Illinois 2023-2024 Regular Session

Illinois House Bill HB3111 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3111 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED: 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not engaged in the business of selling tangible personal property to purchasers for use or consumption within the meaning of this Act. Effective immediately. LRB103 29603 HLH 55998 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3111 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED: 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not engaged in the business of selling tangible personal property to purchasers for use or consumption within the meaning of this Act. Effective immediately. LRB103 29603 HLH 55998 b LRB103 29603 HLH 55998 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3111 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55
4	4	35 ILCS 105/2 from Ch. 120, par. 439.2
5	5	35 ILCS 110/2 from Ch. 120, par. 439.32
6	6	35 ILCS 115/2 from Ch. 120, par. 439.102
7	7	35 ILCS 120/1 from Ch. 120, par. 440
8	8	35 ILCS 120/2-55 from Ch. 120, par. 441-55
9	9	Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not engaged in the business of selling tangible personal property to purchasers for use or consumption within the meaning of this Act. Effective immediately.
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12	12	A BILL FOR
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14	14	HB3111 LRB103 29603 HLH 55998 b
15	15	1 AN ACT concerning revenue.
16	16	2 Be it enacted by the People of the State of Illinois,
17	17	3 represented in the General Assembly:
18	18	4 Section 5. The Use Tax Act is amended by changing Section 2
19	19	5 as follows:
20	20	6 (35 ILCS 105/2) (from Ch. 120, par. 439.2)
21	21	7 Sec. 2. Definitions.
22	22	8 "Use" means the exercise by any person of any right or
23	23	9 power over tangible personal property incident to the
24	24	10 ownership of that property, except that it does not include
25	25	11 the sale of such property in any form as tangible personal
26	26	12 property in the regular course of business to the extent that
27	27	13 such property is not first subjected to a use for which it was
28	28	14 purchased, and does not include the use of such property by its
29	29	15 owner for demonstration purposes: Provided that the property
30	30	16 purchased is deemed to be purchased for the purpose of resale,
31	31	17 despite first being used, to the extent to which it is resold
32	32	18 as an ingredient of an intentionally produced product or
33	33	19 by-product of manufacturing. "Use" does not mean the
34	34	20 demonstration use or interim use of tangible personal property
35	35	21 by a retailer before he sells that tangible personal property.
36	36	22 For watercraft or aircraft, if the period of demonstration use
37	37	23 or interim use by the retailer exceeds 18 months, the retailer
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41	41	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3111 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED:
42	42	35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 from Ch. 120, par. 440 35 ILCS 120/2-55 from Ch. 120, par. 441-55
43	43	35 ILCS 105/2 from Ch. 120, par. 439.2
44	44	35 ILCS 110/2 from Ch. 120, par. 439.32
45	45	35 ILCS 115/2 from Ch. 120, par. 439.102
46	46	35 ILCS 120/1 from Ch. 120, par. 440
47	47	35 ILCS 120/2-55 from Ch. 120, par. 441-55
48	48	Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not engaged in the business of selling tangible personal property to purchasers for use or consumption within the meaning of this Act. Effective immediately.
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51	51	A BILL FOR
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57	57	35 ILCS 105/2 from Ch. 120, par. 439.2
58	58	35 ILCS 110/2 from Ch. 120, par. 439.32
59	59	35 ILCS 115/2 from Ch. 120, par. 439.102
60	60	35 ILCS 120/1 from Ch. 120, par. 440
61	61	35 ILCS 120/2-55 from Ch. 120, par. 441-55
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80	80	1 shall pay on the retailers' original cost price the tax
81	81	2 imposed by this Act, and no credit for that tax is permitted if
82	82	3 the watercraft or aircraft is subsequently sold by the
83	83	4 retailer. "Use" does not mean the physical incorporation of
84	84	5 tangible personal property, to the extent not first subjected
85	85	6 to a use for which it was purchased, as an ingredient or
86	86	7 constituent, into other tangible personal property (a) which
87	87	8 is sold in the regular course of business or (b) which the
88	88	9 person incorporating such ingredient or constituent therein
89	89	10 has undertaken at the time of such purchase to cause to be
90	90	11 transported in interstate commerce to destinations outside the
91	91	12 State of Illinois: Provided that the property purchased is
92	92	13 deemed to be purchased for the purpose of resale, despite
93	93	14 first being used, to the extent to which it is resold as an
94	94	15 ingredient of an intentionally produced product or by-product
95	95	16 of manufacturing.
96	96	17 "Watercraft" means a Class 2, Class 3, or Class 4
97	97	18 watercraft as defined in Section 3-2 of the Boat Registration
98	98	19 and Safety Act, a personal watercraft, or any boat equipped
99	99	20 with an inboard motor.
100	100	21 "Purchase at retail" means the acquisition of the
101	101	22 ownership of or title to tangible personal property through a
102	102	23 sale at retail.
103	103	24 "Purchaser" means anyone who, through a sale at retail,
104	104	25 acquires the ownership of tangible personal property for a
105	105	26 valuable consideration.
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116	116	1 "Sale at retail" means any transfer of the ownership of or
117	117	2 title to tangible personal property to a purchaser, for the
118	118	3 purpose of use, and not for the purpose of resale in any form
119	119	4 as tangible personal property to the extent not first
120	120	5 subjected to a use for which it was purchased, for a valuable
121	121	6 consideration: Provided that the property purchased is deemed
122	122	7 to be purchased for the purpose of resale, despite first being
123	123	8 used, to the extent to which it is resold as an ingredient of
124	124	9 an intentionally produced product or by-product of
125	125	10 manufacturing. For this purpose, slag produced as an incident
126	126	11 to manufacturing pig iron or steel and sold is considered to be
127	127	12 an intentionally produced by-product of manufacturing. "Sale
128	128	13 at retail" includes any such transfer made for resale unless
129	129	14 made in compliance with Section 2c of the Retailers'
130	130	15 Occupation Tax Act, as incorporated by reference into Section
131	131	16 12 of this Act. Transactions whereby the possession of the
132	132	17 property is transferred but the seller retains the title as
133	133	18 security for payment of the selling price are sales.
134	134	19 "Sale at retail" shall also be construed to include any
135	135	20 Illinois florist's sales transaction in which the purchase
136	136	21 order is received in Illinois by a florist and the sale is for
137	137	22 use or consumption, but the Illinois florist has a florist in
138	138	23 another state deliver the property to the purchaser or the
139	139	24 purchaser's donee in such other state.
140	140	25 Nonreusable tangible personal property that is used by
141	141	26 persons engaged in the business of operating a restaurant,
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152	152	1 cafeteria, or drive-in is a sale for resale when it is
153	153	2 transferred to customers in the ordinary course of business as
154	154	3 part of the sale of food or beverages and is used to deliver,
155	155	4 package, or consume food or beverages, regardless of where
156	156	5 consumption of the food or beverages occurs. Examples of those
157	157	6 items include, but are not limited to nonreusable, paper and
158	158	7 plastic cups, plates, baskets, boxes, sleeves, buckets or
159	159	8 other containers, utensils, straws, placemats, napkins, doggie
160	160	9 bags, and wrapping or packaging materials that are transferred
161	161	10 to customers as part of the sale of food or beverages in the
162	162	11 ordinary course of business.
163	163	12 The purchase, employment and transfer of such tangible
164	164	13 personal property as newsprint and ink for the primary purpose
165	165	14 of conveying news (with or without other information) is not a
166	166	15 purchase, use or sale of tangible personal property.
167	167	16 "Selling price" means the consideration for a sale valued
168	168	17 in money whether received in money or otherwise, including
169	169	18 cash, credits, property other than as hereinafter provided,
170	170	19 and services, but, prior to January 1, 2020 and beginning
171	171	20 again on January 1, 2022, not including the value of or credit
172	172	21 given for traded-in tangible personal property where the item
173	173	22 that is traded-in is of like kind and character as that which
174	174	23 is being sold; beginning January 1, 2020 and until January 1,
175	175	24 2022, "selling price" includes the portion of the value of or
176	176	25 credit given for traded-in motor vehicles of the First
177	177	26 Division as defined in Section 1-146 of the Illinois Vehicle
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188	188	1 Code of like kind and character as that which is being sold
189	189	2 that exceeds $10,000. "Selling price" shall be determined
190	190	3 without any deduction on account of the cost of the property
191	191	4 sold, the cost of materials used, labor or service cost or any
192	192	5 other expense whatsoever, but does not include interest or
193	193	6 finance charges which appear as separate items on the bill of
194	194	7 sale or sales contract nor charges that are added to prices by
195	195	8 sellers on account of the seller's tax liability under the
196	196	9 Retailers' Occupation Tax Act, or on account of the seller's
197	197	10 duty to collect, from the purchaser, the tax that is imposed by
198	198	11 this Act, or, except as otherwise provided with respect to any
199	199	12 cigarette tax imposed by a home rule unit, on account of the
200	200	13 seller's tax liability under any local occupation tax
201	201	14 administered by the Department, or, except as otherwise
202	202	15 provided with respect to any cigarette tax imposed by a home
203	203	16 rule unit on account of the seller's duty to collect, from the
204	204	17 purchasers, the tax that is imposed under any local use tax
205	205	18 administered by the Department. Effective December 1, 1985,
206	206	19 "selling price" shall include charges that are added to prices
207	207	20 by sellers on account of the seller's tax liability under the
208	208	21 Cigarette Tax Act, on account of the seller's duty to collect,
209	209	22 from the purchaser, the tax imposed under the Cigarette Use
210	210	23 Tax Act, and on account of the seller's duty to collect, from
211	211	24 the purchaser, any cigarette tax imposed by a home rule unit.
212	212	25 Notwithstanding any law to the contrary, for any motor
213	213	26 vehicle, as defined in Section 1-146 of the Vehicle Code, that
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224	224	1 is sold on or after January 1, 2015 for the purpose of leasing
225	225	2 the vehicle for a defined period that is longer than one year
226	226	3 and (1) is a motor vehicle of the second division that: (A) is
227	227	4 a self-contained motor vehicle designed or permanently
228	228	5 converted to provide living quarters for recreational,
229	229	6 camping, or travel use, with direct walk through access to the
230	230	7 living quarters from the driver's seat; (B) is of the van
231	231	8 configuration designed for the transportation of not less than
232	232	9 7 nor more than 16 passengers; or (C) has a gross vehicle
233	233	10 weight rating of 8,000 pounds or less or (2) is a motor vehicle
234	234	11 of the first division, "selling price" or "amount of sale"
235	235	12 means the consideration received by the lessor pursuant to the
236	236	13 lease contract, including amounts due at lease signing and all
237	237	14 monthly or other regular payments charged over the term of the
238	238	15 lease. Also included in the selling price is any amount
239	239	16 received by the lessor from the lessee for the leased vehicle
240	240	17 that is not calculated at the time the lease is executed,
241	241	18 including, but not limited to, excess mileage charges and
242	242	19 charges for excess wear and tear. For sales that occur in
243	243	20 Illinois, with respect to any amount received by the lessor
244	244	21 from the lessee for the leased vehicle that is not calculated
245	245	22 at the time the lease is executed, the lessor who purchased the
246	246	23 motor vehicle does not incur the tax imposed by the Use Tax Act
247	247	24 on those amounts, and the retailer who makes the retail sale of
248	248	25 the motor vehicle to the lessor is not required to collect the
249	249	26 tax imposed by this Act or to pay the tax imposed by the
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260	260	1 Retailers' Occupation Tax Act on those amounts. However, the
261	261	2 lessor who purchased the motor vehicle assumes the liability
262	262	3 for reporting and paying the tax on those amounts directly to
263	263	4 the Department in the same form (Illinois Retailers'
264	264	5 Occupation Tax, and local retailers' occupation taxes, if
265	265	6 applicable) in which the retailer would have reported and paid
266	266	7 such tax if the retailer had accounted for the tax to the
267	267	8 Department. For amounts received by the lessor from the lessee
268	268	9 that are not calculated at the time the lease is executed, the
269	269	10 lessor must file the return and pay the tax to the Department
270	270	11 by the due date otherwise required by this Act for returns
271	271	12 other than transaction returns. If the retailer is entitled
272	272	13 under this Act to a discount for collecting and remitting the
273	273	14 tax imposed under this Act to the Department with respect to
274	274	15 the sale of the motor vehicle to the lessor, then the right to
275	275	16 the discount provided in this Act shall be transferred to the
276	276	17 lessor with respect to the tax paid by the lessor for any
277	277	18 amount received by the lessor from the lessee for the leased
278	278	19 vehicle that is not calculated at the time the lease is
279	279	20 executed; provided that the discount is only allowed if the
280	280	21 return is timely filed and for amounts timely paid. The
281	281	22 "selling price" of a motor vehicle that is sold on or after
282	282	23 January 1, 2015 for the purpose of leasing for a defined period
283	283	24 of longer than one year shall not be reduced by the value of or
284	284	25 credit given for traded-in tangible personal property owned by
285	285	26 the lessor, nor shall it be reduced by the value of or credit
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296	296	1 given for traded-in tangible personal property owned by the
297	297	2 lessee, regardless of whether the trade-in value thereof is
298	298	3 assigned by the lessee to the lessor. In the case of a motor
299	299	4 vehicle that is sold for the purpose of leasing for a defined
300	300	5 period of longer than one year, the sale occurs at the time of
301	301	6 the delivery of the vehicle, regardless of the due date of any
302	302	7 lease payments. A lessor who incurs a Retailers' Occupation
303	303	8 Tax liability on the sale of a motor vehicle coming off lease
304	304	9 may not take a credit against that liability for the Use Tax
305	305	10 the lessor paid upon the purchase of the motor vehicle (or for
306	306	11 any tax the lessor paid with respect to any amount received by
307	307	12 the lessor from the lessee for the leased vehicle that was not
308	308	13 calculated at the time the lease was executed) if the selling
309	309	14 price of the motor vehicle at the time of purchase was
310	310	15 calculated using the definition of "selling price" as defined
311	311	16 in this paragraph. Notwithstanding any other provision of this
312	312	17 Act to the contrary, lessors shall file all returns and make
313	313	18 all payments required under this paragraph to the Department
314	314	19 by electronic means in the manner and form as required by the
315	315	20 Department. This paragraph does not apply to leases of motor
316	316	21 vehicles for which, at the time the lease is entered into, the
317	317	22 term of the lease is not a defined period, including leases
318	318	23 with a defined initial period with the option to continue the
319	319	24 lease on a month-to-month or other basis beyond the initial
320	320	25 defined period.
321	321	26 The phrase "like kind and character" shall be liberally
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332	332	1 construed (including but not limited to any form of motor
333	333	2 vehicle for any form of motor vehicle, or any kind of farm or
334	334	3 agricultural implement for any other kind of farm or
335	335	4 agricultural implement), while not including a kind of item
336	336	5 which, if sold at retail by that retailer, would be exempt from
337	337	6 retailers' occupation tax and use tax as an isolated or
338	338	7 occasional sale.
339	339	8 "Department" means the Department of Revenue.
340	340	9 "Person" means any natural individual, firm, partnership,
341	341	10 association, joint stock company, joint adventure, public or
342	342	11 private corporation, limited liability company, or a receiver,
343	343	12 executor, trustee, guardian or other representative appointed
344	344	13 by order of any court.
345	345	14 "Retailer" means and includes every person engaged in the
346	346	15 business of making sales at retail as defined in this Section.
347	347	16 A person who holds himself or herself out as being engaged
348	348	17 (or who habitually engages) in selling tangible personal
349	349	18 property at retail is a retailer hereunder with respect to
350	350	19 such sales (and not primarily in a service occupation)
351	351	20 notwithstanding the fact that such person designs and produces
352	352	21 such tangible personal property on special order for the
353	353	22 purchaser and in such a way as to render the property of value
354	354	23 only to such purchaser, if such tangible personal property so
355	355	24 produced on special order serves substantially the same
356	356	25 function as stock or standard items of tangible personal
357	357	26 property that are sold at retail.
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368	368	1 A person whose activities are organized and conducted
369	369	2 primarily as a not-for-profit service enterprise, and who
370	370	3 engages in selling tangible personal property at retail
371	371	4 (whether to the public or merely to members and their guests)
372	372	5 is a retailer with respect to such transactions, excepting
373	373	6 only a person organized and operated exclusively for
374	374	7 charitable, religious or educational purposes either (1), to
375	375	8 the extent of sales by such person to its members, students,
376	376	9 patients or inmates of tangible personal property to be used
377	377	10 primarily for the purposes of such person, or (2), to the
378	378	11 extent of sales by such person of tangible personal property
379	379	12 which is not sold or offered for sale by persons organized for
380	380	13 profit. The selling of school books and school supplies by
381	381	14 schools at retail to students is not "primarily for the
382	382	15 purposes of" the school which does such selling. This
383	383	16 paragraph does not apply to nor subject to taxation occasional
384	384	17 dinners, social or similar activities of a person organized
385	385	18 and operated exclusively for charitable, religious or
386	386	19 educational purposes, whether or not such activities are open
387	387	20 to the public.
388	388	21 A person who is the recipient of a grant or contract under
389	389	22 Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
390	390	23 serves meals to participants in the federal Nutrition Program
391	391	24 for the Elderly in return for contributions established in
392	392	25 amount by the individual participant pursuant to a schedule of
393	393	26 suggested fees as provided for in the federal Act is not a
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404	404	1 retailer under this Act with respect to such transactions.
405	405	2 Persons who engage in the business of transferring
406	406	3 tangible personal property upon the redemption of trading
407	407	4 stamps are retailers hereunder when engaged in such business.
408	408	5 The isolated or occasional sale of tangible personal
409	409	6 property at retail by a person who does not hold himself out as
410	410	7 being engaged (or who does not habitually engage) in selling
411	411	8 such tangible personal property at retail or a sale through a
412	412	9 bulk vending machine does not make such person a retailer
413	413	10 hereunder. However, any person who is engaged in a business
414	414	11 which is not subject to the tax imposed by the Retailers'
415	415	12 Occupation Tax Act because of involving the sale of or a
416	416	13 contract to sell real estate or a construction contract to
417	417	14 improve real estate, but who, in the course of conducting such
418	418	15 business, transfers tangible personal property to users or
419	419	16 consumers in the finished form in which it was purchased, and
420	420	17 which does not become real estate, under any provision of a
421	421	18 construction contract or real estate sale or real estate sales
422	422	19 agreement entered into with some other person arising out of
423	423	20 or because of such nontaxable business, is a retailer to the
424	424	21 extent of the value of the tangible personal property so
425	425	22 transferred. If, in such transaction, a separate charge is
426	426	23 made for the tangible personal property so transferred, the
427	427	24 value of such property, for the purposes of this Act, is the
428	428	25 amount so separately charged, but not less than the cost of
429	429	26 such property to the transferor; if no separate charge is
430	430
431	431
432	432
433	433
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436	436
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440	440	1 made, the value of such property, for the purposes of this Act,
441	441	2 is the cost to the transferor of such tangible personal
442	442	3 property.
443	443	4 "Retailer maintaining a place of business in this State",
444	444	5 or any like term, means and includes any of the following
445	445	6 retailers:
446	446	7 (1) A retailer having or maintaining within this
447	447	8 State, directly or by a subsidiary, an office,
448	448	9 distribution house, sales house, warehouse or other place
449	449	10 of business, or any agent or other representative
450	450	11 operating within this State under the authority of the
451	451	12 retailer or its subsidiary, irrespective of whether such
452	452	13 place of business or agent or other representative is
453	453	14 located here permanently or temporarily, or whether such
454	454	15 retailer or subsidiary is licensed to do business in this
455	455	16 State. However, the ownership of property that is located
456	456	17 at the premises of a printer with which the retailer has
457	457	18 contracted for printing and that consists of the final
458	458	19 printed product, property that becomes a part of the final
459	459	20 printed product, or copy from which the printed product is
460	460	21 produced shall not result in the retailer being deemed to
461	461	22 have or maintain an office, distribution house, sales
462	462	23 house, warehouse, or other place of business within this
463	463	24 State.
464	464	25 (1.1) A retailer having a contract with a person
465	465	26 located in this State under which the person, for a
466	466
467	467
468	468
469	469
470	470
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472	472
473	473
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475	475	HB3111 - 13 - LRB103 29603 HLH 55998 b
476	476	1 commission or other consideration based upon the sale of
477	477	2 tangible personal property by the retailer, directly or
478	478	3 indirectly refers potential customers to the retailer by
479	479	4 providing to the potential customers a promotional code or
480	480	5 other mechanism that allows the retailer to track
481	481	6 purchases referred by such persons. Examples of mechanisms
482	482	7 that allow the retailer to track purchases referred by
483	483	8 such persons include but are not limited to the use of a
484	484	9 link on the person's Internet website, promotional codes
485	485	10 distributed through the person's hand-delivered or mailed
486	486	11 material, and promotional codes distributed by the person
487	487	12 through radio or other broadcast media. The provisions of
488	488	13 this paragraph (1.1) shall apply only if the cumulative
489	489	14 gross receipts from sales of tangible personal property by
490	490	15 the retailer to customers who are referred to the retailer
491	491	16 by all persons in this State under such contracts exceed
492	492	17 $10,000 during the preceding 4 quarterly periods ending on
493	493	18 the last day of March, June, September, and December. A
494	494	19 retailer meeting the requirements of this paragraph (1.1)
495	495	20 shall be presumed to be maintaining a place of business in
496	496	21 this State but may rebut this presumption by submitting
497	497	22 proof that the referrals or other activities pursued
498	498	23 within this State by such persons were not sufficient to
499	499	24 meet the nexus standards of the United States Constitution
500	500	25 during the preceding 4 quarterly periods.
501	501	26 (1.2) Beginning July 1, 2011, a retailer having a
502	502
503	503
504	504
505	505
506	506
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508	508
509	509
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511	511	HB3111 - 14 - LRB103 29603 HLH 55998 b
512	512	1 contract with a person located in this State under which:
513	513	2 (A) the retailer sells the same or substantially
514	514	3 similar line of products as the person located in this
515	515	4 State and does so using an identical or substantially
516	516	5 similar name, trade name, or trademark as the person
517	517	6 located in this State; and
518	518	7 (B) the retailer provides a commission or other
519	519	8 consideration to the person located in this State
520	520	9 based upon the sale of tangible personal property by
521	521	10 the retailer.
522	522	11 The provisions of this paragraph (1.2) shall apply
523	523	12 only if the cumulative gross receipts from sales of
524	524	13 tangible personal property by the retailer to customers in
525	525	14 this State under all such contracts exceed $10,000 during
526	526	15 the preceding 4 quarterly periods ending on the last day
527	527	16 of March, June, September, and December.
528	528	17 (2) (Blank).
529	529	18 (3) (Blank).
530	530	19 (4) (Blank).
531	531	20 (5) (Blank).
532	532	21 (6) (Blank).
533	533	22 (7) (Blank).
534	534	23 (8) (Blank).
535	535	24 (9) Beginning October 1, 2018, a retailer making sales
536	536	25 of tangible personal property to purchasers in Illinois
537	537	26 from outside of Illinois if:
538	538
539	539
540	540
541	541
542	542
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544	544
545	545
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547	547	HB3111 - 15 - LRB103 29603 HLH 55998 b
548	548	1 (A) the cumulative gross receipts from sales of
549	549	2 tangible personal property to purchasers in Illinois
550	550	3 are $100,000 or more; or
551	551	4 (B) the retailer enters into 200 or more separate
552	552	5 transactions for the sale of tangible personal
553	553	6 property to purchasers in Illinois.
554	554	7 The retailer shall determine on a quarterly basis,
555	555	8 ending on the last day of March, June, September, and
556	556	9 December, whether he or she meets the criteria of either
557	557	10 subparagraph (A) or (B) of this paragraph (9) for the
558	558	11 preceding 12-month period. If the retailer meets the
559	559	12 threshold of either subparagraph (A) or (B) for a 12-month
560	560	13 period, he or she is considered a retailer maintaining a
561	561	14 place of business in this State and is required to collect
562	562	15 and remit the tax imposed under this Act and file returns
563	563	16 for one year. At the end of that one-year period, the
564	564	17 retailer shall determine whether he or she met the
565	565	18 threshold of either subparagraph (A) or (B) during the
566	566	19 preceding 12-month period. If the retailer met the
567	567	20 criteria in either subparagraph (A) or (B) for the
568	568	21 preceding 12-month period, he or she is considered a
569	569	22 retailer maintaining a place of business in this State and
570	570	23 is required to collect and remit the tax imposed under
571	571	24 this Act and file returns for the subsequent year. If at
572	572	25 the end of a one-year period a retailer that was required
573	573	26 to collect and remit the tax imposed under this Act
574	574
575	575
576	576
577	577
578	578
579	579	HB3111 - 15 - LRB103 29603 HLH 55998 b
580	580
581	581
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583	583	HB3111 - 16 - LRB103 29603 HLH 55998 b
584	584	1 determines that he or she did not meet the threshold in
585	585	2 either subparagraph (A) or (B) during the preceding
586	586	3 12-month period, the retailer shall subsequently determine
587	587	4 on a quarterly basis, ending on the last day of March,
588	588	5 June, September, and December, whether he or she meets the
589	589	6 threshold of either subparagraph (A) or (B) for the
590	590	7 preceding 12-month period.
591	591	8 Beginning January 1, 2020, neither the gross receipts
592	592	9 from nor the number of separate transactions for sales of
593	593	10 tangible personal property to purchasers in Illinois that
594	594	11 a retailer makes through a marketplace facilitator and for
595	595	12 which the retailer has received a certification from the
596	596	13 marketplace facilitator pursuant to Section 2d of this Act
597	597	14 shall be included for purposes of determining whether he
598	598	15 or she has met the thresholds of this paragraph (9).
599	599	16 (10) Beginning January 1, 2020, a marketplace
600	600	17 facilitator that meets a threshold set forth in subsection
601	601	18 (b) of Section 2d of this Act.
602	602	19 Motor carriers, as defined in Section 18c-1104 of the
603	603	20 Vehicle Code, that sell items of tangible personal property to
604	604	21 purchasers for use or consumption in addition to rendering
605	605	22 service as a motor carrier are engaged in a profession or
606	606	23 service occupation as a motor carrier and are not engaged in
607	607	24 the business of selling tangible personal property to
608	608	25 purchasers for use or consumption within the meaning of this
609	609	26 Act. Those motor carriers are not required to remit retailers'
610	610
611	611
612	612
613	613
614	614
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616	616
617	617
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619	619	HB3111 - 17 - LRB103 29603 HLH 55998 b
620	620	1 occupation taxes measured by their receipts from engaging in
621	621	2 such profession or service occupation, including receipts from
622	622	3 both services and tangible personal property.
623	623	4 "Bulk vending machine" means a vending machine, containing
624	624	5 unsorted confections, nuts, toys, or other items designed
625	625	6 primarily to be used or played with by children which, when a
626	626	7 coin or coins of a denomination not larger than $0.50 are
627	627	8 inserted, are dispensed in equal portions, at random and
628	628	9 without selection by the customer.
629	629	10 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 1-1-20;
630	630	11 101-604, eff. 1-1-20; 102-353, eff. 1-1-22.)
631	631	12 Section 10. The Service Use Tax Act is amended by changing
632	632	13 Section 2 as follows:
633	633	14 (35 ILCS 110/2) (from Ch. 120, par. 439.32)
634	634	15 Sec. 2. Definitions. In this Act:
635	635	16 "Use" means the exercise by any person of any right or
636	636	17 power over tangible personal property incident to the
637	637	18 ownership of that property, but does not include the sale or
638	638	19 use for demonstration by him of that property in any form as
639	639	20 tangible personal property in the regular course of business.
640	640	21 "Use" does not mean the interim use of tangible personal
641	641	22 property nor the physical incorporation of tangible personal
642	642	23 property, as an ingredient or constituent, into other tangible
643	643	24 personal property, (a) which is sold in the regular course of
644	644
645	645
646	646
647	647
648	648
649	649	HB3111 - 17 - LRB103 29603 HLH 55998 b
650	650
651	651
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654	654	1 business or (b) which the person incorporating such ingredient
655	655	2 or constituent therein has undertaken at the time of such
656	656	3 purchase to cause to be transported in interstate commerce to
657	657	4 destinations outside the State of Illinois.
658	658	5 "Purchased from a serviceman" means the acquisition of the
659	659	6 ownership of, or title to, tangible personal property through
660	660	7 a sale of service.
661	661	8 "Purchaser" means any person who, through a sale of
662	662	9 service, acquires the ownership of, or title to, any tangible
663	663	10 personal property.
664	664	11 "Cost price" means the consideration paid by the
665	665	12 serviceman for a purchase valued in money, whether paid in
666	666	13 money or otherwise, including cash, credits and services, and
667	667	14 shall be determined without any deduction on account of the
668	668	15 supplier's cost of the property sold or on account of any other
669	669	16 expense incurred by the supplier. When a serviceman contracts
670	670	17 out part or all of the services required in his sale of
671	671	18 service, it shall be presumed that the cost price to the
672	672	19 serviceman of the property transferred to him or her by his or
673	673	20 her subcontractor is equal to 50% of the subcontractor's
674	674	21 charges to the serviceman in the absence of proof of the
675	675	22 consideration paid by the subcontractor for the purchase of
676	676	23 such property.
677	677	24 "Selling price" means the consideration for a sale valued
678	678	25 in money whether received in money or otherwise, including
679	679	26 cash, credits and service, and shall be determined without any
680	680
681	681
682	682
683	683
684	684
685	685	HB3111 - 18 - LRB103 29603 HLH 55998 b
686	686
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689	689	HB3111 - 19 - LRB103 29603 HLH 55998 b
690	690	1 deduction on account of the serviceman's cost of the property
691	691	2 sold, the cost of materials used, labor or service cost or any
692	692	3 other expense whatsoever, but does not include interest or
693	693	4 finance charges which appear as separate items on the bill of
694	694	5 sale or sales contract nor charges that are added to prices by
695	695	6 sellers on account of the seller's duty to collect, from the
696	696	7 purchaser, the tax that is imposed by this Act.
697	697	8 "Department" means the Department of Revenue.
698	698	9 "Person" means any natural individual, firm, partnership,
699	699	10 association, joint stock company, joint venture, public or
700	700	11 private corporation, limited liability company, and any
701	701	12 receiver, executor, trustee, guardian or other representative
702	702	13 appointed by order of any court.
703	703	14 "Sale of service" means any transaction except:
704	704	15 (1) a retail sale of tangible personal property
705	705	16 taxable under the Retailers' Occupation Tax Act or under
706	706	17 the Use Tax Act.
707	707	18 (2) a sale of tangible personal property for the
708	708	19 purpose of resale made in compliance with Section 2c of
709	709	20 the Retailers' Occupation Tax Act.
710	710	21 (3) except as hereinafter provided, a sale or transfer
711	711	22 of tangible personal property as an incident to the
712	712	23 rendering of service for or by any governmental body, or
713	713	24 for or by any corporation, society, association,
714	714	25 foundation or institution organized and operated
715	715	26 exclusively for charitable, religious or educational
716	716
717	717
718	718
719	719
720	720
721	721	HB3111 - 19 - LRB103 29603 HLH 55998 b
722	722
723	723
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725	725	HB3111 - 20 - LRB103 29603 HLH 55998 b
726	726	1 purposes or any not-for-profit corporation, society,
727	727	2 association, foundation, institution or organization which
728	728	3 has no compensated officers or employees and which is
729	729	4 organized and operated primarily for the recreation of
730	730	5 persons 55 years of age or older. A limited liability
731	731	6 company may qualify for the exemption under this paragraph
732	732	7 only if the limited liability company is organized and
733	733	8 operated exclusively for educational purposes.
734	734	9 (4) (blank).
735	735	10 (4a) a sale or transfer of tangible personal property
736	736	11 as an incident to the rendering of service for owners,
737	737	12 lessors, or shippers of tangible personal property which
738	738	13 is utilized by interstate carriers for hire for use as
739	739	14 rolling stock moving in interstate commerce so long as so
740	740	15 used by interstate carriers for hire, and equipment
741	741	16 operated by a telecommunications provider, licensed as a
742	742	17 common carrier by the Federal Communications Commission,
743	743	18 which is permanently installed in or affixed to aircraft
744	744	19 moving in interstate commerce.
745	745	20 (4a-5) on and after July 1, 2003 and through June 30,
746	746	21 2004, a sale or transfer of a motor vehicle of the second
747	747	22 division with a gross vehicle weight in excess of 8,000
748	748	23 pounds as an incident to the rendering of service if that
749	749	24 motor vehicle is subject to the commercial distribution
750	750	25 fee imposed under Section 3-815.1 of the Illinois Vehicle
751	751	26 Code. Beginning on July 1, 2004 and through June 30, 2005,
752	752
753	753
754	754
755	755
756	756
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758	758
759	759
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761	761	HB3111 - 21 - LRB103 29603 HLH 55998 b
762	762	1 the use in this State of motor vehicles of the second
763	763	2 division: (i) with a gross vehicle weight rating in excess
764	764	3 of 8,000 pounds; (ii) that are subject to the commercial
765	765	4 distribution fee imposed under Section 3-815.1 of the
766	766	5 Illinois Vehicle Code; and (iii) that are primarily used
767	767	6 for commercial purposes. Through June 30, 2005, this
768	768	7 exemption applies to repair and replacement parts added
769	769	8 after the initial purchase of such a motor vehicle if that
770	770	9 motor vehicle is used in a manner that would qualify for
771	771	10 the rolling stock exemption otherwise provided for in this
772	772	11 Act. For purposes of this paragraph, "used for commercial
773	773	12 purposes" means the transportation of persons or property
774	774	13 in furtherance of any commercial or industrial enterprise
775	775	14 whether for-hire or not.
776	776	15 (5) a sale or transfer of machinery and equipment used
777	777	16 primarily in the process of the manufacturing or
778	778	17 assembling, either in an existing, an expanded or a new
779	779	18 manufacturing facility, of tangible personal property for
780	780	19 wholesale or retail sale or lease, whether such sale or
781	781	20 lease is made directly by the manufacturer or by some
782	782	21 other person, whether the materials used in the process
783	783	22 are owned by the manufacturer or some other person, or
784	784	23 whether such sale or lease is made apart from or as an
785	785	24 incident to the seller's engaging in a service occupation
786	786	25 and the applicable tax is a Service Use Tax or Service
787	787	26 Occupation Tax, rather than Use Tax or Retailers'
788	788
789	789
790	790
791	791
792	792
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794	794
795	795
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797	797	HB3111 - 22 - LRB103 29603 HLH 55998 b
798	798	1 Occupation Tax. The exemption provided by this paragraph
799	799	2 (5) includes production related tangible personal
800	800	3 property, as defined in Section 3-50 of the Use Tax Act,
801	801	4 purchased on or after July 1, 2019. The exemption provided
802	802	5 by this paragraph (5) does not include machinery and
803	803	6 equipment used in (i) the generation of electricity for
804	804	7 wholesale or retail sale; (ii) the generation or treatment
805	805	8 of natural or artificial gas for wholesale or retail sale
806	806	9 that is delivered to customers through pipes, pipelines,
807	807	10 or mains; or (iii) the treatment of water for wholesale or
808	808	11 retail sale that is delivered to customers through pipes,
809	809	12 pipelines, or mains. The provisions of Public Act 98-583
810	810	13 are declaratory of existing law as to the meaning and
811	811	14 scope of this exemption. The exemption under this
812	812	15 paragraph (5) is exempt from the provisions of Section
813	813	16 3-75.
814	814	17 (5a) the repairing, reconditioning or remodeling, for
815	815	18 a common carrier by rail, of tangible personal property
816	816	19 which belongs to such carrier for hire, and as to which
817	817	20 such carrier receives the physical possession of the
818	818	21 repaired, reconditioned or remodeled item of tangible
819	819	22 personal property in Illinois, and which such carrier
820	820	23 transports, or shares with another common carrier in the
821	821	24 transportation of such property, out of Illinois on a
822	822	25 standard uniform bill of lading showing the person who
823	823	26 repaired, reconditioned or remodeled the property to a
824	824
825	825
826	826
827	827
828	828
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830	830
831	831
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833	833	HB3111 - 23 - LRB103 29603 HLH 55998 b
834	834	1 destination outside Illinois, for use outside Illinois.
835	835	2 (5b) a sale or transfer of tangible personal property
836	836	3 which is produced by the seller thereof on special order
837	837	4 in such a way as to have made the applicable tax the
838	838	5 Service Occupation Tax or the Service Use Tax, rather than
839	839	6 the Retailers' Occupation Tax or the Use Tax, for an
840	840	7 interstate carrier by rail which receives the physical
841	841	8 possession of such property in Illinois, and which
842	842	9 transports such property, or shares with another common
843	843	10 carrier in the transportation of such property, out of
844	844	11 Illinois on a standard uniform bill of lading showing the
845	845	12 seller of the property as the shipper or consignor of such
846	846	13 property to a destination outside Illinois, for use
847	847	14 outside Illinois.
848	848	15 (6) until July 1, 2003, a sale or transfer of
849	849	16 distillation machinery and equipment, sold as a unit or
850	850	17 kit and assembled or installed by the retailer, which
851	851	18 machinery and equipment is certified by the user to be
852	852	19 used only for the production of ethyl alcohol that will be
853	853	20 used for consumption as motor fuel or as a component of
854	854	21 motor fuel for the personal use of such user and not
855	855	22 subject to sale or resale.
856	856	23 (7) at the election of any serviceman not required to
857	857	24 be otherwise registered as a retailer under Section 2a of
858	858	25 the Retailers' Occupation Tax Act, made for each fiscal
859	859	26 year sales of service in which the aggregate annual cost
860	860
861	861
862	862
863	863
864	864
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866	866
867	867
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869	869	HB3111 - 24 - LRB103 29603 HLH 55998 b
870	870	1 price of tangible personal property transferred as an
871	871	2 incident to the sales of service is less than 35%, or 75%
872	872	3 in the case of servicemen transferring prescription drugs
873	873	4 or servicemen engaged in graphic arts production, of the
874	874	5 aggregate annual total gross receipts from all sales of
875	875	6 service. The purchase of such tangible personal property
876	876	7 by the serviceman shall be subject to tax under the
877	877	8 Retailers' Occupation Tax Act and the Use Tax Act.
878	878	9 However, if a primary serviceman who has made the election
879	879	10 described in this paragraph subcontracts service work to a
880	880	11 secondary serviceman who has also made the election
881	881	12 described in this paragraph, the primary serviceman does
882	882	13 not incur a Use Tax liability if the secondary serviceman
883	883	14 (i) has paid or will pay Use Tax on his or her cost price
884	884	15 of any tangible personal property transferred to the
885	885	16 primary serviceman and (ii) certifies that fact in writing
886	886	17 to the primary serviceman.
887	887	18 Tangible personal property transferred incident to the
888	888	19 completion of a maintenance agreement is exempt from the tax
889	889	20 imposed pursuant to this Act.
890	890	21 Exemption (5) also includes machinery and equipment used
891	891	22 in the general maintenance or repair of such exempt machinery
892	892	23 and equipment or for in-house manufacture of exempt machinery
893	893	24 and equipment. On and after July 1, 2017, exemption (5) also
894	894	25 includes graphic arts machinery and equipment, as defined in
895	895	26 paragraph (5) of Section 3-5. The machinery and equipment
896	896
897	897
898	898
899	899
900	900
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902	902
903	903
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905	905	HB3111 - 25 - LRB103 29603 HLH 55998 b
906	906	1 exemption does not include machinery and equipment used in (i)
907	907	2 the generation of electricity for wholesale or retail sale;
908	908	3 (ii) the generation or treatment of natural or artificial gas
909	909	4 for wholesale or retail sale that is delivered to customers
910	910	5 through pipes, pipelines, or mains; or (iii) the treatment of
911	911	6 water for wholesale or retail sale that is delivered to
912	912	7 customers through pipes, pipelines, or mains. The provisions
913	913	8 of Public Act 98-583 are declaratory of existing law as to the
914	914	9 meaning and scope of this exemption. For the purposes of
915	915	10 exemption (5), each of these terms shall have the following
916	916	11 meanings: (1) "manufacturing process" shall mean the
917	917	12 production of any article of tangible personal property,
918	918	13 whether such article is a finished product or an article for
919	919	14 use in the process of manufacturing or assembling a different
920	920	15 article of tangible personal property, by procedures commonly
921	921	16 regarded as manufacturing, processing, fabricating, or
922	922	17 refining which changes some existing material or materials
923	923	18 into a material with a different form, use or name. In relation
924	924	19 to a recognized integrated business composed of a series of
925	925	20 operations which collectively constitute manufacturing, or
926	926	21 individually constitute manufacturing operations, the
927	927	22 manufacturing process shall be deemed to commence with the
928	928	23 first operation or stage of production in the series, and
929	929	24 shall not be deemed to end until the completion of the final
930	930	25 product in the last operation or stage of production in the
931	931	26 series; and further, for purposes of exemption (5),
932	932
933	933
934	934
935	935
936	936
937	937	HB3111 - 25 - LRB103 29603 HLH 55998 b
938	938
939	939
940	940	HB3111- 26 -LRB103 29603 HLH 55998 b HB3111 - 26 - LRB103 29603 HLH 55998 b
941	941	HB3111 - 26 - LRB103 29603 HLH 55998 b
942	942	1 photoprocessing is deemed to be a manufacturing process of
943	943	2 tangible personal property for wholesale or retail sale; (2)
944	944	3 "assembling process" shall mean the production of any article
945	945	4 of tangible personal property, whether such article is a
946	946	5 finished product or an article for use in the process of
947	947	6 manufacturing or assembling a different article of tangible
948	948	7 personal property, by the combination of existing materials in
949	949	8 a manner commonly regarded as assembling which results in a
950	950	9 material of a different form, use or name; (3) "machinery"
951	951	10 shall mean major mechanical machines or major components of
952	952	11 such machines contributing to a manufacturing or assembling
953	953	12 process; and (4) "equipment" shall include any independent
954	954	13 device or tool separate from any machinery but essential to an
955	955	14 integrated manufacturing or assembly process; including
956	956	15 computers used primarily in a manufacturer's computer assisted
957	957	16 design, computer assisted manufacturing (CAD/CAM) system; or
958	958	17 any subunit or assembly comprising a component of any
959	959	18 machinery or auxiliary, adjunct or attachment parts of
960	960	19 machinery, such as tools, dies, jigs, fixtures, patterns and
961	961	20 molds; or any parts which require periodic replacement in the
962	962	21 course of normal operation; but shall not include hand tools.
963	963	22 Equipment includes chemicals or chemicals acting as catalysts
964	964	23 but only if the chemicals or chemicals acting as catalysts
965	965	24 effect a direct and immediate change upon a product being
966	966	25 manufactured or assembled for wholesale or retail sale or
967	967	26 lease. The purchaser of such machinery and equipment who has
968	968
969	969
970	970
971	971
972	972
973	973	HB3111 - 26 - LRB103 29603 HLH 55998 b
974	974
975	975
976	976	HB3111- 27 -LRB103 29603 HLH 55998 b HB3111 - 27 - LRB103 29603 HLH 55998 b
977	977	HB3111 - 27 - LRB103 29603 HLH 55998 b
978	978	1 an active resale registration number shall furnish such number
979	979	2 to the seller at the time of purchase. The purchaser of such
980	980	3 machinery and equipment and tools without an active resale
981	981	4 registration number shall prepare a certificate of exemption
982	982	5 stating facts establishing the exemption, which certificate
983	983	6 shall be available to the Department for inspection or audit.
984	984	7 The Department shall prescribe the form of the certificate.
985	985	8 Any informal rulings, opinions or letters issued by the
986	986	9 Department in response to an inquiry or request for any
987	987	10 opinion from any person regarding the coverage and
988	988	11 applicability of exemption (5) to specific devices shall be
989	989	12 published, maintained as a public record, and made available
990	990	13 for public inspection and copying. If the informal ruling,
991	991	14 opinion or letter contains trade secrets or other confidential
992	992	15 information, where possible the Department shall delete such
993	993	16 information prior to publication. Whenever such informal
994	994	17 rulings, opinions, or letters contain any policy of general
995	995	18 applicability, the Department shall formulate and adopt such
996	996	19 policy as a rule in accordance with the provisions of the
997	997	20 Illinois Administrative Procedure Act.
998	998	21 On and after July 1, 1987, no entity otherwise eligible
999	999	22 under exemption (3) of this Section shall make tax-free
1000	1000	23 purchases unless it has an active exemption identification
1001	1001	24 number issued by the Department.
1002	1002	25 The purchase, employment and transfer of such tangible
1003	1003	26 personal property as newsprint and ink for the primary purpose
1004	1004
1005	1005
1006	1006
1007	1007
1008	1008
1009	1009	HB3111 - 27 - LRB103 29603 HLH 55998 b
1010	1010
1011	1011
1012	1012	HB3111- 28 -LRB103 29603 HLH 55998 b HB3111 - 28 - LRB103 29603 HLH 55998 b
1013	1013	HB3111 - 28 - LRB103 29603 HLH 55998 b
1014	1014	1 of conveying news (with or without other information) is not a
1015	1015	2 purchase, use or sale of service or of tangible personal
1016	1016	3 property within the meaning of this Act.
1017	1017	4 "Serviceman" means any person who is engaged in the
1018	1018	5 occupation of making sales of service.
1019	1019	6 Motor carriers, as defined in Section 18c-1104 of the
1020	1020	7 Vehicle Code, that sell items of tangible personal property to
1021	1021	8 purchasers for use or consumption in addition to rendering
1022	1022	9 service as a motor carrier are engaged in a profession or
1023	1023	10 service occupation as a motor carrier and are not engaged in
1024	1024	11 the business of selling tangible personal property to
1025	1025	12 purchasers for use or consumption within the meaning of this
1026	1026	13 Act. Those motor carriers are not required to remit retailers'
1027	1027	14 occupation taxes measured by their receipts from engaging in
1028	1028	15 such profession or service occupation, including receipts from
1029	1029	16 both services and tangible personal property.
1030	1030	17 "Sale at retail" means "sale at retail" as defined in the
1031	1031	18 Retailers' Occupation Tax Act.
1032	1032	19 "Supplier" means any person who makes sales of tangible
1033	1033	20 personal property to servicemen for the purpose of resale as
1034	1034	21 an incident to a sale of service.
1035	1035	22 "Serviceman maintaining a place of business in this
1036	1036	23 State", or any like term, means and includes any serviceman:
1037	1037	24 (1) having or maintaining within this State, directly
1038	1038	25 or by a subsidiary, an office, distribution house, sales
1039	1039	26 house, warehouse or other place of business, or any agent
1040	1040
1041	1041
1042	1042
1043	1043
1044	1044
1045	1045	HB3111 - 28 - LRB103 29603 HLH 55998 b
1046	1046
1047	1047
1048	1048	HB3111- 29 -LRB103 29603 HLH 55998 b HB3111 - 29 - LRB103 29603 HLH 55998 b
1049	1049	HB3111 - 29 - LRB103 29603 HLH 55998 b
1050	1050	1 or other representative operating within this State under
1051	1051	2 the authority of the serviceman or its subsidiary,
1052	1052	3 irrespective of whether such place of business or agent or
1053	1053	4 other representative is located here permanently or
1054	1054	5 temporarily, or whether such serviceman or subsidiary is
1055	1055	6 licensed to do business in this State;
1056	1056	7 (1.1) having a contract with a person located in this
1057	1057	8 State under which the person, for a commission or other
1058	1058	9 consideration based on the sale of service by the
1059	1059	10 serviceman, directly or indirectly refers potential
1060	1060	11 customers to the serviceman by providing to the potential
1061	1061	12 customers a promotional code or other mechanism that
1062	1062	13 allows the serviceman to track purchases referred by such
1063	1063	14 persons. Examples of mechanisms that allow the serviceman
1064	1064	15 to track purchases referred by such persons include but
1065	1065	16 are not limited to the use of a link on the person's
1066	1066	17 Internet website, promotional codes distributed through
1067	1067	18 the person's hand-delivered or mailed material, and
1068	1068	19 promotional codes distributed by the person through radio
1069	1069	20 or other broadcast media. The provisions of this paragraph
1070	1070	21 (1.1) shall apply only if the cumulative gross receipts
1071	1071	22 from sales of service by the serviceman to customers who
1072	1072	23 are referred to the serviceman by all persons in this
1073	1073	24 State under such contracts exceed $10,000 during the
1074	1074	25 preceding 4 quarterly periods ending on the last day of
1075	1075	26 March, June, September, and December; a serviceman meeting
1076	1076
1077	1077
1078	1078
1079	1079
1080	1080
1081	1081	HB3111 - 29 - LRB103 29603 HLH 55998 b
1082	1082
1083	1083
1084	1084	HB3111- 30 -LRB103 29603 HLH 55998 b HB3111 - 30 - LRB103 29603 HLH 55998 b
1085	1085	HB3111 - 30 - LRB103 29603 HLH 55998 b
1086	1086	1 the requirements of this paragraph (1.1) shall be presumed
1087	1087	2 to be maintaining a place of business in this State but may
1088	1088	3 rebut this presumption by submitting proof that the
1089	1089	4 referrals or other activities pursued within this State by
1090	1090	5 such persons were not sufficient to meet the nexus
1091	1091	6 standards of the United States Constitution during the
1092	1092	7 preceding 4 quarterly periods;
1093	1093	8 (1.2) beginning July 1, 2011, having a contract with a
1094	1094	9 person located in this State under which:
1095	1095	10 (A) the serviceman sells the same or substantially
1096	1096	11 similar line of services as the person located in this
1097	1097	12 State and does so using an identical or substantially
1098	1098	13 similar name, trade name, or trademark as the person
1099	1099	14 located in this State; and
1100	1100	15 (B) the serviceman provides a commission or other
1101	1101	16 consideration to the person located in this State
1102	1102	17 based upon the sale of services by the serviceman.
1103	1103	18 The provisions of this paragraph (1.2) shall apply only if
1104	1104	19 the cumulative gross receipts from sales of service by the
1105	1105	20 serviceman to customers in this State under all such
1106	1106	21 contracts exceed $10,000 during the preceding 4 quarterly
1107	1107	22 periods ending on the last day of March, June, September,
1108	1108	23 and December;
1109	1109	24 (2) soliciting orders for tangible personal property
1110	1110	25 by means of a telecommunication or television shopping
1111	1111	26 system (which utilizes toll free numbers) which is
1112	1112
1113	1113
1114	1114
1115	1115
1116	1116
1117	1117	HB3111 - 30 - LRB103 29603 HLH 55998 b
1118	1118
1119	1119
1120	1120	HB3111- 31 -LRB103 29603 HLH 55998 b HB3111 - 31 - LRB103 29603 HLH 55998 b
1121	1121	HB3111 - 31 - LRB103 29603 HLH 55998 b
1122	1122	1 intended by the retailer to be broadcast by cable
1123	1123	2 television or other means of broadcasting, to consumers
1124	1124	3 located in this State;
1125	1125	4 (3) pursuant to a contract with a broadcaster or
1126	1126	5 publisher located in this State, soliciting orders for
1127	1127	6 tangible personal property by means of advertising which
1128	1128	7 is disseminated primarily to consumers located in this
1129	1129	8 State and only secondarily to bordering jurisdictions;
1130	1130	9 (4) soliciting orders for tangible personal property
1131	1131	10 by mail if the solicitations are substantial and recurring
1132	1132	11 and if the retailer benefits from any banking, financing,
1133	1133	12 debt collection, telecommunication, or marketing
1134	1134	13 activities occurring in this State or benefits from the
1135	1135	14 location in this State of authorized installation,
1136	1136	15 servicing, or repair facilities;
1137	1137	16 (5) being owned or controlled by the same interests
1138	1138	17 which own or control any retailer engaging in business in
1139	1139	18 the same or similar line of business in this State;
1140	1140	19 (6) having a franchisee or licensee operating under
1141	1141	20 its trade name if the franchisee or licensee is required
1142	1142	21 to collect the tax under this Section;
1143	1143	22 (7) pursuant to a contract with a cable television
1144	1144	23 operator located in this State, soliciting orders for
1145	1145	24 tangible personal property by means of advertising which
1146	1146	25 is transmitted or distributed over a cable television
1147	1147	26 system in this State;
1148	1148
1149	1149
1150	1150
1151	1151
1152	1152
1153	1153	HB3111 - 31 - LRB103 29603 HLH 55998 b
1154	1154
1155	1155
1156	1156	HB3111- 32 -LRB103 29603 HLH 55998 b HB3111 - 32 - LRB103 29603 HLH 55998 b
1157	1157	HB3111 - 32 - LRB103 29603 HLH 55998 b
1158	1158	1 (8) engaging in activities in Illinois, which
1159	1159	2 activities in the state in which the supply business
1160	1160	3 engaging in such activities is located would constitute
1161	1161	4 maintaining a place of business in that state; or
1162	1162	5 (9) beginning October 1, 2018, making sales of service
1163	1163	6 to purchasers in Illinois from outside of Illinois if:
1164	1164	7 (A) the cumulative gross receipts from sales of
1165	1165	8 service to purchasers in Illinois are $100,000 or
1166	1166	9 more; or
1167	1167	10 (B) the serviceman enters into 200 or more
1168	1168	11 separate transactions for sales of service to
1169	1169	12 purchasers in Illinois.
1170	1170	13 The serviceman shall determine on a quarterly basis,
1171	1171	14 ending on the last day of March, June, September, and
1172	1172	15 December, whether he or she meets the criteria of either
1173	1173	16 subparagraph (A) or (B) of this paragraph (9) for the
1174	1174	17 preceding 12-month period. If the serviceman meets the
1175	1175	18 criteria of either subparagraph (A) or (B) for a 12-month
1176	1176	19 period, he or she is considered a serviceman maintaining a
1177	1177	20 place of business in this State and is required to collect
1178	1178	21 and remit the tax imposed under this Act and file returns
1179	1179	22 for one year. At the end of that one-year period, the
1180	1180	23 serviceman shall determine whether the serviceman met the
1181	1181	24 criteria of either subparagraph (A) or (B) during the
1182	1182	25 preceding 12-month period. If the serviceman met the
1183	1183	26 criteria in either subparagraph (A) or (B) for the
1184	1184
1185	1185
1186	1186
1187	1187
1188	1188
1189	1189	HB3111 - 32 - LRB103 29603 HLH 55998 b
1190	1190
1191	1191
1192	1192	HB3111- 33 -LRB103 29603 HLH 55998 b HB3111 - 33 - LRB103 29603 HLH 55998 b
1193	1193	HB3111 - 33 - LRB103 29603 HLH 55998 b
1194	1194	1 preceding 12-month period, he or she is considered a
1195	1195	2 serviceman maintaining a place of business in this State
1196	1196	3 and is required to collect and remit the tax imposed under
1197	1197	4 this Act and file returns for the subsequent year. If at
1198	1198	5 the end of a one-year period a serviceman that was
1199	1199	6 required to collect and remit the tax imposed under this
1200	1200	7 Act determines that he or she did not meet the criteria in
1201	1201	8 either subparagraph (A) or (B) during the preceding
1202	1202	9 12-month period, the serviceman subsequently shall
1203	1203	10 determine on a quarterly basis, ending on the last day of
1204	1204	11 March, June, September, and December, whether he or she
1205	1205	12 meets the criteria of either subparagraph (A) or (B) for
1206	1206	13 the preceding 12-month period.
1207	1207	14 Beginning January 1, 2020, neither the gross receipts
1208	1208	15 from nor the number of separate transactions for sales of
1209	1209	16 service to purchasers in Illinois that a serviceman makes
1210	1210	17 through a marketplace facilitator and for which the
1211	1211	18 serviceman has received a certification from the
1212	1212	19 marketplace facilitator pursuant to Section 2d of this Act
1213	1213	20 shall be included for purposes of determining whether he
1214	1214	21 or she has met the thresholds of this paragraph (9).
1215	1215	22 (10) Beginning January 1, 2020, a marketplace
1216	1216	23 facilitator, as defined in Section 2d of this Act.
1217	1217	24 (Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
1218	1218	25 100-587, eff. 6-4-18; 100-863, eff. 8-14-18; 101-9, Article
1219	1219	26 10, Section 10-15, eff. 6-5-19; 101-9, Article 25, Section
1220	1220
1221	1221
1222	1222
1223	1223
1224	1224
1225	1225	HB3111 - 33 - LRB103 29603 HLH 55998 b
1226	1226
1227	1227
1228	1228	HB3111- 34 -LRB103 29603 HLH 55998 b HB3111 - 34 - LRB103 29603 HLH 55998 b
1229	1229	HB3111 - 34 - LRB103 29603 HLH 55998 b
1230	1230	1 25-10, eff. 6-5-19; 101-604, eff. 12-13-19.)
1231	1231	2 Section 15. The Service Occupation Tax Act is amended by
1232	1232	3 changing Section 2 as follows:
1233	1233	4 (35 ILCS 115/2) (from Ch. 120, par. 439.102)
1234	1234	5 Sec. 2. In this Act:
1235	1235	6 "Transfer" means any transfer of the title to property or
1236	1236	7 of the ownership of property whether or not the transferor
1237	1237	8 retains title as security for the payment of amounts due him
1238	1238	9 from the transferee.
1239	1239	10 "Cost Price" means the consideration paid by the
1240	1240	11 serviceman for a purchase valued in money, whether paid in
1241	1241	12 money or otherwise, including cash, credits and services, and
1242	1242	13 shall be determined without any deduction on account of the
1243	1243	14 supplier's cost of the property sold or on account of any other
1244	1244	15 expense incurred by the supplier. When a serviceman contracts
1245	1245	16 out part or all of the services required in his sale of
1246	1246	17 service, it shall be presumed that the cost price to the
1247	1247	18 serviceman of the property transferred to him by his or her
1248	1248	19 subcontractor is equal to 50% of the subcontractor's charges
1249	1249	20 to the serviceman in the absence of proof of the consideration
1250	1250	21 paid by the subcontractor for the purchase of such property.
1251	1251	22 "Department" means the Department of Revenue.
1252	1252	23 "Person" means any natural individual, firm, partnership,
1253	1253	24 association, joint stock company, joint venture, public or
1254	1254
1255	1255
1256	1256
1257	1257
1258	1258
1259	1259	HB3111 - 34 - LRB103 29603 HLH 55998 b
1260	1260
1261	1261
1262	1262	HB3111- 35 -LRB103 29603 HLH 55998 b HB3111 - 35 - LRB103 29603 HLH 55998 b
1263	1263	HB3111 - 35 - LRB103 29603 HLH 55998 b
1264	1264	1 private corporation, limited liability company, and any
1265	1265	2 receiver, executor, trustee, guardian or other representative
1266	1266	3 appointed by order of any court.
1267	1267	4 "Sale of Service" means any transaction except:
1268	1268	5 (a) A retail sale of tangible personal property taxable
1269	1269	6 under the Retailers' Occupation Tax Act or under the Use Tax
1270	1270	7 Act.
1271	1271	8 (b) A sale of tangible personal property for the purpose
1272	1272	9 of resale made in compliance with Section 2c of the Retailers'
1273	1273	10 Occupation Tax Act.
1274	1274	11 (c) Except as hereinafter provided, a sale or transfer of
1275	1275	12 tangible personal property as an incident to the rendering of
1276	1276	13 service for or by any governmental body or for or by any
1277	1277	14 corporation, society, association, foundation or institution
1278	1278	15 organized and operated exclusively for charitable, religious
1279	1279	16 or educational purposes or any not-for-profit corporation,
1280	1280	17 society, association, foundation, institution or organization
1281	1281	18 which has no compensated officers or employees and which is
1282	1282	19 organized and operated primarily for the recreation of persons
1283	1283	20 55 years of age or older. A limited liability company may
1284	1284	21 qualify for the exemption under this paragraph only if the
1285	1285	22 limited liability company is organized and operated
1286	1286	23 exclusively for educational purposes.
1287	1287	24 (d) (Blank).
1288	1288	25 (d-1) A sale or transfer of tangible personal property as
1289	1289	26 an incident to the rendering of service for owners, lessors or
1290	1290
1291	1291
1292	1292
1293	1293
1294	1294
1295	1295	HB3111 - 35 - LRB103 29603 HLH 55998 b
1296	1296
1297	1297
1298	1298	HB3111- 36 -LRB103 29603 HLH 55998 b HB3111 - 36 - LRB103 29603 HLH 55998 b
1299	1299	HB3111 - 36 - LRB103 29603 HLH 55998 b
1300	1300	1 shippers of tangible personal property which is utilized by
1301	1301	2 interstate carriers for hire for use as rolling stock moving
1302	1302	3 in interstate commerce, and equipment operated by a
1303	1303	4 telecommunications provider, licensed as a common carrier by
1304	1304	5 the Federal Communications Commission, which is permanently
1305	1305	6 installed in or affixed to aircraft moving in interstate
1306	1306	7 commerce.
1307	1307	8 (d-1.1) On and after July 1, 2003 and through June 30,
1308	1308	9 2004, a sale or transfer of a motor vehicle of the second
1309	1309	10 division with a gross vehicle weight in excess of 8,000 pounds
1310	1310	11 as an incident to the rendering of service if that motor
1311	1311	12 vehicle is subject to the commercial distribution fee imposed
1312	1312	13 under Section 3-815.1 of the Illinois Vehicle Code. Beginning
1313	1313	14 on July 1, 2004 and through June 30, 2005, the use in this
1314	1314	15 State of motor vehicles of the second division: (i) with a
1315	1315	16 gross vehicle weight rating in excess of 8,000 pounds; (ii)
1316	1316	17 that are subject to the commercial distribution fee imposed
1317	1317	18 under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
1318	1318	19 that are primarily used for commercial purposes. Through June
1319	1319	20 30, 2005, this exemption applies to repair and replacement
1320	1320	21 parts added after the initial purchase of such a motor vehicle
1321	1321	22 if that motor vehicle is used in a manner that would qualify
1322	1322	23 for the rolling stock exemption otherwise provided for in this
1323	1323	24 Act. For purposes of this paragraph, "used for commercial
1324	1324	25 purposes" means the transportation of persons or property in
1325	1325	26 furtherance of any commercial or industrial enterprise whether
1326	1326
1327	1327
1328	1328
1329	1329
1330	1330
1331	1331	HB3111 - 36 - LRB103 29603 HLH 55998 b
1332	1332
1333	1333
1334	1334	HB3111- 37 -LRB103 29603 HLH 55998 b HB3111 - 37 - LRB103 29603 HLH 55998 b
1335	1335	HB3111 - 37 - LRB103 29603 HLH 55998 b
1336	1336	1 for-hire or not.
1337	1337	2 (d-2) The repairing, reconditioning or remodeling, for a
1338	1338	3 common carrier by rail, of tangible personal property which
1339	1339	4 belongs to such carrier for hire, and as to which such carrier
1340	1340	5 receives the physical possession of the repaired,
1341	1341	6 reconditioned or remodeled item of tangible personal property
1342	1342	7 in Illinois, and which such carrier transports, or shares with
1343	1343	8 another common carrier in the transportation of such property,
1344	1344	9 out of Illinois on a standard uniform bill of lading showing
1345	1345	10 the person who repaired, reconditioned or remodeled the
1346	1346	11 property as the shipper or consignor of such property to a
1347	1347	12 destination outside Illinois, for use outside Illinois.
1348	1348	13 (d-3) A sale or transfer of tangible personal property
1349	1349	14 which is produced by the seller thereof on special order in
1350	1350	15 such a way as to have made the applicable tax the Service
1351	1351	16 Occupation Tax or the Service Use Tax, rather than the
1352	1352	17 Retailers' Occupation Tax or the Use Tax, for an interstate
1353	1353	18 carrier by rail which receives the physical possession of such
1354	1354	19 property in Illinois, and which transports such property, or
1355	1355	20 shares with another common carrier in the transportation of
1356	1356	21 such property, out of Illinois on a standard uniform bill of
1357	1357	22 lading showing the seller of the property as the shipper or
1358	1358	23 consignor of such property to a destination outside Illinois,
1359	1359	24 for use outside Illinois.
1360	1360	25 (d-4) Until January 1, 1997, a sale, by a registered
1361	1361	26 serviceman paying tax under this Act to the Department, of
1362	1362
1363	1363
1364	1364
1365	1365
1366	1366
1367	1367	HB3111 - 37 - LRB103 29603 HLH 55998 b
1368	1368
1369	1369
1370	1370	HB3111- 38 -LRB103 29603 HLH 55998 b HB3111 - 38 - LRB103 29603 HLH 55998 b
1371	1371	HB3111 - 38 - LRB103 29603 HLH 55998 b
1372	1372	1 special order printed materials delivered outside Illinois and
1373	1373	2 which are not returned to this State, if delivery is made by
1374	1374	3 the seller or agent of the seller, including an agent who
1375	1375	4 causes the product to be delivered outside Illinois by a
1376	1376	5 common carrier or the U.S. postal service.
1377	1377	6 (e) A sale or transfer of machinery and equipment used
1378	1378	7 primarily in the process of the manufacturing or assembling,
1379	1379	8 either in an existing, an expanded or a new manufacturing
1380	1380	9 facility, of tangible personal property for wholesale or
1381	1381	10 retail sale or lease, whether such sale or lease is made
1382	1382	11 directly by the manufacturer or by some other person, whether
1383	1383	12 the materials used in the process are owned by the
1384	1384	13 manufacturer or some other person, or whether such sale or
1385	1385	14 lease is made apart from or as an incident to the seller's
1386	1386	15 engaging in a service occupation and the applicable tax is a
1387	1387	16 Service Occupation Tax or Service Use Tax, rather than
1388	1388	17 Retailers' Occupation Tax or Use Tax. The exemption provided
1389	1389	18 by this paragraph (e) includes production related tangible
1390	1390	19 personal property, as defined in Section 3-50 of the Use Tax
1391	1391	20 Act, purchased on or after July 1, 2019. The exemption
1392	1392	21 provided by this paragraph (e) does not include machinery and
1393	1393	22 equipment used in (i) the generation of electricity for
1394	1394	23 wholesale or retail sale; (ii) the generation or treatment of
1395	1395	24 natural or artificial gas for wholesale or retail sale that is
1396	1396	25 delivered to customers through pipes, pipelines, or mains; or
1397	1397	26 (iii) the treatment of water for wholesale or retail sale that
1398	1398
1399	1399
1400	1400
1401	1401
1402	1402
1403	1403	HB3111 - 38 - LRB103 29603 HLH 55998 b
1404	1404
1405	1405
1406	1406	HB3111- 39 -LRB103 29603 HLH 55998 b HB3111 - 39 - LRB103 29603 HLH 55998 b
1407	1407	HB3111 - 39 - LRB103 29603 HLH 55998 b
1408	1408	1 is delivered to customers through pipes, pipelines, or mains.
1409	1409	2 The provisions of Public Act 98-583 are declaratory of
1410	1410	3 existing law as to the meaning and scope of this exemption. The
1411	1411	4 exemption under this subsection (e) is exempt from the
1412	1412	5 provisions of Section 3-75.
1413	1413	6 (f) Until July 1, 2003, the sale or transfer of
1414	1414	7 distillation machinery and equipment, sold as a unit or kit
1415	1415	8 and assembled or installed by the retailer, which machinery
1416	1416	9 and equipment is certified by the user to be used only for the
1417	1417	10 production of ethyl alcohol that will be used for consumption
1418	1418	11 as motor fuel or as a component of motor fuel for the personal
1419	1419	12 use of such user and not subject to sale or resale.
1420	1420	13 (g) At the election of any serviceman not required to be
1421	1421	14 otherwise registered as a retailer under Section 2a of the
1422	1422	15 Retailers' Occupation Tax Act, made for each fiscal year sales
1423	1423	16 of service in which the aggregate annual cost price of
1424	1424	17 tangible personal property transferred as an incident to the
1425	1425	18 sales of service is less than 35% (75% in the case of
1426	1426	19 servicemen transferring prescription drugs or servicemen
1427	1427	20 engaged in graphic arts production) of the aggregate annual
1428	1428	21 total gross receipts from all sales of service. The purchase
1429	1429	22 of such tangible personal property by the serviceman shall be
1430	1430	23 subject to tax under the Retailers' Occupation Tax Act and the
1431	1431	24 Use Tax Act. However, if a primary serviceman who has made the
1432	1432	25 election described in this paragraph subcontracts service work
1433	1433	26 to a secondary serviceman who has also made the election
1434	1434
1435	1435
1436	1436
1437	1437
1438	1438
1439	1439	HB3111 - 39 - LRB103 29603 HLH 55998 b
1440	1440
1441	1441
1442	1442	HB3111- 40 -LRB103 29603 HLH 55998 b HB3111 - 40 - LRB103 29603 HLH 55998 b
1443	1443	HB3111 - 40 - LRB103 29603 HLH 55998 b
1444	1444	1 described in this paragraph, the primary serviceman does not
1445	1445	2 incur a Use Tax liability if the secondary serviceman (i) has
1446	1446	3 paid or will pay Use Tax on his or her cost price of any
1447	1447	4 tangible personal property transferred to the primary
1448	1448	5 serviceman and (ii) certifies that fact in writing to the
1449	1449	6 primary serviceman.
1450	1450	7 Tangible personal property transferred incident to the
1451	1451	8 completion of a maintenance agreement is exempt from the tax
1452	1452	9 imposed pursuant to this Act.
1453	1453	10 Exemption (e) also includes machinery and equipment used
1454	1454	11 in the general maintenance or repair of such exempt machinery
1455	1455	12 and equipment or for in-house manufacture of exempt machinery
1456	1456	13 and equipment. On and after July 1, 2017, exemption (e) also
1457	1457	14 includes graphic arts machinery and equipment, as defined in
1458	1458	15 paragraph (5) of Section 3-5. The machinery and equipment
1459	1459	16 exemption does not include machinery and equipment used in (i)
1460	1460	17 the generation of electricity for wholesale or retail sale;
1461	1461	18 (ii) the generation or treatment of natural or artificial gas
1462	1462	19 for wholesale or retail sale that is delivered to customers
1463	1463	20 through pipes, pipelines, or mains; or (iii) the treatment of
1464	1464	21 water for wholesale or retail sale that is delivered to
1465	1465	22 customers through pipes, pipelines, or mains. The provisions
1466	1466	23 of Public Act 98-583 are declaratory of existing law as to the
1467	1467	24 meaning and scope of this exemption. For the purposes of
1468	1468	25 exemption (e), each of these terms shall have the following
1469	1469	26 meanings: (1) "manufacturing process" shall mean the
1470	1470
1471	1471
1472	1472
1473	1473
1474	1474
1475	1475	HB3111 - 40 - LRB103 29603 HLH 55998 b
1476	1476
1477	1477
1478	1478	HB3111- 41 -LRB103 29603 HLH 55998 b HB3111 - 41 - LRB103 29603 HLH 55998 b
1479	1479	HB3111 - 41 - LRB103 29603 HLH 55998 b
1480	1480	1 production of any article of tangible personal property,
1481	1481	2 whether such article is a finished product or an article for
1482	1482	3 use in the process of manufacturing or assembling a different
1483	1483	4 article of tangible personal property, by procedures commonly
1484	1484	5 regarded as manufacturing, processing, fabricating, or
1485	1485	6 refining which changes some existing material or materials
1486	1486	7 into a material with a different form, use or name. In relation
1487	1487	8 to a recognized integrated business composed of a series of
1488	1488	9 operations which collectively constitute manufacturing, or
1489	1489	10 individually constitute manufacturing operations, the
1490	1490	11 manufacturing process shall be deemed to commence with the
1491	1491	12 first operation or stage of production in the series, and
1492	1492	13 shall not be deemed to end until the completion of the final
1493	1493	14 product in the last operation or stage of production in the
1494	1494	15 series; and further for purposes of exemption (e),
1495	1495	16 photoprocessing is deemed to be a manufacturing process of
1496	1496	17 tangible personal property for wholesale or retail sale; (2)
1497	1497	18 "assembling process" shall mean the production of any article
1498	1498	19 of tangible personal property, whether such article is a
1499	1499	20 finished product or an article for use in the process of
1500	1500	21 manufacturing or assembling a different article of tangible
1501	1501	22 personal property, by the combination of existing materials in
1502	1502	23 a manner commonly regarded as assembling which results in a
1503	1503	24 material of a different form, use or name; (3) "machinery"
1504	1504	25 shall mean major mechanical machines or major components of
1505	1505	26 such machines contributing to a manufacturing or assembling
1506	1506
1507	1507
1508	1508
1509	1509
1510	1510
1511	1511	HB3111 - 41 - LRB103 29603 HLH 55998 b
1512	1512
1513	1513
1514	1514	HB3111- 42 -LRB103 29603 HLH 55998 b HB3111 - 42 - LRB103 29603 HLH 55998 b
1515	1515	HB3111 - 42 - LRB103 29603 HLH 55998 b
1516	1516	1 process; and (4) "equipment" shall include any independent
1517	1517	2 device or tool separate from any machinery but essential to an
1518	1518	3 integrated manufacturing or assembly process; including
1519	1519	4 computers used primarily in a manufacturer's computer assisted
1520	1520	5 design, computer assisted manufacturing (CAD/CAM) system; or
1521	1521	6 any subunit or assembly comprising a component of any
1522	1522	7 machinery or auxiliary, adjunct or attachment parts of
1523	1523	8 machinery, such as tools, dies, jigs, fixtures, patterns and
1524	1524	9 molds; or any parts which require periodic replacement in the
1525	1525	10 course of normal operation; but shall not include hand tools.
1526	1526	11 Equipment includes chemicals or chemicals acting as catalysts
1527	1527	12 but only if the chemicals or chemicals acting as catalysts
1528	1528	13 effect a direct and immediate change upon a product being
1529	1529	14 manufactured or assembled for wholesale or retail sale or
1530	1530	15 lease. The purchaser of such machinery and equipment who has
1531	1531	16 an active resale registration number shall furnish such number
1532	1532	17 to the seller at the time of purchase. The purchaser of such
1533	1533	18 machinery and equipment and tools without an active resale
1534	1534	19 registration number shall furnish to the seller a certificate
1535	1535	20 of exemption stating facts establishing the exemption, which
1536	1536	21 certificate shall be available to the Department for
1537	1537	22 inspection or audit.
1538	1538	23 Except as provided in Section 2d of this Act, the rolling
1539	1539	24 stock exemption applies to rolling stock used by an interstate
1540	1540	25 carrier for hire, even just between points in Illinois, if
1541	1541	26 such rolling stock transports, for hire, persons whose
1542	1542
1543	1543
1544	1544
1545	1545
1546	1546
1547	1547	HB3111 - 42 - LRB103 29603 HLH 55998 b
1548	1548
1549	1549
1550	1550	HB3111- 43 -LRB103 29603 HLH 55998 b HB3111 - 43 - LRB103 29603 HLH 55998 b
1551	1551	HB3111 - 43 - LRB103 29603 HLH 55998 b
1552	1552	1 journeys or property whose shipments originate or terminate
1553	1553	2 outside Illinois.
1554	1554	3 Any informal rulings, opinions or letters issued by the
1555	1555	4 Department in response to an inquiry or request for any
1556	1556	5 opinion from any person regarding the coverage and
1557	1557	6 applicability of exemption (e) to specific devices shall be
1558	1558	7 published, maintained as a public record, and made available
1559	1559	8 for public inspection and copying. If the informal ruling,
1560	1560	9 opinion or letter contains trade secrets or other confidential
1561	1561	10 information, where possible the Department shall delete such
1562	1562	11 information prior to publication. Whenever such informal
1563	1563	12 rulings, opinions, or letters contain any policy of general
1564	1564	13 applicability, the Department shall formulate and adopt such
1565	1565	14 policy as a rule in accordance with the provisions of the
1566	1566	15 Illinois Administrative Procedure Act.
1567	1567	16 On and after July 1, 1987, no entity otherwise eligible
1568	1568	17 under exemption (c) of this Section shall make tax-free
1569	1569	18 purchases unless it has an active exemption identification
1570	1570	19 number issued by the Department.
1571	1571	20 "Serviceman" means any person who is engaged in the
1572	1572	21 occupation of making sales of service.
1573	1573	22 Motor carriers, as defined in Section 18c-1104 of the
1574	1574	23 Vehicle Code, that sell items of tangible personal property to
1575	1575	24 purchasers for use or consumption in addition to rendering
1576	1576	25 service as a motor carrier are engaged in a profession or
1577	1577	26 service occupation as a motor carrier and are not engaged in
1578	1578
1579	1579
1580	1580
1581	1581
1582	1582
1583	1583	HB3111 - 43 - LRB103 29603 HLH 55998 b
1584	1584
1585	1585
1586	1586	HB3111- 44 -LRB103 29603 HLH 55998 b HB3111 - 44 - LRB103 29603 HLH 55998 b
1587	1587	HB3111 - 44 - LRB103 29603 HLH 55998 b
1588	1588	1 the business of selling tangible personal property to
1589	1589	2 purchasers for use or consumption within the meaning of this
1590	1590	3 Act. Those motor carriers are not required to remit retailers'
1591	1591	4 occupation taxes measured by their receipts from engaging in
1592	1592	5 such profession or service occupation, including receipts from
1593	1593	6 both services and tangible personal property.
1594	1594	7 "Sale at Retail" means "sale at retail" as defined in the
1595	1595	8 Retailers' Occupation Tax Act.
1596	1596	9 "Supplier" means any person who makes sales of tangible
1597	1597	10 personal property to servicemen for the purpose of resale as
1598	1598	11 an incident to a sale of service.
1599	1599	12 (Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
1600	1600	13 100-863, eff. 8-14-18; 101-9, eff. 6-5-19; 101-604, eff.
1601	1601	14 12-13-19.)
1602	1602	15 Section 20. The Retailers' Occupation Tax Act is amended
1603	1603	16 by changing Sections 1 and 2-55 as follows:
1604	1604	17 (35 ILCS 120/1) (from Ch. 120, par. 440)
1605	1605	18 Sec. 1. Definitions. "Sale at retail" means any transfer
1606	1606	19 of the ownership of or title to tangible personal property to a
1607	1607	20 purchaser, for the purpose of use or consumption, and not for
1608	1608	21 the purpose of resale in any form as tangible personal
1609	1609	22 property to the extent not first subjected to a use for which
1610	1610	23 it was purchased, for a valuable consideration: Provided that
1611	1611	24 the property purchased is deemed to be purchased for the
1612	1612
1613	1613
1614	1614
1615	1615
1616	1616
1617	1617	HB3111 - 44 - LRB103 29603 HLH 55998 b
1618	1618
1619	1619
1620	1620	HB3111- 45 -LRB103 29603 HLH 55998 b HB3111 - 45 - LRB103 29603 HLH 55998 b
1621	1621	HB3111 - 45 - LRB103 29603 HLH 55998 b
1622	1622	1 purpose of resale, despite first being used, to the extent to
1623	1623	2 which it is resold as an ingredient of an intentionally
1624	1624	3 produced product or byproduct of manufacturing. For this
1625	1625	4 purpose, slag produced as an incident to manufacturing pig
1626	1626	5 iron or steel and sold is considered to be an intentionally
1627	1627	6 produced byproduct of manufacturing. Transactions whereby the
1628	1628	7 possession of the property is transferred but the seller
1629	1629	8 retains the title as security for payment of the selling price
1630	1630	9 shall be deemed to be sales.
1631	1631	10 "Sale at retail" shall be construed to include any
1632	1632	11 transfer of the ownership of or title to tangible personal
1633	1633	12 property to a purchaser, for use or consumption by any other
1634	1634	13 person to whom such purchaser may transfer the tangible
1635	1635	14 personal property without a valuable consideration, and to
1636	1636	15 include any transfer, whether made for or without a valuable
1637	1637	16 consideration, for resale in any form as tangible personal
1638	1638	17 property unless made in compliance with Section 2c of this
1639	1639	18 Act.
1640	1640	19 Sales of tangible personal property, which property, to
1641	1641	20 the extent not first subjected to a use for which it was
1642	1642	21 purchased, as an ingredient or constituent, goes into and
1643	1643	22 forms a part of tangible personal property subsequently the
1644	1644	23 subject of a "Sale at retail", are not sales at retail as
1645	1645	24 defined in this Act: Provided that the property purchased is
1646	1646	25 deemed to be purchased for the purpose of resale, despite
1647	1647	26 first being used, to the extent to which it is resold as an
1648	1648
1649	1649
1650	1650
1651	1651
1652	1652
1653	1653	HB3111 - 45 - LRB103 29603 HLH 55998 b
1654	1654
1655	1655
1656	1656	HB3111- 46 -LRB103 29603 HLH 55998 b HB3111 - 46 - LRB103 29603 HLH 55998 b
1657	1657	HB3111 - 46 - LRB103 29603 HLH 55998 b
1658	1658	1 ingredient of an intentionally produced product or byproduct
1659	1659	2 of manufacturing.
1660	1660	3 "Sale at retail" shall be construed to include any
1661	1661	4 Illinois florist's sales transaction in which the purchase
1662	1662	5 order is received in Illinois by a florist and the sale is for
1663	1663	6 use or consumption, but the Illinois florist has a florist in
1664	1664	7 another state deliver the property to the purchaser or the
1665	1665	8 purchaser's donee in such other state.
1666	1666	9 Nonreusable tangible personal property that is used by
1667	1667	10 persons engaged in the business of operating a restaurant,
1668	1668	11 cafeteria, or drive-in is a sale for resale when it is
1669	1669	12 transferred to customers in the ordinary course of business as
1670	1670	13 part of the sale of food or beverages and is used to deliver,
1671	1671	14 package, or consume food or beverages, regardless of where
1672	1672	15 consumption of the food or beverages occurs. Examples of those
1673	1673	16 items include, but are not limited to nonreusable, paper and
1674	1674	17 plastic cups, plates, baskets, boxes, sleeves, buckets or
1675	1675	18 other containers, utensils, straws, placemats, napkins, doggie
1676	1676	19 bags, and wrapping or packaging materials that are transferred
1677	1677	20 to customers as part of the sale of food or beverages in the
1678	1678	21 ordinary course of business.
1679	1679	22 The purchase, employment and transfer of such tangible
1680	1680	23 personal property as newsprint and ink for the primary purpose
1681	1681	24 of conveying news (with or without other information) is not a
1682	1682	25 purchase, use or sale of tangible personal property.
1683	1683	26 A person whose activities are organized and conducted
1684	1684
1685	1685
1686	1686
1687	1687
1688	1688
1689	1689	HB3111 - 46 - LRB103 29603 HLH 55998 b
1690	1690
1691	1691
1692	1692	HB3111- 47 -LRB103 29603 HLH 55998 b HB3111 - 47 - LRB103 29603 HLH 55998 b
1693	1693	HB3111 - 47 - LRB103 29603 HLH 55998 b
1694	1694	1 primarily as a not-for-profit service enterprise, and who
1695	1695	2 engages in selling tangible personal property at retail
1696	1696	3 (whether to the public or merely to members and their guests)
1697	1697	4 is engaged in the business of selling tangible personal
1698	1698	5 property at retail with respect to such transactions,
1699	1699	6 excepting only a person organized and operated exclusively for
1700	1700	7 charitable, religious or educational purposes either (1), to
1701	1701	8 the extent of sales by such person to its members, students,
1702	1702	9 patients or inmates of tangible personal property to be used
1703	1703	10 primarily for the purposes of such person, or (2), to the
1704	1704	11 extent of sales by such person of tangible personal property
1705	1705	12 which is not sold or offered for sale by persons organized for
1706	1706	13 profit. The selling of school books and school supplies by
1707	1707	14 schools at retail to students is not "primarily for the
1708	1708	15 purposes of" the school which does such selling. The
1709	1709	16 provisions of this paragraph shall not apply to nor subject to
1710	1710	17 taxation occasional dinners, socials or similar activities of
1711	1711	18 a person organized and operated exclusively for charitable,
1712	1712	19 religious or educational purposes, whether or not such
1713	1713	20 activities are open to the public.
1714	1714	21 A person who is the recipient of a grant or contract under
1715	1715	22 Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
1716	1716	23 serves meals to participants in the federal Nutrition Program
1717	1717	24 for the Elderly in return for contributions established in
1718	1718	25 amount by the individual participant pursuant to a schedule of
1719	1719	26 suggested fees as provided for in the federal Act is not
1720	1720
1721	1721
1722	1722
1723	1723
1724	1724
1725	1725	HB3111 - 47 - LRB103 29603 HLH 55998 b
1726	1726
1727	1727
1728	1728	HB3111- 48 -LRB103 29603 HLH 55998 b HB3111 - 48 - LRB103 29603 HLH 55998 b
1729	1729	HB3111 - 48 - LRB103 29603 HLH 55998 b
1730	1730	1 engaged in the business of selling tangible personal property
1731	1731	2 at retail with respect to such transactions.
1732	1732	3 "Purchaser" means anyone who, through a sale at retail,
1733	1733	4 acquires the ownership of or title to tangible personal
1734	1734	5 property for a valuable consideration.
1735	1735	6 "Reseller of motor fuel" means any person engaged in the
1736	1736	7 business of selling or delivering or transferring title of
1737	1737	8 motor fuel to another person other than for use or
1738	1738	9 consumption. No person shall act as a reseller of motor fuel
1739	1739	10 within this State without first being registered as a reseller
1740	1740	11 pursuant to Section 2c or a retailer pursuant to Section 2a.
1741	1741	12 "Selling price" or the "amount of sale" means the
1742	1742	13 consideration for a sale valued in money whether received in
1743	1743	14 money or otherwise, including cash, credits, property, other
1744	1744	15 than as hereinafter provided, and services, but, prior to
1745	1745	16 January 1, 2020 and beginning again on January 1, 2022, not
1746	1746	17 including the value of or credit given for traded-in tangible
1747	1747	18 personal property where the item that is traded-in is of like
1748	1748	19 kind and character as that which is being sold; beginning
1749	1749	20 January 1, 2020 and until January 1, 2022, "selling price"
1750	1750	21 includes the portion of the value of or credit given for
1751	1751	22 traded-in motor vehicles of the First Division as defined in
1752	1752	23 Section 1-146 of the Illinois Vehicle Code of like kind and
1753	1753	24 character as that which is being sold that exceeds $10,000.
1754	1754	25 "Selling price" shall be determined without any deduction on
1755	1755	26 account of the cost of the property sold, the cost of materials
1756	1756
1757	1757
1758	1758
1759	1759
1760	1760
1761	1761	HB3111 - 48 - LRB103 29603 HLH 55998 b
1762	1762
1763	1763
1764	1764	HB3111- 49 -LRB103 29603 HLH 55998 b HB3111 - 49 - LRB103 29603 HLH 55998 b
1765	1765	HB3111 - 49 - LRB103 29603 HLH 55998 b
1766	1766	1 used, labor or service cost or any other expense whatsoever,
1767	1767	2 but does not include charges that are added to prices by
1768	1768	3 sellers on account of the seller's tax liability under this
1769	1769	4 Act, or on account of the seller's duty to collect, from the
1770	1770	5 purchaser, the tax that is imposed by the Use Tax Act, or,
1771	1771	6 except as otherwise provided with respect to any cigarette tax
1772	1772	7 imposed by a home rule unit, on account of the seller's tax
1773	1773	8 liability under any local occupation tax administered by the
1774	1774	9 Department, or, except as otherwise provided with respect to
1775	1775	10 any cigarette tax imposed by a home rule unit on account of the
1776	1776	11 seller's duty to collect, from the purchasers, the tax that is
1777	1777	12 imposed under any local use tax administered by the
1778	1778	13 Department. Effective December 1, 1985, "selling price" shall
1779	1779	14 include charges that are added to prices by sellers on account
1780	1780	15 of the seller's tax liability under the Cigarette Tax Act, on
1781	1781	16 account of the sellers' duty to collect, from the purchaser,
1782	1782	17 the tax imposed under the Cigarette Use Tax Act, and on account
1783	1783	18 of the seller's duty to collect, from the purchaser, any
1784	1784	19 cigarette tax imposed by a home rule unit.
1785	1785	20 Notwithstanding any law to the contrary, for any motor
1786	1786	21 vehicle, as defined in Section 1-146 of the Vehicle Code, that
1787	1787	22 is sold on or after January 1, 2015 for the purpose of leasing
1788	1788	23 the vehicle for a defined period that is longer than one year
1789	1789	24 and (1) is a motor vehicle of the second division that: (A) is
1790	1790	25 a self-contained motor vehicle designed or permanently
1791	1791	26 converted to provide living quarters for recreational,
1792	1792
1793	1793
1794	1794
1795	1795
1796	1796
1797	1797	HB3111 - 49 - LRB103 29603 HLH 55998 b
1798	1798
1799	1799
1800	1800	HB3111- 50 -LRB103 29603 HLH 55998 b HB3111 - 50 - LRB103 29603 HLH 55998 b
1801	1801	HB3111 - 50 - LRB103 29603 HLH 55998 b
1802	1802	1 camping, or travel use, with direct walk through access to the
1803	1803	2 living quarters from the driver's seat; (B) is of the van
1804	1804	3 configuration designed for the transportation of not less than
1805	1805	4 7 nor more than 16 passengers; or (C) has a gross vehicle
1806	1806	5 weight rating of 8,000 pounds or less or (2) is a motor vehicle
1807	1807	6 of the first division, "selling price" or "amount of sale"
1808	1808	7 means the consideration received by the lessor pursuant to the
1809	1809	8 lease contract, including amounts due at lease signing and all
1810	1810	9 monthly or other regular payments charged over the term of the
1811	1811	10 lease. Also included in the selling price is any amount
1812	1812	11 received by the lessor from the lessee for the leased vehicle
1813	1813	12 that is not calculated at the time the lease is executed,
1814	1814	13 including, but not limited to, excess mileage charges and
1815	1815	14 charges for excess wear and tear. For sales that occur in
1816	1816	15 Illinois, with respect to any amount received by the lessor
1817	1817	16 from the lessee for the leased vehicle that is not calculated
1818	1818	17 at the time the lease is executed, the lessor who purchased the
1819	1819	18 motor vehicle does not incur the tax imposed by the Use Tax Act
1820	1820	19 on those amounts, and the retailer who makes the retail sale of
1821	1821	20 the motor vehicle to the lessor is not required to collect the
1822	1822	21 tax imposed by the Use Tax Act or to pay the tax imposed by
1823	1823	22 this Act on those amounts. However, the lessor who purchased
1824	1824	23 the motor vehicle assumes the liability for reporting and
1825	1825	24 paying the tax on those amounts directly to the Department in
1826	1826	25 the same form (Illinois Retailers' Occupation Tax, and local
1827	1827	26 retailers' occupation taxes, if applicable) in which the
1828	1828
1829	1829
1830	1830
1831	1831
1832	1832
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1834	1834
1835	1835
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1837	1837	HB3111 - 51 - LRB103 29603 HLH 55998 b
1838	1838	1 retailer would have reported and paid such tax if the retailer
1839	1839	2 had accounted for the tax to the Department. For amounts
1840	1840	3 received by the lessor from the lessee that are not calculated
1841	1841	4 at the time the lease is executed, the lessor must file the
1842	1842	5 return and pay the tax to the Department by the due date
1843	1843	6 otherwise required by this Act for returns other than
1844	1844	7 transaction returns. If the retailer is entitled under this
1845	1845	8 Act to a discount for collecting and remitting the tax imposed
1846	1846	9 under this Act to the Department with respect to the sale of
1847	1847	10 the motor vehicle to the lessor, then the right to the discount
1848	1848	11 provided in this Act shall be transferred to the lessor with
1849	1849	12 respect to the tax paid by the lessor for any amount received
1850	1850	13 by the lessor from the lessee for the leased vehicle that is
1851	1851	14 not calculated at the time the lease is executed; provided
1852	1852	15 that the discount is only allowed if the return is timely filed
1853	1853	16 and for amounts timely paid. The "selling price" of a motor
1854	1854	17 vehicle that is sold on or after January 1, 2015 for the
1855	1855	18 purpose of leasing for a defined period of longer than one year
1856	1856	19 shall not be reduced by the value of or credit given for
1857	1857	20 traded-in tangible personal property owned by the lessor, nor
1858	1858	21 shall it be reduced by the value of or credit given for
1859	1859	22 traded-in tangible personal property owned by the lessee,
1860	1860	23 regardless of whether the trade-in value thereof is assigned
1861	1861	24 by the lessee to the lessor. In the case of a motor vehicle
1862	1862	25 that is sold for the purpose of leasing for a defined period of
1863	1863	26 longer than one year, the sale occurs at the time of the
1864	1864
1865	1865
1866	1866
1867	1867
1868	1868
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1870	1870
1871	1871
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1873	1873	HB3111 - 52 - LRB103 29603 HLH 55998 b
1874	1874	1 delivery of the vehicle, regardless of the due date of any
1875	1875	2 lease payments. A lessor who incurs a Retailers' Occupation
1876	1876	3 Tax liability on the sale of a motor vehicle coming off lease
1877	1877	4 may not take a credit against that liability for the Use Tax
1878	1878	5 the lessor paid upon the purchase of the motor vehicle (or for
1879	1879	6 any tax the lessor paid with respect to any amount received by
1880	1880	7 the lessor from the lessee for the leased vehicle that was not
1881	1881	8 calculated at the time the lease was executed) if the selling
1882	1882	9 price of the motor vehicle at the time of purchase was
1883	1883	10 calculated using the definition of "selling price" as defined
1884	1884	11 in this paragraph. Notwithstanding any other provision of this
1885	1885	12 Act to the contrary, lessors shall file all returns and make
1886	1886	13 all payments required under this paragraph to the Department
1887	1887	14 by electronic means in the manner and form as required by the
1888	1888	15 Department. This paragraph does not apply to leases of motor
1889	1889	16 vehicles for which, at the time the lease is entered into, the
1890	1890	17 term of the lease is not a defined period, including leases
1891	1891	18 with a defined initial period with the option to continue the
1892	1892	19 lease on a month-to-month or other basis beyond the initial
1893	1893	20 defined period.
1894	1894	21 The phrase "like kind and character" shall be liberally
1895	1895	22 construed (including but not limited to any form of motor
1896	1896	23 vehicle for any form of motor vehicle, or any kind of farm or
1897	1897	24 agricultural implement for any other kind of farm or
1898	1898	25 agricultural implement), while not including a kind of item
1899	1899	26 which, if sold at retail by that retailer, would be exempt from
1900	1900
1901	1901
1902	1902
1903	1903
1904	1904
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1906	1906
1907	1907
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1909	1909	HB3111 - 53 - LRB103 29603 HLH 55998 b
1910	1910	1 retailers' occupation tax and use tax as an isolated or
1911	1911	2 occasional sale.
1912	1912	3 "Gross receipts" from the sales of tangible personal
1913	1913	4 property at retail means the total selling price or the amount
1914	1914	5 of such sales, as hereinbefore defined. In the case of charge
1915	1915	6 and time sales, the amount thereof shall be included only as
1916	1916	7 and when payments are received by the seller. Receipts or
1917	1917	8 other consideration derived by a seller from the sale,
1918	1918	9 transfer or assignment of accounts receivable to a wholly
1919	1919	10 owned subsidiary will not be deemed payments prior to the time
1920	1920	11 the purchaser makes payment on such accounts.
1921	1921	12 "Department" means the Department of Revenue.
1922	1922	13 "Person" means any natural individual, firm, partnership,
1923	1923	14 association, joint stock company, joint adventure, public or
1924	1924	15 private corporation, limited liability company, or a receiver,
1925	1925	16 executor, trustee, guardian or other representative appointed
1926	1926	17 by order of any court.
1927	1927	18 The isolated or occasional sale of tangible personal
1928	1928	19 property at retail by a person who does not hold himself out as
1929	1929	20 being engaged (or who does not habitually engage) in selling
1930	1930	21 such tangible personal property at retail, or a sale through a
1931	1931	22 bulk vending machine, does not constitute engaging in a
1932	1932	23 business of selling such tangible personal property at retail
1933	1933	24 within the meaning of this Act; provided that any person who is
1934	1934	25 engaged in a business which is not subject to the tax imposed
1935	1935	26 by this Act because of involving the sale of or a contract to
1936	1936
1937	1937
1938	1938
1939	1939
1940	1940
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1942	1942
1943	1943
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1945	1945	HB3111 - 54 - LRB103 29603 HLH 55998 b
1946	1946	1 sell real estate or a construction contract to improve real
1947	1947	2 estate or a construction contract to engineer, install, and
1948	1948	3 maintain an integrated system of products, but who, in the
1949	1949	4 course of conducting such business, transfers tangible
1950	1950	5 personal property to users or consumers in the finished form
1951	1951	6 in which it was purchased, and which does not become real
1952	1952	7 estate or was not engineered and installed, under any
1953	1953	8 provision of a construction contract or real estate sale or
1954	1954	9 real estate sales agreement entered into with some other
1955	1955	10 person arising out of or because of such nontaxable business,
1956	1956	11 is engaged in the business of selling tangible personal
1957	1957	12 property at retail to the extent of the value of the tangible
1958	1958	13 personal property so transferred. If, in such a transaction, a
1959	1959	14 separate charge is made for the tangible personal property so
1960	1960	15 transferred, the value of such property, for the purpose of
1961	1961	16 this Act, shall be the amount so separately charged, but not
1962	1962	17 less than the cost of such property to the transferor; if no
1963	1963	18 separate charge is made, the value of such property, for the
1964	1964	19 purposes of this Act, is the cost to the transferor of such
1965	1965	20 tangible personal property. Construction contracts for the
1966	1966	21 improvement of real estate consisting of engineering,
1967	1967	22 installation, and maintenance of voice, data, video, security,
1968	1968	23 and all telecommunication systems do not constitute engaging
1969	1969	24 in a business of selling tangible personal property at retail
1970	1970	25 within the meaning of this Act if they are sold at one
1971	1971	26 specified contract price.
1972	1972
1973	1973
1974	1974
1975	1975
1976	1976
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1978	1978
1979	1979
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1981	1981	HB3111 - 55 - LRB103 29603 HLH 55998 b
1982	1982	1 A person who holds himself or herself out as being engaged
1983	1983	2 (or who habitually engages) in selling tangible personal
1984	1984	3 property at retail is a person engaged in the business of
1985	1985	4 selling tangible personal property at retail hereunder with
1986	1986	5 respect to such sales (and not primarily in a service
1987	1987	6 occupation) notwithstanding the fact that such person designs
1988	1988	7 and produces such tangible personal property on special order
1989	1989	8 for the purchaser and in such a way as to render the property
1990	1990	9 of value only to such purchaser, if such tangible personal
1991	1991	10 property so produced on special order serves substantially the
1992	1992	11 same function as stock or standard items of tangible personal
1993	1993	12 property that are sold at retail.
1994	1994	13 Persons who engage in the business of transferring
1995	1995	14 tangible personal property upon the redemption of trading
1996	1996	15 stamps are engaged in the business of selling such property at
1997	1997	16 retail and shall be liable for and shall pay the tax imposed by
1998	1998	17 this Act on the basis of the retail value of the property
1999	1999	18 transferred upon redemption of such stamps.
2000	2000	19 Motor carriers, as defined in Section 18c-1104 of the
2001	2001	20 Vehicle Code, that sell items of tangible personal property to
2002	2002	21 purchasers for use or consumption in addition to rendering
2003	2003	22 service as a motor carrier are engaged in a profession or
2004	2004	23 service occupation as a motor carrier and are not engaged in
2005	2005	24 the business of selling tangible personal property to
2006	2006	25 purchasers for use or consumption within the meaning of this
2007	2007	26 Act. Those motor carriers are not required to remit retailers'
2008	2008
2009	2009
2010	2010
2011	2011
2012	2012
2013	2013	HB3111 - 55 - LRB103 29603 HLH 55998 b
2014	2014
2015	2015
2016	2016	HB3111- 56 -LRB103 29603 HLH 55998 b HB3111 - 56 - LRB103 29603 HLH 55998 b
2017	2017	HB3111 - 56 - LRB103 29603 HLH 55998 b
2018	2018	1 occupation taxes measured by their receipts from engaging in
2019	2019	2 such profession or service occupation, including receipts from
2020	2020	3 both services and tangible personal property.
2021	2021	4 "Bulk vending machine" means a vending machine, containing
2022	2022	5 unsorted confections, nuts, toys, or other items designed
2023	2023	6 primarily to be used or played with by children which, when a
2024	2024	7 coin or coins of a denomination not larger than $0.50 are
2025	2025	8 inserted, are dispensed in equal portions, at random and
2026	2026	9 without selection by the customer.
2027	2027	10 "Remote retailer" means a retailer that does not maintain
2028	2028	11 within this State, directly or by a subsidiary, an office,
2029	2029	12 distribution house, sales house, warehouse or other place of
2030	2030	13 business, or any agent or other representative operating
2031	2031	14 within this State under the authority of the retailer or its
2032	2032	15 subsidiary, irrespective of whether such place of business or
2033	2033	16 agent is located here permanently or temporarily or whether
2034	2034	17 such retailer or subsidiary is licensed to do business in this
2035	2035	18 State.
2036	2036	19 "Marketplace" means a physical or electronic place, forum,
2037	2037	20 platform, application, or other method by which a marketplace
2038	2038	21 seller sells or offers to sell items.
2039	2039	22 "Marketplace facilitator" means a person who, pursuant to
2040	2040	23 an agreement with an unrelated third-party marketplace seller,
2041	2041	24 directly or indirectly through one or more affiliates
2042	2042	25 facilitates a retail sale by an unrelated third party
2043	2043	26 marketplace seller by:
2044	2044
2045	2045
2046	2046
2047	2047
2048	2048
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2050	2050
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2053	2053	HB3111 - 57 - LRB103 29603 HLH 55998 b
2054	2054	1 (1) listing or advertising for sale by the marketplace
2055	2055	2 seller in a marketplace, tangible personal property that
2056	2056	3 is subject to tax under this Act; and
2057	2057	4 (2) either directly or indirectly, through agreements
2058	2058	5 or arrangements with third parties, collecting payment
2059	2059	6 from the customer and transmitting that payment to the
2060	2060	7 marketplace seller regardless of whether the marketplace
2061	2061	8 facilitator receives compensation or other consideration
2062	2062	9 in exchange for its services.
2063	2063	10 A person who provides advertising services, including
2064	2064	11 listing products for sale, is not considered a marketplace
2065	2065	12 facilitator, so long as the advertising service platform or
2066	2066	13 forum does not engage, directly or indirectly through one or
2067	2067	14 more affiliated persons, in the activities described in
2068	2068	15 paragraph (2) of this definition of "marketplace facilitator".
2069	2069	16 "Marketplace facilitator" does not include any person
2070	2070	17 licensed under the Auction License Act. This exemption does
2071	2071	18 not apply to any person who is an Internet auction listing
2072	2072	19 service, as defined by the Auction License Act.
2073	2073	20 "Marketplace seller" means a person that makes sales
2074	2074	21 through a marketplace operated by an unrelated third party
2075	2075	22 marketplace facilitator.
2076	2076	23 (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20;
2077	2077	24 102-353, eff. 1-1-22; 102-634, eff. 8-27-21; 102-813, eff.
2078	2078	25 5-13-22.)
2079	2079
2080	2080
2081	2081
2082	2082
2083	2083
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2085	2085
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2088	2088	HB3111 - 58 - LRB103 29603 HLH 55998 b
2089	2089	1 (35 ILCS 120/2-55) (from Ch. 120, par. 441-55)
2090	2090	2 Sec. 2-55. Serviceman transfer. Tangible personal property
2091	2091	3 purchased by a serviceman, as defined in Section 2 of the
2092	2092	4 Service Occupation Tax Act, is subject to the tax imposed by
2093	2093	5 this Act when purchased for transfer by the serviceman
2094	2094	6 incidental to completion of a maintenance agreement.
2095	2095	7 Motor carriers, as defined in Section 18c-1104 of the
2096	2096	8 Vehicle Code, that sell items of tangible personal property to
2097	2097	9 purchasers for use or consumption in addition to rendering
2098	2098	10 service as a motor carrier are engaged in a profession or
2099	2099	11 service occupation as a motor carrier and are not engaged in
2100	2100	12 the business of selling tangible personal property to
2101	2101	13 purchasers for use or consumption within the meaning of this
2102	2102	14 Act. Those motor carriers are not required to remit retailers'
2103	2103	15 occupation taxes measured by their receipts from engaging in
2104	2104	16 such profession or service occupation, including receipts from
2105	2105	17 both services and tangible personal property.
2106	2106	18 (Source: P.A. 91-51, eff. 6-30-99.)
2107	2107	19 Section 99. Effective date. This Act takes effect upon
2108	2108	20 becoming law.
2109	2109
2110	2110
2111	2111
2112	2112
2113	2113
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