Illinois House Bill HB5578 Introduced / Bill

                    103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5578 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. Provides that medical appliances, including, but not limited to, devices used to provide advanced life support services, and Class III medical devices that are used for cancer treatment pursuant to a prescription are exempt from the taxes imposed by those Acts. Effective January 1, 2025. LRB103 38815 HLH 68952 b   A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5578 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. Provides that medical appliances, including, but not limited to, devices used to provide advanced life support services, and Class III medical devices that are used for cancer treatment pursuant to a prescription are exempt from the taxes imposed by those Acts. Effective January 1, 2025.  LRB103 38815 HLH 68952 b     LRB103 38815 HLH 68952 b   A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5578 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. Provides that medical appliances, including, but not limited to, devices used to provide advanced life support services, and Class III medical devices that are used for cancer treatment pursuant to a prescription are exempt from the taxes imposed by those Acts. Effective January 1, 2025.
LRB103 38815 HLH 68952 b     LRB103 38815 HLH 68952 b
    LRB103 38815 HLH 68952 b
A BILL FOR
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  HB5578  LRB103 38815 HLH 68952 b
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 HB5578 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. Provides that medical appliances, including, but not limited to, devices used to provide advanced life support services, and Class III medical devices that are used for cancer treatment pursuant to a prescription are exempt from the taxes imposed by those Acts. Effective January 1, 2025.
LRB103 38815 HLH 68952 b     LRB103 38815 HLH 68952 b
    LRB103 38815 HLH 68952 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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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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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
21  provide advanced life support services, as defined by Section
22  3.10 of the Emergency Medical Services (EMS) Systems Act, and
23  any other items designated as medical appliances by the
24  Department by rule. This paragraph is exempt from the
25  provisions of Section 3-90.
26  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,

 

 

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1  Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
2  eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
3  Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
4  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
5  revised 12-12-23.)
6  (35 ILCS 105/3-10)
7  Sec. 3-10. Rate of tax. Unless otherwise provided in this
8  Section, the tax imposed by this Act is at the rate of 6.25% of
9  either the selling price or the fair market value, if any, of
10  the tangible personal property. In all cases where property
11  functionally used or consumed is the same as the property that
12  was purchased at retail, then the tax is imposed on the selling
13  price of the property. In all cases where property
14  functionally used or consumed is a by-product or waste product
15  that has been refined, manufactured, or produced from property
16  purchased at retail, then the tax is imposed on the lower of
17  the fair market value, if any, of the specific property so used
18  in this State or on the selling price of the property purchased
19  at retail. For purposes of this Section "fair market value"
20  means the price at which property would change hands between a
21  willing buyer and a willing seller, neither being under any
22  compulsion to buy or sell and both having reasonable knowledge
23  of the relevant facts. The fair market value shall be
24  established by Illinois sales by the taxpayer of the same
25  property as that functionally used or consumed, or if there

 

 

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1  are no such sales by the taxpayer, then comparable sales or
2  purchases of property of like kind and character in Illinois.
3  Beginning on July 1, 2000 and through December 31, 2000,
4  with respect to motor fuel, as defined in Section 1.1 of the
5  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
6  the Use Tax Act, the tax is imposed at the rate of 1.25%.
7  Beginning on August 6, 2010 through August 15, 2010, and
8  beginning again on August 5, 2022 through August 14, 2022,
9  with respect to sales tax holiday items as defined in Section
10  3-6 of this Act, the tax is imposed at the rate of 1.25%.
11  With respect to gasohol, the tax imposed by this Act
12  applies to (i) 70% of the proceeds of sales made on or after
13  January 1, 1990, and before July 1, 2003, (ii) 80% of the
14  proceeds of sales made on or after July 1, 2003 and on or
15  before July 1, 2017, (iii) 100% of the proceeds of sales made
16  after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
17  the proceeds of sales made on or after January 1, 2024 and on
18  or before December 31, 2028, and (v) 100% of the proceeds of
19  sales made after December 31, 2028. If, at any time, however,
20  the tax under this Act on sales of gasohol is imposed at the
21  rate of 1.25%, then the tax imposed by this Act applies to 100%
22  of the proceeds of sales of gasohol made during that time.
23  With respect to mid-range ethanol blends, the tax imposed
24  by this Act applies to (i) 80% of the proceeds of sales made on
25  or after January 1, 2024 and on or before December 31, 2028 and
26  (ii) 100% of the proceeds of sales made thereafter. If, at any

 

 

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

 

 

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1  after July 1, 2003 and on or before December 31, 2023. On and
2  after January 1, 2024 and on or before December 31, 2030, the
3  taxation of biodiesel, renewable diesel, and biodiesel blends
4  shall be as provided in Section 3-5.1.
5  Until July 1, 2022 and beginning again on July 1, 2023,
6  with respect to food for human consumption that is to be
7  consumed off the premises where it is sold (other than
8  alcoholic beverages, food consisting of or infused with adult
9  use cannabis, soft drinks, and food that has been prepared for
10  immediate consumption), the tax is imposed at the rate of 1%.
11  Beginning on July 1, 2022 and until July 1, 2023, with respect
12  to food for human consumption that is to be consumed off the
13  premises where it is sold (other than alcoholic beverages,
14  food consisting of or infused with adult use cannabis, soft
15  drinks, and food that has been prepared for immediate
16  consumption), the tax is imposed at the rate of 0%.
17  With respect to prescription and nonprescription
18  medicines, drugs, medical appliances, products classified as
19  Class III medical devices by the United States Food and Drug
20  Administration that are used for cancer treatment pursuant to
21  a prescription, as well as any accessories and components
22  related to those devices, modifications to a motor vehicle for
23  the purpose of rendering it usable by a person with a
24  disability, and insulin, blood sugar testing materials,
25  syringes, and needles used by human diabetics (except to the
26  extent that those items are exempt by the Department under

 

 

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1  paragraph (44) of Section 3-5), the tax is imposed at the rate
2  of 1%. For the purposes of this Section, until September 1,
3  2009: the term "soft drinks" means any complete, finished,
4  ready-to-use, non-alcoholic drink, whether carbonated or not,
5  including, but not limited to, soda water, cola, fruit juice,
6  vegetable juice, carbonated water, and all other preparations
7  commonly known as soft drinks of whatever kind or description
8  that are contained in any closed or sealed bottle, can,
9  carton, or container, regardless of size; but "soft drinks"
10  does not include coffee, tea, non-carbonated water, infant
11  formula, milk or milk products as defined in the Grade A
12  Pasteurized Milk and Milk Products Act, or drinks containing
13  50% or more natural fruit or vegetable juice.
14  Notwithstanding any other provisions of this Act,
15  beginning September 1, 2009, "soft drinks" means non-alcoholic
16  beverages that contain natural or artificial sweeteners. "Soft
17  drinks" does not include beverages that contain milk or milk
18  products, soy, rice or similar milk substitutes, or greater
19  than 50% of vegetable or fruit juice by volume.
20  Until August 1, 2009, and notwithstanding any other
21  provisions of this Act, "food for human consumption that is to
22  be consumed off the premises where it is sold" includes all
23  food sold through a vending machine, except soft drinks and
24  food products that are dispensed hot from a vending machine,
25  regardless of the location of the vending machine. Beginning
26  August 1, 2009, and notwithstanding any other provisions of

 

 

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

 

 

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1  label includes:
2  (A) a "Drug Facts" panel; or
3  (B) a statement of the "active ingredient(s)" with a
4  list of those ingredients contained in the compound,
5  substance or preparation.
6  Beginning on January 1, 2014 (the effective date of Public
7  Act 98-122), "prescription and nonprescription medicines and
8  drugs" includes medical cannabis purchased from a registered
9  dispensing organization under the Compassionate Use of Medical
10  Cannabis Program Act.
11  As used in this Section, "adult use cannabis" means
12  cannabis subject to tax under the Cannabis Cultivation
13  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
14  and does not include cannabis subject to tax under the
15  Compassionate Use of Medical Cannabis Program Act.
16  If the property that is purchased at retail from a
17  retailer is acquired outside Illinois and used outside
18  Illinois before being brought to Illinois for use here and is
19  taxable under this Act, the "selling price" on which the tax is
20  computed shall be reduced by an amount that represents a
21  reasonable allowance for depreciation for the period of prior
22  out-of-state use.
23  (Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
24  Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
25  60-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
26  4-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)

 

 

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

 

 

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1  organizations, local arts councils, visual arts organizations,
2  and media arts organizations. On and after July 1, 2001 (the
3  effective date of Public Act 92-35), however, an entity
4  otherwise eligible for this exemption shall not make tax-free
5  purchases unless it has an active identification number issued
6  by the Department.
7  (4) Legal tender, currency, medallions, or gold or silver
8  coinage issued by the State of Illinois, the government of the
9  United States of America, or the government of any foreign
10  country, and bullion.
11  (5) Until July 1, 2003 and beginning again on September 1,
12  2004 through August 30, 2014, graphic arts machinery and
13  equipment, including repair and replacement parts, both new
14  and used, and including that manufactured on special order or
15  purchased for lease, certified by the purchaser to be used
16  primarily for graphic arts production. Equipment includes
17  chemicals or chemicals acting as catalysts but only if the
18  chemicals or chemicals acting as catalysts effect a direct and
19  immediate change upon a graphic arts product. Beginning on
20  July 1, 2017, graphic arts machinery and equipment is included
21  in the manufacturing and assembling machinery and equipment
22  exemption under Section 2 of this Act.
23  (6) Personal property purchased from a teacher-sponsored
24  student organization affiliated with an elementary or
25  secondary school located in Illinois.
26  (7) Farm machinery and equipment, both new and used,

 

 

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

 

 

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

 

 

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1  origination to the city of final destination on the same
2  aircraft, without regard to a change in the flight number of
3  that aircraft.
4  (9) Proceeds of mandatory service charges separately
5  stated on customers' bills for the purchase and consumption of
6  food and beverages acquired as an incident to the purchase of a
7  service from a serviceman, to the extent that the proceeds of
8  the service charge are in fact turned over as tips or as a
9  substitute for tips to the employees who participate directly
10  in preparing, serving, hosting or cleaning up the food or
11  beverage function with respect to which the service charge is
12  imposed.
13  (10) 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  (11) Proceeds from the sale of photoprocessing machinery
24  and equipment, including repair and replacement parts, both
25  new and used, including that manufactured on special order,
26  certified by the purchaser to be used primarily for

 

 

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

 

 

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1  ending on January 1, 2008 (the effective date of Public Act
2  95-88).
3  (15) Computers and communications equipment utilized for
4  any hospital purpose and equipment used in the diagnosis,
5  analysis, or treatment of hospital patients purchased by a
6  lessor who leases the equipment, under a lease of one year or
7  longer executed or in effect at the time the lessor would
8  otherwise be subject to the tax imposed by this Act, to a
9  hospital that has been issued an active tax exemption
10  identification number by the Department under Section 1g of
11  the Retailers' Occupation Tax Act. If the equipment is leased
12  in a manner that does not qualify for this exemption or is used
13  in any other non-exempt manner, the lessor shall be liable for
14  the tax imposed under this Act or the Use Tax Act, as the case
15  may be, based on the fair market value of the property at the
16  time the non-qualifying use occurs. No lessor shall collect or
17  attempt to collect an amount (however designated) that
18  purports to reimburse that lessor for the tax imposed by this
19  Act or the Use Tax Act, as the case may be, if the tax has not
20  been paid by the lessor. If a lessor improperly collects any
21  such amount from the lessee, the lessee shall have a legal
22  right to claim a refund of that amount from the lessor. If,
23  however, that amount is not refunded to the lessee for any
24  reason, the lessor is liable to pay that amount to the
25  Department.
26  (16) Personal property purchased by a lessor who leases

 

 

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

 

 

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

 

 

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

 

 

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1  exempt from the provisions of Section 3-75.
2  (22) Beginning January 1, 2000 and through December 31,
3  2001, new or used automatic vending machines that prepare and
4  serve hot food and beverages, including coffee, soup, and
5  other items, and replacement parts for these machines.
6  Beginning January 1, 2002 and through June 30, 2003, machines
7  and parts for machines used in commercial, coin-operated
8  amusement and vending business if a use or occupation tax is
9  paid on the gross receipts derived from the use of the
10  commercial, coin-operated amusement and vending machines. This
11  paragraph is exempt from the provisions of Section 3-75.
12  (23) Beginning August 23, 2001 and through June 30, 2016,
13  food for human consumption that is to be consumed off the
14  premises where it is sold (other than alcoholic beverages,
15  soft drinks, and food that has been prepared for immediate
16  consumption) and prescription and nonprescription medicines,
17  drugs, medical appliances, and insulin, urine testing
18  materials, syringes, and needles used by diabetics, for human
19  use, when purchased for use by a person receiving medical
20  assistance under Article V of the Illinois Public Aid Code who
21  resides in a licensed long-term care facility, as defined in
22  the Nursing Home Care Act, or in a licensed facility as defined
23  in the ID/DD Community Care Act, the MC/DD Act, or the
24  Specialized Mental Health Rehabilitation Act of 2013.
25  (24) Beginning on August 2, 2001 (the effective date of
26  Public Act 92-227), computers and communications equipment

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1  (35) Beginning on January 1, 2025, medical appliances and
2  products that are classified as Class III medical devices by
3  the United States Food and Drug Administration and that are
4  used for cancer treatment pursuant to a prescription, as well
5  as any accessories and components related to those appliances
6  and devices. As used in this paragraph, "medical appliance"
7  means a product that was classified as a medical appliance and
8  was subject to a 1% rate of tax immediately prior to the
9  effective date of this amendatory Act of the 103rd General
10  Assembly, including, but not limited to, devices used to
11  provide advanced life support services, as defined by Section
12  3.10 of the Emergency Medical Services (EMS) Systems Act, and
13  any other items designated as medical appliances by the
14  Department by rule. This paragraph is exempt from the
15  provisions of Section 3-75.
16  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
17  Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
18  75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
19  Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
20  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
21  revised 12-12-23.)
22  (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
23  Sec. 3-10. Rate of tax. Unless otherwise provided in this
24  Section, the tax imposed by this Act is at the rate of 6.25% of
25  the selling price of tangible personal property transferred as

 

 

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1  an incident to the sale of service, but, for the purpose of
2  computing this tax, in no event shall the selling price be less
3  than the cost price of the property to the serviceman.
4  Beginning on July 1, 2000 and through December 31, 2000,
5  with respect to motor fuel, as defined in Section 1.1 of the
6  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
7  the Use Tax Act, the tax is imposed at the rate of 1.25%.
8  With respect to gasohol, as defined in the Use Tax Act, the
9  tax imposed by this Act applies to (i) 70% of the selling price
10  of property transferred as an incident to the sale of service
11  on or after January 1, 1990, and before July 1, 2003, (ii) 80%
12  of the selling price of property transferred as an incident to
13  the sale of service on or after July 1, 2003 and on or before
14  July 1, 2017, (iii) 100% of the selling price of property
15  transferred as an incident to the sale of service after July 1,
16  2017 and before January 1, 2024, (iv) 90% of the selling price
17  of property transferred as an incident to the sale of service
18  on or after January 1, 2024 and on or before December 31, 2028,
19  and (v) 100% of the selling price of property transferred as an
20  incident to the sale of service after December 31, 2028. If, at
21  any time, however, the tax under this Act on sales of gasohol,
22  as defined in the Use Tax Act, is imposed at the rate of 1.25%,
23  then the tax imposed by this Act applies to 100% of the
24  proceeds of sales of gasohol made during that time.
25  With respect to mid-range ethanol blends, as defined in
26  Section 3-44.3 of the Use Tax Act, the tax imposed by this Act

 

 

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

 

 

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1  at any time, however, the tax under this Act on sales of
2  biodiesel blends, as defined in the Use Tax Act, with no less
3  than 1% and no more than 10% biodiesel is imposed at the rate
4  of 1.25%, then the tax imposed by this Act applies to 100% of
5  the proceeds of sales of biodiesel blends with no less than 1%
6  and no more than 10% biodiesel made during that time.
7  With respect to biodiesel, as defined in the Use Tax Act,
8  and biodiesel blends, as defined in the Use Tax Act, with more
9  than 10% but no more than 99% biodiesel, the tax imposed by
10  this Act does not apply to the proceeds of the selling price of
11  property transferred as an incident to the sale of service on
12  or after July 1, 2003 and on or before December 31, 2023. On
13  and after January 1, 2024 and on or before December 31, 2030,
14  the taxation of biodiesel, renewable diesel, and biodiesel
15  blends shall be as provided in Section 3-5.1 of the Use Tax
16  Act.
17  At the election of any registered serviceman made for each
18  fiscal year, sales of service in which the aggregate annual
19  cost price of tangible personal property transferred as an
20  incident to the sales of service is less than 35%, or 75% in
21  the case of servicemen transferring prescription drugs or
22  servicemen engaged in graphic arts production, of the
23  aggregate annual total gross receipts from all sales of
24  service, the tax imposed by this Act shall be based on the
25  serviceman's cost price of the tangible personal property
26  transferred as an incident to the sale of those services.

 

 

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

 

 

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1  pursuant to the Life Care Facilities Act. Beginning on July 1,
2  2022 and until July 1, 2023, the tax shall also be imposed at
3  the rate of 0% on food for human consumption that is to be
4  consumed off the premises where it is sold (other than
5  alcoholic beverages, food consisting of or infused with adult
6  use cannabis, soft drinks, and food that has been prepared for
7  immediate consumption and is not otherwise included in this
8  paragraph).
9  The tax shall also be imposed at the rate of 1% on
10  prescription and nonprescription medicines, drugs, medical
11  appliances, products classified as Class III medical devices
12  by the United States Food and Drug Administration that are
13  used for cancer treatment pursuant to a prescription, as well
14  as any accessories and components related to those devices,
15  modifications to a motor vehicle for the purpose of rendering
16  it usable by a person with a disability, and insulin, blood
17  sugar testing materials, syringes, and needles used by human
18  diabetics (except to the extent that those items are exempt by
19  the Department under paragraph (35) of Section 3-5). For the
20  purposes of this Section, until September 1, 2009: the term
21  "soft drinks" means any complete, finished, ready-to-use,
22  non-alcoholic drink, whether carbonated or not, including, but
23  not limited to, soda water, cola, fruit juice, vegetable
24  juice, carbonated water, and all other preparations commonly
25  known as soft drinks of whatever kind or description that are
26  contained in any closed or sealed bottle, can, carton, or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1  to be registered under Section 3-809 of the Illinois Vehicle
2  Code, but excluding other motor vehicles required to be
3  registered under the Illinois Vehicle Code. Horticultural
4  polyhouses or hoop houses used for propagating, growing, or
5  overwintering plants shall be considered farm machinery and
6  equipment under this item (7). Agricultural chemical tender
7  tanks and dry boxes shall include units sold separately from a
8  motor vehicle required to be licensed and units sold mounted
9  on a motor vehicle required to be licensed if the selling price
10  of the tender is separately stated.
11  Farm machinery and equipment shall include precision
12  farming equipment that is installed or purchased to be
13  installed on farm machinery and equipment, including, but not
14  limited to, tractors, harvesters, sprayers, planters, seeders,
15  or spreaders. Precision farming equipment includes, but is not
16  limited to, soil testing sensors, computers, monitors,
17  software, global positioning and mapping systems, and other
18  such equipment.
19  Farm machinery and equipment also includes computers,
20  sensors, software, and related equipment used primarily in the
21  computer-assisted operation of production agriculture
22  facilities, equipment, and activities such as, but not limited
23  to, the collection, monitoring, and correlation of animal and
24  crop data for the purpose of formulating animal diets and
25  agricultural chemicals.
26  Beginning on January 1, 2024, farm machinery and equipment

 

 

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1  also includes electrical power generation equipment used
2  primarily for production agriculture.
3  This item (7) is exempt from the provisions of Section
4  3-55.
5  (8) Until June 30, 2013, fuel and petroleum products sold
6  to or used by an air common carrier, certified by the carrier
7  to be used for consumption, shipment, or storage in the
8  conduct of its business as an air common carrier, for a flight
9  destined for or returning from a location or locations outside
10  the United States without regard to previous or subsequent
11  domestic stopovers.
12  Beginning July 1, 2013, fuel and petroleum products sold
13  to or used by an air carrier, certified by the carrier to be
14  used for consumption, shipment, or storage in the conduct of
15  its business as an air common carrier, for a flight that (i) is
16  engaged in foreign trade or is engaged in trade between the
17  United States and any of its possessions and (ii) transports
18  at least one individual or package for hire from the city of
19  origination to the city of final destination on the same
20  aircraft, without regard to a change in the flight number of
21  that aircraft.
22  (9) Proceeds of mandatory service charges separately
23  stated on customers' bills for the purchase and consumption of
24  food and beverages, to the extent that the proceeds of the
25  service charge are in fact turned over as tips or as a
26  substitute for tips to the employees who participate directly

 

 

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

 

 

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1  (the effective date of Public Act 98-456) for such taxes paid
2  during the period beginning July 1, 2003 and ending on August
3  16, 2013 (the effective date of Public Act 98-456).
4  (13) Beginning January 1, 1992 and through June 30, 2016,
5  food for human consumption that is to be consumed off the
6  premises where it is sold (other than alcoholic beverages,
7  soft drinks and food that has been prepared for immediate
8  consumption) and prescription and non-prescription medicines,
9  drugs, medical appliances, and insulin, urine testing
10  materials, syringes, and needles used by diabetics, for human
11  use, when purchased for use by a person receiving medical
12  assistance under Article V of the Illinois Public Aid Code who
13  resides in a licensed long-term care facility, as defined in
14  the Nursing Home Care Act, or in a licensed facility as defined
15  in the ID/DD Community Care Act, the MC/DD Act, or the
16  Specialized Mental Health Rehabilitation Act of 2013.
17  (14) Semen used for artificial insemination of livestock
18  for direct agricultural production.
19  (15) Horses, or interests in horses, registered with and
20  meeting the requirements of any of the Arabian Horse Club
21  Registry of America, Appaloosa Horse Club, American Quarter
22  Horse Association, United States Trotting Association, or
23  Jockey Club, as appropriate, used for purposes of breeding or
24  racing for prizes. This item (15) is exempt from the
25  provisions of Section 3-55, and the exemption provided for
26  under this item (15) applies for all periods beginning May 30,

 

 

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1  1995, but no claim for credit or refund is allowed on or after
2  January 1, 2008 (the effective date of Public Act 95-88) for
3  such taxes paid during the period beginning May 30, 2000 and
4  ending on January 1, 2008 (the effective date of Public Act
5  95-88).
6  (16) Computers and communications equipment utilized for
7  any hospital purpose and equipment used in the diagnosis,
8  analysis, or treatment of hospital patients sold to a lessor
9  who leases the equipment, under a lease of one year or longer
10  executed or in effect at the time of the purchase, to a
11  hospital that has been issued an active tax exemption
12  identification number by the Department under Section 1g of
13  the Retailers' Occupation Tax Act.
14  (17) Personal property sold to a lessor who leases the
15  property, under a lease of one year or longer executed or in
16  effect at the time of the purchase, to a governmental body that
17  has been issued an active tax exemption identification number
18  by the Department under Section 1g of the Retailers'
19  Occupation Tax Act.
20  (18) Beginning with taxable years ending on or after
21  December 31, 1995 and ending with taxable years ending on or
22  before December 31, 2004, personal property that is donated
23  for disaster relief to be used in a State or federally declared
24  disaster area in Illinois or bordering Illinois by a
25  manufacturer or retailer that is registered in this State to a
26  corporation, society, association, foundation, or institution

 

 

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

 

 

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

 

 

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1  exempt from the provisions of Section 3-55.
2  (23) Beginning January 1, 2000 and through December 31,
3  2001, new or used automatic vending machines that prepare and
4  serve hot food and beverages, including coffee, soup, and
5  other items, and replacement parts for these machines.
6  Beginning January 1, 2002 and through June 30, 2003, machines
7  and parts for machines used in commercial, coin-operated
8  amusement and vending business if a use or occupation tax is
9  paid on the gross receipts derived from the use of the
10  commercial, coin-operated amusement and vending machines. This
11  paragraph is exempt from the provisions of Section 3-55.
12  (24) Beginning on August 2, 2001 (the effective date of
13  Public Act 92-227), computers and communications equipment
14  utilized for any hospital purpose and equipment used in the
15  diagnosis, analysis, or treatment of hospital patients sold to
16  a lessor who leases the equipment, under a lease of one year or
17  longer executed or in effect at the time of the purchase, to a
18  hospital that has been issued an active tax exemption
19  identification number by the Department under Section 1g of
20  the Retailers' Occupation Tax Act. This paragraph is exempt
21  from the provisions of Section 3-55.
22  (25) Beginning on August 2, 2001 (the effective date of
23  Public Act 92-227), personal property sold to a lessor who
24  leases the property, under a lease of one year or longer
25  executed or in effect at the time of the purchase, to a
26  governmental body that has been issued an active tax exemption

 

 

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1  identification number by the Department under Section 1g of
2  the Retailers' Occupation Tax Act. This paragraph is exempt
3  from the provisions of Section 3-55.
4  (26) Beginning on January 1, 2002 and through June 30,
5  2016, tangible personal property purchased from an Illinois
6  retailer by a taxpayer engaged in centralized purchasing
7  activities in Illinois who will, upon receipt of the property
8  in Illinois, temporarily store the property in Illinois (i)
9  for the purpose of subsequently transporting it outside this
10  State for use or consumption thereafter solely outside this
11  State or (ii) for the purpose of being processed, fabricated,
12  or manufactured into, attached to, or incorporated into other
13  tangible personal property to be transported outside this
14  State and thereafter used or consumed solely outside this
15  State. The Director of Revenue shall, pursuant to rules
16  adopted in accordance with the Illinois Administrative
17  Procedure Act, issue a permit to any taxpayer in good standing
18  with the Department who is eligible for the exemption under
19  this paragraph (26). The permit issued under this paragraph
20  (26) shall authorize the holder, to the extent and in the
21  manner specified in the rules adopted under this Act, to
22  purchase tangible personal property from a retailer exempt
23  from the taxes imposed by this Act. Taxpayers shall maintain
24  all necessary books and records to substantiate the use and
25  consumption of all such tangible personal property outside of
26  the State of Illinois.

 

 

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1  (27) Beginning January 1, 2008, tangible personal property
2  used in the construction or maintenance of a community water
3  supply, as defined under Section 3.145 of the Environmental
4  Protection Act, that is operated by a not-for-profit
5  corporation that holds a valid water supply permit issued
6  under Title IV of the Environmental Protection Act. This
7  paragraph is exempt from the provisions of Section 3-55.
8  (28) Tangible personal property sold to a
9  public-facilities corporation, as described in Section
10  11-65-10 of the Illinois Municipal Code, for purposes of
11  constructing or furnishing a municipal convention hall, but
12  only if the legal title to the municipal convention hall is
13  transferred to the municipality without any further
14  consideration by or on behalf of the municipality at the time
15  of the completion of the municipal convention hall or upon the
16  retirement or redemption of any bonds or other debt
17  instruments issued by the public-facilities corporation in
18  connection with the development of the municipal convention
19  hall. This exemption includes existing public-facilities
20  corporations as provided in Section 11-65-25 of the Illinois
21  Municipal Code. This paragraph is exempt from the provisions
22  of Section 3-55.
23  (29) Beginning January 1, 2010 and continuing through
24  December 31, 2029, materials, parts, equipment, components,
25  and furnishings incorporated into or upon an aircraft as part
26  of the modification, refurbishment, completion, replacement,

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1  item (33) is exempt from the provisions of Section 3-55. As
2  used in this item (33):
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  (34) Tangible personal property sold by or on behalf of
16  the State Treasurer pursuant to the Revised Uniform Unclaimed
17  Property Act. This item (34) is exempt from the provisions of
18  Section 3-55.
19  (35) 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 member
24  of the armed forces must complete, at the point of sale, a form
25  prescribed by the Department of Revenue documenting that the
26  transaction is eligible for the exemption under this

 

 

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1  paragraph. Retailers must keep the form as documentation of
2  the exemption in their records for a period of not less than 6
3  years. "Armed forces of the United States" means the United
4  States Army, Navy, Air Force, Marine Corps, or Coast Guard.
5  This paragraph is exempt from the provisions of Section 3-55.
6  (36) Beginning on January 1, 2025, medical appliances and
7  products that are classified as Class III medical devices by
8  the United States Food and Drug Administration and that are
9  used for cancer treatment pursuant to a prescription, as well
10  as any accessories and components related to those appliances
11  and devices. As used in this paragraph, "medical appliance"
12  means a product that was classified as a medical appliance and
13  was subject to a 1% rate of tax immediately prior to the
14  effective date of this amendatory Act of the 103rd General
15  Assembly, including, but not limited to, devices used to
16  provide advanced life support services, as defined by Section
17  3.10 of the Emergency Medical Services (EMS) Systems Act, and
18  any other items designated as medical appliances by the
19  Department by rule. This paragraph is exempt from the
20  provisions of Section 3-55.
21  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
22  Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
23  75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
24  Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
25  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
26  revised 12-12-23.)

 

 

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1  (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
2  Sec. 3-10. Rate of tax. Unless otherwise provided in this
3  Section, the tax imposed by this Act is at the rate of 6.25% of
4  the "selling price", as defined in Section 2 of the Service Use
5  Tax Act, of the tangible personal property. For the purpose of
6  computing this tax, in no event shall the "selling price" be
7  less than the cost price to the serviceman of the tangible
8  personal property transferred. The selling price of each item
9  of tangible personal property transferred as an incident of a
10  sale of service may be shown as a distinct and separate item on
11  the serviceman's billing to the service customer. If the
12  selling price is not so shown, the selling price of the
13  tangible personal property is deemed to be 50% of the
14  serviceman's entire billing to the service customer. When,
15  however, a serviceman contracts to design, develop, and
16  produce special order machinery or equipment, the tax imposed
17  by this Act shall be based on the serviceman's cost price of
18  the tangible personal property transferred incident to the
19  completion of the contract.
20  Beginning on July 1, 2000 and through December 31, 2000,
21  with respect to motor fuel, as defined in Section 1.1 of the
22  Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
23  the Use Tax Act, the tax is imposed at the rate of 1.25%.
24  With respect to gasohol, as defined in the Use Tax Act, the
25  tax imposed by this Act shall apply to (i) 70% of the cost

 

 

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

 

 

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

 

 

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1  than 10% but no more than 99% biodiesel material, the tax
2  imposed by this Act does not apply to the proceeds of the
3  selling price of property transferred as an incident to the
4  sale of service on or after July 1, 2003 and on or before
5  December 31, 2023. On and after January 1, 2024 and on or
6  before December 31, 2030, the taxation of biodiesel, renewable
7  diesel, and biodiesel blends shall be as provided in Section
8  3-5.1 of the Use Tax Act.
9  At the election of any registered serviceman made for each
10  fiscal year, sales of service in which the aggregate annual
11  cost price of tangible personal property transferred as an
12  incident to the sales of service is less than 35%, or 75% in
13  the case of servicemen transferring prescription drugs or
14  servicemen engaged in graphic arts production, of the
15  aggregate annual total gross receipts from all sales of
16  service, the tax imposed by this Act shall be based on the
17  serviceman's cost price of the tangible personal property
18  transferred incident to the sale of those services.
19  Until July 1, 2022 and beginning again on July 1, 2023, the
20  tax shall be imposed at the rate of 1% on food prepared for
21  immediate consumption and transferred incident to a sale of
22  service subject to this Act or the Service Use Tax Act by an
23  entity licensed under the Hospital Licensing Act, the Nursing
24  Home Care Act, the Assisted Living and Shared Housing Act, the
25  ID/DD Community Care Act, the MC/DD Act, the Specialized
26  Mental Health Rehabilitation Act of 2013, or the Child Care

 

 

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

 

 

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1  prescription and nonprescription medicines, drugs, medical
2  appliances, products classified as Class III medical devices
3  by the United States Food and Drug Administration that are
4  used for cancer treatment pursuant to a prescription, as well
5  as any accessories and components related to those devices,
6  modifications to a motor vehicle for the purpose of rendering
7  it usable by a person with a disability, and insulin, blood
8  sugar testing materials, syringes, and needles used by human
9  diabetics (except to the extent that those items are exempt by
10  the Department under paragraph (36) of Section 3-5). For the
11  purposes of this Section, until September 1, 2009: the term
12  "soft drinks" means any complete, finished, ready-to-use,
13  non-alcoholic drink, whether carbonated or not, including, but
14  not limited to, soda water, cola, fruit juice, vegetable
15  juice, carbonated water, and all other preparations commonly
16  known as soft drinks of whatever kind or description that are
17  contained in any closed or sealed can, carton, or container,
18  regardless of size; but "soft drinks" does not include coffee,
19  tea, non-carbonated water, infant formula, milk or milk
20  products as defined in the Grade A Pasteurized Milk and Milk
21  Products Act, or drinks containing 50% or more natural fruit
22  or vegetable juice.
23  Notwithstanding any other provisions of this Act,
24  beginning September 1, 2009, "soft drinks" means non-alcoholic
25  beverages that contain natural or artificial sweeteners. "Soft
26  drinks" does not include beverages that contain milk or milk

 

 

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

 

 

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1  purposes of this Section, "grooming and hygiene products"
2  includes, but is not limited to, soaps and cleaning solutions,
3  shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
4  lotions and screens, unless those products are available by
5  prescription only, regardless of whether the products meet the
6  definition of "over-the-counter-drugs". For the purposes of
7  this paragraph, "over-the-counter-drug" means a drug for human
8  use that contains a label that identifies the product as a drug
9  as required by 21 CFR 201.66. The "over-the-counter-drug"
10  label includes:
11  (A) a "Drug Facts" panel; or
12  (B) a statement of the "active ingredient(s)" with a
13  list of those ingredients contained in the compound,
14  substance or preparation.
15  Beginning on January 1, 2014 (the effective date of Public
16  Act 98-122), "prescription and nonprescription medicines and
17  drugs" includes medical cannabis purchased from a registered
18  dispensing organization under the Compassionate Use of Medical
19  Cannabis Program Act.
20  As used in this Section, "adult use cannabis" means
21  cannabis subject to tax under the Cannabis Cultivation
22  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
23  and does not include cannabis subject to tax under the
24  Compassionate Use of Medical Cannabis Program Act.
25  (Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
26  102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,

 

 

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1  Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
2  103-154, eff. 6-30-23.)
3  Section 20. The Retailers' Occupation Tax Act is amended
4  by changing Sections 2-5 and 2-10 as follows:
5  (35 ILCS 120/2-5)
6  Sec. 2-5. Exemptions. Gross receipts from proceeds from
7  the sale of the following tangible personal property are
8  exempt from the tax imposed by this Act:
9  (1) Farm chemicals.
10  (2) Farm machinery and equipment, both new and used,
11  including that manufactured on special order, certified by
12  the purchaser to be used primarily for production
13  agriculture or State or federal agricultural programs,
14  including individual replacement parts for the machinery
15  and equipment, including machinery and equipment purchased
16  for lease, and including implements of husbandry defined
17  in Section 1-130 of the Illinois Vehicle Code, farm
18  machinery and agricultural chemical and fertilizer
19  spreaders, and nurse wagons required to be registered
20  under Section 3-809 of the Illinois Vehicle Code, but
21  excluding other motor vehicles required to be registered
22  under the Illinois Vehicle Code. Horticultural polyhouses
23  or hoop houses used for propagating, growing, or
24  overwintering plants shall be considered farm machinery

 

 

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1  and equipment under this item (2). Agricultural chemical
2  tender tanks and dry boxes shall include units sold
3  separately from a motor vehicle required to be licensed
4  and units sold mounted on a motor vehicle required to be
5  licensed, if the selling price of the tender is separately
6  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
10  not limited to, tractors, harvesters, sprayers, planters,
11  seeders, or spreaders. Precision farming equipment
12  includes, but is not limited to, soil testing sensors,
13  computers, monitors, software, global positioning and
14  mapping systems, and other such equipment.
15  Farm machinery and equipment also includes computers,
16  sensors, software, and related equipment used primarily in
17  the computer-assisted operation of production agriculture
18  facilities, equipment, and activities such as, but not
19  limited to, the collection, monitoring, and correlation of
20  animal and crop data for the purpose of formulating animal
21  diets and agricultural chemicals.
22  Beginning on January 1, 2024, farm machinery and
23  equipment also includes electrical power generation
24  equipment used primarily for production agriculture.
25  This item (2) is exempt from the provisions of Section
26  2-70.

 

 

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1  (3) Until July 1, 2003, distillation machinery and
2  equipment, sold as a unit or kit, assembled or installed
3  by the retailer, certified by the user to be used only for
4  the production of ethyl alcohol that will be used for
5  consumption as motor fuel or as a component of motor fuel
6  for the personal use of the user, and not subject to sale
7  or resale.
8  (4) Until July 1, 2003 and beginning again September
9  1, 2004 through August 30, 2014, graphic arts machinery
10  and equipment, including repair and replacement parts,
11  both new and used, and including that manufactured on
12  special order or purchased for lease, certified by the
13  purchaser to be used primarily for graphic arts
14  production. Equipment includes chemicals or chemicals
15  acting as catalysts but only if the chemicals or chemicals
16  acting as catalysts effect a direct and immediate change
17  upon a graphic arts product. Beginning on July 1, 2017,
18  graphic arts machinery and equipment is included in the
19  manufacturing and assembling machinery and equipment
20  exemption under paragraph (14).
21  (5) A motor vehicle that is used for automobile
22  renting, as defined in the Automobile Renting Occupation
23  and Use Tax Act. This paragraph is exempt from the
24  provisions of Section 2-70.
25  (6) Personal property sold by a teacher-sponsored
26  student organization affiliated with an elementary or

 

 

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1  secondary school located in Illinois.
2  (7) Until July 1, 2003, proceeds of that portion of
3  the selling price of a passenger car the sale of which is
4  subject to the Replacement Vehicle Tax.
5  (8) Personal property sold to an Illinois county fair
6  association for use in conducting, operating, or promoting
7  the county fair.
8  (9) Personal property sold to a not-for-profit arts or
9  cultural organization that establishes, by proof required
10  by the Department by rule, that it has received an
11  exemption under Section 501(c)(3) of the Internal Revenue
12  Code and that is organized and operated primarily for the
13  presentation or support of arts or cultural programming,
14  activities, or services. These organizations include, but
15  are not limited to, music and dramatic arts organizations
16  such as symphony orchestras and theatrical groups, arts
17  and cultural service organizations, local arts councils,
18  visual arts organizations, and media arts organizations.
19  On and after July 1, 2001 (the effective date of Public Act
20  92-35), however, an entity otherwise eligible for this
21  exemption shall not make tax-free purchases unless it has
22  an active identification number issued by the Department.
23  (10) Personal property sold by a corporation, society,
24  association, foundation, institution, or organization,
25  other than a limited liability company, that is organized
26  and operated as a not-for-profit service enterprise for

 

 

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1  the benefit of persons 65 years of age or older if the
2  personal property was not purchased by the enterprise for
3  the purpose of resale by the enterprise.
4  (11) Except as otherwise provided in this Section,
5  personal property sold to a governmental body, to a
6  corporation, society, association, foundation, or
7  institution organized and operated exclusively for
8  charitable, religious, or educational purposes, or to a
9  not-for-profit corporation, society, association,
10  foundation, institution, or organization that has no
11  compensated officers or employees and that is organized
12  and operated primarily for the recreation of persons 55
13  years of age or older. A limited liability company may
14  qualify for the exemption under this paragraph only if the
15  limited liability company is organized and operated
16  exclusively for educational purposes. On and after July 1,
17  1987, however, no entity otherwise eligible for this
18  exemption shall make tax-free purchases unless it has an
19  active identification number issued by the Department.
20  (12) (Blank).
21  (12-5) On and after July 1, 2003 and through June 30,
22  2004, motor vehicles of the second division with a gross
23  vehicle weight in excess of 8,000 pounds that are subject
24  to the commercial distribution fee imposed under Section
25  3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
26  2004 and through June 30, 2005, the use in this State of

 

 

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1  motor vehicles of the second division: (i) with a gross
2  vehicle weight rating in excess of 8,000 pounds; (ii) that
3  are subject to the commercial distribution fee imposed
4  under Section 3-815.1 of the Illinois Vehicle Code; and
5  (iii) that are primarily used for commercial purposes.
6  Through June 30, 2005, this exemption applies to repair
7  and replacement parts added after the initial purchase of
8  such a motor vehicle if that motor vehicle is used in a
9  manner that would qualify for the rolling stock exemption
10  otherwise provided for in this Act. For purposes of this
11  paragraph, "used for commercial purposes" means the
12  transportation of persons or property in furtherance of
13  any commercial or industrial enterprise whether for-hire
14  or not.
15  (13) Proceeds from sales to owners, lessors, or
16  shippers of tangible personal property that is utilized by
17  interstate carriers for hire for use as rolling stock
18  moving in interstate commerce and equipment operated by a
19  telecommunications provider, licensed as a common carrier
20  by the Federal Communications Commission, which is
21  permanently installed in or affixed to aircraft moving in
22  interstate commerce.
23  (14) Machinery and equipment that will be used by the
24  purchaser, or a lessee of the purchaser, primarily in the
25  process of manufacturing or assembling tangible personal
26  property for wholesale or retail sale or lease, whether

 

 

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1  the sale or lease is made directly by the manufacturer or
2  by some other person, whether the materials used in the
3  process are owned by the manufacturer or some other
4  person, or whether the sale or lease is made apart from or
5  as an incident to the seller's engaging in the service
6  occupation of producing machines, tools, dies, jigs,
7  patterns, gauges, or other similar items of no commercial
8  value on special order for a particular purchaser. The
9  exemption provided by this paragraph (14) does not include
10  machinery and equipment used in (i) the generation of
11  electricity for wholesale or retail sale; (ii) the
12  generation or treatment of natural or artificial gas for
13  wholesale or retail sale that is delivered to customers
14  through pipes, pipelines, or mains; or (iii) the treatment
15  of water for wholesale or retail sale that is delivered to
16  customers through pipes, pipelines, or mains. The
17  provisions of Public Act 98-583 are declaratory of
18  existing law as to the meaning and scope of this
19  exemption. Beginning on July 1, 2017, the exemption
20  provided by this paragraph (14) includes, but is not
21  limited to, graphic arts machinery and equipment, as
22  defined in paragraph (4) of this Section.
23  (15) Proceeds of mandatory service charges separately
24  stated on customers' bills for purchase and consumption of
25  food and beverages, to the extent that the proceeds of the
26  service charge are in fact turned over as tips or as a

 

 

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1  substitute for tips to the employees who participate
2  directly in preparing, serving, hosting or cleaning up the
3  food or beverage function with respect to which the
4  service charge is imposed.
5  (16) Tangible personal property sold to a purchaser if
6  the purchaser is exempt from use tax by operation of
7  federal law. This paragraph is exempt from the provisions
8  of Section 2-70.
9  (17) Tangible personal property sold to a common
10  carrier by rail or motor that receives the physical
11  possession of the property in Illinois and that transports
12  the property, or shares with another common carrier in the
13  transportation of the property, out of Illinois on a
14  standard uniform bill of lading showing the seller of the
15  property as the shipper or consignor of the property to a
16  destination outside Illinois, for use outside Illinois.
17  (18) Legal tender, currency, medallions, or gold or
18  silver coinage issued by the State of Illinois, the
19  government of the United States of America, or the
20  government of any foreign country, and bullion.
21  (19) Until July 1, 2003, oil field exploration,
22  drilling, and production equipment, including (i) rigs and
23  parts of rigs, rotary rigs, cable tool rigs, and workover
24  rigs, (ii) pipe and tubular goods, including casing and
25  drill strings, (iii) pumps and pump-jack units, (iv)
26  storage tanks and flow lines, (v) any individual

 

 

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1  replacement part for oil field exploration, drilling, and
2  production equipment, and (vi) machinery and equipment
3  purchased for lease; but excluding motor vehicles required
4  to be registered under the Illinois Vehicle Code.
5  (20) Photoprocessing machinery and equipment,
6  including repair and replacement parts, both new and used,
7  including that manufactured on special order, certified by
8  the purchaser to be used primarily for photoprocessing,
9  and including photoprocessing machinery and equipment
10  purchased for lease.
11  (21) Until July 1, 2028, coal and aggregate
12  exploration, mining, off-highway hauling, processing,
13  maintenance, and reclamation equipment, including
14  replacement parts and equipment, and including equipment
15  purchased for lease, but excluding motor vehicles required
16  to be registered under the Illinois Vehicle Code. The
17  changes made to this Section by Public Act 97-767 apply on
18  and after July 1, 2003, but no claim for credit or refund
19  is allowed on or after August 16, 2013 (the effective date
20  of Public Act 98-456) for such taxes paid during the
21  period beginning July 1, 2003 and ending on August 16,
22  2013 (the effective date of Public Act 98-456).
23  (22) Until June 30, 2013, fuel and petroleum products
24  sold to or used by an air carrier, certified by the carrier
25  to be used for consumption, shipment, or storage in the
26  conduct of its business as an air common carrier, for a

 

 

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1  flight destined for or returning from a location or
2  locations outside the United States without regard to
3  previous or subsequent domestic stopovers.
4  Beginning July 1, 2013, fuel and petroleum products
5  sold to or used by an air carrier, certified by the carrier
6  to be used for consumption, shipment, or storage in the
7  conduct of its business as an air common carrier, for a
8  flight that (i) is engaged in foreign trade or is engaged
9  in trade between the United States and any of its
10  possessions and (ii) transports at least one individual or
11  package for hire from the city of origination to the city
12  of final destination on the same aircraft, without regard
13  to a change in the flight number of that aircraft.
14  (23) A transaction in which the purchase order is
15  received by a florist who is located outside Illinois, but
16  who has a florist located in Illinois deliver the property
17  to the purchaser or the purchaser's donee in Illinois.
18  (24) Fuel consumed or used in the operation of ships,
19  barges, or vessels that are used primarily in or for the
20  transportation of property or the conveyance of persons
21  for hire on rivers bordering on this State if the fuel is
22  delivered by the seller to the purchaser's barge, ship, or
23  vessel while it is afloat upon that bordering river.
24  (25) Except as provided in item (25-5) of this
25  Section, a motor vehicle sold in this State to a
26  nonresident even though the motor vehicle is delivered to

 

 

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1  the nonresident in this State, if the motor vehicle is not
2  to be titled in this State, and if a drive-away permit is
3  issued to the motor vehicle as provided in Section 3-603
4  of the Illinois Vehicle Code or if the nonresident
5  purchaser has vehicle registration plates to transfer to
6  the motor vehicle upon returning to his or her home state.
7  The issuance of the drive-away permit or having the
8  out-of-state registration plates to be transferred is
9  prima facie evidence that the motor vehicle will not be
10  titled in this State.
11  (25-5) The exemption under item (25) does not apply if
12  the state in which the motor vehicle will be titled does
13  not allow a reciprocal exemption for a motor vehicle sold
14  and delivered in that state to an Illinois resident but
15  titled in Illinois. The tax collected under this Act on
16  the sale of a motor vehicle in this State to a resident of
17  another state that does not allow a reciprocal exemption
18  shall be imposed at a rate equal to the state's rate of tax
19  on taxable property in the state in which the purchaser is
20  a resident, except that the tax shall not exceed the tax
21  that would otherwise be imposed under this Act. At the
22  time of the sale, the purchaser shall execute a statement,
23  signed under penalty of perjury, of his or her intent to
24  title the vehicle in the state in which the purchaser is a
25  resident within 30 days after the sale and of the fact of
26  the payment to the State of Illinois of tax in an amount

 

 

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1  equivalent to the state's rate of tax on taxable property
2  in his or her state of residence and shall submit the
3  statement to the appropriate tax collection agency in his
4  or her state of residence. In addition, the retailer must
5  retain a signed copy of the statement in his or her
6  records. Nothing in this item shall be construed to
7  require the removal of the vehicle from this state
8  following the filing of an intent to title the vehicle in
9  the purchaser's state of residence if the purchaser titles
10  the vehicle in his or her state of residence within 30 days
11  after the date of sale. The tax collected under this Act in
12  accordance with this item (25-5) shall be proportionately
13  distributed as if the tax were collected at the 6.25%
14  general rate imposed under this Act.
15  (25-7) Beginning on July 1, 2007, no tax is imposed
16  under this Act on the sale of an aircraft, as defined in
17  Section 3 of the Illinois Aeronautics Act, if all of the
18  following conditions are met:
19  (1) the aircraft leaves this State within 15 days
20  after the later of either the issuance of the final
21  billing for the sale of the aircraft, or the
22  authorized approval for return to service, completion
23  of the maintenance record entry, and completion of the
24  test flight and ground test for inspection, as
25  required by 14 CFR 91.407;
26  (2) the aircraft is not based or registered in

 

 

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1  this State after the sale of the aircraft; and
2  (3) the seller retains in his or her books and
3  records and provides to the Department a signed and
4  dated certification from the purchaser, on a form
5  prescribed by the Department, certifying that the
6  requirements of this item (25-7) are met. The
7  certificate must also include the name and address of
8  the purchaser, the address of the location where the
9  aircraft is to be titled or registered, the address of
10  the primary physical location of the aircraft, and
11  other information that the Department may reasonably
12  require.
13  For purposes of this item (25-7):
14  "Based in this State" means hangared, stored, or
15  otherwise used, excluding post-sale customizations as
16  defined in this Section, for 10 or more days in each
17  12-month period immediately following the date of the sale
18  of the aircraft.
19  "Registered in this State" means an aircraft
20  registered with the Department of Transportation,
21  Aeronautics Division, or titled or registered with the
22  Federal Aviation Administration to an address located in
23  this State.
24  This paragraph (25-7) is exempt from the provisions of
25  Section 2-70.
26  (26) Semen used for artificial insemination of

 

 

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1  livestock for direct agricultural production.
2  (27) Horses, or interests in horses, registered with
3  and meeting the requirements of any of the Arabian Horse
4  Club Registry of America, Appaloosa Horse Club, American
5  Quarter Horse Association, United States Trotting
6  Association, or Jockey Club, as appropriate, used for
7  purposes of breeding or racing for prizes. This item (27)
8  is exempt from the provisions of Section 2-70, and the
9  exemption provided for under this item (27) applies for
10  all periods beginning May 30, 1995, but no claim for
11  credit or refund is allowed on or after January 1, 2008
12  (the effective date of Public Act 95-88) for such taxes
13  paid during the period beginning May 30, 2000 and ending
14  on January 1, 2008 (the effective date of Public Act
15  95-88).
16  (28) Computers and communications equipment utilized
17  for any hospital purpose and equipment used in the
18  diagnosis, analysis, or treatment of hospital patients
19  sold to a lessor who leases the equipment, under a lease of
20  one year or longer executed or in effect at the time of the
21  purchase, to a hospital that has been issued an active tax
22  exemption identification number by the Department under
23  Section 1g of this Act.
24  (29) Personal property sold to a lessor who leases the
25  property, under a lease of one year or longer executed or
26  in effect at the time of the purchase, to a governmental

 

 

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

 

 

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1  declared disaster area within 6 months after the disaster.
2  (32) Beginning July 1, 1999, game or game birds sold
3  at a "game breeding and hunting preserve area" as that
4  term is used in the Wildlife Code. This paragraph is
5  exempt from the provisions of Section 2-70.
6  (33) A motor vehicle, as that term is defined in
7  Section 1-146 of the Illinois Vehicle Code, that is
8  donated to a corporation, limited liability company,
9  society, association, foundation, or institution that is
10  determined by the Department to be organized and operated
11  exclusively for educational purposes. For purposes of this
12  exemption, "a corporation, limited liability company,
13  society, association, foundation, or institution organized
14  and operated exclusively for educational purposes" means
15  all tax-supported public schools, private schools that
16  offer systematic instruction in useful branches of
17  learning by methods common to public schools and that
18  compare favorably in their scope and intensity with the
19  course of study presented in tax-supported schools, and
20  vocational or technical schools or institutes organized
21  and operated exclusively to provide a course of study of
22  not less than 6 weeks duration and designed to prepare
23  individuals to follow a trade or to pursue a manual,
24  technical, mechanical, industrial, business, or commercial
25  occupation.
26  (34) Beginning January 1, 2000, personal property,

 

 

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1  including food, purchased through fundraising events for
2  the benefit of a public or private elementary or secondary
3  school, a group of those schools, or one or more school
4  districts if the events are sponsored by an entity
5  recognized by the school district that consists primarily
6  of volunteers and includes parents and teachers of the
7  school children. This paragraph does not apply to
8  fundraising events (i) for the benefit of private home
9  instruction or (ii) for which the fundraising entity
10  purchases the personal property sold at the events from
11  another individual or entity that sold the property for
12  the purpose of resale by the fundraising entity and that
13  profits from the sale to the fundraising entity. This
14  paragraph is exempt from the provisions of Section 2-70.
15  (35) Beginning January 1, 2000 and through December
16  31, 2001, new or used automatic vending machines that
17  prepare and serve hot food and beverages, including
18  coffee, soup, and other items, and replacement parts for
19  these machines. Beginning January 1, 2002 and through June
20  30, 2003, machines and parts for machines used in
21  commercial, coin-operated amusement and vending business
22  if a use or occupation tax is paid on the gross receipts
23  derived from the use of the commercial, coin-operated
24  amusement and vending machines. This paragraph is exempt
25  from the provisions of Section 2-70.
26  (35-5) Beginning August 23, 2001 and through June 30,

 

 

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1  2016, food for human consumption that is to be consumed
2  off the premises where it is sold (other than alcoholic
3  beverages, soft drinks, and food that has been prepared
4  for immediate consumption) and prescription and
5  nonprescription medicines, drugs, medical appliances, and
6  insulin, urine testing materials, syringes, and needles
7  used by diabetics, for human use, when purchased for use
8  by a person receiving medical assistance under Article V
9  of the Illinois Public Aid Code who resides in a licensed
10  long-term care facility, as defined in the Nursing Home
11  Care Act, or a licensed facility as defined in the ID/DD
12  Community Care Act, the MC/DD Act, or the Specialized
13  Mental Health Rehabilitation Act of 2013.
14  (36) Beginning August 2, 2001, computers and
15  communications equipment utilized for any hospital purpose
16  and equipment used in the diagnosis, analysis, or
17  treatment of hospital patients sold to a lessor who leases
18  the equipment, under a lease of one year or longer
19  executed or in effect at the time of the purchase, to a
20  hospital that has been issued an active tax exemption
21  identification number by the Department under Section 1g
22  of this Act. This paragraph is exempt from the provisions
23  of Section 2-70.
24  (37) Beginning August 2, 2001, personal property sold
25  to a lessor who leases the property, under a lease of one
26  year or longer executed or in effect at the time of the

 

 

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1  purchase, to a governmental body that has been issued an
2  active tax exemption identification number by the
3  Department under Section 1g of this Act. This paragraph is
4  exempt from the provisions of Section 2-70.
5  (38) Beginning on January 1, 2002 and through June 30,
6  2016, tangible personal property purchased from an
7  Illinois retailer by a taxpayer engaged in centralized
8  purchasing activities in Illinois who will, upon receipt
9  of the property in Illinois, temporarily store the
10  property in Illinois (i) for the purpose of subsequently
11  transporting it outside this State for use or consumption
12  thereafter solely outside this State or (ii) for the
13  purpose of being processed, fabricated, or manufactured
14  into, attached to, or incorporated into other tangible
15  personal property to be transported outside this State and
16  thereafter used or consumed solely outside this State. The
17  Director of Revenue shall, pursuant to rules adopted in
18  accordance with the Illinois Administrative Procedure Act,
19  issue a permit to any taxpayer in good standing with the
20  Department who is eligible for the exemption under this
21  paragraph (38). The permit issued under this paragraph
22  (38) shall authorize the holder, to the extent and in the
23  manner specified in the rules adopted under this Act, to
24  purchase tangible personal property from a retailer exempt
25  from the taxes imposed by this Act. Taxpayers shall
26  maintain all necessary books and records to substantiate

 

 

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1  the use and consumption of all such tangible personal
2  property outside of the State of Illinois.
3  (39) Beginning January 1, 2008, tangible personal
4  property used in the construction or maintenance of a
5  community water supply, as defined under Section 3.145 of
6  the Environmental Protection Act, that is operated by a
7  not-for-profit corporation that holds a valid water supply
8  permit issued under Title IV of the Environmental
9  Protection Act. This paragraph is exempt from the
10  provisions of Section 2-70.
11  (40) Beginning January 1, 2010 and continuing through
12  December 31, 2029, materials, parts, equipment,
13  components, and furnishings incorporated into or upon an
14  aircraft as part of the modification, refurbishment,
15  completion, replacement, repair, or maintenance of the
16  aircraft. This exemption includes consumable supplies used
17  in the modification, refurbishment, completion,
18  replacement, repair, and maintenance of aircraft. However,
19  until January 1, 2024, this exemption excludes any
20  materials, parts, equipment, components, and consumable
21  supplies used in the modification, replacement, repair,
22  and maintenance of aircraft engines or power plants,
23  whether such engines or power plants are installed or
24  uninstalled upon any such aircraft. "Consumable supplies"
25  include, but are not limited to, adhesive, tape,
26  sandpaper, general purpose lubricants, cleaning solution,

 

 

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1  latex gloves, and protective films.
2  Beginning January 1, 2010 and continuing through
3  December 31, 2023, this exemption applies only to the sale
4  of qualifying tangible personal property to persons who
5  modify, refurbish, complete, replace, or maintain an
6  aircraft and who (i) hold an Air Agency Certificate and
7  are empowered to operate an approved repair station by the
8  Federal Aviation Administration, (ii) have a Class IV
9  Rating, and (iii) conduct operations in accordance with
10  Part 145 of the Federal Aviation Regulations. The
11  exemption does not include aircraft operated by a
12  commercial air carrier providing scheduled passenger air
13  service pursuant to authority issued under Part 121 or
14  Part 129 of the Federal Aviation Regulations. From January
15  1, 2024 through December 31, 2029, this exemption applies
16  only to the use of qualifying tangible personal property
17  by: (A) persons who modify, refurbish, complete, repair,
18  replace, or maintain aircraft and who (i) hold an Air
19  Agency Certificate and are empowered to operate an
20  approved repair station by the Federal Aviation
21  Administration, (ii) have a Class IV Rating, and (iii)
22  conduct operations in accordance with Part 145 of the
23  Federal Aviation Regulations; and (B) persons who engage
24  in the modification, replacement, repair, and maintenance
25  of aircraft engines or power plants without regard to
26  whether or not those persons meet the qualifications of

 

 

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1  item (A).
2  The changes made to this paragraph (40) by Public Act
3  98-534 are declarative of existing law. It is the intent
4  of the General Assembly that the exemption under this
5  paragraph (40) applies continuously from January 1, 2010
6  through December 31, 2024; however, no claim for credit or
7  refund is allowed for taxes paid as a result of the
8  disallowance of this exemption on or after January 1, 2015
9  and prior to February 5, 2020 (the effective date of
10  Public Act 101-629).
11  (41) Tangible personal property sold to a
12  public-facilities corporation, as described in Section
13  11-65-10 of the Illinois Municipal Code, for purposes of
14  constructing or furnishing a municipal convention hall,
15  but only if the legal title to the municipal convention
16  hall is transferred to the municipality without any
17  further consideration by or on behalf of the municipality
18  at the time of the completion of the municipal convention
19  hall or upon the retirement or redemption of any bonds or
20  other debt instruments issued by the public-facilities
21  corporation in connection with the development of the
22  municipal convention hall. This exemption includes
23  existing public-facilities corporations as provided in
24  Section 11-65-25 of the Illinois Municipal Code. This
25  paragraph is exempt from the provisions of Section 2-70.
26  (42) Beginning January 1, 2017 and through December

 

 

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1  31, 2026, menstrual pads, tampons, and menstrual cups.
2  (43) Merchandise that is subject to the Rental
3  Purchase Agreement Occupation and Use Tax. The purchaser
4  must certify that the item is purchased to be rented
5  subject to a rental-purchase rental purchase agreement, as
6  defined in the Rental-Purchase Rental Purchase Agreement
7  Act, and provide proof of registration under the Rental
8  Purchase Agreement Occupation and Use Tax Act. This
9  paragraph is exempt from the provisions of Section 2-70.
10  (44) Qualified tangible personal property used in the
11  construction or operation of a data center that has been
12  granted a certificate of exemption by the Department of
13  Commerce and Economic Opportunity, whether that tangible
14  personal property is purchased by the owner, operator, or
15  tenant of the data center or by a contractor or
16  subcontractor of the owner, operator, or tenant. Data
17  centers that would have qualified for a certificate of
18  exemption prior to January 1, 2020 had Public Act 101-31
19  been in effect, may apply for and obtain an exemption for
20  subsequent purchases of computer equipment or enabling
21  software purchased or leased to upgrade, supplement, or
22  replace computer equipment or enabling software purchased
23  or leased in the original investment that would have
24  qualified.
25  The Department of Commerce and Economic Opportunity
26  shall grant a certificate of exemption under this item

 

 

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1  (44) to qualified data centers as defined by Section
2  605-1025 of the Department of Commerce and Economic
3  Opportunity Law of the Civil Administrative Code of
4  Illinois.
5  For the purposes of this item (44):
6  "Data center" means a building or a series of
7  buildings rehabilitated or constructed to house
8  working servers in one physical location or multiple
9  sites within the State of Illinois.
10  "Qualified tangible personal property" means:
11  electrical systems and equipment; climate control and
12  chilling equipment and systems; mechanical systems and
13  equipment; monitoring and secure systems; emergency
14  generators; hardware; computers; servers; data storage
15  devices; network connectivity equipment; racks;
16  cabinets; telecommunications cabling infrastructure;
17  raised floor systems; peripheral components or
18  systems; software; mechanical, electrical, or plumbing
19  systems; battery systems; cooling systems and towers;
20  temperature control systems; other cabling; and other
21  data center infrastructure equipment and systems
22  necessary to operate qualified tangible personal
23  property, including fixtures; and component parts of
24  any of the foregoing, including installation,
25  maintenance, repair, refurbishment, and replacement of
26  qualified tangible personal property to generate,

 

 

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1  transform, transmit, distribute, or manage electricity
2  necessary to operate qualified tangible personal
3  property; and all other tangible personal property
4  that is essential to the operations of a computer data
5  center. The term "qualified tangible personal
6  property" also includes building materials physically
7  incorporated into the qualifying data center. To
8  document the exemption allowed under this Section, the
9  retailer must obtain from the purchaser a copy of the
10  certificate of eligibility issued by the Department of
11  Commerce and Economic Opportunity.
12  This item (44) is exempt from the provisions of
13  Section 2-70.
14  (45) Beginning January 1, 2020 and through December
15  31, 2020, sales of tangible personal property made by a
16  marketplace seller over a marketplace for which tax is due
17  under this Act but for which use tax has been collected and
18  remitted to the Department by a marketplace facilitator
19  under Section 2d of the Use Tax Act are exempt from tax
20  under this Act. A marketplace seller claiming this
21  exemption shall maintain books and records demonstrating
22  that the use tax on such sales has been collected and
23  remitted by a marketplace facilitator. Marketplace sellers
24  that have properly remitted tax under this Act on such
25  sales may file a claim for credit as provided in Section 6
26  of this Act. No claim is allowed, however, for such taxes

 

 

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1  for which a credit or refund has been issued to the
2  marketplace facilitator under the Use Tax Act, or for
3  which the marketplace facilitator has filed a claim for
4  credit or refund under the Use Tax Act.
5  (46) Beginning July 1, 2022, breast pumps, breast pump
6  collection and storage supplies, and breast pump kits.
7  This item (46) is exempt from the provisions of Section
8  2-70. As used in this item (46):
9  "Breast pump" means an electrically controlled or
10  manually controlled pump device designed or marketed to be
11  used to express milk from a human breast during lactation,
12  including the pump device and any battery, AC adapter, or
13  other power supply unit that is used to power the pump
14  device and is packaged and sold with the pump device at the
15  time of sale.
16  "Breast pump collection and storage supplies" means
17  items of tangible personal property designed or marketed
18  to be used in conjunction with a breast pump to collect
19  milk expressed from a human breast and to store collected
20  milk until it is ready for consumption.
21  "Breast pump collection and storage supplies"
22  includes, but is not limited to: breast shields and breast
23  shield connectors; breast pump tubes and tubing adapters;
24  breast pump valves and membranes; backflow protectors and
25  backflow protector adaptors; bottles and bottle caps
26  specific to the operation of the breast pump; and breast

 

 

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1  milk storage bags.
2  "Breast pump collection and storage supplies" does not
3  include: (1) bottles and bottle caps not specific to the
4  operation of the breast pump; (2) breast pump travel bags
5  and other similar carrying accessories, including ice
6  packs, labels, and other similar products; (3) breast pump
7  cleaning supplies; (4) nursing bras, bra pads, breast
8  shells, and other similar products; and (5) creams,
9  ointments, and other similar products that relieve
10  breastfeeding-related symptoms or conditions of the
11  breasts or nipples, unless sold as part of a breast pump
12  kit that is pre-packaged by the breast pump manufacturer
13  or distributor.
14  "Breast pump kit" means a kit that: (1) contains no
15  more than a breast pump, breast pump collection and
16  storage supplies, a rechargeable battery for operating the
17  breast pump, a breastmilk cooler, bottle stands, ice
18  packs, and a breast pump carrying case; and (2) is
19  pre-packaged as a breast pump kit by the breast pump
20  manufacturer or distributor.
21  (47) Tangible personal property sold by or on behalf
22  of the State Treasurer pursuant to the Revised Uniform
23  Unclaimed Property Act. This item (47) is exempt from the
24  provisions of Section 2-70.
25  (48) Beginning on January 1, 2024, tangible personal
26  property purchased by an active duty member of the armed

 

 

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1  forces of the United States who presents valid military
2  identification and purchases the property using a form of
3  payment where the federal government is the payor. The
4  member of the armed forces must complete, at the point of
5  sale, a form prescribed by the Department of Revenue
6  documenting that the transaction is eligible for the
7  exemption under this paragraph. Retailers must keep the
8  form as documentation of the exemption in their records
9  for a period of not less than 6 years. "Armed forces of the
10  United States" means the United States Army, Navy, Air
11  Force, Marine Corps, or Coast Guard. This paragraph is
12  exempt from the provisions of Section 2-70.
13  (49) Beginning on January 1, 2025, medical appliances
14  and products that are classified as Class III medical
15  devices by the United States Food and Drug Administration
16  and that are used for cancer treatment pursuant to a
17  prescription, as well as any accessories and components
18  related to those appliances and devices. As used in this
19  paragraph, "medical appliance" means a product that was
20  classified as a medical appliance and was subject to a 1%
21  rate of tax immediately prior to the effective date of
22  this amendatory Act of the 103rd General Assembly,
23  including, but not limited to, devices used to provide
24  advanced life support services, as defined by Section 3.10
25  of the Emergency Medical Services (EMS) Systems Act, and
26  any other items designated as medical appliances by the

 

 

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1  Department by rule. This paragraph is exempt from the
2  provisions of Section 2-70.
3  (Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
4  102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
5  Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
6  5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
7  5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
8  6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
9  12-12-23.)
10  (35 ILCS 120/2-10)
11  Sec. 2-10. Rate of tax. Unless otherwise provided in this
12  Section, the tax imposed by this Act is at the rate of 6.25% of
13  gross receipts from sales of tangible personal property made
14  in the course of business.
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  Beginning on August 6, 2010 through August 15, 2010, and
20  beginning again on August 5, 2022 through August 14, 2022,
21  with respect to sales tax holiday items as defined in Section
22  2-8 of this Act, the tax is imposed at the rate of 1.25%.
23  Within 14 days after July 1, 2000 (the effective date of
24  Public Act 91-872), each retailer of motor fuel and gasohol
25  shall cause the following notice to be posted in a prominently

 

 

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1  visible place on each retail dispensing device that is used to
2  dispense motor fuel or gasohol in the State of Illinois: "As of
3  July 1, 2000, the State of Illinois has eliminated the State's
4  share of sales tax on motor fuel and gasohol through December
5  31, 2000. The price on this pump should reflect the
6  elimination of the tax." The notice shall be printed in bold
7  print on a sign that is no smaller than 4 inches by 8 inches.
8  The sign shall be clearly visible to customers. Any retailer
9  who fails to post or maintain a required sign through December
10  31, 2000 is guilty of a petty offense for which the fine shall
11  be $500 per day per each retail premises where a violation
12  occurs.
13  With respect to gasohol, as defined in the Use Tax Act, the
14  tax imposed by this Act applies to (i) 70% of the proceeds of
15  sales made on or after January 1, 1990, and before July 1,
16  2003, (ii) 80% of the proceeds of sales made on or after July
17  1, 2003 and on or before July 1, 2017, (iii) 100% of the
18  proceeds of sales made after July 1, 2017 and prior to January
19  1, 2024, (iv) 90% of the proceeds of sales made on or after
20  January 1, 2024 and on or before December 31, 2028, and (v)
21  100% of the proceeds of sales made after December 31, 2028. If,
22  at any time, however, the tax under this Act on sales of
23  gasohol, as defined in the Use Tax Act, is imposed at the rate
24  of 1.25%, then the tax imposed by this Act applies to 100% of
25  the proceeds of sales of gasohol made during that time.
26  With respect to mid-range ethanol blends, as defined in

 

 

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1  Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
2  applies to (i) 80% of the proceeds of sales made on or after
3  January 1, 2024 and on or before December 31, 2028 and (ii)
4  100% of the proceeds of sales made after December 31, 2028. If,
5  at any time, however, the tax under this Act on sales of
6  mid-range ethanol blends is imposed at the rate of 1.25%, then
7  the tax imposed by this Act applies to 100% of the proceeds of
8  sales of mid-range ethanol blends made during that time.
9  With respect to majority blended ethanol fuel, as defined
10  in the Use Tax Act, the tax imposed by this Act does not apply
11  to the proceeds of sales made on or after July 1, 2003 and on
12  or before December 31, 2028 but applies to 100% of the proceeds
13  of sales made thereafter.
14  With respect to biodiesel blends, as defined in the Use
15  Tax Act, with no less than 1% and no more than 10% biodiesel,
16  the tax imposed by this Act applies to (i) 80% of the proceeds
17  of sales made on or after July 1, 2003 and on or before
18  December 31, 2018 and (ii) 100% of the proceeds of sales made
19  after December 31, 2018 and before January 1, 2024. On and
20  after 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 sales made on or
7  after July 1, 2003 and on or before December 31, 2023. On and
8  after January 1, 2024 and on or before December 31, 2030, the
9  taxation of biodiesel, renewable diesel, and biodiesel blends
10  shall be as provided in Section 3-5.1 of the Use Tax Act.
11  Until July 1, 2022 and beginning again on July 1, 2023,
12  with respect to food for human consumption that is to be
13  consumed off the premises where it is sold (other than
14  alcoholic beverages, food consisting of or infused with adult
15  use cannabis, soft drinks, and food that has been prepared for
16  immediate consumption), the tax is imposed at the rate of 1%.
17  Beginning July 1, 2022 and until July 1, 2023, with respect to
18  food for human consumption that is to be consumed off the
19  premises where it is sold (other than alcoholic beverages,
20  food consisting of or infused with adult use cannabis, soft
21  drinks, and food that has been prepared for immediate
22  consumption), the tax is imposed at the rate of 0%.
23  With respect to prescription and nonprescription
24  medicines, drugs, medical appliances, products classified as
25  Class III medical devices by the United States Food and Drug
26  Administration that are used for cancer treatment pursuant to

 

 

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1  a prescription, as well as any accessories and components
2  related to those devices, modifications to a motor vehicle for
3  the purpose of rendering it usable by a person with a
4  disability, and insulin, blood sugar testing materials,
5  syringes, and needles used by human diabetics (except to the
6  extent that those items are exempt by the Department under
7  paragraph (49) of Section 2-5), the tax is imposed at the rate
8  of 1%. For the purposes of this Section, until September 1,
9  2009: the term "soft drinks" means any complete, finished,
10  ready-to-use, non-alcoholic drink, whether carbonated or not,
11  including, but not limited to, soda water, cola, fruit juice,
12  vegetable juice, carbonated water, and all other preparations
13  commonly known as soft drinks of whatever kind or description
14  that are contained in any closed or sealed bottle, can,
15  carton, or container, regardless of size; but "soft drinks"
16  does not include coffee, tea, non-carbonated water, infant
17  formula, milk or milk products as defined in the Grade A
18  Pasteurized Milk and Milk Products Act, or drinks containing
19  50% or more natural fruit or vegetable juice.
20  Notwithstanding any other provisions of this Act,
21  beginning September 1, 2009, "soft drinks" means non-alcoholic
22  beverages that contain natural or artificial sweeteners. "Soft
23  drinks" does not include beverages that contain milk or milk
24  products, soy, rice or similar milk substitutes, or greater
25  than 50% of vegetable or fruit juice by volume.
26  Until August 1, 2009, and notwithstanding any other

 

 

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

 

 

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1  lotions and screens, unless those products are available by
2  prescription only, regardless of whether the products meet the
3  definition of "over-the-counter-drugs". For the purposes of
4  this paragraph, "over-the-counter-drug" means a drug for human
5  use that contains a label that identifies the product as a drug
6  as required by 21 CFR 201.66. The "over-the-counter-drug"
7  label includes:
8  (A) a "Drug Facts" panel; or
9  (B) a statement of the "active ingredient(s)" with a
10  list of those ingredients contained in the compound,
11  substance or preparation.
12  Beginning on January 1, 2014 (the effective date of Public
13  Act 98-122), "prescription and nonprescription medicines and
14  drugs" includes medical cannabis purchased from a registered
15  dispensing organization under the Compassionate Use of Medical
16  Cannabis Program Act.
17  As used in this Section, "adult use cannabis" means
18  cannabis subject to tax under the Cannabis Cultivation
19  Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
20  and does not include cannabis subject to tax under the
21  Compassionate Use of Medical Cannabis Program Act.
22  (Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
23  Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
24  60-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
25  4-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
26  Section 99. Effective date. This Act takes effect on

 

 

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