Illinois House Bill HB5577 Introduced / Bill

                    103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5577 Introduced , by Rep. Hoan Huynh SYNOPSIS AS INTRODUCED: 35 ILCS 105/3-535 ILCS 105/3-1035 ILCS 110/3-535 ILCS 110/3-10 from Ch. 120, par. 439.33-1035 ILCS 115/3-535 ILCS 115/3-10 from Ch. 120, par. 439.103-1035 ILCS 120/2-535 ILCS 120/2-10 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for medical appliances, including, but not limited to, devices used to treat amyotrophic lateral sclerosis. Effective January 1, 2025. LRB103 38816 HLH 68953 b   A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5577 Introduced , by Rep. Hoan Huynh SYNOPSIS AS INTRODUCED:  35 ILCS 105/3-535 ILCS 105/3-1035 ILCS 110/3-535 ILCS 110/3-10 from Ch. 120, par. 439.33-1035 ILCS 115/3-535 ILCS 115/3-10 from Ch. 120, par. 439.103-1035 ILCS 120/2-535 ILCS 120/2-10 35 ILCS 105/3-5  35 ILCS 105/3-10  35 ILCS 110/3-5  35 ILCS 110/3-10 from Ch. 120, par. 439.33-10 35 ILCS 115/3-5  35 ILCS 115/3-10 from Ch. 120, par. 439.103-10 35 ILCS 120/2-5  35 ILCS 120/2-10  Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for medical appliances, including, but not limited to, devices used to treat amyotrophic lateral sclerosis. Effective January 1, 2025.  LRB103 38816 HLH 68953 b     LRB103 38816 HLH 68953 b   A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5577 Introduced , by Rep. Hoan Huynh SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-535 ILCS 105/3-1035 ILCS 110/3-535 ILCS 110/3-10 from Ch. 120, par. 439.33-1035 ILCS 115/3-535 ILCS 115/3-10 from Ch. 120, par. 439.103-1035 ILCS 120/2-535 ILCS 120/2-10 35 ILCS 105/3-5  35 ILCS 105/3-10  35 ILCS 110/3-5  35 ILCS 110/3-10 from Ch. 120, par. 439.33-10 35 ILCS 115/3-5  35 ILCS 115/3-10 from Ch. 120, par. 439.103-10 35 ILCS 120/2-5  35 ILCS 120/2-10
35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
35 ILCS 120/2-10
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for medical appliances, including, but not limited to, devices used to treat amyotrophic lateral sclerosis. Effective January 1, 2025.
LRB103 38816 HLH 68953 b     LRB103 38816 HLH 68953 b
    LRB103 38816 HLH 68953 b
A BILL FOR
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1  AN ACT concerning revenue.
2  Be it enacted by the People of the State of Illinois,
3  represented in the General Assembly:
4  Section 5. The Use Tax Act is amended by changing Sections
5  3-5 and 3-10 as follows:
6  (35 ILCS 105/3-5)
7  Sec. 3-5. Exemptions. Use of the following tangible
8  personal property is exempt from the tax imposed by this Act:
9  (1) Personal property purchased from a corporation,
10  society, association, foundation, institution, or
11  organization, other than a limited liability company, that is
12  organized and operated as a not-for-profit service enterprise
13  for the benefit of persons 65 years of age or older if the
14  personal property was not purchased by the enterprise for the
15  purpose of resale by the enterprise.
16  (2) Personal property purchased by a not-for-profit
17  Illinois county fair association for use in conducting,
18  operating, or promoting the county fair.
19  (3) Personal property purchased by a not-for-profit arts
20  or cultural organization that establishes, by proof required
21  by the Department by rule, that it has received an exemption
22  under Section 501(c)(3) of the Internal Revenue Code and that
23  is organized and operated primarily for the presentation or

 

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5577 Introduced , by Rep. Hoan Huynh SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-535 ILCS 105/3-1035 ILCS 110/3-535 ILCS 110/3-10 from Ch. 120, par. 439.33-1035 ILCS 115/3-535 ILCS 115/3-10 from Ch. 120, par. 439.103-1035 ILCS 120/2-535 ILCS 120/2-10 35 ILCS 105/3-5  35 ILCS 105/3-10  35 ILCS 110/3-5  35 ILCS 110/3-10 from Ch. 120, par. 439.33-10 35 ILCS 115/3-5  35 ILCS 115/3-10 from Ch. 120, par. 439.103-10 35 ILCS 120/2-5  35 ILCS 120/2-10
35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
35 ILCS 120/2-10
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for medical appliances, including, but not limited to, devices used to treat amyotrophic lateral sclerosis. Effective January 1, 2025.
LRB103 38816 HLH 68953 b     LRB103 38816 HLH 68953 b
    LRB103 38816 HLH 68953 b
A BILL FOR

 

 

35 ILCS 105/3-5
35 ILCS 105/3-10
35 ILCS 110/3-5
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-5
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-5
35 ILCS 120/2-10



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1  support of arts or cultural programming, activities, or
2  services. These organizations include, but are not limited to,
3  music and dramatic arts organizations such as symphony
4  orchestras and theatrical groups, arts and cultural service
5  organizations, local arts councils, visual arts organizations,
6  and media arts organizations. On and after July 1, 2001 (the
7  effective date of Public Act 92-35), however, an entity
8  otherwise eligible for this exemption shall not make tax-free
9  purchases unless it has an active identification number issued
10  by the Department.
11  (4) Except as otherwise provided in this Act, personal
12  property purchased by a governmental body, by a corporation,
13  society, association, foundation, or institution organized and
14  operated exclusively for charitable, religious, or educational
15  purposes, or by a not-for-profit corporation, society,
16  association, foundation, institution, or organization that has
17  no compensated officers or employees and that is organized and
18  operated primarily for the recreation of persons 55 years of
19  age or older. A limited liability company may qualify for the
20  exemption under this paragraph only if the limited liability
21  company is organized and operated exclusively for educational
22  purposes. On and after July 1, 1987, however, no entity
23  otherwise eligible for this exemption shall make tax-free
24  purchases unless it has an active exemption identification
25  number issued by the Department.
26  (5) Until July 1, 2003, a passenger car that is a

 

 

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1  replacement vehicle to the extent that the purchase price of
2  the car is subject to the Replacement Vehicle Tax.
3  (6) Until July 1, 2003 and beginning again on September 1,
4  2004 through August 30, 2014, graphic arts machinery and
5  equipment, including repair and replacement parts, both new
6  and used, and including that manufactured on special order,
7  certified by the purchaser to be used primarily for graphic
8  arts production, and including machinery and equipment
9  purchased for lease. Equipment includes chemicals or chemicals
10  acting as catalysts but only if the chemicals or chemicals
11  acting as catalysts effect a direct and immediate change upon
12  a graphic arts product. Beginning on July 1, 2017, graphic
13  arts machinery and equipment is included in the manufacturing
14  and assembling machinery and equipment exemption under
15  paragraph (18).
16  (7) Farm chemicals.
17  (8) Legal tender, currency, medallions, or gold or silver
18  coinage issued by the State of Illinois, the government of the
19  United States of America, or the government of any foreign
20  country, and bullion.
21  (9) Personal property purchased from a teacher-sponsored
22  student organization affiliated with an elementary or
23  secondary school located in Illinois.
24  (10) A motor vehicle that is used for automobile renting,
25  as defined in the Automobile Renting Occupation and Use Tax
26  Act.

 

 

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1  (11) Farm machinery and equipment, both new and used,
2  including that manufactured on special order, certified by the
3  purchaser to be used primarily for production agriculture or
4  State or federal agricultural programs, including individual
5  replacement parts for the machinery and equipment, including
6  machinery and equipment purchased for lease, and including
7  implements of husbandry defined in Section 1-130 of the
8  Illinois Vehicle Code, farm machinery and agricultural
9  chemical and fertilizer spreaders, and nurse wagons required
10  to be registered under Section 3-809 of the Illinois Vehicle
11  Code, but excluding other motor vehicles required to be
12  registered under the Illinois Vehicle Code. Horticultural
13  polyhouses or hoop houses used for propagating, growing, or
14  overwintering plants shall be considered farm machinery and
15  equipment under this item (11). Agricultural chemical tender
16  tanks and dry boxes shall include units sold separately from a
17  motor vehicle required to be licensed and units sold mounted
18  on a motor vehicle required to be licensed if the selling price
19  of the tender is separately stated.
20  Farm machinery and equipment shall include precision
21  farming equipment that is installed or purchased to be
22  installed on farm machinery and equipment, including, but not
23  limited to, tractors, harvesters, sprayers, planters, seeders,
24  or spreaders. Precision farming equipment includes, but is not
25  limited to, soil testing sensors, computers, monitors,
26  software, global positioning and mapping systems, and other

 

 

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1  such equipment.
2  Farm machinery and equipment also includes computers,
3  sensors, software, and related equipment used primarily in the
4  computer-assisted operation of production agriculture
5  facilities, equipment, and activities such as, but not limited
6  to, the collection, monitoring, and correlation of animal and
7  crop data for the purpose of formulating animal diets and
8  agricultural chemicals.
9  Beginning on January 1, 2024, farm machinery and equipment
10  also includes electrical power generation equipment used
11  primarily for production agriculture.
12  This item (11) is exempt from the provisions of Section
13  3-90.
14  (12) Until June 30, 2013, fuel and petroleum products sold
15  to or used by an air common carrier, certified by the carrier
16  to be used for consumption, shipment, or storage in the
17  conduct of its business as an air common carrier, for a flight
18  destined for or returning from a location or locations outside
19  the United States without regard to previous or subsequent
20  domestic stopovers.
21  Beginning July 1, 2013, fuel and petroleum products sold
22  to or used by an air carrier, certified by the carrier to be
23  used for consumption, shipment, or storage in the conduct of
24  its business as an air common carrier, for a flight that (i) is
25  engaged in foreign trade or is engaged in trade between the
26  United States and any of its possessions and (ii) transports

 

 

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1  at least one individual or package for hire from the city of
2  origination to the city of final destination on the same
3  aircraft, without regard to a change in the flight number of
4  that aircraft.
5  (13) Proceeds of mandatory service charges separately
6  stated on customers' bills for the purchase and consumption of
7  food and beverages purchased at retail from a retailer, to the
8  extent that the proceeds of the service charge are in fact
9  turned over as tips or as a substitute for tips to the
10  employees who participate directly in preparing, serving,
11  hosting or cleaning up the food or beverage function with
12  respect to which the service charge is imposed.
13  (14) Until July 1, 2003, oil field exploration, drilling,
14  and production equipment, including (i) rigs and parts of
15  rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
16  pipe and tubular goods, including casing and drill strings,
17  (iii) pumps and pump-jack units, (iv) storage tanks and flow
18  lines, (v) any individual replacement part for oil field
19  exploration, drilling, and production equipment, and (vi)
20  machinery and equipment purchased for lease; but excluding
21  motor vehicles required to be registered under the Illinois
22  Vehicle Code.
23  (15) Photoprocessing machinery and equipment, including
24  repair and replacement parts, both new and used, including
25  that manufactured on special order, certified by the purchaser
26  to be used primarily for photoprocessing, and including

 

 

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1  photoprocessing machinery and equipment purchased for lease.
2  (16) Until July 1, 2028, coal and aggregate exploration,
3  mining, off-highway hauling, processing, maintenance, and
4  reclamation equipment, including replacement parts and
5  equipment, and including equipment purchased for lease, but
6  excluding motor vehicles required to be registered under the
7  Illinois Vehicle Code. The changes made to this Section by
8  Public Act 97-767 apply on and after July 1, 2003, but no claim
9  for credit or refund is allowed on or after August 16, 2013
10  (the effective date of Public Act 98-456) for such taxes paid
11  during the period beginning July 1, 2003 and ending on August
12  16, 2013 (the effective date of Public Act 98-456).
13  (17) Until July 1, 2003, distillation machinery and
14  equipment, sold as a unit or kit, assembled or installed by the
15  retailer, certified by the user to be used only for the
16  production of ethyl alcohol that will be used for consumption
17  as motor fuel or as a component of motor fuel for the personal
18  use of the user, and not subject to sale or resale.
19  (18) Manufacturing and assembling machinery and equipment
20  used primarily in the process of manufacturing or assembling
21  tangible personal property for wholesale or retail sale or
22  lease, whether that sale or lease is made directly by the
23  manufacturer or by some other person, whether the materials
24  used in the process are owned by the manufacturer or some other
25  person, or whether that sale or lease is made apart from or as
26  an incident to the seller's engaging in the service occupation

 

 

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1  of producing machines, tools, dies, jigs, patterns, gauges, or
2  other similar items of no commercial value on special order
3  for a particular purchaser. The exemption provided by this
4  paragraph (18) includes production related tangible personal
5  property, as defined in Section 3-50, purchased on or after
6  July 1, 2019. The exemption provided by this paragraph (18)
7  does not include machinery and equipment used in (i) the
8  generation of electricity for wholesale or retail sale; (ii)
9  the generation or treatment of natural or artificial gas for
10  wholesale or retail sale that is delivered to customers
11  through pipes, pipelines, or mains; or (iii) the treatment of
12  water for wholesale or retail sale that is delivered to
13  customers through pipes, pipelines, or mains. The provisions
14  of Public Act 98-583 are declaratory of existing law as to the
15  meaning and scope of this exemption. Beginning on July 1,
16  2017, the exemption provided by this paragraph (18) includes,
17  but is not limited to, graphic arts machinery and equipment,
18  as defined in paragraph (6) of this Section.
19  (19) Personal property delivered to a purchaser or
20  purchaser's donee inside Illinois when the purchase order for
21  that personal property was received by a florist located
22  outside Illinois who has a florist located inside Illinois
23  deliver the personal property.
24  (20) Semen used for artificial insemination of livestock
25  for direct agricultural production.
26  (21) Horses, or interests in horses, registered with and

 

 

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1  meeting the requirements of any of the Arabian Horse Club
2  Registry of America, Appaloosa Horse Club, American Quarter
3  Horse Association, United States Trotting Association, or
4  Jockey Club, as appropriate, used for purposes of breeding or
5  racing for prizes. This item (21) is exempt from the
6  provisions of Section 3-90, and the exemption provided for
7  under this item (21) applies for all periods beginning May 30,
8  1995, but no claim for credit or refund is allowed on or after
9  January 1, 2008 for such taxes paid during the period
10  beginning May 30, 2000 and ending on January 1, 2008.
11  (22) Computers and communications equipment utilized for
12  any hospital purpose and equipment used in the diagnosis,
13  analysis, or treatment of hospital patients purchased by a
14  lessor who leases the equipment, under a lease of one year or
15  longer executed or in effect at the time the lessor would
16  otherwise be subject to the tax imposed by this Act, to a
17  hospital that has been issued an active tax exemption
18  identification number by the Department under Section 1g of
19  the Retailers' Occupation Tax Act. If the equipment is leased
20  in a manner that does not qualify for this exemption or is used
21  in any other non-exempt manner, the lessor shall be liable for
22  the tax imposed under this Act or the Service Use Tax Act, as
23  the case may be, based on the fair market value of the property
24  at the time the non-qualifying use occurs. No lessor shall
25  collect or attempt to collect an amount (however designated)
26  that purports to reimburse that lessor for the tax imposed by

 

 

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1  this Act or the Service Use Tax Act, as the case may be, if the
2  tax has not been paid by the lessor. If a lessor improperly
3  collects any such amount from the lessee, the lessee shall
4  have a legal right to claim a refund of that amount from the
5  lessor. If, however, that amount is not refunded to the lessee
6  for any reason, the lessor is liable to pay that amount to the
7  Department.
8  (23) Personal property purchased by a lessor who leases
9  the property, under a lease of one year or longer executed or
10  in effect at the time the lessor would otherwise be subject to
11  the tax imposed by this Act, to a governmental body that has
12  been issued an active sales tax exemption identification
13  number by the Department under Section 1g of the Retailers'
14  Occupation Tax Act. If the property is leased in a manner that
15  does not qualify for this exemption or used in any other
16  non-exempt manner, the lessor shall be liable for the tax
17  imposed under this Act or the Service Use Tax Act, as the case
18  may be, based on the fair market value of the property at the
19  time the non-qualifying use occurs. No lessor shall collect or
20  attempt to collect an amount (however designated) that
21  purports to reimburse that lessor for the tax imposed by this
22  Act or the Service Use Tax Act, as the case may be, if the tax
23  has not been paid by the lessor. If a lessor improperly
24  collects any such amount from the lessee, the lessee shall
25  have a legal right to claim a refund of that amount from the
26  lessor. If, however, that amount is not refunded to the lessee

 

 

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1  for any reason, the lessor is liable to pay that amount to the
2  Department.
3  (24) Beginning with taxable years ending on or after
4  December 31, 1995 and ending with taxable years ending on or
5  before December 31, 2004, personal property that is donated
6  for disaster relief to be used in a State or federally declared
7  disaster area in Illinois or bordering Illinois by a
8  manufacturer or retailer that is registered in this State to a
9  corporation, society, association, foundation, or institution
10  that has been issued a sales tax exemption identification
11  number by the Department that assists victims of the disaster
12  who reside within the declared disaster area.
13  (25) Beginning with taxable years ending on or after
14  December 31, 1995 and ending with taxable years ending on or
15  before December 31, 2004, personal property that is used in
16  the performance of infrastructure repairs in this State,
17  including, but not limited to, municipal roads and streets,
18  access roads, bridges, sidewalks, waste disposal systems,
19  water and sewer line extensions, water distribution and
20  purification facilities, storm water drainage and retention
21  facilities, and sewage treatment facilities, resulting from a
22  State or federally declared disaster in Illinois or bordering
23  Illinois when such repairs are initiated on facilities located
24  in the declared disaster area within 6 months after the
25  disaster.
26  (26) Beginning July 1, 1999, game or game birds purchased

 

 

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1  at a "game breeding and hunting preserve area" as that term is
2  used in the Wildlife Code. This paragraph is exempt from the
3  provisions of Section 3-90.
4  (27) A motor vehicle, as that term is defined in Section
5  1-146 of the Illinois Vehicle Code, that is donated to a
6  corporation, limited liability company, society, association,
7  foundation, or institution that is determined by the
8  Department to be organized and operated exclusively for
9  educational purposes. For purposes of this exemption, "a
10  corporation, limited liability company, society, association,
11  foundation, or institution organized and operated exclusively
12  for educational purposes" means all tax-supported public
13  schools, private schools that offer systematic instruction in
14  useful branches of learning by methods common to public
15  schools and that compare favorably in their scope and
16  intensity with the course of study presented in tax-supported
17  schools, and vocational or technical schools or institutes
18  organized and operated exclusively to provide a course of
19  study of not less than 6 weeks duration and designed to prepare
20  individuals to follow a trade or to pursue a manual,
21  technical, mechanical, industrial, business, or commercial
22  occupation.
23  (28) Beginning January 1, 2000, personal property,
24  including food, purchased through fundraising events for the
25  benefit of a public or private elementary or secondary school,
26  a group of those schools, or one or more school districts if

 

 

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1  the events are sponsored by an entity recognized by the school
2  district that consists primarily of volunteers and includes
3  parents and teachers of the school children. This paragraph
4  does not apply to fundraising events (i) for the benefit of
5  private home instruction or (ii) for which the fundraising
6  entity purchases the personal property sold at the events from
7  another individual or entity that sold the property for the
8  purpose of resale by the fundraising entity and that profits
9  from the sale to the fundraising entity. This paragraph is
10  exempt from the provisions of Section 3-90.
11  (29) Beginning January 1, 2000 and through December 31,
12  2001, new or used automatic vending machines that prepare and
13  serve hot food and beverages, including coffee, soup, and
14  other items, and replacement parts for these machines.
15  Beginning January 1, 2002 and through June 30, 2003, machines
16  and parts for machines used in commercial, coin-operated
17  amusement and vending business if a use or occupation tax is
18  paid on the gross receipts derived from the use of the
19  commercial, coin-operated amusement and vending machines. This
20  paragraph is exempt from the provisions of Section 3-90.
21  (30) Beginning January 1, 2001 and through June 30, 2016,
22  food for human consumption that is to be consumed off the
23  premises where it is sold (other than alcoholic beverages,
24  soft drinks, and food that has been prepared for immediate
25  consumption) and prescription and nonprescription medicines,
26  drugs, medical appliances, and insulin, urine testing

 

 

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1  materials, syringes, and needles used by diabetics, for human
2  use, when purchased for use by a person receiving medical
3  assistance under Article V of the Illinois Public Aid Code who
4  resides in a licensed long-term care facility, as defined in
5  the Nursing Home Care Act, or in a licensed facility as defined
6  in the ID/DD Community Care Act, the MC/DD Act, or the
7  Specialized Mental Health Rehabilitation Act of 2013.
8  (31) Beginning on August 2, 2001 (the effective date of
9  Public Act 92-227), computers and communications equipment
10  utilized for any hospital purpose and equipment used in the
11  diagnosis, analysis, or treatment of hospital patients
12  purchased by a lessor who leases the equipment, under a lease
13  of one year or longer executed or in effect at the time the
14  lessor would otherwise be subject to the tax imposed by this
15  Act, to a hospital that has been issued an active tax exemption
16  identification number by the Department under Section 1g of
17  the Retailers' Occupation Tax Act. If the equipment is leased
18  in a manner that does not qualify for this exemption or is used
19  in any other nonexempt manner, the lessor shall be liable for
20  the tax imposed under this Act or the Service Use Tax Act, as
21  the case may be, based on the fair market value of the property
22  at the time the nonqualifying use occurs. No lessor shall
23  collect or attempt to collect an amount (however designated)
24  that purports to reimburse that lessor for the tax imposed by
25  this Act or the Service Use Tax Act, as the case may be, if the
26  tax has not been paid by the lessor. If a lessor improperly

 

 

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1  collects any such amount from the lessee, the lessee shall
2  have a legal right to claim a refund of that amount from the
3  lessor. If, however, that amount is not refunded to the lessee
4  for any reason, the lessor is liable to pay that amount to the
5  Department. This paragraph is exempt from the provisions of
6  Section 3-90.
7  (32) Beginning on August 2, 2001 (the effective date of
8  Public Act 92-227), personal property purchased by a lessor
9  who leases the property, under a lease of one year or longer
10  executed or in effect at the time the lessor would otherwise be
11  subject to the tax imposed by this Act, to a governmental body
12  that has been issued an active sales tax exemption
13  identification number by the Department under Section 1g of
14  the Retailers' Occupation Tax Act. If the property is leased
15  in a manner that does not qualify for this exemption or used in
16  any other nonexempt manner, the lessor shall be liable for the
17  tax imposed under this Act or the Service Use Tax Act, as the
18  case may be, based on the fair market value of the property at
19  the time the nonqualifying use occurs. No lessor shall collect
20  or attempt to collect an amount (however designated) that
21  purports to reimburse that lessor for the tax imposed by this
22  Act or the Service Use Tax Act, as the case may be, if the tax
23  has not been paid by the lessor. If a lessor improperly
24  collects any such amount from the lessee, the lessee shall
25  have a legal right to claim a refund of that amount from the
26  lessor. If, however, that amount is not refunded to the lessee

 

 

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1  for any reason, the lessor is liable to pay that amount to the
2  Department. This paragraph is exempt from the provisions of
3  Section 3-90.
4  (33) On and after July 1, 2003 and through June 30, 2004,
5  the use in this State of motor vehicles of the second division
6  with a gross vehicle weight in excess of 8,000 pounds and that
7  are subject to the commercial distribution fee imposed under
8  Section 3-815.1 of the Illinois Vehicle Code. Beginning on
9  July 1, 2004 and through June 30, 2005, the use in this State
10  of motor vehicles of the second division: (i) with a gross
11  vehicle weight rating in excess of 8,000 pounds; (ii) that are
12  subject to the commercial distribution fee imposed under
13  Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
14  are primarily used for commercial purposes. Through June 30,
15  2005, this exemption applies to repair and replacement parts
16  added after the initial purchase of such a motor vehicle if
17  that motor vehicle is used in a manner that would qualify for
18  the rolling stock exemption otherwise provided for in this
19  Act. For purposes of this paragraph, the term "used for
20  commercial purposes" means the transportation of persons or
21  property in furtherance of any commercial or industrial
22  enterprise, whether for-hire or not.
23  (34) Beginning January 1, 2008, tangible personal property
24  used in the construction or maintenance of a community water
25  supply, as defined under Section 3.145 of the Environmental
26  Protection Act, that is operated by a not-for-profit

 

 

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  HB5577 - 17 - LRB103 38816 HLH 68953 b
1  corporation that holds a valid water supply permit issued
2  under Title IV of the Environmental Protection Act. This
3  paragraph is exempt from the provisions of Section 3-90.
4  (35) Beginning January 1, 2010 and continuing through
5  December 31, 2029, materials, parts, equipment, components,
6  and furnishings incorporated into or upon an aircraft as part
7  of the modification, refurbishment, completion, replacement,
8  repair, or maintenance of the aircraft. This exemption
9  includes consumable supplies used in the modification,
10  refurbishment, completion, replacement, repair, and
11  maintenance of aircraft. However, until January 1, 2024, this
12  exemption excludes any materials, parts, equipment,
13  components, and consumable supplies used in the modification,
14  replacement, repair, and maintenance of aircraft engines or
15  power plants, whether such engines or power plants are
16  installed or uninstalled upon any such aircraft. "Consumable
17  supplies" include, but are not limited to, adhesive, tape,
18  sandpaper, general purpose lubricants, cleaning solution,
19  latex gloves, and protective films.
20  Beginning January 1, 2010 and continuing through December
21  31, 2023, this exemption applies only to the use of qualifying
22  tangible personal property by persons who modify, refurbish,
23  complete, repair, replace, or maintain aircraft and who (i)
24  hold an Air Agency Certificate and are empowered to operate an
25  approved repair station by the Federal Aviation
26  Administration, (ii) have a Class IV Rating, and (iii) conduct

 

 

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1  operations in accordance with Part 145 of the Federal Aviation
2  Regulations. From January 1, 2024 through December 31, 2029,
3  this exemption applies only to the use of qualifying tangible
4  personal property by: (A) persons who modify, refurbish,
5  complete, repair, replace, or maintain aircraft and who (i)
6  hold an Air Agency Certificate and are empowered to operate an
7  approved repair station by the Federal Aviation
8  Administration, (ii) have a Class IV Rating, and (iii) conduct
9  operations in accordance with Part 145 of the Federal Aviation
10  Regulations; and (B) persons who engage in the modification,
11  replacement, repair, and maintenance of aircraft engines or
12  power plants without regard to whether or not those persons
13  meet the qualifications of item (A).
14  The exemption does not include aircraft operated by a
15  commercial air carrier providing scheduled passenger air
16  service pursuant to authority issued under Part 121 or Part
17  129 of the Federal Aviation Regulations. The changes made to
18  this paragraph (35) by Public Act 98-534 are declarative of
19  existing law. It is the intent of the General Assembly that the
20  exemption under this paragraph (35) applies continuously from
21  January 1, 2010 through December 31, 2024; however, no claim
22  for credit or refund is allowed for taxes paid as a result of
23  the disallowance of this exemption on or after January 1, 2015
24  and prior to February 5, 2020 (the effective date of Public Act
25  101-629).
26  (36) Tangible personal property purchased by a

 

 

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1  public-facilities corporation, as described in Section
2  11-65-10 of the Illinois Municipal Code, for purposes of
3  constructing or furnishing a municipal convention hall, but
4  only if the legal title to the municipal convention hall is
5  transferred to the municipality without any further
6  consideration by or on behalf of the municipality at the time
7  of the completion of the municipal convention hall or upon the
8  retirement or redemption of any bonds or other debt
9  instruments issued by the public-facilities corporation in
10  connection with the development of the municipal convention
11  hall. This exemption includes existing public-facilities
12  corporations as provided in Section 11-65-25 of the Illinois
13  Municipal Code. This paragraph is exempt from the provisions
14  of Section 3-90.
15  (37) Beginning January 1, 2017 and through December 31,
16  2026, menstrual pads, tampons, and menstrual cups.
17  (38) Merchandise that is subject to the Rental Purchase
18  Agreement Occupation and Use Tax. The purchaser must certify
19  that the item is purchased to be rented subject to a
20  rental-purchase rental purchase agreement, as defined in the
21  Rental-Purchase Rental Purchase Agreement Act, and provide
22  proof of registration under the Rental Purchase Agreement
23  Occupation and Use Tax Act. This paragraph is exempt from the
24  provisions of Section 3-90.
25  (39) Tangible personal property purchased by a purchaser
26  who is exempt from the tax imposed by this Act by operation of

 

 

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1  federal law. This paragraph is exempt from the provisions of
2  Section 3-90.
3  (40) Qualified tangible personal property used in the
4  construction or operation of a data center that has been
5  granted a certificate of exemption by the Department of
6  Commerce and Economic Opportunity, whether that tangible
7  personal property is purchased by the owner, operator, or
8  tenant of the data center or by a contractor or subcontractor
9  of the owner, operator, or tenant. Data centers that would
10  have qualified for a certificate of exemption prior to January
11  1, 2020 had Public Act 101-31 been in effect may apply for and
12  obtain an exemption for subsequent purchases of computer
13  equipment or enabling software purchased or leased to upgrade,
14  supplement, or replace computer equipment or enabling software
15  purchased or leased in the original investment that would have
16  qualified.
17  The Department of Commerce and Economic Opportunity shall
18  grant a certificate of exemption under this item (40) to
19  qualified data centers as defined by Section 605-1025 of the
20  Department of Commerce and Economic Opportunity Law of the
21  Civil Administrative Code of Illinois.
22  For the purposes of this item (40):
23  "Data center" means a building or a series of
24  buildings rehabilitated or constructed to house working
25  servers in one physical location or multiple sites within
26  the State of Illinois.

 

 

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1  "Qualified tangible personal property" means:
2  electrical systems and equipment; climate control and
3  chilling equipment and systems; mechanical systems and
4  equipment; monitoring and secure systems; emergency
5  generators; hardware; computers; servers; data storage
6  devices; network connectivity equipment; racks; cabinets;
7  telecommunications cabling infrastructure; raised floor
8  systems; peripheral components or systems; software;
9  mechanical, electrical, or plumbing systems; battery
10  systems; cooling systems and towers; temperature control
11  systems; other cabling; and other data center
12  infrastructure equipment and systems necessary to operate
13  qualified tangible personal property, including fixtures;
14  and component parts of any of the foregoing, including
15  installation, maintenance, repair, refurbishment, and
16  replacement of qualified tangible personal property to
17  generate, transform, transmit, distribute, or manage
18  electricity necessary to operate qualified tangible
19  personal property; and all other tangible personal
20  property that is essential to the operations of a computer
21  data center. The term "qualified tangible personal
22  property" also includes building materials physically
23  incorporated into in to the qualifying data center. To
24  document the exemption allowed under this Section, the
25  retailer must obtain from the purchaser a copy of the
26  certificate of eligibility issued by the Department of

 

 

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1  Commerce and Economic Opportunity.
2  This item (40) is exempt from the provisions of Section
3  3-90.
4  (41) Beginning July 1, 2022, breast pumps, breast pump
5  collection and storage supplies, and breast pump kits. This
6  item (41) is exempt from the provisions of Section 3-90. As
7  used in this item (41):
8  "Breast pump" means an electrically controlled or
9  manually controlled pump device designed or marketed to be
10  used to express milk from a human breast during lactation,
11  including the pump device and any battery, AC adapter, or
12  other power supply unit that is used to power the pump
13  device and is packaged and sold with the pump device at the
14  time of sale.
15  "Breast pump collection and storage supplies" means
16  items of tangible personal property designed or marketed
17  to be used in conjunction with a breast pump to collect
18  milk expressed from a human breast and to store collected
19  milk until it is ready for consumption.
20  "Breast pump collection and storage supplies"
21  includes, but is not limited to: breast shields and breast
22  shield connectors; breast pump tubes and tubing adapters;
23  breast pump valves and membranes; backflow protectors and
24  backflow protector adaptors; bottles and bottle caps
25  specific to the operation of the breast pump; and breast
26  milk storage bags.

 

 

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1  "Breast pump collection and storage supplies" does not
2  include: (1) bottles and bottle caps not specific to the
3  operation of the breast pump; (2) breast pump travel bags
4  and other similar carrying accessories, including ice
5  packs, labels, and other similar products; (3) breast pump
6  cleaning supplies; (4) nursing bras, bra pads, breast
7  shells, and other similar products; and (5) creams,
8  ointments, and other similar products that relieve
9  breastfeeding-related symptoms or conditions of the
10  breasts or nipples, unless sold as part of a breast pump
11  kit that is pre-packaged by the breast pump manufacturer
12  or distributor.
13  "Breast pump kit" means a kit that: (1) contains no
14  more than a breast pump, breast pump collection and
15  storage supplies, a rechargeable battery for operating the
16  breast pump, a breastmilk cooler, bottle stands, ice
17  packs, and a breast pump carrying case; and (2) is
18  pre-packaged as a breast pump kit by the breast pump
19  manufacturer or distributor.
20  (42) Tangible personal property sold by or on behalf of
21  the State Treasurer pursuant to the Revised Uniform Unclaimed
22  Property Act. This item (42) is exempt from the provisions of
23  Section 3-90.
24  (43) Beginning on January 1, 2024, tangible personal
25  property purchased by an active duty member of the armed
26  forces of the United States who presents valid military

 

 

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  HB5577 - 24 - LRB103 38816 HLH 68953 b
1  identification and purchases the property using a form of
2  payment where the federal government is the payor. The member
3  of the armed forces must complete, at the point of sale, a form
4  prescribed by the Department of Revenue documenting that the
5  transaction is eligible for the exemption under this
6  paragraph. Retailers must keep the form as documentation of
7  the exemption in their records for a period of not less than 6
8  years. "Armed forces of the United States" means the United
9  States Army, Navy, Air Force, Marine Corps, or Coast Guard.
10  This paragraph is exempt from the provisions of Section 3-90.
11  (44) Beginning on January 1, 2025, medical appliances and
12  products that are classified as Class III medical devices by
13  the United States Food and Drug Administration and that are
14  used for cancer treatment pursuant to a prescription, as well
15  as any accessories and components related to those appliances
16  and devices. As used in this paragraph, "medical appliance"
17  means a product that was classified as a medical appliance and
18  was subject to a 1% rate of tax immediately prior to the
19  effective date of this amendatory Act of the 103rd General
20  Assembly, including, but not limited to, devices used to treat
21  amyotrophic lateral sclerosis, as well as other items as
22  determined by the Department by rule. This paragraph is exempt
23  from the provisions of Section 3-90.
24  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
25  Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
26  eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,

 

 

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1  Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
2  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
3  revised 12-12-23.)
4  (35 ILCS 105/3-10)
5  Sec. 3-10. Rate of tax. Unless otherwise provided in this
6  Section, the tax imposed by this Act is at the rate of 6.25% of
7  either the selling price or the fair market value, if any, of
8  the tangible personal property. In all cases where property
9  functionally used or consumed is the same as the property that
10  was purchased at retail, then the tax is imposed on the selling
11  price of the property. In all cases where property
12  functionally used or consumed is a by-product or waste product
13  that has been refined, manufactured, or produced from property
14  purchased at retail, then the tax is imposed on the lower of
15  the fair market value, if any, of the specific property so used
16  in this State or on the selling price of the property purchased
17  at retail. For purposes of this Section "fair market value"
18  means the price at which property would change hands between a
19  willing buyer and a willing seller, neither being under any
20  compulsion to buy or sell and both having reasonable knowledge
21  of the relevant facts. The fair market value shall be
22  established by Illinois sales by the taxpayer of the same
23  property as that functionally used or consumed, or if there
24  are no such sales by the taxpayer, then comparable sales or
25  purchases of property of like kind and character in Illinois.

 

 

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1  Beginning on July 1, 2000 and through December 31, 2000,
2  with respect to motor fuel, as defined in Section 1.1 of the
3  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
4  the Use Tax Act, the tax is imposed at the rate of 1.25%.
5  Beginning on August 6, 2010 through August 15, 2010, and
6  beginning again on August 5, 2022 through August 14, 2022,
7  with respect to sales tax holiday items as defined in Section
8  3-6 of this Act, the tax is imposed at the rate of 1.25%.
9  With respect to gasohol, the tax imposed by this Act
10  applies to (i) 70% of the proceeds of sales made on or after
11  January 1, 1990, and before July 1, 2003, (ii) 80% of the
12  proceeds of sales made on or after July 1, 2003 and on or
13  before July 1, 2017, (iii) 100% of the proceeds of sales made
14  after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
15  the proceeds of sales made on or after January 1, 2024 and on
16  or before December 31, 2028, and (v) 100% of the proceeds of
17  sales made after December 31, 2028. If, at any time, however,
18  the tax under this Act on sales of gasohol is imposed at the
19  rate of 1.25%, then the tax imposed by this Act applies to 100%
20  of the proceeds of sales of gasohol made during that time.
21  With respect to mid-range ethanol blends, the tax imposed
22  by this Act applies to (i) 80% of the proceeds of sales made on
23  or after January 1, 2024 and on or before December 31, 2028 and
24  (ii) 100% of the proceeds of sales made thereafter. If, at any
25  time, however, the tax under this Act on sales of mid-range
26  ethanol blends is imposed at the rate of 1.25%, then the tax

 

 

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1  imposed by this Act applies to 100% of the proceeds of sales of
2  mid-range ethanol blends made during that time.
3  With respect to majority blended ethanol fuel, the tax
4  imposed by this Act does not apply to the proceeds of sales
5  made on or after July 1, 2003 and on or before December 31,
6  2028 but applies to 100% of the proceeds of sales made
7  thereafter.
8  With respect to biodiesel blends with no less than 1% and
9  no more than 10% biodiesel, the tax imposed by this Act applies
10  to (i) 80% of the proceeds of sales made on or after July 1,
11  2003 and on or before December 31, 2018 and (ii) 100% of the
12  proceeds of sales made after December 31, 2018 and before
13  January 1, 2024. On and after January 1, 2024 and on or before
14  December 31, 2030, the taxation of biodiesel, renewable
15  diesel, and biodiesel blends shall be as provided in Section
16  3-5.1. If, at any time, however, the tax under this Act on
17  sales of biodiesel blends with no less than 1% and no more than
18  10% biodiesel is imposed at the rate of 1.25%, then the tax
19  imposed by this Act applies to 100% of the proceeds of sales of
20  biodiesel blends with no less than 1% and no more than 10%
21  biodiesel made during that time.
22  With respect to biodiesel and biodiesel blends with more
23  than 10% but no more than 99% biodiesel, the tax imposed by
24  this Act does not apply to the proceeds of sales made on or
25  after July 1, 2003 and on or before December 31, 2023. On and
26  after January 1, 2024 and on or before December 31, 2030, the

 

 

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1  taxation of biodiesel, renewable diesel, and biodiesel blends
2  shall be as provided in Section 3-5.1.
3  Until July 1, 2022 and beginning again on July 1, 2023,
4  with respect to food for human consumption that is to be
5  consumed off the premises where it is sold (other than
6  alcoholic beverages, food consisting of or infused with adult
7  use cannabis, soft drinks, and food that has been prepared for
8  immediate consumption), the tax is imposed at the rate of 1%.
9  Beginning on July 1, 2022 and until July 1, 2023, with respect
10  to food for human consumption that is to be consumed off the
11  premises where it is sold (other than alcoholic beverages,
12  food consisting of or infused with adult use cannabis, soft
13  drinks, and food that has been prepared for immediate
14  consumption), the tax is imposed at the rate of 0%.
15  With respect to prescription and nonprescription
16  medicines, drugs, medical appliances, products classified as
17  Class III medical devices by the United States Food and Drug
18  Administration that are used for cancer treatment pursuant to
19  a prescription, as well as any accessories and components
20  related to those devices, modifications to a motor vehicle for
21  the purpose of rendering it usable by a person with a
22  disability, and insulin, blood sugar testing materials,
23  syringes, and needles used by human diabetics (except to the
24  extent that those items are exempt by the Department under
25  paragraph (44) of Section 3-5), the tax is imposed at the rate
26  of 1%. For the purposes of this Section, until September 1,

 

 

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1  2009: the term "soft drinks" means any complete, finished,
2  ready-to-use, non-alcoholic drink, whether carbonated or not,
3  including, but not limited to, soda water, cola, fruit juice,
4  vegetable juice, carbonated water, and all other preparations
5  commonly known as soft drinks of whatever kind or description
6  that are contained in any closed or sealed bottle, can,
7  carton, or container, regardless of size; but "soft drinks"
8  does not include coffee, tea, non-carbonated water, infant
9  formula, milk or milk products as defined in the Grade A
10  Pasteurized Milk and Milk Products Act, or drinks containing
11  50% or more natural fruit or vegetable juice.
12  Notwithstanding any other provisions of this Act,
13  beginning September 1, 2009, "soft drinks" means non-alcoholic
14  beverages that contain natural or artificial sweeteners. "Soft
15  drinks" does not include beverages that contain milk or milk
16  products, soy, rice or similar milk substitutes, or greater
17  than 50% of vegetable or fruit juice by volume.
18  Until August 1, 2009, and notwithstanding any other
19  provisions of this Act, "food for human consumption that is to
20  be consumed off the premises where it is sold" includes all
21  food sold through a vending machine, except soft drinks and
22  food products that are dispensed hot from a vending machine,
23  regardless of the location of the vending machine. Beginning
24  August 1, 2009, and notwithstanding any other provisions of
25  this Act, "food for human consumption that is to be consumed
26  off the premises where it is sold" includes all food sold

 

 

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1  through a vending machine, except soft drinks, candy, and food
2  products that are dispensed hot from a vending machine,
3  regardless of the location of the vending machine.
4  Notwithstanding any other provisions of this Act,
5  beginning September 1, 2009, "food for human consumption that
6  is to be consumed off the premises where it is sold" does not
7  include candy. For purposes of this Section, "candy" means a
8  preparation of sugar, honey, or other natural or artificial
9  sweeteners in combination with chocolate, fruits, nuts or
10  other ingredients or flavorings in the form of bars, drops, or
11  pieces. "Candy" does not include any preparation that contains
12  flour or requires refrigeration.
13  Notwithstanding any other provisions of this Act,
14  beginning September 1, 2009, "nonprescription medicines and
15  drugs" does not include grooming and hygiene products. For
16  purposes of this Section, "grooming and hygiene products"
17  includes, but is not limited to, soaps and cleaning solutions,
18  shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
19  lotions and screens, unless those products are available by
20  prescription only, regardless of whether the products meet the
21  definition of "over-the-counter-drugs". For the purposes of
22  this paragraph, "over-the-counter-drug" means a drug for human
23  use that contains a label that identifies the product as a drug
24  as required by 21 CFR 201.66. The "over-the-counter-drug"
25  label includes:
26  (A) a "Drug Facts" panel; or

 

 

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1  (B) a statement of the "active ingredient(s)" with a
2  list of those ingredients contained in the compound,
3  substance or preparation.
4  Beginning on January 1, 2014 (the effective date of Public
5  Act 98-122), "prescription and nonprescription medicines and
6  drugs" includes medical cannabis purchased from a registered
7  dispensing organization under the Compassionate Use of Medical
8  Cannabis Program Act.
9  As used in this Section, "adult use cannabis" means
10  cannabis subject to tax under the Cannabis Cultivation
11  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
12  and does not include cannabis subject to tax under the
13  Compassionate Use of Medical Cannabis Program Act.
14  If the property that is purchased at retail from a
15  retailer is acquired outside Illinois and used outside
16  Illinois before being brought to Illinois for use here and is
17  taxable under this Act, the "selling price" on which the tax is
18  computed shall be reduced by an amount that represents a
19  reasonable allowance for depreciation for the period of prior
20  out-of-state use.
21  (Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
22  Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
23  60-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
24  4-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
25  Section 10. The Service Use Tax Act is amended by changing

 

 

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1  Sections 3-5 and 3-10 as follows:
2  (35 ILCS 110/3-5)
3  Sec. 3-5. Exemptions. Use of the following tangible
4  personal property is exempt from the tax imposed by this Act:
5  (1) Personal property purchased from a corporation,
6  society, association, foundation, institution, or
7  organization, other than a limited liability company, that is
8  organized and operated as a not-for-profit service enterprise
9  for the benefit of persons 65 years of age or older if the
10  personal property was not purchased by the enterprise for the
11  purpose of resale by the enterprise.
12  (2) Personal property purchased by a non-profit Illinois
13  county fair association for use in conducting, operating, or
14  promoting the county fair.
15  (3) Personal property purchased by a not-for-profit arts
16  or cultural organization that establishes, by proof required
17  by the Department by rule, that it has received an exemption
18  under Section 501(c)(3) of the Internal Revenue Code and that
19  is organized and operated primarily for the presentation or
20  support of arts or cultural programming, activities, or
21  services. These organizations include, but are not limited to,
22  music and dramatic arts organizations such as symphony
23  orchestras and theatrical groups, arts and cultural service
24  organizations, local arts councils, visual arts organizations,
25  and media arts organizations. On and after July 1, 2001 (the

 

 

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1  effective date of Public Act 92-35), however, an entity
2  otherwise eligible for this exemption shall not make tax-free
3  purchases unless it has an active identification number issued
4  by the Department.
5  (4) Legal tender, currency, medallions, or gold or silver
6  coinage issued by the State of Illinois, the government of the
7  United States of America, or the government of any foreign
8  country, and bullion.
9  (5) Until July 1, 2003 and beginning again on September 1,
10  2004 through August 30, 2014, graphic arts machinery and
11  equipment, including repair and replacement parts, both new
12  and used, and including that manufactured on special order or
13  purchased for lease, certified by the purchaser to be used
14  primarily for graphic arts production. Equipment includes
15  chemicals or chemicals acting as catalysts but only if the
16  chemicals or chemicals acting as catalysts effect a direct and
17  immediate change upon a graphic arts product. Beginning on
18  July 1, 2017, graphic arts machinery and equipment is included
19  in the manufacturing and assembling machinery and equipment
20  exemption under Section 2 of this Act.
21  (6) Personal property purchased from a teacher-sponsored
22  student organization affiliated with an elementary or
23  secondary school located in Illinois.
24  (7) Farm machinery and equipment, both new and used,
25  including that manufactured on special order, certified by the
26  purchaser to be used primarily for production agriculture or

 

 

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1  State or federal agricultural programs, including individual
2  replacement parts for the machinery and equipment, including
3  machinery and equipment purchased for lease, and including
4  implements of husbandry defined in Section 1-130 of the
5  Illinois Vehicle Code, farm machinery and agricultural
6  chemical and fertilizer spreaders, and nurse wagons required
7  to be registered under Section 3-809 of the Illinois Vehicle
8  Code, but excluding other motor vehicles required to be
9  registered under the Illinois Vehicle Code. Horticultural
10  polyhouses or hoop houses used for propagating, growing, or
11  overwintering plants shall be considered farm machinery and
12  equipment under this item (7). Agricultural chemical tender
13  tanks and dry boxes shall include units sold separately from a
14  motor vehicle required to be licensed and units sold mounted
15  on a motor vehicle required to be licensed if the selling price
16  of the tender is separately stated.
17  Farm machinery and equipment shall include precision
18  farming equipment that is installed or purchased to be
19  installed on farm machinery and equipment, including, but not
20  limited to, tractors, harvesters, sprayers, planters, seeders,
21  or spreaders. Precision farming equipment includes, but is not
22  limited to, soil testing sensors, computers, monitors,
23  software, global positioning and mapping systems, and other
24  such equipment.
25  Farm machinery and equipment also includes computers,
26  sensors, software, and related equipment used primarily in the

 

 

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1  computer-assisted operation of production agriculture
2  facilities, equipment, and activities such as, but not limited
3  to, the collection, monitoring, and correlation of animal and
4  crop data for the purpose of formulating animal diets and
5  agricultural chemicals.
6  Beginning on January 1, 2024, farm machinery and equipment
7  also includes electrical power generation equipment used
8  primarily for production agriculture.
9  This item (7) is exempt from the provisions of Section
10  3-75.
11  (8) Until June 30, 2013, fuel and petroleum products sold
12  to or used by an air common carrier, certified by the carrier
13  to be used for consumption, shipment, or storage in the
14  conduct of its business as an air common carrier, for a flight
15  destined for or returning from a location or locations outside
16  the United States without regard to previous or subsequent
17  domestic stopovers.
18  Beginning July 1, 2013, fuel and petroleum products sold
19  to or used by an air carrier, certified by the carrier to be
20  used for consumption, shipment, or storage in the conduct of
21  its business as an air common carrier, for a flight that (i) is
22  engaged in foreign trade or is engaged in trade between the
23  United States and any of its possessions and (ii) transports
24  at least one individual or package for hire from the city of
25  origination to the city of final destination on the same
26  aircraft, without regard to a change in the flight number of

 

 

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1  that aircraft.
2  (9) Proceeds of mandatory service charges separately
3  stated on customers' bills for the purchase and consumption of
4  food and beverages acquired as an incident to the purchase of a
5  service from a serviceman, to the extent that the proceeds of
6  the service charge are in fact turned over as tips or as a
7  substitute for tips to the employees who participate directly
8  in preparing, serving, hosting or cleaning up the food or
9  beverage function with respect to which the service charge is
10  imposed.
11  (10) Until July 1, 2003, oil field exploration, drilling,
12  and production equipment, including (i) rigs and parts of
13  rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
14  pipe and tubular goods, including casing and drill strings,
15  (iii) pumps and pump-jack units, (iv) storage tanks and flow
16  lines, (v) any individual replacement part for oil field
17  exploration, drilling, and production equipment, and (vi)
18  machinery and equipment purchased for lease; but excluding
19  motor vehicles required to be registered under the Illinois
20  Vehicle Code.
21  (11) Proceeds from the sale of photoprocessing machinery
22  and equipment, including repair and replacement parts, both
23  new and used, including that manufactured on special order,
24  certified by the purchaser to be used primarily for
25  photoprocessing, and including photoprocessing machinery and
26  equipment purchased for lease.

 

 

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1  (12) Until July 1, 2028, coal and aggregate exploration,
2  mining, off-highway hauling, processing, maintenance, and
3  reclamation equipment, including replacement parts and
4  equipment, and including equipment purchased for lease, but
5  excluding motor vehicles required to be registered under the
6  Illinois Vehicle Code. The changes made to this Section by
7  Public Act 97-767 apply on and after July 1, 2003, but no claim
8  for credit or refund is allowed on or after August 16, 2013
9  (the effective date of Public Act 98-456) for such taxes paid
10  during the period beginning July 1, 2003 and ending on August
11  16, 2013 (the effective date of Public Act 98-456).
12  (13) Semen used for artificial insemination of livestock
13  for direct agricultural production.
14  (14) Horses, or interests in horses, registered with and
15  meeting the requirements of any of the Arabian Horse Club
16  Registry of America, Appaloosa Horse Club, American Quarter
17  Horse Association, United States Trotting Association, or
18  Jockey Club, as appropriate, used for purposes of breeding or
19  racing for prizes. This item (14) is exempt from the
20  provisions of Section 3-75, and the exemption provided for
21  under this item (14) applies for all periods beginning May 30,
22  1995, but no claim for credit or refund is allowed on or after
23  January 1, 2008 (the effective date of Public Act 95-88) for
24  such taxes paid during the period beginning May 30, 2000 and
25  ending on January 1, 2008 (the effective date of Public Act
26  95-88).

 

 

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1  (15) Computers and communications equipment utilized for
2  any hospital purpose and equipment used in the diagnosis,
3  analysis, or treatment of hospital patients purchased by a
4  lessor who leases the equipment, under a lease of one year or
5  longer executed or in effect at the time the lessor would
6  otherwise be subject to the tax imposed by this Act, to a
7  hospital that has been issued an active tax exemption
8  identification number by the Department under Section 1g of
9  the Retailers' Occupation Tax Act. If the equipment is leased
10  in a manner that does not qualify for this exemption or is used
11  in any other non-exempt manner, the lessor shall be liable for
12  the tax imposed under this Act or the Use Tax Act, as the case
13  may be, based on the fair market value of the property at the
14  time the non-qualifying use occurs. No lessor shall collect or
15  attempt to collect an amount (however designated) that
16  purports to reimburse that lessor for the tax imposed by this
17  Act or the Use Tax Act, as the case may be, if the tax has not
18  been paid by the lessor. If a lessor improperly collects any
19  such amount from the lessee, the lessee shall have a legal
20  right to claim a refund of that amount from the lessor. If,
21  however, that amount is not refunded to the lessee for any
22  reason, the lessor is liable to pay that amount to the
23  Department.
24  (16) Personal property purchased by a lessor who leases
25  the property, under a lease of one year or longer executed or
26  in effect at the time the lessor would otherwise be subject to

 

 

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1  the tax imposed by this Act, to a governmental body that has
2  been issued an active tax exemption identification number by
3  the Department under Section 1g of the Retailers' Occupation
4  Tax Act. If the property is leased in a manner that does not
5  qualify for this exemption or is used in any other non-exempt
6  manner, the lessor shall be liable for the tax imposed under
7  this Act or the Use Tax Act, as the case may be, based on the
8  fair market value of the property at the time the
9  non-qualifying use occurs. No lessor shall collect or attempt
10  to collect an amount (however designated) that purports to
11  reimburse that lessor for the tax imposed by this Act or the
12  Use Tax Act, as the case may be, if the tax has not been paid
13  by the lessor. If a lessor improperly collects any such amount
14  from the lessee, the lessee shall have a legal right to claim a
15  refund of that amount from the lessor. If, however, that
16  amount is not refunded to the lessee for any reason, the lessor
17  is liable to pay that amount to the Department.
18  (17) Beginning with taxable years ending on or after
19  December 31, 1995 and ending with taxable years ending on or
20  before December 31, 2004, personal property that is donated
21  for disaster relief to be used in a State or federally declared
22  disaster area in Illinois or bordering Illinois by a
23  manufacturer or retailer that is registered in this State to a
24  corporation, society, association, foundation, or institution
25  that has been issued a sales tax exemption identification
26  number by the Department that assists victims of the disaster

 

 

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1  who reside within the declared disaster area.
2  (18) Beginning with taxable years ending on or after
3  December 31, 1995 and ending with taxable years ending on or
4  before December 31, 2004, personal property that is used in
5  the performance of infrastructure repairs in this State,
6  including, but not limited to, municipal roads and streets,
7  access roads, bridges, sidewalks, waste disposal systems,
8  water and sewer line extensions, water distribution and
9  purification facilities, storm water drainage and retention
10  facilities, and sewage treatment facilities, resulting from a
11  State or federally declared disaster in Illinois or bordering
12  Illinois when such repairs are initiated on facilities located
13  in the declared disaster area within 6 months after the
14  disaster.
15  (19) Beginning July 1, 1999, game or game birds purchased
16  at a "game breeding and hunting preserve area" as that term is
17  used in the Wildlife Code. This paragraph is exempt from the
18  provisions of Section 3-75.
19  (20) A motor vehicle, as that term is defined in Section
20  1-146 of the Illinois Vehicle Code, that is donated to a
21  corporation, limited liability company, society, association,
22  foundation, or institution that is determined by the
23  Department to be organized and operated exclusively for
24  educational purposes. For purposes of this exemption, "a
25  corporation, limited liability company, society, association,
26  foundation, or institution organized and operated exclusively

 

 

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1  for educational purposes" means all tax-supported public
2  schools, private schools that offer systematic instruction in
3  useful branches of learning by methods common to public
4  schools and that compare favorably in their scope and
5  intensity with the course of study presented in tax-supported
6  schools, and vocational or technical schools or institutes
7  organized and operated exclusively to provide a course of
8  study of not less than 6 weeks duration and designed to prepare
9  individuals to follow a trade or to pursue a manual,
10  technical, mechanical, industrial, business, or commercial
11  occupation.
12  (21) Beginning January 1, 2000, personal property,
13  including food, purchased through fundraising events for the
14  benefit of a public or private elementary or secondary school,
15  a group of those schools, or one or more school districts if
16  the events are sponsored by an entity recognized by the school
17  district that consists primarily of volunteers and includes
18  parents and teachers of the school children. This paragraph
19  does not apply to fundraising events (i) for the benefit of
20  private home instruction or (ii) for which the fundraising
21  entity purchases the personal property sold at the events from
22  another individual or entity that sold the property for the
23  purpose of resale by the fundraising entity and that profits
24  from the sale to the fundraising entity. This paragraph is
25  exempt from the provisions of Section 3-75.
26  (22) Beginning January 1, 2000 and through December 31,

 

 

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1  2001, new or used automatic vending machines that prepare and
2  serve hot food and beverages, including coffee, soup, and
3  other items, and replacement parts for these machines.
4  Beginning January 1, 2002 and through June 30, 2003, machines
5  and parts for machines used in commercial, coin-operated
6  amusement and vending business if a use or occupation tax is
7  paid on the gross receipts derived from the use of the
8  commercial, coin-operated amusement and vending machines. This
9  paragraph is exempt from the provisions of Section 3-75.
10  (23) Beginning August 23, 2001 and through June 30, 2016,
11  food for human consumption that is to be consumed off the
12  premises where it is sold (other than alcoholic beverages,
13  soft drinks, and food that has been prepared for immediate
14  consumption) and prescription and nonprescription medicines,
15  drugs, medical appliances, and insulin, urine testing
16  materials, syringes, and needles used by diabetics, for human
17  use, when purchased for use by a person receiving medical
18  assistance under Article V of the Illinois Public Aid Code who
19  resides in a licensed long-term care facility, as defined in
20  the Nursing Home Care Act, or in a licensed facility as defined
21  in the ID/DD Community Care Act, the MC/DD Act, or the
22  Specialized Mental Health Rehabilitation Act of 2013.
23  (24) Beginning on August 2, 2001 (the effective date of
24  Public Act 92-227), computers and communications equipment
25  utilized for any hospital purpose and equipment used in the
26  diagnosis, analysis, or treatment of hospital patients

 

 

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1  purchased by a lessor who leases the equipment, under a lease
2  of one year or longer executed or in effect at the time the
3  lessor would otherwise be subject to the tax imposed by this
4  Act, to a hospital that has been issued an active tax exemption
5  identification number by the Department under Section 1g of
6  the Retailers' Occupation Tax Act. If the equipment is leased
7  in a manner that does not qualify for this exemption or is used
8  in any other nonexempt manner, the lessor shall be liable for
9  the tax imposed under this Act or the Use Tax Act, as the case
10  may be, based on the fair market value of the property at the
11  time the nonqualifying use occurs. No lessor shall collect or
12  attempt to collect an amount (however designated) that
13  purports to reimburse that lessor for the tax imposed by this
14  Act or the Use Tax Act, as the case may be, if the tax has not
15  been paid by the lessor. If a lessor improperly collects any
16  such amount from the lessee, the lessee shall have a legal
17  right to claim a refund of that amount from the lessor. If,
18  however, that amount is not refunded to the lessee for any
19  reason, the lessor is liable to pay that amount to the
20  Department. This paragraph is exempt from the provisions of
21  Section 3-75.
22  (25) Beginning on August 2, 2001 (the effective date of
23  Public Act 92-227), personal property purchased by a lessor
24  who leases the property, under a lease of one year or longer
25  executed or in effect at the time the lessor would otherwise be
26  subject to the tax imposed by this Act, to a governmental body

 

 

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1  that has been issued an active tax exemption identification
2  number by the Department under Section 1g of the Retailers'
3  Occupation Tax Act. If the property is leased in a manner that
4  does not qualify for this exemption or is used in any other
5  nonexempt manner, the lessor shall be liable for the tax
6  imposed under this Act or the Use Tax Act, as the case may be,
7  based on the fair market value of the property at the time the
8  nonqualifying use occurs. No lessor shall collect or attempt
9  to collect an amount (however designated) that purports to
10  reimburse that lessor for the tax imposed by this Act or the
11  Use Tax Act, as the case may be, if the tax has not been paid
12  by the lessor. If a lessor improperly collects any such amount
13  from the lessee, the lessee shall have a legal right to claim a
14  refund of that amount from the lessor. If, however, that
15  amount is not refunded to the lessee for any reason, the lessor
16  is liable to pay that amount to the Department. This paragraph
17  is exempt from the provisions of Section 3-75.
18  (26) Beginning January 1, 2008, tangible personal property
19  used in the construction or maintenance of a community water
20  supply, as defined under Section 3.145 of the Environmental
21  Protection Act, that is operated by a not-for-profit
22  corporation that holds a valid water supply permit issued
23  under Title IV of the Environmental Protection Act. This
24  paragraph is exempt from the provisions of Section 3-75.
25  (27) Beginning January 1, 2010 and continuing through
26  December 31, 2029, materials, parts, equipment, components,

 

 

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1  and furnishings incorporated into or upon an aircraft as part
2  of the modification, refurbishment, completion, replacement,
3  repair, or maintenance of the aircraft. This exemption
4  includes consumable supplies used in the modification,
5  refurbishment, completion, replacement, repair, and
6  maintenance of aircraft. However, until January 1, 2024, this
7  exemption excludes any materials, parts, equipment,
8  components, and consumable supplies used in the modification,
9  replacement, repair, and maintenance of aircraft engines or
10  power plants, whether such engines or power plants are
11  installed or uninstalled upon any such aircraft. "Consumable
12  supplies" include, but are not limited to, adhesive, tape,
13  sandpaper, general purpose lubricants, cleaning solution,
14  latex gloves, and protective films.
15  Beginning January 1, 2010 and continuing through December
16  31, 2023, this exemption applies only to the use of qualifying
17  tangible personal property transferred incident to the
18  modification, refurbishment, completion, replacement, repair,
19  or maintenance of aircraft by persons who (i) hold an Air
20  Agency Certificate and are empowered to operate an approved
21  repair station by the Federal Aviation Administration, (ii)
22  have a Class IV Rating, and (iii) conduct operations in
23  accordance with Part 145 of the Federal Aviation Regulations.
24  From January 1, 2024 through December 31, 2029, this exemption
25  applies only to the use of qualifying tangible personal
26  property by: (A) persons who modify, refurbish, complete,

 

 

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1  repair, replace, or maintain aircraft and who (i) hold an Air
2  Agency Certificate and are empowered to operate an approved
3  repair station by the Federal Aviation Administration, (ii)
4  have a Class IV Rating, and (iii) conduct operations in
5  accordance with Part 145 of the Federal Aviation Regulations;
6  and (B) persons who engage in the modification, replacement,
7  repair, and maintenance of aircraft engines or power plants
8  without regard to whether or not those persons meet the
9  qualifications of item (A).
10  The exemption does not include aircraft operated by a
11  commercial air carrier providing scheduled passenger air
12  service pursuant to authority issued under Part 121 or Part
13  129 of the Federal Aviation Regulations. The changes made to
14  this paragraph (27) by Public Act 98-534 are declarative of
15  existing law. It is the intent of the General Assembly that the
16  exemption under this paragraph (27) applies continuously from
17  January 1, 2010 through December 31, 2024; however, no claim
18  for credit or refund is allowed for taxes paid as a result of
19  the disallowance of this exemption on or after January 1, 2015
20  and prior to February 5, 2020 (the effective date of Public Act
21  101-629).
22  (28) Tangible personal property purchased by a
23  public-facilities corporation, as described in Section
24  11-65-10 of the Illinois Municipal Code, for purposes of
25  constructing or furnishing a municipal convention hall, but
26  only if the legal title to the municipal convention hall is

 

 

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1  transferred to the municipality without any further
2  consideration by or on behalf of the municipality at the time
3  of the completion of the municipal convention hall or upon the
4  retirement or redemption of any bonds or other debt
5  instruments issued by the public-facilities corporation in
6  connection with the development of the municipal convention
7  hall. This exemption includes existing public-facilities
8  corporations as provided in Section 11-65-25 of the Illinois
9  Municipal Code. This paragraph is exempt from the provisions
10  of Section 3-75.
11  (29) Beginning January 1, 2017 and through December 31,
12  2026, menstrual pads, tampons, and menstrual cups.
13  (30) Tangible personal property transferred to a purchaser
14  who is exempt from the tax imposed by this Act by operation of
15  federal law. This paragraph is exempt from the provisions of
16  Section 3-75.
17  (31) Qualified tangible personal property used in the
18  construction or operation of a data center that has been
19  granted a certificate of exemption by the Department of
20  Commerce and Economic Opportunity, whether that tangible
21  personal property is purchased by the owner, operator, or
22  tenant of the data center or by a contractor or subcontractor
23  of the owner, operator, or tenant. Data centers that would
24  have qualified for a certificate of exemption prior to January
25  1, 2020 had Public Act 101-31 been in effect, may apply for and
26  obtain an exemption for subsequent purchases of computer

 

 

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1  equipment or enabling software purchased or leased to upgrade,
2  supplement, or replace computer equipment or enabling software
3  purchased or leased in the original investment that would have
4  qualified.
5  The Department of Commerce and Economic Opportunity shall
6  grant a certificate of exemption under this item (31) to
7  qualified data centers as defined by Section 605-1025 of the
8  Department of Commerce and Economic Opportunity Law of the
9  Civil Administrative Code of Illinois.
10  For the purposes of this item (31):
11  "Data center" means a building or a series of
12  buildings rehabilitated or constructed to house working
13  servers in one physical location or multiple sites within
14  the State of Illinois.
15  "Qualified tangible personal property" means:
16  electrical systems and equipment; climate control and
17  chilling equipment and systems; mechanical systems and
18  equipment; monitoring and secure systems; emergency
19  generators; hardware; computers; servers; data storage
20  devices; network connectivity equipment; racks; cabinets;
21  telecommunications cabling infrastructure; raised floor
22  systems; peripheral components or systems; software;
23  mechanical, electrical, or plumbing systems; battery
24  systems; cooling systems and towers; temperature control
25  systems; other cabling; and other data center
26  infrastructure equipment and systems necessary to operate

 

 

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1  qualified tangible personal property, including fixtures;
2  and component parts of any of the foregoing, including
3  installation, maintenance, repair, refurbishment, and
4  replacement of qualified tangible personal property to
5  generate, transform, transmit, distribute, or manage
6  electricity necessary to operate qualified tangible
7  personal property; and all other tangible personal
8  property that is essential to the operations of a computer
9  data center. The term "qualified tangible personal
10  property" also includes building materials physically
11  incorporated into in to the qualifying data center. To
12  document the exemption allowed under this Section, the
13  retailer must obtain from the purchaser a copy of the
14  certificate of eligibility issued by the Department of
15  Commerce and Economic Opportunity.
16  This item (31) is exempt from the provisions of Section
17  3-75.
18  (32) Beginning July 1, 2022, breast pumps, breast pump
19  collection and storage supplies, and breast pump kits. This
20  item (32) is exempt from the provisions of Section 3-75. As
21  used in this item (32):
22  "Breast pump" means an electrically controlled or
23  manually controlled pump device designed or marketed to be
24  used to express milk from a human breast during lactation,
25  including the pump device and any battery, AC adapter, or
26  other power supply unit that is used to power the pump

 

 

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1  device and is packaged and sold with the pump device at the
2  time of sale.
3  "Breast pump collection and storage supplies" means
4  items of tangible personal property designed or marketed
5  to be used in conjunction with a breast pump to collect
6  milk expressed from a human breast and to store collected
7  milk until it is ready for consumption.
8  "Breast pump collection and storage supplies"
9  includes, but is not limited to: breast shields and breast
10  shield connectors; breast pump tubes and tubing adapters;
11  breast pump valves and membranes; backflow protectors and
12  backflow protector adaptors; bottles and bottle caps
13  specific to the operation of the breast pump; and breast
14  milk storage bags.
15  "Breast pump collection and storage supplies" does not
16  include: (1) bottles and bottle caps not specific to the
17  operation of the breast pump; (2) breast pump travel bags
18  and other similar carrying accessories, including ice
19  packs, labels, and other similar products; (3) breast pump
20  cleaning supplies; (4) nursing bras, bra pads, breast
21  shells, and other similar products; and (5) creams,
22  ointments, and other similar products that relieve
23  breastfeeding-related symptoms or conditions of the
24  breasts or nipples, unless sold as part of a breast pump
25  kit that is pre-packaged by the breast pump manufacturer
26  or distributor.

 

 

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1  "Breast pump kit" means a kit that: (1) contains no
2  more than a breast pump, breast pump collection and
3  storage supplies, a rechargeable battery for operating the
4  breast pump, a breastmilk cooler, bottle stands, ice
5  packs, and a breast pump carrying case; and (2) is
6  pre-packaged as a breast pump kit by the breast pump
7  manufacturer or distributor.
8  (33) Tangible personal property sold by or on behalf of
9  the State Treasurer pursuant to the Revised Uniform Unclaimed
10  Property Act. This item (33) is exempt from the provisions of
11  Section 3-75.
12  (34) Beginning on January 1, 2024, tangible personal
13  property purchased by an active duty member of the armed
14  forces of the United States who presents valid military
15  identification and purchases the property using a form of
16  payment where the federal government is the payor. The member
17  of the armed forces must complete, at the point of sale, a form
18  prescribed by the Department of Revenue documenting that the
19  transaction is eligible for the exemption under this
20  paragraph. Retailers must keep the form as documentation of
21  the exemption in their records for a period of not less than 6
22  years. "Armed forces of the United States" means the United
23  States Army, Navy, Air Force, Marine Corps, or Coast Guard.
24  This paragraph is exempt from the provisions of Section 3-75.
25  (35) Beginning on January 1, 2025, medical appliances and
26  products that are classified as Class III medical devices by

 

 

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1  the United States Food and Drug Administration and that are
2  used for cancer treatment pursuant to a prescription, as well
3  as any accessories and components related to those appliances
4  and devices. As used in this paragraph, "medical appliance"
5  means a product that was classified as a medical appliance and
6  was subject to a 1% rate of tax immediately prior to the
7  effective date of this amendatory Act of the 103rd General
8  Assembly, including, but not limited to, devices used to treat
9  amyotrophic lateral sclerosis, as well as other items as
10  determined by the Department by rule. This paragraph is exempt
11  from the provisions of Section 3-75.
12  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
13  Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
14  75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
15  Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
16  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
17  revised 12-12-23.)
18  (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
19  Sec. 3-10. Rate of tax. Unless otherwise provided in this
20  Section, the tax imposed by this Act is at the rate of 6.25% of
21  the selling price of tangible personal property transferred as
22  an incident to the sale of service, but, for the purpose of
23  computing this tax, in no event shall the selling price be less
24  than the cost price of the property to the serviceman.
25  Beginning on July 1, 2000 and through December 31, 2000,

 

 

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1  with respect to motor fuel, as defined in Section 1.1 of the
2  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
3  the Use Tax Act, the tax is imposed at the rate of 1.25%.
4  With respect to gasohol, as defined in the Use Tax Act, the
5  tax imposed by this Act applies to (i) 70% of the selling price
6  of property transferred as an incident to the sale of service
7  on or after January 1, 1990, and before July 1, 2003, (ii) 80%
8  of the selling price of property transferred as an incident to
9  the sale of service on or after July 1, 2003 and on or before
10  July 1, 2017, (iii) 100% of the selling price of property
11  transferred as an incident to the sale of service after July 1,
12  2017 and before January 1, 2024, (iv) 90% of the selling price
13  of property transferred as an incident to the sale of service
14  on or after January 1, 2024 and on or before December 31, 2028,
15  and (v) 100% of the selling price of property transferred as an
16  incident to the sale of service after December 31, 2028. If, at
17  any time, however, the tax under this Act on sales of gasohol,
18  as defined in the Use Tax Act, is imposed at the rate of 1.25%,
19  then the tax imposed by this Act applies to 100% of the
20  proceeds of sales of gasohol made during that time.
21  With respect to mid-range ethanol blends, as defined in
22  Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
23  applies to (i) 80% of the selling price of property
24  transferred as an incident to the sale of service on or after
25  January 1, 2024 and on or before December 31, 2028 and (ii)
26  100% of the selling price of property transferred as an

 

 

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1  incident to the sale of service after December 31, 2028. If, at
2  any time, however, the tax under this Act on sales of mid-range
3  ethanol blends is imposed at the rate of 1.25%, then the tax
4  imposed by this Act applies to 100% of the selling price of
5  mid-range ethanol blends transferred as an incident to the
6  sale of service during that time.
7  With respect to majority blended ethanol fuel, as defined
8  in the Use Tax Act, the tax imposed by this Act does not apply
9  to the selling price of property transferred as an incident to
10  the sale of service on or after July 1, 2003 and on or before
11  December 31, 2028 but applies to 100% of the selling price
12  thereafter.
13  With respect to biodiesel blends, as defined in the Use
14  Tax Act, with no less than 1% and no more than 10% biodiesel,
15  the tax imposed by this Act applies to (i) 80% of the selling
16  price of property transferred as an incident to the sale of
17  service on or after July 1, 2003 and on or before December 31,
18  2018 and (ii) 100% of the proceeds of the selling price after
19  December 31, 2018 and before January 1, 2024. On and after
20  January 1, 2024 and on or before December 31, 2030, the
21  taxation of biodiesel, renewable diesel, and biodiesel blends
22  shall be as provided in Section 3-5.1 of the Use Tax Act. If,
23  at any time, however, the tax under this Act on sales of
24  biodiesel blends, as defined in the Use Tax Act, with no less
25  than 1% and no more than 10% biodiesel is imposed at the rate
26  of 1.25%, then the tax imposed by this Act applies to 100% of

 

 

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1  the proceeds of sales of biodiesel blends with no less than 1%
2  and no more than 10% biodiesel made during that time.
3  With respect to biodiesel, as defined in the Use Tax Act,
4  and biodiesel blends, as defined in the Use Tax Act, with more
5  than 10% but no more than 99% biodiesel, the tax imposed by
6  this Act does not apply to the proceeds of the selling price of
7  property transferred as an incident to the sale of service on
8  or after July 1, 2003 and on or before December 31, 2023. On
9  and after January 1, 2024 and on or before December 31, 2030,
10  the taxation of biodiesel, renewable diesel, and biodiesel
11  blends shall be as provided in Section 3-5.1 of the Use Tax
12  Act.
13  At the election of any registered serviceman made for each
14  fiscal year, sales of service in which the aggregate annual
15  cost price of tangible personal property transferred as an
16  incident to the sales of service is less than 35%, or 75% in
17  the case of servicemen transferring prescription drugs or
18  servicemen engaged in graphic arts production, of the
19  aggregate annual total gross receipts from all sales of
20  service, the tax imposed by this Act shall be based on the
21  serviceman's cost price of the tangible personal property
22  transferred as an incident to the sale of those services.
23  Until July 1, 2022 and beginning again on July 1, 2023, the
24  tax shall be imposed at the rate of 1% on food prepared for
25  immediate consumption and transferred incident to a sale of
26  service subject to this Act or the Service Occupation Tax Act

 

 

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1  by an entity licensed under the Hospital Licensing Act, the
2  Nursing Home Care Act, the Assisted Living and Shared Housing
3  Act, the ID/DD Community Care Act, the MC/DD Act, the
4  Specialized Mental Health Rehabilitation Act of 2013, or the
5  Child Care Act of 1969, or an entity that holds a permit issued
6  pursuant to the Life Care Facilities Act. Until July 1, 2022
7  and beginning again on July 1, 2023, the tax shall also be
8  imposed at the rate of 1% on food for human consumption that is
9  to be consumed off the premises where it is sold (other than
10  alcoholic beverages, food consisting of or infused with adult
11  use cannabis, soft drinks, and food that has been prepared for
12  immediate consumption and is not otherwise included in this
13  paragraph).
14  Beginning on July 1, 2022 and until July 1, 2023, the tax
15  shall be imposed at the rate of 0% on food prepared for
16  immediate consumption and transferred incident to a sale of
17  service subject to this Act or the Service Occupation Tax Act
18  by an entity licensed under the Hospital Licensing Act, the
19  Nursing Home Care Act, the Assisted Living and Shared Housing
20  Act, the ID/DD Community Care Act, the MC/DD Act, the
21  Specialized Mental Health Rehabilitation Act of 2013, or the
22  Child Care Act of 1969, or an entity that holds a permit issued
23  pursuant to the Life Care Facilities Act. Beginning on July 1,
24  2022 and until July 1, 2023, the tax shall also be imposed at
25  the rate of 0% on food for human consumption that is to be
26  consumed off the premises where it is sold (other than

 

 

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1  alcoholic beverages, food consisting of or infused with adult
2  use cannabis, soft drinks, and food that has been prepared for
3  immediate consumption and is not otherwise included in this
4  paragraph).
5  The tax shall also be imposed at the rate of 1% on
6  prescription and nonprescription medicines, drugs, medical
7  appliances, products classified as Class III medical devices
8  by the United States Food and Drug Administration that are
9  used for cancer treatment pursuant to a prescription, as well
10  as any accessories and components related to those devices,
11  modifications to a motor vehicle for the purpose of rendering
12  it usable by a person with a disability, and insulin, blood
13  sugar testing materials, syringes, and needles used by human
14  diabetics (except to the extent that those items are exempt by
15  the Department under paragraph (35) of Section 3-5). For the
16  purposes of this Section, until September 1, 2009: the term
17  "soft drinks" means any complete, finished, ready-to-use,
18  non-alcoholic drink, whether carbonated or not, including, but
19  not limited to, soda water, cola, fruit juice, vegetable
20  juice, carbonated water, and all other preparations commonly
21  known as soft drinks of whatever kind or description that are
22  contained in any closed or sealed bottle, can, carton, or
23  container, regardless of size; but "soft drinks" does not
24  include coffee, tea, non-carbonated water, infant formula,
25  milk or milk products as defined in the Grade A Pasteurized
26  Milk and Milk Products Act, or drinks containing 50% or more

 

 

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1  natural fruit or vegetable juice.
2  Notwithstanding any other provisions of this Act,
3  beginning September 1, 2009, "soft drinks" means non-alcoholic
4  beverages that contain natural or artificial sweeteners. "Soft
5  drinks" does not include beverages that contain milk or milk
6  products, soy, rice or similar milk substitutes, or greater
7  than 50% of vegetable or fruit juice by volume.
8  Until August 1, 2009, and notwithstanding any other
9  provisions of this Act, "food for human consumption that is to
10  be consumed off the premises where it is sold" includes all
11  food sold through a vending machine, except soft drinks and
12  food products that are dispensed hot from a vending machine,
13  regardless of the location of the vending machine. Beginning
14  August 1, 2009, and notwithstanding any other provisions of
15  this Act, "food for human consumption that is to be consumed
16  off the premises where it is sold" includes all food sold
17  through a vending machine, except soft drinks, candy, and food
18  products that are dispensed hot from a vending machine,
19  regardless of the location of the vending machine.
20  Notwithstanding any other provisions of this Act,
21  beginning September 1, 2009, "food for human consumption that
22  is to be consumed off the premises where it is sold" does not
23  include candy. For purposes of this Section, "candy" means a
24  preparation of sugar, honey, or other natural or artificial
25  sweeteners in combination with chocolate, fruits, nuts or
26  other ingredients or flavorings in the form of bars, drops, or

 

 

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1  pieces. "Candy" does not include any preparation that contains
2  flour or requires refrigeration.
3  Notwithstanding any other provisions of this Act,
4  beginning September 1, 2009, "nonprescription medicines and
5  drugs" does not include grooming and hygiene products. For
6  purposes of this Section, "grooming and hygiene products"
7  includes, but is not limited to, soaps and cleaning solutions,
8  shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
9  lotions and screens, unless those products are available by
10  prescription only, regardless of whether the products meet the
11  definition of "over-the-counter-drugs". For the purposes of
12  this paragraph, "over-the-counter-drug" means a drug for human
13  use that contains a label that identifies the product as a drug
14  as required by 21 CFR 201.66. The "over-the-counter-drug"
15  label includes:
16  (A) a "Drug Facts" panel; or
17  (B) a statement of the "active ingredient(s)" with a
18  list of those ingredients contained in the compound,
19  substance or preparation.
20  Beginning on January 1, 2014 (the effective date of Public
21  Act 98-122), "prescription and nonprescription medicines and
22  drugs" includes medical cannabis purchased from a registered
23  dispensing organization under the Compassionate Use of Medical
24  Cannabis Program Act.
25  As used in this Section, "adult use cannabis" means
26  cannabis subject to tax under the Cannabis Cultivation

 

 

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1  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
2  and does not include cannabis subject to tax under the
3  Compassionate Use of Medical Cannabis Program Act.
4  If the property that is acquired from a serviceman is
5  acquired outside Illinois and used outside Illinois before
6  being brought to Illinois for use here and is taxable under
7  this Act, the "selling price" on which the tax is computed
8  shall be reduced by an amount that represents a reasonable
9  allowance for depreciation for the period of prior
10  out-of-state use.
11  (Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
12  102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
13  Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
14  103-154, eff. 6-30-23.)
15  Section 15. The Service Occupation Tax Act is amended by
16  changing Sections 3-5 and 3-10 as follows:
17  (35 ILCS 115/3-5)
18  Sec. 3-5. Exemptions. The following tangible personal
19  property is exempt from the tax imposed by this Act:
20  (1) Personal property sold by a corporation, society,
21  association, foundation, institution, or organization, other
22  than a limited liability company, that is organized and
23  operated as a not-for-profit service enterprise for the
24  benefit of persons 65 years of age or older if the personal

 

 

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1  property was not purchased by the enterprise for the purpose
2  of resale by the enterprise.
3  (2) Personal property purchased by a not-for-profit
4  Illinois county fair association for use in conducting,
5  operating, or promoting the county fair.
6  (3) Personal property purchased by any not-for-profit arts
7  or cultural organization that establishes, by proof required
8  by the Department by rule, that it has received an exemption
9  under Section 501(c)(3) of the Internal Revenue Code and that
10  is organized and operated primarily for the presentation or
11  support of arts or cultural programming, activities, or
12  services. These organizations include, but are not limited to,
13  music and dramatic arts organizations such as symphony
14  orchestras and theatrical groups, arts and cultural service
15  organizations, local arts councils, visual arts organizations,
16  and media arts organizations. On and after July 1, 2001 (the
17  effective date of Public Act 92-35), however, an entity
18  otherwise eligible for this exemption shall not make tax-free
19  purchases unless it has an active identification number issued
20  by the Department.
21  (4) Legal tender, currency, medallions, or gold or silver
22  coinage issued by the State of Illinois, the government of the
23  United States of America, or the government of any foreign
24  country, and bullion.
25  (5) Until July 1, 2003 and beginning again on September 1,
26  2004 through August 30, 2014, graphic arts machinery and

 

 

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1  equipment, including repair and replacement parts, both new
2  and used, and including that manufactured on special order or
3  purchased for lease, certified by the purchaser to be used
4  primarily for graphic arts production. Equipment includes
5  chemicals or chemicals acting as catalysts but only if the
6  chemicals or chemicals acting as catalysts effect a direct and
7  immediate change upon a graphic arts product. Beginning on
8  July 1, 2017, graphic arts machinery and equipment is included
9  in the manufacturing and assembling machinery and equipment
10  exemption under Section 2 of this Act.
11  (6) Personal property sold by a teacher-sponsored student
12  organization affiliated with an elementary or secondary school
13  located in Illinois.
14  (7) Farm machinery and equipment, both new and used,
15  including that manufactured on special order, certified by the
16  purchaser to be used primarily for production agriculture or
17  State or federal agricultural programs, including individual
18  replacement parts for the machinery and equipment, including
19  machinery and equipment purchased for lease, and including
20  implements of husbandry defined in Section 1-130 of the
21  Illinois Vehicle Code, farm machinery and agricultural
22  chemical and fertilizer spreaders, and nurse wagons required
23  to be registered under Section 3-809 of the Illinois Vehicle
24  Code, but excluding other motor vehicles required to be
25  registered under the Illinois Vehicle Code. Horticultural
26  polyhouses or hoop houses used for propagating, growing, or

 

 

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1  overwintering plants shall be considered farm machinery and
2  equipment under this item (7). Agricultural chemical tender
3  tanks and dry boxes shall include units sold separately from a
4  motor vehicle required to be licensed and units sold mounted
5  on a motor vehicle required to be licensed if the selling price
6  of the tender is separately stated.
7  Farm machinery and equipment shall include precision
8  farming equipment that is installed or purchased to be
9  installed on farm machinery and equipment, including, but not
10  limited to, tractors, harvesters, sprayers, planters, seeders,
11  or spreaders. Precision farming equipment includes, but is not
12  limited to, soil testing sensors, computers, monitors,
13  software, global positioning and mapping systems, and other
14  such equipment.
15  Farm machinery and equipment also includes computers,
16  sensors, software, and related equipment used primarily in the
17  computer-assisted operation of production agriculture
18  facilities, equipment, and activities such as, but not limited
19  to, the collection, monitoring, and correlation of animal and
20  crop data for the purpose of formulating animal diets and
21  agricultural chemicals.
22  Beginning on January 1, 2024, farm machinery and equipment
23  also includes electrical power generation equipment used
24  primarily for production agriculture.
25  This item (7) is exempt from the provisions of Section
26  3-55.

 

 

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1  (8) Until June 30, 2013, fuel and petroleum products sold
2  to or used by an air common carrier, certified by the carrier
3  to be used for consumption, shipment, or storage in the
4  conduct of its business as an air common carrier, for a flight
5  destined for or returning from a location or locations outside
6  the United States without regard to previous or subsequent
7  domestic stopovers.
8  Beginning July 1, 2013, fuel and petroleum products sold
9  to or used by an air carrier, certified by the carrier to be
10  used for consumption, shipment, or storage in the conduct of
11  its business as an air common carrier, for a flight that (i) is
12  engaged in foreign trade or is engaged in trade between the
13  United States and any of its possessions and (ii) transports
14  at least one individual or package for hire from the city of
15  origination to the city of final destination on the same
16  aircraft, without regard to a change in the flight number of
17  that aircraft.
18  (9) Proceeds of mandatory service charges separately
19  stated on customers' bills for the purchase and consumption of
20  food and beverages, to the extent that the proceeds of the
21  service charge are in fact turned over as tips or as a
22  substitute for tips to the employees who participate directly
23  in preparing, serving, hosting or cleaning up the food or
24  beverage function with respect to which the service charge is
25  imposed.
26  (10) Until July 1, 2003, oil field exploration, drilling,

 

 

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1  and production equipment, including (i) rigs and parts of
2  rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
3  pipe and tubular goods, including casing and drill strings,
4  (iii) pumps and pump-jack units, (iv) storage tanks and flow
5  lines, (v) any individual replacement part for oil field
6  exploration, drilling, and production equipment, and (vi)
7  machinery and equipment purchased for lease; but excluding
8  motor vehicles required to be registered under the Illinois
9  Vehicle Code.
10  (11) Photoprocessing machinery and equipment, including
11  repair and replacement parts, both new and used, including
12  that manufactured on special order, certified by the purchaser
13  to be used primarily for photoprocessing, and including
14  photoprocessing machinery and equipment purchased for lease.
15  (12) Until July 1, 2028, coal and aggregate exploration,
16  mining, off-highway hauling, processing, maintenance, and
17  reclamation equipment, including replacement parts and
18  equipment, and including equipment purchased for lease, but
19  excluding motor vehicles required to be registered under the
20  Illinois Vehicle Code. The changes made to this Section by
21  Public Act 97-767 apply on and after July 1, 2003, but no claim
22  for credit or refund is allowed on or after August 16, 2013
23  (the effective date of Public Act 98-456) for such taxes paid
24  during the period beginning July 1, 2003 and ending on August
25  16, 2013 (the effective date of Public Act 98-456).
26  (13) Beginning January 1, 1992 and through June 30, 2016,

 

 

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1  food for human consumption that is to be consumed off the
2  premises where it is sold (other than alcoholic beverages,
3  soft drinks and food that has been prepared for immediate
4  consumption) and prescription and non-prescription medicines,
5  drugs, medical appliances, and insulin, urine testing
6  materials, syringes, and needles used by diabetics, for human
7  use, when purchased for use by a person receiving medical
8  assistance under Article V of the Illinois Public Aid Code who
9  resides in a licensed long-term care facility, as defined in
10  the Nursing Home Care Act, or in a licensed facility as defined
11  in the ID/DD Community Care Act, the MC/DD Act, or the
12  Specialized Mental Health Rehabilitation Act of 2013.
13  (14) Semen used for artificial insemination of livestock
14  for direct agricultural production.
15  (15) Horses, or interests in horses, registered with and
16  meeting the requirements of any of the Arabian Horse Club
17  Registry of America, Appaloosa Horse Club, American Quarter
18  Horse Association, United States Trotting Association, or
19  Jockey Club, as appropriate, used for purposes of breeding or
20  racing for prizes. This item (15) is exempt from the
21  provisions of Section 3-55, and the exemption provided for
22  under this item (15) applies for all periods beginning May 30,
23  1995, but no claim for credit or refund is allowed on or after
24  January 1, 2008 (the effective date of Public Act 95-88) for
25  such taxes paid during the period beginning May 30, 2000 and
26  ending on January 1, 2008 (the effective date of Public Act

 

 

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1  95-88).
2  (16) Computers and communications equipment utilized for
3  any hospital purpose and equipment used in the diagnosis,
4  analysis, or treatment of hospital patients sold to a lessor
5  who leases the equipment, under a lease of one year or longer
6  executed or in effect at the time of the purchase, to a
7  hospital that has been issued an active tax exemption
8  identification number by the Department under Section 1g of
9  the Retailers' Occupation Tax Act.
10  (17) Personal property sold to a lessor who leases the
11  property, under a lease of one year or longer executed or in
12  effect at the time of the purchase, to a governmental body that
13  has been issued an active tax exemption identification number
14  by the Department under Section 1g of the Retailers'
15  Occupation Tax Act.
16  (18) Beginning with taxable years ending on or after
17  December 31, 1995 and ending with taxable years ending on or
18  before December 31, 2004, personal property that is donated
19  for disaster relief to be used in a State or federally declared
20  disaster area in Illinois or bordering Illinois by a
21  manufacturer or retailer that is registered in this State to a
22  corporation, society, association, foundation, or institution
23  that has been issued a sales tax exemption identification
24  number by the Department that assists victims of the disaster
25  who reside within the declared disaster area.
26  (19) Beginning with taxable years ending on or after

 

 

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1  December 31, 1995 and ending with taxable years ending on or
2  before December 31, 2004, personal property that is used in
3  the performance of infrastructure repairs in this State,
4  including, but not limited to, municipal roads and streets,
5  access roads, bridges, sidewalks, waste disposal systems,
6  water and sewer line extensions, water distribution and
7  purification facilities, storm water drainage and retention
8  facilities, and sewage treatment facilities, resulting from a
9  State or federally declared disaster in Illinois or bordering
10  Illinois when such repairs are initiated on facilities located
11  in the declared disaster area within 6 months after the
12  disaster.
13  (20) Beginning July 1, 1999, game or game birds sold at a
14  "game breeding and hunting preserve area" as that term is used
15  in the Wildlife Code. This paragraph is exempt from the
16  provisions of Section 3-55.
17  (21) A motor vehicle, as that term is defined in Section
18  1-146 of the Illinois Vehicle Code, that is donated to a
19  corporation, limited liability company, society, association,
20  foundation, or institution that is determined by the
21  Department to be organized and operated exclusively for
22  educational purposes. For purposes of this exemption, "a
23  corporation, limited liability company, society, association,
24  foundation, or institution organized and operated exclusively
25  for educational purposes" means all tax-supported public
26  schools, private schools that offer systematic instruction in

 

 

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1  useful branches of learning by methods common to public
2  schools and that compare favorably in their scope and
3  intensity with the course of study presented in tax-supported
4  schools, and vocational or technical schools or institutes
5  organized and operated exclusively to provide a course of
6  study of not less than 6 weeks duration and designed to prepare
7  individuals to follow a trade or to pursue a manual,
8  technical, mechanical, industrial, business, or commercial
9  occupation.
10  (22) Beginning January 1, 2000, personal property,
11  including food, purchased through fundraising events for the
12  benefit of a public or private elementary or secondary school,
13  a group of those schools, or one or more school districts if
14  the events are sponsored by an entity recognized by the school
15  district that consists primarily of volunteers and includes
16  parents and teachers of the school children. This paragraph
17  does not apply to fundraising events (i) for the benefit of
18  private home instruction or (ii) for which the fundraising
19  entity purchases the personal property sold at the events from
20  another individual or entity that sold the property for the
21  purpose of resale by the fundraising entity and that profits
22  from the sale to the fundraising entity. This paragraph is
23  exempt from the provisions of Section 3-55.
24  (23) Beginning January 1, 2000 and through December 31,
25  2001, new or used automatic vending machines that prepare and
26  serve hot food and beverages, including coffee, soup, and

 

 

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1  other items, and replacement parts for these machines.
2  Beginning January 1, 2002 and through June 30, 2003, machines
3  and parts for machines used in commercial, coin-operated
4  amusement and vending business if a use or occupation tax is
5  paid on the gross receipts derived from the use of the
6  commercial, coin-operated amusement and vending machines. This
7  paragraph is exempt from the provisions of Section 3-55.
8  (24) Beginning on August 2, 2001 (the effective date of
9  Public Act 92-227), computers and communications equipment
10  utilized for any hospital purpose and equipment used in the
11  diagnosis, analysis, or treatment of hospital patients sold to
12  a lessor who leases the equipment, under a lease of one year or
13  longer executed or in effect at the time of the purchase, to a
14  hospital that has been issued an active tax exemption
15  identification number by the Department under Section 1g of
16  the Retailers' Occupation Tax Act. This paragraph is exempt
17  from the provisions of Section 3-55.
18  (25) Beginning on August 2, 2001 (the effective date of
19  Public Act 92-227), personal property sold to a lessor who
20  leases the property, under a lease of one year or longer
21  executed or in effect at the time of the purchase, to a
22  governmental body that has been issued an active tax exemption
23  identification number by the Department under Section 1g of
24  the Retailers' Occupation Tax Act. This paragraph is exempt
25  from the provisions of Section 3-55.
26  (26) Beginning on January 1, 2002 and through June 30,

 

 

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1  2016, tangible personal property purchased from an Illinois
2  retailer by a taxpayer engaged in centralized purchasing
3  activities in Illinois who will, upon receipt of the property
4  in Illinois, temporarily store the property in Illinois (i)
5  for the purpose of subsequently transporting it outside this
6  State for use or consumption thereafter solely outside this
7  State or (ii) for the purpose of being processed, fabricated,
8  or manufactured into, attached to, or incorporated into other
9  tangible personal property to be transported outside this
10  State and thereafter used or consumed solely outside this
11  State. The Director of Revenue shall, pursuant to rules
12  adopted in accordance with the Illinois Administrative
13  Procedure Act, issue a permit to any taxpayer in good standing
14  with the Department who is eligible for the exemption under
15  this paragraph (26). The permit issued under this paragraph
16  (26) shall authorize the holder, to the extent and in the
17  manner specified in the rules adopted under this Act, to
18  purchase tangible personal property from a retailer exempt
19  from the taxes imposed by this Act. Taxpayers shall maintain
20  all necessary books and records to substantiate the use and
21  consumption of all such tangible personal property outside of
22  the State of Illinois.
23  (27) Beginning January 1, 2008, tangible personal property
24  used in the construction or maintenance of a community water
25  supply, as defined under Section 3.145 of the Environmental
26  Protection Act, that is operated by a not-for-profit

 

 

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1  corporation that holds a valid water supply permit issued
2  under Title IV of the Environmental Protection Act. This
3  paragraph is exempt from the provisions of Section 3-55.
4  (28) Tangible personal property sold to a
5  public-facilities corporation, as described in Section
6  11-65-10 of the Illinois Municipal Code, for purposes of
7  constructing or furnishing a municipal convention hall, but
8  only if the legal title to the municipal convention hall is
9  transferred to the municipality without any further
10  consideration by or on behalf of the municipality at the time
11  of the completion of the municipal convention hall or upon the
12  retirement or redemption of any bonds or other debt
13  instruments issued by the public-facilities corporation in
14  connection with the development of the municipal convention
15  hall. This exemption includes existing public-facilities
16  corporations as provided in Section 11-65-25 of the Illinois
17  Municipal Code. This paragraph is exempt from the provisions
18  of Section 3-55.
19  (29) Beginning January 1, 2010 and continuing through
20  December 31, 2029, materials, parts, equipment, components,
21  and furnishings incorporated into or upon an aircraft as part
22  of the modification, refurbishment, completion, replacement,
23  repair, or maintenance of the aircraft. This exemption
24  includes consumable supplies used in the modification,
25  refurbishment, completion, replacement, repair, and
26  maintenance of aircraft. However, until January 1, 2024, this

 

 

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1  exemption excludes any materials, parts, equipment,
2  components, and consumable supplies used in the modification,
3  replacement, repair, and maintenance of aircraft engines or
4  power plants, whether such engines or power plants are
5  installed or uninstalled upon any such aircraft. "Consumable
6  supplies" include, but are not limited to, adhesive, tape,
7  sandpaper, general purpose lubricants, cleaning solution,
8  latex gloves, and protective films.
9  Beginning January 1, 2010 and continuing through December
10  31, 2023, this exemption applies only to the transfer of
11  qualifying tangible personal property incident to the
12  modification, refurbishment, completion, replacement, repair,
13  or maintenance of an aircraft by persons who (i) hold an Air
14  Agency Certificate and are empowered to operate an approved
15  repair station by the Federal Aviation Administration, (ii)
16  have a Class IV Rating, and (iii) conduct operations in
17  accordance with Part 145 of the Federal Aviation Regulations.
18  The exemption does not include aircraft operated by a
19  commercial air carrier providing scheduled passenger air
20  service pursuant to authority issued under Part 121 or Part
21  129 of the Federal Aviation Regulations. From January 1, 2024
22  through December 31, 2029, this exemption applies only to the
23  use of qualifying tangible personal property by: (A) persons
24  who modify, refurbish, complete, repair, replace, or maintain
25  aircraft and who (i) hold an Air Agency Certificate and are
26  empowered to operate an approved repair station by the Federal

 

 

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1  Aviation Administration, (ii) have a Class IV Rating, and
2  (iii) conduct operations in accordance with Part 145 of the
3  Federal Aviation Regulations; and (B) persons who engage in
4  the modification, replacement, repair, and maintenance of
5  aircraft engines or power plants without regard to whether or
6  not those persons meet the qualifications of item (A).
7  The changes made to this paragraph (29) by Public Act
8  98-534 are declarative of existing law. It is the intent of the
9  General Assembly that the exemption under this paragraph (29)
10  applies continuously from January 1, 2010 through December 31,
11  2024; however, no claim for credit or refund is allowed for
12  taxes paid as a result of the disallowance of this exemption on
13  or after January 1, 2015 and prior to February 5, 2020 (the
14  effective date of Public Act 101-629).
15  (30) Beginning January 1, 2017 and through December 31,
16  2026, menstrual pads, tampons, and menstrual cups.
17  (31) Tangible personal property transferred to a purchaser
18  who is exempt from tax by operation of federal law. This
19  paragraph is exempt from the provisions of Section 3-55.
20  (32) Qualified tangible personal property used in the
21  construction or operation of a data center that has been
22  granted a certificate of exemption by the Department of
23  Commerce and Economic Opportunity, whether that tangible
24  personal property is purchased by the owner, operator, or
25  tenant of the data center or by a contractor or subcontractor
26  of the owner, operator, or tenant. Data centers that would

 

 

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1  have qualified for a certificate of exemption prior to January
2  1, 2020 had Public Act 101-31 been in effect, may apply for and
3  obtain an exemption for subsequent purchases of computer
4  equipment or enabling software purchased or leased to upgrade,
5  supplement, or replace computer equipment or enabling software
6  purchased or leased in the original investment that would have
7  qualified.
8  The Department of Commerce and Economic Opportunity shall
9  grant a certificate of exemption under this item (32) to
10  qualified data centers as defined by Section 605-1025 of the
11  Department of Commerce and Economic Opportunity Law of the
12  Civil Administrative Code of Illinois.
13  For the purposes of this item (32):
14  "Data center" means a building or a series of
15  buildings rehabilitated or constructed to house working
16  servers in one physical location or multiple sites within
17  the State of Illinois.
18  "Qualified tangible personal property" means:
19  electrical systems and equipment; climate control and
20  chilling equipment and systems; mechanical systems and
21  equipment; monitoring and secure systems; emergency
22  generators; hardware; computers; servers; data storage
23  devices; network connectivity equipment; racks; cabinets;
24  telecommunications cabling infrastructure; raised floor
25  systems; peripheral components or systems; software;
26  mechanical, electrical, or plumbing systems; battery

 

 

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1  systems; cooling systems and towers; temperature control
2  systems; other cabling; and other data center
3  infrastructure equipment and systems necessary to operate
4  qualified tangible personal property, including fixtures;
5  and component parts of any of the foregoing, including
6  installation, maintenance, repair, refurbishment, and
7  replacement of qualified tangible personal property to
8  generate, transform, transmit, distribute, or manage
9  electricity necessary to operate qualified tangible
10  personal property; and all other tangible personal
11  property that is essential to the operations of a computer
12  data center. The term "qualified tangible personal
13  property" also includes building materials physically
14  incorporated into in to the qualifying data center. To
15  document the exemption allowed under this Section, the
16  retailer must obtain from the purchaser a copy of the
17  certificate of eligibility issued by the Department of
18  Commerce and Economic Opportunity.
19  This item (32) is exempt from the provisions of Section
20  3-55.
21  (33) Beginning July 1, 2022, breast pumps, breast pump
22  collection and storage supplies, and breast pump kits. This
23  item (33) is exempt from the provisions of Section 3-55. As
24  used in this item (33):
25  "Breast pump" means an electrically controlled or
26  manually controlled pump device designed or marketed to be

 

 

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1  used to express milk from a human breast during lactation,
2  including the pump device and any battery, AC adapter, or
3  other power supply unit that is used to power the pump
4  device and is packaged and sold with the pump device at the
5  time of sale.
6  "Breast pump collection and storage supplies" means
7  items of tangible personal property designed or marketed
8  to be used in conjunction with a breast pump to collect
9  milk expressed from a human breast and to store collected
10  milk until it is ready for consumption.
11  "Breast pump collection and storage supplies"
12  includes, but is not limited to: breast shields and breast
13  shield connectors; breast pump tubes and tubing adapters;
14  breast pump valves and membranes; backflow protectors and
15  backflow protector adaptors; bottles and bottle caps
16  specific to the operation of the breast pump; and breast
17  milk storage bags.
18  "Breast pump collection and storage supplies" does not
19  include: (1) bottles and bottle caps not specific to the
20  operation of the breast pump; (2) breast pump travel bags
21  and other similar carrying accessories, including ice
22  packs, labels, and other similar products; (3) breast pump
23  cleaning supplies; (4) nursing bras, bra pads, breast
24  shells, and other similar products; and (5) creams,
25  ointments, and other similar products that relieve
26  breastfeeding-related symptoms or conditions of the

 

 

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1  breasts or nipples, unless sold as part of a breast pump
2  kit that is pre-packaged by the breast pump manufacturer
3  or distributor.
4  "Breast pump kit" means a kit that: (1) contains no
5  more than a breast pump, breast pump collection and
6  storage supplies, a rechargeable battery for operating the
7  breast pump, a breastmilk cooler, bottle stands, ice
8  packs, and a breast pump carrying case; and (2) is
9  pre-packaged as a breast pump kit by the breast pump
10  manufacturer or distributor.
11  (34) Tangible personal property sold by or on behalf of
12  the State Treasurer pursuant to the Revised Uniform Unclaimed
13  Property Act. This item (34) is exempt from the provisions of
14  Section 3-55.
15  (35) Beginning on January 1, 2024, tangible personal
16  property purchased by an active duty member of the armed
17  forces of the United States who presents valid military
18  identification and purchases the property using a form of
19  payment where the federal government is the payor. The member
20  of the armed forces must complete, at the point of sale, a form
21  prescribed by the Department of Revenue documenting that the
22  transaction is eligible for the exemption under this
23  paragraph. Retailers must keep the form as documentation of
24  the exemption in their records for a period of not less than 6
25  years. "Armed forces of the United States" means the United
26  States Army, Navy, Air Force, Marine Corps, or Coast Guard.

 

 

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1  This paragraph is exempt from the provisions of Section 3-55.
2  (36) Beginning on January 1, 2025, medical appliances and
3  products that are classified as Class III medical devices by
4  the United States Food and Drug Administration and that are
5  used for cancer treatment pursuant to a prescription, as well
6  as any accessories and components related to those appliances
7  and devices. As used in this paragraph, "medical appliance"
8  means a product that was classified as a medical appliance and
9  was subject to a 1% rate of tax immediately prior to the
10  effective date of this amendatory Act of the 103rd General
11  Assembly, including, but not limited to, devices used to treat
12  amyotrophic lateral sclerosis, as well as other items as
13  determined by the Department by rule. This paragraph is exempt
14  from the provisions of Section 3-55.
15  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
16  Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
17  75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
18  Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
19  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
20  revised 12-12-23.)
21  (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
22  Sec. 3-10. Rate of tax. Unless otherwise provided in this
23  Section, the tax imposed by this Act is at the rate of 6.25% of
24  the "selling price", as defined in Section 2 of the Service Use
25  Tax Act, of the tangible personal property. For the purpose of

 

 

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1  computing this tax, in no event shall the "selling price" be
2  less than the cost price to the serviceman of the tangible
3  personal property transferred. The selling price of each item
4  of tangible personal property transferred as an incident of a
5  sale of service may be shown as a distinct and separate item on
6  the serviceman's billing to the service customer. If the
7  selling price is not so shown, the selling price of the
8  tangible personal property is deemed to be 50% of the
9  serviceman's entire billing to the service customer. When,
10  however, a serviceman contracts to design, develop, and
11  produce special order machinery or equipment, the tax imposed
12  by this Act shall be based on the serviceman's cost price of
13  the tangible personal property transferred incident to the
14  completion of the contract.
15  Beginning on July 1, 2000 and through December 31, 2000,
16  with respect to motor fuel, as defined in Section 1.1 of the
17  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
18  the Use Tax Act, the tax is imposed at the rate of 1.25%.
19  With respect to gasohol, as defined in the Use Tax Act, the
20  tax imposed by this Act shall apply to (i) 70% of the cost
21  price of property transferred as an incident to the sale of
22  service on or after January 1, 1990, and before July 1, 2003,
23  (ii) 80% of the selling price of property transferred as an
24  incident to the sale of service on or after July 1, 2003 and on
25  or before July 1, 2017, (iii) 100% of the selling price of
26  property transferred as an incident to the sale of service

 

 

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1  after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
2  the selling price of property transferred as an incident to
3  the sale of service on or after January 1, 2024 and on or
4  before December 31, 2028, and (v) 100% of the selling price of
5  property transferred as an incident to the sale of service
6  after December 31, 2028. If, at any time, however, the tax
7  under this Act on sales of gasohol, as defined in the Use Tax
8  Act, is imposed at the rate of 1.25%, then the tax imposed by
9  this Act applies to 100% of the proceeds of sales of gasohol
10  made during that time.
11  With respect to mid-range ethanol blends, as defined in
12  Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
13  applies to (i) 80% of the selling price of property
14  transferred as an incident to the sale of service on or after
15  January 1, 2024 and on or before December 31, 2028 and (ii)
16  100% of the selling price of property transferred as an
17  incident to the sale of service after December 31, 2028. If, at
18  any time, however, the tax under this Act on sales of mid-range
19  ethanol blends is imposed at the rate of 1.25%, then the tax
20  imposed by this Act applies to 100% of the selling price of
21  mid-range ethanol blends transferred as an incident to the
22  sale of service during that time.
23  With respect to majority blended ethanol fuel, as defined
24  in the Use Tax Act, the tax imposed by this Act does not apply
25  to the selling price of property transferred as an incident to
26  the sale of service on or after July 1, 2003 and on or before

 

 

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1  December 31, 2028 but applies to 100% of the selling price
2  thereafter.
3  With respect to biodiesel blends, as defined in the Use
4  Tax Act, with no less than 1% and no more than 10% biodiesel,
5  the tax imposed by this Act applies to (i) 80% of the selling
6  price of property transferred as an incident to the sale of
7  service on or after July 1, 2003 and on or before December 31,
8  2018 and (ii) 100% of the proceeds of the selling price after
9  December 31, 2018 and before January 1, 2024. On and after
10  January 1, 2024 and on or before December 31, 2030, the
11  taxation of biodiesel, renewable diesel, and biodiesel blends
12  shall be as provided in Section 3-5.1 of the Use Tax Act. If,
13  at any time, however, the tax under this Act on sales of
14  biodiesel blends, as defined in the Use Tax Act, with no less
15  than 1% and no more than 10% biodiesel is imposed at the rate
16  of 1.25%, then the tax imposed by this Act applies to 100% of
17  the proceeds of sales of biodiesel blends with no less than 1%
18  and no more than 10% biodiesel made during that time.
19  With respect to biodiesel, as defined in the Use Tax Act,
20  and biodiesel blends, as defined in the Use Tax Act, with more
21  than 10% but no more than 99% biodiesel material, the tax
22  imposed by this Act does not apply to the proceeds of the
23  selling price of property transferred as an incident to the
24  sale of service on or after July 1, 2003 and on or before
25  December 31, 2023. On and after January 1, 2024 and on or
26  before December 31, 2030, the taxation of biodiesel, renewable

 

 

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1  diesel, and biodiesel blends shall be as provided in Section
2  3-5.1 of the Use Tax Act.
3  At the election of any registered serviceman made for each
4  fiscal year, sales of service in which the aggregate annual
5  cost price of tangible personal property transferred as an
6  incident to the sales of service is less than 35%, or 75% in
7  the case of servicemen transferring prescription drugs or
8  servicemen engaged in graphic arts production, of the
9  aggregate annual total gross receipts from all sales of
10  service, the tax imposed by this Act shall be based on the
11  serviceman's cost price of the tangible personal property
12  transferred incident to the sale of those services.
13  Until July 1, 2022 and beginning again on July 1, 2023, the
14  tax shall be imposed at the rate of 1% on food prepared for
15  immediate consumption and transferred incident to a sale of
16  service subject to this Act or the Service Use Tax Act by an
17  entity licensed under the Hospital Licensing Act, the Nursing
18  Home Care Act, the Assisted Living and Shared Housing Act, the
19  ID/DD Community Care Act, the MC/DD Act, the Specialized
20  Mental Health Rehabilitation Act of 2013, or the Child Care
21  Act of 1969, or an entity that holds a permit issued pursuant
22  to the Life Care Facilities Act. Until July 1, 2022 and
23  beginning again on July 1, 2023, the tax shall also be imposed
24  at the rate of 1% on food for human consumption that is to be
25  consumed off the premises where it is sold (other than
26  alcoholic beverages, food consisting of or infused with adult

 

 

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1  use cannabis, soft drinks, and food that has been prepared for
2  immediate consumption and is not otherwise included in this
3  paragraph).
4  Beginning on July 1, 2022 and until July 1, 2023, the tax
5  shall be imposed at the rate of 0% on food prepared for
6  immediate consumption and transferred incident to a sale of
7  service subject to this Act or the Service Use Tax Act by an
8  entity licensed under the Hospital Licensing Act, the Nursing
9  Home Care Act, the Assisted Living and Shared Housing Act, the
10  ID/DD Community Care Act, the MC/DD Act, the Specialized
11  Mental Health Rehabilitation Act of 2013, or the Child Care
12  Act of 1969, or an entity that holds a permit issued pursuant
13  to the Life Care Facilities Act. Beginning July 1, 2022 and
14  until July 1, 2023, the tax shall also be imposed at the rate
15  of 0% on food for human consumption that is to be consumed off
16  the premises where it is sold (other than alcoholic beverages,
17  food consisting of or infused with adult use cannabis, soft
18  drinks, and food that has been prepared for immediate
19  consumption and is not otherwise included in this paragraph).
20  The tax shall also be imposed at the rate of 1% on
21  prescription and nonprescription medicines, drugs, medical
22  appliances, products classified as Class III medical devices
23  by the United States Food and Drug Administration that are
24  used for cancer treatment pursuant to a prescription, as well
25  as any accessories and components related to those devices,
26  modifications to a motor vehicle for the purpose of rendering

 

 

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1  it usable by a person with a disability, and insulin, blood
2  sugar testing materials, syringes, and needles used by human
3  diabetics (except to the extent that those items are exempt by
4  the Department under paragraph (36) of Section 3-5). For the
5  purposes of this Section, until September 1, 2009: the term
6  "soft drinks" means any complete, finished, ready-to-use,
7  non-alcoholic drink, whether carbonated or not, including, but
8  not limited to, soda water, cola, fruit juice, vegetable
9  juice, carbonated water, and all other preparations commonly
10  known as soft drinks of whatever kind or description that are
11  contained in any closed or sealed can, carton, or container,
12  regardless of size; but "soft drinks" does not include coffee,
13  tea, non-carbonated water, infant formula, milk or milk
14  products as defined in the Grade A Pasteurized Milk and Milk
15  Products Act, or drinks containing 50% or more natural fruit
16  or vegetable juice.
17  Notwithstanding any other provisions of this Act,
18  beginning September 1, 2009, "soft drinks" means non-alcoholic
19  beverages that contain natural or artificial sweeteners. "Soft
20  drinks" does not include beverages that contain milk or milk
21  products, soy, rice or similar milk substitutes, or greater
22  than 50% of vegetable or fruit juice by volume.
23  Until August 1, 2009, and notwithstanding any other
24  provisions of this Act, "food for human consumption that is to
25  be consumed off the premises where it is sold" includes all
26  food sold through a vending machine, except soft drinks and

 

 

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1  food products that are dispensed hot from a vending machine,
2  regardless of the location of the vending machine. Beginning
3  August 1, 2009, and notwithstanding any other provisions of
4  this Act, "food for human consumption that is to be consumed
5  off the premises where it is sold" includes all food sold
6  through a vending machine, except soft drinks, candy, and food
7  products that are dispensed hot from a vending machine,
8  regardless of the location of the vending machine.
9  Notwithstanding any other provisions of this Act,
10  beginning September 1, 2009, "food for human consumption that
11  is to be consumed off the premises where it is sold" does not
12  include candy. For purposes of this Section, "candy" means a
13  preparation of sugar, honey, or other natural or artificial
14  sweeteners in combination with chocolate, fruits, nuts or
15  other ingredients or flavorings in the form of bars, drops, or
16  pieces. "Candy" does not include any preparation that contains
17  flour or requires refrigeration.
18  Notwithstanding any other provisions of this Act,
19  beginning September 1, 2009, "nonprescription medicines and
20  drugs" does not include grooming and hygiene products. For
21  purposes of this Section, "grooming and hygiene products"
22  includes, but is not limited to, soaps and cleaning solutions,
23  shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
24  lotions and screens, unless those products are available by
25  prescription only, regardless of whether the products meet the
26  definition of "over-the-counter-drugs". For the purposes of

 

 

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1  this paragraph, "over-the-counter-drug" means a drug for human
2  use that contains a label that identifies the product as a drug
3  as required by 21 CFR 201.66. The "over-the-counter-drug"
4  label includes:
5  (A) a "Drug Facts" panel; or
6  (B) a statement of the "active ingredient(s)" with a
7  list of those ingredients contained in the compound,
8  substance or preparation.
9  Beginning on January 1, 2014 (the effective date of Public
10  Act 98-122), "prescription and nonprescription medicines and
11  drugs" includes medical cannabis purchased from a registered
12  dispensing organization under the Compassionate Use of Medical
13  Cannabis Program Act.
14  As used in this Section, "adult use cannabis" means
15  cannabis subject to tax under the Cannabis Cultivation
16  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
17  and does not include cannabis subject to tax under the
18  Compassionate Use of Medical Cannabis Program Act.
19  (Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
20  102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
21  Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
22  103-154, eff. 6-30-23.)
23  Section 20. The Retailers' Occupation Tax Act is amended
24  by changing Sections 2-5 and 2-10 as follows:

 

 

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1  (35 ILCS 120/2-5)
2  Sec. 2-5. Exemptions. Gross receipts from proceeds from
3  the sale of the following tangible personal property are
4  exempt from the tax imposed by this Act:
5  (1) Farm chemicals.
6  (2) Farm machinery and equipment, both new and used,
7  including that manufactured on special order, certified by
8  the purchaser to be used primarily for production
9  agriculture or State or federal agricultural programs,
10  including individual replacement parts for the machinery
11  and equipment, including machinery and equipment purchased
12  for lease, and including implements of husbandry defined
13  in Section 1-130 of the Illinois Vehicle Code, farm
14  machinery and agricultural chemical and fertilizer
15  spreaders, and nurse wagons required to be registered
16  under Section 3-809 of the Illinois Vehicle Code, but
17  excluding other motor vehicles required to be registered
18  under the Illinois Vehicle Code. Horticultural polyhouses
19  or hoop houses used for propagating, growing, or
20  overwintering plants shall be considered farm machinery
21  and equipment under this item (2). Agricultural chemical
22  tender tanks and dry boxes shall include units sold
23  separately from a motor vehicle required to be licensed
24  and units sold mounted on a motor vehicle required to be
25  licensed, if the selling price of the tender is separately
26  stated.

 

 

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1  Farm machinery and equipment shall include precision
2  farming equipment that is installed or purchased to be
3  installed on farm machinery and equipment including, but
4  not limited to, tractors, harvesters, sprayers, planters,
5  seeders, or spreaders. Precision farming equipment
6  includes, but is not limited to, soil testing sensors,
7  computers, monitors, software, global positioning and
8  mapping systems, and other such equipment.
9  Farm machinery and equipment also includes computers,
10  sensors, software, and related equipment used primarily in
11  the computer-assisted operation of production agriculture
12  facilities, equipment, and activities such as, but not
13  limited to, the collection, monitoring, and correlation of
14  animal and crop data for the purpose of formulating animal
15  diets and agricultural chemicals.
16  Beginning on January 1, 2024, farm machinery and
17  equipment also includes electrical power generation
18  equipment used primarily for production agriculture.
19  This item (2) is exempt from the provisions of Section
20  2-70.
21  (3) Until July 1, 2003, distillation machinery and
22  equipment, sold as a unit or kit, assembled or installed
23  by the retailer, certified by the user to be used only for
24  the production of ethyl alcohol that will be used for
25  consumption as motor fuel or as a component of motor fuel
26  for the personal use of the user, and not subject to sale

 

 

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1  or resale.
2  (4) Until July 1, 2003 and beginning again September
3  1, 2004 through August 30, 2014, graphic arts machinery
4  and equipment, including repair and replacement parts,
5  both new and used, and including that manufactured on
6  special order or purchased for lease, certified by the
7  purchaser to be used primarily for graphic arts
8  production. Equipment includes chemicals or chemicals
9  acting as catalysts but only if the chemicals or chemicals
10  acting as catalysts effect a direct and immediate change
11  upon a graphic arts product. Beginning on July 1, 2017,
12  graphic arts machinery and equipment is included in the
13  manufacturing and assembling machinery and equipment
14  exemption under paragraph (14).
15  (5) A motor vehicle that is used for automobile
16  renting, as defined in the Automobile Renting Occupation
17  and Use Tax Act. This paragraph is exempt from the
18  provisions of Section 2-70.
19  (6) Personal property sold by a teacher-sponsored
20  student organization affiliated with an elementary or
21  secondary school located in Illinois.
22  (7) Until July 1, 2003, proceeds of that portion of
23  the selling price of a passenger car the sale of which is
24  subject to the Replacement Vehicle Tax.
25  (8) Personal property sold to an Illinois county fair
26  association for use in conducting, operating, or promoting

 

 

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1  the county fair.
2  (9) Personal property sold to a not-for-profit arts or
3  cultural organization that establishes, by proof required
4  by the Department by rule, that it has received an
5  exemption under Section 501(c)(3) of the Internal Revenue
6  Code and that is organized and operated primarily for the
7  presentation or support of arts or cultural programming,
8  activities, or services. These organizations include, but
9  are not limited to, music and dramatic arts organizations
10  such as symphony orchestras and theatrical groups, arts
11  and cultural service organizations, local arts councils,
12  visual arts organizations, and media arts organizations.
13  On and after July 1, 2001 (the effective date of Public Act
14  92-35), however, an entity otherwise eligible for this
15  exemption shall not make tax-free purchases unless it has
16  an active identification number issued by the Department.
17  (10) Personal property sold by a corporation, society,
18  association, foundation, institution, or organization,
19  other than a limited liability company, that is organized
20  and operated as a not-for-profit service enterprise for
21  the benefit of persons 65 years of age or older if the
22  personal property was not purchased by the enterprise for
23  the purpose of resale by the enterprise.
24  (11) Except as otherwise provided in this Section,
25  personal property sold to a governmental body, to a
26  corporation, society, association, foundation, or

 

 

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1  institution organized and operated exclusively for
2  charitable, religious, or educational purposes, or to a
3  not-for-profit corporation, society, association,
4  foundation, institution, or organization that has no
5  compensated officers or employees and that is organized
6  and operated primarily for the recreation of persons 55
7  years of age or older. A limited liability company may
8  qualify for the exemption under this paragraph only if the
9  limited liability company is organized and operated
10  exclusively for educational purposes. On and after July 1,
11  1987, however, no entity otherwise eligible for this
12  exemption shall make tax-free purchases unless it has an
13  active identification number issued by the Department.
14  (12) (Blank).
15  (12-5) On and after July 1, 2003 and through June 30,
16  2004, motor vehicles of the second division with a gross
17  vehicle weight in excess of 8,000 pounds that are subject
18  to the commercial distribution fee imposed under Section
19  3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
20  2004 and through June 30, 2005, the use in this State of
21  motor vehicles of the second division: (i) with a gross
22  vehicle weight rating in excess of 8,000 pounds; (ii) that
23  are subject to the commercial distribution fee imposed
24  under Section 3-815.1 of the Illinois Vehicle Code; and
25  (iii) that are primarily used for commercial purposes.
26  Through June 30, 2005, this exemption applies to repair

 

 

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1  and replacement parts added after the initial purchase of
2  such a motor vehicle if that motor vehicle is used in a
3  manner that would qualify for the rolling stock exemption
4  otherwise provided for in this Act. For purposes of this
5  paragraph, "used for commercial purposes" means the
6  transportation of persons or property in furtherance of
7  any commercial or industrial enterprise whether for-hire
8  or not.
9  (13) Proceeds from sales to owners, lessors, or
10  shippers of tangible personal property that is utilized by
11  interstate carriers for hire for use as rolling stock
12  moving in interstate commerce and equipment operated by a
13  telecommunications provider, licensed as a common carrier
14  by the Federal Communications Commission, which is
15  permanently installed in or affixed to aircraft moving in
16  interstate commerce.
17  (14) Machinery and equipment that will be used by the
18  purchaser, or a lessee of the purchaser, primarily in the
19  process of manufacturing or assembling tangible personal
20  property for wholesale or retail sale or lease, whether
21  the sale or lease is made directly by the manufacturer or
22  by some other person, whether the materials used in the
23  process are owned by the manufacturer or some other
24  person, or whether the sale or lease is made apart from or
25  as an incident to the seller's engaging in the service
26  occupation of producing machines, tools, dies, jigs,

 

 

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1  patterns, gauges, or other similar items of no commercial
2  value on special order for a particular purchaser. The
3  exemption provided by this paragraph (14) does not include
4  machinery and equipment used in (i) the generation of
5  electricity for wholesale or retail sale; (ii) the
6  generation or treatment of natural or artificial gas for
7  wholesale or retail sale that is delivered to customers
8  through pipes, pipelines, or mains; or (iii) the treatment
9  of water for wholesale or retail sale that is delivered to
10  customers through pipes, pipelines, or mains. The
11  provisions of Public Act 98-583 are declaratory of
12  existing law as to the meaning and scope of this
13  exemption. Beginning on July 1, 2017, the exemption
14  provided by this paragraph (14) includes, but is not
15  limited to, graphic arts machinery and equipment, as
16  defined in paragraph (4) of this Section.
17  (15) Proceeds of mandatory service charges separately
18  stated on customers' bills for purchase and consumption of
19  food and beverages, to the extent that the proceeds of the
20  service charge are in fact turned over as tips or as a
21  substitute for tips to the employees who participate
22  directly in preparing, serving, hosting or cleaning up the
23  food or beverage function with respect to which the
24  service charge is imposed.
25  (16) Tangible personal property sold to a purchaser if
26  the purchaser is exempt from use tax by operation of

 

 

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1  federal law. This paragraph is exempt from the provisions
2  of Section 2-70.
3  (17) Tangible personal property sold to a common
4  carrier by rail or motor that receives the physical
5  possession of the property in Illinois and that transports
6  the property, or shares with another common carrier in the
7  transportation of the property, out of Illinois on a
8  standard uniform bill of lading showing the seller of the
9  property as the shipper or consignor of the property to a
10  destination outside Illinois, for use outside Illinois.
11  (18) Legal tender, currency, medallions, or gold or
12  silver coinage issued by the State of Illinois, the
13  government of the United States of America, or the
14  government of any foreign country, and bullion.
15  (19) Until July 1, 2003, oil field exploration,
16  drilling, and production equipment, including (i) rigs and
17  parts of rigs, rotary rigs, cable tool rigs, and workover
18  rigs, (ii) pipe and tubular goods, including casing and
19  drill strings, (iii) pumps and pump-jack units, (iv)
20  storage tanks and flow lines, (v) any individual
21  replacement part for oil field exploration, drilling, and
22  production equipment, and (vi) machinery and equipment
23  purchased for lease; but excluding motor vehicles required
24  to be registered under the Illinois Vehicle Code.
25  (20) Photoprocessing machinery and equipment,
26  including repair and replacement parts, both new and used,

 

 

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1  including that manufactured on special order, certified by
2  the purchaser to be used primarily for photoprocessing,
3  and including photoprocessing machinery and equipment
4  purchased for lease.
5  (21) Until July 1, 2028, coal and aggregate
6  exploration, mining, off-highway hauling, processing,
7  maintenance, and reclamation equipment, including
8  replacement parts and equipment, and including equipment
9  purchased for lease, but excluding motor vehicles required
10  to be registered under the Illinois Vehicle Code. The
11  changes made to this Section by Public Act 97-767 apply on
12  and after July 1, 2003, but no claim for credit or refund
13  is allowed on or after August 16, 2013 (the effective date
14  of Public Act 98-456) for such taxes paid during the
15  period beginning July 1, 2003 and ending on August 16,
16  2013 (the effective date of Public Act 98-456).
17  (22) Until June 30, 2013, fuel and petroleum products
18  sold to or used by an air carrier, certified by the carrier
19  to be used for consumption, shipment, or storage in the
20  conduct of its business as an air common carrier, for a
21  flight destined for or returning from a location or
22  locations outside the United States without regard to
23  previous or subsequent domestic stopovers.
24  Beginning July 1, 2013, fuel and petroleum products
25  sold to or used by an air carrier, certified by the carrier
26  to be used for consumption, shipment, or storage in the

 

 

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1  conduct of its business as an air common carrier, for a
2  flight that (i) is engaged in foreign trade or is engaged
3  in trade between the United States and any of its
4  possessions and (ii) transports at least one individual or
5  package for hire from the city of origination to the city
6  of final destination on the same aircraft, without regard
7  to a change in the flight number of that aircraft.
8  (23) A transaction in which the purchase order is
9  received by a florist who is located outside Illinois, but
10  who has a florist located in Illinois deliver the property
11  to the purchaser or the purchaser's donee in Illinois.
12  (24) Fuel consumed or used in the operation of ships,
13  barges, or vessels that are used primarily in or for the
14  transportation of property or the conveyance of persons
15  for hire on rivers bordering on this State if the fuel is
16  delivered by the seller to the purchaser's barge, ship, or
17  vessel while it is afloat upon that bordering river.
18  (25) Except as provided in item (25-5) of this
19  Section, a motor vehicle sold in this State to a
20  nonresident even though the motor vehicle is delivered to
21  the nonresident in this State, if the motor vehicle is not
22  to be titled in this State, and if a drive-away permit is
23  issued to the motor vehicle as provided in Section 3-603
24  of the Illinois Vehicle Code or if the nonresident
25  purchaser has vehicle registration plates to transfer to
26  the motor vehicle upon returning to his or her home state.

 

 

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1  The issuance of the drive-away permit or having the
2  out-of-state registration plates to be transferred is
3  prima facie evidence that the motor vehicle will not be
4  titled in this State.
5  (25-5) The exemption under item (25) does not apply if
6  the state in which the motor vehicle will be titled does
7  not allow a reciprocal exemption for a motor vehicle sold
8  and delivered in that state to an Illinois resident but
9  titled in Illinois. The tax collected under this Act on
10  the sale of a motor vehicle in this State to a resident of
11  another state that does not allow a reciprocal exemption
12  shall be imposed at a rate equal to the state's rate of tax
13  on taxable property in the state in which the purchaser is
14  a resident, except that the tax shall not exceed the tax
15  that would otherwise be imposed under this Act. At the
16  time of the sale, the purchaser shall execute a statement,
17  signed under penalty of perjury, of his or her intent to
18  title the vehicle in the state in which the purchaser is a
19  resident within 30 days after the sale and of the fact of
20  the payment to the State of Illinois of tax in an amount
21  equivalent to the state's rate of tax on taxable property
22  in his or her state of residence and shall submit the
23  statement to the appropriate tax collection agency in his
24  or her state of residence. In addition, the retailer must
25  retain a signed copy of the statement in his or her
26  records. Nothing in this item shall be construed to

 

 

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1  require the removal of the vehicle from this state
2  following the filing of an intent to title the vehicle in
3  the purchaser's state of residence if the purchaser titles
4  the vehicle in his or her state of residence within 30 days
5  after the date of sale. The tax collected under this Act in
6  accordance with this item (25-5) shall be proportionately
7  distributed as if the tax were collected at the 6.25%
8  general rate imposed under this Act.
9  (25-7) Beginning on July 1, 2007, no tax is imposed
10  under this Act on the sale of an aircraft, as defined in
11  Section 3 of the Illinois Aeronautics Act, if all of the
12  following conditions are met:
13  (1) the aircraft leaves this State within 15 days
14  after the later of either the issuance of the final
15  billing for the sale of the aircraft, or the
16  authorized approval for return to service, completion
17  of the maintenance record entry, and completion of the
18  test flight and ground test for inspection, as
19  required by 14 CFR 91.407;
20  (2) the aircraft is not based or registered in
21  this State after the sale of the aircraft; and
22  (3) the seller retains in his or her books and
23  records and provides to the Department a signed and
24  dated certification from the purchaser, on a form
25  prescribed by the Department, certifying that the
26  requirements of this item (25-7) are met. The

 

 

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1  certificate must also include the name and address of
2  the purchaser, the address of the location where the
3  aircraft is to be titled or registered, the address of
4  the primary physical location of the aircraft, and
5  other information that the Department may reasonably
6  require.
7  For purposes of this item (25-7):
8  "Based in this State" means hangared, stored, or
9  otherwise used, excluding post-sale customizations as
10  defined in this Section, for 10 or more days in each
11  12-month period immediately following the date of the sale
12  of the aircraft.
13  "Registered in this State" means an aircraft
14  registered with the Department of Transportation,
15  Aeronautics Division, or titled or registered with the
16  Federal Aviation Administration to an address located in
17  this State.
18  This paragraph (25-7) is exempt from the provisions of
19  Section 2-70.
20  (26) Semen used for artificial insemination of
21  livestock for direct agricultural production.
22  (27) Horses, or interests in horses, registered with
23  and meeting the requirements of any of the Arabian Horse
24  Club Registry of America, Appaloosa Horse Club, American
25  Quarter Horse Association, United States Trotting
26  Association, or Jockey Club, as appropriate, used for

 

 

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1  purposes of breeding or racing for prizes. This item (27)
2  is exempt from the provisions of Section 2-70, and the
3  exemption provided for under this item (27) applies for
4  all periods beginning May 30, 1995, but no claim for
5  credit or refund is allowed on or after January 1, 2008
6  (the effective date of Public Act 95-88) for such taxes
7  paid during the period beginning May 30, 2000 and ending
8  on January 1, 2008 (the effective date of Public Act
9  95-88).
10  (28) Computers and communications equipment utilized
11  for any hospital purpose and equipment used in the
12  diagnosis, analysis, or treatment of hospital patients
13  sold to a lessor who leases the equipment, under a lease of
14  one year or longer executed or in effect at the time of the
15  purchase, to a hospital that has been issued an active tax
16  exemption identification number by the Department under
17  Section 1g of this Act.
18  (29) Personal property sold to a lessor who leases the
19  property, under a lease of one year or longer executed or
20  in effect at the time of the purchase, to a governmental
21  body that has been issued an active tax exemption
22  identification number by the Department under Section 1g
23  of this Act.
24  (30) Beginning with taxable years ending on or after
25  December 31, 1995 and ending with taxable years ending on
26  or before December 31, 2004, personal property that is

 

 

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1  donated for disaster relief to be used in a State or
2  federally declared disaster area in Illinois or bordering
3  Illinois by a manufacturer or retailer that is registered
4  in this State to a corporation, society, association,
5  foundation, or institution that has been issued a sales
6  tax exemption identification number by the Department that
7  assists victims of the disaster who reside within the
8  declared disaster area.
9  (31) Beginning with taxable years ending on or after
10  December 31, 1995 and ending with taxable years ending on
11  or before December 31, 2004, personal property that is
12  used in the performance of infrastructure repairs in this
13  State, including, but not limited to, municipal roads and
14  streets, access roads, bridges, sidewalks, waste disposal
15  systems, water and sewer line extensions, water
16  distribution and purification facilities, storm water
17  drainage and retention facilities, and sewage treatment
18  facilities, resulting from a State or federally declared
19  disaster in Illinois or bordering Illinois when such
20  repairs are initiated on facilities located in the
21  declared disaster area within 6 months after the disaster.
22  (32) Beginning July 1, 1999, game or game birds sold
23  at a "game breeding and hunting preserve area" as that
24  term is used in the Wildlife Code. This paragraph is
25  exempt from the provisions of Section 2-70.
26  (33) A motor vehicle, as that term is defined in

 

 

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1  Section 1-146 of the Illinois Vehicle Code, that is
2  donated to a corporation, limited liability company,
3  society, association, foundation, or institution that is
4  determined by the Department to be organized and operated
5  exclusively for educational purposes. For purposes of this
6  exemption, "a corporation, limited liability company,
7  society, association, foundation, or institution organized
8  and operated exclusively for educational purposes" means
9  all tax-supported public schools, private schools that
10  offer systematic instruction in useful branches of
11  learning by methods common to public schools and that
12  compare favorably in their scope and intensity with the
13  course of study presented in tax-supported schools, and
14  vocational or technical schools or institutes organized
15  and operated exclusively to provide a course of study of
16  not less than 6 weeks duration and designed to prepare
17  individuals to follow a trade or to pursue a manual,
18  technical, mechanical, industrial, business, or commercial
19  occupation.
20  (34) Beginning January 1, 2000, personal property,
21  including food, purchased through fundraising events for
22  the benefit of a public or private elementary or secondary
23  school, a group of those schools, or one or more school
24  districts if the events are sponsored by an entity
25  recognized by the school district that consists primarily
26  of volunteers and includes parents and teachers of the

 

 

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1  school children. This paragraph does not apply to
2  fundraising events (i) for the benefit of private home
3  instruction or (ii) for which the fundraising entity
4  purchases the personal property sold at the events from
5  another individual or entity that sold the property for
6  the purpose of resale by the fundraising entity and that
7  profits from the sale to the fundraising entity. This
8  paragraph is exempt from the provisions of Section 2-70.
9  (35) Beginning January 1, 2000 and through December
10  31, 2001, new or used automatic vending machines that
11  prepare and serve hot food and beverages, including
12  coffee, soup, and other items, and replacement parts for
13  these machines. Beginning January 1, 2002 and through June
14  30, 2003, machines and parts for machines used in
15  commercial, coin-operated amusement and vending business
16  if a use or occupation tax is paid on the gross receipts
17  derived from the use of the commercial, coin-operated
18  amusement and vending machines. This paragraph is exempt
19  from the provisions of Section 2-70.
20  (35-5) Beginning August 23, 2001 and through June 30,
21  2016, food for human consumption that is to be consumed
22  off the premises where it is sold (other than alcoholic
23  beverages, soft drinks, and food that has been prepared
24  for immediate consumption) and prescription and
25  nonprescription medicines, drugs, medical appliances, and
26  insulin, urine testing materials, syringes, and needles

 

 

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1  used by diabetics, for human use, when purchased for use
2  by a person receiving medical assistance under Article V
3  of the Illinois Public Aid Code who resides in a licensed
4  long-term care facility, as defined in the Nursing Home
5  Care Act, or a licensed facility as defined in the ID/DD
6  Community Care Act, the MC/DD Act, or the Specialized
7  Mental Health Rehabilitation Act of 2013.
8  (36) Beginning August 2, 2001, computers and
9  communications equipment utilized for any hospital purpose
10  and equipment used in the diagnosis, analysis, or
11  treatment of hospital patients sold to a lessor who leases
12  the equipment, under a lease of one year or longer
13  executed or in effect at the time of the purchase, to a
14  hospital that has been issued an active tax exemption
15  identification number by the Department under Section 1g
16  of this Act. This paragraph is exempt from the provisions
17  of Section 2-70.
18  (37) Beginning August 2, 2001, personal property sold
19  to a lessor who leases the property, under a lease of one
20  year or longer executed or in effect at the time of the
21  purchase, to a governmental body that has been issued an
22  active tax exemption identification number by the
23  Department under Section 1g of this Act. This paragraph is
24  exempt from the provisions of Section 2-70.
25  (38) Beginning on January 1, 2002 and through June 30,
26  2016, tangible personal property purchased from an

 

 

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1  Illinois retailer by a taxpayer engaged in centralized
2  purchasing activities in Illinois who will, upon receipt
3  of the property in Illinois, temporarily store the
4  property in Illinois (i) for the purpose of subsequently
5  transporting it outside this State for use or consumption
6  thereafter solely outside this State or (ii) for the
7  purpose of being processed, fabricated, or manufactured
8  into, attached to, or incorporated into other tangible
9  personal property to be transported outside this State and
10  thereafter used or consumed solely outside this State. The
11  Director of Revenue shall, pursuant to rules adopted in
12  accordance with the Illinois Administrative Procedure Act,
13  issue a permit to any taxpayer in good standing with the
14  Department who is eligible for the exemption under this
15  paragraph (38). The permit issued under this paragraph
16  (38) shall authorize the holder, to the extent and in the
17  manner specified in the rules adopted under this Act, to
18  purchase tangible personal property from a retailer exempt
19  from the taxes imposed by this Act. Taxpayers shall
20  maintain all necessary books and records to substantiate
21  the use and consumption of all such tangible personal
22  property outside of the State of Illinois.
23  (39) Beginning January 1, 2008, tangible personal
24  property used in the construction or maintenance of a
25  community water supply, as defined under Section 3.145 of
26  the Environmental Protection Act, that is operated by a

 

 

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1  not-for-profit corporation that holds a valid water supply
2  permit issued under Title IV of the Environmental
3  Protection Act. This paragraph is exempt from the
4  provisions of Section 2-70.
5  (40) Beginning January 1, 2010 and continuing through
6  December 31, 2029, materials, parts, equipment,
7  components, and furnishings incorporated into or upon an
8  aircraft as part of the modification, refurbishment,
9  completion, replacement, repair, or maintenance of the
10  aircraft. This exemption includes consumable supplies used
11  in the modification, refurbishment, completion,
12  replacement, repair, and maintenance of aircraft. However,
13  until January 1, 2024, this exemption excludes any
14  materials, parts, equipment, components, and consumable
15  supplies used in the modification, replacement, repair,
16  and maintenance of aircraft engines or power plants,
17  whether such engines or power plants are installed or
18  uninstalled upon any such aircraft. "Consumable supplies"
19  include, but are not limited to, adhesive, tape,
20  sandpaper, general purpose lubricants, cleaning solution,
21  latex gloves, and protective films.
22  Beginning January 1, 2010 and continuing through
23  December 31, 2023, this exemption applies only to the sale
24  of qualifying tangible personal property to persons who
25  modify, refurbish, complete, replace, or maintain an
26  aircraft and who (i) hold an Air Agency Certificate and

 

 

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1  are empowered to operate an approved repair station by the
2  Federal Aviation Administration, (ii) have a Class IV
3  Rating, and (iii) conduct operations in accordance with
4  Part 145 of the Federal Aviation Regulations. The
5  exemption does not include aircraft operated by a
6  commercial air carrier providing scheduled passenger air
7  service pursuant to authority issued under Part 121 or
8  Part 129 of the Federal Aviation Regulations. From January
9  1, 2024 through December 31, 2029, this exemption applies
10  only to the use of qualifying tangible personal property
11  by: (A) persons who modify, refurbish, complete, repair,
12  replace, or maintain aircraft and who (i) hold an Air
13  Agency Certificate and are empowered to operate an
14  approved repair station by the Federal Aviation
15  Administration, (ii) have a Class IV Rating, and (iii)
16  conduct operations in accordance with Part 145 of the
17  Federal Aviation Regulations; and (B) persons who engage
18  in the modification, replacement, repair, and maintenance
19  of aircraft engines or power plants without regard to
20  whether or not those persons meet the qualifications of
21  item (A).
22  The changes made to this paragraph (40) by Public Act
23  98-534 are declarative of existing law. It is the intent
24  of the General Assembly that the exemption under this
25  paragraph (40) applies continuously from January 1, 2010
26  through December 31, 2024; however, no claim for credit or

 

 

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1  refund is allowed for taxes paid as a result of the
2  disallowance of this exemption on or after January 1, 2015
3  and prior to February 5, 2020 (the effective date of
4  Public Act 101-629).
5  (41) Tangible personal property sold to a
6  public-facilities corporation, as described in Section
7  11-65-10 of the Illinois Municipal Code, for purposes of
8  constructing or furnishing a municipal convention hall,
9  but only if the legal title to the municipal convention
10  hall is transferred to the municipality without any
11  further consideration by or on behalf of the municipality
12  at the time of the completion of the municipal convention
13  hall or upon the retirement or redemption of any bonds or
14  other debt instruments issued by the public-facilities
15  corporation in connection with the development of the
16  municipal convention hall. This exemption includes
17  existing public-facilities corporations as provided in
18  Section 11-65-25 of the Illinois Municipal Code. This
19  paragraph is exempt from the provisions of Section 2-70.
20  (42) Beginning January 1, 2017 and through December
21  31, 2026, menstrual pads, tampons, and menstrual cups.
22  (43) Merchandise that is subject to the Rental
23  Purchase Agreement Occupation and Use Tax. The purchaser
24  must certify that the item is purchased to be rented
25  subject to a rental-purchase rental purchase agreement, as
26  defined in the Rental-Purchase Rental Purchase Agreement

 

 

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1  Act, and provide proof of registration under the Rental
2  Purchase Agreement Occupation and Use Tax Act. This
3  paragraph is exempt from the provisions of Section 2-70.
4  (44) Qualified tangible personal property used in the
5  construction or operation of a data center that has been
6  granted a certificate of exemption by the Department of
7  Commerce and Economic Opportunity, whether that tangible
8  personal property is purchased by the owner, operator, or
9  tenant of the data center or by a contractor or
10  subcontractor of the owner, operator, or tenant. Data
11  centers that would have qualified for a certificate of
12  exemption prior to January 1, 2020 had Public Act 101-31
13  been in effect, may apply for and obtain an exemption for
14  subsequent purchases of computer equipment or enabling
15  software purchased or leased to upgrade, supplement, or
16  replace computer equipment or enabling software purchased
17  or leased in the original investment that would have
18  qualified.
19  The Department of Commerce and Economic Opportunity
20  shall grant a certificate of exemption under this item
21  (44) to qualified data centers as defined by Section
22  605-1025 of the Department of Commerce and Economic
23  Opportunity Law of the Civil Administrative Code of
24  Illinois.
25  For the purposes of this item (44):
26  "Data center" means a building or a series of

 

 

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1  buildings rehabilitated or constructed to house
2  working servers in one physical location or multiple
3  sites within the State of Illinois.
4  "Qualified tangible personal property" means:
5  electrical systems and equipment; climate control and
6  chilling equipment and systems; mechanical systems and
7  equipment; monitoring and secure systems; emergency
8  generators; hardware; computers; servers; data storage
9  devices; network connectivity equipment; racks;
10  cabinets; telecommunications cabling infrastructure;
11  raised floor systems; peripheral components or
12  systems; software; mechanical, electrical, or plumbing
13  systems; battery systems; cooling systems and towers;
14  temperature control systems; other cabling; and other
15  data center infrastructure equipment and systems
16  necessary to operate qualified tangible personal
17  property, including fixtures; and component parts of
18  any of the foregoing, including installation,
19  maintenance, repair, refurbishment, and replacement of
20  qualified tangible personal property to generate,
21  transform, transmit, distribute, or manage electricity
22  necessary to operate qualified tangible personal
23  property; and all other tangible personal property
24  that is essential to the operations of a computer data
25  center. The term "qualified tangible personal
26  property" also includes building materials physically

 

 

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1  incorporated into the qualifying data center. To
2  document the exemption allowed under this Section, the
3  retailer must obtain from the purchaser a copy of the
4  certificate of eligibility issued by the Department of
5  Commerce and Economic Opportunity.
6  This item (44) is exempt from the provisions of
7  Section 2-70.
8  (45) Beginning January 1, 2020 and through December
9  31, 2020, sales of tangible personal property made by a
10  marketplace seller over a marketplace for which tax is due
11  under this Act but for which use tax has been collected and
12  remitted to the Department by a marketplace facilitator
13  under Section 2d of the Use Tax Act are exempt from tax
14  under this Act. A marketplace seller claiming this
15  exemption shall maintain books and records demonstrating
16  that the use tax on such sales has been collected and
17  remitted by a marketplace facilitator. Marketplace sellers
18  that have properly remitted tax under this Act on such
19  sales may file a claim for credit as provided in Section 6
20  of this Act. No claim is allowed, however, for such taxes
21  for which a credit or refund has been issued to the
22  marketplace facilitator under the Use Tax Act, or for
23  which the marketplace facilitator has filed a claim for
24  credit or refund under the Use Tax Act.
25  (46) Beginning July 1, 2022, breast pumps, breast pump
26  collection and storage supplies, and breast pump kits.

 

 

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1  This item (46) is exempt from the provisions of Section
2  2-70. As used in this item (46):
3  "Breast pump" means an electrically controlled or
4  manually controlled pump device designed or marketed to be
5  used to express milk from a human breast during lactation,
6  including the pump device and any battery, AC adapter, or
7  other power supply unit that is used to power the pump
8  device and is packaged and sold with the pump device at the
9  time of sale.
10  "Breast pump collection and storage supplies" means
11  items of tangible personal property designed or marketed
12  to be used in conjunction with a breast pump to collect
13  milk expressed from a human breast and to store collected
14  milk until it is ready for consumption.
15  "Breast pump collection and storage supplies"
16  includes, but is not limited to: breast shields and breast
17  shield connectors; breast pump tubes and tubing adapters;
18  breast pump valves and membranes; backflow protectors and
19  backflow protector adaptors; bottles and bottle caps
20  specific to the operation of the breast pump; and breast
21  milk storage bags.
22  "Breast pump collection and storage supplies" does not
23  include: (1) bottles and bottle caps not specific to the
24  operation of the breast pump; (2) breast pump travel bags
25  and other similar carrying accessories, including ice
26  packs, labels, and other similar products; (3) breast pump

 

 

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1  cleaning supplies; (4) nursing bras, bra pads, breast
2  shells, and other similar products; and (5) creams,
3  ointments, and other similar products that relieve
4  breastfeeding-related symptoms or conditions of the
5  breasts or nipples, unless sold as part of a breast pump
6  kit that is pre-packaged by the breast pump manufacturer
7  or distributor.
8  "Breast pump kit" means a kit that: (1) contains no
9  more than a breast pump, breast pump collection and
10  storage supplies, a rechargeable battery for operating the
11  breast pump, a breastmilk cooler, bottle stands, ice
12  packs, and a breast pump carrying case; and (2) is
13  pre-packaged as a breast pump kit by the breast pump
14  manufacturer or distributor.
15  (47) Tangible personal property sold by or on behalf
16  of the State Treasurer pursuant to the Revised Uniform
17  Unclaimed Property Act. This item (47) is exempt from the
18  provisions of Section 2-70.
19  (48) Beginning on January 1, 2024, tangible personal
20  property purchased by an active duty member of the armed
21  forces of the United States who presents valid military
22  identification and purchases the property using a form of
23  payment where the federal government is the payor. The
24  member of the armed forces must complete, at the point of
25  sale, a form prescribed by the Department of Revenue
26  documenting that the transaction is eligible for the

 

 

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1  exemption under this paragraph. Retailers must keep the
2  form as documentation of the exemption in their records
3  for a period of not less than 6 years. "Armed forces of the
4  United States" means the United States Army, Navy, Air
5  Force, Marine Corps, or Coast Guard. This paragraph is
6  exempt from the provisions of Section 2-70.
7  (49) Beginning on January 1, 2025, medical appliances
8  and products that are classified as Class III medical
9  devices by the United States Food and Drug Administration
10  and that are used for cancer treatment pursuant to a
11  prescription, as well as any accessories and components
12  related to those appliances and devices. As used in this
13  paragraph, "medical appliance" means a product that was
14  classified as a medical appliance and was subject to a 1%
15  rate of tax immediately prior to the effective date of
16  this amendatory Act of the 103rd General Assembly,
17  including, but not limited to, devices used to treat
18  amyotrophic lateral sclerosis, as well as other items as
19  determined by the Department by rule. This paragraph is
20  exempt from the provisions of Section 2-70.
21  (Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
22  102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
23  Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
24  5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
25  5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
26  6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised

 

 

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1  12-12-23.)
2  (35 ILCS 120/2-10)
3  Sec. 2-10. Rate of tax. Unless otherwise provided in this
4  Section, the tax imposed by this Act is at the rate of 6.25% of
5  gross receipts from sales of tangible personal property made
6  in the course of business.
7  Beginning on July 1, 2000 and through December 31, 2000,
8  with respect to motor fuel, as defined in Section 1.1 of the
9  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
10  the Use Tax Act, the tax is imposed at the rate of 1.25%.
11  Beginning on August 6, 2010 through August 15, 2010, and
12  beginning again on August 5, 2022 through August 14, 2022,
13  with respect to sales tax holiday items as defined in Section
14  2-8 of this Act, the tax is imposed at the rate of 1.25%.
15  Within 14 days after July 1, 2000 (the effective date of
16  Public Act 91-872), each retailer of motor fuel and gasohol
17  shall cause the following notice to be posted in a prominently
18  visible place on each retail dispensing device that is used to
19  dispense motor fuel or gasohol in the State of Illinois: "As of
20  July 1, 2000, the State of Illinois has eliminated the State's
21  share of sales tax on motor fuel and gasohol through December
22  31, 2000. The price on this pump should reflect the
23  elimination of the tax." The notice shall be printed in bold
24  print on a sign that is no smaller than 4 inches by 8 inches.
25  The sign shall be clearly visible to customers. Any retailer

 

 

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1  who fails to post or maintain a required sign through December
2  31, 2000 is guilty of a petty offense for which the fine shall
3  be $500 per day per each retail premises where a violation
4  occurs.
5  With respect to gasohol, as defined in the Use Tax Act, the
6  tax imposed by this Act applies to (i) 70% of the proceeds of
7  sales made on or after January 1, 1990, and before July 1,
8  2003, (ii) 80% of the proceeds of sales made on or after July
9  1, 2003 and on or before July 1, 2017, (iii) 100% of the
10  proceeds of sales made after July 1, 2017 and prior to January
11  1, 2024, (iv) 90% of the proceeds of sales made on or after
12  January 1, 2024 and on or before December 31, 2028, and (v)
13  100% of the proceeds of sales made after December 31, 2028. If,
14  at any time, however, the tax under this Act on sales of
15  gasohol, as defined in the Use Tax Act, is imposed at the rate
16  of 1.25%, then the tax imposed by this Act applies to 100% of
17  the proceeds of sales of gasohol made during that time.
18  With respect to mid-range ethanol blends, as defined in
19  Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
20  applies to (i) 80% of the proceeds of sales made on or after
21  January 1, 2024 and on or before December 31, 2028 and (ii)
22  100% of the proceeds of sales made after December 31, 2028. If,
23  at any time, however, the tax under this Act on sales of
24  mid-range ethanol blends is imposed at the rate of 1.25%, then
25  the tax imposed by this Act applies to 100% of the proceeds of
26  sales of mid-range ethanol blends made during that time.

 

 

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1  With respect to majority blended ethanol fuel, as defined
2  in the Use Tax Act, the tax imposed by this Act does not apply
3  to the proceeds of sales made on or after July 1, 2003 and on
4  or before December 31, 2028 but applies to 100% of the proceeds
5  of sales made thereafter.
6  With respect to biodiesel blends, as defined in the Use
7  Tax Act, with no less than 1% and no more than 10% biodiesel,
8  the tax imposed by this Act applies to (i) 80% of the proceeds
9  of sales made on or after July 1, 2003 and on or before
10  December 31, 2018 and (ii) 100% of the proceeds of sales made
11  after December 31, 2018 and before January 1, 2024. On and
12  after January 1, 2024 and on or before December 31, 2030, the
13  taxation of biodiesel, renewable diesel, and biodiesel blends
14  shall be as provided in Section 3-5.1 of the Use Tax Act. If,
15  at any time, however, the tax under this Act on sales of
16  biodiesel blends, as defined in the Use Tax Act, with no less
17  than 1% and no more than 10% biodiesel is imposed at the rate
18  of 1.25%, then the tax imposed by this Act applies to 100% of
19  the proceeds of sales of biodiesel blends with no less than 1%
20  and no more than 10% biodiesel made during that time.
21  With respect to biodiesel, as defined in the Use Tax Act,
22  and biodiesel blends, as defined in the Use Tax Act, with more
23  than 10% but no more than 99% biodiesel, the tax imposed by
24  this Act does not apply to the proceeds of sales made on or
25  after July 1, 2003 and on or before December 31, 2023. On and
26  after January 1, 2024 and on or before December 31, 2030, the

 

 

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1  taxation of biodiesel, renewable diesel, and biodiesel blends
2  shall be as provided in Section 3-5.1 of the Use Tax Act.
3  Until July 1, 2022 and beginning again on July 1, 2023,
4  with respect to food for human consumption that is to be
5  consumed off the premises where it is sold (other than
6  alcoholic beverages, food consisting of or infused with adult
7  use cannabis, soft drinks, and food that has been prepared for
8  immediate consumption), the tax is imposed at the rate of 1%.
9  Beginning July 1, 2022 and until July 1, 2023, with respect to
10  food for human consumption that is to be consumed off the
11  premises where it is sold (other than alcoholic beverages,
12  food consisting of or infused with adult use cannabis, soft
13  drinks, and food that has been prepared for immediate
14  consumption), the tax is imposed at the rate of 0%.
15  With respect to prescription and nonprescription
16  medicines, drugs, medical appliances, products classified as
17  Class III medical devices by the United States Food and Drug
18  Administration that are used for cancer treatment pursuant to
19  a prescription, as well as any accessories and components
20  related to those devices, modifications to a motor vehicle for
21  the purpose of rendering it usable by a person with a
22  disability, and insulin, blood sugar testing materials,
23  syringes, and needles used by human diabetics (except to the
24  extent that those items are exempt by the Department under
25  paragraph (49) of Section 2-5), the tax is imposed at the rate
26  of 1%. For the purposes of this Section, until September 1,

 

 

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1  2009: the term "soft drinks" means any complete, finished,
2  ready-to-use, non-alcoholic drink, whether carbonated or not,
3  including, but not limited to, soda water, cola, fruit juice,
4  vegetable juice, carbonated water, and all other preparations
5  commonly known as soft drinks of whatever kind or description
6  that are contained in any closed or sealed bottle, can,
7  carton, or container, regardless of size; but "soft drinks"
8  does not include coffee, tea, non-carbonated water, infant
9  formula, milk or milk products as defined in the Grade A
10  Pasteurized Milk and Milk Products Act, or drinks containing
11  50% or more natural fruit or vegetable juice.
12  Notwithstanding any other provisions of this Act,
13  beginning September 1, 2009, "soft drinks" means non-alcoholic
14  beverages that contain natural or artificial sweeteners. "Soft
15  drinks" does not include beverages that contain milk or milk
16  products, soy, rice or similar milk substitutes, or greater
17  than 50% of vegetable or fruit juice by volume.
18  Until August 1, 2009, and notwithstanding any other
19  provisions of this Act, "food for human consumption that is to
20  be consumed off the premises where it is sold" includes all
21  food sold through a vending machine, except soft drinks and
22  food products that are dispensed hot from a vending machine,
23  regardless of the location of the vending machine. Beginning
24  August 1, 2009, and notwithstanding any other provisions of
25  this Act, "food for human consumption that is to be consumed
26  off the premises where it is sold" includes all food sold

 

 

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1  through a vending machine, except soft drinks, candy, and food
2  products that are dispensed hot from a vending machine,
3  regardless of the location of the vending machine.
4  Notwithstanding any other provisions of this Act,
5  beginning September 1, 2009, "food for human consumption that
6  is to be consumed off the premises where it is sold" does not
7  include candy. For purposes of this Section, "candy" means a
8  preparation of sugar, honey, or other natural or artificial
9  sweeteners in combination with chocolate, fruits, nuts or
10  other ingredients or flavorings in the form of bars, drops, or
11  pieces. "Candy" does not include any preparation that contains
12  flour or requires refrigeration.
13  Notwithstanding any other provisions of this Act,
14  beginning September 1, 2009, "nonprescription medicines and
15  drugs" does not include grooming and hygiene products. For
16  purposes of this Section, "grooming and hygiene products"
17  includes, but is not limited to, soaps and cleaning solutions,
18  shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
19  lotions and screens, unless those products are available by
20  prescription only, regardless of whether the products meet the
21  definition of "over-the-counter-drugs". For the purposes of
22  this paragraph, "over-the-counter-drug" means a drug for human
23  use that contains a label that identifies the product as a drug
24  as required by 21 CFR 201.66. The "over-the-counter-drug"
25  label includes:
26  (A) a "Drug Facts" panel; or

 

 

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1  (B) a statement of the "active ingredient(s)" with a
2  list of those ingredients contained in the compound,
3  substance or preparation.
4  Beginning on January 1, 2014 (the effective date of Public
5  Act 98-122), "prescription and nonprescription medicines and
6  drugs" includes medical cannabis purchased from a registered
7  dispensing organization under the Compassionate Use of Medical
8  Cannabis Program Act.
9  As used in this Section, "adult use cannabis" means
10  cannabis subject to tax under the Cannabis Cultivation
11  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
12  and does not include cannabis subject to tax under the
13  Compassionate Use of Medical Cannabis Program Act.
14  (Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
15  Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
16  60-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
17  4-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)

 

 

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