, but excluding motor vehicles required to
 4    be registered under the Illinois Vehicle Code.
 5        (22)  Fuel and petroleum products sold to or used  by  an
 6    air  carrier,  certified  by  the  carrier  to  be  used  for
 7    consumption,  shipment,  or  storage  in  the  conduct of its
 8    business as an air common carrier, for a flight destined  for
 9    or  returning from a location or locations outside the United
10    States without regard  to  previous  or  subsequent  domestic
11    stopovers.
12        (23)  A  transaction  in  which  the  purchase  order  is
13    received  by  a  florist who is located outside Illinois, but
14    who has a florist located in Illinois deliver the property to
15    the purchaser or the purchaser's donee in Illinois.
16        (24)  Fuel consumed or used in the  operation  of  ships,
17    barges,  or  vessels  that  are  used primarily in or for the
18    transportation of property or the conveyance of  persons  for
19    hire  on  rivers  bordering  on  this  State  if  the fuel is
20    delivered by the seller to the purchaser's  barge,  ship,  or
21    vessel while it is afloat upon that bordering river.
22        (25)  A motor vehicle sold in this State to a nonresident
23    even though the motor vehicle is delivered to the nonresident
24    in  this  State,  if the motor vehicle is not to be titled in
25    this State, and if a driveaway decal permit is issued to  the
26    motor  vehicle  as  provided in Section 3-603 of the Illinois
27    Vehicle Code or if  the  nonresident  purchaser  has  vehicle
28    registration  plates  to  transfer  to the motor vehicle upon
29    returning to his or her home  state.   The  issuance  of  the
30    driveaway   decal   permit   or   having   the   out-of-state
31    registration plates to be transferred is prima facie evidence
32    that the motor vehicle will not be titled in this State.
33        (26)  Semen used for artificial insemination of livestock
34    for direct agricultural production.
 
                            -30-               LRB9203973SMdv
 1        (27)  Horses, or interests in horses, registered with and
 2    meeting  the  requirements  of  any of the Arabian Horse Club
 3    Registry of America, Appaloosa Horse Club,  American  Quarter
 4    Horse  Association,  United  States  Trotting Association, or
 5    Jockey Club, as appropriate, used for purposes of breeding or
 6    racing for prizes.
 7        (28)  Computers and communications equipment utilized for
 8    any hospital purpose and equipment  used  in  the  diagnosis,
 9    analysis,  or treatment of hospital patients sold to a lessor
10    who leases the equipment, under a lease of one year or longer
11    executed or in effect at the  time  of  the  purchase,  to  a
12    hospital  that  has  been  issued  an  active  tax  exemption
13    identification  number  by the Department under Section 1g of
14    this Act.
15        (29)  Personal property sold to a lessor who  leases  the
16    property,  under a lease of one year or longer executed or in
17    effect at the time of the purchase, to  a  governmental  body
18    that  has  been issued an active tax exemption identification
19    number by the Department under Section 1g of this Act.
20        (30)  Beginning with taxable years  ending  on  or  after
21    December  31, 1995 and ending with taxable years ending on or
22    before December 31, 2004, personal property that  is  donated
23    for  disaster  relief  to  be  used  in  a State or federally
24    declared disaster area in Illinois or bordering Illinois by a
25    manufacturer or retailer that is registered in this State  to
26    a   corporation,   society,   association,   foundation,   or
27    institution  that  has  been  issued  a  sales  tax exemption
28    identification number by the Department that assists  victims
29    of the disaster who reside within the declared disaster area.
30        (31)  Beginning  with  taxable  years  ending on or after
31    December 31, 1995 and ending with taxable years ending on  or
32    before  December  31, 2004, personal property that is used in
33    the performance of  infrastructure  repairs  in  this  State,
34    including  but  not  limited  to municipal roads and streets,
 
                            -31-               LRB9203973SMdv
 1    access roads, bridges,  sidewalks,  waste  disposal  systems,
 2    water  and  sewer  line  extensions,  water  distribution and
 3    purification facilities, storm water drainage  and  retention
 4    facilities, and sewage treatment facilities, resulting from a
 5    State or federally declared disaster in Illinois or bordering
 6    Illinois  when  such  repairs  are  initiated  on  facilities
 7    located  in  the declared disaster area within 6 months after
 8    the disaster.
 9        (32)  Beginning July 1, 1999, game or game birds sold  at
10    a  "game  breeding  and  hunting preserve area" or an "exotic
11    game hunting area" as those terms are used  in  the  Wildlife
12    Code or at a hunting enclosure approved through rules adopted
13    by  the  Department  of Natural Resources.  This paragraph is
14    exempt from the provisions of Section 2-70.
15        (33) (32)  A motor vehicle, as that term  is  defined  in
16    Section  1-146  of the Illinois Vehicle Code, that is donated
17    to  a  corporation,  limited  liability   company,   society,
18    association, foundation, or institution that is determined by
19    the  Department  to be organized and operated exclusively for
20    educational purposes.  For purposes  of  this  exemption,  "a
21    corporation, limited liability company, society, association,
22    foundation, or institution organized and operated exclusively
23    for  educational  purposes"  means  all  tax-supported public
24    schools, private schools that offer systematic instruction in
25    useful branches of  learning  by  methods  common  to  public
26    schools  and  that  compare  favorably  in  their  scope  and
27    intensity with the course of study presented in tax-supported
28    schools,  and  vocational  or technical schools or institutes
29    organized and operated exclusively to  provide  a  course  of
30    study  of  not  less  than  6  weeks duration and designed to
31    prepare individuals to follow a trade or to pursue a  manual,
32    technical,  mechanical,  industrial,  business, or commercial
33    occupation.
34        (34) (33)  Beginning January 1, 2000,  personal property,
 
                            -32-               LRB9203973SMdv
 1    including food, purchased through fundraising events for  the
 2    benefit  of  a  public  or  private  elementary  or secondary
 3    school, a group of those  schools,  or  one  or  more  school
 4    districts if the events are sponsored by an entity recognized
 5    by  the school district that consists primarily of volunteers
 6    and includes parents and teachers  of  the  school  children.
 7    This  paragraph  does not apply to fundraising events (i) for
 8    the benefit of private home instruction or (ii) for which the
 9    fundraising entity purchases the personal  property  sold  at
10    the  events  from  another individual or entity that sold the
11    property for the purpose of resale by the fundraising  entity
12    and  that  profits  from  the sale to the fundraising entity.
13    This paragraph is exempt from the provisions of Section 2-70.
14        (35)  (32)  Beginning  January  1,  2000,  new  or   used
15    automatic  vending  machines  that prepare and serve hot food
16    and beverages, including coffee, soup, and other  items,  and
17    replacement  parts  for  these  machines.   This paragraph is
18    exempt from the provisions of Section 2-70.
19        (36)  Beginning  January  1,  2002,   tangible   personal
20    property   and   its   component   parts   purchased   by   a
21    telecommunications carrier if the property and parts are used
22    directly and primarily in transmitting, receiving, switching,
23    or   recording   any   interactive,  two-way  electromagnetic
24    communications,   including   voice,   image,    data,    and
25    information,  through  the  use of any medium, including, but
26    not limited to, poles, wires,  cables,  switching  equipment,
27    computers,  and  record  storage  devices  and  media.   This
28    paragraph is exempt from the provisions of Section 2-70.
29    (Source: P.A.   90-14,  eff.  7-1-97;  90-519,  eff.  6-1-98;
30    90-552, eff. 12-12-97;  90-605,  eff.  6-30-98;  91-51,  eff.
31    6-30-99;  91-200,  eff. 7-20-99; 91-439, eff. 8-6-99; 91-533,
32    eff. 8-13-99; 91-637, eff.  8-20-99;  91-644,  eff.  8-20-99;
33    revised 9-28-99.)
 
                            -33-               LRB9203973SMdv
 1        Section  90.  The State Mandates Act is amended by adding
 2    Section 8.25 as follows:

 3        (30 ILCS 805/8.25 new)
 4        Sec. 8.25. Exempt mandate.   Notwithstanding  Sections  6
 5    and  8 of this Act, no reimbursement by the State is required
 6    for  the  implementation  of  any  mandate  created  by  this
 7    amendatory Act of the 92nd General Assembly.

 8        Section 99.  Effective date.  This Act takes effect  upon
 9    becoming law.

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