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92_HB3977
LRB9212732SMdv
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 primarily for the presentation or
24 support of arts or cultural programming, activities, or
25 services. These organizations include, but are not limited
26 to, music and dramatic arts organizations such as symphony
27 orchestras and theatrical groups, arts and cultural service
28 organizations, local arts councils, visual arts
29 organizations, and media arts organizations. On and after the
30 effective date of this amendatory Act of the 92nd General
31 Assembly, however, an entity otherwise eligible for this
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1 exemption shall not make tax-free purchases unless it has an
2 active identification number issued by the Department.
3 (4) Personal property purchased by a governmental body,
4 by a corporation, society, association, foundation, or
5 institution organized and operated exclusively for
6 charitable, religious, or educational purposes, or by a
7 not-for-profit corporation, society, association, foundation,
8 institution, or organization that has no compensated officers
9 or employees and that is organized and operated primarily for
10 the recreation of persons 55 years of age or older. A limited
11 liability company may qualify for the exemption under this
12 paragraph only if the limited liability company is organized
13 and operated exclusively for educational purposes. On and
14 after July 1, 1987, however, no entity otherwise eligible for
15 this exemption shall make tax-free purchases unless it has an
16 active exemption identification number issued by the
17 Department.
18 (5) A passenger car that is a replacement vehicle to the
19 extent that the purchase price of the car is subject to the
20 Replacement Vehicle Tax.
21 (6) Graphic arts machinery and equipment, including
22 repair and replacement parts, both new and used, and
23 including that manufactured on special order, certified by
24 the purchaser to be used primarily for graphic arts
25 production, and including machinery and equipment purchased
26 for lease. Equipment includes chemicals or chemicals acting
27 as catalysts but only if the chemicals or chemicals acting as
28 catalysts effect a direct and immediate change upon a graphic
29 arts product.
30 (7) Farm chemicals.
31 (8) Legal tender, currency, medallions, or gold or
32 silver coinage issued by the State of Illinois, the
33 government of the United States of America, or the government
34 of any foreign country, and bullion.
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1 (9) Personal property purchased from a teacher-sponsored
2 student organization affiliated with an elementary or
3 secondary school located in Illinois.
4 (10) A motor vehicle of the first division, a motor
5 vehicle of the second division that is a self-contained motor
6 vehicle designed or permanently converted to provide living
7 quarters for recreational, camping, or travel use, with
8 direct walk through to the living quarters from the driver's
9 seat, or a motor vehicle of the second division that is of
10 the van configuration designed for the transportation of not
11 less than 7 nor more than 16 passengers, as defined in
12 Section 1-146 of the Illinois Vehicle Code, that is used for
13 automobile renting, as defined in the Automobile Renting
14 Occupation and Use Tax Act.
15 (11) Farm machinery and equipment, both new and used,
16 including that manufactured on special order, certified by
17 the purchaser to be used primarily for production agriculture
18 or State or federal agricultural programs, including
19 individual replacement parts for the machinery and equipment,
20 including machinery and equipment purchased for lease, and
21 including implements of husbandry defined in Section 1-130 of
22 the Illinois Vehicle Code, farm machinery and agricultural
23 chemical and fertilizer spreaders, and nurse wagons required
24 to be registered under Section 3-809 of the Illinois Vehicle
25 Code, but excluding other motor vehicles required to be
26 registered under the Illinois Vehicle Code. Horticultural
27 polyhouses or hoop houses used for propagating, growing, or
28 overwintering plants shall be considered farm machinery and
29 equipment under this item (11). Agricultural chemical tender
30 tanks and dry boxes shall include units sold separately from
31 a motor vehicle required to be licensed and units sold
32 mounted on a motor vehicle required to be licensed if the
33 selling price of the tender is separately stated.
34 Farm machinery and equipment shall include precision
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1 farming equipment that is installed or purchased to be
2 installed on farm machinery and equipment including, but not
3 limited to, tractors, harvesters, sprayers, planters,
4 seeders, or spreaders. Precision farming equipment includes,
5 but is not limited to, soil testing sensors, computers,
6 monitors, software, global positioning and mapping systems,
7 and other such equipment.
8 Farm machinery and equipment also includes computers,
9 sensors, software, and related equipment used primarily in
10 the computer-assisted operation of production agriculture
11 facilities, equipment, and activities such as, but not
12 limited to, the collection, monitoring, and correlation of
13 animal and crop data for the purpose of formulating animal
14 diets and agricultural chemicals. This item (11) is exempt
15 from the provisions of Section 3-90.
16 (12) Fuel and petroleum products sold to or used by an
17 air common carrier, certified by the carrier to be used for
18 consumption, shipment, or storage in the conduct of its
19 business as an air common carrier, for a flight destined for
20 or returning from a location or locations outside the United
21 States without regard to previous or subsequent domestic
22 stopovers.
23 (13) Proceeds of mandatory service charges separately
24 stated on customers' bills for the purchase and consumption
25 of food and beverages purchased at retail from a retailer, to
26 the extent that the proceeds of the service charge are in
27 fact turned over as tips or as a substitute for tips to the
28 employees who participate directly in preparing, serving,
29 hosting or cleaning up the food or beverage function with
30 respect to which the service charge is imposed.
31 (14) Oil field exploration, drilling, and production
32 equipment, including (i) rigs and parts of rigs, rotary rigs,
33 cable tool rigs, and workover rigs, (ii) pipe and tubular
34 goods, including casing and drill strings, (iii) pumps and
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1 pump-jack units, (iv) storage tanks and flow lines, (v) any
2 individual replacement part for oil field exploration,
3 drilling, and production equipment, and (vi) machinery and
4 equipment purchased for lease; but excluding motor vehicles
5 required to be registered under the Illinois Vehicle Code.
6 (15) Photoprocessing machinery and equipment, including
7 repair and replacement parts, both new and used, including
8 that manufactured on special order, certified by the
9 purchaser to be used primarily for photoprocessing, and
10 including photoprocessing machinery and equipment purchased
11 for lease.
12 (16) Coal exploration, mining, offhighway hauling,
13 processing, maintenance, and reclamation equipment, including
14 replacement parts and equipment, and including equipment
15 purchased for lease, but excluding motor vehicles required to
16 be registered under the Illinois Vehicle Code.
17 (17) Distillation machinery and equipment, sold as a
18 unit or kit, assembled or installed by the retailer,
19 certified by the user to be used only for the production of
20 ethyl alcohol that will be used for consumption as motor fuel
21 or as a component of motor fuel for the personal use of the
22 user, and not subject to sale or resale.
23 (18) Manufacturing and assembling machinery and
24 equipment used primarily in the process of manufacturing or
25 assembling tangible personal property for wholesale or retail
26 sale or lease, whether that sale or lease is made directly by
27 the manufacturer or by some other person, whether the
28 materials used in the process are owned by the manufacturer
29 or some other person, or whether that sale or lease is made
30 apart from or as an incident to the seller's engaging in the
31 service occupation of producing machines, tools, dies, jigs,
32 patterns, gauges, or other similar items of no commercial
33 value on special order for a particular purchaser.
34 (19) Personal property delivered to a purchaser or
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1 purchaser's donee inside Illinois when the purchase order for
2 that personal property was received by a florist located
3 outside Illinois who has a florist located inside Illinois
4 deliver the personal property.
5 (20) Semen used for artificial insemination of livestock
6 for direct agricultural production.
7 (21) Horses, or interests in horses, registered with and
8 meeting the requirements of any of the Arabian Horse Club
9 Registry of America, Appaloosa Horse Club, American Quarter
10 Horse Association, United States Trotting Association, or
11 Jockey Club, as appropriate, used for purposes of breeding or
12 racing for prizes.
13 (22) Computers and communications equipment utilized for
14 any hospital purpose and equipment used in the diagnosis,
15 analysis, or treatment of hospital patients purchased by a
16 lessor who leases the equipment, under a lease of one year or
17 longer executed or in effect at the time the lessor would
18 otherwise be subject to the tax imposed by this Act, to a
19 hospital that has been issued an active tax exemption
20 identification number by the Department under Section 1g of
21 the Retailers' Occupation Tax Act. If the equipment is
22 leased in a manner that does not qualify for this exemption
23 or is used in any other non-exempt manner, the lessor shall
24 be liable for the tax imposed under this Act or the Service
25 Use Tax Act, as the case may be, based on the fair market
26 value of the property at the time the non-qualifying use
27 occurs. No lessor shall collect or attempt to collect an
28 amount (however designated) that purports to reimburse that
29 lessor for the tax imposed by this Act or the Service Use Tax
30 Act, as the case may be, if the tax has not been paid by the
31 lessor. If a lessor improperly collects any such amount from
32 the lessee, the lessee shall have a legal right to claim a
33 refund of that amount from the lessor. If, however, that
34 amount is not refunded to the lessee for any reason, the
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1 lessor is liable to pay that amount to the Department.
2 (23) Personal property purchased by a lessor who leases
3 the property, under a lease of one year or longer executed
4 or in effect at the time the lessor would otherwise be
5 subject to the tax imposed by this Act, to a governmental
6 body that has been issued an active sales tax exemption
7 identification number by the Department under Section 1g of
8 the Retailers' Occupation Tax Act. If the property is leased
9 in a manner that does not qualify for this exemption or used
10 in any other non-exempt manner, the lessor shall be liable
11 for the tax imposed under this Act or the Service Use Tax
12 Act, as the case may be, based on the fair market value of
13 the property at the time the non-qualifying use occurs. No
14 lessor shall collect or attempt to collect an amount (however
15 designated) that purports to reimburse that lessor for the
16 tax imposed by this Act or the Service Use Tax Act, as the
17 case may be, if the tax has not been paid by the lessor. If
18 a lessor improperly collects any such amount from the lessee,
19 the lessee shall have a legal right to claim a refund of that
20 amount from the lessor. If, however, that amount is not
21 refunded to the lessee for any reason, the lessor is liable
22 to pay that amount to the Department.
23 (24) Beginning with taxable years ending on or after
24 December 31, 1995 and ending with taxable years ending on or
25 before December 31, 2004, personal property that is donated
26 for disaster relief to be used in a State or federally
27 declared disaster area in Illinois or bordering Illinois by a
28 manufacturer or retailer that is registered in this State to
29 a corporation, society, association, foundation, or
30 institution that has been issued a sales tax exemption
31 identification number by the Department that assists victims
32 of the disaster who reside within the declared disaster area.
33 (25) Beginning with taxable years ending on or after
34 December 31, 1995 and ending with taxable years ending on or
-8- LRB9212732SMdv
1 before December 31, 2004, personal property that is used in
2 the performance of infrastructure repairs in this State,
3 including but not limited to municipal roads and streets,
4 access roads, bridges, sidewalks, waste disposal systems,
5 water and sewer line extensions, water distribution and
6 purification facilities, storm water drainage and retention
7 facilities, and sewage treatment facilities, resulting from a
8 State or federally declared disaster in Illinois or bordering
9 Illinois when such repairs are initiated on facilities
10 located in the declared disaster area within 6 months after
11 the disaster.
12 (26) Beginning July 1, 1999, game or game birds
13 purchased at a "game breeding and hunting preserve area" or
14 an "exotic game hunting area" as those terms are used in the
15 Wildlife Code or at a hunting enclosure approved through
16 rules adopted by the Department of Natural Resources. This
17 paragraph is exempt from the provisions of Section 3-90.
18 (27) A motor vehicle, as that term is defined in Section
19 1-146 of the Illinois Vehicle Code, that is donated to a
20 corporation, limited liability company, society, association,
21 foundation, or institution that is determined by the
22 Department to be organized and operated exclusively for
23 educational purposes. For purposes of this exemption, "a
24 corporation, limited liability company, society, association,
25 foundation, or institution organized and operated exclusively
26 for educational purposes" means all tax-supported public
27 schools, private schools that offer systematic instruction in
28 useful branches of learning by methods common to public
29 schools and that compare favorably in their scope and
30 intensity with the course of study presented in tax-supported
31 schools, and vocational or technical schools or institutes
32 organized and operated exclusively to provide a course of
33 study of not less than 6 weeks duration and designed to
34 prepare individuals to follow a trade or to pursue a manual,
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1 technical, mechanical, industrial, business, or commercial
2 occupation.
3 (28) Beginning January 1, 2000, personal property,
4 including food, purchased through fundraising events for the
5 benefit of a public or private elementary or secondary
6 school, a group of those schools, or one or more school
7 districts if the events are sponsored by an entity recognized
8 by the school district that consists primarily of volunteers
9 and includes parents and teachers of the school children.
10 This paragraph does not apply to fundraising events (i) for
11 the benefit of private home instruction or (ii) for which the
12 fundraising entity purchases the personal property sold at
13 the events from another individual or entity that sold the
14 property for the purpose of resale by the fundraising entity
15 and that profits from the sale to the fundraising entity.
16 This paragraph is exempt from the provisions of Section 3-90.
17 (29) Beginning January 1, 2000 and through December 31,
18 2001, new or used automatic vending machines that prepare and
19 serve hot food and beverages, including coffee, soup, and
20 other items, and replacement parts for these machines.
21 Beginning January 1, 2002, machines and parts for machines
22 used in commercial, coin-operated amusement and vending
23 business if a use or occupation tax is paid on the gross
24 receipts derived from the use of the commercial,
25 coin-operated amusement and vending machines. This paragraph
26 is exempt from the provisions of Section 3-90.
27 (30) Food for human consumption that is to be consumed
28 off the premises where it is sold (other than alcoholic
29 beverages, soft drinks, and food that has been prepared for
30 immediate consumption) and prescription and nonprescription
31 medicines, drugs, medical appliances, and insulin, urine
32 testing materials, syringes, and needles used by diabetics,
33 for human use, when purchased for use by a person receiving
34 medical assistance under Article 5 of the Illinois Public Aid
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1 Code who resides in a licensed long-term care facility, as
2 defined in the Nursing Home Care Act.
3 (31) Beginning on the effective date of this amendatory
4 Act of the 92nd General Assembly, computers and
5 communications equipment utilized for any hospital purpose
6 and equipment used in the diagnosis, analysis, or treatment
7 of hospital patients purchased by a lessor who leases the
8 equipment, under a lease of one year or longer executed or in
9 effect at the time the lessor would otherwise be subject to
10 the tax imposed by this Act, to a hospital that has been
11 issued an active tax exemption identification number by the
12 Department under Section 1g of the Retailers' Occupation Tax
13 Act. If the equipment is leased in a manner that does not
14 qualify for this exemption or is used in any other nonexempt
15 manner, the lessor shall be liable for the tax imposed under
16 this Act or the Service Use Tax Act, as the case may be,
17 based on the fair market value of the property at the time
18 the nonqualifying use occurs. No lessor shall collect or
19 attempt to collect an amount (however designated) that
20 purports to reimburse that lessor for the tax imposed by this
21 Act or the Service Use Tax Act, as the case may be, if the
22 tax has not been paid by the lessor. If a lessor improperly
23 collects any such amount from the lessee, the lessee shall
24 have a legal right to claim a refund of that amount from the
25 lessor. If, however, that amount is not refunded to the
26 lessee for any reason, the lessor is liable to pay that
27 amount to the Department. This paragraph is exempt from the
28 provisions of Section 3-90.
29 (32) Beginning on the effective date of this amendatory
30 Act of the 92nd General Assembly, personal property purchased
31 by a lessor who leases the property, under a lease of one
32 year or longer executed or in effect at the time the lessor
33 would otherwise be subject to the tax imposed by this Act, to
34 a governmental body that has been issued an active sales tax
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1 exemption identification number by the Department under
2 Section 1g of the Retailers' Occupation Tax Act. If the
3 property is leased in a manner that does not qualify for this
4 exemption or used in any other nonexempt manner, the lessor
5 shall be liable for the tax imposed under this Act or the
6 Service Use Tax Act, as the case may be, based on the fair
7 market value of the property at the time the nonqualifying
8 use occurs. No lessor shall collect or attempt to collect an
9 amount (however designated) that purports to reimburse that
10 lessor for the tax imposed by this Act or the Service Use Tax
11 Act, as the case may be, if the tax has not been paid by the
12 lessor. If a lessor improperly collects any such amount from
13 the lessee, the lessee shall have a legal right to claim a
14 refund of that amount from the lessor. If, however, that
15 amount is not refunded to the lessee for any reason, the
16 lessor is liable to pay that amount to the Department. This
17 paragraph is exempt from the provisions of Section 3-90.
18 (33) Beginning January 1, 2003, tangible personal
19 property and its component parts purchased by a
20 telecommunications carrier if the property and parts are used
21 directly and primarily in transmitting, receiving, switching,
22 or recording any interactive, two-way electromagnetic
23 communications, including voice, image, data, and
24 information, through the use of any medium, including, but
25 not limited to, poles, wires, cables, switching equipment,
26 computers, and record storage devices and media. This
27 paragraph is exempt from the provisions of Section 3-90.
28 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
29 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
30 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
31 eff. 8-20-99; 91-901, eff. 1-1-01; 92-35, eff. 7-1-01;
32 92-227, eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff.
33 8-23-01; revised 10-10-01.)
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1 Section 10. The Service Use Tax Act is amended by
2 changing Section 3-5 as follows:
3 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
4 Sec. 3-5. Exemptions. Use of the following tangible
5 personal property is exempt from the tax imposed by this Act:
6 (1) Personal property purchased from a corporation,
7 society, association, foundation, institution, or
8 organization, other than a limited liability company, that is
9 organized and operated as a not-for-profit service enterprise
10 for the benefit of persons 65 years of age or older if the
11 personal property was not purchased by the enterprise for the
12 purpose of resale by the enterprise.
13 (2) Personal property purchased by a non-profit Illinois
14 county fair association for use in conducting, operating, or
15 promoting the county fair.
16 (3) Personal property purchased by a not-for-profit arts
17 or cultural organization that establishes, by proof required
18 by the Department by rule, that it has received an exemption
19 under Section 501(c)(3) of the Internal Revenue Code and that
20 is organized and operated primarily for the presentation or
21 support of arts or cultural programming, activities, or
22 services. These organizations include, but are not limited
23 to, music and dramatic arts organizations such as symphony
24 orchestras and theatrical groups, arts and cultural service
25 organizations, local arts councils, visual arts
26 organizations, and media arts organizations. On and after the
27 effective date of this amendatory Act of the 92nd General
28 Assembly, however, an entity otherwise eligible for this
29 exemption shall not make tax-free purchases unless it has an
30 active identification number issued by the Department.
31 (4) Legal tender, currency, medallions, or gold or
32 silver coinage issued by the State of Illinois, the
33 government of the United States of America, or the government
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1 of any foreign country, and bullion.
2 (5) Graphic arts machinery and equipment, including
3 repair and replacement parts, both new and used, and
4 including that manufactured on special order or purchased for
5 lease, certified by the purchaser to be used primarily for
6 graphic arts production. Equipment includes chemicals or
7 chemicals acting as catalysts but only if the chemicals or
8 chemicals acting as catalysts effect a direct and immediate
9 change upon a graphic arts product.
10 (6) Personal property purchased from a teacher-sponsored
11 student organization affiliated with an elementary or
12 secondary school located in Illinois.
13 (7) Farm machinery and equipment, both new and used,
14 including that manufactured on special order, certified by
15 the purchaser to be used primarily for production agriculture
16 or State or federal agricultural programs, including
17 individual replacement parts for the machinery and equipment,
18 including machinery and equipment purchased for lease, and
19 including implements of husbandry defined in Section 1-130 of
20 the Illinois Vehicle Code, farm machinery and agricultural
21 chemical and fertilizer spreaders, and nurse wagons required
22 to be registered under Section 3-809 of the Illinois Vehicle
23 Code, but excluding other motor vehicles required to be
24 registered under the Illinois Vehicle Code. Horticultural
25 polyhouses or hoop houses used for propagating, growing, or
26 overwintering plants shall be considered farm machinery and
27 equipment under this item (7). Agricultural chemical tender
28 tanks and dry boxes shall include units sold separately from
29 a motor vehicle required to be licensed and units sold
30 mounted on a motor vehicle required to be licensed if the
31 selling price of the tender is separately stated.
32 Farm machinery and equipment shall include precision
33 farming equipment that is installed or purchased to be
34 installed on farm machinery and equipment including, but not
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1 limited to, tractors, harvesters, sprayers, planters,
2 seeders, or spreaders. Precision farming equipment includes,
3 but is not limited to, soil testing sensors, computers,
4 monitors, software, global positioning and mapping systems,
5 and other such equipment.
6 Farm machinery and equipment also includes computers,
7 sensors, software, and related equipment used primarily in
8 the computer-assisted operation of production agriculture
9 facilities, equipment, and activities such as, but not
10 limited to, the collection, monitoring, and correlation of
11 animal and crop data for the purpose of formulating animal
12 diets and agricultural chemicals. This item (7) is exempt
13 from the provisions of Section 3-75.
14 (8) Fuel and petroleum products sold to or used by an
15 air common carrier, certified by the carrier to be used for
16 consumption, shipment, or storage in the conduct of its
17 business as an air common carrier, for a flight destined for
18 or returning from a location or locations outside the United
19 States without regard to previous or subsequent domestic
20 stopovers.
21 (9) Proceeds of mandatory service charges separately
22 stated on customers' bills for the purchase and consumption
23 of food and beverages acquired as an incident to the purchase
24 of a service from a serviceman, to the extent that the
25 proceeds of the service charge are in fact turned over as
26 tips or as a substitute for tips to the employees who
27 participate directly in preparing, serving, hosting or
28 cleaning up the food or beverage function with respect to
29 which the service charge is imposed.
30 (10) Oil field exploration, drilling, and production
31 equipment, including (i) rigs and parts of rigs, rotary rigs,
32 cable tool rigs, and workover rigs, (ii) pipe and tubular
33 goods, including casing and drill strings, (iii) pumps and
34 pump-jack units, (iv) storage tanks and flow lines, (v) any
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1 individual replacement part for oil field exploration,
2 drilling, and production equipment, and (vi) machinery and
3 equipment purchased for lease; but excluding motor vehicles
4 required to be registered under the Illinois Vehicle Code.
5 (11) Proceeds from the sale of photoprocessing machinery
6 and equipment, including repair and replacement parts, both
7 new and used, including that manufactured on special order,
8 certified by the purchaser to be used primarily for
9 photoprocessing, and including photoprocessing machinery and
10 equipment purchased for lease.
11 (12) Coal exploration, mining, offhighway hauling,
12 processing, maintenance, and reclamation equipment, including
13 replacement parts and equipment, and including equipment
14 purchased for lease, but excluding motor vehicles required to
15 be registered under the Illinois Vehicle Code.
16 (13) Semen used for artificial insemination of livestock
17 for direct agricultural production.
18 (14) Horses, or interests in horses, registered with and
19 meeting the requirements of any of the Arabian Horse Club
20 Registry of America, Appaloosa Horse Club, American Quarter
21 Horse Association, United States Trotting Association, or
22 Jockey Club, as appropriate, used for purposes of breeding or
23 racing for prizes.
24 (15) Computers and communications equipment utilized for
25 any hospital purpose and equipment used in the diagnosis,
26 analysis, or treatment of hospital patients purchased by a
27 lessor who leases the equipment, under a lease of one year or
28 longer executed or in effect at the time the lessor would
29 otherwise be subject to the tax imposed by this Act, to a
30 hospital that has been issued an active tax exemption
31 identification number by the Department under Section 1g of
32 the Retailers' Occupation Tax Act. If the equipment is leased
33 in a manner that does not qualify for this exemption or is
34 used in any other non-exempt manner, the lessor shall be
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1 liable for the tax imposed under this Act or the Use Tax Act,
2 as the case may be, based on the fair market value of the
3 property at the time the non-qualifying use occurs. No
4 lessor shall collect or attempt to collect an amount (however
5 designated) that purports to reimburse that lessor for the
6 tax imposed by this Act or the Use Tax Act, as the case may
7 be, if the tax has not been paid by the lessor. If a lessor
8 improperly collects any such amount from the lessee, the
9 lessee shall have a legal right to claim a refund of that
10 amount from the lessor. If, however, that amount is not
11 refunded to the lessee for any reason, the lessor is liable
12 to pay that amount to the Department.
13 (16) Personal property purchased by a lessor who leases
14 the property, under a lease of one year or longer executed or
15 in effect at the time the lessor would otherwise be subject
16 to the tax imposed by this Act, to a governmental body that
17 has been issued an active tax exemption identification number
18 by the Department under Section 1g of the Retailers'
19 Occupation Tax Act. If the property is leased in a manner
20 that does not qualify for this exemption or is used in any
21 other non-exempt manner, the lessor shall be liable for the
22 tax imposed under this Act or the Use Tax Act, as the case
23 may be, based on the fair market value of the property at the
24 time the non-qualifying use occurs. No lessor shall collect
25 or attempt to collect an amount (however designated) that
26 purports to reimburse that lessor for the tax imposed by this
27 Act or the Use Tax Act, as the case may be, if the tax has
28 not been paid by the lessor. If a lessor improperly collects
29 any such amount from the lessee, the lessee shall have a
30 legal right to claim a refund of that amount from the lessor.
31 If, however, that amount is not refunded to the lessee for
32 any reason, the lessor is liable to pay that amount to the
33 Department.
34 (17) Beginning with taxable years ending on or after
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1 December 31, 1995 and ending with taxable years ending on or
2 before December 31, 2004, personal property that is donated
3 for disaster relief to be used in a State or federally
4 declared disaster area in Illinois or bordering Illinois by a
5 manufacturer or retailer that is registered in this State to
6 a corporation, society, association, foundation, or
7 institution that has been issued a sales tax exemption
8 identification number by the Department that assists victims
9 of the disaster who reside within the declared disaster area.
10 (18) Beginning with taxable years ending on or after
11 December 31, 1995 and ending with taxable years ending on or
12 before December 31, 2004, personal property that is used in
13 the performance of infrastructure repairs in this State,
14 including but not limited to municipal roads and streets,
15 access roads, bridges, sidewalks, waste disposal systems,
16 water and sewer line extensions, water distribution and
17 purification facilities, storm water drainage and retention
18 facilities, and sewage treatment facilities, resulting from a
19 State or federally declared disaster in Illinois or bordering
20 Illinois when such repairs are initiated on facilities
21 located in the declared disaster area within 6 months after
22 the disaster.
23 (19) Beginning July 1, 1999, game or game birds
24 purchased at a "game breeding and hunting preserve area" or
25 an "exotic game hunting area" as those terms are used in the
26 Wildlife Code or at a hunting enclosure approved through
27 rules adopted by the Department of Natural Resources. This
28 paragraph is exempt from the provisions of Section 3-75.
29 (20) A motor vehicle, as that term is defined in Section
30 1-146 of the Illinois Vehicle Code, that is donated to a
31 corporation, limited liability company, society, association,
32 foundation, or institution that is determined by the
33 Department to be organized and operated exclusively for
34 educational purposes. For purposes of this exemption, "a
-18- LRB9212732SMdv
1 corporation, limited liability company, society, association,
2 foundation, or institution organized and operated exclusively
3 for educational purposes" means all tax-supported public
4 schools, private schools that offer systematic instruction in
5 useful branches of learning by methods common to public
6 schools and that compare favorably in their scope and
7 intensity with the course of study presented in tax-supported
8 schools, and vocational or technical schools or institutes
9 organized and operated exclusively to provide a course of
10 study of not less than 6 weeks duration and designed to
11 prepare individuals to follow a trade or to pursue a manual,
12 technical, mechanical, industrial, business, or commercial
13 occupation.
14 (21) Beginning January 1, 2000, personal property,
15 including food, purchased through fundraising events for the
16 benefit of a public or private elementary or secondary
17 school, a group of those schools, or one or more school
18 districts if the events are sponsored by an entity recognized
19 by the school district that consists primarily of volunteers
20 and includes parents and teachers of the school children.
21 This paragraph does not apply to fundraising events (i) for
22 the benefit of private home instruction or (ii) for which the
23 fundraising entity purchases the personal property sold at
24 the events from another individual or entity that sold the
25 property for the purpose of resale by the fundraising entity
26 and that profits from the sale to the fundraising entity.
27 This paragraph is exempt from the provisions of Section 3-75.
28 (22) Beginning January 1, 2000 and through December 31,
29 2001, new or used automatic vending machines that prepare and
30 serve hot food and beverages, including coffee, soup, and
31 other items, and replacement parts for these machines.
32 Beginning January 1, 2002, machines and parts for machines
33 used in commercial, coin-operated amusement and vending
34 business if a use or occupation tax is paid on the gross
-19- LRB9212732SMdv
1 receipts derived from the use of the commercial,
2 coin-operated amusement and vending machines. This paragraph
3 is exempt from the provisions of Section 3-75.
4 (23) Food for human consumption that is to be consumed
5 off the premises where it is sold (other than alcoholic
6 beverages, soft drinks, and food that has been prepared for
7 immediate consumption) and prescription and nonprescription
8 medicines, drugs, medical appliances, and insulin, urine
9 testing materials, syringes, and needles used by diabetics,
10 for human use, when purchased for use by a person receiving
11 medical assistance under Article 5 of the Illinois Public Aid
12 Code who resides in a licensed long-term care facility, as
13 defined in the Nursing Home Care Act.
14 (24) (23) Beginning on the effective date of this
15 amendatory Act of the 92nd General Assembly, computers and
16 communications equipment utilized for any hospital purpose
17 and equipment used in the diagnosis, analysis, or treatment
18 of hospital patients purchased by a lessor who leases the
19 equipment, under a lease of one year or longer executed or in
20 effect at the time the lessor would otherwise be subject to
21 the tax imposed by this Act, to a hospital that has been
22 issued an active tax exemption identification number by the
23 Department under Section 1g of the Retailers' Occupation Tax
24 Act. If the equipment is leased in a manner that does not
25 qualify for this exemption or is used in any other nonexempt
26 manner, the lessor shall be liable for the tax imposed under
27 this Act or the Use Tax Act, as the case may be, based on the
28 fair market value of the property at the time the
29 nonqualifying use occurs. No lessor shall collect or attempt
30 to collect an amount (however designated) that purports to
31 reimburse that lessor for the tax imposed by this Act or the
32 Use Tax Act, as the case may be, if the tax has not been paid
33 by the lessor. If a lessor improperly collects any such
34 amount from the lessee, the lessee shall have a legal right
-20- LRB9212732SMdv
1 to claim a refund of that amount from the lessor. If,
2 however, that amount is not refunded to the lessee for any
3 reason, the lessor is liable to pay that amount to the
4 Department. This paragraph is exempt from the provisions of
5 Section 3-75.
6 (25) (24) Beginning on the effective date of this
7 amendatory Act of the 92nd General Assembly, personal
8 property purchased by a lessor who leases the property, under
9 a lease of one year or longer executed or in effect at the
10 time the lessor would otherwise be subject to the tax imposed
11 by this Act, to a governmental body that has been issued an
12 active tax exemption identification number by the Department
13 under Section 1g of the Retailers' Occupation Tax Act. If
14 the property is leased in a manner that does not qualify for
15 this exemption or is used in any other nonexempt manner, the
16 lessor shall be liable for the tax imposed under this Act or
17 the Use Tax Act, as the case may be, based on the fair market
18 value of the property at the time the nonqualifying use
19 occurs. No lessor shall collect or attempt to collect an
20 amount (however designated) that purports to reimburse that
21 lessor for the tax imposed by this Act or the Use Tax Act, as
22 the case may be, if the tax has not been paid by the lessor.
23 If a lessor improperly collects any such amount from the
24 lessee, the lessee shall have a legal right to claim a refund
25 of that amount from the lessor. If, however, that amount is
26 not refunded to the lessee for any reason, the lessor is
27 liable to pay that amount to the Department. This paragraph
28 is exempt from the provisions of Section 3-75.
29 (26) Beginning January 1, 2003, tangible personal
30 property and its component parts purchased by a
31 telecommunications carrier if the property and parts are used
32 directly and primarily in transmitting, receiving, switching,
33 or recording any interactive, two-way electromagnetic
34 communications, including voice, image, data, and
-21- LRB9212732SMdv
1 information, through the use of any medium, including, but
2 not limited to, poles, wires, cables, switching equipment,
3 computers, and record storage devices and media. This
4 paragraph is exempt from the provisions of Section 3-75.
5 (Source: P.A. 91-51, eff. 6-30-99; 91-200, eff. 7-20-99;
6 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644, eff.
7 8-20-99; 92-16, eff. 6-28-01; 92-35, eff. 7-1-01; 92-227,
8 eff. 8-2-01; 92-337, eff. 8-10-01; 92-484, eff. 8-23-01;
9 revised 10-10-01.)
10 Section 15. The Service Occupation Tax Act is amended by
11 changing Section 3-5 as follows:
12 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
13 Sec. 3-5. Exemptions. The following tangible personal
14 property is exempt from the tax imposed by this Act:
15 (1) Personal property sold by a corporation, society,
16 association, foundation, institution, or organization, other
17 than a limited liability company, that is organized and
18 operated as a not-for-profit service enterprise for the
19 benefit of persons 65 years of age or older if the personal
20 property was not purchased by the enterprise for the purpose
21 of resale by the enterprise.
22 (2) Personal property purchased by a not-for-profit
23 Illinois county fair association for use in conducting,
24 operating, or promoting the county fair.
25 (3) Personal property purchased by any not-for-profit
26 arts or cultural organization that establishes, by proof
27 required by the Department by rule, that it has received an
28 exemption under Section 501(c)(3) of the Internal Revenue
29 Code and that is organized and operated primarily for the
30 presentation or support of arts or cultural programming,
31 activities, or services. These organizations include, but
32 are not limited to, music and dramatic arts organizations
-22- LRB9212732SMdv
1 such as symphony orchestras and theatrical groups, arts and
2 cultural service organizations, local arts councils, visual
3 arts organizations, and media arts organizations. On and
4 after the effective date of this amendatory Act of the 92nd
5 General Assembly, however, an entity otherwise eligible for
6 this exemption shall not make tax-free purchases unless it
7 has an active identification number issued by the Department.
8 (4) Legal tender, currency, medallions, or gold or
9 silver coinage issued by the State of Illinois, the
10 government of the United States of America, or the government
11 of any foreign country, and bullion.
12 (5) 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. Equipment includes chemicals or
17 chemicals acting as catalysts but only if the chemicals or
18 chemicals acting as catalysts effect a direct and immediate
19 change upon a graphic arts product.
20 (6) Personal property sold by a teacher-sponsored
21 student organization affiliated with an elementary or
22 secondary school located in Illinois.
23 (7) Farm machinery and equipment, both new and used,
24 including that manufactured on special order, certified by
25 the purchaser to be used primarily for production agriculture
26 or State or federal agricultural programs, including
27 individual replacement parts for the machinery and equipment,
28 including machinery and equipment purchased for lease, and
29 including implements of husbandry defined in Section 1-130 of
30 the Illinois Vehicle Code, farm machinery and agricultural
31 chemical and fertilizer spreaders, and nurse wagons required
32 to be registered under Section 3-809 of the Illinois Vehicle
33 Code, but excluding other motor vehicles required to be
34 registered under the Illinois Vehicle Code. Horticultural
-23- LRB9212732SMdv
1 polyhouses or hoop houses used for propagating, growing, or
2 overwintering plants shall be considered farm machinery and
3 equipment under this item (7). Agricultural chemical tender
4 tanks and dry boxes shall include units sold separately from
5 a motor vehicle required to be licensed and units sold
6 mounted on a motor vehicle required to be licensed if the
7 selling price of the tender is separately stated.
8 Farm machinery and equipment shall include precision
9 farming equipment that is installed or purchased to be
10 installed on farm machinery and equipment including, but not
11 limited to, tractors, harvesters, sprayers, planters,
12 seeders, or spreaders. Precision farming equipment includes,
13 but is not limited to, soil testing sensors, computers,
14 monitors, software, global positioning and mapping systems,
15 and other such equipment.
16 Farm machinery and equipment also includes computers,
17 sensors, software, and related equipment used primarily in
18 the computer-assisted operation of production agriculture
19 facilities, equipment, and activities such as, but not
20 limited to, the collection, monitoring, and correlation of
21 animal and crop data for the purpose of formulating animal
22 diets and agricultural chemicals. This item (7) is exempt
23 from the provisions of Section 3-55.
24 (8) Fuel and petroleum products sold to or used by an
25 air common carrier, certified by the carrier to be used for
26 consumption, shipment, or storage in the conduct of its
27 business as an air common carrier, for a flight destined for
28 or returning from a location or locations outside the United
29 States without regard to previous or subsequent domestic
30 stopovers.
31 (9) Proceeds of mandatory service charges separately
32 stated on customers' bills for the purchase and consumption
33 of food and beverages, to the extent that the proceeds of the
34 service charge are in fact turned over as tips or as a
-24- LRB9212732SMdv
1 substitute for tips to the employees who participate directly
2 in preparing, serving, hosting or cleaning up the food or
3 beverage function with respect to which the service charge is
4 imposed.
5 (10) Oil field exploration, drilling, and production
6 equipment, including (i) rigs and parts of rigs, rotary rigs,
7 cable tool rigs, and workover rigs, (ii) pipe and tubular
8 goods, including casing and drill strings, (iii) pumps and
9 pump-jack units, (iv) storage tanks and flow lines, (v) any
10 individual replacement part for oil field exploration,
11 drilling, and production equipment, and (vi) machinery and
12 equipment purchased for lease; but excluding motor vehicles
13 required to be registered under the Illinois Vehicle Code.
14 (11) Photoprocessing machinery and equipment, including
15 repair and replacement parts, both new and used, including
16 that manufactured on special order, certified by the
17 purchaser to be used primarily for photoprocessing, and
18 including photoprocessing machinery and equipment purchased
19 for lease.
20 (12) Coal exploration, mining, offhighway hauling,
21 processing, maintenance, and reclamation equipment, including
22 replacement parts and equipment, and including equipment
23 purchased for lease, but excluding motor vehicles required to
24 be registered under the Illinois Vehicle Code.
25 (13) Food for human consumption that is to be consumed
26 off the premises where it is sold (other than alcoholic
27 beverages, soft drinks and food that has been prepared for
28 immediate consumption) and prescription and non-prescription
29 medicines, drugs, medical appliances, and insulin, urine
30 testing materials, syringes, and needles used by diabetics,
31 for human use, when purchased for use by a person receiving
32 medical assistance under Article 5 of the Illinois Public Aid
33 Code who resides in a licensed long-term care facility, as
34 defined in the Nursing Home Care Act.
-25- LRB9212732SMdv
1 (14) Semen used for artificial insemination of livestock
2 for direct agricultural production.
3 (15) Horses, or interests in horses, registered with and
4 meeting the requirements of any of the Arabian Horse Club
5 Registry of America, Appaloosa Horse Club, American Quarter
6 Horse Association, United States Trotting Association, or
7 Jockey Club, as appropriate, used for purposes of breeding or
8 racing for prizes.
9 (16) Computers and communications equipment utilized for
10 any hospital purpose and equipment used in the diagnosis,
11 analysis, or treatment of hospital patients sold to a lessor
12 who leases the equipment, under a lease of one year or longer
13 executed or in effect at the time of the purchase, to a
14 hospital that has been issued an active tax exemption
15 identification number by the Department under Section 1g of
16 the Retailers' Occupation Tax Act.
17 (17) Personal property sold to a lessor who leases the
18 property, under a lease of one year or longer executed or in
19 effect at the time of the purchase, to a governmental body
20 that has been issued an active tax exemption identification
21 number by the Department under Section 1g of the Retailers'
22 Occupation Tax Act.
23 (18) Beginning with taxable years ending on or after
24 December 31, 1995 and ending with taxable years ending on or
25 before December 31, 2004, personal property that is donated
26 for disaster relief to be used in a State or federally
27 declared disaster area in Illinois or bordering Illinois by a
28 manufacturer or retailer that is registered in this State to
29 a corporation, society, association, foundation, or
30 institution that has been issued a sales tax exemption
31 identification number by the Department that assists victims
32 of the disaster who reside within the declared disaster area.
33 (19) Beginning with taxable years ending on or after
34 December 31, 1995 and ending with taxable years ending on or
-26- LRB9212732SMdv
1 before December 31, 2004, personal property that is used in
2 the performance of infrastructure repairs in this State,
3 including but not limited to municipal roads and streets,
4 access roads, bridges, sidewalks, waste disposal systems,
5 water and sewer line extensions, water distribution and
6 purification facilities, storm water drainage and retention
7 facilities, and sewage treatment facilities, resulting from a
8 State or federally declared disaster in Illinois or bordering
9 Illinois when such repairs are initiated on facilities
10 located in the declared disaster area within 6 months after
11 the disaster.
12 (20) Beginning July 1, 1999, game or game birds sold at
13 a "game breeding and hunting preserve area" or an "exotic
14 game hunting area" as those terms are used in the Wildlife
15 Code or at a hunting enclosure approved through rules adopted
16 by the Department of Natural Resources. This paragraph is
17 exempt from the provisions of Section 3-55.
18 (21) A motor vehicle, as that term is defined in Section
19 1-146 of the Illinois Vehicle Code, that is donated to a
20 corporation, limited liability company, society, association,
21 foundation, or institution that is determined by the
22 Department to be organized and operated exclusively for
23 educational purposes. For purposes of this exemption, "a
24 corporation, limited liability company, society, association,
25 foundation, or institution organized and operated exclusively
26 for educational purposes" means all tax-supported public
27 schools, private schools that offer systematic instruction in
28 useful branches of learning by methods common to public
29 schools and that compare favorably in their scope and
30 intensity with the course of study presented in tax-supported
31 schools, and vocational or technical schools or institutes
32 organized and operated exclusively to provide a course of
33 study of not less than 6 weeks duration and designed to
34 prepare individuals to follow a trade or to pursue a manual,
-27- LRB9212732SMdv
1 technical, mechanical, industrial, business, or commercial
2 occupation.
3 (22) Beginning January 1, 2000, personal property,
4 including food, purchased through fundraising events for the
5 benefit of a public or private elementary or secondary
6 school, a group of those schools, or one or more school
7 districts if the events are sponsored by an entity recognized
8 by the school district that consists primarily of volunteers
9 and includes parents and teachers of the school children.
10 This paragraph does not apply to fundraising events (i) for
11 the benefit of private home instruction or (ii) for which the
12 fundraising entity purchases the personal property sold at
13 the events from another individual or entity that sold the
14 property for the purpose of resale by the fundraising entity
15 and that profits from the sale to the fundraising entity.
16 This paragraph is exempt from the provisions of Section 3-55.
17 (23) Beginning January 1, 2000 and through December 31,
18 2001, new or used automatic vending machines that prepare and
19 serve hot food and beverages, including coffee, soup, and
20 other items, and replacement parts for these machines.
21 Beginning January 1, 2002, machines and parts for machines
22 used in commercial, coin-operated amusement and vending
23 business if a use or occupation tax is paid on the gross
24 receipts derived from the use of the commercial,
25 coin-operated amusement and vending machines. This paragraph
26 is exempt from the provisions of Section 3-55.
27 (24) Beginning on the effective date of this amendatory
28 Act of the 92nd General Assembly, computers and
29 communications equipment utilized for any hospital purpose
30 and equipment used in the diagnosis, analysis, or treatment
31 of hospital patients sold to a lessor who leases the
32 equipment, under a lease of one year or longer executed or in
33 effect at the time of the purchase, to a hospital that has
34 been issued an active tax exemption identification number by
-28- LRB9212732SMdv
1 the Department under Section 1g of the Retailers' Occupation
2 Tax Act. This paragraph is exempt from the provisions of
3 Section 3-55.
4 (25) Beginning on the effective date of this amendatory
5 Act of the 92nd General Assembly, personal property sold to a
6 lessor who leases the property, under a lease of one year or
7 longer executed or in effect at the time of the purchase, to
8 a governmental body that has been issued an active tax
9 exemption identification number by the Department under
10 Section 1g of the Retailers' Occupation Tax Act. This
11 paragraph is exempt from the provisions of Section 3-55.
12 (26) (24) Beginning on January 1, 2002, tangible
13 personal property purchased from an Illinois retailer by a
14 taxpayer engaged in centralized purchasing activities in
15 Illinois who will, upon receipt of the property in Illinois,
16 temporarily store the property in Illinois (i) for the
17 purpose of subsequently transporting it outside this State
18 for use or consumption thereafter solely outside this State
19 or (ii) for the purpose of being processed, fabricated, or
20 manufactured into, attached to, or incorporated into other
21 tangible personal property to be transported outside this
22 State and thereafter used or consumed solely outside this
23 State. The Director of Revenue shall, pursuant to rules
24 adopted in accordance with the Illinois Administrative
25 Procedure Act, issue a permit to any taxpayer in good
26 standing with the Department who is eligible for the
27 exemption under this paragraph (24). The permit issued under
28 this paragraph (24) shall authorize the holder, to the extent
29 and in the manner specified in the rules adopted under this
30 Act, to purchase tangible personal property from a retailer
31 exempt from the taxes imposed by this Act. Taxpayers shall
32 maintain all necessary books and records to substantiate the
33 use and consumption of all such tangible personal property
34 outside of the State of Illinois.
-29- LRB9212732SMdv
1 (27) Beginning January 1, 2003, tangible personal
2 property and its component parts purchased by a
3 telecommunications carrier if the property and parts are used
4 directly and primarily in transmitting, receiving, switching,
5 or recording any interactive, two-way electromagnetic
6 communications, including voice, image, data, and
7 information, through the use of any medium, including, but
8 not limited to, poles, wires, cables, switching equipment,
9 computers, and record storage devices and media. This
10 paragraph is exempt from the provisions of Section 3-55.
11 (Source: P.A. 91-51, eff. 6-30-99; 91-200, eff. 7-20-99;
12 91-439, eff. 8-6-99; 91-533, eff. 8-13-99; 91-637, eff.
13 8-20-99; 91-644, eff. 8-20-99; 92-16, eff. 6-28-01; 92-35,
14 eff. 7-1-01; 92-227, eff. 8-2-01; 92-337, eff. 8-10-01;
15 92-484, eff. 8-23-01; 92-488, eff. 8-23-01; revised
16 10-10-01.)
17 Section 20. The Retailers' Occupation Tax Act is amended
18 by changing Section 2-5 as follows:
19 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
20 Sec. 2-5. Exemptions. Gross receipts from proceeds from
21 the sale of the following tangible personal property are
22 exempt from the tax imposed by this Act:
23 (1) Farm chemicals.
24 (2) Farm machinery and equipment, both new and used,
25 including that manufactured on special order, certified by
26 the purchaser to be used primarily for production agriculture
27 or State or federal agricultural programs, including
28 individual replacement parts for the machinery and equipment,
29 including machinery and equipment purchased for lease, and
30 including implements of husbandry defined in Section 1-130 of
31 the Illinois Vehicle Code, farm machinery and agricultural
32 chemical and fertilizer spreaders, and nurse wagons required
-30- LRB9212732SMdv
1 to be registered under Section 3-809 of the Illinois Vehicle
2 Code, but excluding other motor vehicles required to be
3 registered under the Illinois Vehicle Code. Horticultural
4 polyhouses or hoop houses used for propagating, growing, or
5 overwintering plants shall be considered farm machinery and
6 equipment under this item (2). Agricultural chemical tender
7 tanks and dry boxes shall include units sold separately from
8 a motor vehicle required to be licensed and units sold
9 mounted on a motor vehicle required to be licensed, if the
10 selling price of the tender is separately stated.
11 Farm machinery and equipment shall include precision
12 farming equipment that is installed or purchased to be
13 installed on farm machinery and equipment including, but not
14 limited to, tractors, harvesters, sprayers, planters,
15 seeders, or spreaders. Precision farming equipment includes,
16 but is not limited to, soil testing sensors, computers,
17 monitors, software, global positioning and mapping systems,
18 and other such equipment.
19 Farm machinery and equipment also includes computers,
20 sensors, software, and related equipment used primarily in
21 the computer-assisted operation of production agriculture
22 facilities, equipment, and activities such as, but not
23 limited to, the collection, monitoring, and correlation of
24 animal and crop data for the purpose of formulating animal
25 diets and agricultural chemicals. This item (7) is exempt
26 from the provisions of Section 2-70.
27 (3) Distillation machinery and equipment, sold as a unit
28 or kit, assembled or installed by the retailer, certified by
29 the user to be used only for the production of ethyl alcohol
30 that will be used for consumption as motor fuel or as a
31 component of motor fuel for the personal use of the user, and
32 not subject to sale or resale.
33 (4) Graphic arts machinery and equipment, including
34 repair and replacement parts, both new and used, and
-31- LRB9212732SMdv
1 including that manufactured on special order or purchased for
2 lease, certified by the purchaser to be used primarily for
3 graphic arts production. Equipment includes chemicals or
4 chemicals acting as catalysts but only if the chemicals or
5 chemicals acting as catalysts effect a direct and immediate
6 change upon a graphic arts product.
7 (5) A motor vehicle of the first division, a motor
8 vehicle of the second division that is a self-contained motor
9 vehicle designed or permanently converted to provide living
10 quarters for recreational, camping, or travel use, with
11 direct walk through access to the living quarters from the
12 driver's seat, or a motor vehicle of the second division that
13 is of the van configuration designed for the transportation
14 of not less than 7 nor more than 16 passengers, as defined in
15 Section 1-146 of the Illinois Vehicle Code, that is used for
16 automobile renting, as defined in the Automobile Renting
17 Occupation and Use Tax Act.
18 (6) Personal property sold by a teacher-sponsored
19 student organization affiliated with an elementary or
20 secondary school located in Illinois.
21 (7) Proceeds of that portion of the selling price of a
22 passenger car the sale of which is subject to the Replacement
23 Vehicle Tax.
24 (8) Personal property sold to an Illinois county fair
25 association for use in conducting, operating, or promoting
26 the county fair.
27 (9) Personal property sold to a not-for-profit arts or
28 cultural organization that establishes, by proof required by
29 the Department by rule, that it has received an exemption
30 under Section 501(c)(3) of the Internal Revenue Code and that
31 is organized and operated primarily for the presentation or
32 support of arts or cultural programming, activities, or
33 services. These organizations include, but are not limited
34 to, music and dramatic arts organizations such as symphony
-32- LRB9212732SMdv
1 orchestras and theatrical groups, arts and cultural service
2 organizations, local arts councils, visual arts
3 organizations, and media arts organizations. On and after the
4 effective date of this amendatory Act of the 92nd General
5 Assembly, however, an entity otherwise eligible for this
6 exemption shall not make tax-free purchases unless it has an
7 active identification number issued by the Department.
8 (10) Personal property sold by a corporation, society,
9 association, foundation, institution, or organization, other
10 than a limited liability company, that is organized and
11 operated as a not-for-profit service enterprise for the
12 benefit of persons 65 years of age or older if the personal
13 property was not purchased by the enterprise for the purpose
14 of resale by the enterprise.
15 (11) Personal property sold to a governmental body, to a
16 corporation, society, association, foundation, or institution
17 organized and operated exclusively for charitable, religious,
18 or educational purposes, or to a not-for-profit corporation,
19 society, association, foundation, institution, or
20 organization that has no compensated officers or employees
21 and that is organized and operated primarily for the
22 recreation of persons 55 years of age or older. A limited
23 liability company may qualify for the exemption under this
24 paragraph only if the limited liability company is organized
25 and operated exclusively for educational purposes. On and
26 after July 1, 1987, however, no entity otherwise eligible for
27 this exemption shall make tax-free purchases unless it has an
28 active identification number issued by the Department.
29 (12) Personal property sold to interstate carriers for
30 hire for use as rolling stock moving in interstate commerce
31 or to lessors under leases of one year or longer executed or
32 in effect at the time of purchase by interstate carriers for
33 hire for use as rolling stock moving in interstate commerce
34 and equipment operated by a telecommunications provider,
-33- LRB9212732SMdv
1 licensed as a common carrier by the Federal Communications
2 Commission, which is permanently installed in or affixed to
3 aircraft moving in interstate commerce.
4 (13) Proceeds from sales to owners, lessors, or shippers
5 of tangible personal property that is utilized by interstate
6 carriers for hire for use as rolling stock moving in
7 interstate commerce and equipment operated by a
8 telecommunications provider, licensed as a common carrier by
9 the Federal Communications Commission, which is permanently
10 installed in or affixed to aircraft moving in interstate
11 commerce.
12 (14) Machinery and equipment that will be used by the
13 purchaser, or a lessee of the purchaser, primarily in the
14 process of manufacturing or assembling tangible personal
15 property for wholesale or retail sale or lease, whether the
16 sale or lease is made directly by the manufacturer or by some
17 other person, whether the materials used in the process are
18 owned by the manufacturer or some other person, or whether
19 the sale or lease is made apart from or as an incident to the
20 seller's engaging in the service occupation of producing
21 machines, tools, dies, jigs, patterns, gauges, or other
22 similar items of no commercial value on special order for a
23 particular purchaser.
24 (15) Proceeds of mandatory service charges separately
25 stated on customers' bills for purchase and consumption of
26 food and beverages, to the extent that the proceeds of the
27 service charge are in fact turned over as tips or as a
28 substitute for tips to the employees who participate directly
29 in preparing, serving, hosting or cleaning up the food or
30 beverage function with respect to which the service charge is
31 imposed.
32 (16) Petroleum products sold to a purchaser if the
33 seller is prohibited by federal law from charging tax to the
34 purchaser.
-34- LRB9212732SMdv
1 (17) Tangible personal property sold to a common carrier
2 by rail or motor that receives the physical possession of the
3 property in Illinois and that transports the property, or
4 shares with another common carrier in the transportation of
5 the property, out of Illinois on a standard uniform bill of
6 lading showing the seller of the property as the shipper or
7 consignor of the property to a destination outside Illinois,
8 for use outside Illinois.
9 (18) Legal tender, currency, medallions, or gold or
10 silver coinage issued by the State of Illinois, the
11 government of the United States of America, or the government
12 of any foreign country, and bullion.
13 (19) Oil field exploration, drilling, and production
14 equipment, including (i) rigs and parts of rigs, rotary rigs,
15 cable tool rigs, and workover rigs, (ii) pipe and tubular
16 goods, including casing and drill strings, (iii) pumps and
17 pump-jack units, (iv) storage tanks and flow lines, (v) any
18 individual replacement part for oil field exploration,
19 drilling, and production equipment, and (vi) machinery and
20 equipment purchased for lease; but excluding motor vehicles
21 required to be registered under the Illinois Vehicle Code.
22 (20) Photoprocessing machinery and equipment, including
23 repair and replacement parts, both new and used, including
24 that manufactured on special order, certified by the
25 purchaser to be used primarily for photoprocessing, and
26 including photoprocessing machinery and equipment purchased
27 for lease.
28 (21) Coal exploration, mining, offhighway hauling,
29 processing, maintenance, and reclamation equipment, including
30 replacement parts and equipment, and including equipment
31 purchased for lease, but excluding motor vehicles required to
32 be registered under the Illinois Vehicle Code.
33 (22) Fuel and petroleum products sold to or used by an
34 air carrier, certified by the carrier to be used for
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1 consumption, shipment, or storage in the conduct of its
2 business as an air common carrier, for a flight destined for
3 or returning from a location or locations outside the United
4 States without regard to previous or subsequent domestic
5 stopovers.
6 (23) A transaction in which the purchase order is
7 received by a florist who is located outside Illinois, but
8 who has a florist located in Illinois deliver the property to
9 the purchaser or the purchaser's donee in Illinois.
10 (24) Fuel consumed or used in the operation of ships,
11 barges, or vessels that are used primarily in or for the
12 transportation of property or the conveyance of persons for
13 hire on rivers bordering on this State if the fuel is
14 delivered by the seller to the purchaser's barge, ship, or
15 vessel while it is afloat upon that bordering river.
16 (25) A motor vehicle sold in this State to a nonresident
17 even though the motor vehicle is delivered to the nonresident
18 in this State, if the motor vehicle is not to be titled in
19 this State, and if a driveaway decal permit is issued to the
20 motor vehicle as provided in Section 3-603 of the Illinois
21 Vehicle Code or if the nonresident purchaser has vehicle
22 registration plates to transfer to the motor vehicle upon
23 returning to his or her home state. The issuance of the
24 driveaway decal permit or having the out-of-state
25 registration plates to be transferred is prima facie evidence
26 that the motor vehicle will not be titled in this State.
27 (26) Semen used for artificial insemination of livestock
28 for direct agricultural production.
29 (27) Horses, or interests in horses, registered with and
30 meeting the requirements of any of the Arabian Horse Club
31 Registry of America, Appaloosa Horse Club, American Quarter
32 Horse Association, United States Trotting Association, or
33 Jockey Club, as appropriate, used for purposes of breeding or
34 racing for prizes.
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1 (28) Computers and communications equipment utilized for
2 any hospital purpose and equipment used in the diagnosis,
3 analysis, or treatment of hospital patients sold to a lessor
4 who leases the equipment, under a lease of one year or longer
5 executed or in effect at the time of the purchase, to a
6 hospital that has been issued an active tax exemption
7 identification number by the Department under Section 1g of
8 this Act.
9 (29) Personal property sold to a lessor who leases the
10 property, under a lease of one year or longer executed or in
11 effect at the time of the purchase, to a governmental body
12 that has been issued an active tax exemption identification
13 number by the Department under Section 1g of this Act.
14 (30) Beginning with taxable years ending on or after
15 December 31, 1995 and ending with taxable years ending on or
16 before December 31, 2004, personal property that is donated
17 for disaster relief to be used in a State or federally
18 declared disaster area in Illinois or bordering Illinois by a
19 manufacturer or retailer that is registered in this State to
20 a corporation, society, association, foundation, or
21 institution that has been issued a sales tax exemption
22 identification number by the Department that assists victims
23 of the disaster who reside within the declared disaster area.
24 (31) Beginning with taxable years ending on or after
25 December 31, 1995 and ending with taxable years ending on or
26 before December 31, 2004, personal property that is used in
27 the performance of infrastructure repairs in this State,
28 including but not limited to municipal roads and streets,
29 access roads, bridges, sidewalks, waste disposal systems,
30 water and sewer line extensions, water distribution and
31 purification facilities, storm water drainage and retention
32 facilities, and sewage treatment facilities, resulting from a
33 State or federally declared disaster in Illinois or bordering
34 Illinois when such repairs are initiated on facilities
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1 located in the declared disaster area within 6 months after
2 the disaster.
3 (32) Beginning July 1, 1999, game or game birds sold at
4 a "game breeding and hunting preserve area" or an "exotic
5 game hunting area" as those terms are used in the Wildlife
6 Code or at a hunting enclosure approved through rules adopted
7 by the Department of Natural Resources. This paragraph is
8 exempt from the provisions of Section 2-70.
9 (33) A motor vehicle, as that term is defined in Section
10 1-146 of the Illinois Vehicle Code, that is donated to a
11 corporation, limited liability company, society, association,
12 foundation, or institution that is determined by the
13 Department to be organized and operated exclusively for
14 educational purposes. For purposes of this exemption, "a
15 corporation, limited liability company, society, association,
16 foundation, or institution organized and operated exclusively
17 for educational purposes" means all tax-supported public
18 schools, private schools that offer systematic instruction in
19 useful branches of learning by methods common to public
20 schools and that compare favorably in their scope and
21 intensity with the course of study presented in tax-supported
22 schools, and vocational or technical schools or institutes
23 organized and operated exclusively to provide a course of
24 study of not less than 6 weeks duration and designed to
25 prepare individuals to follow a trade or to pursue a manual,
26 technical, mechanical, industrial, business, or commercial
27 occupation.
28 (34) Beginning January 1, 2000, personal property,
29 including food, purchased through fundraising events for the
30 benefit of a public or private elementary or secondary
31 school, a group of those schools, or one or more school
32 districts if the events are sponsored by an entity recognized
33 by the school district that consists primarily of volunteers
34 and includes parents and teachers of the school children.
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1 This paragraph does not apply to fundraising events (i) for
2 the benefit of private home instruction or (ii) for which the
3 fundraising entity purchases the personal property sold at
4 the events from another individual or entity that sold the
5 property for the purpose of resale by the fundraising entity
6 and that profits from the sale to the fundraising entity.
7 This paragraph is exempt from the provisions of Section 2-70.
8 (35) Beginning January 1, 2000 and through December 31,
9 2001, new or used automatic vending machines that prepare and
10 serve hot food and beverages, including coffee, soup, and
11 other items, and replacement parts for these machines.
12 Beginning January 1, 2002, machines and parts for machines
13 used in commercial, coin-operated amusement and vending
14 business if a use or occupation tax is paid on the gross
15 receipts derived from the use of the commercial,
16 coin-operated amusement and vending machines. This paragraph
17 is exempt from the provisions of Section 2-70.
18 (36) Beginning on the effective date of this amendatory
19 Act of the 92nd General Assembly, computers and
20 communications equipment utilized for any hospital purpose
21 and equipment used in the diagnosis, analysis, or treatment
22 of hospital patients sold to a lessor who leases the
23 equipment, under a lease of one year or longer executed or in
24 effect at the time of the purchase, to a hospital that has
25 been issued an active tax exemption identification number by
26 the Department under Section 1g of this Act. This paragraph
27 is exempt from the provisions of Section 2-70.
28 (37) Beginning on the effective date of this amendatory
29 Act of the 92nd General Assembly, personal property sold to a
30 lessor who leases the property, under a lease of one year or
31 longer executed or in effect at the time of the purchase, to
32 a governmental body that has been issued an active tax
33 exemption identification number by the Department under
34 Section 1g of this Act. This paragraph is exempt from the
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1 provisions of Section 2-70.
2 (38) (36) Beginning on January 1, 2002, tangible
3 personal property purchased from an Illinois retailer by a
4 taxpayer engaged in centralized purchasing activities in
5 Illinois who will, upon receipt of the property in Illinois,
6 temporarily store the property in Illinois (i) for the
7 purpose of subsequently transporting it outside this State
8 for use or consumption thereafter solely outside this State
9 or (ii) for the purpose of being processed, fabricated, or
10 manufactured into, attached to, or incorporated into other
11 tangible personal property to be transported outside this
12 State and thereafter used or consumed solely outside this
13 State. The Director of Revenue shall, pursuant to rules
14 adopted in accordance with the Illinois Administrative
15 Procedure Act, issue a permit to any taxpayer in good
16 standing with the Department who is eligible for the
17 exemption under this paragraph (36). The permit issued under
18 this paragraph (36) shall authorize the holder, to the extent
19 and in the manner specified in the rules adopted under this
20 Act, to purchase tangible personal property from a retailer
21 exempt from the taxes imposed by this Act. Taxpayers shall
22 maintain all necessary books and records to substantiate the
23 use and consumption of all such tangible personal property
24 outside of the State of Illinois.
25 (39) Beginning January 1, 2003, 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 2-70.
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1 (Source: P.A. 91-51, eff. 6-30-99; 91-200, eff. 7-20-99;
2 91-439, eff. 8-6-99; 91-533, eff. 8-13-99; 91-637, eff.
3 8-20-99; 91-644, eff. 8-20-99; 92-16, eff. 6-28-01; 92-35,
4 eff. 7-1-01; 92-227, eff. 8-2-01; 92-337, eff. 8-10-01;
5 92-484, eff. 8-23-01; 92-488, eff. 8-23-01; revised
6 10-10-01.)
7 Section 90. The State Mandates Act is amended by adding
8 Section 8.26 as follows:
9 (30 ILCS 805/8.26 new)
10 Sec. 8.26. Exempt mandate. Notwithstanding Sections 6
11 and 8 of this Act, no reimbursement by the State is required
12 for the implementation of any mandate created by this
13 amendatory Act of the 92nd General Assembly.
14 Section 99. Effective date. This Act takes effect upon
15 becoming law.